Tetley v. McElmurry

• Decision Date: 22 February 1907
• Citation: 100 S.W. 37,201 Mo. 382
• Parties: TETLEY v. McELMURRY.
• Court: Missouri Supreme Court

100 S.W. 37

201 Mo. 382

TETLEY v. McELMURRY.

Supreme Court of Missouri, Division No. 1.

February 22, 1907.

CONTRACTS—CONSTRUCTION—FORFEITURE.

Plaintiff, who owned a leasehold in a lot at a certain annual ground rent, erected a house on the lot, and then contracted to sell his rights in the premises to defendant. The contract provided that in consideration of a certain sum, together with "such lease rent and repairs insurance and interest that may accrue," plaintiff agreed to convey his rights "to be paid as follows $10 and interest due each and every month as agreed by the promissory note of even date," and defendant agreed, on default of three monthly payments, to deliver the premises. The note referred to in the contract required defendant to make "monthly payments of $10 and interest due each and every month until paid," and provided that, if the interest should not be paid "annually," it should become as principal, and bear the same rate of interest. Plaintiff carried insurance on the house in his own name, the insurance having been in existence at the inception of the contract, and paid the ground rent. Plaintiff, for about three years, while the contract was running, made no demand on defendant for any monthly installment of interest, ground rent, or insurance. Subsequent to the execution of the contract, defendant became indebted to plaintiff for a lumber bill. Held, that plaintiff was not entitled to exact a forfeiture and obtain possession, because defendant had not paid the lumber bill, because he owed the ground rent and insurance, or because of the nonpayment of interest monthly; the note being a part of the contract.

Appeal from Circuit Court, St. Francois County; R. A. Anthony, Judge.

Action by F. I. Tetley against James L. McElmurry, in which an equitable answer was interposed seeking equitable relief, and, from a decree in favor of plaintiff, defendant appeals. Reversed.

Jere S. Gossom, for appellant. Pipkin & Swink, for respondent.

LAMM, J.

Plaintiff sued defendant in ejectment (in conventional form) in the circuit court of St. Francois county for "Leased lot No. 1 in Block `C' of East Flat River, Mo.," laying his ouster as of April 1, 1901. An equitable answer was interposed asking affirmative relief, thus putting the case in equity. A decree went for plaintiff, from which defendant appeals.

It seems plaintiff owned a leasehold in said lot, running for a term of 20 years at a ground rent of $10 per year, payable quarterly; that he built a dwelling house thereon, and presently entered into a contract with defendant to become the purchaser of his right in the premises at a consideration of $400. Defendant was a miner, living on a daily wage, and, the record shows, could read "a little bit." Plaintiff was a business man, a lumber dealer at Bonne Terre, Mo., and part of his business was that of building, selling, and renting houses and collecting installments of rent and purchase money. Plaintiff, with his own pen, drafted an eminently formidable and complicated contract, empty of punctuation, but full of obscurity, forfeitures, and perplexity, which the miner signed, and which we produce here for the double purpose of showing its terms and as an example to be avoided. The instrument reads:

"Articles of agreement made this day between F. I. Tetley and James McElmurry both of St. Francois county Mo.—Witnesseth that the said Tetley for the sum of three hundred and sixty dollars together with such lease rent and repairs insurance and interest that may accrue to convey his Right to a certain leased lot No. 1 in Block `C' of East Flat River leased from the F. M. & P. Co. to be paid as follows 10 Ten dollars and interest due each and every month until on or before the 10th of each month at the office of F. I. Tetley in Bonne Terre as agreed by the Promissory note of even date the said McElmurry Promising in case he makes default of three monthly payments to deliver unto the said Tetley or his Representative full and complete Possession of the above Premises and his agreement as soon as this is done the said Tetley if any money had been paid in excess of seven dollars per month said seven dollars per month shall be for the monthly rent of the premises to return such excess this shall be the same in case of sale before paid the said Tetley to have the Right of Refusal at the terms before mentioned but in no case shall sale be made without the written consent of Tetley thereto this shall be ended if not paid or broken on or before the first day of December 1901, by the said McElmurry delivering unto the said Tetley or his Representative without any written notice or demand whatever any holding over after that time or the time before mentioned or moneys paid not to be considered as renewing this agreement unless a New agreement is made this is to be considered as ended if suit has to be brought for Possession the said Tetley to retain in addition to rent the cost of suit and a reasonable attorneys fees in case of fire and there be an insurance and it received the said McElmurry to Receive his proportion to the Amt. paid and Received the said Tetley Promising not to molest the said McElmurry in his Possession of the above Premises as Long as the requirement of this agreement are complied with in witness whereof we have hereunto set our hands and seal in Presence of and for each other this 25th day of July 1898."

It seems that when this contract was signed plaintiff supposed defendant had so much as $40 in his pocket which he would hand over, and therefore the sum mentioned in the contract is $360. However, it was not so. He had but $10 by him, which he gave plaintiff. Several days after signing this contract, to wit, on August 1, 1898, the transaction was consummated by executing the note called for in the writing, as follows: "$390.00. Bonne Terre, Mo., Aug. 1st, 1898. Within thirty-six months after date I promise to pay to the order of Frederick I Tetley, in monthly payments of $10.00 and interest, due each and every month until paid, three hundred and ninety dollars. For value received, negotiable and payable without defalcation or discount and with interest from date at the rate of eight per cent. per annum, and if the interest be not paid annually to become as principal and bear the same rate of interest. [Signed] James McElmurry."

It will be observed that the face of the note calls for the $400 consideration, less the $10 paid when the contract was drawn, and the fact that it calls for $30 more than the sum mentioned in the contract is thus accounted for. During the month of August of that year, McElmurry paid Tetley $25. Possession was not delivered until the 1st of September, and Tetley collected $6 rent of one Cook, his tenant then in possession, and which became due after the contract was entered into. Tetley claims that by verbal understanding the possession was not to be delivered until September, and, by the same token, that Cook's rent for the month of August was to go to him (Tetley). McElmurry does not agree this was the understanding, but he says that Tetley appropriated this rent, and by so doing he received more than the $40 advance payment. Taking into account said rent from Cook, it stands practically conceded that McElmurry paid to Tetley on the foregoing note and contract, in the ensuing 31 months, the sum of $342.50. The evidence shows that by a working arrangement Tetley did not stand on the punctilio of exacting payment at his office in Bonne Terre. He seems to have been collecting monthly installments of money from divers and sundry other people in the McElmurry neighborhood, and, accordingly, collected McElmurry's installments at his own home. The evidence establishes the fact that during said 31 months McElmurry practically paid $10 each month, missing a month two or three times, and then paying in augmented amounts to catch up. At no time prior to March, 1901, was any demand made on him for a monthly payment of interest, or for ground rent, or for insurance. It seems Tetley carried insurance on the house in his own name, that this insurance was in existence at the inception of the contract, and that it was renewed once during these 31 months, and during that time Tetley paid the ground rent. It will be seen that, if the $40 advance payment is deducted from the gross sums paid by McElmurry, there will be left $302.50 to apply on the $360 mentioned in the contract, and at $10 a month McElmurry at the end of 31 months would be behind but a trifling sum, barring interest, ground rent, and insurance. At the end of these 31 months, Tetley refused to receive any more money. His monthly installments were tendered him, but he claimed and stood upon a forfeiture and demanded possession. He exacted this forfeiture on the theory that McElmurry owed him 31 installments of interest, on the fact that he owed him a small lumber bill, and on the fact that he owed him ground rent...