Title: Zions First National Bank v. Carlson
Citation: 23 Utah 2d 395, 464 P.2d 387
Docket Number: 11636
State: Utah
Issuer: Utah Supreme Court
Date: January 19, 1970

464 P.2d 387 (1970) 23 Utah 2d 395 ZIONS FIRST NATIONAL BANK, Plaintiff, v. Harold A. CARLSON and M.E. Harris, Jr., Defendants. M.E. HARRIS, Jr., Third-Party Plaintiff and Respondent, v. ZIONS SECURITIES CORP., a Utah corporation, and Artcol Corporation, Third-Party Defendants and Appellant. No. 11636. Supreme Court of Utah. January 19, 1970. McKay &amp; Burton, Paul E. Reimann, Leonard S. Ralph, Salt Lake City, for appellant. Cannon, Greene, Nebeker &amp; Horsley, Salt Lake City, for plaintiff Zions First Nat. Bank. Draper, Sundack &amp; Saperstein, Salt Lake City, for respondent. CALLISTER, Justice. The appellant, Zions Securities Corporation, the owner in fee of certain land, executed a ground lease, as landlord, with Artcol Corporation, as tenant, for a term of 85 years. The respondent, an architect, was engaged by Artcol to draw plans and specifications and render other architectural services for a proposed high-rise apartment building. Artcol went defunct and consequently no building was constructed. The unpaid architect filed a mechanic's lien and sued to foreclose the interests of both the lessor, Zions, and lessee, Artcol. At the conclusion of the trial, the court made findings of fact and concluded as a matter of law that the interest of Zions became lienable under Section 38-1-3, U.C.A., 1953, by reason of its conduct during the time the architectural services were performed; work was commenced within the meaning of the statute by the clearing of the ground and the digging of soil test holes; and the lien attached and was not defeated by later abandonment of the work. The court rendered a judgment of foreclosure of respondent's lien. Appellant contends that since no building was constructed, the architect's lien could not attach to its interest in the land. Section 38-1-3, U.C.A., 1953, provides: The trial court properly construed Section 38-1-3, U.C.A., 1953, insofar as it held that an architect may file a lien upon the property concerning which he has rendered professional service, although his plans may not be brought to fruition by erection of a building. However, the judgment of the district court may not be sustained, since under the facts and circumstances there is no basis to conclude that Zions Securities Corporation impliedly authorized its lessee, Artcol, to engage an architect so as to bind the lessor's interest in respect to the services rendered. In Stanton Transportation Company v. Davis,[1] this court observed: In the Stanton case, this court examined the history and background of Section 38-1-3, U.C.A., 1953. Prior to the compilation of the Utah statutes in 1933, the liens provided in this section were in four separate sections. The Code Commission in consolidating the statutes for that compilation fused all of those sections into one. The former section relating to architects and engineers provided: This court stated: Under this unique statutory enactment, an architect is entitled to a "lien upon the property upon or concerning which" he has rendered his professional services. As was observed in 1966 Utah Law Review, 181, 188, "Architects and surveyors are specifically entitled to mechanics' liens under the Utah statute. Their liens create a priority problem, however, since their services are usually performed before the `visible to the eye' commencement of construction * * *." In the instant action, there was no priority problem involved. However, if there were, the problem would be to resolve the priorities and not to reconstruct the specific language of Section 38-1-3, so as to deprive an architect, who has rendered services concerning a specific res, of his lien. This interpretation is reinforced by the language of the prior statute which granted an architect a lien for "describing, illustrating * * * such structure of work * * * to be done, or in any part connected therewith, * * *" The Stanton case clearly established that there was no intention to change the unique nature of the lien granted to architects, and the Code Commission merely substituted some of the cumbersome language with more general terms. The critical issue of the instant action is whether Zions impliedly authorized the architectural services and thus impliedly granted its lessee authority to bind its fee interest. The trial court found as a matter of fact that the lessee had been granted implied authority to bind the lessor's interest by the following: (a) The provisions of the option to lease and the lease; (b) Approval of preliminary sketches; (c) Execution of zoning variance applications and appearances and participation in zoning hearings; (d) Approval of architectural services (Exhibit 22). Exhibit 22 is a letter from Zions to the Planning and Zoning Board of Adjustment, requesting an extension of a variance order. In the letter it is stated: The facts to support findings (b) and (d) were merely expressions of knowledge of the lessor that the lessee was proceeding with the development of the property and do not constitute an implied authorization. Zion's participation in the zoning hearings was in compliance with specific provisions of the lease, which cannot be distorted into an agency agreement, wherein Zions agreed: The sixteen-page lease agreement, which superseded the option to lease, contains numerous provisions, which, if any structure or improvement be erected, grant substantial benefits which will inure to the lessor's reversionary interest. However, there is no agreement that the lessee make any improvement or engage in any business upon the property nor could Zions compel its lessee to build or forfeit the lease. Provision 7 specifies: *390 In Utley v. Wear[3] the court in a scholarly opinion conceptualized the implied agency issue as follows: In the instant action, the lease agreement created merely a relationship of landlord and tenant for a term of 85 years. The lease neither required nor obligated the lessee to construct any improvements which would substantially enhance the value of the freehold. The lessor participated in the plans for construction only insofar as the law required the owner of the fee to make certain applications. The evidence upon which the trial court relied to support its determination constituted merely a grant of permission or acquiescence on the part of the lessor for the lessee to have the work done. The lessee, solely at its option, could determine whether or not to construct any improvement on the land. Under these circumstances, the lessee cannot, as a matter of law, be held the (implied) agent of the lessor so as to subject the lessor's fee interest to a mechanic's lien. The other points raised on appeal are without merit. The judgment of the district court in respect to its disposition of the party, Zions Securities Corporation, is reversed and remanded. No costs awarded. *391 TUCKETT and HENRIOD, JJ., concur. CROCKETT, Chief Justice (concurring). I concur upon the ground, as stated in the main opinion, that "under the facts and circumstances there is no basis to conclude that Zions Securities Corporation impliedly [or expressly] authorized its lessee, Artcol, to engage an architect so as to bind the lessor's interest" in the property. ELLETT, Justice (concurring in the result). I concur in the result reached in the main opinion but do not think it is necessary to place my concurrence upon the grounds given therein. In my opinion, an architect can have no lien upon land when no building is erected thereon. Section 38-1-3, U.C.A. 1953, as set out in the main opinion provides that certain persons therein specified shall have a lien upon the property upon or concerning which they have rendered service, etc. All alike are given liens, and all liens are upon equal footing (Sec. 38-1-10, U.C.A. 1953) regardless of the time when the work was performed. By Sec. 38-1-4, U.C.A. 1953, the extent of the liens (including those for architects) is set out as follows: I know of no case where a lien has been granted when there was no improvement to the land, and none to the contrary is cited in the main opinion or in the briefs of counsel. By Sec. 38-1-5, U.C.A. 1953, all liens are given a priority as of the time when work was first done or material furnished on the ground for the improvement. Since in this case there never was any work done on the ground nor material furnished on the ground for the structure, there would be no effective date for the lien of the architect, even if he had one. The general law is stated in 57 C.J.S. Mechanics' Liens § 36, page 530, to be: See also annotation in 60 A.L.R. at page 1270. That which does not become a part of the realty is generally considered as not giving any rights to a lien under the statutes. See 36 Am.Jur., Mechanics' Liens § 351. For example, there is no mechanic's lien available to one who furnishes or installs trade fixtures which are not installed as a part of the construction or improvement of a building, and this is so for the reason that trade fixtures remain personalty and do not become a part of the realty. See annotation in Ann.Cas. 1912B at page 20 and 42 Am. S.R. at page 796. Our statute gives the lien only for material furnished and work done in the construction, alteration, or addition to or repair of any building, structure, or improvement upon land. See Frehner v. Morton, 18 Utah 2d 422, 424 P.2d 446 (1967). The plans and specifications of an architect are a service rendered for the benefit of the building only, and they in no wise enhance the value of the land unless the building is constructed. The purpose of the statute is primarily to protect those who have added directly to the value of real property by performing labor or furnishing material upon it. See Stanton Transportation Co. v. Davis, 9 Utah 2d 184, 341 P.2d 207 (1959). It is to prevent the contracting owner of an interest in land from taking the benefit of improvements placed thereon without paying *392 for labor and material that went into it. See King Bros., Inc. v. Utah Dry Kiln Co., 13 Utah 2d 339, 374 P.2d 254 (1962). By the contract between the architect and Artcol Corporation, the plans and specifications remain the property of the architect whether the building is constructed or not. Here the architect tries to get full pay for his plans and specifications of which he and he alone claims full ownership. In this case the drawing of plans and specifications would not enhance the value of the land unless there was construction of an improvement thereon. When the plans and specifications are brought to fruition, then the land is benefited as much by the architect's preliminary work as it is by the labor and materials actually furnished in the erection of the building pursuant to the plans and specifications. The Supreme Court of Washington in the case of Lipscomb v. Exchange Nat. Bank of Spokane, 80 Wash. 296, 141 P. 686, 688 (1914), stated: It followed, therefore, that the trial court erred in holding that the architect had a lien upon the land. Since the respondent had no lien at all, I do not think it was necessary to discuss the other matters covered in the prevailing opinion. [1] 9 Utah 2d 184, 186, 341 P.2d 207, 209 (1959). [2] See pp. 187-188 of 9 Utah 2d, p. 210 of 341 341 P.2d. [3] Mo. App., 333 S.W.2d 787, 791-792, 793 (1960). [4] Also see Newport v. Hedges, Mo. App., 358 S.W.2d 441 (1962); DeVry Brick Co. v. Mordka, 96 Ariz. 70, 391 P.2d 925, 926 (1964); Bunt v. Roberts, 76 Idaho 158, 279 P.2d 629, 630 (1955); Bunn v. Bates, 31 Wash. 2d 315, 196 P.2d 741, 743 (1948); Backstatter v. Berry Hill Building Corp., 56 Misc.2d 351, 288 N.Y.S.2d 850, 852 (1968); Thorson v. Maxwell Hardware Co., S.D., 146 N.W.2d 739, 741 (1966).