Rohn v. Cook

Kerwin, J. Whether the cross-complaint states a cause of action turns upon the construction of the contract between — 302 — Goolc and Holbrook and tbe Realty Company, by wbicb tbe Realty Company was pnt in possession of tbe property' for forty-nine years and six months. If tbis instrument constitutes a lease by wbicb tbe conventional relation of landlord and tenant was created between tbe parties, then no lien would attach in favor of tbe cross-complainants against tbe lessors upon tbe allegations of the cross-complaint under tbe provisions of sec. 3314, Stats., wbicb provides: “This section shall not be construed as giving a lien upon tbe interests of any owner in land where tbe Avork or labor is done, or material is furnished or plans or specifications or estimates are prepared, at tbe request of any person bolding such land under any contract of lease, demise or contract for tbe sale thereof, with such owner unless there shall also be an express agreement between such owner and tbe person doing such work or labor or furnishing such material, or preparing such plans, specifications or estimates Avhereby such OAvner has agreed to pay for or become responsible for tbe payment of tbe same, but such lien shall affect tbe interests only of tbe person bolding tbe land under such contract of lease, demise or sale.” Tbe cross-complaint sets forth at length tbe terms of tbis instrument and we are convinced that it is a lease. It designates tbe owners of tbe property, Goolc and Holbrook, as lessors and tbe Realty Company as lessee, and provides “That tbe parties of tbe first part, for and in consideration of the covenants and agreements hereinafter mentioned to be kept and performed by tbe said party of tbe second part, have demised and leased, and by these presents do hereby demise and lease, unto tbe said party of the second part, all of lot numbered one (1) in block numbered one hundred seventy-six (176) and all of lot numbered one (1) in block numbered sixty-five (65) except tbe south ninety (90) feet in width thereof, in the Fourth ward of tbe city of Milwaukee, county of Milwaukee, state of Wisconsin, subject to a right of way over and across tbe south ten (10) feet in width of said premises hereby demised and leased; together with all and singular the rights, privileges, easements, and appurtenances — 303 — to the said premises belonging'or in any wise appertaining or therewith usually held and enjoyed. “To have and to hold the premises hereby demised unto the. said party of the second part from the 10th day of April,' 1913, for the term of forty-nine (49) years and six (6) months.” The- lease then goes on ,to provide that the lessee, in consideration of the execution of the lease by the lessors, does covenant and agree to pay all taxes and assessments upon the premises, buildings, and improvements during the term and perform every other agreement or promise therein contained, and will pay to said lessors in gold coin of the United States, or any lawful money of the United States, at the option of said lessors, as rent for said premises during the term or period of the lease, $12,000 annually in advance in four equal quarter-yearly instalments, on the 10th day of each of the months of April, July, October, and January. The lease further provides that the lessee will, not later than thirty months after April 10, 1913, expend or lay out in remodeling and improving the buildings on the demised premises for the enhancement of the value thereof not less than $20,000, $10,000 of which shall be expended within one year after April 10, 1913, which amount shall be in addition to any sums required or which may be expended by said lessee in making current repairs for the maintenance and upkeep of the buildings situate upon said premises, and that the work of remodeling and improving said buildings shall be commenced not later than July 10, 1913. The lease further makes provision as to what the work of remodeling shall consist of; that the lessee covenants and agrees’to pay to the lessors the sum of $10,000 in cash upon the delivery of the lease, which sum is to remain in the hands of the lessors as security for the covenants contained in the lease and as security for the payment of any rent and for the payment of any sum or sums of money which shall become payable by — 304 — the lessee under the terms of the lease, interest at five per cent, to he allowed on said $10,000 while it remains in the hands of the lessors; this $10,000 to be in addition to the said $20,000 agreed to be expended by the lessee above mentioned, making a total of $30,000 to be expended for remodeling and improving the buildings upon the demised premises during the term of the lease; that if the lessee fails to expend said sum of $10,000 within said term, the balance thereof remaining at the termination of the lease for any cause shall be paid to the lessors as additional rental. It is clear from the terms of -the lease that the $20,000 is a part of the rental of the premises in addition to the $12,000 annual payment mentioned therein, and that by the terms of the lease the lessee is permitted and required to pay said additional rental by way of making permanent improvements upon the premises, and further that the $10,000 is to be held by the lessors as security for the performance of the conditions of the lease by the lessee and also to be expended in improving the premises, and, if not so expended, to be held “as additional rental.” The lease further provides at great length the duties and relations existing between the parties, but we shall not further recite them here. It is sufficient to say that we are convinced that the instrument between the parties was a .lease and comes squarely within the provision of the statute [see. 3314] above quoted which exempts the interests of the landlord in such leased property from the operation of a mechanic’s lien. There is nothing in the lease which forms any basis for the claim that any money was deposited to secure payment of liens, nor is there any allegation in the cross-complaint of any “express agreement between such owner and the person doing such work or labor or furnishing such material. ...” Considerable stress is placed upon sec. 3314, Stats., which provides that a lien shall attach and be a lien upon the real — 305 — property of any person upon whose premises improvements are made, “such owner having knowledge thereof and consenting thereto.” True, this statute applies in proper cases, but has no application to a case such as the one set up in the cross-complaint, where a lien is expressly forbidden by the terms of the statute. The history of the mechanics’ lien statutes together with the decisions of this court under the statutes show this. Clark v. North, 131 Wis. 599, 111 N. W. 681; Lentz v. Eimermann, 119 Wis. 492, 97 N. W. 181; Hart v. Hart, 117 Wis. 639, 657, 94 N. W. 890; J. B. Alfree Mfg. Co. v. Henry, 96 Wis. 327, 71 N. W. 370; Coorsen v. Ziehl, 103 Wis. 381, 79 N. W. 562; Bentley v. Adams, 92 Wis. 386, 66 N. W. 505; Cook v. Goodyear, 79 Wis. 606, 48 N. W., 860; Heath v. Solles, 73 Wis. 217, 40 N. W. 804; North v. La Flesh, 73 Wis. 520, 41 N. W. 633. We are of opinion that the cross-complaint states no cause of action, hence the court below was right in sustaining the demurrer thereto. It is also insisted that the cross-complaint is defective in that there is no proper allegation that a notice was served in compliance with sec. 3315, Stats., and we are asked to determine this question in view of further litigation in the case. True, the allegation is not specific, but on demurrer and under the liberal rules of pleading which obtain under our practice we are inclined to regard it sufficient. The allegation is “That on January 9, 1915, a notice that these defendants had performed work, labor, and services and furnished materials and supplies in the repairs, construction, alteration, and improvements of said building as principal contractors, was served on defendants Harriet M. Ooolc and Sarah A. Holbrook in accordance with section 3315 of the Revised Statutes of Wisconsin for the year 1913.” We are also asked, in view of the fact that the question will arise in this case on further litigation, whether a party who is — 306 — brought in as a defendant and who claims a lien, but has not been made a party until after the expiration of a year from the time of furnishing the material and labor, is barred under the provisions of sec. 3318, Stats. The contention is that the cross-complaint must show that it was filed and the action commenced in favor of the cross-complainants within one year from the date of the last charge for labor or material furnished, and that the complaint was filed with the clerk of the court within one year from such date. We do not regard the contention tenable. It was not necessary for the defendants doing business as Wisconsin Mantel & Tile Company to set up their cause of action or claim by way of cross-complaint. They were entitled to have it considered, adjudicated, and determined in the action brought by the plaintiff. Dusick v. Green, 118 Wis. 240, 95 N. W. 144. Secs. 3321-3326, Stats., regulate proceedings for foreclosure'of a mechanic’s lien and provide a scheme for equal sharing among dien claimants, and such scheme allows any one or more claimants to bring an action to which all others are to be made parties for the purpose, among other things, of ascertaining the amount of all other liens with which plaintiff must share the proceeds of the property. “The fact that the judgment will award liens to other defendants; and order money paid to them, is only incidental to the granting of full relief to the plaintiff.” Dusick v. Green, supra. It is clear that no cross-complaint demanding affirmative relief was necessary, therefore the commencement of the action by plaintiff within the time provided by sec. 3318, Stats., was' sufficient to authorize the court to consider and adjudicate the rights of the defendants doing business as Wisconsin Mantel & Tile Company to a lien upon the property in question. . By the Oourt. — The part of the order appealed from is affirmed with costs, and the cause remanded for further proceedings according to law.