Hiatt Inv. Co. v. Buehler

• Decision Date: 04 March 1929
• Parties: THE HIATT INVESTMENT COMPANY, APPELLANT, v. E. A. BUEHLER, RESPONDENT
• Court: Kansas Court of Appeals

16 S.W.2d 219

225 Mo.App. 151

THE HIATT INVESTMENT COMPANY, APPELLANT, v. E. A. BUEHLER, RESPONDENT

Court of Appeals of Missouri, Kansas City

March 4, 1929

Appeal from Circuit Court of Jackson County.--Hon. Clarence A Burney, Judge.

AFFIRMED.

Judgment affirmed.

Harzfeld Beach & Steeper for appellant.

Nourse & Bell and Henri L. Warren for respondent.

BLAND J. Arnold, J., concurs. Trimble, P. J., absent.

OPINION

BLAND, J.

This is an action for rent reserved in a lease executed by the defendant as tenant to plaintiff as landlord. Defendant filed a counterclaim based upon a violation by plaintiff of a covenant in the lease and on allegations of fraud on the part of the plaintiff in procuring the lease. The jury found for the defendant on plaintiff's cause of action, and returned a verdict in the sum of $ 5500 on defendant's counterclaim. Plaintiff has appealed.

The lease was for a store room, occupied as a drug store, located at the northwest corner of St. John and Elmwood avenues in Kansas City. It was dated July 25, 1925, and was for a term of three years, beginning on August 1, 1925. Defendant vacated the premises in December, 1925. He paid the monthly rental of $ 160 for five months only ending on December 31, 1925. This suit is for $ 2380 the balance of the rent for the whole term, $ 800 having been realized by the plaintiff from rentals of the premises after defendant ceased paying rent. Defendant in his counterclaim prayed damages in the sum of $ 11,858.31 on account of the fraud alleged therein and a violation of a covenant of the lease wherein plaintiff agreed that there should be no other drug store in the holdings of plaintiff. There is no controversy but that defendant moved out of the premises and paid no rent after December, 1925, nor the amount for which defendant is liable under his lease provided he was not justified in abandoning the premises to plaintiff.

The facts in reference to the matter in controversy show that there was a small business center, consisting of about a dozen store rooms at the intersection of St. John and Elmwood avenues in Kansas City, facing St. John. These stores were owned by the plaintiff with the exception of a fire station located at the northwest corner of the intersection and which sets back some distance from St. John. The building and store room in question stands immediately west of the fire station and the latter being situated further to the north gave the store room some of the advantages of a corner location. There were houses located along the south side of St. John avenue immediately opposite the premises in question and the property south was restricted for residence purposes. The other store rooms at the intersection were leased or rented to various persons for other than drug store purposes, but the plaintiff owned a vacant lot at the southeast corner of the intersection which afforded the only location where possible competition to the drug store might be afforded.

The defendant became plaintiff's tenant in the drug store beginning in September, 1920, coming in under an unexpired lease of a former tenant. This lease expired at the end of June, 1923, at which time the rent was raised from $ 90 to $ 160. From this time until the execution of the lease in controversy defendant occupied the premises as a tenant from month to month. From the time the defendant went into the premises until he sold out his stock and fixtures the business increased from month to month.

The situation was such that the drug store was not near another competing drug store. When the matter of executing the lease in question came up between the parties defendant expressed fear to Mr. Sagehorn, the president of the plaintiff, that a building containing a drug store might be erected upon the vacant lot owned by the plaintiff. Defendant testified that there had been a rumor that plaintiff intended to sell the corner to some people who would erect a building to contain another drug store there. In his negotiation with Sagehorn defendant discussed this matter. Sagehorn testified that he brought up the question of the vacant lot but that defendant was not interested in anything but the twelve other existing store rooms at the intersection. Defendant testified that he knew the vacant lot belonged to the plaintiff and discussed the matter with Sagehorn, because there was a rumor that plaintiff was about to sell to someone who would erect a building there and open a drug store therein; that Sagehorn told the defendant that he would not permit any drug store on plaintiff's holdings; that "the estate was not financially able to build on it" (the lot); that "there would not be another business on that corner;" that "he had offered and been unable to sell it;" that "he could not sell it because the estate was in such shape that he could not sell it." (It seems that a stockholder of plaintiff had recently died.)

Thereafter Sagehorn drafted the lease and on July 25, 1925, brought it to defendant at the latter's store for his signature. The lease prepared by Sagehorn not having in it a clause protecting the defendant against the competition feared by him defendant called the circumstance to the attention of Sagehorn, who said, "well, you know me personally, that my word is good; that we cannot sell the land and haven't got the money to build on it." But defendant stated, "I am paying for protection and I would like to have the words put on the lease." Thereupon Sagehorn wrote the following at the end of the lease: "It is expressly understood that there is to be no other drug store in the holdings of the Hiatt Investment Company." and the lease was then executed by the parties.

Defendant testified that it was "considered by me and Sagehorn at the time the clause was inserted in the lease that the vacant lot there was a part of plaintiff's holdings." The lease was signed about noon and about six o'clock of the same afternoon defendant heard a rumor to the effect that plaintiff had either sold or was about to sell the vacant lot in question, "to some investor for a Piggly-Wiggly and the Crown Drug Company." Defendant made unsuccessful efforts to get in touch with Sagehorn for two days thereafter. When the defendant found Sagehorn the latter assured defendant there was nothing in the rumor; Sagehorn denied that plaintiff was selling the lot.

The testimony of Sagehorn himself shows that he entered into a contract (secret as far as defendant was concerned) on behalf of plaintiff for the sale of the lot to one Jones two days before the lease was signed by the defendant. It was stipulated that the purchaser should erect a business building of a specified type but no restrictive covenant of any kind was mentioned. In the face of this the evidence of Sagehorn himself shows that he told defendant at the time the lease was signed, to the effect that the lot had not been sold; that if the finances of the plaintiff "were in such shape that we would not be forced to sell or vacate the ground, we would be glad to hold it, but if I had to go into it further and find we were short of money, that we would probably be forced to sell some of it."

One morning a few days after the lease was signed defendant observed some surveyors surveying the lot and setting stakes as if staking off a building. Defendant called up Sagehorn who said, "yes, I guess we are on a deal to sell the land with certain restrictions." Defendant asked him "how about the restrictions," Sagehorn replied, "Well, we just had to do it or go into bankruptcy;" that plaintiff was hard pressed for money; that defendant should not be afraid of the coming of a drug store, because "we got an awful price for it;" that "the price of the land was so great that when the building had been erected the investment would be too great for a drug store to pay the rent."

The building was erected on the vacant lot and in November, 1925, the Crown Drug Company signed a ten year lease for one of the two-store rooms in the building. That the Crown Drug Company was going into the building to be erected on the vacant lot was understood in the neighborhood from a time beginning shortly after the signing of the defendant's lease. As soon as defendant learned that the Crown Drug Company (which the evidence shows operated "cut rate" drug stores underselling ordinary drug stores, such as defendants, and serious competition for them) was going into this building, he began to attempt to sell his drug store. He listed it with three brokers, one of whom had previously offered defendant on behalf of a client, $ 14,000 for the store. Moore and Simmons two of these brokers began sending customers to look at the store. Defendant asked $ 14,000 for it, the price he had before, in the spring of 1925, refused, but the prospective buyers would not pay that much in view of the character of competition to be afforded by the Crown Drug Company. Defendant then offered his store for $ 12,500 and then in the month of September for $ 10,500. No one could be found who was interested in buying the store under the conditions. Thereafter defendant's broker offered the stock to an agent of the Crown Drug Company for $ 8,500 cash and about a week later he succeeded in selling it to that company for $ 8,500. This was for the sale of the stock and fixtures. The stock was removed shortly afterwards across the street to the premises of the Crown Drug Company. What became of the fixtures is not disclosed in the testimony.

Plaintiff contends that the court erred in permitting defendant to introduce oral testimony tending to alter, vary and change the written lease. This evidence had to do with the understanding between the defendant and Sagehorn in reference to the clause in the lease providing...