Lemire v. McCollum
| Decision Date | 29 March 1967 |
| Citation | 425 P.2d 755,246 Or. 418 |
| Parties | J. C. LEMIRE, Plaintiff, Harley J. Hart, Respondent, Hubert C. Lane, Swan Lake Moulding Company, a corporation, Newman R. Kimes, dba Kimes' Plumbing and Heating Company, and R. W. Mitchell, Plaintiffs, v. Melvin W. McCOLLUM, Edna McCollum, Appellants, Arthur A. Beddoe, Doreen Beddoe, Harley J. Hart, Respondents. |
| Court | Oregon Supreme Court |
O. W. Goakey, Klamath Falls, for appellants.
Glenn D. Ramirez, Klamath Falls, argued the cause for respondent Harley J. Hart. On the brief were Ramirez & Hoots, Klamath Falls.
Beddoe & Wood, Klamath Falls, for respondents Arthur A. Beddoe and Doreen Beddoe.
Before McALLISTER, C.J., and PERRY, O'CONNELL and DENECKE, JJ., and REDDING, J. Pro Tem.
This is an appeal by Melvin and Edna McCollum, husband and wife, from a decree of the circuit court for Klamath county, foreclosing various mechanics' and materialmen's liens on Lot 31, in the First Addition to Madison Park, Klamath Falls, Oregon. These various liens arose out of the furnishing of labor and materials in the course of construction of a dwelling house upon the above lot. While in the trial court there were many parties, the only parties to this appeal, other than appellants McCollum, are respondents Harley J. Hart, and Arthur and Doreen Beddoe, husband and wife, and only their interests need be considered. The other parties were mechanics and materialmen whose liens were held to be valid and which are not contested in this court.
The facts giving rise to this appeal, which from a review of the record we find established by a preponderance of the evidence, are as follows:
Sometime in the summer of 1958, Arthur Beddoe, a lawyer in Klamath Falls, and his wife, were looking for a suitable home. It was suggested to them by Harley J. Hart, a building contractor in the area, that he could build a home for them which would be more satisfactory for their needs than one they were then contemplating buying. Beddoe and Hart then conducted negotiations with McCollum, a partner in a buiding supply firm, who had from time to time financed Hart's operations.
It was agreed orally between the three parties that McCollum would supply materials and would cause Hart to construct upon land owned or to be purchased by McCollum prior to the commencement of construction, a dwelling house such as was contemplated by the Beddoes. The price, while left somewhat indefinite, was to range between $25,000 and $29,000. Beddoe orally agreed to buy the home from McCollum upon its completion. The trial court concluded, and its conclusion is supported by a preponderance of the evidence, that the agreement reached was that McCollum was to be the owner of the land upon which the home was to be built. The home was to be built by Hart at McCollum's behest and Beddoe's only undertaking was that upon completion of the dwelling he would purchase it. Hart was to act as builder and general contractor for McCollum and had no contractual relation, express or implied, with Beddoe.
Under this arrangement, McCollum designated Lot 31 as the lot upon which the house was to be built, and on July 31, 1958, he made the first delivery of materials to the building site. On August 5, 1958, Hart commenced construction.
An unrecorded deed to Lot 31 at this time was held in escrow by Robert Veatch along with unrecorded deeds to other lots in Madison Park, under an agreement which accorded Hart, who was named as grantee in each of said deeds, the option to purchase any lot in the tract for the purpose of building thereon. Hart had made no payment on Lot 31. Title, therefore, both legal and equitable, remained in the escrow sellers, Robert and Helen Cheyne. May v. Emerson, 52 Or. 262, 96 P. 454, 96 P. 1065 (1908). Robert Veatch, the escrow agent, had been given a power of attorney by Hart empowering Veatch, on behalf of Hart, to convey any of the lots to a third person upon payment being made to Veatch therefor. This arrangement was intended to facilitate persons desiring Hart's building services to acquire land upon which to build. Hart contemplated no acquisition of ownership of any of these lots for himself. Because, however, of the escrow agreement, title had first to pass through Hart.
On August 28, 1958, McCollum paid for Lot 31 and caused title to pass first to Hart, and then by virtue of Veatch's power of attorney, Veatch executed a deed to the McCollums on behalf of Hart. Prior to August 28, 1958, neither Hart nor McCollum had title to Lot 31. Hart's only privity to the title was as a conduit of the title from the sellers, Cheyne, to McCollum. The purchase price was furnished by McCollum, who intended Hart to take no beneficial interest in the property. It was, on the contrary, clearly McCollum's intention to cause title to vest in himself. Under these circumstances, Hart's only contact with the title was as a resulting trustee for McCollum. Blacklaw v. Blacklaw, 150 Or. 244, 44 P.2d 728 (1935); Rhodes v. Peery, 142 Or. 165, 19 P.2d 418 (1933).
Appellant contends that because, for a fleeting moment, Hart held bare legal title, he cannot assert a lien on Lot 31 under the principle that one cannot hold a lien upon land which he owns. This contention, however, lacks merit. To hold that because title passed through Hart, as a mere conduit to McCollum, Hart cannot now assert a lien for his labor, is to disregard the substance of the matter. In substance, the McCollums paid for and obtained a conveyance to them from the Cheynes. Hart had no ownership interest in the property by virtue of his momentary status as resulting trustee which would require a court of equity to deny him a lien for labor which he performed at McCollum's instance.
Construction having commenced on August 5, 1958, continued until the home was completed on August 21, 1959. At that time the Beddoes discovered that the cost of the home amounted to $42,000, some $13,000 in excess of the maximum estimated cost. Because of this fact, the Beddoes refused to purchase the home.
Subsequently, the various mechanics and materialmen who were parties below, including the respondent Hart, filed liens. No challenge was made on trial or on this appeal as to the amount, quality of work done, dates or times of performance. No issue is raised on appeal as to the time-liness of filing of the Hart lien or of Hart's compliance with other statutory requirements to the perfecting of said lien.
It was established by a preponderance of the evidence upon the trial, and the trial court in its Findings, Conclusions and Opinion held that the Beddoes were not owners of the property in question, but that they had '* * * an oral option to purchase which * * * (they have) failed to exercise * * *.' The court further refused to enter a personal judgment against them for the amount prayed for by Hart, on the ground that the Beddoes had not contracted for the materials or labor furnished by Hart, but had contracted orally to purchase the completed dwelling from McCollum.
With reference to the McCollums, the trial court was warranted by the evidence in finding that at all material times, subsequent to August 28, 1958, the McCollums were the owners of the property in question and that they had entered into a contract with Hart prior to that time for the construction of the dwelling.
Pursuant to these findings and conclusions, the trial court entered its decree relieving the Beddoes of all liability and entering a judgment against the appellants McCollum in the sum of $8,272.83, with interest, costs and attorneys' fees, and foreclosed Hart's mechanics' lien for the above sum and ordered the real property as well as the improvement sold as provided by law. It is from this decree that the McCollums have appealed.
Turning first to the matters raised as to the liability of the Beddoes to Hart. The evidence preponderates in favor of the trial court's conclusion that the only undertaking of the Beddoes was their oral promise to purchase the completed dwelling from McCollum. Such oral agreement, being for the purchase of real property, was within the statute of frauds, ORS 41.580(5) 1 and, therefore, unenforcable. The trial court aptly characterized the Beddoes' undertaking as 'an oral option to purchase' from McCollum.
On trial, Hart contended that by the oral contract above mentioned, the Beddoes acquired a lienable interest in the premises. On appeal, McCollum urges that such agreement shows that the Beddoes, and not the McCollums, were the owners of the premises and held it subject to Hart's lien.
Though a contract purchaser's equitable interest in land is a lienable ownership interest under the mechanics' lien law, Schram v. Manary, 123 Or. 354, 260 P. 214, 262 P.2d 263 (1927) and Randolph v. Christensen et al., 124 Or. 661, 265 P. 797 (1928), the contract giving rise to such equitable interest must be legally enforcible. Panushka v. Panushka, 221 Or. 145, 349 P.2d 450 (1960). As the Beddoes' contract to purchase the property was oral, and thus unenforcible under ORS 41.580(5), the Beddoes, by their promise, obtained no equitable title which could be the subject of a lien for labor.
The fact that the Beddoes were not 'owners' within the meaning of the mechanics' lien statutes is alone sufficient to defeat the claimed lien of Hart as against the Beddoes. Another...
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