Long v. Smith, WD

• Decision Date: 15 August 1989
• Docket Number: No. WD,WD
• Citation: 776 S.W.2d 409
• Parties: Helen M. LONG, Respondent, v. Betty SMITH, Appellant. 41023.
• Court: Missouri Court of Appeals

Page 409

776 S.W.2d 409

Helen M. LONG, Respondent, v. Betty SMITH, Appellant.

No. WD 41023.

Missouri Court of Appeals Western District.

Aug. 15, 1989.

Londa S. Shabazz, Kansas City, for appellant.

DeLoss McKnight, III, Kansas City, for respondent.

Before GAITAN, P.J., and MANFORD and ULRICH, JJ.

MANFORD, Judge.

This case involves a claim by Helen Long against Betty Smith for rent and possession of property. Long filed a Landlord's Complaint under Chapter 535, RSMo 1986, Landlord-Tenant Actions, alleging that Smith purchased property from her under contract for deed, but became a tenant pursuant to the forfeiture clause of the contract. Smith filed a counterclaim for specific performance and for damages. After trial to the circuit court sitting without a jury, the court entered judgment in favor of Long and awarded her damages in the amount of $5,850, and possession of the property. The court further entered judgment against Smith on the counterclaim. Smith appeals.

Smith raises two points on appeal which charge, in summary, that the trial court erred in entering the judgment because (1) Long's petition failed to state a claim upon which relief can be granted, and (2) the judgment is not supported by substantial evidence, is against the weight of the evidence, and erroneously declares and applies the law. The judgment is affirmed.

The pertinent facts are as follows.

Appellant Smith became interested in purchasing property owned by Long and located at 5015-5017 Paseo Boulevard in Kansas City, Missouri. In August of 1983, the parties orally agreed that appellant Smith could live at the property for one year before entering into a contract for deed. During this period, appellant Smith paid Long $450 per month as rent. The agreement was that at the end of the one-year period, the parties would execute a contract for deed and appellant Smith would receive a $3,000 credit towards the $20,000 purchase price of the property.

In August of 1984, after renting the property for one year, appellant Smith expressed her desire to enter into the contract for deed. However, the contract was not actually executed until almost one year later, on June 12, 1985. The contract for deed provided that Long would sell appellant Smith the property subject to a first deed of trust recorded. Appellant Smith promised to pay $20,000 as follows: $3,000 in hand and $17,000 in monthly payments of $450 on the third day of each month with 10% annual interest. The contract was validated as of August 1, 1984 and the parties understood that appellant Smith would receive credit for all payments made from August 1, 1984.

Because Long had previously encumbered the property, the contract for deed was modified by a handwritten provision which states:

This contract for deed will be in effect until party of the first part [Long] has satisfied her first mortgage of $5000 with mortgagor, approximately 3 yr. 2 mo. 23 days, and at that time, party of the first part [Long] will transfer contract for deed to first mortgage to party of the second part [Smith], and will continue to carry same $ $450 per month $ 10% until balance of $17,000 is paid. Taxes, insurance and maintainence (sic) to be assumed by party of the second part, her payments to run approximately 3 yr. 4 mo. 2 days. Warranted deed and title to be delivered when final payment is made.

Appellant Smith kept the one original contract for deed and amortization schedule. These documents were placed in an envelope at Smith's house. Long initialed the schedule each time Smith made a payment.

The contract contains a forfeiture provision which states:

It is expressly understood and agreed that Time Is the Essence of This Contract and that if the buyer shall fail to pay any installment, interest, taxes, lien or other payment for a period of thirty days after said payment shall become due and payable, then the amount theretofore paid by the buyer shall, at the option of the seller, be forfeited to the seller as liquidated damages for breach of this contract, and on such default, it will be lawful and proper for the seller, or its assigns, without notice, to take possession of said premises, and it is further agreed that upon such default the buyer shall then become a tenant of the seller as tenant from month to month and agrees to pay four hundred fifty Dollars per month as rent for such premises, said rent becoming due and payable monthly in advance.

Appellant Smith often made partial monthly payments. Long went to the property two or three times a month to collect from Smith. Both parties testified that Smith made partial payments, but never made late payments because she paid the full amount within the 30-day grace period, before the end of each month. The amortization schedule was initialled to record payments. However, appellant Smith also requested receipts indicating that the installment payments were rent payments so Smith could show the receipts to her social security caseworkers. Long understood that appellant received social security income and requested the transaction be completed in the form of a contract for deed so it would appear that she rented, but did not own, property.

The contents of the envelope containing the documents were taken from Smith's house in late-1986. Smith also testified that she asked Long for another contract for deed, but never received one. Long created a schedule for appellant showing payments that remained under the contract.

The principal factual controversy at trial concerned the events of default. Long testified that appellant Smith never paid real estate taxes or insurance costs, and Long herself paid these expenses because Smith refused to do so. Conversely, appellant Smith testified that when the contract for deed was executed, she paid Long $960 in cash for back taxes and insurance.

The record contains conflicting evidence regarding Smith's default in monthly payments. Long's testimony was that she received monthly payments through July, 1987. On or about August 3, 1987, Long went to the property to ask Smith for the August payment. Smith told Long that she was not going to make repairs, did not intend to pay taxes or insurance, did not want the house, but did not intend to move. According to Long, Smith offered to accept $5,000 in order to move out and give the property back to Long. Long further testified that in November of 1987, she went back to see if Smith had changed her mind. Smith met Long at the door, said, "I told you I was not going to pay you", and shut the door. Long did not receive any payments from Smith thereafter.

In contrast, Smith testified that she made all monthly payments through October, 1987. She refused to make monthly payments after October, 1987 because Long would not present evidence, as required in the handwritten provision in the contract, that Long paid the $5,000 mortgage on the property. Smith believed the mortgage was to be fully satisfied by October or November of 1987. Smith testified that although the amortization schedule showed the last installment payment was to be made in May, 1988, she also believed that pursuant to the contract her last payment was to be in November, 1987. Smith said Long refused to show her deeds and title to the property. Therefore, Smith refused to make further payments because she did not have the contract for deed which would evidence the fact that she was purchasing the property.

Smith further testified that she attempted three times to obtain a loan to pay Long in full and make repairs to the property. Smith believed the house needed ten to fifteen thousand dollars worth of repairs. Smith applied for the third loan after Long filed this lawsuit. Although Smith believed that Long prevented issuance of the loan because Long told the lending institution that Smith was merely a tenant, one letter read into the record indicates that Smith's February, 1988 loan application was denied because the lender was unable to determine that Smith had sufficient income for monthly loan payments.

Finally, the amortization schedule, which was admitted to the record by Long, indicates that 35 of 46 monthly payments (those up to but not including July, 1987) have been initialized, presumably indicating payments received. The schedule also indicates that an ending balance of $4,117.29 would exist after receipt of the July, 1987 monthly payment. It is not clear from an examination of the schedule whether monthly payments were received for July, 1987 or thereafter.

Upon notification that Long's action for rent and possession had been filed in December, 1987, appellant Smith tendered to Long, through her attorney at the first court appearance, an offer to pay the balance of the purchase price. Smith testified that the offer was not accompanied by cash, check or money order. Smith was asked during trial how much she would have to pay Long if specific performance of the contract for deed were ordered by the court. Smith responded that she had no money with which to make a tender and didn't feel like she should have to pay Long anything because of the trouble Long put her through.

Review of this court-tried case is governed by Rule 73.01, V.A.M.R. as construed in Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976). Accordingly, the judgment of the trial court will be sustained by this appellate court unless there is no substantial evidence to support it, unless it is against the weight of the evidence, or unless it erroneously declares or applies the law. Furthermore, the judgment in a court-tried case is to be affirmed if it could properly have been reached on any reasonable theory. Nail Boutique, Inc. v. Church, 758 S.W.2d 206, 208 (Mo.App.1988).

In her first point on appeal, appellant Smith contends that the trial court erred in granting judgment in favor of Long because Long's petition failed to state a cause of action upon which relief could be granted. More specifically, Smith...