Phelps Stone & Supply Co. v. Norton
| Decision Date | 28 August 1932 |
| Citation | 52 S.W.2d 413,227 Mo.App. 268 |
| Parties | THE PHELPS STONE & SUPPLY COMPANY, APPELLANT, v. THOMAS F. NORTON ET AL., RESPONDENTS |
| Court | Kansas Court of Appeals |
Appeal from the Circuit Court of Jackson County.--Hon. Ralph S Latshaw, Judge.
AFFIRMED.
Judgment affirmed.
Woodruff & Gard for appellant.
Cooper Neel, Kemp & Sutherland and Frank J. Rogers for respondents.
--On March 11, 1920, plaintiff as lessor and defendants as lessees, entered into a contract in writing by the terms of which plaintiff demised to defendants land situate in Jackson county, Missouri, and in Wyandotte county, Kansas, for the purpose of quarrying, crushing and selling rock and stone located on said lands.
It is provided in the lease that the land was demised from March 11, 1920, to March 10, 1925; that defendants would pay to plaintiff a royalty of twelve cents per cubic yard for each cubic yard of rock or stone quarried, taken or removed from said land; that the minimum royalty during each year of the five year term "shall be not less than $ 2500," and that defendants will pay to plaintiff a sum equal to one-fourth of said minimum royalty at the expiration of three months from the commencement of the term, "regardless of whether the measurements and calculations to determine the amount of rock and stone which has actually been quarried and removed from said land has then been made and completed, or whether the amount of rock and stone actually quarried and removed from said ledge or ledges would produce a royalty equal to said sum, and will pay a like sum to the lessor at the expiration of each and every three months' period thereafter throughout the term of this lease."
The lease also provides as follows:
It is admitted that defendants entered upon the performance of the lease and during the first five years of the term thereby created, performed all of the conditions of the lease and paid all royalties due thereunder; that at the expiration of that term defendants continued in possession of the property, and that nothing was said by either of the parties relative to an extension of the lease; that defendants continued to operate the quarry until about March, 1927, at which time they ceased operation but continued to pay royalty as hereinafter stated, but failed and refused to pay the quarterly installments which plaintiff claims became due September 10, 1929, December 10, 1929, and March 10, 1930; that thereupon plaintiff brought suit seeking to recover said three installments of royalty and for breach of the conditions of lease relating to the removal of debris from the quarry.
The defendants' answer is a general denial and plea that all rents or royalty had been paid in accordance with the terms of the lease. Defendants also filed counterclaim seeking to recover an overpayment of royalty.
The cause was tried to the court and jury, verdict returned in favor of the defendants plaintiff's cause of action for the recovery of royalty and for plaintiff on the count for damages, and for defendants on their counterclaim. Plaintiff has appealed.
The assignments of error developed under points and authorities are: (1) That the written lease is clear in its terms, and therefore the court should have directed verdict for plaintiff for the minimum royalty upon the basis of $ 3500 per year; (2) that the court erred in giving defendants instructions Nos. 2 and 6; (3) that the allowance of interest on defendants counterclaim was erroneous, and (4) that the amount of damage awarded plaintiff is grossly inadequate.
In support of assignment of error No. 1 plaintiff argues that "When the plaintiff billed the defendants and accepted payment on the basis of the increased royalty (which was done at the very first time there was occasion for it), plaintiff then became bound by the option provision of the lease and estopped from claiming that the plant was not of the required capacity. "
On this question the defendants say that the minimum royalty for the second period of five years was $ 2500 unless during the first five year period they erected on the premises a plant having a daily capacity of 1000 cubic yards of crushed rock, in which event if the lease was extended the minimum annual royalty would be $ 3500, and that whether or not defendants did erect a plant of such capacity, was a question of fact for the determination of the jury.
At the trial plaintiff's treasurer and manager in direct examination testified that defendants, during the first five years of the lease, constructed a crushing plant which, in his opinion, had a daily capacity of 1000 cubic yards of crushed rock.
The defendants' evidence on that subject was that the plant constructed by it had a daily capacity of 350 cubic yards. It is evident that the parties tried the cause upon the theory that defendants were not required to pay minimum royalty upon the basis of $ 3500 per year for the second five year period unless during the first five year term they had erected a plant having a daily capacity of 1000 cubic yards. That theory was the correct theory. It is conceded by both parties that the terms of the option provision of the contract are clear and unambiguous. Under the plain terms of the option provision defendants were not entitled to extend the life of the lease unless during the five year term they constructed a plant having a daily capacity of 1000 cubic yards of crushed rock, nor were they liable to pay royalty upon the basis of $ 3500 per annum thereafter unless such plant had been constructed. We apprehend that it will not be claimed that if, at the termination of the first five year period it was admitted that defendants had not constructed a plant having a daily capacity of 1000 cubic yards, they could compel plaintiff to extend the lease. When defendants held over after the expiration of the first five year period, without anything being said relative to the terms upon which they held, they were not liable for increased royalty unless they had the right to exercise and did exercise the option provision. [Leggett v. Exposition Company, 157 Mo.App. 108, 137 S.W. 893.]
It was shown that plaintiffs, on June 10, 1925, submitted bill for royalty for the sum of $ 847.08; that on December 10, 1925, plaintiff submitted bill for royalty for the three months' period from September 10, 1925, to December 10, 1925, in the sum of $ 697.20; that the bill for royalty submitted in June, 1926, was for the sum of $ 627, and that the bill submitted in December, 1926, was for $ 625. The first bill submitted by plaintiff to the defendants, in which reference is made to the claim that the minimum royalty was $ 3500 per year, is dated March 21, 1927. At that time defendants had ceased operation, presumably for the reason that the rock in the quarry had been condemned. Thereafter defendants paid to plaintiff, quarterly, the sum of $ 875 except for the three quarters ending March 10, 1930.
It is evident that plaintiff, in submitting bills for a sum less than the minimum royalty now claimed by it, was pursuing a course from which a jury could find that it was not claiming that defendants had...
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