Tracy v. Union Iron Works

• Decision Date: 20 February 1888
• Citation: 29 Mo.App. 342
• Parties: H. W. TRACY, Respondent, v. UNION IRON WORKS, Appellant.
• Court: Kansas Court of Appeals

29 Mo.App. 342

H. W. TRACY, Respondent, v. UNION IRON WORKS, Appellant.

Court of Appeals of Missouri, Kansas City.

February 20, 1888

APPEAL from Jackson Circuit Court, HON. TURNER A. GILL, Judge.

Affirmed.

Case certified to Supreme Court.

Statement of case by the court.

This is an action to recover rent alleged to be due on a written contract of lease. The lease was for one year, from May 1 1884, at an annual rent of one thousand dollars, payable in monthly instalments. This action is to recover for the last six months of the year.

The written contract is as follows: " This article of agreement witnesseth: That H. W. Tracy has this day rented to the Union Iron Works Company, of Decatur, Illinois, in the present condition thereof, the upper story of his business-house, known as 1305, 1307, and 1309, West Twelfth street, Kansas City, Missouri, said company to have the use of elevator and platform in common with the other tenants of building, and to pay their fair proportion of water rates for same, and other uses about the house; also office, deskroom and space for sample machine on first floor, for the period of one year from the first day of May, 1884, on the following terms and conditions, to-wit:"

For the use and rent thereof, the said Iron Works Company hereby promise to pay said H. W. Tracy, or to his order, one thousand dollars per year for the whole time above stated and to pay the same monthly on the first of each month; that they will not sublet or allow any other tenant to come in with or under them without the consent of the said H. W. Tracy; that they will repair all injuries or damages done to the premises during their occupancy, or pay for the same; that all of their property, whether subject to legal exemption or not, shall be bound and subject to the payment of the rents and damages thereof; that they will take good care of the building and premises, and keep them free from filth, from danger of fire, or any nuisance, and protect and defend the said H. W. Tracy from all charges for such; that the house and premises shall be fairly treated, kept clean and left so; that in default of the payment of any monthly instalment of rent for ten days after the same is due, they will, at the request of the said H. W. Tracy, quit and render to him the peaceable possession thereof, but for this cause the obligation to pay shall not cease; and finally, at the end of their term, they will surrender to said H. W. Tracy, his heirs or assigns, the peaceable possession of the said house and premises, with all the keys, bolts, latches and repairs, if any, in as good condition as they received the same, the usual wear and use and providential destruction excepted. In case of any accident that may occur to the elevator, the party at fault for same shall pay for all costs of repairing made necessary by such accident."

The answer, after admitting that defendant is a corporation, and the execution of the written lease, made the following plea:

" 3. The defendant, for further answer and counter-claim, states that at the time of the execution of the lease sued on, and ever since, the defendant was engaged in the manufacture and sale of heavy engines and agricultural machinery of various kinds, requiring large storerooms and warehouses, and such as are provided with railroad switch-track facilities for the proper, expeditious, and economical shipping and transferring of its goods; that the entire character of the defendant's business and operations were well known to plaintiff; and previous to, and at the time of the execution, as alleged, this defendant so informed plaintiff about the necessities and requirements as above for its business, and informed him that proper and adequate switch-track facilities were an indispensable necessity to the premises to be occupied by it."

That said plaintiff, being so informed, agreed, as an inducement to the execution of the lease, and as a part of the consideration for the leasing of said premises described by this defendant, that he would construct and cause to be laid, at his own expense, a suitable switch track in the rear of, or along the side of, said premises, so that cars might be run and operated up to and along said building.

That, at the time of the execution of the lease herein, it was verbally agreed by said plaintiff that he would cause to be laid and constructed in a short time, at his own expense, a proper and sufficient switch track leading to said premises for the operation of cars thereon; that said stipulation and agreement were intended to be and should have been inserted in said lease, but that the same was purposely omitted by the fraudulent and deceptive inducements and representations of this plaintiff, and that defendant was induced to sign and execute said lease by the fraudulent promises and representations of this plaintiff, and that defendant was induced to sign and execute said lease by the fraudulent promises and representations of plaintiff that he would comply with and perform this part of his agreement as if it were in said lease contained, and that the same was unnecessary to be inserted in said lease, as he would always do what he promised verbally, as if in writing; that, upon these considerations and inducements, this defendant was induced to sign said contract of leasing; that defendant, by its agents and servants, often demanded of said plaintiff to perform his agreement and construct said switch track as alleged, but that plaintiff refused to put in said track or any part of same; that, by reason of such failure to perform this part of said agreement, this defendant was compelled to leave said building and premises and procure other buildings and premises suited to the proper conduct of its business; that it was put to great inconvenience, expense, and delay by having to pay large drayage accounts and hauling expenses for the want of said switch tracks, as agreed to be put in by plaintiff; that it was put to large expense in moving its effects to other suitable premises, all in the sum of one thousand dollars. Wherefore, defendant asks judgment for one thousand dollars."

The issue at the trial was as to this matter of defence.

The defendant's evidence tended to show the facts respecting the importance of the switch facilities as stated in the answer, and that this fact was made known to plaintiff during the negotiation for the lease. The plaintiff stated to the defendant's agent, who was conducting the negotiations for defendant, that it was not necessary to put such stipulation in the written contract, as he would have the switch ready by the time the defendant wanted it for its first carload of machinery, and that his word was as good as his bond; and that, accordingly, the defendant was induced to execute the written contract in reliance upon this assurance. The lease was drawn up by plaintiff, and forwarded to the company, at its headquarters in the city of Decatur, Illinois, for execution. The evidence was that, on inspection of the contract, as sent by plaintiff to defendant, the words, " also office, deskroom, and space for sample machine on first floor," were inserted by defendant before executing the lease; and further, that, before the execution thereof, the company's executive officer asked its agent about the switch facilities, and why it was not inserted in the lease, whereat the agent stated the reason as before given. Upon this state of facts, the company signed the lease. Defendant took possession of the premises, and in about two weeks its first consignment of machinery arrived, but the railroad switch was not built as agreed. Plaintiff again assured defendant he would soon have it in. These assurances were, from time to time, repeated, until half the term had expired, without performance on the part of plaintiff, whereat defendant claimed that the absence of the switch so materially retarded the proper carrying on of its business that it could not longer, without great loss, occupy the building, and accordingly abandoned the same, and secured another building in the vicinity. Evidence was given on the part of defendant as to the amount of damages sustained by it on account of the failure to build said switch.

On the conclusion of the defendant's evidence, the court sustained a demurrer thereto, and directed the jury to find for the plaintiff the amount of the six months' rental as per written lease. Defendant has appealed.

ALBERT YOUNG and W. A. ALDERSON, for the appellant.

I. The court erred in its instruction to the jury to find a verdict for the plaintiff, and the verdict and judgment are against the law, and contrary to the evidence as offered by defendant to support its counter-claim.

II. Though all anterior and contemporaneous agreements are presumed to be merged in a contract when reduced to writing yet this rule does not include fraudulent misrepresentations made for the purpose of inducing a party to execute a contract, and as to matters and conditions precedent which go to the consideration of the signing of such instrument. Also a verbal agreement, which is collateral to a lease of writing, and a part of the consideration, may be shown in evidence. The above rule is stated by Wharton, in his treatise on Evidence, as follows: " Fraud, employed by one party to obtain the assent of the other party, may always, as we have also seen, be shown for the purpose of impeaching the contract. But a further step may be taken, where it is shown that, before the execution of a contract, it was agreed, as a part of the consideration of the contract, that it should be essentially modified in its operation. Supposing, in such case, facts amounting to express or constructive fraud to be shown, the court will reform such a...