Title: Brenner v. Smullian

State: florida

Issuer: Florida Supreme Court

Document:

84 So. 2d 44 (1955)
Al BRENNER, Harvey Brenner, Abe Danches, Mabel T. Brenner, Alice Danches, and Louise Brenner, Appellants,
v.
Charles SMULLIAN, Appellee.

Supreme Court of Florida. Special Division A.
December 14, 1955.
Rehearing Denied January 26, 1956.
*45 Milton M. Ferrell and J.M. Flowers, Miami, for appellants.
Irwin E. Kott, of Myers, Heiman & Kaplan, Miami, for appellee.
WILLIAM P. ALLEN, Associate Justice.
This case is an appeal from the Circuit Court of Dade County, enforcing certain liens against the owners of the property in the City of Miami Beach, Florida.
The bill of complaint was brought to foreclose eight mechanics' liens aggregating approximately $24,000. All of the liens prior to suit were assigned to the plaintiff below, appellee here, Charles Smullian. The appellants, as lessors, leased the real property involved to Alton Road Catering Company, which lease contained a covenant upon the part of the lessee not to make any changes or alterations without the consent of the lessors. The original lessee assigned the lease to Ciro Operating Company, a Florida corporation. The sub-lessee began to make improvements without the consent of lessors and was stopped by the lessors from proceeding with the work of repairing and altering the premises.
The sub-lessee and the lessors entered into a modification of the lease, after which the sub-lessee, Ciro Operating Company, proceeded with the changes that had been stopped by the lessor.
The liens in this case accrued primarily from the furnishing of materials to the job in question and certain specialized work done on the premises.
The first question involved in this case is whether or not under the original lease, the amendments thereto and the facts involved in the case, the sub-lessee was required by the lessor to do the work out of which these liens accrued.
Section 84.03(2), Florida Statutes, F.S.A. provides:
*46 The above section has been construed by this court to make the lessor's interest in the property liable for any construction work done by the lessee only if the lease agreement required the lessee to make the alterations or to effect the improvements involved. An acquiescence on the part of the lessor to the improvements does not render the interest of the lessor liable but affects only the interest of the lessee in the premises.
In the case of Masterbilt Corporation v. S.A. Ryan Motors, Inc. of Miami, 149 Fla. 644, 6 So. 2d 818, this court held that an instrument whereby the lessor authorized lessee to remodel leased premises which had been used as automobile display room to a place suitable for a restaurant in accordance with plans prepared by an architect was insufficient to establish a "lien" in favor of the contractor which contracted with sub-lessee for the remodeling, where signature of neither the contractor nor the sub-lessee appeared on the instrument and consent to remodel did not grant to contractor authority to do the work and it was not shown that lessor or lessee knew or had negotiations with the contractor incident to the alterations. In the above case the repairing of the premises was done by a sub-lessee and the contract was between the plaintiff contractor and the sub-lessee. In its opinion, the court said, 6 So.2d at page 820:
There is no contention on the part of the parties to this action that the original lease authorized or permitted the lessee to alter the premises. After construction had been started in violation of the original lease and the sub-lessee and his contractor had been stopped, the parties agreed on a modification of the lease. On page 24 of the transcript, shown as plaintiffs' Exhibit A, appears a modification of the lease which recites that the lessor had previously entered into a lease dated October 11, 1950, with the Alton Road Catering Company as lessee, and the said lease had been assigned to Ciro Operating Company, and that the parties now desire to make certain modifications. Paragraph 3 of the contract, Tr. 25, provides:
This paragraph then proceeds to cover certain questions involving taxation, etc.
On page 27 of the transcript appears plaintiff's Exhibit C, which was the agreement entered on the same date between the original lessors and owners of the property and Ciro Operating Company, the sub-lessee. This agreement provides:
The lease then provides that the second party at its own cost and expense will make and complete alterations in accordance with plans and specifications prepared by an architect who had drawn these plans before this instrument was entered into. Section 2 required the sub-lessee to enter into a fixed contract with the G.E. Construction Company, who had been selected by the second party for the completion of said construction at a cost of approximately $30,000, and, as a part of the agreement, the second party, the sub-lessee, was immediately to make payment to the said G.E. Construction Company of an aggregate sum of not less than $25,000, and that the contractors would specifically agree to accept the personal credit of the second party for the difference between said sum of $25,000, and the actual cost of said alterations, and, in addition thereto, the sub-lessee would deliver a duly executed release of lien from the general contractor for the protection of the first parties, the owners. The contract in Section 3, on page 28 of the transcript, provided that all additions, alterations and improvements made to the premises should belong to and become the property of the owners (the original lessors) and should not be removed from the premises. Paragraph 4, on page 29 of the transcript, provides:
Paragraph 5 on page 30 of the transcript provides:
The record shows that the cost of improvements involved in this job increased from the original estimate of $30,000 to a final total of $62,894 plus a ten per cent overall cost, most of which, it was testified to, was because of the owner's, appellant's, requirements. The Master's report on page 50 of the transcript states:
The Circuit Court approved the Master's report and required the payment of the liens to the assignee, Charles Smullian.
We are of the opinion that under the amended lease and the testimony produced in the record that the decision of the lower court in construing the original agreement, the new agreement, and other contracts herein, requiring the sub-lessee to complete the contracts was correct.
The appellants in their brief state this question: "Were liens in equity actually paid by general contractors who released to appellants?" In this brief and in the oral argument before this court, the attorney representing the appellants argued that equity will grant no relief to any party who does not come into equity with clean hands and that the final decree should be reversed as the record showed such fraudulent acts of the general contractors acting in connection with and through the appellee, as plaintiff, as to bar any relief to them.
The appellee argued that no pleadings are shown in the case that justify this action, nor is any assignment of error based thereon. The appellant replied that there plaintiff did not come into equity with clean hands, it is not necessary to plead the matter and that the court could deny relief to the plaintiff on its own motion.
It has been held by this court that the doctrine of clean hands need not be pleaded in order to be available where the evidence disclosed its applicability. See State ex rel. Harris v. Gautier, 108 Fla. 390, 146 So. 562, 147 So. 240; Dale v. Jennings, 90 Fla. 234, 107 So. 175.
The Alabama Supreme Court in the case of McInnis v. Sutton, 260 Ala. 432, 70 So. 2d 625, held that the court might apply the doctrine sua sponte.
The appellants contend that the record shows that the general contractors themselves bought the claims of the lienors and had them assigned to the plaintiff below, the appellee, who was the father of one of the general contractors; that the purchase of the liens was handled through one of the associates of the firm of attorneys who represented the general contractors; that the general contractors were financially responsible, were primarily liable for the payment in full of all of the liens, had released the appellants from such liens, and had paid all of their debts on all jobs with the exception of the one here involved, and were attempting indirectly to profit on this job at the expense of the lessors who had secured a release of all liens from the said general contractors.
Gerlernter, one of the two contractors, testified that he and his partner owned all of the stock in the G.E. Construction Company; that they owned all of the stock in *49 Atlantic Consolidated Builders Supply, Inc., which latter company employed the appellee, plaintiff below, Charles Smullian, who had allegedly purchased all of the liens involved in this suit. He further testified that the Atlantic Consolidated Builders Supply, Inc., advanced the money with which the appellee purchased the liens foreclosed by the lower court.
Jerome Elson, the other partner, testified that the plaintiff was his father, although having a different name. He further testified that the plaintiff borrowed the money and said further, "He has an open account with us, and we have an open account with him." The lien of the Atlantic Consolidated Builders Supply, Inc., owned by the two partners was assigned to plaintiff without consideration. No money was paid to two of the lienholders for their assignment to the plaintiff because each of them owed money to the Atlantic Consolidated Builders Supply, Inc.
The record shows that a default was entered against the G.E. Construction Company, although they were primarily liable for the liens in question and were solvent. The appellant, in his brief, page 25, stated that an aggregate sum of $5,285.23 was paid for an aggregate of liens of some $23,817.38.
Looking at the record below in the light of the above testimony casts doubt, to say the least, upon the interest of the plaintiff below, appellee here, Charles Smullian, but Smullian himself testified that while some of the money was advanced by a company which he worked for and which was owned by the two partners of the G.E. Construction Company, that it was his money that was paid for the liens, that the same was borrowed by him as he had done before from this company, that if it was not reimbursed by the court holding the owners liable under the liens the loss would fall on him and not on the partners, his employers in the construction firm.
The Master below heard the testimony of the witnesses, and his report in effect held that Smullian was the bona fide purchaser and assignee of the liens in question, which report was confirmed by the lower court. On appeal this court does not decide a case based upon how they would have decided the case had they heard the original testimony, but only whether there was sufficient evidence in the record to justify the lower court's decision.
Therefore, the decision of the lower court is hereby affirmed.
DREW, C.J., and TERRELL and ROBERTS, JJ., concur.