Cahill-Swift Mfg. Co. v. Sayer
| Decision Date | 03 December 1918 |
| Docket Number | Case Number: 9389 |
| Citation | 178 P. 671,1918 OK 688,72 Okla. 88 |
| Parties | CAHILL-SWIFT MFG. CO. et al. v. SAYER et al. |
| Court | Oklahoma Supreme Court |
¶0 1. Mechanics' Liens -- Separate Lien on Building and Improvements--Priorities--Lien Against the Fee.
Under section 3862, Rev. Laws 1910, providing that, if the title to land is not in the person with whom a contract for the erection of a building thereon is made, but is leased and unimproved, a lien shall be allowed on the building and improvements separately from the real estate, where the unimproved land was leased, the lessee building thereon, the lessor's fee in the premises was not subject to lien arising under the building contract made with the lessee.
2. Same--Priority--Land of Lessor--Notice.
Where the unimproved land was leased, the instrument giving the lessor a first lien on a building to be erected to secure the unpaid rent, etc., and the contractors for such building had notice that the party with whom they dealt was merely lessee, and not the owner of the land, the lien of the lessor on the building erected under the lease was superior to the contractors' lien under section 3862, Rev. Laws 1910. Having notice of the lease giving a lien for unpaid rents, they were chargeable with knowledge of all facts they might have ascertained by the exercise of reasonable diligence, as by inquiry of the lessor, as to the amount of the rent unpaid.
Error from Superior Court,Muskogee County; Hal C. Thurman, Judge.
Action by the Cahill-Swift Manufacturing Company and others against the Baltimore Investment Company and Vade N. Sayer. Judgment for plaintiffs for foreclosure of mechanics' lien on leasehold interest and adjudging it inferior to lessor's lien under a lease, and plaintiffs bring error. Affirmed.
John H. Mosier, B. B. Wheeler, Malcolm E. Rosser, Norman E. Reynolds, and Paul Williams, for plaintiffs in error.
Blakeney & Maxey, W. W. Noffsinger, and Y. P. Broome, for defendant in error Sayer.
¶1 This action was brought by Cahill-Swift Manufacturing Company against the Baltimore Investment Company to recover for material furnished in the erection of a building, and to foreclose a material-mans' lien. The defendant Sayer was made a party to the action because he owned the fee in the land on which the building was erected. He leased the premises to the investment company for a period of 99 years. The lease, in addition to an annual rental, provided for the erection of a building at the expense of the lessee, and also for the payment by the lessee of all taxes and other charges against the premises. By the terms of the lease a first lien was given to Sayer to secure the payment of the rentals and the performance of the other covenants of the lease. The contract under which the materials were furnished was made with the lessee, and not with Sayer Judgment below was for the plaintiff for the amount claimed and for the foreclosure of the lien on the leasehold interest, including the building but not on the fee, and holding also Sayer's lien under the lease for rentals superior to the materialman's lien on the improvements.
¶2 The questions to be determined here are (1) Whether the fee simple, title of Sayer is chargeable with the statutory lien for the materials furnished; and (2) whether Sayer's lien, under the lease for the unpaid rent, is superior to the materialman's lien on the improvements.
¶3 Section 3862. Rev. Laws 1910, under which the materialman's lien is claimed, provides:
¶4 It will be noticed this statute gives the lien where the contract is made with the owner, but if the land on which the material is to be used is leased, and the title is not in the person contracting, the lien is on the improvements and leasehold estate, and not on the land; that is to say, the lien attaches only to the estate and interest owned by the person making the contract.
¶5 This statute was construed by the United States Circuit Court of Appeals in the case of Mellon v. St. Louis Union Trust Co., 225 F. 693, 140 C.C.A. 567, where the identical question was presented. It was there held the lien attaches to the improvements and leasehold estate only, and not to the realty. In this connection it was said:
"* * * The language of the statute clearly shows that the mechanic's lien, when the realty is leased and unimproved, shall be allowed only on the buildings and improvements on such land, separately from the real estate."
¶6 This statute was adopted from Kansas, and was construed by the Supreme Court of that state in the case of Huff V. Jolly, 41 Kan. 537, 21 P. 646. There it was held that the lien allowed by the statute was upon the realty with buildings attached only to the extent of the ownership of the one who contracted for the construction of the buildings. In the case of Chicago Lbr. Co. v. Schweiter, 45 Kan. 207, 25 P. 592, and in Getto v. Friend, 46 Kan. 24, 26 P. 473, it was held:
"For material furnished for a building to one who held under executory contract of purchase a mechanic's lien is confined to the equity of the purchaser under the executory contract."
¶7 In the case of Forbes v. Mosquito Fleet Yatch Club, 175 Mass. 432, 56 N.E. 615, where the lease required the lessee to erect a building, it was held that a mechanic's lien applied only to the buildings and leasehold, and not to the fee of the lessor.
¶8 Counsel concede there can be no lien except where the contract is made with the owner, but they insist that the provision of the lease requiring the lessee to erect a building constitutes the lessee the agent of the lessor for that purpose, and the contract becomes the...
To continue reading
Request your trial