Bammert v. Kenefick

• Decision Date: 04 March 1924
• Docket Number: No. 23866.,23866.
• Citation: 261 S.W. 78
• Parties: BAMMERT v. KENEFICK.
• Court: Missouri Supreme Court

261 S.W. 78

BAMMERT v. KENEFICK.

No. 23866.

Supreme Court of Missouri, Division No. 2.

March 4, 1924.

Motion for Rehearing Overruled April 7, 1924.

Appeal from St. Louis Circuit Court; R. W. Hall, judge.

Action by Frank J. Bammert against Daisy A. Kenefick and others. Judgment for plaintiff, and defendant named appeals. Affirmed.

George o. Durham, of St. Louis, for appellant.

R. P. & C. B. Williams, of St. Louis, for respondent.

WHITE, J.

Action for specific performance to convey real estate.

In June, 1916, the plaintiff leased a house and lot in the city of St. Louis, the lease containing a paragraph giving the lessee an option to purchase. One Johanna Schnatmeyer executed the lease as lessor. Schnatmeyer, described in the evidence as a straw person, afterwards conveyed the property to the defendant Daisy A. Kenefick. Kenefick, however, was only a nominal owner, the real party in interest being her father, George A. Sanguinet, Sr. Sangumet testified that he could not do business in his own name because of difficulty with his wife, from whom he had separated; because of that he had put this property in the name of Daisy Kenefick, and had Schnatmeyer convey to her after the lease was executed. The suit was brought by the plaintiff against Schnatmeyer, Sanguinet, and Kenefick; judgment was rendered for plaintiff, decreeing a specific performance of the contract to convey. Daisy A. Kenefick, record owner at the time of the trial, appealed.

The lease was dated June 21, 1916, and under it Bammert took possession about July 1, 1916. It was for a term of two years, with an option to purchase at any time within that period. The terms of that agreement will be considered later. Suit for specific performance was filed July 11, 1921—five years after the execution of the lease, the petition set forth the facts about the state of the title, the real ownership, the terms of the option to purchase, and alleged that plaintiff entered into possession of the property for the purpose of making it his home, and that, with the full knowledge of Sanguinet, he expended large sums in making valuable improvements upon it; that before the expiration of the lease he duly notified Sanguinet a his election to purchase on the terms and conditions in the contract; that he had made all payments and had done all things required of him under the contract, and that he was ready and willing to pay the balance of such purchase price and to perform whatever else was necessary to complete the purchase; that he had paid $1,975 on the contract—$1,078.48 on the principal debt, and $896.52 as interest.

The petition further alleged that the plaintiff was ignorant, inexperienced in business, and trusted Sanguinet, believing Sanguinet would "treat him right"; that on June 28, 1921, a notice was served upon him purporting to be signed by Daisy A. Kenefick and George Sanguinet, stating an intention to terminate the tenancy July 31, 1921, and notifying him to move, and threatening legal action to dispossess him. He prayed for a decree of specific performance and an injunction pending the suit to restrain the defendants from proceeding to recover possession.

Mrs. Kenefick answered, denying that Sanguinet was the owner of the property, alleging that she was the owner in fee simple, and that at the date of the contract the record title was in Schnatmeyer, who held for her benefit. She admitted the lease and the terms of the option contract; denied that plaintiff exercised the option to purchase on the terms and conditions in the contract, or any other terms; denied that the plaintiff during the term of the lease, or at any other time prior to the institution of the suit, .performed or offered to perform on his part the things necessary to be performed by him under his option to purchase; and denied specifically other allegations of the petition. The answer further averred that the plaintiff entered into possession under contract of lease, and that on the termination of the lease the plaintiff continued in possession as the lessee of the defendant; that the plaintiff was without equity, guilty of lathes, and was estopped from pressing any rights which at any time he might have against the defendant, for, since the execution of the lease, plaintiff, without notice to the defendant of any claim of interest, had stood by and permitted the defendant to expend large sums of money for taxes and expenses against said property, mentioning taxes for the several years 1916 to 1920, including sprinkling taxes and insurance of the property.

Sanguinet filed an answer disclaiming any interest in or title, to the property. Schnatmeyer answered that she was the holder of the record title, but had no beneficial interest in the same, and that it was fully vested in the defendant Daisy A. Kenefick.

For reply to the separate answer of Kenefick, plaintiff denied that Daisy A. Kenefick had any beneficial interest in the property, and alleged that at all times it belonged to Sanguinet, and that, if the lessor at any time had any right to declare the option agreement was forfeited on account of the plaintiff's failure to perform within the time limited, defendants Kenefick and Sanguinet had waived the right by suffering and permitting the plaintiff to perform the contract after the expiration of said time, and that the said parties, after waiving and excusing such delay, never at any time notified the plaintiff of any intention to declare the option contract forfeited or rescinded on account of such delay. It is further alleged in reply that Kenefick and Sanguinet were estopped from claiming any forfeiture of the plaintiff's rights by knowingly permitting the plaintiff to expend large sums of money for many and valuable improvements on the property. The reply then admitted that Sanguinet paid the taxes on the property, and averred that the plaintiff was at all times ready to repay the same.

It is more convenient to examine other facts presented by the record in considering the points presented for reversal.

I. It stands admitted, notwithstanding the allegations of the answers, that Sanguinet was the real party in interest, and whatever he did was binding upon the record owner. It is first necessary to examine the contract which the plaintiff seeks to enforce. The lease is in the ordinary form, dated June 21, 1916. Johanna Schnatmeyer leased the property to plaintiff Bammert for a period of two years commencing July 1, 1916, at $420 per year, payable monthly in advance in installments of $35 per month, with stipulations and conditions regarding the duties of the lessee, which are not important here. It contains this provision:

"Any failure to pay each month's rent when due, or to keep or perform any of the covenants herein contained, shall produce a forfeiture of this lease if so determined by said lessor or her heirs or assigns, or legal representatives without further demand or notice."

The option agreement is as follows:

"It is hereby agreed between the parties hereto that the said party of the second part shall have the option to purchase the within described property at a price of thirty-five hundred dollars ($3,500) at any time during the term of this lease that the total payments on account of rent, exclusive of six per cent. interest per annum on the said purchase price of $3,500 and the taxes on this property, shall amount to a total of four hundred dollars ($400), and the balance of said purchase price shall be payable as follows: Assume a deed of trust of twenty-four hundred dollars ($2,400) and the balance of seven hundred dollars ($700) and interest on said $2,400 in monthly installments of thirty-five dollars ($35) each."

Thus it appears that before Bammert could exercise his option to purchase, these conditions must be met: (a) $400 must have been paid on the principal debt, (b) before the expiration of lease, and (c) out of the $35 per month, after deducting interest at 6 per cent. and taxes. These conditions, as will appear, were impossible of fulfillment.

Bammert might purchase at any time within two years, the life of the lease, when his "total payments on account of rent" should amount to $400 after deducting interest and taxes. Language could not make it plainer that payments of $35 per month were to include interest and taxes which the lessor must deduct and credit the balance as payment on the purchase price. At $420 a year the total payments required of the plaintiff in the two years was $840. Unless interest at 6 per cent. on $3,500 and taxes for two years should amount to $440 or less, the contract was incapable of performance. As a matter of fact, the taxes actually paid on the property for the two years was $68.89, and the interest was about $400, after making deductions on account of the reduced principal. So, under the circumstances, it was impossible for the plaintiff to comply with the exact terms of the contract. His $35 a month, if he had paid it regularly, would have been insufficient to pay the interest on the property and the taxes, and still allow $400 to credit on the principal. In order to meet that condition should the contract be construed so as to require the plaintiff, the purchaser, to pay more than the contract stipulated he should pay? The contract showed on its face that the lessor considered the interest, 6 per cent. net, sufficient return on her investment; for, after deducting interest and taxes from the $35 payments, the balance was to be credited on the purchase price. It is not conceivable that if he fully complied with the contract regarding payments the parties intended the lessee to lose those credits. The failure of the credits to amount to $400 before the end of the term was not foreseen by the parties. We hold, therefore, that if the plaintiff had paid $35 a month according to contract, his right to purchase could not have been lost because the net credit did not amount to $400. The option contract...