AgriBank FCB v. Cross Timbers Ranch, Inc.

• Decision Date: 21 March 1996
• Docket Number: No. 19940,19940
• Citation: 919 S.W.2d 256
• Parties: AGRIBANK FCB, a federally chartered corporation, Plaintiff-Respondent, v. CROSS TIMBERS RANCH, INC., an Arkansas corporation, Defendant-Appellant.
• Court: Missouri Court of Appeals

Page 256

919 S.W.2d 256

AGRIBANK FCB, a federally chartered corporation, Plaintiff-Respondent, v. CROSS TIMBERS RANCH, INC., an Arkansas corporation Defendant-Appellant.

No. 19940.

Missouri Court of Appeals Southern District.

March 21, 1996.

Appeal from Hickory County Court; Honorable James P. Anderton, Judge.

William A.R. Dalton, Daniel, Clampett, Lilley, Dalton, Powell & Cunningham, Springfield, for appellant.

Jerry W. Venters, Venters, Pletz & Reed, P.C., Jefferson City, for respondent.

PER CURIAM.

Cross Timbers Ranch, Inc., appeals from a judgment of the Circuit Court of Hickory County, Missouri, entered upon a jury verdict finding in favor of Plaintiff AgriBank FCB on its claim of unlawful detainer.

In 1978, Allison Brothers, Inc., predecessor in interest to Cross Timbers Ranch, Inc. (Cross Timbers) and William E. Allison and Mallie A. Allison, executed a $500,000.00 promissory note to The Federal Land Bank of St. Louis, predecessor in interest to Respondent AgriBank FCB (AgriBank). The note was secured by a deed of trust, with a power of sale provision, covering 3,736 acres of farm property located in Hickory County, Missouri (the property). The record shows that Allison Brothers, Inc., and its successor in interest, Cross Timbers, suffered financial reversals and filed a Chapter 11 Bankruptcy in Oklahoma, followed by a Chapter 12 Bankruptcy in Missouri. When AgriBank attempted to foreclose under the deed of trust a third bankruptcy action, a Chapter 11 proceeding, was filed. During the course of the Chapter 12 proceeding AgriBank obtained relief from a stay order and proceeded to foreclose on March 12, 1993. AgriBank purchased the property for $675,000.00 and a substitute trustee's deed was duly executed on June 16, 1993. AgriBank did not then take control over the property or its farm operations.

Both before and after the foreclosure sale there were on-going discussions relating to restructuring the loan as well as the sale of the property back to Cross Timbers pursuant to federal lending rights accorded Cross Timbers. ¹ Additionally, Cross Timbers notified the substitute trustee and AgriBank of its intentions to exercise its statutory rights of redemption but it did not do so. There were also failed negotiations for the leasing of the property to Cross Timbers. On December 1, 1993, AgriBank made a demand for possession of the property, effective December 8, 1993. AgriBank never collected rent from Cross Timbers after foreclosure.

Cross Timbers contends that AgriBank's agents had legally bound the lender through an oral agreement to continue the farming operation by harvesting the crops, taking care of the property and accounting for the rentals. AgriBank denies these allegations.

Cross Timbers argues two points on its appeal. First it contends that the trial court erred in overruling Cross Timbers' motion for judgment notwithstanding the verdict. Cross Timbers asserts that as a matter of law AgriBank was not entitled to recover in its unlawful detainer action because AgriBank had made an oral lease of the property to Cross Timbers. Therefore, a tenancy at will was created requiring a sixty day notice of termination and AgriBank had not proffered timely termination notice. Secondly, it argues that the trial court erred in giving AgriBank's Instruction No. 4 to the jury because the instruction did not require the jury to find either wrongful or unlawful possession of the property by Cross Timbers or that AgriBank had a right to possession at the time the unlawful detainer action was filed.

I

"Appeals from trial court denials of motions for judgment notwithstanding verdict are treated in the same fashion as appeals from denial of motions for directed verdicts at the close of the evidence. In both instances, the primary question is, did plaintiff make a submissible case?" Norris v. Jones, 687 S.W.2d 280, 281 (Mo.App.1985). We view the evidence and all reasonable inferences to be drawn therefrom in the light most favorable to AgriBank, the prevailing party, and will disregard all evidence and inferences to the contrary. Dockery v. Mannisi, 636 S.W.2d 372, 376 (Mo.App.1982). "If one or more of the elements of a cause of action are not supported by substantial evidence, a motion for directed verdict and for judgment [notwithstanding the verdict] should be granted." Kennedy v. Fournie, 898 S.W.2d 672, 680 (Mo.App.1995).

Cross Timbers asserts that after the foreclosure an oral agreement was created when AgriBank expressly authorized it to continue the farm operation and maintain the property. Cross Timbers' witnesses testified at trial that its agents had been told by AgriBank's agents to continue to farm the ranch like it had in the past and to "keep the place up." Cross Timbers asserted that since it was lawfully in possession of the property a tenancy at will had been created and that unlawful detainer would not lie to oust it from the land because it had not been given the requisite 60 days to vacate as directed by § 441.050. ² AgriBank denied that its agents entered into an oral agreement with Cross Timbers. It maintained that its agent, Mr. Strom, told Cross Timbers' agent that there was no agreement, "you're just here." AgriBank further asserted that it allowed Cross Timbers to hold over pursuant to negotiations for the repurchase, and later the leasing of the property to Cross Timbers, but never consented to the creation of a tenancy. Thus there was a clear conflict in the testimony of the witnesses. "With this conflict before it, the jury could choose to believe or disbelieve any witness." Guevara v. Friedeman, 732 S.W.2d 259, 260 (Mo.App.1987).

No type of tenancy at will, including a year-to-year tenancy, arises without some form of consent on the part of the landlord, whether express, inferred or implied. Watkins v. Wattle, 558 S.W.2d 705, 712 (Mo.App.1977). "The mere holding over by the tenant [after expiration of a leasehold] does not of and in itself create a new tenancy. It only gives the landlord the option to renew the lease. No new term is created until the owner, in some manner, recognizes the tenancy as existing." Millhouse v. Drainage Dist. No. 48, 304 S.W.2d 54, 59 (Mo.App.1957) (Italics in original.); Kilbourne v. Forester, 464 S.W.2d 770, 774 (Mo.App.1970). In Martin v. Lorren, 890 S.W.2d 352 (Mo.App.1994), the prior owners of a foreclosed property argued that they were entitled to a 30 day notice to vacate because a tenancy at sufferance had arisen when the purchaser did not immediately evict them. In that case the foreclosure sale took place some five months before the purchaser paid for the property due to the need for bankruptcy court approval of the purchase. This Court found that there was nothing in the record to indicate that the purchaser had allowed the previous owners to remain on the property as tenants and affirmed an ejectment judgment against the prior owners. Id. at 358.

In the instant case, the trial court submitted Instruction 5 requested by Cross Timbers whereby the jury could have found that an oral lease had been created by the parties thereby precluding recovery under an unlawful detainer theory. ³ However, the jury found against Cross Timbers on its requested instruction, finding in favor of AgriBank. "Under Missouri law, a jury verdict will not be overturned unless there is a complete absence of probative facts to support the verdict. Such issues as the weight of the evidence, credibility of the witnesses and resolution of conflicts in the testimony are not matters for appellate review." Steif v. Limpiphiphatn, 814 S.W.2d 695, 697 (Mo.App.1991) (Citations omitted.) "Removing a case from the jury is a drastic measure which may only be taken if in the exercise of fair and impartial judgment there is no room for reasonable minds to differ." Kennedy, 898 S.W.2d at 679. Because the jury found no oral lease was created between the parties, Point I is denied.

II

In its second point, Cross Timbers argues that the trial court erred in giving AgriBank's Instruction No. 4 to the jury in that the instruction did not require the jury to find that AgriBank had a right to possession at the time it filed its action in unlawful detainer. Additionally, it did not require a finding that Cross Timbers was in wrongful or unlawful possession of the property.

Section 534.030 defines three distinct factual situations, or classes, that may constitute "unlawful detainer." ⁴ With regard to the statute, Judge Flanigan wrote as follows in Watkins, 558 S.W.2d at 712:

The first class is the "hold-over tenant" class, the second (added in 1939) is the "hold-over employee" class, and the third is the "intruder class" (wrongful possession, without force, by disseisin) ... The relationship of landlord and tenant is unnecessary in actions under the "intruder class," but a written demand for possession prior to the institution of the action is necessary in such actions. In actions involving the hold-over tenant class, no demand for possession is necessary but a landlord-tenant relationship must have existed.

(Emphasis ours.) (Citations omitted.)

Therefore, in the instant case we apply the statutory language of the "first class" as herein mentioned, to-wit:

"[w]hen any person shall willfully and without force hold over any lands, tenements or other possessions, after the termination of the time for which they were demised or let to him, or the person under whom he claims ... such person shall be deemed guilty of an unlawful detainer." § 534.030.

The prerequisites to maintaining an action in unlawful detainer in the instant case are to show a landlord-tenant relationship and a willful holding over by the tenant after the termination of the leasehold. See Cusumano v. Outdoors Today, Inc., 608 S.W.2d 136, 139 (Mo.App.1980). In light of the foregoing, we review Jury Instruction No. 4 which reads as follows:

INSTRUCTION NO. 4

Your verdict must be for the plaintiff if you...