Commercial Asphalt, Inc. v. Smith
| Decision Date | 22 January 1966 |
| Docket Number | No. 44294,44294 |
| Citation | 196 Kan. 164,409 P.2d 796 |
| Court | Kansas Supreme Court |
| Parties | COMMERCIAL ASPHALT, INC., Appellee, v. Milo G. SMITH and Frank L. Smith d/b/a Big Three Sand & Gravel Company, Appellants. |
Syllabus by the Court
1. If an agreement is unilateral and not originally binding on one of the parties, but has been performed by the party not bound so that the other party has received the promised benefits, the contract becomes binding on the benefited party.
2. In an action to have a sand lease declared unenforceable because of lack of consideration and lack of mutuality of obligations, the record is examiend and it is held, the benefits passing to the lessors and the detriment to the lessees from performance of the lease agreement constituted sufficient independent consideration to bind the lessors or the subsequent purchaser of the leased premises.
Ralph E. Gilchrist and Harry E. Robbins, Jr., Wichita, argued the cause, and Lyndon Gamelson and Donald C. Tinker, Jr., Wichita, were with them on the briefs for appellants.
Benjamin C. Langel, Wichita, argued the cause, and George B. Powers, Carl T. Smith, John F. Eberhardt, Stuart R. Carter, Robert C. Foulston, Malcolm Miller, Robert N. Partridge, Robert M. Siefkin, Richard C. Harris, Gerald Sawatzky, Donald L. Cordes, Robert L. Howard, Charles J. Woodin and Mikel L. Stout, all of Wichita, were with him on the briefs for appellee.
HATCHER, Commissioner.
This action was brought for the purpose of having a sand lease declared unenforceable and the lessees removed from the leased premises.
The case was tried to the court on stipulated facts which will be summarized.
On February 20, 1954, Henry and Emma Koster, husband and wife, entered into a written agreement with the Big Three Sand and Gravel Company which was executed by the defendant, Frank L. Smith. The agreement specifically described 40 acres in Sedgwick County, Kansas, and continued:
'WHEREAS, the party of the second part is desirous of pumping, producing and purchasing sand from property.
'NOW THEREFORE, in consideration of the money payments hereinafter set out and the mutual covenants and agreements herein contained, it is agreed as follows:
'FIRST: The parties of the first part hereby grants unto the party of the second part for a period of twenty (20) years from date hereof, unless terminated or extended as hereinafter provided, the right to pump, produce and purchase sand from said property, as the party of the second part many see fit and proper.'
The second paragraph provided for the payment of five cents per ton for the sand removed and an automatic termination of the contract in event the payments were overdue for 45 days. The third paragraph provided for payment of $100.00 per month as rental if pumping operations ceased for a period of sixty days or longer.
The contract further provided:
Omitting other rpovisions of the lease agreement, one of which prohibited assignment without written consent, the lease agreement concluded by making the contract binding on the heirs and assigns of both parties.
The lessees took possession of the property and placed thereon such equipment as was necessary to pump and remove the sand. They complied with all the terms of the lease agreement. The lessees operated the lease to the apparent satisfaction of the lessors for a period of eleven years.
On January 22, 1964, the plaintiff, Commercial Asphalt, Inc., purchased the land covered by the sand lease agreement. The knowledge of the purchaser as to the existing lease agreement is well expressed by the stipulation which reads:
'* * * It is stipulated that the plaintiff had constructive notice by reason of the recording and also had actual notice of it, and it was the plaintiff's position that the contract was invalid, having read it and upon advice of counsel.'
On January 30, 1964, the plaintiff addressed a letter to Milo Smith informing defendants that they were cancelling the contract because it was unilateral and because the addition of Milo, the son of Frank, to the partnership constituted an unlawful assignment.
Sometime later, the date is not disclosed by the record, this action was brought. The trial court concluded:
'1. Paragraph numbered Fourth of said contract, plaintiff's exhibit A as attached to plaintiff's petition and plaintiff's exhibit 1 in evidence, controls and determines this action in that said paragraph provides that Big Three can terminate said contract at will, and therefore, as a matter of law Koster, or in this case his assignee Commercial, can terminate said contract at will.
Judgment was entered for plaintiff and defendants have appealed.
Appellants contend that if there was lack of mutuality in the agreement, the defect was cured by prompt performance. As we are inclined to agree with apellants, we will give attention to the argument of appellee in support of the judgment.
The appellee first contends that, there being no independent consideration, the contract is void for lack of mutual obligation to perform. Appellee suggests that the lessees could have walked away without making any attempt to perform the contract and the lessors would have had no recourse. There is merit to appellee's contention. However, the lessees did not choose to walk away. They proceeded immediately to move the necessary equipment on the leased premises, produce sand and pay royalty to the lessors. It would appear from the lease agreement that the lessees wanted sand; the lessors wanted the royalty money for the sand produced. Everything was performed as and when the contract anticipated.
This court adheres to the rule that if an agreement is unilateral, and not originally binding on one of the parties, but has been performed by the party not bound so that the other party has received the promised benefits, the contract becomes binding on the benefited party. The lack of mutuality is cured where the contract is executed.
The rule was recognized in Connell v. Kanwa Oil, Inc., 165 Kan. 241, 194 P.2d 950, where we stated:
...
To continue reading
Request your trial
-
Seneca Nursing Home v. Kansas State Bd. of Social Welf.
...a contract may be made binding and mutual by the performance contemplated, and the receipt of promised benefits. Commercial Asphalt, Inc. v. Smith, 196 Kan. 164, 409 P.2d 796. The trial court's opinion did not discuss K.S.A. 46-901, the governmental immunity statute. 46-901 does declare tha......
-
White v. Four B Corp.
...requirement of consideration is otherwise met, there is no additional requirement of mutuality of obligation. See Commercial Asphalt, Inc. v. Smith, 196 Kan. 164, 167 (1966) (any reasonable consideration will be sufficient to protect a contract against an attack of lack of mutuality); accor......
-
Commercial Asphalt, Inc. v. Smith
...the second lawsuit between the same parties. The previous action also involved an attempt to cancel the lease. (See Commercial Asphalt v. Smith, 196 Kan. 164, 409 P.2d 796.) The present action involves alleged improper use of the lease by the defendants subsequent to the trial of the first ......