White v. Buntin

• Citation: 77 S.W.3d 702
• Decision Date: 18 June 2002
• Docket Number: No. ED 80214.,ED 80214.
• Parties: In the Matter of Dail WHITE, Appellant, v. William H. BUNTIN and Nellie M. Buntin, Respondents.
• Court: Court of Appeal of Missouri (US)

77 S.W.3d 702

In the Matter of Dail WHITE, Appellant, v. William H. BUNTIN and Nellie M. Buntin, Respondents.

No. ED 80214.

Missouri Court of Appeals, Eastern District, Northern Division.

June 18, 2002.

Mark S. Wasinger, Hannibal, MO, for appellant.

Rickey R. Roberts, Kahoka, MO, for respondent.

CLIFFORD H. AHRENS, Judge.

Dail White ("tenant") appeals from a judgment of the Circuit Court of Clark County, granting William H. Buntin and Nellie M. Buntin ("purchasers") possession of real estate, including certain improvements made by tenant consisting of fill dirt, driveways, and drain tiles. Tenant claims the trial court erred in finding the Buntins to be "innocent purchasers" who took title to the real estate without knowledge of the terms of an oral lease granting tenant the right to remove the fixtures, because purchasers neglected their duty of inquiry of the possessor of the land. We affirm.

The following are the facts viewed in the light most favorable to the judgment. In 1992, tenant leased a tract of land from the owner M.R. Hudson ("landowner") in Clark County for the purpose of selling fireworks. Tenant's interest was on a year-to-year basis under the terms of an oral lease with landowner.

Landowner granted tenant the right to construct a portable building on the land and put fill dirt, driveways, and drain tiles on the land. Tenant contends that under the terms of his oral lease with landowner, he retained the right to remove the building, fill dirt, driveways and drain tiles at the conclusion of his lease.

Purchasers were interested in buying the land. Landowner told purchasers that tenant had a year-to-year lease to sell fireworks there during fireworks season. Landowner also showed purchasers a written lease from previous tenants. He explained that the terms of the lease were mainly still in effect pursuant to the oral lease with the current tenant. From their discussions with landowner, purchasers understood that the property would be sold in the condition it was in, but there was some question about the building. The building was on skids, and purchasers did not know how much of it landowner owned. Purchaser Mr. Buntin testified that this was reflected in the price and he "basically paid for the ground." Landowner did not inform purchasers of any claim by tenant to a right to remove the fill dirt, driveways, and drain tiles.

Purchasers bought the land on December 28, 2000, from the estate of landowner, who had died. The estate's appraisal of the land did not include the building, and the appraisal made no reduction in the valuation of the land for the fill dirt, driveways, and drain tiles claimed by tenant. At the time of sale, tenant was in possession of the land. Purchasers notified tenant that his tenancy would not be extended into 2001. On January 23, 2001, purchasers served a notice of eviction on tenant, which demanded he vacate the premises. Tenant did not vacate and surrender possession of the land and did not pay rent to purchasers. Purchasers filed a lawsuit for rent and possession, and then requested an injunction against tenant to prevent him from removing the fill dirt, driveways, and drain tiles from the land.

The trial court determined that purchasers were innocent purchasers who took title to the land without knowledge of the "secret" terms of the oral lease allowing tenant to remove fill dirt, driveways, and drain tiles. The court found that at no time did landowner or anyone ever disclose to purchasers anything about the removal of the fill dirt, driveways, and drain tiles, and there was no adjustment in the appraisal for their removal. The court found that those items were "affixed to" and were "an intricate part" of the real estate, and that "their removal would be very difficult and would substantially destroy the real estate and would render it useless and of very little value to anyone." It therefore granted purchasers immediate possession of the land, including the fill dirt, driveways, and drain tiles.¹ Tenant now appeals.

The judgment of the trial court will be sustained unless there is no substantial evidence to support it, it is against the weight of the evidence, or it erroneously declares or applies the law. Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976).

In tenant's sole point on appeal, he claims that the trial court erred in declaring that the fill dirt, driveways and drain tiles were the property of purchasers because they had the legal duty to inquire of tenant, as possessor of the land, as to the terms of the oral lease. Purchasers claim that any alleged secret intention or agreement not known by them as innocent purchasers should not be considered and that the intention to annex articles to land may be inferred from the surrounding circumstances.

There are three elements which must be satisfied in order to determine whether property has become a fixture. Rothermich v. Union Planters Nat. Bank, 10 S.W.3d 610, 614 (Mo.App.2000). These are: "annexation to the realty, adaptation to the use to which the realty is devoted, and intention that the object become a permanent accession to the land." Id. In the present case, we do not need to reach the issue of whether the driveways, drain tile and fill dirt are fixtures. However, we note that there was substantial evidence to support the finding of the trial court that the dirt, driveways and drain tiles were annexed to the land and became such an integral part of the land itself that they would have been difficult to remove from the property and would render it useless and of little value. Moreover, with respect to the fill dirt, the court could reasonably have considered that the majority of the dirt came from the landowner's property itself and would be difficult to separate and remove from the land.

Although a landowner can enter into an agreement with another that what would normally be a fixture will remain as personalty, such an agreement cannot be given effect against the rights of intervening third parties without notice. Id.; Goff v. Case, 17 S.W.3d 574 (Mo.App.2000). Purchasers here were intervening third parties who were not bound by any agreement between landowner and tenant unless purchasers had notice of the alleged oral agreement to remove the fixtures. The issue in the present case, therefore, is what was necessary to charge the purchasers with notice of the oral agreement between the landlord and the tenant allowing removal of fixtures.

Notice can be either constructive notice under the recording laws or actual notice. Leawood Nat. Bank of Kansas City v. City Nat. Bank & Trust Co. of Kansas City, 474 S.W.2d 641, 644 (Mo. App.1971). A subsequent purchaser of realty is deemed to purchase with constructive notice of the contents of all recorded instruments. Section 442.390 RSMo; Hamrick v. Herrera, 744 S.W.2d 458, 461 (Mo. App.1987). In this case, there was no constructive notice. There was nothing of record concerning the oral lease. Lease provisions which attempt to change the character of property affixed to the real estate are not binding on purchasers where not of record. Leawood Nat. Bank, 474 S.W.2d at 645. There was no evidence in this case of any written, recorded lease or other instrument which would give constructive notice of tenant's agreement with landlord to remove the fill dirt, driveways, and drain tiles.

We turn to the issue of actual notice. Here, there is no evidence that purchasers had actual notice from anyone of tenant's claim to the fill dirt, driveways, and drain tiles. But that does not end our inquiry. Actual notice in regard to the contents of agreements affecting real estate can include circumstances where the purchaser is charged with notice, if the purchaser has knowledge of facts which would put an ordinarily...