Tureman v. Altman

• Decision Date: 14 May 1951
• Docket Number: No. 41523,41523
• Parties: , 26 A.L.R.2d 729 TUREMAN et al. v. ALTMAN et al.
• Court: Missouri Supreme Court

Page 304

239 S.W.2d 304

361 Mo. 1220, 26 A.L.R.2d 729

TUREMAN et al. v. ALTMAN et al.

No. 41523.

Supreme Court of Missouri, En Banc.

May 14, 1951.

Charles M. Miller, Carson E. Cowherd, A. Z. Patterson, Elton L. Marshall, and Charles E. Whittaker, all of Kansas City, Watson, Ess, Whittaker, Marshall & Enggas, Kansas City, of counsel, for appellants.

William S. Hogsett, Hale Houts, Abraham E. Margolin, and F. Philip Kirwan, all of Kansas City, Hogsett, Trippe, Depping, Houts & James, Kansas City, Margolin, Kirwan & Smith, of counsel, for respondents.

BARRETT, Commissioner.

This is a suit equity to value a lot in Kansas City and thereby established its annual rental value under the terms of a ninety-nine year lease executed in 1895. The lot, on the southeast corner of Eleventh and Walnut Streets, fronts forty-eight feet on Walnut Street and 110.5 feet on Eleventh Street in the heart of the '100% downtown retail district' and with Lots 44 and 45 of Swope's Addition is occupied by the Altman Building. There are three principal or essential questions involved upon this appeal: Whether, in the circumstances, the court had jurisdiction to value the property and fix the rent; the reasonableness of the court's valuation, and, whether the valuation and rental was properly effective as of March 1, 1945 rather than the date of the court's decree in April 1949.

The lease, known as the 'Walpole Lease' was executed on the 7th day of January 1895 for a term of ninety-nine years. The owners and lessors were Richard and Hannah Walpole and the lessee was Frank G. Altman. Kathleen and Arthur P. Tureman acquired the title to the lot and Mrs. Tureman and her son, Robert, and the First National Bank as trustees under Mr. Tureman's will are the plaintiffs in this action. The defendants are Frank G. Altman's sons and daughters and the present owners of the ninety-nine year lease. There was a fruit and vegetable market on the lot in 1895 and in 1896, under the lease, the five-story Altman Building was erected on Lot 46 and adjoining lots. The lease provided for an annual rental of $6,000.00 for the first fifteen years. At the termination of the first fifteen year period the lease provided: '* * * there shall be an appraisement of the real estate above described, exclusive of improvements, such appraisement to be made by three appraisers, one to be selected by each party hereto, * * * and the third selected by the two appraisers so chosen; and the annual rental for the five years after the first period of fifteen years shall be six per cent of the valuation so fixed by said appraisers, * * *. At the end of any and every period of five years after the first appraisement it shall be the right and privilege of either of the parties hereto, * * * to demand a new appraisement of the real estate above described, and after each and every appraisement the annual rental for five years following or until a new appraisement has been made shall be six per cent of the valuation fixed by the appraisers at the last appraisement made as above provided; * * *.'

At the expiration of the first fifteen years the parties did not attempt to establish the annual rental under this provision of the lease. Instead, on March 29, 1909, Mr. and Mrs. Arthur P. Tureman and Mr. and Mrs. Frank G. Altman entered into a supplemental agreement 'making certain specific amendments or alterations to said lease and * * * no other changes or alterations are made in said lease.' One of the amendments provided, in the event the present building should be destroyed, that the lessee in rebuilding should construct a foundation capable of supporting a ten-story building of steel and concrete substantially similar to the Sharp Building then on the northwest corner of Eleventh and Walnut Streets. The other amendment provided that the rent for the first ten-year term, beginning on March 1, 1910, should be $19,000.00 a year and for the second ten-year period the annual rent should be $20,000.00 a year, and thus the annual rental for the lot was amicably and mutually provided for until 1930.

Since 1930 there have been no amicable or mutual agreements between the parties concerning the rent. Instead there has been constant strife, litigation and maneuvering for advantageous position. When the lessors have accepted it the lessees have paid an annual rent of $20,000.00. In 1930 the lessors gave notice and demanded an appriaisal of the lot, exclusive of the improvements, under the quoted provision of the original lease. In that attempt to appraise the property, the appraiser selected by the lessor and the third appraiser agreed on a valuation of $864.000.00 but the appraiser selected by the lessees' successor did not agree to that valuation and separately valued the lot at $589,325.00. The lessors then instituted an action to have the appraisement of the two appraisers declared to be the valid appraisement and the rent determined accordingly. The trial judge indicated that a valid arbitration required the concurrence of all three appraisers and the lessors dismissed the suit. In their answer to the suit the lessees had indicated a willingness to attempt a second arbitration and, before dismissing the suit, the lessors nominated another appraiser and again asked for arbitration of the value of the lot under the terms of the lease. The lessee nominated an appraiser but the two were unable to agree on a third and so the second attempt at arbitration failed. The lessors contend that another attempt to arbitrate in 1931 failed because the lessees refused to appoint an appraiser but it is not necessary to consider that attempt or any question concerning it. Likewise it is not necessary to consider whether a second suit was filed in 1932. In any event, in 1919 the Merchants Realty Company succeeded to the interests of the lessee and in 1933 a corporation, Shopping Center Building Company, dominated by the lessors, acquired all the rights of the Merchants Realty Company and entered into an agreement with the lessors for an increased rental. This resulted in protracted and complicated litigation which terminated favorable to the Altmans and preserved their rights as lessees under the lease. Altman v. Shopping Center Bldg. Co., 8 Cir., 82 F.2d 521. In February 1945 there was another attempt at an appraisal under the lease but that appraisal failed because the three appraisers could not agree. Likewise an appraisal attempted in 1946 failed when the appraisers could not agree.

In December 1947 the lessors instituted this suit. The trial court took jurisdiction of the action, valued the lot at $688,800.00 and fixed the annual rent from March 1, 1945 at $41,328.00 and retained jurisdiction of the cause so as to redetermine the value and rent at the end of every five-year period at the request of either of the parties. Upon this appeal the lessees contend that the trial court did not have equitable jurisdiction to value the property and thus change the terms of the ninety-nine year lease and in effect write a new lease for the parties merely because the appraisers selected by the parties had failed to agree, through no fault of the lessees. It is said that the court's jurisdiction 'is predicated solely upon the alleged failures of appraisements, without any fault of the lessees.' Their position, in general, is summarized in their brief: 'Because under the pleadings which made the lease contract a part thereof, the sole and only issue of five alleged attempts at an appraisement by appraisers selected as provided by the appraisement provision in the 99-year lease to agree to an appraisement failed due to no fault of the parties to the lease contract did not give a court of equity jurisdiction, and justify a court in taking jurisdiction * * *.' In this connection it is further urged that the court erred in holding and finding under the evidence that 'no appraisement of Lot 46, in the manner provided for in said lease can succeed,' and erred in holding that after the supplemental agreement expired in 1930 there had been no effective agreement fixing the amount of the rent under the lease. It is contended that the appraisements of 1930 and 1932 were abandoned by the lessors who accepted the old rent of $20,000.00 a year and made no new demand for an appraisal until 1945 and that at most the court could only consider three attempts at appraisement. This is but a brief outline of the appellants' general argument but the essence of their appeal in the power and propriety, in the circumstances, of the court's assuming and retaining jurisdiction of the cause. In trying the case anew, it should be interpolated here, that certain mentioned questions neither briefed nor argued, such as the imparirment of contracts or other constitutional questions, are deemed abandoned. Wright v. Tucker, Mo.Sup., 137 S.W.2d 557; Petty v. Kansas City Public Serv. Co., 355 Mo. 824, 198 S.W.2d 684.

But, upon the essential issue, even the cases upon which the appellants rely recognize that when value and rents or other rights are made to depend upon an arbitration and the appraisal fails that a court of equity, in appropriate circumstances, may intervene and determine value and fix the rental. Tscheider v. Biddle, Fed.Cas.No. 14,210, 4 Dill., U.S., 58. In Biddle v. McDonough, 15 Mo.App. 532, a thirty-year lease fixed the rent for the first ten-year period and then provided that the rent for subsequent ten-year periods should be determined by appraisement of the value of the property. An attempt to appraise the property failed and the court declined to assume jurisdiction and value the property but, in addition to the appraisal clause, the lease provided that if the appraisers failed to agree the lessee should pay rent 'at the rate of six per cent on the last valuation of the ground for city taxes.' In short, the parties anticipated that arbitration might fail and they specifically provided what the rent should be in...