Hughes v. Kershow

42 Colo. 210 | Colo. | 1908

Mr. Justice Helm

delivered the opinion of the court:

The building erected by Paul T. Hughes upon the three lots at the corner of Sixteenth and Market streets, Denver, leased from the heirs of Jeremiah Kershow, through J. H. Kershow, guardian, is clearly within the class of improvements known in law as “fixtures.” This structure, as re-erected after the fire, was of brick, covering the entire three lots and with a foundation sufficiently strong to support a five-story building. The ground floor was divided into storerooms and so used, while the upper portion was finished off for theatrical purposes and subsequently became known as. the “Haymarket Theater. ’ ’

But the parties invested this structure with the character of personalty. In the lease it was expressly stipulated that all improvements erected upon the property by the lessee should belong to him, and that he might remove the same during the sixty days last preceding the expiration of the lease, provided he had paid all rents, taxes and assessments agreed to be discharged by him. Thus, by express contract, the building mentioned became personal property during the life of the lease.

This provision was for the benefit of the lessee; but to avail himself of such benefit it was incumbent upon him to remove the building before expiration of the contract. If he failed to do so in accordance with the terms specified, then, upon expiration of the contract, by operation of law the building ceased to be personalty; its character as a fixture attached and it at once became a part of the real estate.

During the existence of the lease mentioned, plaintiff advanced to Hughes, the tenant, who was her husband, an aggregate of about $15,000.00 with which to rebuild or' reconstruct the building first placed upon the leased ground and previously destroyed by fire. The loans thus made were not evidenced by writing, but, according to plaintiff’s testimony, Hughes, as security therefor, gave her a verbal lien upon his interest so retained in the building.

It is not necessary for the purposes of this case to consider the sufficiency of a lien thus created. For, assuming that this lien was valid and binding as between the parties, it could only extend to the interest held by Hughes in the property. And when, for any reason, this interest legally terminated, plaintiff’s lien thereon also terminated. Hence, as above observed, if Hughes allowed the period fixed in the lease to expire without payment of rents, taxes and assessments and removal of the structure from the lots, as therein provided, the building became a part of the realty; that is to say, the inchoate right or claim of his lessors thereto ripened into complete ownership, and title vested in them.

“It is hardly necessary to add that the plaintiffs can claim no better title to the property in controversy than that which was vested in the tenant under whom they claim as mortgagee. When the mortgage was made, the building and machinery were fixtures annexed to the realty of the defendant by his tenant, and which the defendant had then the inchoate right to claim as part of the freehold if not seasonably disannexed before the term was ended. ’ ’— Talbot v. Whipple, 14 Allen 177.

“Although the tenant possessed the right of removal, he was bound to exercise it if at all before his term expired or within the period limited by his lease, or at all events, before quitting’ possession of the real estate upon which the trade fixtures were situated.” — Mass. Nat. Bank v. Shinn, 18 N. Y. App. Div. 282; Fitzgerald v. Anderson, 81 Wis. 342; Smith v. Park, 31 Minn. 70; Free v. Stuart, 39 Neb. 225.

The giving of the new lease a few months before the original lease expired, extending the tenancy period on practically the same terms, did not operate to invest plaintiff with an absolute lien upon the structure, freed from limitation to the interest of Hughes. .She says that this action was taken without her knowledge or consent, but she knew, or must be presumed to have known, the date fixed for expiration of the original lease. When her husband failed to take steps for removal of the building during the last sixty days of such period, she was put upon inquiry which would have disclosed the existence of the new contract; and if she intended to assert her lien under the expiring lease, she should have taken appropriate steps so to do. Failing to assert her lien within the time fixed by that contract, she must at least be held to have acquiesced in the new lease and consented to the extension, intending to hold her lien subject thereto. She certainly can occupy no stronger position than that her lien continued to cover Hughes ’ interest under the new lease with the same force and effect it possessed under the former lease.

The conditions here are not analogous to the illustration used by counsel for appellant, of two chattel mortgages given at different dates upon the same property. Undoubtedly in such case a release, of the senior mortgage would invest the junior mortgage with a paramount lien, even though a new mortgage were taken for the earlier debt. The lien of plaintiff under consideration being limited to the conditional interest reserved by Hughes in the building in the first lease, the only question arising is whether this lien perished altogether upon expiration of that lease; or whether, under all the circumstances, we can treat it as attaching to the interest of Hughes under the new lease.

But when in 1896, shortly before the expiration of the second lease, Hughes surrendered the tenancy and turned the property over to his lessors under an arrangement for distribution of accumulated rents, his title as tenant finally terminated, and all right or ■interest held by him in the building- ceased. The character of the building as personalty disappeared; it became a part of the real estate, and ownership vested in the landlord.

It might, perhaps, be held that when the interest of Hughes thus ceased, the lien of plaintiff upon that interest also ceased. But, giving plaintiff the benefit of the most favorable view we could possibly adopt, her lien could not have continued beyond June 30th, following, the date at which the second lease expired by its own terms. And when she allowed this period to pass and the possession to be retained by the landlord, without attempting to assert any right or interest claimed under the lien, most assuredly the lien itself became ineffective and non-enforceable. In law she could not sit quietly by for two years, as she did, before taking’ steps to enforce ber. lien, even had she possessed a right to such enforcement at the expiration of the period fixed by the second lease.

But counsel for appellant invite our attention to the alleged agreement of J. H. Kershow, guardian for the minor heirs (owners of the lots), to recognize her claim or lien against the building; and they argue that by virtue of this agreement her status and rights, as above indicated, were in some way modified, so that her lien upon the building was preserved and she was entitled to enforce the same in the-present action.

This agreement of the guardian is not clearly established by the evidence; it is denied by him; it is in certain respects, which we will not now enumerate, unreasonable and improbable; the trial court declined to determine the matter, saying that it was not material in view of his conclusion otherwise touching the case.

But let us assume that the guardian did give plaintiff the assurances to which she testifies. His agreement that her advancements to Hughes should be returned, was a mere verbal promise to answer for the debt of her husband, and was not binding even upon himself. And as guardian he had no power, certainly without express authority from the court, which nowhere appears, to place a lien or incumbrance upon the estate of his wards through such an agreement. His assurance, if he gave such an assurance, can only be regarded as an acquiescence by him'in plaintiff’s claim of a verbal lien upon the interest of Hughes in the building for moneys advanced by her.

The foregoing conclusions require an affirmance of the decree under review, and it is not necessary to consider the additional questions discussed in the briefs and arguments on file.-

If the view urged by counsel for appellant were correct, that plaintiff’s lien was entirely independent of and unsupported by the second lease, her claim to relief would also be defeated by her laches. The first lease expired, according to its own terms, in April, 1893. Suit was not instituted by plaintiff until June, 1898, over five years after her cause of action, according to counsel’s view, accrued. But this is not all. After instituting' the action she did not bring it to trial until May, 1903, nearly five years later. No sufficient excuse — if, indeed, there could be one— appears in the record for either of these delays.

This is an action in equity for the enforcement of a lien against property, and the wise and beneficent doctrine of laches is applicable, even though no such special plea, is formally interposed by answer.

In support of the foregoing suggestions in relation to plaintiff’s laches, viz.: That no formal plea thereof was necessary; that the delay in commencing this action should, under counsel’s assumption above stated, operate as a bar thereto; and that such unreasonable delay in prosecuting a suit, even though it be commenced in time, might, in and of itself, bar a recovery in equity, we cité the following' authorities : Hagerman v. Bates, 5 Colo. App. 402; Hagerman v. Bates, 24 Colo. 80; Sullivan, v. Portland R. R. Co., 94 U. S. 811; Johnson v. Standard Min. Co., 148 U. S. 370; McKnight v. Taylor, 1 Howard *168; Terry v. Fontaine’s Adm’r et al., 83 Va. 455; Great West Min. Co. v. Woodmas of A. Min. Co., 14 Colo. 90; Graff v. Town Co., 12 Colo. App. 112.

The judgment of the court below must be affirmed. Affirmed.

Chiee Justice Steele and Mr. Justice Maxwell concurring.