Sager v. Renwick Park & Traffic Ass'n

This action was brought to foreclose mechanics’ liens. The Renwick Park & Traffic Association is the owner of certain premises used as an amusement park. This association, on the 5th day of May, 1914, entered into a-written lease with one Paul K. Clymer, by the terms of which the said Paul K. Clymer covenanted and agreed that he would take the said premises, subject to a lease for the year-1914 to one William Jarvis, and subject to the right of the Renwick Park & Traffic Association to “make such changes or improvements therein by virtue of the contract now existing between the party of the first part and the New York State Dredging Corporation” during the seasons of 1914, 1915, 1916, 1917, 1918, and 1919, “with full privilege to the party of the second part, so long ás he lives up to the terms of this lease, to grant concessions, to lease grounds for purposes appropriate thereto, and to enjoy and receive the money rent from such concessions and leases.” The party of the second part (Clymer) further covenanted that he would, “for the use of said premises, do all in his power to maintain the park in attractive condition and increase its popularity as a pleasure resort, and will keep the grounds in a satisfactory condition for the purpose of a pleasure resort, and will also at his own expense keep the buildings and docks in as good condition and repair as they now are, and will install and leave thereon at the expiration of his lease the necessary equipment for lighting the buildings now situated upon the premises, and will pay to the party of .the first part as rental during the season of 1914 and 1915 all taxes that may be taxed or assessed against said premises, and all insurance premiums placed upon buildings and fixtures by the party of the. first part, to an extent and valuation of not to exceed $10,000 of insurance, and will pay all interest on the mortgage hereafter to be given to the New York State Dredging Corporation,” etc.

Other provisions were made for the payment of the rentals for the remainder of the term, and the party of the second part further covenanted “to expend the sum of thirty-five hundred dollars ($3,500) in the construction of an outdoor theater along lines and plans and in a location to be mutually agreed upon between the party of the first part and the party of the second part, and in the installation of lights and permanent improvements to be mutually agreed upon between the parties hereto, which said sum is all to be expended during the year 1914; it being covenanted and agreed that, unless hereinafter mutually otherwise agreed, at least $3,000 of said $3,500 shall be expended in the construction of the theater and equipment, and in consideration thereof the party of the first part agrees to provide for $1,500 of said

It was then further understood and agreed “that the title of the aforementioned theater and its equipment, and to all other property and amusement devices placed upon the premises hereby leased,” should be vested in and remain in the parties of the first part, “unless otherwise mutually agreed upon in writing between the parties hereto from time to time, but that at the expiration of this lease, in the event that the party of the second part has repaid to the party of the first part the $1,500 advanced, with all accrued interest thereon, and also has made over all other payments and faithfully performed as in this agreement provided, that then and in that event the party of the first part will at its option (1) either repay to the party of the second part the then present value of said theater and its equipment, * * * or will permit him to remove the same from the leased premises, or to give to the party of the second part the privilege of operating the said theater without rental charge for a period of three years hereafter, subject to such reasonable restrictions as may hereafter be mutually agreed upon, and as shall not be detrimental to the orderly operation of said park; and (2) the party of the first part will also at its option either repay to the party of the second part the then present value, to be determined by appraisers selected as aforementioned, of all other property, except lighting equipment, hereinbefore referred to, placed in said park by the party of the second part, which are not permanently attached to and a part of the real estate unless at time of construction agreed to be personalty, or will give in writing to the party of the second part a bill of sale of such property so installed by the party of the second part and permit him to move the said property from said premises.” It was further agreed that the party of the second part might renew the lease, under certain conditions, for a period of five more years.

[1] After this lease was executed the Renwick Park & Traffic Association turned over to Clymer the sum of $1,500, which was obviously a loan to enable him to perform his covenant of expending “the sum of $3,500 in the construction of an outdoor theater” and in the installing of lights, and may be construed as a waiver of the condition that Clymer was to furnish an itemized statement of the materials and labor used in the construction of the improvements. But the net result of the contract expressed in the lease was. that Clymer leased

The Renwick Park Amusement Company had not taken an assignment of the lease existing between the Renwick Park & Traffic Association and Clymer, covenanting to fulfill his covenants, but had become a sublessee, and it was with this corporation that the material-men and laborers dealt in the construction of the buildings and improvements for which liens were filed against the premises. The most that could be properly claimed, it would seem, would be that the Renwick Park & Traffic Association had consented to the construction and equipment of a summer theater upon the premises of a value not to exceed $3,500; but it is not disputed that more than this sum in cash has already been paid on account of this property, and it is now sought to charge the owners of the land with improvements aggregating $5,177.46, in addition to the sum of $6,110.84 which the Amusement Company has paid in cash on account of said improvements.

[2] No evidence is claimed to exist outside of the lease to Clymer of any consent on the part of the Renwick Park & Traffic Association to the construction of the improvements for which these liens are filed, and it is attempted to make the covenant of Clymer that he “will for the use of said premises do all in his power to maintain the park in attractive condition and increase its popularity as a pleasure resort, and will keep the grounds in a satisfactory condition for the purposes of a pleasure resort, and will also at his own expense keep the buildings and docks in as good condition,” etc., the foundation for such alleged consent. But a covenant to maintain the park in its then condition, and to use his best efforts to improve its popularity, is clearly

indebted to him in any manner for the work and labor which he performed. The referee has found, as a fact, that during the performance of the work and the furnishing of the material Frederick Krapp, one of the lessors, was present on different occasions while the repairs were being made, and conversed with the plaintiff, and consented thereto. Upon this finding it cannot be held, as matter of law, that Krapp became a party to the contract, or in any manner indebted to the plaintiff for making the repairs upon the hotel property. No lien can be created upon the interest of an owner, except when he has entered into a contract, either express or implied, to pay for the work and labor. Knapp v. Brown, 45 N. Y. 207 . The mere consent of the owners of the fee that his tenant for a term of years) may improve the premises by erecting buildings thereon, or repairing those already constructed, does not obligate him, either legally or morally, to pay for the same. The tenant had the right to make the repairs without the consent of his lessors, and it is absurd to claim that the approval of the act of their tenant in this respect amounted to a consent on their part that their title might be charged with the cost of the repairs, if the tenant failed to keep his promise to pay the contractor therefor. In Knapp v. Brown, supra, it was one of the express term's of the lease that the tenant should make certain specified repairs and improvements as one of the considerations for making the lease, and the court'held that this did not subject the lessor’s title to a lien) in favor of the contractor who made the repairs.”

It is true that the statute has been changed somewhat in form since Mr. Justice Barker wrote, but it is still necessary that the consent of the owner should be secured, or that he should request the work to be done, and that there should be a contract relation, expressed or implied, between the owner and the materialman or laborer. The statute contemplates that the owner of property shall not be charged with the cost of improvements made upon his premises without such an assent to such improvements as would morally obligate him to pay for the same, and where an entire stranger to the contract contained in the lease enters upon the premises under a sublease and elects to make improvements, the owner of the fee, without his consent, cannot be morally or legally liable for the payment of the debt of such stranger. Whether the lienors could have enforced an obligation against the Renwick Park & Traffic Association for the construction of a theater costing not more than $3,500 is not before us. No such question is here presented. More cash has been expended upon these improvements than the contract called for.

The question here is whether a building and other improvements, not contemplated by the lease, and which were not constructed by Clymer, but by his lessee, under no contract obligation to construct any buildings or improvements whatever, can now become a charge upon the fee of these premises. We find nothing in the contract of lease which authorized Clymer to construct buildings or improvements in excess of $3,500, and these only under special conditions; and without some evidence that the owners of the fee consented to these erections under such conditions as to impose a moral obligation at least, we can see no foundation for the judgment now under consideration. The tenant in possession had a right to make these improvements without the consent of the owners. Jones v. Manning, supra. It merely took the risk of losing the investment, which was not provided for in its lease, and, as was said by Mr. Justice Barker:

“The mere consent of the owner of the fee that his tenant for a term_ of years may improve the premises by erecting buildings thereon, or repairing those already constructed, does not obligate him, either legally or morally, to pay for the same.”

The consent contemplated by the statute is not a consent given to the tenant, but a consent given to the materialman. It is a holding out of the owner as acquiescing in the giving of credit which is at the foundation of the right to a lien against the owner of the fee, and where the contract is made with a tenant in possession under a lease having no connection whatever with the owner of the fee, it cannot reasonably be contended that the latter is either morally or legally hound to compensate the lienors.

The case of Otis v. Dodd, 90 N. Y. 336 , on which the learned court below relies, is to be distinguished from this case by the fact that in that' case the owner of the fee leased the premises to the Union Portland Cement Company, under a contract which required that company to construct certain buildings upon the premises, and to permit them to become a part of the realty. The Cement Company entered into a contract for the construction of these particular buildings, and the lessors came upon the premises, and assisted in locating the buildings, and gave directions as to their construction. The sole question determined by the court in that case was whether “the simple consent of Dodd and Ross to the making of the erections and improvements upon their real estate was sufficient, under the act referred to, to give the plaintiff a lien upon their interest in the real estate,” and it was held that it did. There, however, the improvements were required by the contract for the benefit of the lessors, while in the case at bar the lessee is to have the benefit of such erections. There the lessee, who was bound to make the erections, entered into the contract for the construction of the buildings in pursuance of the contract, while here the lessee sublet the premises, and the subtenant entered into a contract for improvements not contemplated by the original lease, and which are not shown to have been constructed with the consent of the owners of the fee.

The lienors, before entering into their contract, could have ascertained the extent of the interest of the Renwick Park Amusement Company in the premises, and consequently the adequacy of their lien as security (Knapp v. Brown, 45 N. Y. 207 , 212), and having elected to contract with a corporation having no relations whatever with the owner of the fee, and no facts appearing which would charge the latter with having consented to the improvements in excess of -those contracted for in the lease with Clymer, there is no legitimate foundation for the assertion of a lien against the Renwick Park & Traffic Association.

The judgment should be reversed.

LYON and COCHRANE, JJ., concur.

(concurring in result). The evidence is not before us, and the only question present is whether the findings support the judgment. I think we may well assume that the Amuse

The only finding tending to show that the theater was built, equipped, and lighted, or that the other improvements were made with the consent of the owner, is finding 27b, that the owner, “aside from the knowledge it acquired by virtue of the terms of said lease, had a general knowledge and information that improvements of the same,general character as those described in the lease were being made, or had been made, but it had no specific knowledge as to the details of the work, nor did it assume to exercise any control over the execution of said work or the extent of the same.” This is not a finding that the owner knew how the theater was being built, or that it was being built, or that its owner had waived the plans and other requirements, and had committed those matters to the lessee. The finding might, be of force, were it not for the words “or had been made.” Those words render it valueless as showing consent of the owner. It may be that the owner had no knowledge of the fact that the theater was being built until after the work was substantially finished. If a sketch of the building was shown the owner) and it made no objection, or if it permitted the construction of the building without inquiry, those and perhaps other facts might tend to show a waiver of the provision for the plans, the mutual agreement, and the cost.

It is perhaps probable that the owner had such knowledge, and by raising no objection to the work in progress has put itself in a position where it cannot object to the building, or to the expense thereof. It is not clear that all of the plaintiff’s claim was with reference to the theater and its equipment; neither is it clear that the bill of the respondent Williams related only to the lighting or equipment of the theater. Apparently they embraced other matters. In the view we take of the case, the building, lighting, and equipment of the theater were required by the lease, and the lease itself furnished the necessary consent of the owner, if the lessee or his assignee fairly complied with the terms of the lease as interpreted by the parties, or as its specific terms were waived or changed by their acts. We cannot, however, from the finding determine those facts in the absence of evidence, and with some reluctance we feel that the judgment in favor of the plaintiff and claimant Williams must be reversed, as not sustained by the findings.

The judgment, so far as appealed from, should be reversed, and a new trial granted, with costs to the appellants to- abide the event.

HOWARD, J., concurs.