Marty v. Hippodrome Amusement Co.

JOHNSON, J. —This is an action to enforce a mechanic’s lien for materials furnished for the repair and alteration of a> building on premises leased by the defendant Railway Company to its codefendant. The materials were furnished under a contract with the lessee but the object of the suit is to enforce the lien against the freehold as well as the leasehold estate, on the ground that the lessee in making the improvements was acting as the agent of the lessor as well as in its own behalf. A jury was waived and the court rendered personal judgment against the lessee and adjudged that the leasehold estate-be subjected to a lien for the amount of plaintiff’s demand but held that no lien had attached to the freehold. Plaintiff appealed. The facts of the case áre as follows: The Metropolitan Street Railway Company owned the premises at the southwest corner of Twelfth and Charlotte streets in Kansas City and had built thereon a brick power house 300 feet long and 125 feet wide, which later it converted into a street car barn and for some years used as a storage place for cars. The floor was covered with tracks and there was a pit under a part of the tracks used by workmen in the repairing of motors and bottom parts of cars. The roof had been allowed to become and remain in a leaky condition and the building could not be used for any other purpose without the making of repairs and alterations. On September 5, 1908, the railway company entered into a written lease with Joseph R. Donegan by the terms of which it leased-the premises for a term of three years at a monthly rental of $416.66. Donegan assigned the lease to the Hippodrome Amusement Company with the consent of the lessor and the assignee entered into possession and proceeded to repair the buildings and make alterations to change it into a place of amusement. The lessee was given the privilege of an extension of the term “for an additional period of two years at such increased rate as may be [709] agreed on, and if not agreed on, as fixed by arbitrators.” Other material agreements in the lease were that the premises were let “in the present condition thereof,” that the lessee “intends to remodel and improve said premises at his own expense on estimated cost of eight thousand dollars, the cost of said improvement to~be borne by the party of the second part (lessee) and the party of the first part to be indemnified from a loss therefrom” and that the .lessee “before beginning such improvement shall. execute and deliver to the party of the first part a good and sufficient bond to be approved by the party of the first part, the same to be equal in amount to eight thousand dollars, conditioned that the party of the second part will pay all bills for material and labor, arising out of said improvement and protect the party of the first part from mechanic’s, materialmen’s or labor liens on said premises, and said improvement shall not- be begun until this stipulation is complied with and the party of the first part protected against loss by reason thereof.” The lessee agreed “to use said premises for purposes of amusement only” and “at the expiration of term hereby created whether determined by lapse of time or otherwise, to surrender to first party quiet and peaceable possession of premises hereby let with all appurtenances and fixtures in as good condition as same now are the usual wear and tear and damage or destruction by fire without fault of second party or by any providential means excepted.” Further the lease provided for a forfeiture in case of the breach of any-of the covenants and conditions to be performed by the lessee. The amusement company gave a bond in the sum of $8000 to the railway company pursuant to the terms of the contract, but instead of spending $8000 in the improvement and repair of the building, made repairs and improvements costing over $30,000. There is no evidence that the railway company con [710] sented to these additional improvements or even knew that they were made until after the lessee had defaulted in the performance of conditions of the lease and surrendered the premises. The materials furnished, by plaintiff were sold to the amusement company and used in these repairs and improvements. There is no evidence tending to show that any consideration for the proposed improvement of the building was to be paid by the lessor; that the improvement substantially enhanced the present value of the freehold estate, was made in part for the benefit of the lessor, or that the lessor did anything to constitute th¿ lessee its agent for the improvement of the building. Certainly no such inference may be drawn from the terms of the lease which show beyond question that the lessor leased the building in its present condition with the understanding and agreement that the lessee would accept it in that condition and at its own expense, and on its own responsibility would make" repairs and improvements necessary to adapt the building to the use the lessee intended to make of it. In order to hold the freehold it devolved on plaintiff to show that the lessor had constituted the lessee its agent to contract on its behalf for improvements of substantial and present benefit to the freehold. Such agency would be implied from stipulations in the lease which compelled the lessee to make certain specified improvements of apparent value to the freehold and which provided that such improvements should pass to the lessor at the end of the term. [Lumber Co. v. Churchill, 114 Mo. App. 578; Hardware Co. v. Churchill, 126 Mo. App. 462; Lumber Co. v. Morris, 170 Mo. App. 212, 156 S. W. 75.] Speaking through Trimble, J. we say in the last case cited: “Wherever the facts show that the improvements are really for the present benefit of the freehold interest, or that they are made under such circumstances as to indicate that the lessor is really having the im [711] provements made, or that lie has constituted the lessee his agent to make , them, or where, by reason of the terms of the lease, the value and extent of the improvements, and the relative length of the term, it can be seen that the improvements substantially increase the value of the freehold interest primarily, and not merely as a future, incidental matter, then the lien against the lessor’s interest will be upheld, without regard to the language of the lease concerning liens.” The-present case does not fall within that rule but belongs to the class where the lessee, with the consent of the lessor, makes repairs and improvements at his own expense for the benefit only of his own estate. In such case he cannot be said to have' acted as the agent of the landlord nor will the estate of the latter be held bound for labor and materials furnished under contracts with him alone. The judgment is affirmed. All concur.