Fountain v. Schulenberg & Boeckler Lumber Co.

• Decision Date: 14 March 1892
• Citation: 109 Mo. 55,18 S.W. 1147
• Court: Missouri Supreme Court
• Parties: FOUNTAIN et al. v. SCHULENBERG & BOECKLER LUMBER CO.

18 S.W. 1147

109 Mo. 55

FOUNTAIN et al. v. SCHULENBERG & BOECKLER LUMBER CO.

Supreme Court of Missouri, Division No. 1.

March 14, 1892.

BREACH OF CONTRACT — MEASURE OF DAMAGES — LIABILITIES OF ASSIGNEE — CONSTRUCTION OF CONTRACT.

1. Where plaintiffs leased a lot to defendant, who agreed to pay the taxes thereon for the use of the same, and neglected so to do, whereupon the property was sold for taxes, and plaintiffs lost title thereto, the proper measure of plaintiff's damage is the amount of the tax unpaid, together with interest thereon.

2. Where defendant was a corporation that "went into the shoes" of the original lessee, succeeding it in its business and occupancy of the lot, defendant is liable for taxes that became due while its predecessor was in possession.

3. The fact that plaintiffs were non-residents, and had no actual notice of the tax-sale, gave them no right to rely on defendant's agreement as one of indemnity in case of tax-sale, they being chargeable with knowledge of the annual levy of taxes against their property.

4. The refusal of the court to rule on the question as to whether the tax judgment, and sale thereunder, divested plaintiffs of their title, was not error, such question being immaterial.

5. Where defendant and the prior firms occupied under a written lease from a trustee, whose title was not disputed by defendant, it was enough for plaintiffs to show that they held the title conveyed to such trustee.

6. A deed of certain lots stated that it was given to indemnify the grantor's sureties on a certain bond, for a designated amount payable at her death, and to save them from pecuniary harm, conveyed "in trust, however, as aforesaid, to the intent" that the beneficiaries "shall have possession, exclusive control, and management of the lots, and be entitled to all the profits and rents;" and the trustee, at the death of the grantor or thereafter, as the beneficiaries may direct, shall "make and convey such title as is vested in him" to any person or persons whom the beneficiaries may designate. Held, that the instrument was in the nature of a mortgage, and not an absolute conveyance.

Cross-appeals from St. Louis circuit court; D. D. FISHER, Judge.

Action by Lamar Fountain and others against Schulenberg & Boeckler Lumber Company. From a judgment for plaintiffs both sides appeal. Affirmed.

E. T. Farish, for plaintiffs. Rudolph Schulenberg, for defendant.

BLACK, J.

The plaintiffs aver that they were the owners of lot 98, in block 31, of North St. Louis; that the defendant corporation occupied the lot in 1879 as their tenant, under an agreement to pay the taxes assessed thereon as a rental therefor; that the defendant suffered and allowed the lot to be sold for the taxes of 1879, amounting to $64, whereby they lost their property; that the lot was of the value of $5,000, and for this amount they ask judgment. The court gave judgment for plaintiffs for $102.07, the amount of the taxes and interest thereon, and from that judgment both sides appealed. The evidence shows that on the 10th December, 1842, Mary C. Smith, by her deed of that date, conveyed this and another lot to Major C. Cheatam, in trust for Henry B. Brickell and Lemuel Smith, Jr. This deed states that Brickell and Smith are bound as the sureties of Mary C. Smith on a bond given by her for the use and benefit of the heirs of Nicholas P. Smith, for the sum of $4,315, due at the death of said Mary C. Smith; that, owing to the amount of debts against her, the sureties will in all probability have to pay the bond at her death; that, to indemnify them from pecuniary harm, she conveys the lot to Cheatam, "in trust, however, as aforesaid, to the intent and purpose that said Henry B. Brickell and Lemuel Smith, Jr., shall have the possession of the lot, and the exclusive control and management of the same, and be entitled to all the profits and rents arising from the rent or improvement of the said lot; and the said Major C. Cheatam shall, at the death of said Mary C. Smith, or at any time after her death, as the said Henry B. Brickell and Lemuel Smith, Jr., may appoint, make and convey such title as is vested in him by this instrument to any person or persons whom the said Henry B. Brickell and Lemuel Smith, Jr., may designate." Brickell and Major Cheatam married daughters of Mary C. Smith, and Lemuel Smith, Jr., was her son. Lemuel Smith, Jr., died in 1843. Brickell died prior to 1868. Mary C. Smith died in May, 1868, and Major Cheatam died in 1873. The plaintiffs in this case are not the persons upon whom descent was cast at the death of Mary C. Smith, as is alleged in the petition, but they are heirs of and purchasers from the heirs of such persons. Between 1855 and 1860 Major Cheatam, as such trustee, through his attorney in fact, leased the lot to the firm of Brotherton & Dryden for a period of 15 years, the lessees agreeing to pay the taxes on the property for the use of the same. This firm occupied the lot for a lumber-yard, and paid the taxes thereon until 1864. The same business was continued by the following firms, which succeeded each other in the following order: Dryden, Overstolz & Co.; Dryden, Wagner & Co.; A. Boeckler & Co. The last firm was succeeded by the defendant, Schulenberg & Boeckler Lumber Company, a corporation organized on the 12th February, 1880. These several firms occupied the property for the same business, and paid the taxes regularly down to the year 1879. The defendant corporation continued to use the lot for like purposes. Mr. Boeckler, the president of the defendant and a member of the firm of A. Boeckler & Co., testified that that firm occupied the lot in 1879; that the failure to pay the taxes for that year was due to some oversight; that the defendant paid taxes on the lot after 1879; that the prior firms had paid the taxes; and that the defendant "just went into their shoes." In 1881 the collector brought suit against the unknown heirs of Mary C. Smith to enforce the payment of the taxes for 1879. The defendants in that case, being all non-residents were notified by publication, and a judgment was rendered by default for $63.40. The property was sold in 1882 to one Mary Wing for $518, under an execution issued on the special tax judgment.

1. Conceding, for the present, that the defendant is liable, and liable to these plaintiffs, as their tenant, for a failure to pay the taxes for 1879, the question then arises, what is the measure of damages? The plaintiffs contend that they should have been awarded the full value of the lot, while the trial court held that they could not, in any event, recover more than the amount of the unpaid taxes and interest; and hence that court did not pass upon the question of the validity of the tax judgment and sale thereunder. The averment of the petition is, and the evidence tends to show no more, that the defendant agreed to pay the taxes in lieu of rent. Such, then, is the covenant for the breach of which damages to the full value of the lot are demanded. Mr. Sedgwick, after alluding to Hadley v. Baxendale, 9 Exch. 341, and subsequent American and English cases, reaches this conclusion: "That the plaintiff recovers such damages as are proximate and natural, and...