Matthews v. Moore, 19975

• Decision Date: 01 December 1995
• Docket Number: No. 19975,19975
• Citation: 911 S.W.2d 664
• Parties: Charles D. MATTHEWS, V, Christopher Matthews, and Melissa Ellen Matthews, Appellants, v. J. Handy MOORE and Dorothy M. Moore, Respondents.
• Court: Missouri Court of Appeals

Page 664

911 S.W.2d 664

Charles D. MATTHEWS, V, Christopher Matthews, and Melissa Ellen Matthews, Appellants, v. J. Handy MOORE and Dorothy M. Moore, Respondents.

No. 19975.

Missouri Court of Appeals,

Southern District,

Division Two.

Dec. 1, 1995.

C.H. Parsons, Jr., Dennis Wilson, Parsons, Wilson & Satterfield, P.C., Dexter, for appellants.

W. Edward Reeves, Ward & Reeves, Caruthersville, for respondents.

CROW, Judge.

The lessees of an apple orchard abandoned it and were sued by the lessors for rent that allegedly became due thereafter. The trial court heard the case without a jury and entered judgment for the lessees, unembellished with findings of fact or conclusions of law. The lessors appeal.

We preface our analysis of the claims of error with an account of the facts. In narrating them, we accept as true the evidence and inferences from it favorable to the trial court's judgment and disregard contrary evidence. T.B.G. v. C.A.G., 772 S.W.2d 653, 654 (Mo. banc 1989).

There are three lessors: Charles D. Matthews, V; Christopher D. Matthews; Melissa Ellen Matthews. ¹ They are siblings. We henceforth refer to them collectively as "Plaintiffs."

There are two lessees: J. Handy Moore and Dorothy M. Moore, husband and wife ("Defendants"). Dorothy Moore ("Dottie") ² is a sister of the Plaintiffs' father, who died in 1974.

The orchard comprises approximately 90 acres situated within a tract of approximately 1,000 acres known as "the Hodge Farm." In 1978, Plaintiffs and Dottie owned the Hodge Farm and numerous other tracts of real estate "jointly." The testimony of Plaintiff Charles D. Matthews, V ("Matt") revealed the background:

"Q. Can you explain ... how you acquired ownership in this property ...?

A. It was all inherited property. Some came from my father's interest, some came from my great-grandmother's interest, and some came from my great-aunt's estate."

Asked whether Dottie "had the same interest" in the properties as Plaintiffs, Matt replied, "Generally, yes."

In "1978 or '79," Plaintiffs and Defendants began negotiating to divide the properties, "trying to balance out acres and values and in an effort to basically separate [their] affairs." The negotiations culminated in a comprehensive and complex "Memorandum of Agreement" signed June 16, 1981.

The agreement divided the Hodge Farm, with Plaintiffs receiving part and Dottie receiving the other part. The orchard lay in the part received by Plaintiffs. The agreement provided, among other things, that Plaintiffs would lease the orchard to Defendants "for a term of 15 years at an annual rental per acre equal to the amount of average crop rental computed in an annual cash rent figure, which the Hodge Farm would have paid for the year next preceding."

The orchard had existed since 1970 or 1971, when Defendant J. Handy Moore ("Handy") planted it. He testified he did so pursuant to a lease with "the Virginia Lemons estate." He explained:

"[T]hat was to keep the value of the property out of the Lemons estate. It was to remove it in case of or in the event of the owner dying, that the property--the value, the added increment would be taxed to me and not to Virginia Lemons.... And then when she died, it became the people that subsequently were the owner. And, of course, as long as I paid the rent, I kept my interest in that improvement. And my understanding was when we negotiated that if I didn't pay the rent, I lost my interest in it. That was the understanding.

Q. And the lease was then--

A. It was null.

Q. So you had an option to protect your investment?

A. I had to pay the rent.

Q. You had to pay the rent. But if you wanted to lose your investment and let the owners of the land have the investment--

A. All I had to do was not pay the rent.

Q. Not pay the rent. Then they would get the improvements, the orchard.

A. And I had lost it. That was the understanding."

Handy avowed he invested "over $100,000 in the orchard."

Simultaneously with signing the "Memorandum of Agreement" on June 16, 1981, Plaintiffs and Defendants signed a document captioned "Orchard Lease Agreement." ³ The latter document ("the lease") designated Plaintiffs as "Landlord" and Defendants as "Tenant." The lease was "for a term commencing January 1, 1981, and expiring December 31, 1996." It provided, among other things:

"3. The Tenant further covenants and agrees:

(a) To use the premises for orchard purposes only.

....

(c) To retain possession of the premises during the term hereof and not to assign or sublet without the Landlord's written consent.

....

7. The non-payment of any rental when due or the abandonment of the leased premises shall act as a forfeiture of the balance of the term of this lease, and Landlord may enter the premises and take possession of same immediately."

Defendants subsequently assigned their interest in the lease to Morning Sun Orchards, Incorporated, a corporation in which Handy was a shareholder. Morning Sun, managed by Tom Adkins, operated the orchard and paid rent to Plaintiffs through 1986. Handy recounted that Adkins departed near the end of 1986, whereupon Handy told Plaintiffs that Defendants were no longer going to operate the orchard.

Defendants paid Plaintiffs no rent after 1986. In the summer of 1987, Plaintiffs received a letter from Defendants' lawyer stating Defendants "had chosen to abandon the lease." Despite Defendants' abandonment, the orchard produced apples in 1987. Handy testified:

"We told the Matthews boys that there was a crop of apples out there. There were apples on the trees, and we said it would be a shame for those apples to just fall on the ground.... I think I talked to Matt and said, 'We will try to salvage that crop and turn over whatever proceeds it makes to you.' Nobody was doing anything with them.... [I]t looked like maybe there was some money that could be salvaged. I had tried to help Matt to find management for the orchard.... And I thought if there was some possibility of making some money off of [the apples], that would be fine. We would do that and turn the money over to them. That's--So there were some apples out there, and they were picked.... There was no money.... The apples didn't sell for enough to pay for the harvest, for the cost of getting them out. There was no money, and they were informed of that."

After the 1987 harvest, Defendants engaged in no further activity on the orchard. In the winter of 1987-88, Plaintiffs "attempted to hire a successor operator," but were unsuccessful. In the fall of 1988, Plaintiffs decided they "would enter and again operate the orchard" themselves.

Over Defendants' objection that the testimony was immaterial, the trial court permitted Matt to testify that in negotiating the division of the Hodge Farm and other tracts, Handy was unwilling to take the part of the Hodge Farm where the orchard lay. Consequently, said Matt:

"[T]he compromise ... was that the orchard, which had previously been leased from my Aunt Virginia's estate, would then be leased from my brother and my sister and I as landowners. And that, we would be no worse off by having taken the land because we would have a lease for 15 years. And that would pay us crop income based on the average crop rental income for the entire farm, not that particular piece of property."

Matt added that Defendants represented to him that the lease "would equalize out the trade that [I] had, in effect, agreed to in the [Memorandum of Agreement]."

Handy, called as a witness by Plaintiffs, testified on direct examination that the lease provided that if Defendants abandoned the orchard, they were not obligated to pay Plaintiffs any future rent. Handy's testimony:

"Q. Now, was it the paragraph in the lease that you relied on as No. 7 that you believed gave you the right to just abandon this farm without suffering any consequences?

A. I negotiated that paragraph. I negotiated every element of that contract with Bob Matthews.[ ⁴ And my understanding was exactly that, that the orchard was a valuable commodity; and if anybody turned that over, they did so and forfeited the property. And that's exactly what was intended when we wrote it. We did not intend to have any liquidating [sic] damages or we would have specified that. We simply said if I don't come up with the rent in March, that I lost the apples, which I spent a lot of money on...."

Handy also testified that after Defendants told Plaintiffs that Defendants were abandoning the orchard, he asked Matt whether he (Matt) wanted Handy to "cut the trees off" so the orchard could be converted to "row crop land." Handy quoted Matt as saying he "did not want to cut them off."

The first of Plaintiffs' four points relied on reads:

"The trial court erred in denying damages to Plaintiffs because a common sense interpretation of paragraph 7 of the lease agreement, considered together with the other lease provisions, the provisions of the Memorandum of Agreement, and the parties' intent, did not allow the Defendants to terminate the lease simply by failing to pay rent when due or abandoning the lease [sic] premises."

In the argument following the point, Plaintiffs maintain that "the terms of the lease agreement are ambiguous." Therefore, say Plaintiffs, in determining whether the lease allowed Defendants to abandon the orchard without liability to Plaintiffs for future rent, a court may consider, among other things, the construction the parties themselves placed on the lease by their acts and deeds, together with other external circumstances which cast light on the parties' intent.

In adjudicating Plaintiffs' first point it is unnecessary to decide whether they are correct in insisting that the lease is ambiguous regarding whether Defendants could abandon the orchard during the term of the lease without liability for future rent. We shall assume, without deciding, that the lease is ambiguous about that.

Additionally, although we are uncertain whether a court in...