Court Opinion

ID: 8305328
Source: CourtListenerOpinion
Date Created: 2022-10-17 11:28:24.592595+00
Date Added: 2024-06-11T16:44:31.044435
License: Public Domain

ON PETITION TO REHEAR
McAMIS, P.J.:
Sarbec has filed a petition to rehear based in the main upon its contention that, since the lessee expended from its own funds prior to the fire more than $75,000.00, the amount required by the lease, no lien should be allowed for materials furnished in excess of that amount. De Klyn v. Gould et al., 165 N.Y. 282, 59 N.E. 95, is cited in support of this contention.
As pointed out in the reply brief, after the fire occurred the owner and the lessee mutually agreed the insurance fund would be used to reconstruct the building, as contemplated by the lease. The conclusion is inescapable, that the owner knew the insurance fund of approximately $54,000.00 would not be sufficient to reconstruct the building according to then existing plans.
The amount of the unpaid lien claims is only $26,549.96. This amount will be reduced by the balance of the insurance fund still held in the registry of the court. The claims then remaining unpaid, added to the $54,-000.00 insurance fund, will not exceed the limitation of $75,000.00 contained in the lease. It results that even if this limitation should be held valid the unpaid lien claims for expenditures made after the fire should be sustained. All of the lien claims except that of ICnox-Tenn in the amount of $407.05 were incurred after the fire.
*575Under our previous holding the provision of the lease requiring the lessee to make improvements and the agreement to reduce the rent for the first year made the lessee the “agent” of the owner in the sense of the statute, T.C.A. sec. 64-1102. At least in the absence of an express provision in the lease withholding from the lessee, as agent, the power to expend more than $75,000.00 we must hold that the owner cannot escape liability for the act of its agent for this claim of $407.05. For this additional reason the lien claims for materials furnished after the fire are held valid and enforceable against Sarbec. To repeat, all of the materials were furnished under “special contract,” to use the language of the statute, with the owner’s agent. For this reason, among others, De Klyn v. Gould et al, supra, is considered inapposite.
In this view of the case the question whether, generally, the fixing of an amount to be expended by the lessee limits lien claimants to the stipulated amount can be pretermitted.
The petition is denied.
Cooper and Parrott, JJ., concur.