Hughes v. Kershow

• Decision Date: 03 February 1908
• Citation: 93 P. 1116,42 Colo. 210
• Parties: HUGHES v. KERSHOW et al.
• Court: Colorado Supreme Court

93 P. 1116

42 Colo. 210

HUGHES v. KERSHOW et al.

Supreme Court of Colorado

February 3, 1908

Appeal from District Court, Denver County; Peter L. Palmer, Judge.

Action by Margaret Hughes against Carlton M. Kershow and others. From a judgment for defendants, plaintiff appeals. Affirmed.

Jeremiah Kershow died seised of three lots at the corner of Sixteenth and Market streets, Denver. These lots became the property of his minor sons. J. Henry Kershow, as guardian for such minors, in 1882 leased the same to Paul T. Hughes, for a period ending April 23, 1893. By the terms of the lease 'all erections and improvements and repairs made by party of the second part at any time during said term erected upon said premises' were to remain the property of the tenant Hughes. Within the sixty days last preceding the expiration of the time fixed in the lease Hughes was given the privilege of removing such erections, improvements etc., provided he had then 'discharged all rents, taxes and assessments' payable by him under the contract. The building first erected upon the premises was destroyed by fire in 1886. The insurance money not being sufficient to re-erect the kind of a structure desired, Hughes borrowed from appellant, who was plaintiff below and who was his wife some $10,000 or $15,000 with which to finish the same. Mrs Hughes took no notes or other evidences of this indebtedness, nor did she take any written security therefor. She asserts, however, that Hughes gave her a verbal lien upon the building as such security; and she further claims that after she had advanced some $3,000 or $4,000, and when the brickwork was only partly completed, J. Henry Kershow, the guardian, assured her that, if she would continue furnishing the money necessary to complete the building, he would see that she was repaid the same, and that she should have a lien on the improvement for all of the money so furnished. The building, being a brick structure covering the entire three lots and with a foundation capable of supporting five stories, was then completed; plaintiff furnishing the money. The lower part was used for stores. The upper part was finished off for and used as a theater. In December, 1892, four months before the expiration of the lease, owing to the hard times and other causes, Kershow, the guardian, and Hughes, the tenant, arranged for and completed the execution of a new lease extending the term of the tenancy to June 30, 1896, at a higher rental for the ground. Subsequently certain litigation arose between the parties, which was compromised and disposed of early in 1896. Through such compromise and settlement Hughes received a rebate of several thousand dollars upon rents due and $2,000 in cash, and turned the possession of the premises over to his lessors. On the 16th of June, 1898, plaintiff begun the present action for the enforcement of the lien so claimed by her upon the building. The answer of J. H. Kershow, guardian, was filed on March 11, 1899. The cause came on for trial on May 19, 1903, decision being rendered August 17th of the same year. From the decree, which was in favor of defendants, plaintiff prosecuted the present appeal.

Whitford & May, for appellant.

Wells & Chiles, for appellees.

HELM, J. (after stating the facts as above).

The building erected by Paul T. Hughes upon the three lots at the corner of Sixteenth and Market streets, Denver, leased from the heirs of Jeremiah Kershow, through J. H. Kershow guardian, is clearly within the class of improvements known in law as 'fixtures.' This structure, as re-erected after the fire, was of brick, covering the entire three lots, and with a foundation sufficiently strong to support a five story building. The ground floor was divided into storerooms and so used, while the upper portion was finished off for theatrical purposes, and subsequently became known as the 'Haymarket Theater.' But the parties invested this structure with the character of personalty. In the lease it was expressly stipulated that all improvements erected upon the property by the lessee should belong to him, and that he might remove the same during the 60 days last preceding the expiration of the lease, provided he had paid all rents, taxes, and assessments agreed to be discharged by him. Thus by express contract the building mentioned became personal property during the life of the lease. This provision was for the benefit of the lessee; but, to avail himself of such benefit, it was incumbent upon him to remove the building before expiration of the contract. If he failed to do so in accordance with the terms specified, then upon expiration of the contract, by operation of law, the building ceased to be personalty. Its character as a fixture attached, and it at once became a part of the real estate. During the existence of the lease mentioned, plaintiff advanced to Hughes the tenant, who was her husband, an aggregate of about $15,000 with which to rebuild or reconstruct the building first placed upon the leased ground and previously destroyed by fire. The loans thus made were not evidenced by writing, but, according to plaintiff's testimony, Hughes, as security therefor, gave her a verbal lien upon his interest so retained in the building. It is not necessary for the purposes of this case to consider the sufficiency of a lien thus created; for, assuming that this lien was valid and binding as between the parties, it could only extend to the interest held by Hughes in the property. And, when for any reason this interest legally terminated, plaintiff's lien thereon also terminated. Hence, as above observed, if Hughes allowed the period fixed in the lease to expire without payment of rents, taxes, and assessments and removal of the structure from the lots, as therein provided, the building became a part of the realty; that is to say, the inchoate right or claim of his lessors thereto ripened into complete ownership, and title vested in them. 'It is hardly necessary to add that the plaintiffs can claim no better title to the property in controversy than that which was vested in the tenant under whom they claim as mortgagee. When the mortgage was made, the building and...