Court Opinion

ID: 5073521
Source: CourtListenerOpinion
Date Created: 2021-10-01 10:59:27.582541+00
Date Added: 2024-06-11T08:19:56.421858
License: Public Domain

SMITH, Presiding Judge,
dissenting.
I respectfully dissent.
The scholarly discussion of the law set forth in the majority opinion correctly states the methods utilized by the courts in analyzing the relationships in these lien cases. My difficulty with the result reached by the majority is in the failure to treat the relationship between the owner of the property, the entireties entity, and Robert Smith, a sole proprietorship, as one between separate legal entities.
Robert Smith and Elizabeth Smith owned the real estate as a tenancy by the entire-ties. Such a tenancy creates a legal entity distinct from the individuals who make it up. “The distinctive characteristic of an estate by the entireties is that it is deemed to be owned by a single entity, the marital community.” United States Fidelity and Guaranty Company v. Hiles, 670 S.W.2d 134 (Mo.App.1984) [1-4]. Neither of the individuals which comprise the entity can deal with the property as a sole owner such as by individually selling, mortgaging, or encumbering the property. Neither can destroy the entireties estate or the interests *495of the entireties estate without the agreement and consent of the other. Id. Robert Smith operated a construction business as a sole proprietor of that business. He bore sole legal responsibility for that business, was responsible for its debts, and was entitled to its profits. Elizabeth Smith had no legal interest in that sole proprietorship.
I agree with the majority and the trial court that Elizabeth Smith by obtaining the construction loan and by authorizing her husband to develop the complex granted to Robert Smith the authority to subject her interest in the real property to liens. I believe the record further supports the finding of the trial court that Elizabeth and Robert Smith authorized Robert Smith, as a representative or agent of the entireties entity to contract for the construction of the apartment complex. As the agent of the entireties, entity he contracted with Robert Smith, sole proprietor, a different legal entity, to build the complex. The entireties entity, as owner, contracted with Smith, a sole proprietorship, as general contractor. Smith, as a sole proprietorship, in turn contracted with Kaplan to supply materials needed by Smith as general contractor for construction of the apartments. Kaplan was therefore a subcontractor and it properly complied with the law in asserting its lien. This case differs from the usual lien situation involving entireties ownership, because the Smith’s have chosen to inject Robert Smith, as a sole proprietor, between themselves as owners and Kaplan as a supplier. Had they chosen a different general contractor there would be no question of Kaplan’s status as a subcontractor. I do not believe the choice of Smith changes Kaplan’s status.
The majority rejects this analysis, at least in part, upon a finding that no contract, express or implied, existed between the entireties entity and the sole proprietorship. To the extent this rejection is based upon the proposition that Robert Smith as agent for the owners lacked legal capacity to contract with Robert Smith as sole proprietorship, I believe such a holding conflicts with the concept that two distinct legal entities are in fact involved as I have heretofore stated. To the extent that the rejection is based upon the absence of evidence of an actual contractual relationship between the owners and the sole proprietorship, I believe it erroneously views the evidence.
The law has been stated succinctly in Foil-man Properties Company v. Henty Construction Co., Inc., 664 S.W.2d 248 (Mo.App.1983) [1, 2]:
“A contractual relationship may be established without a written contract where the circumstances and the acts and conduct of the parties support a reasonable inference of a mutual understanding and agreement that one party perform and that the other compensate for such performance_ The agreement between the parties arises from their intention, implied or presumed from their acts, where there are circumstances which, according to the common course of dealing and the common understanding of men, show a mutual intent to contract.”
See also, Bailey v. Interstate Airmotive, Inc., 358 Mo. 1121, 219 S.W.2d 333 (1949) [4, 5, 6]; Roper v. Clanton, 258 S.W.2d 283 (Mo.App.1953), [5, 6].
The land in question was owned by the Smith’s by the entireties. It was acquired for the purpose of building apartments to produce rental income for the owner, the entireties entity. A loan was obtained by the owner for the purpose of constructing the apartments. This construction was to be done by the Robert Smith sole proprietorship, an established company with a number of employees which had been in the construction business “periodically” for twenty-three years. Elizabeth Smith was “not really” involved in the business of the sole proprietorship. Robert Smith had developed at least one project in which his wife had no ownership interest. Robert Smith through his construction company had dealt with Kaplan for at least twenty-three years. Elizabeth Smith was aware of her husband’s construction activities. The money from the construction loan obtained by the entireties entity was paid to Robert Smith who utilized it to pay for construe*496tion by his solely owned company. Under these facts it appears clear that Robert Smith Construction Company was building the apartments for the entireties entity and the conduct and acts of the parties create a reasonable inference of an agreement that he do so. We can from that imply the existence of a contract.
I would affirm the judgment of the trial court.