Opinion ID: 1928361
Heading Depth: 1
Heading Rank: 6

Heading: contracting parties

Text: In the second summarized assignment of error, Landmark claims that the district court mistakenly found that Harrisburg had no contract with Landmark. In this regard, Landmark urges not that there existed a direct agreement between Landmark and Harrisburg, but, rather, that a contract between them came into existence through Owen's actions as Harrisburg's agent. An agency is a fiduciary relationship resulting from one person's manifested consent that another may act on behalf and subject to the control of the person manifesting such consent, and further resulting from another's consent to so act. Franksen v. Crossroads Joint Venture, 245 Neb. 863, 515 N.W.2d 794 (1994); Gottsch v. Bank of Stapleton, 235 Neb. 816, 458 N.W.2d 443 (1990). Whether an agency exists depends on the facts underlying the relationship of the parties irrespective of the words or terminology used by the parties to characterize or describe their relationship. Franksen, supra ; Delicious Foods Co. v. Millard Warehouse, 244 Neb. 449, 507 N.W.2d 631 (1993). A tenant cannot without the authority of the landlord charge the land with a hen for materials for constructing or improving a building thereon, and the tenant is not the landlord's agent for this purpose, even if the tenant has the landlord's consent. Waite Lumber Co., Inc. v. Masid Bros., Inc., 189 Neb. 10, 200 N.W.2d 119 (1972); PMner Lumber Co. v. Krug Park Amusement Co., 131 Neb. 831, 270 N.W. 473 (1936). Thus, the landlord-tenant relationship does not, in and of itself, create a principal-agent relationship, even if the tenant has permission to improve the property. Clearly, there was here no actual authority for Owen to act on Harrisburg's behalf. Neither was there any apparent or ostensible authority for Owen to act as an agent of Harrisburg. Such authority may be conferred if the alleged principal affirmatively, intentionally, or by lack of ordinary care causes third persons to act upon the apparent authority. Franksen, supra ; Corman v. Musselman, 232 Neb. 159, 439 N.W.2d 781 (1989). A party who has knowingly permitted others to treat one as his or her agent is estopped to deny the agency. Western Fertilizer v. BRG, 228 Neb. 776, 424 N.W.2d 588 (1988); Department of Banking v. Davis, 227 Neb. 172, 416 N.W.2d 566 (1987). However, the apparent authority or agency for which a principal may be liable must be traceable to the principal and cannot be established by the acts, declaration, or conduct of the agent. Franksen, supra ; Corman, supra . Landmark's reliance on Sheeny v. Fulton, 38 Neb. 691, 57 N.W. 395 (1894), and Guixm v. Ryckman, 77 Neb. 833, 110 N.W. 759 (1906), for the proposition that Owen was Harrisburg's agent are inapplicable. The Sheehy vendor conveyed land to the vendee for a certain sum in cash, the remainder to be paid in 37 days, with the understanding that the vendee would erect a building on the land. The vendor retained a mortgage on the property. The remainder of the purchase price was to be paid from the proceeds of a loan which could not be made until the excavations of the building were made and the foundations were in. The vendee defaulted, whereupon the vendor sued to foreclose his hen for the purchase money, and a number of hens for services and supplies were asserted. The evidence established that the vendor endeavored to have the vendee change contractors because those already hired were working too slowly, and there was evidence that the vendor exercised control over the construction. Furthermore, when a supplier had refused to extend credit to the vendee for building materials, the vendor accompanied the vendee to the supplier and said that `he would protect' the supplier. 38 Neb. at 697, 57 N.W. at 397. The Sheehy commissioners concluded that although a border line case, id. at 696, 57 N.W. at 396, the vendor had established the vendee as the vendor's agent in the building operations sufficiently to charge the vendor's fee estate with the burden of the mechanics' hens arising out of the construction. In Guixm, the legal titleholder vendor entered into a contract to convey two lots to the vendee, with an express provision that the vendee erect houses on each of the lots. The vendor also agreed to take a second mortgage on both the houses and lots if the vendee were unable to secure a loan sufficient to erect the buildings. In holding the vendor liable for the hens filed by the suppliers and laborers, the Guixm commissioners wrote that where the vendor and vendee cooperate together in plans for the erection of improvements upon real estate covered by their agreement, the interest of the vendor, as well as that of the vendee, is bound for the payment of hens for labor and material which have been furnished for such improvements. 77 Neb. at 837,110 N.W. at 760. While it is true that some similarities exist between the present case and the facts in Sheehy, the cases are nonetheless distinguishable. While in the present case the lease required Owen to obtain written consent from Harrisburg prior to making any renovations and provided that Harrisburg could require that its own employees perform the work and that Harrisburg could supervise the renovations, none of these lease terms were implemented, and there is no evidence that Landmark knew and relied upon those provisions. Neither did Harrisburg exercise any control over the construction. Bilby's visit to the construction site and occasional questions did not constitute the exercise of control over the construction. Moreover, both Harrisburg and Owen understood that renovations would be necessary to operate a cocktail lounge, and unlike the situation in Sheehy, Harrisburg never guaranteed payment to Landmark. Guiou is also distinguishable. Not only does the instant case not involve a vendor and vendee, the Guiou contract concerned not only the sale of land, but required that the vendee construct two homes. Furthermore, unlike the situation in Guiou, here Harrisburg did not agree to provide funding for the construction. The contract in the instant case is merely a lease of property for a limited purpose. It is only because of the condition of the property that Owen was required to make renovations. In short, Harrisburg did nothing to cause Landmark to believe that Owen was an agent of Harrisburg. Thus, the evidence does not establish that Harrisburg caused Landmark to believe that Owen had any authority to act on Hamsburg's behalf and does not establish that Owen was Harrisburg's agent.