Langley v. D'Audigne ( 1908 )

Mr. Chief Justice Shepard

delivered the opinion of the Court:

The act of July 2, 1884, providing for mechanics’ liens, was in force when these claims accrued, and their enforcement must be regulated thereby. The pertiment sections are the following:

“Sec. 1. Every building hereafter erected or repaired by the owner or his agent in the District of Columbia, and the lot or lots of ground of the owner upon which the same is being erected or repaired, shall be subject to a lien in favor of the contractor, subcontractor, materialman, journeyman, and laborer, respectively, for the payment for work or materials contracted for or furnished for or about the erection, construction, or repairing of such building, and also for any engine, machinery, or other thing placed in said building, or connected therewith, so as to be a fixture. * * * Sec. 4. * * * When' a building shall be erected or repaired by a lessee, or tenant for life or years, or a person having an equitable estate or interest in such building or the land on which it stands, the lien created by this act shall only extend to and cover the interest or estate of such lessee, tenant, or equitable owner.” 23 Stat. at L. 64, chap. 143; D. C. Comp. Stat. (Abert & Lovejoy) chap. 45, p. 366.

In determining the question presented by the record, we may assume, without so deciding, that the work done by the appellants under contract with Key was in the nature of the improvements and extraordinary repairs stipulated in clause 5 of the lease, and that the allowance of the first month’s rent on that account, and other circumstances, amounted to a waiver of the requirement that written permission therefor should first be had by the lessor.

The agreement between the owner and Key was a lease, not uncommon .in form, and cannot be considered at all as of the nature of a building contract. The Pennsylvania authorities relied on to convert it into a building contract, and make the lessee the agent of the owner to that extent (Woodward v. Leiby) 36 Pa. 437, 441; Fisher v. Rush, 71 Pa. 40, 44, and others) were controlled by a statute of that State. We need not pause to inquire into the points of difference or similarity between that statute and ours, for, if similar, those decisions are in conflict with the interpretation heretofore given to our statute. Albaugh v. Litho-Marble Decorating Co. 14 App. D. C. 113, 120. The relation created by the contract was that of lessor and lessee, and not of principal and agent. Such a contract is rather a negation of the fact of agency than otherwise. Rothe v. Bellingrath, 71 Ala. 55, 66; Albaugh v. Litho-Marble Decorating Co. supra. In that case the contract was for a lease for ninety-nine years, the lessee agreeing to remove a building from the lot and erect a new building thereon at a cost of not less than $75,000, which was to be surrendered to the lessor, her heirs or assigns, at the end of the term, without charge to her. Other provisions of the lease do not appear in the record. An attempt made to fasten a mechanics’ lien on the lot was denied. It was said by Mr. Justice Morris: “But this covenant involves no theory of agency, but quite the reverse. The parties to the lease dealt with each other, not as principal and agent, but practically as adverse parties. To hold that a lessor covenanting with a lessee for the security of his interest under the lease, the payment of rent probably, should construct a building upon the land in place of one to be demolished, would thereby and by virtue of such a covenant make the lessee his agent, and bind himself personally, as well as his property, for the contracts of the lessee in the performance of the covenant, seems to us to be wholly without warrant in law or in reason; and we greatly question whether even the most positive legislation could impose liability upon one person for the obligation of another in such a contingency. Certainly no such liability is imposed, or sought to be imposed, by our mechanics’ lien law.”

The lessee in this case was bound by the rule of the common law, as well as expressly by his covenant, to keep the building in good repair during the term; and the fact that the lessor agreed to permit him, under conditions, to make improvements and extraordinary repairs, for which she would allow him the sum of $5,000 to be deducted from the rent at the rate of $1,000 per year, did not alter the relations of the parties as lessor and lessee, or convert the lessee into her agent for that particular purpose. Section 4 of our statute, quoted above, meets the conditions here by expressly limiting the lien made by a lessee or tenant for life or years, to his interest only in the property improved. In Maryland, in a case where the contract was very much like the present one in substance, and under a clause of a statute quite similar to sec. 4, supra, it was held that the mechanics’ lien for material furnished for the erection of buildings under the terms of the lease attached to the interest of the lessee only. Hoffman v. McColgan, 81 Md. 390, 395, 32 Atl. 179, and earlier cases cited therein.

It seems quite clear from the facts and circumstances in evidence, that the complainants in this case, in contracting with Key, did not regard him as the agent of the lessor, but as acting for himself and in his own interest. He was apparently solvent, and was believed to have the support of Scott, a man with money. In one of the contracts it was expressly stipulated that for the last two payments Scott was to join in the execution of the notes. The aggregate contracts of the parties working on the premises about the same time amounted to far more than the stipulated allowance for improvements in the lease; and they knew this limitation, at least, and that it was payable only by credits on the rent of not more than $1,000 per year during the term. That they may have regarded the provision of the lease, of which they had heard, but did not consider it necessary to examine, as of some slight security, may be conceded. And it is true that, had Key continued to perform the covenants of his lease, they might, by timely and appropriate proceedings, have subjected the instalments due him as a credit on the rent, as they accrued. But that stipulation was necessarily dependent upon the continued performance by Key of the covenants of his lease, and his interest terminated with his failure and the consequent forfeiture of his lease. Failing in his attempt to keep the hotel business going, and having ceased to pay any rent at all, there was nothing on which he could have founded a claim for reimbursement by the lessor if he had paid for the improvements as he had contracted with complainants too. Their right attaching to his interest, as created by the lease contract, could rise no higher than his, and necessarily fell with the termination of the lease. Rothe v. Bellingrath, 11 Ala. 55, 60; Hoffman v. McColgan, supra,

While it may be true that the value of the property was materially enhanced by the improvements made by Key, those improvements at once became an inseparable part of the realty, and, by virtue of an established rule of law, reverted therewith to the owner on the failure of the lessee to perform the contract of lease under which he entered; and there were no dealings with, or representations by, the owner and lessor, that wonld estop her from the assertion of her right, as against the complainants. There is no recognizable foundation for the assertion of an equitable right, on their behalf, against the owner or her property. With ample opportunity to know just what the rights and interests of Key were, they extended credit to him and took the chances of his ability to pay. Sympathy with them in their disappointment cannot justify the transfer of their losses to the owner of the property whose conduct had nothing to do with their occasion.

The decree dismissing the bills was right, and will therefore be affirmed with costs. Affirmed.