St. Louis Union Trust Co. v. Hunt

• Decision Date: 02 March 1943
• Docket Number: No. 26246.,26246.
• Citation: 169 S.W.2d 433
• Parties: ST. LOUIS UNION TRUST CO. v. HUNT et al.
• Court: Missouri Court of Appeals

169 S.W.2d 433

ST. LOUIS UNION TRUST CO. v. HUNT et al.

No. 26246.

St. Louis Court of Appeals. Missouri.

March 2, 1943.

Rehearing Denied March 26, 1943.

Appeal from St. Louis Circuit Court; William B. Flynn, Judge.

"Not to be reported in State Reports."

Bill of interpleader by the St. Louis Union Trust Company against May Stanford Hunt and another as executors of the estate of Charles L. Hunt, deceased, and others. From an adverse judgment, Charles R. Judge appeals.

Affirmed.

Dubail & Judge, of St. Louis, for appellant.

Henry H. Oberschelp, of St. Louis, for respondent.

McCULLEN, Judge.

This suit was instituted by the St. Louis Union Trust Company as plaintiff by the filing of its bill of interpleader in the Circuit Court of the City of St. Louis on August 7, 1940. Thereafter, proceedings in said court resulted in a decree wherein the court sustained plaintiff's amended bill of interpleader and ordered plaintiff to pay over to the clerk of the court, to be held until further orders, the subject matter of its bill of interpleader, as follows: Cash $3,414.28, and $302.49 par value State of Arkansas Road District Refunding Series B Bonds dated January 1, 1934, due January 1, 1945, noninterest bearing. The court further ordered defendant Charles R. Judge hereinafter referred to as Judge, and defendant Meyer Real Estate and Investment Company, hereinafter referred to as Meyer Company, to interplead and set up their respective claims to the fund consisting of the cash and securities above referred to.

In due time defendant Meyer Company and defendant Judge filed their respective interpleas and after a hearing thereon the court rendered judgment in favor of interpleader Meyer Company and ordered the clerk of the court to deliver the fund to said company after deducting therefrom a fee for plaintiff's attorneys and costs. From said judgment interpleader Judge duly appealed to this court.

May Stanford Hunt and Charles Lucas Hunt, Jr., Executors of the Estate of Charles L. Hunt, deceased, filed in the Circuit Court their written disclaimer of any interest in and to the cash and securities mentioned and are not involved in this appeal.

The fund which the plaintiff Trust Company deposited in court pursuant to the court's order consisted of the proceeds of securities which had been deposited with the Trust Company under an escrow agreement between Charles L. Hunt (who later became assignor of Judge), party of the first part in said agreement, John P. Cooper, Trustee (who later became assignor of Meyer Company), party of the second part therein, and the Trust Company, Trustee, as third party therein. For brevity, John P. Cooper, Trustee, will be referred to sometimes as Cooper. Said agreement between Hunt, Cooper and the Trust Company was dated July 15, 1930, and was executed in connection with a sublease, also dated July 15, 1930, in which Cooper sublet certain property to Hunt. The property so sublet and referred to in said escrow agreement was located at the northeast corner of Ninth and Walnut Streets in the City of St. Louis, Missouri, in City Block 189. Said escrow agreement recited that by a lease of even date therewith the second party (Cooper as lessor) had leased to the first party (Hunt as lessee) the premises described in said lease, and that said lease provided, in paragraph seven thereof, that: "The Lessee agrees to furnish to Lessor a surety bond in the principal amount of Three Thousand Dollars ($3,000.00), or in lieu thereof Lessee agrees to deposit in escrow with St. Louis Union Trust Company of St. Louis, Missouri, securities acceptable to Lessor of a market value of Three Thousand Dollars ($3,000.00) to guaranty the prompt payment of the installments of rent and the performance of all obligations which Lessee does, by the terms of this instrument, assume".

The escrow agreement further recited that Hunt had that day deposited with the Trust Company as trustee bonds No. 404, 405, and 445, 5½% Improvement Bonds of the County of Pulaski, North Little Rock and Galloway Highway District of the sum of $1,000 each; and further recited that the second party (Cooper) accepted the deposit of the said bonds as a compliance with the provisions of said lease concerning a deposit of bonds. The agreement then proceeded, "* * * it is agreed that said bonds shall be held by the Trustee and disposed of strictly in accordance with the following terms and conditions:

"In event Lessee shall default in the payment of any installment or installments of rent, taxes, assessments or other obligations hereunder, and shall continue in such default after thirty (30) days written notice to Lessee, such notice to specify the nature of Lessee's default and to designate the time, place, and manner of the intended sale, then said Trustee, upon Lessor's request, shall sell for the best price reasonably obtainable, sufficient of said securities to provide funds adequate in amount to pay any rent then in default and/or taxes or assessments; and the proceeds of such sale shall be applied and disbursed by the Trustee, first: to satisfy the costs of said sale, and, second, to remove and satisfy Lessee's default, any remainder thereof and of the securities to be held by the Trustee to secure Lessee's further performance of his same covenants and obligations hereunder. Upon the lawful termination of this lease, without default by Lessee, all securities then remaining in the hands of the Trustee shall be returned to Lessee.

"Until default shall be made by the party of the First Part in any of the covenants of said lease, the party of the third part shall deliver to the party of the first part all interest coupons on said bonds as same mature.

"A transfer in due form of said lease by either the Lessor or Lessee herein shall likewise effect and carry with it a transfer of the interest of the party, lessor, or lessee, making such transfer, in and to said bonds."

The aforesaid escrow agreement contained the following notation after the signatures of the parties: "It is agreed that the Lessee is to pay the compensation of the St. Louis Union Trust Co. as Trustee."

It is conceded that the bonds originally deposited with the Trust Company defaulted and were subsequently refunded and called for redemption, and that the Trust Company sold the $3,000 par value Refunding Arkansas "Series A" bonds for cash in 1941 before redemption; that the escrow account at the time of the trial herein consisted of $3,414.28 in cash and the "Series B" bonds, dated January 1, 1934, noninterest bearing.

It appears that on July 13, 1926, Meyer Company, as owner in fee of the real estate described in said escrow agreement and in said sublease, had entered into a ninety-nine year lease of said premises with one Fred H. Fitch who mortgaged the premises to secure a note for $30,000, evidently borrowed to erect the improvements required in said ninety-nine year lease. On July 1, 1928, Fitch assigned the ninety-nine year lease, subject to said encumbrance, to John P. Cooper, Trustee. Fitch died some time thereafter.

On July 15, 1930, John P. Cooper, Trustee, as assignee of the ninety-nine year lease, executed and delivered a sublease whereby he sublet the premises to Charles L. Hunt for a term of fifteen years at a monthly rental of $750 for the first five years, with an increased rental thereafter. Hunt agreed in said sublease, which was signed by both Cooper and Hunt, to pay taxes, general and special, and one-half of any special tax bill or assessment for the widening of nearby Market Street. It was in connection with the execution of said sublease that Hunt and Cooper, and the Trust Company, entered into the escrow agreement, heretofore set forth, in compliance with which Hunt deposited with the Trust Company the $3,000 in securities to secure the payment by Hunt of the rent and taxes, general and special, as well as one-half of the assessment for widening Market Street, heretofore mentioned.

It appears that Hunt was a chief officer of an incorporated business called St. Louis Motor Parks, Inc., which company was the operator of a number of garages and other properties. Hunt, through his said company, took possession of and occupied the premises in question in carrying on that company's business. Just when the St. Louis Motor Parks, Inc. took possession of the premises and what rents were paid therefor by Hunt or his incorporated company under the sublease is not specifically shown because it appears from the evidence that said St. Louis Motor Parks, Inc. later went into bankruptcy and its records were destroyed by the trustee in bankruptcy a number of years before this suit was brought. It appears, however, that in July, 1932, Hunt was in default for five months rent, which had then accumulated and had not been paid, and was also in default for 1931 taxes, which were afterwards paid by Meyer Company in the sum of $1,456.59. It further appears that in January, 1933, Hunt owed eleven months rent installments amounting to $8,250, as well as 1932 taxes on the premises amounting to $1160.11, and was then also liable for $3034.50, representing Hunt's half of a judgment assessed against the property for widening Market Street, the full amount of which, namely, $6069, became due and was thereafter paid by Meyer Company on January 14, 1933.

The payments of taxes and the judgment above referred to were shown by exhibits introduced in evidence by Meyer Company in the form of receipted tax bills showing payment thereof signed by the Collector of the City of St. Louis. The only evidence concerning their payment was that they had been paid by Meyer Company. There was no evidence whatsoever that Hunt or anyone else for him, at any time, paid or attempted to pay said taxes or judgment. The 1931 and 1932 taxes were paid to the Collector of the City of St. Louis on December 30, 1932, while the 1933 taxes were paid to said officer on October 14, 1933, as was also...