Perrin & Smith Printing Co. v. The Cook Hotel & Excursion Co.

• Decision Date: 27 March 1906
• Citation: 93 S.W. 337,118 Mo.App. 44
• Parties: PERRIN & SMITH PRINTING COMPANY, Respondent, v. THE COOK HOTEL & EXCURSION COMPANY, Defendant; SIMMONS et al., Appellants
• Court: Missouri Court of Appeals

93 S.W. 337

118 Mo.App. 44

PERRIN & SMITH PRINTING COMPANY, Respondent, v. THE COOK HOTEL & EXCURSION COMPANY, Defendant;

SIMMONS et al., Appellants

Court of Appeals of Missouri, St. Louis

March 27, 1906

Appeal from St. Louis City Circuit Court.--Hon. Daniel D. Fisher Judge.

REVERSED AND REMANDED (with directions).

STATEMENT.--On October 21, 1903, Margaret P. and Sarah E. Simmons leased to the Cook Hotel & Excursion Company, for a term to begin on that day and end January 1, 1905, a tract of land in the city of St. Louis. The lessee will be spoken of in this opinion as the hotel company. The lease on the ground given by the intervenors to the hotel company contained, among other paragraphs, the following which are material on this appeal.

"2. For and in consideration of the grant of the term aforesaid the lessee above named, for itself and its assigns, covenants to pay, as rent for the use and occupation of said tract of land, the sum of five thousand dollars ($ 5,000), one-half of which amount shall be paid contemporaneously with the execution and delivery of this lease and the remaining twenty-five hundred dollars ($ 2,500) on the second day of August, A. D., 1904. The lessee also covenants and agrees to pay the taxes assessed against said property that are due and payable during the year 1904, and to pay the same between the first day of September and the thirty-first day of December of that year and to deliver the tax receipts to the lessors. The lessee, for the same consideration, also hereby agrees and covenants to pay to the lessors, prior to the expiration of the term of this lease, a sum sufficient to pay all of the taxes, state and municipal, that may be assessed on the first day of June, 1904, upon the improvements which the lessee may erect or cause to be erected on the demised property. It is understood between the parties that the tax on the improvements aforesaid cannot be paid to the public authorities before the first day of September, 1905; but it is agreed that the value of the improvements, as assessed shall be ascertained during the term aforesaid and the amount of the taxes thereon computed and that a sum equivalent to the amount of the taxes so computed, shall be paid to the lessors prior to the expiration of the term aforesaid.

"3. The lessee above named hereby covenants and agrees to have the improvements, which it may erect upon the demised premises, fully and entirely removed therefrom and the tract above described leveled off and placed in good condition and all the rubbish thereon fully removed, on or before the first day of February, 1905, so that the lessors shall be at no expense whatsoever in removing said improvements.

"4. The lessee above named further covenants and agrees that the lessors shall have a lien upon all of the improvements which it may erect upon the demised premises, to secure the payment of the installment of rent above reserved, which falls due on August 2, 1904, and as security for the payment of the taxes aforesaid, which the lessee agrees to pay, and for the faithful performance, on the part of the lessee, of all other covenants and agreements on its part made and entered into by virtue of any of the provisions of this lease."

The tract was situate near the grounds of the Louisiana Purchase Exposition Company and the lease contemplated the erection of a hotel on the premises to be conducted during the Fair. The lessee partly erected the hotel but ran out of funds before it was completed. On May 31, 1904, the Perrin & Smith Printing Company brought this suit in the circuit court of the city of St Louis against the hotel company, alleging that about $ 32,000 had been expended on the hotel building and other improvements on the premises and $ 7,000 in payment of ground rent; that by the terms of the lease the hotel structure had to be removed at the end of the exposition that in its unfinished condition it was practically valueless, but would be valuable if finished, because of the patronage it would receive while the exposition was in progress; that it could be completed and furnished in about two weeks and respondent, as a creditor of the lessee, was interested in its completion. The appointment of a receiver to take possession of all the property and assets of the lessee was prayed and that the court make such further orders in the proceeding as might be proper. On the allegations of the petition the court appointed Gerrit H. Ten Broek receiver of all the property of the hotel company, including its leasehold interest on the ground of these intervenors. On June 20, 1904, Ten Broek, as receiver, made a report of the assets of the hotel company in which he stated that the assets consisted of the unexpired leasehold, with the unfinished three-story hotel building on it, on which building there had been expended up to date nearly $ 40,000, furniture aggregating in value $ 12,000 and other property worth in all two thousand dollars or more. The receiver recommended the completion of the hotel and its operation during the continuance of the World's Fair. Thereupon the court appointed Joseph A. Wright co-receiver with Ten Broek and ordered that certain work be done by the receivers in making the hotel ready for use and occupancy, in accordance with a proposition made by Caldwell & Drake, a firm of contractors. It was provided in the order that the cost of material and work furnished and done in finishing the building should not exceed $ 15,000 and that the furnishings and supplies for it should not exceed $ 10,000. It was further ordered that the receiver be empowered to pay the contractors Caldwell & Drake in receivers' certificates "of first lien import in due form," the amount of the accounts of said firm for work and material, plus forty per cent on the same; that the sum or sums so paid to Caldwell & Drake be allowed to the receivers in passing on their accounts and the receivers proceed to manage and operate the hotel when completed until the further order of the court; making monthly reports of their management. On December 10, 1904, the court ordered the receivers to advertise for sealed bids for purchasers of the hotel building and its contents. On December 17, 1904, the bids were reported to the court and the bid of Caldwell & Drake was ordered by the court to be accepted by the receivers and that they convey to said Caldwell & Drake the hotel building and all its contents for the sum of $ 9,000, to be paid in designated installments. Gerrit H. Ten Broek, the receiver first appointed, entered into possession of the premises May 31, 1904, and he and his co-receiver Wright continued in possession until January 5, 1905. After the expiration of the lease they delivered the building to Caldwell & Drake. On January 12, 1905, the appellants Margaret P. and Sarah E. Simmons, by leave of court, filed their intervening petition in the present cause of the Perrin & Smith Printing Company against the hotel company. In said intervening petition the lessors of the ground recite the making of the lease to the hotel company and the terms and conditions thereof, together with the facts in relation to the appointments of the receivers. The petition then alleges that the cash rent to be paid for the use of the ground by the hotel company had been paid to the lessors, but that another part of the rent, to-wit; the taxes assessed against the property and which were due and payable during the year 1904, were not paid either by the lessee or the receivers, and the lessors, in order to discharge their real estate from the lien of the taxes, paid the same on January 16, 1905, to the amount of $ 1,097.76. It was further alleged that said taxes constituted part of the rent of the premises and part of the expenses of the receivership of the hotel company and should be repaid to the lessors (intervenors) as a preferred claim out of the funds in the hands of the receivers; wherefore it was prayed that the court order the receivers to pay said sum to the lessors. At the hearing the court dismissed the petition of the intervenors but allowed another intervening demand as a general claim against the assets of the insolvent company. The demand allowed is of no importance on this appeal, wherein the contest is between the intervenors and the holders of the receivers' certificates. The intervenors appealed.

Judgment reversed and cause remanded.

Kehr & Tittmann for the Intervenors, Margaret P. and Sarah E Simmons.

(1) The covenant or ageement in the lease to pay the taxes assessed against the demised property that were due and payable during the year 1904, must be construed as one to pay the taxes as part of the rent. Knight v. Orchard, 92 Mo.App. 471; Elliott v. Gantt, 64 Mo.App. 252; McManus v Shoe & Clothing Co., 60 Mo.App. 218. (2) The appointment of the receivers did not have the effect of changing any rights of action or of changing the contract relations existing between the original parties. Title & Trust Co. v. Brady, 165 Mo. 209, 65 S.W. 303. (3) Under the order of the court of May 31, 1904, directing receiver Ten Broek to take charge of "all and singular the property of the Cook Hotel & Excursion Co. of every description" including "all leasehold interests" and under the further order of court of June 23, 1904, appointing Joseph A. Wright, co-receiver and decreeing that "the title to all the assets, property and effects of said defendant company are hereby vested in said receivers," the receivers became assignees of the lease, a privity of estate was created between them and the lessors, and they became legally and equitably obligated to perform the covenants of the lease. Easton v. Railroad, 38 F. 784; Wells v. Higgins, 132 N.Y. 463; Trust Co. v. Railroad, 150 U.S. 300; Thompson v....