Key v. Gregory, 10191
| Decision Date | 21 June 1977 |
| Docket Number | No. 10191,10191 |
| Citation | 553 S.W.2d 329 |
| Parties | Betty Lou KEY, Plaintiff-Respondent, v. Helen O. GREGORY, Defendant-Appellant. |
| Court | Missouri Court of Appeals |
Max H. Glover, Webb City, for defendant-appellant.
Charles M. Edwards, Myers, Webster & Perry, Webb City, for plaintiff-respondent.
Plaintiff Betty Lou Key sought and obtained specific performance of an installment contract for the sale of land. 1 Defendant appeals.
In January 1968 Cecil F. Gregory and Edwin A. Key were osteopathic physicians practicing in Webb City. At some time in January the two physicians and their wives entered into the contract sued upon, which is of the "contract for deed" or "bond for title" variety. By the terms of the agreement, Dr. and Mrs. Gregory were to convey two lots in an unspecified block of Byers and Ball's Addition to Webb City, Missouri, "including the drugs and fixtures therein contained" to "E. A. Key, D.O., and Betty Lou Key, husband and wife." 2 The agreed selling price was $75,000, to be paid as follows: $10,000 at the time of execution of the contract, and the balance at the rate of $1,000 per month until fully paid with interest at the rate of six percent per annum on the unpaid balance. The contract recites that the vendee's debt shall be evidenced by a promissory note in the amount of $65,000. 3
Other pertinent provisions of the contract were: 1) that the vendees should pay the real property taxes due on the premises for the year 1968 and thereafter; 2) that the vendees "presently occupy said premises together with C. F. Gregory, D.O., and that possession of said premises shall not change until the delivery of the Warranty Deed"; 3) that the vendees should obtain a policy of insurance on Key's life, payable to the vendors as security for payment of the vendees' obligation, and 4) that the vendees should insure the premises against loss by fire, etc., and deliver a copy of the policy of insurance to the vendors. Then follows the contract provision which is the basic subject of controversy in this case:
"It is understood and agreed by and between the parties hereto that time is of the essence of this contract and that in the event (the vendees) should become delinquent for as much as 30 days in the payment of any installment specified hereunder then (the vendors) are hereby (sic) relieved of the obligation of delivering (sic) of the Warranty Deed as herein contemplated and in such event all monies heretofore paid shall be construed (sic) as rent and (the vendees) shall have no further interest in and to said premises, other than as a tenant of (vendors): Provided, however, that in the event the payments are promptly made and the same are completed then the Warranty Deed heretofore mentioned shall be delivered to (the vendees) as evidence of the transfer of title."
At the outset, we should not that a) there is no question that the vendees defaulted; b) notwithstanding their default, the vendees have paid, not including taxes and insurance, $83,000 toward the purchase price; and c) that the balance due and owing on the contract at the time of trial, including interest, was $5,633.28.
To resume our brief narrative, it appears that Dr. Gregory and Dr. Key practiced together at their clinic for several years; the contract payments were regularly made and the transaction appears to have proceeded as the parties intended. Inferably, Dr. Gregory's health declined in 1971, at which time Dr. and Mrs. Key tendered the "total pay off" due on the note and asked that the warranty deed be executed. The vendors refused, because, in defendant Gregory's words, "it was not called for in the contract." The matter of prepayment was not further pursued. In December 1971 Dr. and Mrs. Key separated; Mrs. Key testified "my husband left." She moved to Joplin, obtained employment there as a nurse, and, as we understand her testimony, did not thereafter communicate directly with her husband.
Dr. Gregory died in December 1972. Dr. Key continued to operate the clinic, but at some time late in 1973 or early in 1974 began having difficulty complying with the obligations of the contract. We do not know the source of Dr. Key's troubles; his testimony suggests that he developed an ulcer, and was "practicing in and out due to ill health"; counsel for plaintiff attempted to suggest that Dr. Key's difficulties had a more sinister origin. In any event, Dr. Key did not pay the real property taxes on the clinic for 1973, which became delinquent January 1, 1974, and "had to let" the life and property insurance policies lapse at some time not detailed in the record. The last installment payment to Mrs. Gregory was made in February 1974.
The principal factual controversy on trial concerned the events of default. As noted, the record does not show when Dr. Key "had to" let the insurance policies lapse. Mrs. Gregory's evidence was that she "had nothing to do with" the life insurance policy required by the contract. In 1973 or 1974 we do not know when Mrs. Gregory received a notice from an insurance agent that the clinic was no longer insured, and in May 1974 she paid the premium due. She became aware that the 1973 property taxes had not been paid when she received a notice from the Jasper County Collector's Office, in "June or July" of 1974. She testified, "There was no one at the clinic," when she received the notice of delinquency, and she paid the taxes July 3, 1974. She had the building repaired in March 1975. Mrs. Gregory's testimony was that she did not discuss the clinic with Dr. Key until after the default. As far as plaintiff was concerned, Mrs. Gregory said she "had no communication with Mrs. Key whatsoever," and made no attempt to contact her because Dr. Key "was the one that was using the Clinic and he was making the payments."
Dr. Key's recollection was that after it became apparent to him that he could no longer meet the terms of the contract he called his wife, advised her that he would no longer be able to pay her "alimony" and that she would have to take over the payments on the clinic. Plaintiff answered, "Go to hell," and hung up. The defendant produced a witness, a Mrs. Lawrence, who testified she overheard this telephone conversation, but the plaintiff categorically denied ever having such a conversation with her husband. It is to be borne in mind that Dr. Key and his wife had separated in 1971, but for whatever reason, their marriage was not dissolved until October 9, 1974. In any event, Dr. Key "closed" the clinic in April 1974. He and Mrs. Gregory "agreed" that he should have and retain the furniture and fixtures remaining in the clinic, according to Mrs. Gregory, as consideration "for the down payment." Dr. Key stored the furnishings at Carterville, surrendered the original copy of the contract to Mrs. Gregory, and entered a hospital.
The default was declared on April 2, 1974, when defendant Gregory, as an individual and as executrix of Dr. Gregory's estate, directed a letter to Dr. Key and the plaintiff, which read:
On April 25, 1974, plaintiff, by her attorney, advised Mrs....
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