Warder v. Henry

Decision Date06 November 1893
PartiesWARDER v. HENRY.
CourtMissouri Supreme Court

Appeal from circuit court, Jackson county; R. H. Field, Judge.

Action by George W. Warder against George W. Henry on a written contract, on an oral agreement, and to recover damages to fruit trees on a farm leased by plaintiff to defendant. From a judgment for plaintiff, defendant appeals. Affirmed.

C. O. Tichenor and Jefferson Brumback, for appellant. E. Robinson, for respondent.

BLACK, C. J.

The petition in this case sets up three separate and distinct causes of action: The first is based upon a writing dated 20th January, 1890, whereby defendant, Henry, agreed to pay to the plaintiff, Warder, on or before six months after date, the sum of $10,000, to be paid in bonds of a description fully set forth, or, at the option of Henry, in cash. In the second, the plaintiff states that defendant is indebted to him in the sum of $1,775 on account of the pro rata unexpired premiums on certain fire insurance policies held by the Warder Grand Opera House Company on its property, of which property Henry became the purchaser, and which policies were duly assigned to said Henry. The plaintiff admits that he owes defendant $351.65 on account of certain other unexpired policies turned over by defendant to him. Other items were set out in this cause of action, but, as they are not in dispute in this court, they need not be mentioned. It is alleged in the third cause of action that defendant, while in possession of a certain farm as the lessee of the plaintiff, unlawfully permitted cattle to break down, injure, and destroy fruit and ornamental trees on the farm, to the damage of the plaintiff in the sum of $1,600.

To an understanding of this case, and the various defenses set up to the several causes of action, it is necessary to go back to the beginning of the transactions which give rise to this contest. The Warder Grand Opera House Company, a corporaton, hereafter called the "Opera House Company," owned certain property in the city of Kansas known as the "Warder Grand Opera House" and the "Hotel Warder." On the 10th March, 1888, the corporation executed a deed of trust upon the before-mentioned property to secure a debt of $85,000. This deed of trust was recorded the same day, though there is a claim made in this suit that it was not entitled to record, because not properly acknowledged. Thereafter, and in the month of November, 1888, the Opera House Company leased that part of the property known as the "Warder Grand Opera House" to one Crawford for a period of five years. On the 10th January, 1890, the Opera House Company, by its president, and the defendant, Henry, made a lengthy written contract, whereby the company sold all of the first-mentioned property to Henry for the consideration of $350,000, to be paid as follows: First, to the National Bank of Commerce the sum of $150,000, on account of the said secured debt of $85,000, and of certain mechanics' liens, all then held by said bank; second, to convey to the Opera House Company, or to any person it might designate, a farm of 500 acres in the state of Illinois, known as the "Rossland Park Farm," subject, however, to a mortgage thereon of $50,000; third, to deliver to the Opera House Company, or to its order, $40,000 worth of cattle then on the farm; fourth, a note payable to the Opera House Company, or its order, for $15,000; and, fifth, "said Henry shall also, within six months from time of conveyance to him, deliver to said Opera House Company, or to any one it may designate, bonds to the amount of ($10,000) ten thousand dollars, in the aggregate, out of bonds aggregating $200,000, all of which shall be first mortgage bonds on the property particularly described in paragraph one of this contract, or may, in lieu of said bonds, pay said Opera House Company, or to its order, ten thousand dollars cash, and shall pay such cash if the bonds be not delivered within said six months." The agreement recites the fact that the property was then being advertised for sale under the $85,000 deed of trust, and that Crawford held the above-mentioned lease. The Opera House Company reserved the right to procure a cancellation of the Crawford lease, if it could do so, and in that event it agreed to convey the property to Henry by a warranty deed. It was further agreed that if the company could not procure a cancellation of the lease held by Crawford, then the property was to be sold under the deed of trust, and purchased by Henry at not less than $350,000, to be paid as before mentioned. The contract contains the further stipulation that, if Henry should take title under the trust deed, the said "Opera House Company shall also make to him a warranty deed of the property." The contract contains other stipulations, which need not be noticed. The above contract was duly ratified by the board of directors of the Opera House Company, and at the same time the board ordered Henry to execute to Warder, who was president of the company, the $15,000 note, to be by him discounted for the purpose of paying off liens over and above the $150,000 to be paid by Henry. The board also found that the company was indebted to Warder to an amount exceeding $78,000, and at the same time made an order directing Henry to turn over the cattle, and to convey the farm to Warder, and to deliver to Warder the $10,000 in bonds, or the cash which Henry had the right to pay in lieu of the bonds. The Opera House Company was unable to procure a cancellation of the Crawford lease, and the property was sold under the $85,000 deed of trust, to Henry, at the price of $350,000, and he received a trustee's deed, dated the 20th January, 1890. On the same day the Opera House Company executed a deed conveying to Henry the opera house and hotel property, being the same property conveyed to Henry by the trustee's deed. This deed professes, on its face, to be made in consideration of one dollar, and other valuable considerations. It sets forth, by way of recital, the trustee's deed of the same date, and it is then stated that it is made to ratify and confirm the trustee's sale. The deed also contains full covenants of warranty and against incumbrances, making no exceptions, save as to some unpaid taxes. On the same day, — the 20th January, 1890, — Henry executed a deed conveying the farm to Warder. At the same time, and in compliance with the previous contract, and the order of the board of directors, he gave Warder a writing thereby acknowledging that he owed Warder $10,000, due in six months, to be paid in the described bonds, or, at the option of Henry, in cash. This writing is the basis of the plaintiff's first cause of action. Crawford refused to deliver possession of the opera house to Henry, and thereupon the latter brought suit against Crawford in ejectment. That suit was decided by the trial court in favor of Crawford, on the ground that he had no actual notice of the deed of trust at the time he took the lease, and because the deed of trust was not well acknowledged, and therefore the record of it did not charge Crawford with constructive notice. Henry did not call upon or notify the Opera House Company or Warder to defend that suit. As a defense, Henry sets up the Opera House Company deed to him, the Crawford lease, and claims that the lease constitutes a breach of the covenant in that deed, and that the damages should be set off against the plaintiff's first cause of action. He also pleads a former suit pending, the facts of which will be noted hereafter. The trial court directed a verdict for plaintiff on the first cause of action.

1. The first question is whether the deed of trust, of date March 10, 1888, made to secure the $85,000 debt, was well acknowledged, so that the record thereof charged Crawford with notice, when he, at a subsequent date, accepted the five-year lease. The certificate of acknowledgment, omitting the caption and attestation of the notary, is in these words: "On this first day of March, 1888, before me personally appeared George W. Warder,...

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