St. Louis Union Trust Company v. Van Raalte
| Decision Date | 05 February 1924 |
| Parties | ST. LOUIS UNION TRUST COMPANY, a Corporation, Trustee under the Will of Irwin Z. Smith, Respondent, v. SIMMON VAN RAALTE, Appellant |
| Court | Missouri Court of Appeals |
Appeal from the Circuit Court of the City of St. Louis.--Hon Granville Hogan, Judge.
REVERSED.
Judgment reversed.
Robert E. Collins and O'Neill Ryan for appellant.
(1) The court below erred in admitting over the objections and exceptions saved by the defendant (appellant) irrelevant immaterial and incompetent evidence. (2) The will of Irwin Z Smith did not give to the St. Louis Union Trust Company as trustee power to lease the real estate involved in this case, and, therefore, the trustee did not have the power to lease to the appellant said real estate for a term which would expire on July 31, 2004, a period of approximately eighty-six years. In re Hogaradt, 45 N.Y.S. 841; South End Warehouse Company v. Lavery, 12 Cal.App. 449; In re Hubbell, 135 Iowa 637; Bergengren v. Aldrick, 139 Mass. 259; In re 110th Street, 81 A.D. (1902); Standard Metallic Paint Company v. Prines, 133 Pa. St. 474; In re McCaffrey's Estate, 3 N.Y.S. (1888). (3) The covenant or agreement upon the part of the St. Louis Union Trust Company, as trustee, to give to Simon Van Raalte a lease terminating July 31, 2004, and the covenant and agreement on the part of the said Simon Van Raalte to pay the taxes assessed against the leased property up to February 1, 1920, both contained in the written agreement dated May 29, 1916, are mutual and dependent covenants and agreements, and the covenant and agreement upon the part of the said Simon Van Raalte cannot be enforced by the St. Louis Union Trust Company, as trustee, unless said St. Louis Union Trust Company, as trustee, had the power to execute such a lease and had first tendered performance upon its part. 11 Cyc. page 1053, and cases cited; Hambly v. Railroad, 21 F. 541; Curran Printing Company v. St. Louis, 213 Mo. 22; Keleher v. Henderson, 203 Mo. 498; Lincoln Trust Company v. Nathan, 175 Mo. 32; Turner v. Mellier, 59 Mo. 526; Denny v. Kile, 16 Mo. 450; Riley-Wilson Company v. Canning Company, 125 Mo.App. 325; Buck v. Harris, 125 Mo.App. 365; Law v. Paxton, 175 Mo.App. 541; Springfield Seed Company v. Walton, 94 Mo.App. 76; Daly v. City of Carthage, 143 Mo.App. 564. (4) It was not necessary to a defense in this case that Simon Van Raalte, the defendant, should request or demand a forfeiture by the St. Louis Union Trust Company, as Trustee, of the leasehold estate: (a) Because Simon Van Raalte is not asking any affirmative relief through or in consequence of a forfeiture. (b) Because the St. Louis Union Trust Company, as trustee, in its notice to said Simon Van Raalte, dated October 24, 1918, that it had paid the taxes, proceeded to specifically advise the said Simon Van Raalte that unless the taxes were repaid without delay it would proceed forthwith to forfeit the then existing lease given by said Irwin Z. Smith so as to enable it, the said trustee, to give to said Van Raalte "A valid lease of said premises in accordance with the terms of your contract of May 29, 1916." (c) Because the trustee proceeded to at once forfeit the said lease (said Van Raalte refusing to pay the taxes amounting to the sum of $ 4258.75) and took possession of the property for the benefit of the trust estate without tendering or in any way indicating a purpose to make to the said Van Raalte, or to his nominee, a lease expiring on July 31, 2004, leased said premises to different tenants, thereby securing to the trust estate a very greatly increased rental. That is to say, under the old ninety-nine-year lease and under a new one for the unexpired period of ninety-nine years there would have been a rental of $ 4100 per annum, while the trust estate since the forfeiture of the term of the old ninety-nine-year lease has been receiving a gross rental of over $ 8000, or a net rental of about $ 6200. Manifestly, the trustee either recognized that it had not the power under the will of Irwin Z. Smith to execute the lease which it had agreed by the agreement dated May 29, 1916, to execute, as we contend it had not, or it preferred as a matter of good business to keep the property and sublet it upon more advantageous terms. (5) The St. Louis Union Trust Company, as trustee, is not acting in good faith in prosecuting this action, in that while it agreed in consideration for the agreement on the part of Van Raalte to pay taxes amounting to the sum of $ 4258.75 to forfeit the old ninety-nine year lease and to give Van Raalte a new lease at the same rental as that reserved in the old lease, the term of the new lease to expire on the same date as that of the old lease, which new lease, as we contend, the trustee had no power to execute, it is now leasing the same premises for a net rental of $ 6200, a sum which is $ 2100 per annum in excess of the reatal which it had agreed to accept from Van Raalte.
Bryan, Williams & Cave for respondent.
(1) The consideration for the defendant's agreement to pay the taxes and rentals upon the leasehold estate was the promise of the plaintiff to reduce the rental reserved by the lease. Plaintiff did reduce the rental and thereby the defendant's liability became fixed. Agreement of February 1, 1915; Agreement of May 29, 1916. (2) No agreement was ever made between the plaintiff and defendant that a new lease should be executed to the defendant; he was merely given the option or right to demand that plaintiff should declare a forfeiture of the leasehold and execute a new lease to him, providing that he pay all expenses incurred in effecting such forfeiture and in obtaining possession. The defendant never requested or demanded a forfeiture and the execution of a new lease to him, nor did he ever pay the expenses incurred and therefore he cannot complain. Agreement of May 29, 1916; 13 Corpus Juris 660-661 and cases cited; Page on Contracts, sec. 2970; Rodgers v. Toilettes Company, 76 N.Y.S. 940; Ewing v. French, 1 Blackf. 107. Plaintiff's agreement to declare a forfeiture of the old lease and to execute a new one to the defendant was conditional upon a demand by defendant, was an independent covenant and its performance by plaintiff was not a condition precedent to its right of action. Boone v. Eyre, 1 H. Bl. 273; Page on Contracts, sec. 2974, pages 5248-9; Turner v. Mellier, 59 Mo. 535-6; Kaufman v. Raeder, 108 F. 771 (54 L. R .A. 247); Watson Window Co. v. Weiss Cornice Co., 181 Mo.App. 318; Coal Co. v. Packing Co., 138 Mo.App. 274. (4) Even if the power of plaintiff, as trustee under Mr. Smith's will, to execute a lease to defendant was doubtful, yet it could have undoubtedly obtained from a court of equity, authorization and power to execute such a lease which was shown by uncontradicted evidence to be the proper and prudent way in which to handle this property. In re Upham, 48 L. R. A. (N. S.) 1004; Denegre v. Walker, 214 Ill. 113; Packard et al. v. Ill. Trust & Savings Co., 261 Ill. 450; St. Louis Union Trust Co. v. Prather et al., St. Louis Circuit Court Cause No. 97378.
This is an action by the plaintiff trust company as trustee under the will of Irwin Z. Smith, deceased, to recover from the defendant the sum of $ 4258.75, being the amount of certain taxes--general taxes for the years 1916 and 1917, and sprinkling taxes for the years 1912 to 1917, inclusive--assessed against certain real property constituting a part of the estate in the hands of plaintiff as such trustee, which taxes, it is alleged, the defendant, by agreement with plaintiff, obligated himself to pay. The trial below, before the court without a jury, resulted in a judgment for plaintiff for the amount of the demand, with interest, and the defendant has appealed to this court.
In support of the issues on its part, the plaintiff introduced an agreed statement of facts, together with certain exhibits referred to therein, and the testimony of one witness, a real estate expert. In defense the defendant introduced a further stipulation as to the facts, the testimony of the defendant and that of a real estate expert. The facts thus shown, pertinent to the issues involved, we shall attempt to state with as much brevity as possible.
In 1906 Irwin Z. Smith owned a lot of ground in the city of St. Louis fronting on Sixth street, numbered 812 to 816 North Sixth street. On October 31 of that year he executed a ninety-nine-year lease upon the property to the West End Realty Company as lessee; the term specified therein being from August 1, 1905, to July 31, 2004. By the terms of the lease a rental of $ 4100 per year was reserved, payable to the lessor in monthly installments of $ 341,66; and the lessee was required to pay all taxes upon the property, and to erect a building thereon to cost not less than $ 50,000. The lease further provided for a forfeiture thereof upon the failure of the lessee to pay the taxes assessed against the property or the rentals due under the lease. The lessee, the West End Realty Company, went into possession and thereafter erected a building on the lot costing, according to the testimony, approximately $ 60,000, and executed and disposed of a first mortgage of $ 12,000 upon its leasehold estate in the property. Thereafter the lessee also executed and sold a second mortgage of $ 16,000 on its leasehold interest.
In 1913 Irwin Z. Smith died, leaving a will. The fifth clause of the will, so far as here pertinent, is as follows:
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