Galveston Exhibition Association v. Perkins

A. J. Perkins Co. filed their petition in the District Court of Galveston County on the 19th of August, 1889, against the Galveston Exhibition Association, the Leon H. Blum Land Company, the Island City Savings Bank, May Wainwright, B. Blum Co., Henry Rosenberg, Joseph E. Wallis, Edward D. Garratt, and M.P. Hennessy, alleging that the Galveston Exhibition, Association was indebted to them on open account in the sum of $2003.58 for work and labor done and materials, furnished for certain improvements on 10-acre outlots 101, 102, 103, 104, 126, 127, 128, 129, in the city of Galveston, commonly known as the "Fair Grounds," and sought a foreclosure of alleged liens thereon. The petition alleged that the Leon H. Blum Land Company, the Island City Savings Bank, Henry Rosenberg, Joseph E. Wallis, and Edward D. Garratt claimed or pretended to claim some interest in the said real estate, and upon this allegation of interest they were made defendants. The petition also alleged that May Wainwright, B. Blum Co., and Edward Ketchum claimed liens upon the same property; and that the defendant M.P. Hennessy had seized under a judgment some of the material upon which plaintiffs claimed lien and had sold the same, and sought judgment against him for $150, the alleged value.

All the persons alleged to claim liens came in and asserted them, these claims being similar in character to that, asserted by plaintiffs.

The Galveston Exhibition Association, a private corporation, answered by demurrers and a general denial of the claim of plaintiffs and of Ketchum. All the other defendants answered by demurrers and general denials of all facts alleged other than their claims of interests in the property on which liens were claimed.

The case was tried by the court without the intervention of a jury and a judgment rendered in favor of A. J. Perkins Co. against the Galveston Exhibition Association for $2039.63; in favor of Edward Ketchum against the association for $673.70; in favor of May Wainwright for $775.45; in favor of B. Blum Co. for $184.86, and adjudged the same to be prior liens on all the buildings, erections, or improvements on outlots 101, 102, 103, 104, 126, 127, 128, and 129, in the city of Galveston, and ordered the same sold and the money applied pro rata to the payment of the judgments. Without ascertaining or decreeing that the Galveston Exhibition Association had any right or title in the real estate whatever, the court, went, on to decree that the said judgments were liens on all the right, title, interest, or claim which the said Galveston Exhibition Association held between the 28th day of June, 1889, and the 28th day of July, 1,889, in and to said lots of land, and also ordered all the title, interest, and claim which the Galveston Exhibition Association held in and to said lots to be sold. It also gave judgment against the defendant Hennessy for $150.

Whatever right the Galveston Exhibition Association had in the property described in the petition is based on the following instrument:

"State of Texas, County of Galveston. — Know all men by these presents, that we, Henry Rosenberg, being the owner of seventeen seventieths of the hereinafter described property; Leon Blum, being the owner of twenty-two seventieths thereof; D. The. Ayers, being the owner of twenty-one seventieths thereof, and the Island City Savings Bank, a body politic and corporate under the laws of the State of Texas, being the owners of ten seventieths thereof, do hereby promise and obligate and bind ourselves unto the Galveston Exhibition Association, that upon the performance by the said association of the covenants hereinafter agreed upon, that we will, upon a reasonable request of tile said Galveston Exhibition Association, at any time after the 30th day of June next, the said association having complied with its covenants, at our own proper cost and charge, execute, acknowledge, and deliver, or cause to be executed, acknowledged, and delivered, a deed or deeds of conveyance such as will be sufficient to convey, assure, and confirm to the said Galveston Exhibition Association, its successors and assigns, a good and absolute and indefeasible estate of inheritance in fee simple, clear of all incumbrances, of and in the following premises and property, to-wit: All those certain tracts or parcels of land lying and being situate in the County of Galveston and State of Texas, namely: Outlots Nos. 101, 102, 103, 104, 126, 127, 128, and 129, according to the map or plan of the Galveston City Company, of the city of Galveston, together with all the buildings and improvements of every kind and description upon said premises. The condition of the above obligation is such that whereas tile said Galveston Exhibition Association has paid to its the sum of $10,000 cash, and has agreed to pay its the additional sum of $14,000 on or before the 30th day of June, A.D. 1889; now if the said Galveston Exhibition Association shall well and truly pay us the said sum of $14,000 on or before the 30th day of June, A.D., 1889, then the above obligation is to remain in full force and effect; but if the said association fails to pay the said sum of $14,000 on or before the 30th day of June, A.D. 1889, then this obligation is to become null and void and of no force or effect, and the said association shall forfeit the said sum of $10,000 already paid by it, and no part thereof shall be refunded or repaid to the association.

We further agree that as a part, of the consideration of the said sum Of $10,000 already paid to us that we do perm it and suffer the said Galveston Exhibition Association peaceably and quietly to enter upon, hold and enjoy said premises until the said 30th day of June, 1889, without let or hindrance on our part.

Witness our hands this 15th day of March, A.D. 1889.

THE ISLAND CITY SAVINGS BANK, N. WEEKES, Cashier, H. ROSENBERG, D. THE. AYRES, THE LEON H. BLUM LAND CO., Per LEON BLUM.

Witnesses: T. Evans, S.G. Selkirk, W.J. Frederich, C.G. Sweet, C.G. Sweet, J.W. Burson, B.F. Caston, E. de Normandie.

The Exhibition. Association was in possession of the premises from the latter part of March, 1889, until about the 10th of July, 1889. After the 10th of July, 1889, the defendants Rosenberg, Wallis, Garratt, Blum Land Company, and Savings Bank, took possession of the property and have held it ever since.

The material alleged to have been furnished and labor performed on which liens are claimed was furnished and performed while the Galveston Exhibition Association was in possession under the instrument above set out.

The material question presented by the first, second, and third assignments of error is, did the Galveston Exhibition Association have any interest in the property that would enable it to fix liens on it such as are sought to be established and enforced in this case? for there can be no claim that the persons who executed the instrument before set out ever made any contract with any of the persons claiming liens. All, such persons must be held to have known the extent and character of the interest or right of the association.

Under the instrument it, would have been the right of the association, on payment of the $14,000 within the time prescribed, to have title for the instrument binds its makers to convey on compliance by the other party with its terms. It did not evidence a mere lease, but gave to the association the right to acquire title and in the meantime the right to occupy it. The instrument on its face, however, provided that it should cease to confer such a right if the sum named was not paid on or before June 30, 1889. Parties have the right to make such contracts, and it is the duty of it court to confirm them as made. The instrument then evidences an agreement to convey the land described ill it, but there is no claim that the association ever made the payment that would have entitled it to a conveyance.

The land continued to be the property of the makers of that instrument, or of persons claiming under them, and as there was no agreement that the association should have the right, to remove the improvements made on the land, or hold the same as a property distinct therefrom, it must be held that title to all improvements made on the land became the property of its owners. Dustin v. Crosby, 75 Me. 75; Jones on Liens, 1247; Phillips on Mechanics' Liens, 186. No facts are shown that would vary this general rule, nor does it even appear that the material used and labor done were not applied to the repair or enlargement of improvements existing when the contract was made. That they would so become if the payment was not made by the association, those now asserting lien must be held to have known. Jones on Liens, 1247-1252. Under the statutes of this State Do person other than the owner or proprietor, his agent, trustee, contractor, or contractors, can make contracts fixing liens on lands, houses, buildings, fixtures or improvements such as are asserted in this case. Sayles' Civ. Stats., art. 3146; Gen. Laws 1889, p. 110.

That the persons claiming liens made contracts with any such persons is not claimed, and the only contracts on which they base their rights were made with the Galveston Exhibition Association. It seems to be well settled that a person in possession of land under a written contract to purchase is not, within the meaning of such statutes as those under which the persons claiming liens assert rights, the owner of the land or of the improvements he may place upon it, and for this reason cat not fix lien on either. McGinnis v. Purrington,43 Conn. 143; Scales v. Griffin, 2 Douglass, 54; Hayes v. Fessenden,106 Mass. 228; Wagar v. Briscoe, 38 Mich. 587; Hickox v. Greenwood, 94 Ill. 266; Wilkins v. Litchfield, 69 Iowa 465; Walker v. Burt, 57 Ga. 21. The makers of the instrument in question continued to be the owners of the property, and improvements made thereon became a part of it and theirs as fully as was the land, and the association never having acquired title or right thereto within the period prescribed, certainly could not incumber it with liens. If the association had acquired an interest in the property that interest might be incumbered by it with liens which ought to be enforced to the extent of the interest, but under the contract all the right or interest, other than a possessory right limited to a fixed period passed, it ever acquired was the right to pay the sum stipulated within the time prescribed and thus become entitled to a conveyance of the fee, but this right could not be kept in existence even for the protection of persons with whom it had made contracts in violation of the agreement which conferred all the right it had. If persons now asserting liens had in proper time paid the balance of the purchase money we see no reason why they might not enforce all lawful liens growing out of arty contracts they may have, made with tile association, but that never was done.

It seems to be urged that the owners of the property are bound by the contract of the Galveston Exhibition Association because they became stockholders therein, and some of them perhaps directors, but this can not make the contracts of the association their contracts; and under such a statute as that in force in this State the mere fact that the owners of the property acquiesced or even consented to the furnishing of material to be used on the premises, or to the performance of labor, could not fix liens on the property. If would be different if the statute made the consent of the owner, and not his contract, the basis for liens. Jones on Liens, 1251.

After June, 30, 1889, two of the present owners of the property bought the interest of one of the makers of the instrument before referred to, and in the conveyance to them the contract is referred to and the vendees assumed the obligation of their vendor created thereby, whatever that might be; but this could not give life to the liens the association could not create. Such evidence would tend to show that the vendor may have thought that the instrument then still imposed upon him some obligation, but his purpose was evidently to protect himself against any possible obligation and not to create new ones.

We are of opinion that the claimants of the liens do not show facts entitling them to have sold in payment of their claims any of the improvements on the lands described in the petition, and that as the Galveston Exhibition Association has no interest whatever in the property, no sale of either improvements or lands, or supposed interest therein, should be directed to be made, for the effect of such a sale under decree would but tend to cloud the title of the real owners. The judgment against Hennessy was also unauthorized. Whether facts existed to give liens to all the claimants had the Galveston Exhibition Association been the owners it is unnecessary to consider, in view of the other questions considered.

The judgment will be reversed and the cause remanded.

Reversed and remanded.

Delivered February 27, 1891.

Henry J. Labatt, for appellees, argued a motion for rehearing. The motion was refused.