Fritts v. Cloud Oak Flooring Co.

• Decision Date: 02 March 1972
• Docket Number: No. 9130,9130
• Court: Missouri Court of Appeals
• Parties: L. C. FRITTS d/b/a B & C Leasing Service, Plaintiff-Appellant, v. CLOUD OAK FLOORING COMPANY, a corporation, Defendant-Respondent.

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478 S.W.2d 8

L. C. FRITTS d/b/a B & C Leasing Service, Plaintiff-Appellant, v. CLOUD OAK FLOORING COMPANY, a corporation, Defendant-Respondent.

No. 9130.

Missouri Court of Appeals, Springfield District.

March 2, 1972.

White & Dickey, Clyde R. Allemann, Springfield, for plaintiff-appellant.

Miller, Fairman, Sanford, Carr & Lowther, Henry W. Westbrooke, Jr., Springfield, for defendant-respondent.

STONE, Judge.

In this jury-waived, court-tried action for unlawful detainer (§ 534.030), ¹ plaintiff L. C. Fritts d/b/a B & C Leasing Service (the landlord) sought restitution of certain leased premises, to wit, a tract in Springfield and the business building situate thereon, together with double the monthly rents and profits of said premises (§ 534.330), because (so it was alleged in plaintiff's petition filed on January 9, 1970) 'the lease . . . was terminated at January 1, 1970, for failure of defendant (Cloud Oak Flooring Company, a corporation, the lessee-tenant) to pay the rental reserved.' Plaintiff-landlord appeals from the judgment for defendant-tenant.

The leased premises were demised by a comprehensive, particularized instrument dated as of July 3, 1965, which included thirty numbered paragraphs (spread on eighteen pages of the transcript), only the relevant portions of which are noted here. Paragraph 3 provided for a ten-year term beginning on November 1, 1965 or, if the building and improvements to be constructed on the leased premises were not then ready for occupancy, on the fifth day after such building and improvements were made ready. ² In paragraph 4 the tenant contracted to pay a rental of $1,330 'promptly on the first day of each month in advance.' In paragraph 15 the parties agreed that if the tenant 'shall default in the payment of rent herein reserved, when due, and fails to cure said default within ten (10) days after written notice thereof' from the landlord, the latter might at once, or within six months thereafter (but only during continuance of such default), terminate the lease by written notice to the tenant. Paragraph 25 stated that no failure of the landlord to exercise any power given him under the lease, or to insist upon strict compliance by the tenant with its obligations thereunder, and no custom or practice of the parties at variance with the terms of the lease should constitute a waiver of the landlord's right to demand exact compliance with the terms thereof. And paragraph 26 declared that '(t)ime is of the essence of this agreement.'

The record does not reveal (and it is not here material) when the tenant corporation first failed to make prompt payment of the stipulated monthly rental. However, the landlord's testimony indicates that ere long after occupancy the monthly payments became delinquent and that, in endeavoring to collect them, he had talked from time to time with the then managing officers of the tenant corporation, at first with one Trask and after his departure with one Caterino, and had become 'quite concerned over the fact that they were obviously in pretty serious financial difficulties.' By the middle of December 1968 the rentals were 'about three months past due,' and an addendum to the original lease agreement was negotiated with N. E. Breuer, who had assumed management of the tenant corporation. In this addendum dated December 19, 1968, the tenant agreed to pay the rental for that month forthwith, 'to pay succeeding installments of rental when due, time being of the essence with respect to such payments,' and to liquidate rental arrearages for October and November 1968 by adding.$443.33 to each of the next six monthly payments. The addendum further provided that the original lease agreement 'shall be considered amended as respects paragraph 15, in that any failure of (tenant), for any reason whatsoever, to pay installments of rental on or before the date such installment shall be due, shall result in the immediate termination of (tenant's) right to possession of the premises demised' and that 'no notice of any kind of such failure to make payments shall be required to be given and that time is of the essence in the making of such payments' (hereinafter referred to as the no notice and essence provisions). (Emphasis ours.)

Thereafter, the monthly rentals for December 1968 and for the calendar year of 1969, together with the rental arrearages for October and November 1968, were paid by the tenant's checks issued on the dates and in the sums, and honored by the drawee bank in Springfield on the dates, as detailed in the marginal tabulation. ³ The course of conduct followed with respect to the issuance and handling of these checks throughout 1969, as reflected by the testimony and the photographic copies of the checks in evidence, was for each such check, on the date it was drawn, to be mailed by the tenant to the landlord at his Springfield office, to which it usually would be delivered the following day, and for the landlord thereafter to transmit such check, endorsed 'For Deposit Only,' to a bank in Atlanta, Georgia, where it was credited to the landlord's account and returned through customary banking channels to the drawee bank in Springfield for payment. ⁴

Although only two of the twelve checks (i.e., those dated 12/31/68 and 1/31/69) for monthly rentals accruing during 1969 were mailed in time for them to have been delivered to the landlord on the first business day of the month, all of those checks were accepted, retained and deposited without protest or complaint. With respect to some of the monthly rentals during 1969 which were not paid promptly, either the landlord or Dave Bernard, his assistant who was 'in charge of . . . the administration of accounts receivable and accounts payable and all other attendant functions,' talked over the telephone with either Breuer or Harold M. Horn, Jr., secretary of the tenant corporation; but neither the landlord nor Bernard could recall when or how many such calls had been made. Bernard said that 'my usual approach . . . was I merely contacted the individual and asked when we might expect to receive the money due us . . .. There might be a slight change in the wording at times, but nothing in a demanding sort of way.' Breuer characterized the only call he received from the landlord, which concerned the July 1969 payment, as 'a friendly inquiry.' And in outlining his talks with the landlord, Horn stated that 'most of the conversations had to do with general business conditions, with especially the future and the outlook for our company . . ..' Furthermore, the record is utterly barren of evidence that, at any time during the entire year of 1969, the landlord either undertook to forfeit the leasehold estate for the tenant's failure to pay any monthly rental on the first day of the month in advance or notified the tenant that such forfeiture would be demanded if the stipulated rental for any subsequent month were not paid on the precise date it became due.

The tenant's check for the January 1970 rental was dated, drawn and mailed on January 5, 1970, a Monday. In explanation of the failure to prepare and mail that check sooner, Breuer pointed out that the previous Thurday was New Year's Day, that only he and Horn were at the tenant's place of business for 'part of the day' on Friday, January 2, and that Monday, January 5, was the 'first full workday' in January. Passing these excustory comments, we find from the testimony of the landlord and his assistant that the tenant's January rental check was delivered to the landlord's place of business on or about January 6, 1970; that, prior to such delivery, there had been no demand for payment of the January rental and the tenant had not been contacted with respect thereto; and that the January rental check was in the landlord's possession before he indicated any intention to seek forfeiture of the leasehold estate and termination of the tenant's possession. The January rental check was returned to the tenant on January 7 or 8, and this unlawful detainer action was instituted on January 9. In the course of trial on September 29, 1970, the landlord stated that the tenant's rental checks for February 1970 and subsequent months had been received 'very well on time' and had been retained and cashed on the theory that they were 'half of the damages (the landlord's counsel) felt might be due . . . for unlawful detainer.' § 534.330.

In considering the case at bar, we bear in mind that the landlord did not seek statutory forfeiture in a landlord-tenant action under Chapter 535, which afforded a remedy judicially characterized as 'simple and expeditious' (B--W Acceptance Corp. v. Benack, Mo.App., 423 S.W.2d 215, 216) and also 'fair and equitable' (Carbonetti v. Elms, Mo.App., 261 S.W. 748, 751), but that he chose to invoke the harsh remedy of common-law forfeiture seeking not only to terminate the leasehold estate but also, by proceeding in unlawful detainer, to recover double damages and double rents and profits. § 534.330; Warning v. Rogers, Mo.App., 286 S.W.2d 374, 379. Under such circumstances, the landlord is held to scrupulous observance of every requirement of the common law, ⁵ unless waived by agreement. Independence Flying Service, Inc. v. Abitz, Mo., 386 S.W.2d 399, 404(4); Carbonetti v. Elms, supra, 261 S.W. at 751.

The initial question briefed and argued by counsel here is as to whether or not the common-law requirements prerequisite to forfeiture of a leasehold estate were waived by the hereinbefore-quoted no notice and essence provisions of the addendum dated December 19, 1968. The landlord's counsel vigorously insist that the common law requirements were so waived, while the tenant's attorneys earnestly argue to the contrary. In our view of the case, we find it unnecessary to discuss and determine this issue on its merits. For if it be assumed arguendo, as we do without so deciding, that the landlord's position on this issue is correct, we...