Conservative Federal Savings & Loan Ass'n v. Warnecke

324 S.W.2d 471, 1959 Mo. App. LEXIS 522
CourtMissouri Court of Appeals
DecidedMay 19, 1959
Docket30228
StatusPublished
Cited by35 cases

This text of 324 S.W.2d 471 (Conservative Federal Savings & Loan Ass'n v. Warnecke) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Conservative Federal Savings & Loan Ass'n v. Warnecke, 324 S.W.2d 471, 1959 Mo. App. LEXIS 522 (Mo. Ct. App. 1959).

Opinion

ANDERSON, Judge.

This is an action brought by plaintiff, a lessee in the Paul Brown Building in St. Louis, to construe its lease and to declare that a claimed increase under an escalator clause in the rental provisions of said lease was ineffective for want of timely notice to it of defendant’s claim to said increase. Defendant, the lessor, in his answer requested a finding that the said escalator clause was operative and that plaintiff was indebted to him for additional rent, for which amount defendant prayed judgment. The court found the issues in favor of plaintiff and, from the judgment entered, defendant has appealed.

On September 11, 1951, respondent and the Paul Brown Realty and Investment Company, a corporation, entered into a lease, by the terms of which the latter leased to respondent store rooms numbered 200 and 202 North Ninth Street, which were located on the ground floor of the Paul Brown Building, together with mezzanine and basement space, for a period of ten years commencing December 1, 1951, and ending November 30, 1961. Respondent has occupied said premises and' has been in continuous possession thereof since December 1, 1951. The rent for the term of the lease was $51,000, payable in-advance in equal monthly installments of $425.

The lease was prepared by Mr. Dale R. Cowen of Isaac T. Cook Company, the agent in charge of management of the Paul Brown Building with full authority to make leases. Appellant, George W. War-necke, acquired the Paul Brown Building either the latter part of 1953 or early in 1954.

*475 Included in the aforementioned lease is the following escalator clause:

“Anything to the contrary notwithstanding the Lessee agrees that in the ■event the average scheduled rate for the total rentable area of office space in the Paul Brown Building from the second to the sixteenth floors inclusive shall have been increased from its present average annual rate of •three dollars and eight cents ($3.08) per square foot by December 1, 1956, then in the event the present rate of •$425 per month for the herein leased premises shall be increased the same proportionate amount as the percentage increase of the average office space rate in effect December 1, 1956, bears ■to three dollars and eight cents ($3.08), ■said increased rental rate to be paid by Lessee each and every month of the then remaining five years of this lease. In the event said average annual rate for the office space area of the Paul .Brown Building is less than three dollars and eight cents ($3.08) on De■cember 1, 1956, then in that event the Lessee may cancel and terminate this lease by giving the Lessor ninety (90) •days prior written notice provided the Lessor receives said notice prior to December 31, 1956.”

Plaintiff received monthly bills for rent :at the rate of $425 from December 1, 1951, to December 1, 1956, which bills were regularly paid. Likewise, monthly rental •statements for $425 were received by plaintiff for the period from December 1, 1956, through November 30, 1957, which bills were paid monthly.

Some time in the early part of October, 1957, Mr. Carl O. Kamp, Sr., Executive Vice-President of plaintiff association, telephoned Mr. A. F. Jaquier, who was then manager of the Paul Brown Building, and requested that he come to see Mr. Kamp, Sr., about some remodeling of the leased premises which plaintiff contemplated. Mr. Jaquier then called at the plaintiff’s offices and was told by Mr. Kamp, Sr., that plaintiff desired to do this remodeling and, since it would be expensive, inquired whether plaintiff might obtain an option to renew the lease or enter into a new lease. Mr. Jaquier told Mr. Kamp, Sr., that the existing lease should not be disturbed; that plaintiff was a satisfactory tenant; and that the chances of renewing the lease at the end of the term were good. Mr. Jaquier also told Mr. Kamp, Sr., that it would be necessary to secure permission of the landlord before commencing the contemplated repairs. Mr. Jaquier also told Mr. Kamp, Sr., and Mr. Carl O. Kamp, Jr., who was present at this interview, that he had read their lease and noted that it contained an escalator clause. Mr. Jaquier testified at the trial that he further informed Mr. Kamp, Sr., and Mr. Kamp, Jr., that there could be a substantial rate increase pursuant to the escalator clause and that this increase could be in the neighborhood of 10%. Jaquier also stated he told the Kamps he would have a study made and let them know the amount. Both Mr. Kamp, Sr., and Mr. Kamp, Jr., testified they recalled Mr. Jaquier’s reference to the escalator clause, but denied that he made any mention of an increase in the rent.

Mr. Kamp, Sr., also testified he knew that the lease contained the escalator clause, having read it some time prior to his conversation with Jaquier. In that conversation, Mr. Jaquier told the Kamps to submit their plans to him for his approval. Thereafter, in the latter part of October, the plans and specifications were prepared, and were submitted to Mr. Jaquier for his approval the early part of November. On November 5, 1957, Mr. Jaquier advised the plaintiff by letter that he approved the remodeling program, subject to plaintiff’s furnishing certain insurance, a copy of the St. Louis Building Department’s approval of the alterations, a completion bond, and waiver of lien forms from the general contractor and all subcontractors. These were apparently *476 furnished and the contemplated work was commenced about November 10, 1957. A contract for the remodeling work was entered into by plaintiff some time prior to the date the work started. The remodeling work was completed and the overall cost was in excess of $8,000.

While the remodeling work was in progress Mr. Carl O. Kamp, Sr., received a letter from Mr. Jaquier dated November 19, 1957. This letter was introduced into evidence as plaintiff’s Exhibit 5, and is as follows:

“Dear Mr. Kamp:
“You will recollect that about a month ago we discussed the provisions of your lease which permit of a revision in rate effective December 1, 1956, in accordance with a formula set forth in the lease.
“We have employed the services of Jacquemin, Chatterton and Schlossstein, Certified Public Accountants, who have determined that a rent increase (following the formula) is applicable. The increase is 21.1%. A copy of their report is enclosed for your files. For obvious reasons we request that the information contained in the report be held confidential.
“Effective December 1, 1957, and for the balance of your lease term, we will bill you monthly at the new rate of $514.68.
“With your December, 1957, statement we will also bill you for the retroactive amount due us ($1,076.10) which sum represents the period December 1, 1956 through November 30, 1957.”

A copy of the report of the accountants mentioned in said letter and enclosed therein was introduced as plaintiff’s Exhibit 6, and is as follows:

“Dear Mr. Jaquier:
“In accordance with your request we have made a computation of the average scheduled rent rate for the total rentable area of office space in the Paul Brown Building, from the second to the sixteenth floors inclusive, from data and information made available to us.

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Bluebook (online)
324 S.W.2d 471, 1959 Mo. App. LEXIS 522, Counsel Stack Legal Research, https://law.counselstack.com/opinion/conservative-federal-savings-loan-assn-v-warnecke-moctapp-1959.