Lilenquist v. Pitchford's, Inc.

• Decision Date: 08 August 1974
• Parties: Jean LILENQUIST, Appellant, v. PITCHFORD'S, INC., an Oregon coporation, et al., Respondents.
• Court: Oregon Supreme Court

Page 93

525 P.2d 93

269 Or. 339

Jean LILENQUIST, Appellant, v. PITCHFORD'S, INC., an Oregon coporation, et al., Respondents.

Supreme Court of Oregon, In Banc.

Argued and Submitted Sept. 10, 1973.

Decided Aug. 8, 1974.

Robert G. Schimanski, Spokane, Wash., argued the cause for appellant. With him on the briefs were Bailey, Hoffman, Morris & Van Rysselberghe, Eugene.

Wm. G. Wheatley, of Jaqua & Wheatley, Eugene, argued the cause and filed a brief for respondents.

McALLISTER, Justice.

This is a dispute over the ownership and the right to remove various buildings built under leases and subleases on a tract of commercial property in Eugene.

Plaintiff Jean Lilenquist and defendant Pitchford's, Inc., are both successors in interest to prior lessees, but, for brevity's sake, we will refer to them as if they had been the lessees throughout the entire period here involved. The owner of the real property is not a party to this dispute.

In 1944 Standard Oil Co. leased the tract from the owner and immediately subleased it to Lilenquist. On September 1, 1947, Standard terminated its lease as to a portion of the leased premises, referred to in the record as Parcel B, and on October 1, 1947, the owner leased Parcel B directly to Lilenquist so that thereafter Lilenquist held Parcel A under a sublease from Standard Oil and Parcel B under a lease directly from the owner.

In 1948 Lienquist subleased both parcels to Pitchford's. Through the exercise of options to renew, both the leases to Lilenquist and her sublease to Pitchford's were renewed from time to time and continued until January 31, 1969. This dispute arose when, on termination of all the leases, both parties claimed ownership and the right to remove the buildings built on the land over the years.

We must first determine the nature of this proceeding, which, in turn, determines our scope of review. Plaintiff initiated it as a declaratory judgment proceeding and classified it, both in this court and the court below, as a suit in equity. In the trial court defendant argued that this proceeding was in the nature of an action at law, but did not raise that issue in this court. The trial court treated the proceeding as a suit in equity and terminated it with a decree. We think it is clearly in the nature of an action at law and must be so treated.

Whether a declaratory judgment proceeding is to be treated as a suit in equity or an action at law depends on the essential nature of the proceeding, which, in turn, is normally determined by the nature of the relief sought by the parties. Oregon Farm Bureau v. Thompson, 235 Or. 162, 199, 200--205, 378 P.2d 563, 384 P.2d 182 (1963) (concurring and dissenting opinions on rehearing representing the views of five members of the court on this question); Mayer v. First National Bk. of Oregon, 260 Or. 119, 133, 489 P.2d 385 (1971); May v. Chicago Insurance Co., 260 Or. 285, 291, 490 P.2d 150 (1971); Frontier Ins. v. Hartford Fire Ins., 262 Or. 470, 478, 499 P.2d 1302 (1972); Lee v. State Farm Auto. Ins., 265 Or. 1, 507 P.2d 6 (1973).

While buildings are usually considered part of the realty to which they are attached, parties to a lease may agree that they shall retain their character as personal property. Mattechek v. Pugh, 153 Or. 1, 6--7, 55 P.2d 730, 168 ALR 725 (1936); Gen. Petroleum Corp. v. Schefter, 141 Or. 349, 352, 16 P.2d 645 (1933). By virtue of various lease provisions providing for removal of buildings the parties here and the landowner did so agree. In such a case the right of removal, if contested, is usually settled in an action in replevin or conversion. Wheeler v. McFerron, 33 Or. 22, 24, 52 P. 993 (1898); Kennedy v. City of Hood River et al., 122 Or. 531, 259 P. 911 (1927); Mattechek v. Pugh, supra; Gen. Petroleum Corp. v. Schefter, supra.

The relief prayed for by the plaintiff in this case is the same relief which she could have obtained by an action in replevin, i.e., the right to remove certain buildings from the premises. Since this proceeding is essentially legal in nature we do not review the case de novo, but as an action at law. This means that any factual findings in the trial court are binding on us if they are supported by substantial evidence. However, since most of the issues presented will be decided as a matter of law the precise scope of our review in this case may not be important. See Lee v. State Farm Auto. Ins., supra.

This case has been complicated because both parties claimed all buildings on both parcels without regard to when, by whom, or under what lease provision, they were built. In order to decide the legal questions involved, it is necessary to separate the buildings into several categories, which we shall do.

We deal first with the main building known as the shop building. Standard Oil's 1944 lease from the landowner gave Standard the right to remove any buildings and equipment placed by it on the premises during its leased term. The sublease from Standard to Lilenquist provided:

'NOW, THEREFORE, in consideration of the mutual covenants herein contained it is agreed between the parties hereto as follows:

'As soon as the Lessee is able to secure the necessary materials and equipment and the required permits or authorization from the Governmental authorities having control over the same, Lessee agrees to construct on the demised premises at Lessee's sole cost and expense a building 40 50 for truck services, described as Portion 'B' on the sketch attached hereto as Exhibit 1 and made a part hereof. Said buildings shall be erected at the location shown on Exhibit 1 and shall cost completed not less than Five Thousand Dollars ($5,000.00). Said building shall be built of steel or other fireproof material, shall be constructed in a good workmanlike manner and shall conform in all respects to the Building Code of the City of Eugene, Oregon.

'Lessee shall have the right at their sole cost and expense to construct other buildings and improvements on the demised premises provided the location, type, specifications and cost thereof are approved by the Lessor in advance of any construction. All such additional buildings or improvements constructed or placed upon the demised premises by the Lessee may be removed by the Lessee at Lessee's own cost upon the expiration or sooner termination of said sublease, provided that Lessee repairs and restores all damage done to the premises and the other buildings located thereon resulting from such removal.'

The parties apparently agree that the shop building was built by Lilenquist pursuant to the first paragraph of the Standard-Lilenquist lease quoted above. That paragraph obligated Lilenquist to build the 40 50 building but did not grant her any right to remove the building. The right to remove buildings was granted Lilenquist by the second paragraph quoted above, but was limited to 'other buildings and improvements', which clearly means buildings other than the specific building described in the first paragraph.

Under the above lease provisions we hold that the shop belonged to Standard, that title to the shop passed to the owner when Standard abandoned the shop by failure to remove when it terminated its lease to Parcel B in 1947. In 1970 the owner assigned to Pitchford's any interest it had in the buildings on the premises. Pitchford's thereby acquired the right to remove the shop building and that part of the trial court's judgment declaring that Pitchford's owned the shop is affirmed.

We turn to the next class of buildings, which is comprised of a carport and a parts building. Some time before Lilenquist subleased the premises to Pitchford's she built a carport extending between the shop and the office, but attached to neither. She also built a building described in the Linenquist-Pitchford's sublease as 'the structure located on Parcel 'A' containing the present parts department'.

In order to recover property in a replevin proceeding the plaintiff must identify the property claimed with reasonable certainty. Farmers' Loan and Mtg. Co. v. Hansen, 123 Or. 72, 75, 260 P. 999 (1927); Guille v. Wong Fook, 13 Or. 577, 584, 11 P. 277 (1886). Plaintiff has failed to carry her burden of proof as to these two buildings. There is no doubt that when the 1948 sublease to Pitchford's was executed, the carport existed as a separate improvement and there is evidence that there was a building in some form that housed Lilenquist's parts department. There is no evidence, however, that either the carport or the parts building still existed in an identifiable form when the plaintiff filed this proceeding or at the time of trial. On the contrary, what evidence there is indicates that both of these buildings have been so thoroughly incorporated into the expanded shop building that they no longer exist in any separate identificable from.

Because plaintiff failed to prove that the carport and parts building still existed as separate identifiable articles of property, we affirm that part of the trial court judgment as it pertained to these buildings.

This holding could be rested on the alternative ground that there is no evidence that either the carport or the parts building could be removed without material injury to those buildings or to the realty. The record supports only an inference that any attempt to remove what remains of these buildings would substantially destroy the shop and create a pile of rubble in lieu of the two former buildings.

In Henkle v. Dillon, 15 Or. 610, 614--615, 17 P. 148, 150 (1888), we said:

'* * * So, when things personal in their character are about to be annexed to the realty, and, before such annexation the parties by express agreement provide that such chattels shall retain their character as personalty, or retain their character as chattels, although attached to the realty in such manner that without such agreement they would lose that character, they will continue to be chattels, If they can be removed without...