Gem State Lumber Co. v. Union Grain & Elevator Co.

• Decision Date: 06 June 1929
• Docket Number: 5043
• Citation: 47 Idaho 747,278 P. 775
• Parties: GEM STATE LUMBER COMPANY, a Corporation, Respondent, v. UNION GRAIN AND ELEVATOR COMPANY, a Corporation, Appellant
• Court: Idaho Supreme Court

278 P. 775

47 Idaho 747

GEM STATE LUMBER COMPANY, a Corporation, Respondent, v. UNION GRAIN AND ELEVATOR COMPANY, a Corporation, Appellant

No. 5043

Supreme Court of Idaho

June 6, 1929

MECHANICS' LIENS-STATUTES-CONSTRUCTION-LEASES-LIABILITY-IMPROVEMENTS BY LESSEE.

1. Materialman's lien statutes are to be liberally construed, with view to carry out their objects and to promote justice in favor of materialman.

2. Failure of materialman's lien claim to state NAME of record owner of premises for improvement of which materials were furnished is not fatal.

3. Where lease specifically required certain alterations and repairs of leased premises by lessee, held, that lessee was lessor's agent in obtaining materials for such improvements so as to subject leased premises to materialman's lien.

APPEAL from the District Court of the Fifth Judicial District, for Bannock County. Hon. O. R. Baum, Judge.

Action to foreclose materialman's lien. Judgment for plaintiff. Affirmed.

Judgment affirmed; costs to respondent. Petition for rehearing denied.

Holden & Coffin, for Appellant.

The lessee of real property is not the agent of the owner so as to bind the real property with a materialman's lien unless the terms of the lease so provide, and mere knowledge on the part of the owner that improvements are being placed on the property by the lessee is not sufficient to make the owner the principal, and the lessee the agent so as to bind the property. (Hickman v. Freiermuth, 21 Cal.App 629, 132 P. 772; Williams v. Vanderbilt, 145 Ill 238, 36 Am. St. 486, 34 N.E. 476, 21 L. R. A. 489; Atlas Portland Cement Co. v. Main Line Realty Co., 112 Va. 7 70 S.E. 536; Cedar Rapids Sash & Door Co. v. Dubuque Realty Co., 195 Iowa 679, 192 N.W. 801; Sumrall v. Russell (Tex. Civ. App.), 255 S.W. 239; J. A. Greenleaf & Sons Co. v. Free-Andrews Shoe Co., 123 Me. 352, 123 A. 36.)

Merrill & Merrill, for Respondent.

The statutes giving a lien for materialmen and others must be liberally construed. (Phillips v. Salmon River Min. etc. Co., 9 Idaho 149, 72 P. 886; Armitage v. Bernheim, 32 Idaho 594, 187 P. 938; Abernathy v. Peterson, 38 Idaho 727, 225 P. 132.)

If a lease provides for improvements the property of the lessor may be subjected to liens for these improvements. (C. S., secs. 7339, 7344; Bloom on Mechanics' Liens, sec. 463; Stevenson v. Woodward, 3 Cal.App. 754, 86 P. 990.)

T. BAILEY LEE, J. Budge, C. J., and Givens, Wm. E. Lee and Varian, JJ., concur.

OPINION

T. BAILEY LEE, J.

Suit to foreclose materialman's lien. From a judgment in favor of respondent, Gem State Lumber Company, defendant Union Grain & Elevator Company appeals. The facts are these: Appellant corporation owned a plot of ground adjoining the O. S. L. railroad tracks in McCammon, Idaho, upon which it had a mill and elevator. In March, 1924, it leased the premises to Geo. W. Moench and L. F. Moench, who later, with appellant's consent, assigned the lease to the Peerless Grain Company, a domestic corporation, with its principal place of business at McCammon aforesaid.

The lease required that the lessee should effect certain alterations and make repairs, that the cost of such improvements should be borne by the lessee, the appellant to be in nowise responsible; that the lessee should post notices on the premises disclaiming all liability on the part of appellant for materials which might be furnished the lessee, and that appellant should have a lien on all improvements for possible damages consequent upon breach of condition.

This lease was never recorded and respondent had no notice of its terms until after it had furnished lessee the materials constituting the basis of this action. The lessee proceeded to make the required alterations and repairs, bought materials of respondent, promised to pay for them, actually used them in the projected construction, but wholly failed to post the notices required, and defaulted in payment. In the meantime, respondent having diligently made inquiry in and around the village of McCammon as to the ownership of the premises and having been advised that the Jesse Knight Estate was the true owner, duly filed its claim of lien denominating the Peerless Grain Company and Jesse Knight Estate as the reputed owners. Later it developed that, while said estate did in fact own the controlling capital stock of appellant corporation, the record title to the premises stood in the name of the latter. From the evidence introduced it appears that ap...