Matz v. Miami Club Restaurant

• Decision Date: 02 May 1939
• Docket Number: No. 24907.,24907.
• Citation: 127 S.W.2d 738
• Parties: MATZ v. MIAMI CLUB RESTAURANT et al. (WASHINGTON-GRAND REALTY CO., Intervener).
• Court: Missouri Court of Appeals

127 S.W.2d 738

MATZ v. MIAMI CLUB RESTAURANT et al. (WASHINGTON-GRAND REALTY CO., Intervener).

No. 24907.

St. Louis Court of Appeals. Missouri.

May 2, 1939.

Rehearing Denied May 16, 1939.

Appeal from Circuit Court, City of St. Louis; Robert J. Kirkwood, Judge.

"Not to be reported in State Reports."

Suit on a creditor's bill by Joseph Matz against the Miami Club Restaurant and others to have a chattel mortgage and subsequent transfers of mortgaged property and assets declared fraudulent and void as to plaintiff and other creditors of defendant restaurant and two other defendants, in which the Washington-Grand Realty Company intervened and made claim as lessor of restaurant premises to property brought thereon by defendants. From orders denying intervener's petition and its application for transfer of its alleged lien on such property to the proceeds of a receiver's sale thereof, intervener appeals.

Affirmed.

Jones, Hocker, Gladney & Grand, James C. Jones, and Edward W. Lake, all of St. Louis, for appellant.

Oliver T. Remmers, of St. Louis, for respondent Thos. J. Dwyer, successor receiver.

Sylvan Agatstein, of St. Louis, for respondent Joseph Matz.

BENNICK, Commissioner.

This is a consolidated case, embracing two successive appeals which were taken by appellant, Washington-Grand Realty Company, in connection with the prosecution of its claim to the proceeds of a receiver's sale of the contents of certain premises known as 516 North Grand Boulevard and 3546 Washington Boulevard, in the City of St. Louis, which premises appellant had leased to defendants Merlo and Fabbri, or their successors and assigns, for occupation and use as a restaurant.

Immediately upon the execution of the lease Merlo and Fabbri organized a corporation known as Miami Club Restaurant, which thereupon succeeded to their rights and obligations under the lease, and thereafter continued the operation of the business until, following a foreclosure sale under a pretended chattel mortgage to one Moretta, the assets and chattels formerly owned by Miami Club Restaurant were purportedly transferred by Moretta to a subsequently organized corporation known as New Miami Cafe, Inc.

Appellant is an intervener in a suit upon a creditor's bill, which was brought by plaintiff, Matz, a judgment creditor, against Miami Club Restaurant, Merlo, Fabbri, and New Miami Cafe, Inc., the purpose of the suit having been to have the chattel mortgage to Moretta and all the subsequent transfers of the property and assets declared fraudulent and void as to Matz and other creditors of Merlo, Fabbri, and Miami Club Restaurant, and the property and assets subjected and applied to the payment of their respective claims.

Upon a trial of the issues, a decree was rendered in the plaintiff's favor, setting aside numerous transactions which the court found had been fraudulently entered into by the defendants for the purpose of defeating the claims of creditors; adjudicating that all the assets and chattels which had been the property either of Merlo and Fabbri or of Miami Club Restaurant, and which were later transferred to Moretta or to New Miami Cafe, Inc., should be held to be the property of Miami Club Restaurant, subject to the claims of those of its creditors and the creditors of Merlo and Fabbri who might join in the suit; and directing that the receiver theretofore appointed by the court on the order to show cause should continue in full charge of the business to the end that the claims of all creditors joining in the suit might be established.

The defendants' appeal from such judgment resulted in its subsequent affirmance by this court. Matz v. Miami Club Restaurant, Mo.App., 108 S.W.2d 975.

Following the entry of such decree by the circuit court, appellant, Washington-Grand Realty Company, intervened in the cause, asserting its status as lessor of the premises under the lease heretofore referred to, and making claim, under the terms of the lease, to certain of the property and assets which had been brought upon or added to the premises by the defendants during the period of the lease-hold and were located therein at the time of the filing of the plaintiff's suit.

One clause of the lease had provided that any "alterations, additions, or improvements" which might be made to the premises by the lessees should be and remain the property of the lessor, and should be surrendered with the premises, as a part thereof, upon the termination of the lease.

Relying upon such provision, appellant asserted that certain of the assets (such as booths, ice boxes, a soda fountain, and the like) constituted fixtures inseparable from the real estate itself, and as such had become the property of appellant, the owner and lessor of the real estate, to the exclusion of the claims of creditors of the lessees.

A further clause of the lease provided that all "property and furniture" of the lessees situate upon the premises during the term of the lease should be bound for the payment of the rent reserved and for the fulfillment of all the covenants of the lease; that a lien was thereby created upon such property and furniture in favor of the lessor for the payment of the rents and fulfillment of such covenants; and that in the event the rent was not paid when due; or any covenant was not fulfilled at the time and in the manner contemplated, the lessor should thereupon be entitled to the immediate possession of such property and furniture, and should be entitled to enter upon the premises and take possession of and sell such property and furniture, the proceeds of the sale, after payment of the costs and expenses of the same, to be applied to the payment of any rent due or toward the proper performance of any unfulfilled covenant.

Relying upon the latter provision, appellant asserted that the remaining articles included among the contents of the premises (such as tables, chairs, silverware, and the like), which were not to be characterized as fixtures, were covered by a "contract lien" in appellant's favor which was created by the lease itself; that such lien was superior to the lien of the receiver of the property on behalf of general creditors of the lessees; and that the assets and chattels covered by such lien were therefore subject to be taken and sold by appellant, and the proceeds of the sale applied to the payment of indebtedness aggregating some $3,000 which was due appellant from the lessees by way of unpaid rent and the cost of electric current supplied to the lessees.

No proceedings were had upon appellant's intervening petition pending the appeal to this court from the final decree in the principal suit, but upon the affirmance of that decree the claim was heard, resulting in the entry of an order by the court denying appellant's petition.

While appellant's motion for a new trial was pending, the court, upon the application of the plaintiff, Matz, directed the receiver to sell the property and assets in his possession, and at the sale which was held pursuant to such order...