West Coast Lumber Co. v. Apfield

California Supreme Court Nov 7, 1890 No. No. 13788Published

Before: Fox

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Holding. The court held that a building erected by a lessee on the lessor's land became part of the realty, subjecting the lessor's fee interest to mechanics' liens because the lease contained no reservation of removal rights and the lessor failed to provide statutory notice of non-responsibility.

Issues

Whether a building erected by a lessee becomes part of the realty subject to mechanics' liens in the absence of a removal clause in the lease.
Whether a lessor's secret intention regarding the future removal of a building can defeat the rights of third-party lien claimants.
Whether the failure to join a deceased partner's estate as a party constitutes reversible error when the surviving partner is present.

Disposition. affirmed

Quotations verified verbatim against the opinion

“It was not therefore error to reject this evidence.”

“The finding of consent was unnecessary, and may be treated as surplusage. The finding that it was done with his knowledge is in accordance with the admissions of the pleadings.”

Synopsis

Mechanic’s Lien—Landlord and Tenant — Improvements on Leased Premises — Lien upon Land—Building Subject to Removal — Repayment op Lien. — When a tenant has erected a building on a leased lot, which largely increases the rental value of the premises, even if the building is subject to removal at the expiration of the lease, he cannot object on that ground to having the lien charged upon his interest in the land, if the lease provides that the building cannot he removed until all taxes, rents, and debts are paid, under which provision the landlord may insist that the amount of such lien paid to protect his realty shall he repaid before removal of the building.

Id. — Construction op Lease — Appurtenances — Surrender — Removal op Improvements. —When a lease of a vacant lot by its terms demises the real property, with its appurtenances, and grants no express right to remove a building permanently erected thereupon, and the tenant covenants to surrender, at the expiration of the term, “in as good state and condition as reasonable wear and tear will permit, damage by the elements alone excepted,” the lease includes all buildings which may become appurtenant to the land by being imbedded in it and permanently resting upon it; and a proviso in the lease, that “no building shall be removed until the taxes shall he fully paid, and until all rents and indebtedness have been paid,” will not prevent such permanent buildings from becoming the property of the landlord; and there is no right of removal, except of such buildings as do not partake of the realty.

Id.—Reformation op Lease — Rights of Bona Fide Lien-holders — Merger op Oral Negotiations. — If, by mistake, the parties to a lease have failed to express their intention in the making of the instrument, as to the removal of buildings by the lessee, it may be revised and reformed, as between the parties thereto, upon proper showing of the fact, hut it cannot be so done as to prejudice the rights of lien-holders, acquired in good faith and for value, without notice of the mistake; and if there is no attempt at such reformation, in an action to enforce a lien upon the land for materials furnished for the erection of such buildings, the written lease of the land and appurtenances must be considered as merging and superseding all oral negotiations or stipulations concerning the subject-matter of buildings, which preceded or accompauied the execution of the instrument.

Id.—Erection of Permanent Building by Tenant — Notice'—Lien upon Land. — Where a landlord has leased land, and there is nothing to show or to put third parties upon notice that buildings permanently erected thereon would not inure to his benefit, and become a part of the realty, and the landlord has stood by and seen his tenants erect a large and costly building upon his lot without giving any notice, under section 1192 of the Code of Civil Procedure, that he would not be responsible for the same, he will not be heard to say that the men who performed labor upon and furnished material for such building have no lien upon his lot therefor, because the building has not become a part of the realty, and is not an improvement upon his property.

Fox, J. 1. Appellant is the owner in fee of lot L, block 784, New San Diego. He leased the same for the term of five years to the defendant Apfield, who took one Newkirk into partnership with him, and they proceeded to erect a four-story building upon the lot, upon which divers liens were filed for labor and materials, upon which suits were brought, four of which suits were consolidated and tried together, resulting in judgments in favor of the claimants, from which judgments the defendant Low appeals, also from an order denying his motion for new trial. The lease contains the following provision: “No buildings or improvements shall be removed until the taxes shall be fully paid, and until all rents and indebtedness have been paid. And at the expiration of said term the said party of the second part will quit and surrender the said premises in as good state and condition as reasonable use and wear thereof will permit (damage by the elements alone excepted).” The demised premises are described as being “ all that real property,” etc., “ with the appurtenances,” etc.

There is no clause in the lease either reserving or granting to the lessee the right to remove any buildings [338]or improvements which have been or may be erected upon the premises. But, from the first sentence of the clause above quoted, the appellant argues that the building erected by the lessee upon said lot is not an improvement to or upon the same, and that laborers and material-men who furnish labor and material therefor cannot, by reason thereof, acquire a lien upon his interest (the fee) in said land, the lease being a matter of public record in the office of the county recorder. To this the respondent makes the pertinent suggestion that it is this very improvement to his realty that enables him to realize one hundred dollars per month rent therefor, for the term of the lease,—an amount which it could not command if the lot remained vacant. But assuming that the inference which appellant draws — that the building is subject to removal at the expiration of the lease — be true in fact, he is still protected by the terms of his lease, for it cannot be removed until all taxes, rents, and debts are paid. If, therefore, in order to protect his realty, he has to pay off these liens, the building, even under his theory of the case, cannot be removed until the money is repaid. But there is more than this of this lease. By its terms, he has demised all that there is of the “ real property,” with its appurtenances. That includes not only the land, but everything that is affixed, incidental, or appurtenant to the land. (Civ. Code, sec. 658.) That which is affixed includes that which is “imbedded into it, as in the case of walls, or permanently resting upon it, as in the case of buildings.” (Civ. Code, sec. 660.) And that is deemed incidental or appurtenant to land which is by right used with the land for its benefit. (Civ. Code, sec. 662.) It is apparent that it was the erection of this building which gave to the otherwise vacant lot a rental value of more than a nominal amount. It was a large and substantial structure, not only apparently “permanently resting upon” the lot, but the proof shows that it was resting upon mud-sills “ im

West Coast Lumber Co. v. Apfield

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