Miles v. Bunn

Mitchell, J. William L. Bar and his wife owned lot 14 and part of lot 15, block 31, Lock G-ilvra Addition to Seattle. They organized a corporation called the Sesom Corporation, to which Bar and his wife conveyed the real property mentioned, in consideration, among other things, of all the capital stock of *304 the corporation, which was issued to William L. Bar, except- a few so-called qualifying shares that were issued to one O. N. Dicldson without any consideration from him. The corporation entered into a written lease for a term of years with one R. H. Bunn, under which he went into possession of the premises and erected a building thereon. D. L. Brown and C. Gr. Rinnan, as partners, upon request of the lessee, furnished labor and material in the construction of the building, for which they duly filed and recorded a notice of claim of lien. This suit was brought, in which Brown and Rinnan sought, among other things, a judgment foreclosing their lien against the land belonging to the corporation, which had been made a party to the action. Findings of fact and conclusions of law were filed, upon which judgment was entered that, in part, denied Brown and Rinnan any lien or foreclosure against the land. They have appealed from that adverse portion of the judgment. Appellants do not bring up any statement of facts, but present the case here on the findings of fact. Two main questions are presented on behalf of the appellants: (1) That, notwithstanding the purpose of the lease to the contrary, the lessee was the agent in fact of the owner of the land in constructing the building; and (2) that, under the lien statute (Rem. Rev. Stat., §1129), the lessee was the statutory agent of the owner of the land with respect to the right of lien for labor and material supplied and used in constructing the building. As to the first contention, in the absence of the evidence given at the trial, we are foreclosed by the findings of the trial court. The court made no finding or conclusion of bad faith between the parties, or that the lessee acted other than for himself under the terms of the lease in constructing the building. *305 As to the second contention, certain terms of the contract of lease must be noticed, as follows: “The lessee shall not be obligated to, but, subject to the other provisions of this lease, shall have the right to place and construct upon said premises, a building and improvements . . . ” and ‘ ‘ The rent reserved herein is ground rent and is not based upon the value of any buildings which may be placed by the lessee upon said premises and, therefore, all rent reserved shall be paid during the entire term of this lease regardless of whether or not any building placed upon said premises is destroyed.” 'The question of whether a lessee, in constructing improvements, acts as agent of the owner of the land, under the statute upon the subject of the lien for labor and material, has been considered in this state in a number of cases covering a variety of facts and circumstances. Many of the cases are cited and discussed in Pioneer Sand & Gravel Co. v. Northern Pacific Ry. Co., 170 Wash. 618, 17 P. (2d) 9, which was a case in which the lessee was obligated to construct a building on the land mentioned in the lease. The test is whether the lessee, under the terms of the contract, has a privilege merely, or is obligated, to construct improvements. The case of Pioneer Sand & Gravel Co. v. Northern Pacific Ry. Co., just referred to, citing with approval the rule of the early case of Stetson-Post Mill Co. v. Brown, 21 Wash. 619, 59 Pac. 507, 75 Am. St. 862, said: “We have held that the construction of a building by a lessee upon land held byj him as lessee, in pursuance of a mere lease contract privilege so to do, does not, under these statutory provisions, constitute such lessee the agent of such lessor owner so as to effectually charge the land with lien claims of mechanics and materialmen furnishing labor and material for the construction of such building. ’ ’ *306 That rule is applicable to the contract in the present case, whereby the lessee is not obligated to construct buildings and improvements on the land, but has the privileg-e merely of doing so. Judgment affirmed. Tolman, Main, Millard, Steinert, and Blake, JJ., concur.