Mid-West Engineering & Const. Co. v. Campagna
| Decision Date | 13 September 1965 |
| Docket Number | No. 1,No. 50992,MID-WEST,50992,1 |
| Citation | 397 S.W.2d 616 |
| Court | Missouri Supreme Court |
| Parties | ENGINEERING & CONSTRUCTION CO., a Corporation, Plaintiff-Appellant-Respondent, v. Joseph A. CAMPAGNA, Randolph Development Corporation, a Corporation, and Campagna Corporation, a Corporation, Defendants-Appellants, Andrew Sansone and Roads Realty, Inc., a Corporation, Defendants-Appellants-Respondents, Victor Zeppenfeld and Helen Zeppenfeld, Defendants, Precon Concrete Products Company, a Corporation, Defendant-Respondent, Val Baker Company, Inc., a Corporation, Phil L. Miller Plumbing & Heating Company, a Corporation, E. A. Koeneman Electric Co., a Corporation, and H. A. Dailey, Inc., a Corporation, Defendants-Appellants |
Shifrin, Treiman, Agatstein & Schermer, Sylvan Agatstein, St. Louis, for Mid-West Engineering & Const. Co. Jerome Kalishman, Blumenfeld, Kalishman & Tureen, Melvin L. Hertzman, St. Louis, for Joseph A. Campagna and Campagna Corp.
Ackerman, Schiller & Schwartz, Gideon H. Schiller, Clayton, for Andrew Sansone and Roads Realty, Inc.
Oliver F. Erbs, Kirkwood, and Edward L. Sprague, Clayton, for Phil L. Miller Plumbing & Heating Co.
WELBORN, Commissioner.
This is an equitable mechanic's lien action. Various contractors and materialmen who furnished labor and materials for the construction of a building for the sublessee from an assignee of a 99-year lease sought to establish liens against the interest of the original lessee, his assignee, and the owner of the fee of the tract on which the building was erected. A referee appointed by the trial court heard the testimony and made findings, recommending that, except as to two of the claimants, the liens be allowed. The trial court originally accepted, in essence, the recommendations of the referee. On motions for rehearing, the trial court amended its judgment to deny, except as to one claimant, liens against the interests of the original lessee, his assignee, and the owner of the fee. Appeals followed by the parties seeking to obtain liens, and by the owner and 99-year-old lease assignee, seeking to have disallowed the lien allowed by the trial court to one claimant. Certain appellants also seek to be relieved of general judgments in amounts in excess of $15,000.00.
Andrew Sansone was the owner of a 300 ft. by 300 ft. unimproved tract located at the northwest corner of Clayton Road and Brentwood Boulevard, in St. Louis County. On May 27, 1954, Sansone entered into a 99-year ground lease with Victor Zeppenfeld. The rental specified was at the rate of $500 per month 'until at least one store on the demised premises is occupied; thereafter for the first 25 years a rental of $1,375.00 per month; and thereafter the sum of $1,500.00 per month.' The lease contained the following provision:
Through mesne conveyances, Zeppenfeld assigned the lease to Roads Realty, Inc. (referred to herein as 'Roads'), a corporation which became the assignee of the lease on August 4, 1954. Roads was apparently a Zeppenfeld family owned corporation. Although Victor Zeppenfeld was not a stockholder of Roads, he subsequently became vice-president of that company. He was president of Zeppenfeld, Inc., which, according to him, 'had the broadest authority to handle a matter pertaining to (Roads') * * * property * * *.' In such capacity, Victor Zeppenfeld apparently exercised wide authority in the transactions here under consideration. References herein to 'Zeppenfeld' are to him.
Joseph A. Campagna was at that time a successful St. Louis builder and real estate developer. He was president of Campagna Corporation, which was engaged in the business of building, general contracting and management of real estate. Together with other investors, Campagna became interested in the development of the Sansone tract. Campagna and his fellow investors organized a corporation, Randolph Development Corporation (referred to herein as 'Randolph'), of which Campagna was president, to develop the tract. On January 25, 1955, Roads subleased the tract to Randolph for the remainder of the original 99-year term at a ground rent of $700 per month until May 26, 1955; $1,500 per month until May 26, 1956; $2,100 per month until December 31, 1959, and $2,500 per month thereafter. By the lease, Randolph covenanted and agreed to build or cause to be built on the premises a commercial building at a cost of not less than $750,000.00.
On June 30, 1955, the Randolph stockholders entered into an agreement with Joseph A. Campagna, John J. Campagna and Donald J. Meyer (Campagna's attorney and secretary and a stockholder of Randolph), to which Randolph was a party, for the development of the Sansone tract. Joseph Campagna agreed 'to be responsible for the construction and delivery to Randolph * * * of (an) office building' at a cost of $1,100,000.00. The plan called for the construction of a building for doctors' offices. Some preliminary work on the project, including excavation work, got under way. However, the project fell through and the site remained undeveloped.
In the spring of 1958, Milford Soffer became interested in the erection of a bowling alley on the tract. He asked Sidney Bierman, President of Mid-West Engineering & Construction Co. (referred to herein as 'Mid-West'), to prepare cost estimates for the project. At Soffer's suggestion, Bierman got in touch with Campagna to explore the possibility of a construction contract.
Campagna was interested in the bowling alley project. However, because the income from the bowling alley building would be less than the ground rent for the entire tract, division of the tract into two separate parcels was necessary in order to secure financing for the project. Such division was agreed upon between Campagna and Zeppenfeld on behalf of Randolph's lessor, Roads. On April 16, 1958, Roads and Randolph executed a cancellation of the original lease between them and entered into two separate subleases under which the tract was divided into two parcels, Parcel A and Parcel B. Parcel A, upon which it was contemplated that the bowling alley should be built, fronted 185 feet on Clayton Road and had a depth northwardly of 165 feet. Parcel B was an L-shaped lot fronting 115 feet on Clayton and having a depth of 300 feet on the west line of Brentwood Boulevard, including the 135-ft. strip north and to the rear of Parcel A. Each of the subleases contained a provision whereby the lessee covenanted and agreed to erect improvements on each tract, at a cost of not less than $200,000 on Parcel A and not less than $600,000 on Parcel B. The ground rent for Parcel A was $750 per month for the entire term. For Parcel B, the ground rent was $1,350 per month until December 31, 1959, $1,466.67 per month to December 31, 1960 and $1,750 per month for the remainder of the term. Each lease provided that no materials should be furnished or used nor any labor performed in connection with the construction of the buildings unless lien waivers were delivered to lessor or proper bond therefor provided lessor.
On April 21, 1958, J. A. Mattus, sales manager of Mid-West, submitted a written proposal, addressed to Campagna Corporation, whereby Mid-West offered to construct the 'Cross Roads Bowling Lanes.' As subsequently amended, the proposal set a base price of $95,000, with alternates and extra items which produced a total price of $126,800.00. The proposal was for the construction of the building shell according to plans prepared by Campagna's architect. On April 29, 1958, Joseph Campagna executed the proposal on behalf of Campagna Corporation and returned it to Mid-West for its acceptance.
Although Mid-West did not indicate its acceptance of the proposal in writing until July 23, 1958, construction of the project got under way about May 10, 1958. Zeppenfeld and Sansone were aware that construction of the bowling alley was under way. Zeppenfeld visited the project site frequently after the work began, although it was not shown that Sansone was ever at the job site.
On May 21, 1958, Bierman received a Dun & Bradstreet report on Campagna which indicated that the latter's credit standing was poor. Mid-West was to be paid by the tenth of the following month for the work completed during the preceding month, less a 10% holdback. Mid-West billed Campagna Corporation $8,500 for work during May, but the bill was not paid by June 10. Bierman talked to Campagna shortly after that date and was promised that the account would be paid. However, payment was not forthcoming as Campagna had not obtained financing for the project. Nevertheless, the work continued and, as of June 30, the amount owed Mid-West was $37,169.12. Bierman made repeated...
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