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BECKER AND O'BRIEN v. K. OF C. BUILDING CO
Hall Dame for appellants.
(1) Under the admitted and uncontroverted facts plaintiffs were entitled to a verdict in their favor. Defendant's warranty deed, having the statutory granting words, "grant, bargain and sell," conveyed to the grantee, plaintiffs, with the statutory covenants carried by the form of the deed. It conveyed the improvements and all that constituted a part of the realty. Defendant, grantor, by a prior demise (Exhibit E) had relinquished title to the improvements. R.S. Mo. 1919, sec. 2180; Peters v. Worth, 164 Mo. 431; Bast v. Mason, 165 Mo. App. 718; 58 A.L.R. 1352, note. (2) The outstanding lease constituted a breach of the covenants of the deed since the deed contained no exceptions as to the lease. The items of damages prayed for are proper for such breach. Anthony v. Rockefeller, 102 Mo. App. 326; Hickman v. Hickman, 55 Mo. App. 303; Kite v. Pittman (Mo. App.), 278 S.W. 830; Lasswell Land Lumber Co. v. Langdon (Mo. App.), 204 S.W. 812; Walker v. Deaver, 79 Mo. 644, 11 R.C.L. 1057 et seq.; 35 L.R.A. (N.S.) 781; 61 A.L.R. 11, note; Hazelett v. Woodruff, 150 Mo. 534. (3) The fact that the grantee in the deed had knowledge of the outstanding lease would prevent grantee from ousting the lessee by possessory action at law, but would not alter the character of the lease as an incumbrance and breach of covenants of the deed. Anthony v. Rockefeller, 102 Mo. App. 326; Union Central Life Ins. Co. v. Tillery, 152 Mo. 421; Cox v. McKinney, 212 Mo. App. 522, 528 S.W. 421; Ann. Cases 1914D, page 1176; Simons v. Diamond Match Co., 159 Mich. 241. (4) The effect of the deed could not be varied by parol. A prior oral agreement, if there was such, that the purchaser was to accept the grant subject to the encumbrance of the lease, was inconsistent with the deed and not admissible to destroy the covenants of the deed. Laclede Laundry Co. v. Freudenstein, 179 Mo. App. 175; Ann. Cases 1914D, page 1176; 7 R.C.L. 1136, 1163; Betts v. Harvey (Mo. App.), 297 S.W. 995; Cantrell v. Crane, 161 Mo. App. 308; Anthony v. Rockefeller, 102 Mo. App. 326. (5) Defendant's instruction numbered 11, which told the jury that if they found plaintiffs, grantee, agreed (referring to parol negotiations) to accept the premises subject to the lease, plaintiffs were not entitled to recover was erroneous and highly prejudicial to plaintiffs. Authorities under point 4. (6) Defendant's instruction numbered 2 is not based upon estoppel as a defense, or an agreement to accept constructive possession, but predicates an agreement to assume an incumbrance contradictory to the covenants of the deed, and is hence erroneous and misleading. Authorities under point 4. (7) There was no evidence except the testimony of witness John S. Leahy, bearing upon agreement or estoppel in relation to the lessee of the outstanding unexpired lease being allowed to remain on the purchased property, and the testimony of that witness would not, if given its utmost effect, support the defense of estoppel. It does not tend to show that the deed was proffered on the condition that the lessee was to remain in possession or that the grantee consented to accept the property subject to the lease. There was no evidence that the grantee was to accept the lease and all the burdens under which it placed the lessor. Hence, plaintiffs, in any event, were entitled to recover the money reasonably spent in buying off the lessee, which includes one-half of the costs of the improvements and the value of the equipment. Authorities under points 2, 4 and 8. (8) Any possible estoppel or agreement to allow the lessee to remain in possession extended only to possession of the lessee. Plaintiffs, in any event, were not precluded thereby from recovering money spent for the improvements to which they were entitled under the deed and which they had to redeem from the lease. Anthony v. Rockefeller, 102 Mo. App. 326; Cross v. Noble, 67 P. 74, 35 L.R.A. (N.S.) 779, note; 50 A.L.R. 204, note. (9) The trial court erred severally in refusing to give plaintiffs' offered instructions C, D and E. It left the jury without guidance as to the legal effect of the covenants of the deed and as to the legal effect of the lease. (10) Wm. J. Becker, trustee, and James J. O'Brien, cestui que trust, were properly joined as plaintiffs. Citizens Trust Co. et al. v. Tindle (Mo.), 199 S.W. 1025.
Leahy, Saunders Walther for respondent.
(1) It was for the jury to determine under the evidence whether plaintiffs accepted the conveyance subject to Cassilly's occupancy under the lease. If they so found, as they did, plaintiffs were not entitled to recover of defendant for breach of the covenant against encumbrances, because defendant delivered and plaintiffs accepted constructive possession of the premises. Kneib v. Beardsley, 139 Mo. App. 565; Ream v. Goslee, 52 N.E. (Ind.) 93. (2) The issues having been framed and the case tried upon the theory that parol evidence was admissible as evidence, that plaintiffs agreed to accept the conveyance with Cassilly in possession, and that he was to remain upon the premises, having been offered by defendant and admitted, without objection, plaintiffs cannot, on appeal, complain that such evidence was improperly admitted. International Text Book Co. v. Halbrook, 200 S.W. 705; Briegel v. Terry, 226 S.W. 624; Cady v. Coates, 101 Mo. App. l.c. 152; Forest v. Rogers, 128 Mo. App. 6. (3) Where a grantee knowingly assumes an encumbrance or accepts the benefits thereof and, in addition to the grantee's knowledge, there is something in the transaction showing that the parties did not intend the encumbrance should be within the covenant, the general rule, that mere knowledge of the grantee will not bar recovery for breach of covenant, does not apply. 15 C.J. 1232; Urich v. McPherson, 149 Pac. (Idaho) 295; Medler v. Hiatt, 8 Ind. 171; Savage v. Whitebread, 3 Chancery Rep. 24, 21 Reprint 717; Gill v. Perrin, 52 Atl. (N.H.), l.c. 560; McFarland v. Melson, 20 S.W. 2d, l.c. 66; Gilmer v. Powell, 256 S.W. l.c. 125; 21 R.C.L., page 381, section 152. (4) If, as the jury found, plaintiffs led defendant to believe that they would take the conveyance subject to Cassilly's tenancy and that they wanted Cassilly to remain in possession until their plans should more fully develop, and that defendant delivered and plaintiffs accepted the deed with that understanding, plaintiffs are estopped to claim a breach of the covenants in the deed and to recover damages of defendant for breach thereof. All elements of estoppel are present. First Natl. Bank of Mexico v. Ragsdale, 171 Mo. l.c. 185; Hequembourg v. Edwards, 155 Mo. l.c. 522; Becker v. Becker, 250 Ill. 117, 95 N.E., page 70; Savage v. Whitebread, 3 Ch. Rep. 24, 21 Reprint 717. (5) Plaintiffs, by their contract of purchase, and under the evidence, purchased an unimproved parcel of real estate and by their petition complain of defendant's failure to remove the encumbrance of Cassilly's lease or to dispossess Cassilly. They cannot, under the issues framed by the pleadings, claim the value of the filling station improvements. (6) Plaintiffs purchased the property with knowledge of the Cassilly lease, which provided for the removal of all improvements upon the termination of the lease, and by their petition plaintiffs charge defendant with a breach of the covenant to "clear off said lease as an encumbrance." Having knowledge of the lease by which the improvements remained personalty, they cannot recover the value of improvements in this suit upon the covenants in the deed. 58 A.L.R., pp. 1357-8, note; Priestly v. Johnson, 67 Mo. 632; Pile v. Holloway, 129 Mo. App. 593; Muehling v. McGee, 168 Mo. App. 675; Cox v. Kinney, 212 Mo. App. 522. (7) The court properly refused plaintiff's instruction C. (8) Instruction D is erroneous: (a) In that it tells the jury that under Cassilly's lease, upon termination, he was entitled to receive "one-half of the cost of improvements," when, in fact, said lease (Plaintiffs' Exhibit E) did not so provide, but provided for payment of a pro rata cost; and (b) said instruction directed a verdict for plaintiffs for the value of the improvements. Said instruction was further erroneous in that it did not permit the jury to take into consideration the question whether or not plaintiffs had knowledge of the Cassilly lease and whether or not it was the intention of plaintiffs and defendant that such improvements passed by the deed. See authorities cited under Point II. (9) Instruction E was properly refused, in that it directs the jury that they may allow plaintiff $3,968, if they found that it was necessary to pay Cassilly said sum to get Cassilly to quit the premises, and that by so doing plaintiffs avoided a greater loss. Said instruction comments on the evidence, does not set forth the proper measure of damages or elements of damage to which plaintiffs are entitled; and whether or not plaintiffs avoided a greater loss by payment of said sum is immaterial, the measure of damages being what sums plaintiffs were reasonably required to expend to remove the encumbrance.
Appellate Practice — Evidence — Varying Deed By Parol — Admitted Without Objection — Appellant Cannot Complain On Appeal. In an action to recover damages on account of the alleged breach of covenants in a warranty deed, where plaintiffs, appellants, claimed on appeal that evidence with respect to an oral agreement with regard to a tenancy was improperly admitted because varying the terms of the deed by parol testimony, and it appeared from the record that during the trial plaintiffs had sought to show that they made no oral agreement to take the property subject to such tenancy and offered an instruction along that line, and defendant sought to show that there was such agreement and there were no objections to any of this testimony upon the ground that it was inadmissible to vary the terms of the deed, held plaintiffs could not complain on appeal with respect to the admission of this testimony when they tried the case on this theory and made no objections to any of this testimony at the time it was introduced.
NIPPER, J.
This is an action to recover damages on account of the alleged breach of covenants in a warranty deed, by which the plaintiffs, who were grantees, are alleged to have suffered a loss. There was a verdict and judgment for defendant. and plaintiffs have appealed.
James J. O'Brien, one of the plaintiffs, purchased the property from the defendant, and had the other plaintiff, Wm. J. Becker, named as grantee. Becker was merely a strawman in the transaction. The property was purchased for $70,000, and at the time of the purchase one Cassilly was occupying the premises as lessee of defendant. After plaintiffs purchased the property they had to pay Cassilly something like $4,000 in order to get possession, and it is on account of this fact that the suit is brought.
The property was purchased on May 29, 1925, and consisted of a rectangular parcel of land situated at the northeast corner of Lindell Boulevard and Sarah Street, in the City of St. Louis, having a frontage on Lindell of 150 feet, and a frontage on Sarah of 308 feet.
Plaintiffs, in their petition, complain that in the breach of the covenants of the deed, the real estate so purchased was encumbered by a valid outstanding unexpired lease under which the property was in the possession of Cassilly, who, as defendant's lessee, was conducting a gasoline filling station thereon. This lease was given for a term of two years, starting from May 29, 1924, and half of its term had expired at the time the deed conveying to plaintiffs was executed. The lease provided that Cassilly was to pay the defendant a monthly rental of $150, and that the defendant could terminate the lease by giving Cassilly sixty days' notice in the event the defendant desired to sell the property, or to improve the same for the defendant's own uses. And in the event such option to terminate was exercised, the defendant was to pay Cassilly a pro rata cost of the improvements, which the lessee, pursuant to the lease, had put on the premises, so that, by the exercise of such option at the expiration of one-half of the term of the lease, the defendant was to pay Cassilly one-half of the expense of such improvements, and at the expiration of the term, or earlier termination of the lease, Cassilly had the right to remove the improvements which he had erected upon the premises.
Plaintiffs complain, in their petition, that they were excluded from possession of the purchased premises and deprived of the improvements by the lessee holding under the said lease; that although the lease was not recorded, plaintiffs had knowledge of Cassilly's possession, and hence could not oust him by possessory action without satisfying his rights under the lease.
The petition also alleged that the defendant failed and refused, both before and after the passing of the lease, to take any steps toward the removal of Cassilly from the premises, or to preserve the improvements for the plaintiffs, and that plaintiffs were compelled to buy off Cassilly and redeem the improvements from the provisions of the lease in order to get possession.
The answer admitted that the defendant sold plaintiffs the property, and made, executed, and delivered the deed mentioned, but alleged that plaintiffs knew about the lease and its terms, and agreed to accept, and did accept, the conveyance of the premises subject to the tenancy of Cassilly. The answer also pleaded estoppel.
The deed from defendant to plaintiffs is in the usual form, containing the words, "grant, bargain and sell," and excepting from the covenants only taxes for 1925 and thereafter. There is no question but that at the time of the passing of the deed, May 29, 1925, the premises conveyed and improvements were in the possession of Cassilly under a lease from defendant for a term of two years beginning May 29, 1924. The defendant took no steps to dispossess Cassilly, and he refused to vacate, and insisted on his rights under the lease. Plaintiffs, in order to get possession, immediately notified defendant and Cassilly, and demanded possession, and then filed suits against Cassilly in unlawful detainer and to restrain him from removing the improvements, and later paid him the amount heretofore mentioned, and he surrendered possession. The lease was not recorded, but plaintiffs knew that the property was occupied by lessee.
Plaintiff Becker stated that he had no beneficial interest, but acted and took title as trustee for James J. O'Brien, the other plaintiff; that he represented James J. O'Brien as attorney in the proceedings after the passing of the deed in attempting to remove the lessee, Cassilly, from the land; that he notified the officers of the defendant company of Cassilly's refusal to give possession, and notified Cassilly to vacate; that he knew of the occupancy of the premises by Cassilly before the passing of the deed, but knew nothing about the terms of the lease; that he talked to Mr. Kane, vice-president of the defendant company, who signed the deed for the defendant, and Mr. Kane told him that Mr. John S. Leahy was taking care of that, and immediate possession would be given.
James J. O'Brien testified that he authorized a real estate dealer to make an offer to purchase the property, and afterwards requested his father, William H. O'Brien, to call on Mr. John S. Leahy, president of the defendant company, in an effort to make the purchase at a satisfactory price; that he made one visit with his father to Mr. Leahy's office, and talked with the latter about the purchase. This was a few days before the earnest money contract was given. The price of $70,000 was finally agreed upon. That Mr. Leahy stated he would take care of Cassilly; that he knew nothing of the terms or conditions of Mr. Cassilly's holding possession, and that he had no discussion with Mr. Leahy, or any one else representing the Knights of Columbus Building Company, prior to the closing of the deal about Cassilly's being allowed to remain on the premises; that he had agreed to convey the most valuable part, the corner, to the National Refining Company, and so notified the officers of defendant prior to the execution of the deed; that after the lessee failed to give possession, he had an interview with Mr. Cassilly's attorney, and that negotiations were resumed by his father, William H. O'Brien, acting for him, and Cassilly was finally bought off for the sum of $3,968.
Mr. William H. O'Brien, father of plaintiff James J. O'Brien, testified that he went to see Mr. Leahy, at his son's request, about April, 1925, with respect to the purchase of this property. He was acting for his son at the time. He saw Mr. Leahy a number of times. He said he did not see the lease under which Cassilly occupied the premises, but that Mr. Leahy told him about it, and stated they would take care of Cassilly, although Mr. Leahy testified that he had showed this lease to the elder O'Brien and discussed its provisions with him. It appears that while the negotiations were pending Mr. Leahy went away from the city of St. Louis, and the deal was consummated between the plaintiffs and other officers of the defendant company.
Mr. Joe Kane, as vice-president of the defendant company, testified that he executed the deed in the absence of Mr. Leahy.
Mr. Stretch testified, for the defendant, that he was manager of the defendant company, and that he told the elder O'Brien prior to the sale that Cassilly had a lease; that he was present at the closing of the sale, and that Mr. O'Brien looked at the certificate of title at that time and saw the lease was not recorded, and made the remark that Cassilly "can go to hell, and we can put him out any time we want to." Mr. O'Brien, however, denied ever making any such statement.
Mr. Leahy testified that he was president of the defendant company, and that Mr. William H. O'Brien called to see him first about the purchase in February, 1925, and made about nine later calls; that at one of these conferences Mr. William H. O'Brien was shown the lease, and that they discussed Cassilly's tenancy. He did not undertake to give the exact language used, but said that the effect of his conversations with the elder O'Brien was that Cassilly could remain and need not be disturbed until their plans as to the use of the property had been developed. He said there was some discussion with respect to the zoning ordinance, which might prevent them from starting a filling station on the property, and he thought there might be an object in making the operation of the filing station continuous by arranging to continue immediately when Cassilly quit; that there was no request for any notice to vacate to be given Cassilly; that Mr. O'Brien made one visit to his office in company with his son; and Mr. Leahy further testified that Cassilly was to remain there unmolested, subject to the written direction of Mr. O'Brien.
The court refused certain instructions requested by the plaintiffs. The only instruction given on behalf of plaintiffs was one on the measure of damages.
Plaintiffs, who are appellants here, insist that, as the deed contained no exceptions to the lease, defendant's failure to give plaintiffs possession constituted a breach of the covenants of the deed. Plaintiffs also insist that the effect of this deed cannot be varied by parol testimony, because all prior and contemporaneous oral agreements with respect to the transaction are merged in the deed itself, and parol testimony is inadmissible to vary or contradict the terms of the deed, or release defendant from liability. This is ordinarily true, as may be seen by reference to the following cases cited by plaintiffs: Laclede Laundry Co. v. Freudenstein, 179 Mo. App. 175, 161 S.W. 593; Anthony v. Rockefeller, 102 Mo. App. 326, 76 S.W. 491. The trouble with plaintiffs' situation is this: It appears from this record that both plaintiffs and defendant in the court below introduced testimony as to what the agreement with respect to Cassilly's tenancy was before, at the time, and after the execution of the deed, and both sides sought to show what the oral agreement was prior to and at the time of the execution of the deed. Plaintiffs sought to show that they made no agreement to take the property subject to Cassilly's tenancy, and defendant sought to show by a number of witnesses that such was the agreement, and there were no objections to any of this testimony upon the ground that it was inadmissible to vary the written terms of the deed. Plaintiffs cannot be permitted to complain, on appeal, with respect to the admission of this evidence when they tried the case upon this theory and made no objections to any of this testimony at the time it was introduced. [Briegel v. Terry (Mo. App.), 226 S.W. 624.]
Plaintiffs also requested an instruction submitting the questions to the jury as to whether or not plaintiffs agreed to take the property subject to Cassilly's lease, or agreed to accept Cassilly as a tenant. Although this instruction was refused, plaintiffs not only permitted the instroduction of oral testimony as to the terms and conditions of the transfer of the property, but requested an instruction along that line. Therefore, they are in no position to complain here. [Cady v. Coates, 101 Mo. App. 147, 74 S.W. 424.]
Defendant requested, and the court gave, instructions to the effect that if plaintiffs accepted the premises subject to the occupancy and tenancy of said Cassilly, then plaintiffs could not recover. This seems to be the theory upon which the case was tried by both parties. The case seems to have been fairly tried and submitted upon the theory by which plaintiffs sought to recover.
Finding no reversible error in the record, the judgment is affirmed. Haid, P.J., and Becker, J., concur.
REPORTERS NOTE: — Writ of certiorari in the foregoing cause was denied by the Supreme Court, July 29, 1931.
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