Kansas City v. Kansas City Terminal Ry. Co.

• Decision Date: 03 February 1930
• Docket Number: 27703
• Citation: Kansas City v. Kansas City Terminal Ry. Co., 324 Mo. 461, 23 S.W.2d 1006 (Mo. 1930)
• Parties: Kansas City v. Kansas City Terminal Railway Company, Appellant
• Court: Missouri Supreme Court

23 S.W.2d 1006

324 Mo. 461

Kansas City v. Kansas City Terminal Railway Company, Appellant

No. 27703

Supreme Court of Missouri

February 3, 1930

Appeal from Jackson Circuit Court; Hon. O. A. Lucas, Judge.

Reversed.

Samuel W. Sawyer, John H. Lathrop and Richard S Righter for appellant.

(1) The demurrer to the evidence should have been sustained because there was no express covenant against these special assessments and none can be implied in the franchise contract or in appellant's deed accepted by the city. 7 R. C. L 1093; Cornelius v. Kromminga, 161 N.W. 625. (2) Even if a covenant against incumbrances were implied in the deed such a covenant does not embrace a mere personal judgment, and since the tax bills which form the basis of this suit never became a lien on the real estate they would not come within the terms of a covenant against incumbrances if one were implied. 27 Am. & Eng. Ency. Law (2 Ed.) 735; Clark v. Demers, 254 P. 162. (3) Even if a covenant against incumbrances be implied in the deed, and even if the tax bills had been adjudged a lien on the real estate, nevertheless, they are not incumbrances within the meaning of such a covenant, nor can such a covenant be construed to apply to special assessments for public improvements benefiting the land, the benefit of which accrued only to the vendee, particularly where, as here, the equitable ownership in the land vested in the plaintiff as soon as the land was acquired by the defendant, and the land was therefore held by the defendant in trust for the plaintiff. Snyder v. Murdock, 51 Mo. 174; Manning v. Ins. Co., 123 Mo.App. 456; Ranck v. Wickwire, 255 Mo. 42, 61; Sewell v. Underhill, 197 N.Y. 168, 27 L. R. A. (N. S.) 233; Everett v. Marston, 186 Mo. 587; Gotthelf v. Stranahan, 138 N.Y. 345, 20 L. R. A. 455; Blivis v. Invest. Co., 197 Mo.App. 369, 194 S.W. 1078; Cornelius v. Kromminga, 161 N.W. 625; Nelson v. Robinson, 178 N.W. 416; Carey v. Gundlefinger (Ind. App.), 40 N.E. 1112; Kimberlin v. Templeton, 55 Ind.App. 155; Dotham National Bank v. Hollis, 103 So. 589; Bailey v. Levy, 104 So. 415; Robison v. Cato, 79 Ind.App. 531; Armstrong v. Banking Trust Co., 96 Kan. 722, 153 P. 507, Ann. Cas. 1918D, 972; Cramblitt v. Sherwood, 199 P. 925; Etta Contracting Co. v. Bruning, 63 So. 619. (4) The defendant made numerous valid tenders of good and sufficient deeds to plaintiff and by refusing to accept the same the plaintiff estopped itself from denying and waived the right to deny that the title to the property passed when such tenders were made and therefore that the lien of such tax bills (if they had become a lien) would have attached after the title had passed. Therefore any implied covenant against incumbrances in such deed will not be construed to embrace such subsequent liens. 27 R. C. L. 461, sec. 174.

John T. Barker and J. C. Petherbridge for respondent.

(1) It is the well settled law in this State that an agreement, such as contained in the franchise contract under consideration, to convey land, where nothing is said about taxes or incumbrances thereon, is an implied covenant and warranty that the land, when conveyed, shall be free from all incumbrances, and that the title is a marketable one. Green v. Ditsch, 143 Mo. 1; Kent v. Allen, 24 Mo. 98; Mitchener v. Holmes, 117 Mo. 185; Mastin v. Grimes, 88 Mo. 478; Wieman v. Steffen, 186 Mo.App. 584; Overstreet v. Beasley, 60 Mo.App. 315; 39 Cyc. 1442; 2 Addison on Contracts, sec. 514; Duffy v. Sharp, 73 Mo.App. 316; Parsons v. Kelso, 141 Mo.App. 369; Lafferty v. Milligan, 165 Pa. St. 534. (2) None of the purported deeds tendered prior to October 21, 1913, conformed to all terms of the franchise contract; none were signed by the Kansas City Terminal Railway Company, the beneficiary in the franchise contract, and hence they were a nullity. "The tender of a deed must be one which conforms in all respects to the terms of the contract, or it will be as if no tender was made." McLeod v. Snyder, 110 Mo. 298; Wellman v. Dismukes, 42 Mo. 101; Olmstead v. Smith, 87 Mo. 602; Cornett v. Best, 151 Mo.App. 554. (3) Unless the contract expressly provides that the deed shall be made by a third person, it must be made by the vendor himself, even though the words of the contract are that the vendor shall "transfer or cause to be transferred" to the city the land in question. Miner v. Hilton, 44 N.Y.S. 155; Garr v. Lockridge, 9 Inc. 92; Rudd v. Savelli, 44 Ark. 145; Hussey v. Roquemore, 27 Ala. 281; Bershwell v. Kerr, 112 Minn. 388; Weitzel v. Leyson, 23 S.D. 367; 39 Cyc. 1554; Hurryford v. Turner, 67 Mo. 296. (4) A special assessment or tax bill on the land contracted for, is a lien and an encumbrance within the meaning of a contract to convey free and clear from all encumbrances. Keating v. Craig, 73 Mo. 507; Construction Company v. Ice Rink Co., 242 Mo. 241, 257; Otto v. Young, 227 Mo. 193, 214; Williams v. Monk, 179 Mass. 22; 39 Cyc. 1497; Sec. 24, Art. VIII, Kansas City Charter 1908. (5) The ordinance providing for the grading of Main Street and the payment thereof in special tax bills to be issued against this and other property abutting on the street, was passed in June, 1908, nearly a year before the 200-year franchise contract was entered into; the Terminal Company knew, at the time it solicited and secured such franchise in July, 1909, of such ordinance and the proposed improvement thereunder and knew that when the work was completed, special tax bills would be issued against this property in part payment of such work. Under such circumstances, the Terminal Company is held, in law, to have contracted in view of such knowledge, and is now estopped from denying its liability for such special taxes which became an actual lien on the land before it tendered a proper deed to the city therefor. McLaren v. Sheble, 45 Mo. 130; State v. Railroad, 77 Mo. 221; Blossom v. Van Court, 34 Mo. 390; White v. Stevens, 13 Mo. 240; Construction Co. v. Ice Rink Co., 242 Mo. 257. (6) For nearly two years prior to October 21, 1913 (the time the special tax bills for grading Main Street were issued), the legal title to the land in question stood in the name of the Jasper Land & Improvement Company, by direction of the Terminal Company. The Jasper Company held the land in trust for the Terminal Company; the Terminal Company was therefore the equitable owner at the time of the issuance of the tax bills and not the city, as contended by counsel for the Terminal Company. (7) The cases cited by counsel for the Terminal Company are not in point on the facts and hence not controlling here.

Ellison, C. Lindsay and Seddon, CC., concur.

OPINION

ELLISON

This is an action at law for damages brought by Kansas City, Missouri, against the Kansas City Terminal Railway Company, to recover the amount of certain street grading tax bills issued against an 8 1/2-acre tract known as Union Station Park. The city, in a prior action prosecuted by the owner of the tax bills, had been compelled to pay them, and in this suit asserts the obligation rested on the Terminal Company to discharge the bills under the implied covenants in its franchise, and that it consequently must reimburse the city. The cause was tried to the court, sitting as a jury, and the city had judgment for the full amount claimed, $ 23,702. The defendant Terminal Company has appealed.

The case turns mainly on the construction to be placed on the appellant's franchise. In July, 1909, by ordinance the respondent city granted and in November, 1909, the appellant Terminal Company accepted, a franchise authorizing it to build a union passenger station in Kansas City and in connection therewith to construct and maintain certain tracks, bridges, viaducts, subways and other structures for a period of 200 years. All this entailed the vacation of certain streets and alleys in the city. As part consideration for the franchise the Terminal Company agreed therein to purchase and transfer or cause to be purchased and transferred to Kansas City within four years the 8 1/2-acre tract above mentioned, which adjoined on the south the site of the proposed union station.

By so agreeing, says the city, the Terminal Company impliedly covenanted that the title to be conveyed should be good and free from liens up to the date of the delivery of the deed. The grading tax bills were issued October 21, 1913. The deed was delivered four days later on October 25, 1913. By express reservation in the deed the special assessment for grading was excepted from its covenants of warranty, and a separate written contract was contemporaneously executed providing the rights and liabilities of both parties with respect thereto should stand as they were under the law and not be prejudiced by the delivery of the deed. This left the matter to be governed by the provisions of the franchise ordinance. The pertinent parts thereto are as follows:

"Sec 17. (a) In further consideration of the passage of this ordinance, the Kansas City Terminal Railway Company agrees that, within four (4) years from the date when the vacations are made, it will purchase and transfer, or cause to be purchased and transferred to Kansas City, the following described land immediately south of the proposed Union Passenger Station in Kansas City, Missouri, provided for in Section 11 hereof: [Here follows detailed description.]

"(b) The said property shall be transferred and conveyed to Kansas City upon the express conditions, to which Kansas City hereby gives consent, that it shall be graded by Kansas City within twelve years after the date when the vacations are made as provided in Section 2 hereof, in such manner as shall be approved by the Board of Park Commissioners of Kansas City and that no streetcar line or lines shall be located, constructed or operated...