Agency Relationship Between the Lessee and Lessor In Texas
In Bond v. Kagan-Edelman Enters., 985 S.W.2d 253 (Tex. App.--Houston [1st Dist.] 1999), the appellate court looked beyond the written provisions of a lease to overrule a jury's determination that no agency relationship existed between the lessee and lessor. See 985 S.W.2d at 257.
The lessor in Bond hired the lessee as a general contractor with the authority to employ subcontractors for construction services. See Bond, 985 S.W.2d at 257-58.
Throughout the construction process, the subcontractors performed according to the lessor's direct specifications and supervision. See Bond, 985 S.W.2d at 255.
Despite specific language in the lease denying the existence of an agency relationship, the Bond court held that under these particular circumstances, the parties maintained a dual relationship as lessor-lessee and owner-general contractor, and as general contractor, the lessee had authority to encumber the lessor's fee interest. See Bond, 985 S.W.2d at 257-258.
Finally, the lessor in Bond paid subcontractors, supervised subcontractors' work, and engaged in other conduct indicating his explicit recognition of the lessee's status as general contractor. See Bond, 985 S.W.2d at 255, 258.
Thus, the lien holders in Bond offered ample evidence that the lessor hired the lessee as general contractor and thereby conferred authority on the lessee to act as his agent within the course and scope of his role as a general contractor. See Bond, 985 S.W.2d at 257-58.