Mercantile-Commerce Bank & Trust Co. v. Mid-City Realty Co.

• Citation: 156 S.W.2d 730,348 Mo. 1006
• Decision Date: 12 December 1941
• Docket Number: 37620
• Parties: Mercantile-Commerce Bank & Trust Company, a Corporation, as Trustee, Plaintiff-Appellant, v. Mid-City Realty Company, a Corporation, and Albert M. Keller, Walter C. Haeussler, Fred J. Hoffmeister and Forest P. Tralles, as the Last Board of Directors and Statutory Trustees of the assets of Shubert-Rialto Building Company, a dissolved Corporation, Defendants-Respondents
• Court: United States State Supreme Court of Missouri

156 S.W.2d 730

348 Mo. 1006

Mercantile-Commerce Bank & Trust Company, a Corporation, as Trustee, Plaintiff-Appellant, v. Mid-City Realty Company, a Corporation, and Albert M. Keller, Walter C. Haeussler, Fred J. Hoffmeister and Forest P. Tralles, as the Last Board of Directors and Statutory Trustees of the assets of Shubert-Rialto Building Company, a dissolved Corporation, Defendants-Respondents

No. 37620

Supreme Court of Missouri

December 12, 1941

Appeal from Circuit Court of City of St. Louis; Hon. Eugene L Padberg, Judge.

Affirmed as to defendant Mid-City Realty Company and reversed and remanded (with directions) as to the other defendants.

Thompson Mitchell, Thompson & Young and R. Forder Buckley for appellant.

(1) Real Property, for purposes of separate ownership, may be divided horizontally as well as superficially and vertically. The owner may carve therefrom and convey as many estates or interests, perpendicular or horizontal, perpetual or limited as physical limitations permit. Badger Lumber Co. v Stepp, 157 Mo. 366, 57 S.W. 1059; Hinman v. Pacific Air Transport, 84 F.2d 755; Kidwell v. General Petroleum Corp. of Cal., 300 P. 1; Pearson v. Matheson, 120 S.C. 377, 86 S.E. 1063; Piper v. Taylor, 48 N.D. 967, 188 N.W. 171; Hahn v. Baker Lodge No. 47, A. F.& A. M., 21 Ore. 30; Cobban Realty Co. v. Donlan, 51 Mont. 58, 149 P. 484; Loring v. Bacon, 4 Mass. 574; White v. White, 16 N. J. L. 202; Rhodes, Pegram & Co. v. McCormick, 4 Iowa, 368; Cheeseborough v. Green, 10 Conn. 318; Corbett v. Hill, 9 Eq. Cas. 671; Fay v. Prentice, 1 C. B. 828; Doe on Demise of Freeland v. Burt, 1 T. R. 701; 1 Thompson on Real Property (Perm. Ed.), sec. 63, p. 70, sec. 64, p. 71. (2) When Mid-City Realty Company, by its own voluntary act and for a valuable consideration "conveyed, sold, assigned and transferred" to Grand-Rialto Theatres Company, its successors and assigns, "all of its right, title and interest in and to the building and improvements and fixtures," it severed the building from the ground and an implied easement of subjacent support was created for the building, giving the building the right to remain, without rent or charge, upon the ground under it, until the expiration of the 99-year Bauman lease. Greisinger v. Klinhardt, 321 Mo. 186, 9 S.W.2d 978; Mahnken v. Gillespie, 329 Mo. 51, 43 S.W.2d 797; Hall v. Morton, 125 Mo.App. 315, 102 S.W. 570; Graves v. Berdan, 26 N. Y. Rep. 498; Adams v. Marshall, 138 Mass. 228; McConnell v. Kibbe, 33 Ill. 83; 1 Thompson on Real Property (Perm. Ed.), sec. 390, pp. 630-632, sec. 392, p. 636, sec. 393, pp. 639-41, sec. 405, p. 661, sec. 408, pp. 667-8; Vol. 2, sec. 465, p. 20, sec. 506, pp. 86-87, sec. 611, p. 228; 19 C. J. 914, sec. 103; 17 Am. Jur. 945, sec. 33. This easement would pass by sale under foreclosure. (3) A contract will be construed most strongly against the person who uses the words and who prepared the contract. John Deere Plow Co. v. Cooper, 230 Mo.App. 167, 91 S.W.2d 45; Burrus v. Continental Life Ins. Co., 225 Mo.App. 1129, 40 S.W.2d 493; Sanders v. Sheets, 287 S.W. 1069; 17 C. J. S. 751, sec. 324; 3 Williston on Contracts (Rev. Ed.), p. 1788, sec. 621. This same rule applies to deeds, a deed being construed most strongly against the grantor. Hobbs v. Yeager, 263 S.W. 225; Grooms v. Morrison, 249 Mo. 544, 155 S.W. 430; Bray v. Conrad, 101 Mo. 331, 13 S.W. 957; 26 C. J. S., p. 320, sec. 82 (e). And the same rule applies to leases. 3 Thompson on Real Property (Perm. Ed.), sec. 1110, pp. 151-2. (4) Wherever possible a contract will be so construed as to give it force and effect and render it valid and legal. Natl. Bank of Commerce of Kansas City v. Flanagan Mills, etc. Co., 268 Mo. 547, 188 S.W. 117; Wiggins Ferry Co. v. Chicago, etc., Railroad Co., 128 Mo. 224, 27 S.W. 568; 17 C. J. S., p. 735, sec. 318; 3 Williston on Contracts (Rev. Ed.), p. 1785, sec. 620. The same rule applies to deeds and leases. 26 C. J. S., p. 320, sec. 82 (b). (5) The rule of construction, however, is that wherever possible, a contract will be construed so as not to provide for a forfeiture. Haeffner v. A. P. Green Fire Brick Co., 76 S.W.2d 122; Frank v. Dodd, 130 S.W.2d 210; Panas v. Bopp, 16 S.W.2d 654; 17 C. J. S. 742, sec. 320; 3 Williston on Contracts (Rev. Ed.), sec. 620, p. 1787. (6) In construing an ambiguous contract, the practical construction placed thereon by the contracting parties as shown by their conduct is entitled to great weight. State ex inf. McKittrick, Attorney-General, ex rel. City of Springfield v. Springfield City Water Co., 345 Mo. 6, 131 S.W.2d 525; First Natl. Bank in St. Louis v. West End Bank of University City, 344 Mo. 834, 129 S.W.2d 879; Missouri Service Co. v. City of Stanberry, 341 Mo. 500, 108 S.W.2d 25; McFarland v. Gillioz, 327 Mo. 690, 37 S.W.2d 911; Tomnitz v. Employers' Liability Assur. Corp., Ltd., 343 Mo. 321, 121 S.W.2d 745; 17 C. J. S. 755, sec. 325 (a), 763, sec. 325 (b); 3 Williston on Contracts (Rev. Ed.), p. 1792, sec. 625. The same rule applies as to deeds and to leases. 26 C. J. S. 346, sec. 93; 3 Thompson on Real Property (Perm. Ed.), sec. 1110, pp. 151-152. (7) The circumstances and situation of the parties to the contract at the time of the execution of a contract will be considered in interpreting it. Fulkerson v. Great Lakes Pipe Line Co., 335 Mo. 1058, 75 S.W.2d 844; Stone v. Wandling, 207 Mo. 160, 270 S.W. 315; 3 Williston on Contracts (Rev. Ed.), sec. 618, p. 1780. The same rule applies as to deeds and to leases. 26 C. J. S. 344-5, sec. 92; 3 Thompson on Real Property (Perm. Ed.), sec. 1114, pp. 159, 161. (8) The right to foreclose a deed of trust by a bill in equity still exists in Missouri and is not lost merely because the statutes provide proceedings for foreclosure. Hanna v. Davis, 112 Mo. 599, 20 S.W. 686; Keith & Perry Coal Co. v. Bingham, 97 Mo. 196, 10 S.W. 32. (9) The question of whether a bill in equity is proper in a given case depends on whether equitable issues are raised and equitable relief is asked. Federal Land Bank of St. Louis v. McColgan, 332 Mo. 860, 59 S.W.2d 1052; Crecelius v. Home Heights Co., 217 S.W. 508; Mississippi Valley Trust Co. v. McDonald, 146 Mo. 467, 48 S.W. 483; Northern Finance Co. v. Forked Leaf White Oak Lumber Co., 262 S.W. 437. (10) A multiplicity of liens and issues to be adjudicated constitutes grounds for an equitable foreclosure. Brim v. Fleming, 135 Mo. 597, 37 S.W. 501; State ex rel. Central States Life Ins. Co. v. McElhinney, 232 Mo.App. 107, 90 S.W.2d 124. (11) The prayer for an equitable accounting would alone convert a legal foreclosure into an equitable foreclosure. Dinkelman v. Hovekamp, 336 Mo. 567, 80 S.W.2d 681. (12) A disputed title is ground for an equitable foreclosure. State ex rel. Wyandotte Lodge v. Evans, 176 Mo. 310, 75 S.W. 914; Wolff v. Ward, 104 Mo. 127, 16 S.W. 161. (13) Mercantile-Commerce Bank and Trust Company, as plaintiff, was clearly entitled to an equitable accounting for the rents and profits from the time Mid-City Realty Company took possession of Shubert-Rialto Theatre Building and its contents, until the time of trial. Wilson v. Hoover, 342 Mo. 1182, 119 S.W.2d 768; Strong v. Crancer, 335 Mo. 1209, 76 S.W.2d 383; Dahlberg v. Fisse, 328 Mo. 213, 40 S.W.2d 606; 1 C. J. S. 650, sec. 18. (14) Plaintiff was clearly entitled to an order of the court permitting it to inspect the Shubert-Rialto Theatre Building and its contents, and to make a list and inventory of the property in the building, which is subject to plaintiff's deed of trust. State ex rel. Schlueter Mfg. Co. v. Beck, 337 Mo. 839, 85 S.W.2d 1026; State ex rel. American Mfg. Co. v. Anderson, 270 Mo. 533, 194 S.W. 268; 3 Wigmore on Evidence, secs. 2972, 2194, 2221.

Boyle & Priest, G. T. Priest and Robt. E. Moloney for respondent.

(1) Appellant's alleged bill in equity pleads three separate nonjoinable, causes of action at law (Simplex v. Box Co., 97 S.W.2d 862; Coleman v. Hagey, 252 Mo. 102), in one and the same count, against two nonjoinable defendants. (305 Mo. 396; 313 Mo. 182). (2) The Shubert-Rialto Building Company in its answer admitted all the allegations in plaintiff's petition and made no contest. The action against this defendant was at law. Brown v. Koffler, 133 Mo.App. 494. (3) The contention that the joining of the three causes of action at law in appellant's petition states equitable jurisdiction, on the ground of avoiding a multiplicity of suits, is not tenable. Mo. District Telegraph Co. v. Southwestern Bell Co., 380 Mo. 692. Neither does the prayer for an accounting give equitable jurisdiction. Bennett v. Crane, 220 Mo.App. 609. (4) The re-entry by respondent for failure to pay the ground rent was lawful. Alexander v. Warrance, 17 Mo. 228; Von Rensselaer v. Ball, 19 N.Y. 100; Munro v. Syracuse, 200 N.Y. 224; 28 C. J. 876, sec. 82. (5) Under the circumstances the surrender by the Grand-Rialto Theatres Company, or Shubert-Rialto Building Company, to respondent cuts off the rights of all subsequent parties. Illingworth v. Miltenberger, 11 Mo. 80; Updike v. St. Louis, 94 Mo. 234; Bove v. Coppola, 45 Misc. 633; Bruder v. Geisler, 47 Misc. 370. (6) The building upon completion thus became a part of the land as much as the soil upon which it stood (Buhlinger v. United Firemen's, Inc., 16 S.W.2d 699, l. c. 701). Under the original lease the building could not be conveyed by the lessee (respondent) separate and apart from the land (Kutter v. Smith, 2 Wallace, 491, l. c. 499). (7) The attempted conveyance by respondent of the legal title to the building by Exhibit D was a nullity. Appellant had full notice of this since all the above instruments were recorded. Secs. 3426, 3427, R. S. 1939; Garrett v. Wiltse, 252 Mo. 699. (8) Exhibits C and D, which must be read together, constitute but one instrument, and being for...