Bredell v. Fair Grounds Real Estate Company
| Decision Date | 22 July 1902 |
| Citation | 69 S.W. 635,95 Mo.App. 676 |
| Parties | MARIA BREDELL et al., Respondents, v. FAIR GROUNDS REAL ESTATE COMPANY et al., Defendants; NICHOLLS-RITTER REALTY AND FINANCIAL COMPANY, Appellant |
| Court | Missouri Court of Appeals |
Appeal from St. Louis City Circuit Court.--Hon. William Zachritz Judge.
AFFIRMED.
Judgment affirmed.
R. M Nichols for appellant.
(1) Nicholls-Ritter Realty & Financial Company became agents for the collection of the rent on the fifth day of May, 1898 when the Fair Grounds Real Estate Company acquired the property. The assignment of May 5, 1898, merely directed the application of the rents assigned thereby. The note of $ 2,000, secured by said assignment and the second deed of trust, was paid February 9, 1899. Such assignment of rents and the mortgage then became functus officio. Murphy v. Simpson, 42 Mo.App. 654; Welton v. Hull, 50 Mo. 296; Allen v. Dermott, 80 Mo. 56; Patrick v. Petty, 83 Ala. 420; Bank v. McKinney, 78 Me. 442; Lyon v. Ins. Co., 55 Mich. 141. (2) The assignment of May 5, 1898, having become functus officio on February 9, 1899, Nicholls-Ritter Realty & Financial Company could not be bound thereunder, or be in default under said assignment in not paying the ground rent accruing for March, April and May, 1900, or the interest notes, which did not mature until April 30, 1900. (3) The testimony conclusively shows that the $ 1,000 paid to Henry B. Scammel, on April 27, 1900, and the $ 1,200 paid to Nicholls-Ritter Realty & Financial Company on April 28, 1900, and the $ 1,788.87 paid to Nicholls-Ritter Realty & Financial Company on the open account, were paid on said dates, and that said payments were made under the unconditional assignment of August 17, 1898, long after the claimed conditional assignment had ceased to exist; and under this assignment Nicholls-Ritter Realty & Financial Company had a perfect right to prefer itself in preference to either the ground rent due to Mrs. Pim, or the interest due to Maria Bredell, and Fair Grounds Real Estate Company had a right to make such preference. Ames v. Gilmore, 59 Mo. 537; Foster v. Planing Mill, 93 Mo. 79; Larraber v. Bank, 114 Mo. 593. (4) The provision contained in the mortgage, held by respondent, which provides "in case of a failure to perform any of the covenants herein contained . . . the said parties of the second part, or either of them, or his successor in trust, shall be entitled to the immediate possession of said premises, and the rents, issues and profits thereof," nor the assignment, will not vary the common-law rule, that until the mortgagee takes possession is he entitled to the rents and profits of the real estate. Simpson v. Keene, 39 Mo.App. 635; Armour Pack. Co. v. Wolff, 59 Mo.App. 663; In re Life Assn. v. Rosenblatt, 96 Mo. 32. (5) The testimony shows that the promise to each of the third parties, for whose benefit it was made, has been discharged by payment, by the receiver. There was no debt on the date of the trial owing by the promisee to the third parties. No evidence was given of any assignment of the causes of action to the receiver, or to the plaintiff, Maria Bredell. The receiver was not a party to the suit, and did not ask subrogation to the rights of Mrs. Bredell and Mrs. Pim, under the contract. Therefore, there was no cause of action, and any judgment in favor of the receiver and against the appellants would plainly be erroneous. Hicks v. Hamilton, 144 Mo. 495; Devers v. Howard, 144 Mo. 678; Street & J. v. Goodall, 77 Mo.App. 320; Harberg v. Arnold, 78 Mo.App. 238.
Stewart, Cunningham & Eliot for respondents.
(1) When a corporation places all of its assets into the possession and control of another person, not a bona fide purchaser without notice, leaving its debts unpaid, its property is charged in equity with its debts. Railway v. Bank, 134 U.S. 276; Railroad v. Pettus, 113 U.S. 116; Railroad v. Branch, 59 Ala. 139; Bank v. Moran Packing Co., 138 Mo. 59. (2) A contract made upon a valid consideration may be enforced by a third person, though he is not named in the contract, where the obligee owes to such third person some duty, legal or equitable, which will give him a just claim. Meyer v. Lowell, 44 Mo. 328; Flanagin v. Hutchinson, 47 Mo. 237; Ellis v. Harrison, 104 Mo. 270; Houseman v. Trenton Water Co., 109 Mo. 304; Devers v. Howard, 144 Mo. 671; Kansas City School District v. Livers, 147 Mo. 580; Street v. Goodall, 77 Mo.App. 318; Harberg v. Arnold, 78 Mo.App. 237. (3) The words "ground rent," as used in the instrument of date May 25, 1898, include the payment of taxes, as well as the payment of monthly installments of rent. Gilbert on Rents, p. 9; Smith on Landlord and Tenant, *9, 90; Coke-Littleton, 142a; Doe v. Benham, 7 Q. B. 976; Ehrman v. Mayer, 57 Mo. 622; Eliot v. Gantt, 64 Mo.App. 248; Woods' Landlord and Tenant, sec. 298. (4) The words "subject to," as used in the instrument dated August 17, 1898, are the equivalent of "charged with," and mean that the rents referred to in the instrument are to be applied to the performance of the covenants contained in the deed of trust. Jackson v. Isaacson, 27 L. J. Eq. 392; Bullery v. Rovinson, 3 Burd. 392; 3 Jarman on Wills, p. 399; 9 Am. and Eng. Ency. Law (1 Ed.), p. 962; Walker v. Goodsill, 54 Mo.App. 631.
On December 20, 1900, Celeste Pim, owner in fee, leased to M. A. Haldeman and others a lot of ground with improvements thereon in city block 182, on Olive street, in the city of St. Louis, for a term of twenty-two years to commence January 1, 1891. The property is known as Nos. 720-722, and the building thereon situated as the Virginia Building.
By mesne assignments of the lease, the Fair Grounds Real Estate Company became the assignee of the lease on April 29, 1898. On April 30, 1898, the Fair Grounds Real Estate Company made, executed and delivered its deed of trust on the leased premises, conveying its interest in the leasehold to trustees therein named to secure two principal notes, one for fifteen thousand dollars and the other for ten thousand dollars, and twelve interest-bearing notes, all made payable to J. D. Ferry, beneficiary in said deed. The principal notes were to become due three years after date; the interest notes at intervening periods of six months. These notes were indorsed by Ferry without recourse and delivered to plaintiff Maria Bredell.
The different floors of the Virginia Building were sublet to the Columbia Phonograph Company, Gertrude Davis, and Charles J. Farrar.
On the twenty-fifth day of May, 1898, the Fair Grounds Real Estate Company assigned the rents due and to become due from the sublessees, to Nicholls-Ritter Realty & Financial Company and turned over to it the management and control of the leased premises with authority to collect rents and apply the surplus, after paying certain fixed charges, to the extinguishment of its claim.
On May 25, 1898, the Fair Grounds Real Estate Company executed its deed of trust on the leasehold to S. C. Buckingham as trustee, for the use and benefit of G. A. Dubbs and to secure to said Dubbs the payment of a promissory note of two thousand dollars and two interest notes of sixty dollars each.
On October 14, 1898, it executed a second deed of trust on the leased premises to the same trustee, to secure the payment of a note of twenty-five hundred dollars payable to George A. Dubbs.
M. A. Haldeman, on the twentieth day of May, 1899, recovered judgment in the circuit court of the city of St. Louis against the Fair Grounds Real Estate Company for $ 7,417.68.
On August 17, 1898, the Fair Grounds Real Estate Company executed a second assignment of the rents to Nicholls-Ritter Realty & Financial Company, and to one Scammell, to secure them the amounts due them from the Fair Grounds Real Estate Company. Both the assignments of May 25, 1898, and on August 17, 1898, were made "subject to the deed of trust now on the property."
It appears from the evidence that between May 31, 1898, and April 19, 1900, the Nicholls-Ritter Realty & Financial Company collected rents aggregating $ 27,581.16. Of this amount it disbursed $ 21,521.29 on account of ground rent, interest and expenses. On February 19, 1899, it paid to itself $ 2,080 principal and interest due on the note mentioned in the first assignment. On April 27, 1900, it paid a note of $ 1,000 to Scammell, claimed to be secured by the second assignment, and on April 28, 1900, it paid a note of $ 1,200 due to itself, and the further sum of $ 1,788.87 on open account due from the Fair Grounds Real Estate Company to it, claimed to be secured by the second assignment, making a total of $ 27,519.28 of rents paid out by it. The ground rents for the months of March, April and May, 1900, amounting to $ 1,875 were delinquent and two interest notes were past due on April 1, 1900, aggregating $ 750.
After the assignment of May 25, 1898, by the consent of the Fair Grounds Real Estate Company, Nicholls-Ritter Realty & Financial Company took entire charge of the leased premises and continued in charge thereof and was so in charge when this suit was commenced.
The lease from the owner of the property, was owned by the Fair Grounds Real Estate Company. After the execution of the assignment of May 25, 1898, the control of this property and its entire business was turned over by the Fair Grounds Real Estate Company to Nicholls-Ritter Realty & Financial Company and its accounts were kept by the latter company in its private books.
The suit is in equity to foreclose the deed of trust and to require the Nicholls-Ritter Realty & Financial Company to account for the rents collected by it in excess of the fixed charges and expenses of managing the property. The...
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