Sebastian County Coal & Mining Company v. Fidelity Fuel Company

• Decision Date: 30 July 1925
• Docket Number: 24018
• Citation: 274 S.W. 774,310 Mo. 158
• Parties: SEBASTIAN COUNTY COAL & MINING COMPANY v. FIDELITY FUEL COMPANY, Appellant
• Court: Missouri Supreme Court

274 S.W. 774

310 Mo. 158

SEBASTIAN COUNTY COAL & MINING COMPANY v. FIDELITY FUEL COMPANY, Appellant

No. 24018

Supreme Court of Missouri

July 30, 1925

Appeal from Jackson Circuit Court; Hon. Thomas J. Seehorn Judge.

Affirmed.

E L. Burton and Goodwin Creason for appellant.

(1) The claim of defendant against the plaintiff arises out of the contract or lease set forth in plaintiffs petition as the foundation of plaintiff's claim, and is connected with the subject of the action brought by plaintiff. By both the statute and the decisions, a counterclaim or cross petition may be set up by defendant in the same suit in which he is sued, and defendant's rights and claim against the plaintiff adjudicated in the same action. Secs. 1232, 1233 R. S. 1919; Nelson v. Troll, 173 Mo.App. 51; Bealey v. Smith, 158 Mo. 515; Cosgrove v. Strange, 183 S.W. 691; Hope Lumber Co. v. Stewart, 241 S.W. 675; Ball v. Grismore, 239 S.W. 524. (2) Defendant's claim set up in its cross petition arose out of the same transaction and contract on which plaintiff relies for the foundation of its cause of action, and the fact that plaintiff wrongfully took over the property of the defendant and appropriated same to its, plaintiff's use, does not deprive the defendant of the right to set up its damages therefor as a counterclaim. Ball v. Grismore, 239 S.W. 525; Beally v. Smith, 158 Mo. 525. (3) The courts construe liberally the statute relating to counterclaims in order to effectuate its obvious intent and purpose, and permit of the adjustment, in the same action, of claims that appear to be within its provisions, and may be intelligently settled in one proceeding. Nelson v. Troll, 173 Mo.App. 67. (4) Under the decision of the Supreme Court of Arkansas the lease contract in question requiring personal property to be left on the premises of the lessor by the lessee until all rents and provisions of the lease had been performed, was in law, a mortgage. Valentine v. Washington, 33 Ark. 795. (5) The entry of the mortgagee for the purpose of foreclosure in order to be effective must be in strict conformity with the provisions of the contract, and directions of the statute effecting the same. Otherwise, it is invalid. 27 Cyc. 1440. (C). (6) The plaintiff in the instant case failed to comply with the provisions of the contract and with the statutes in many respects. (a) It failed to furnish the defendant a verified statement of its account against the defendant, showing the items, debt, credit, and balance due as provided by Section 6417, Revised Statutes of Arkansas, pleaded by the defendant. (b) Plaintiff failed to apply before a justice of the peace for the appointment of appraisers, and to have the property appraised as provided by Sections 6419 and 6420, Revised Statutes of Arkansas, and pleaded by the defendant. (c) Plaintiff took and appropriated to itself, defendant's property, alleged by the defendant to be of the value of $ 30,000, without attempting to fix a fair market price therefor, or to settle the matter of its value by arbitration, as provided in the lease in question. (b) The lease in question, being a mortgage under the Arkansas law, where it was passed and to be enforced, the method of appropriation of the property by the plaintiff, was unlawful, and willfully oppressive to defendant's great damage; and for such act defendant may maintain an act for damages against the plaintiff. Missouri Real Estate Co. v. Sims, 179 Mo. 679; Anderson v. Joseph, 95 Ark. 573; 27 Cyc. 1505.

Cyrus Crane, O. E. Swan and John H. Lathrop for respondent.

The alleged cross-petition of defendant was properly stricken out. (a) It did not state a cause of action. Bank v. Tiger Tail Mill Co., 152 Mo. 145; O'Toole v. Lowenstein, 177 Mo.App. 662. (b) There was no pleading of a compliance by the defendant with the terms of the lease, especially as to arbitration. (c) The decisions of Arkansas were not properly pleaded. Musser v. Musser, 281 Mo. 649.

Graves, J. All concur, except Atwood, J., not sitting.

OPINION

GRAVES

There are two cases pending here numbered respectively 24017 and 24018. The Sebastian County Coal & Mining Company originally brought suit in the Circuit Court of Jackson County against John Mayer and Mayer Coal Company. Upon the filing of a third amended petition the Fidelity Fuel Company was made a party defendant and brought into court. From the petition it appears that on January 1, 1909, the Cherokee Construction Company and the Midland Valley Railroad Company were the owners of certain coal lands in the State of Arkansas, and upon such date leased the same to the Fidelity Fuel Company for a period of twenty years from the 1st day of January, 1909, at an annual rental of $ 7,650, payable quarterly on the first days of January, April, July and October, of each year. About the 1st day of October, 1910 the plaintiff herein purchased all the interests of the lessors in such lease by the Cherokee Construction Company and Midland Valley Railroad Company. About January 1, 1914, the royalty or rents, by agreement between this plaintiff and the Fidelity Fuel Company, were reduced from $ 7,650 per annum (payable quarterly) to $ 6,400 per annum, payable quarterly on the dates mentioned in the original lease, i. e. $ 1600 on the first days of January, April, July and October of each year. In the lease and in the subsequent agreement the lessee was to pay all taxes in addition to the sums indicated as rents.

The plaintiff is a New Jersey corporation, the Fidelity Fuel Company is a Missouri corporation, and the Mayer Coal Company is a Kansas corporation, and John Mayer a resident of Kansas City, Missouri. This is merely historical, as no question arises thereon. We have outlined the petition as to facts up to and including the year 1914. From thence on the petition had best speak for itself, and the language of the petition is as follows:

"Plaintiff further states that while the said lease was in full force and effect, the defendant John Mayer and Mayer Coal Company acquired the entire capital stock or a controlling interest thereof of said defendant Fidelity Fuel Company, and that while the said lease was in full force and effect during July or August of 1915, the said defendant Fidelity Fuel Company deeming it to its advantage to have the arrangement hereinafter described, made for the operation of the properties leased under and by virtue of the said lease aforesaid, requested the plaintiff to give its consent in writing, as required by said lease to be given by the lessor, for an assignment of the said lease of a sub-letting of said leased property to certain mine operators or workers, and that the plaintiff, in response to said request, agreed to give such consent in writing upon the express condition that the defendant Fidelity Fuel Company as principal and lessee, and the defendants John Mayer and Mayer Coal Company, individually, as sureties or guarantors, should become and remain obligated personally and individually for the carrying out and the performance of all the terms and conditions of said lease on the part of the lessee; that the defendant Fidelity Fuel Company, lessee, agreed to and accepted said condition in consideration of the said sub-lease, and that the defendants John Mayer and Mayer Coal Company, in writing, assured and guaranteed to plaintiff that said agreement to sub-lease said property as made by the defendant Fidelity Fuel Company, and that, if the said Fidelity Fuel Company or the sub-lessee should default in all or any of the terms of said lease, the defandants John Mayer and Mayer Coal Company would see that plaintiff should suffer no loss or damage on account of the fault of said Fidelity Fuel Company or said sub-lessee.

"Plaintiff states that default has been made in the payment of the quarter yearly installment of rent amount-to $ 1600, which became due on the 1st day of January, 1916, under the provisions of said lease modified as hereinbefore set out, and also in the payment of the quarter yearly installment of rent amounting to $ 1600, which become due on the 1st day of April, 1916, and also in the payment of the quarter yearly installment of rent amounting to $ 1600, which became due on the 1st day of July, 1916, and that the said lessee and the said sub-lessee under said assignment and each of them, have failed, refused to pay the taxes on said premises and improvements for the year 1915, and that to protect the property from default thereunder, plaintiff has been compelled to pay and has paid $ 395.81 in addition to the said installments of rent for $ 1600 each above mentioned, making in all a total of $ 5195.81 to which plaintiff has become entitled as aforesaid under and by virtue of said lease and said modification of said lease and said supplemental agreement; that the payment of each one of said sums, aggregating as aforesaid $ 5195.81, was demanded by this plaintiff from Fidelity Fuel Company, and also from defendants John Mayer and Mayer Coal Company and each of them upon the respective maturities of said installments of rent, respectively, and upon the payment of said sum for taxes, but that payment has not been made to plaintiff of said total, nor of either one of said sums, nor of any part thereof, nor of any interest thereon, and that each of said sums and said total and all interest thereon are by reason of the premises still due to plaintiff from defendants Fidelity Fuel Company, John Mayer and Mayer Coal Company and are altogether unpaid.

"Wherefore plaintiff asks judgment against defendants for $ 5195.81, and interest at the rate of six per cent per annum on the sum of $ 1,600 from January 1, 1916, and on the sum of $ 1600 from the 1st day of April, 1916, and on the sum of $ 1,600 from the 1st day of...