Kemp v. San Antonio Catering Co.

93 S.W. 342, 118 Mo. App. 134, 1906 Mo. App. LEXIS 290
CourtMissouri Court of Appeals
DecidedApril 10, 1906
StatusPublished
Cited by6 cases

This text of 93 S.W. 342 (Kemp v. San Antonio Catering Co.) 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
Kemp v. San Antonio Catering Co., 93 S.W. 342, 118 Mo. App. 134, 1906 Mo. App. LEXIS 290 (Mo. Ct. App. 1906).

Opinion

GOODE, J.

(after stating the facts). — -Plaintiff was the lessor of the San Antonio Catering Company and was, of course, entitled to be paid the rent said company agreed to pay for the premises leased; that is to say, fifty per cent of the receipts. It follows that [145]*145the fund which the Catering Company paid into court as rent under its contract with plaintiff, should be awarded to the latter unless some one else has shown a superior right to it. The only party contesting plaintiff’s right is the Parkview Realty & Improvement Company, which claims the fund in discharge of the ground rent due it from plaintiff. It appears from the petition in the case that plaintiff himself, at the inception of the litigation recognized the justness of the Parkview Company’s claim; for he alleged as an element of his case, that he was compelled to depend on his portion of the receipts accruing from the operation of the hotel leased to the Catering Company, to enable him to pay the ground rent due under his lease from the Parkview Company, and that by reason of the Catering Company’s having withheld the rent, he had been compelled to permit $650 of the rent he owed the Parkview Company to fall into arrears. The petition further alleged that under the terms of its lease to plaintiff, the Parkview Company, on account of such default, might re-enter and take possession of the premises and forfeit plaintiff’s lease, which it would do if the rent was not paid; thereby inflicting irreparable injury on plaintiff. In his testimony plaintiff swore there was a balance of $1,650 for rent due the Parkview Company at the time of the trial, and that his object in bringing this suit was to get what his undertenant owed him in order that he might pay what he owed the Parkview Company. When asked why he had changed his mind about paying it, plaintiff answered that the Parkview Company had turned against him by bringing in the old lease which they had agreed to cancel. The excuse given is a flimsy one. The conversations in regard to the cancellation of the original lease to Drew occurred anterior to the lease made to plaintiff by the Parkview Company, and the latter lease was made subject to any claims which Drew, or those claiming under him might make by virtue of the lease given by [146]*146the Parkview Company to Drew. Moreover, previous to the date of plaintiff’s lease from the Parkview Company containing the above-mentioned proviso, plaintiff had taken an assignment from Drew of the latter’s leashold interest in the premises, which assignment included the buildings thereon and all rent that had accrued or might accrue to Drew. It is therefore perfectly obvious that plaintiff himself desired to have the Drew lease kept alive; or at least assented to its continuance. Neither did substantial prejudice result to plaintiff after his petition had been filed in this cause, from the fact that the Drew lease was not cancelled. Nor does it appear that a demand ever was made by Kemp for its cancellation and refused by the Parkview Company. And if such demand had been made and there had been an obligation on the Parkview Company to cancel it, the breach of that covenant would not have destroyed the Parkview Company’s right to rent, if Kemp retained possession instead of seeking to rescind the contract and surrender possession on account of the breach. He had, at most, an action for damages for the breach. [Hall v. Ryder, 152 Mass. 528; Milliken v. Thorndyke, 103 Mass. 82; Bell v. Baker, 43 Minn. 86.] The alleged failure of the Parkview Company to cancel the Drew lease in no way affects the merits of this case.

As far as Kemp is concerned, we might hold that, by his own pleadings, he concedes the Parkview Company’s right to be paid its ground rent out of the rent due from the Catering Company. Neither do we find any evidence in the record that Kemp has creditors entitled to dispute the Parkview Company’s right to a preference. And even against his creditors there would be an equity in favor of the Parkview Company as the original lessor. Kemp is insolvent and the Parkview Company will lose its ground rent if it is not paid out of the fund in court, The petition showed a clear equity in the Parkview Company to this fund; for it was alleged that [147]*147unless plaintiff was granted a receivership, the Park-view Company had the fight to, and would, re-enter the premises and forfeit his lease. A receiver was appointed on plaintiff’s petition and the rents ordered paid into court; thereby cutting off the Parkview Company from its right to collect its rent by garnishment proceedings against the undertenant, or any other legal process. A court of equity having thus deprived the Parkview Company of its legal remedy, ought to take care that no harm results to it from the interference. [Balfe v. Blake, 1 Ir. Ch. n. s. 365.] Now, in a case of this kind, when the original lessee is insolvent and the lessor cannot collect from him, and a court has ordered the funds paid to a receiver, thereby preventing an action at law by the original lessor, the court will collect the rents from undertenants for the benefit of the original lessor. Perhaps it will do so when there is no receivership; for equity regards the rent as a trust or charge on the estate, which it will enforce by taking the rent due from the undertenant and turning it over to the owner of the premises in satisfaction of his rent. This is to prevent the profits of the estate from being taken by the lessee or others, without making compensation to the owner for the use of his ground. [Treackle v. Coke, 1 Vernon 165; Goddard v. Keat, 1 Vernon 87; 2 Taylor, L. & T. (9 Ed.), 659; 1 McAdams, L. & T., p. 657; Balfe v. Blake, 1 Ir. Ch. n. s. 365; Riggs v. Whitney, 15 Ab. Pr. 388; 1 Story, Eq. Juris. (13 Ed.), sec. 687; Glassner v. Fredericks, 73 Mo. App. 429.]

The case of Otis v. Conway, 114 N. Y. 13, is undistinguishable from the present one, so far as the immediate point is concerned. The plaintiffs had leased premises in New York and their lessee had sublet part of them. Afterwards the first lessee was , adjudged a lunatic and a committee appointed to take charge of his estate. After this occurrence the undertenant’s rent for a year, by agreement of the parties, was deposited with [148]*148a trust company until it should be judicially determined who was entitled to it. The lunatic’s estate was insolvent and the undertenant’s rent was claimed by the committee for the benefit of his creditors, against the claim of the landlords ’ that it be applied on their demand for rent. In other words, the committee contended that the landlords’ demand for rent should stand simply as any other claim against the estate, and not be accorded a preferential right to the rent due from the undertenant to the original lessors. In disposing of this contention the Court of Appeals of New York said that in equity rent was a charge on the estate and in good conscience the lessee ought not to take the profits thereof without a due discharge of the rent. And, further, that the creditors of an insolvent lessee could have no moral or equitable claim to the profits issuing from leased land until after the landlords’ claim was satisfied. The other authorities we have cited pronounce the same doctrine in substance, and all of them support the demand of the Parkview Company for the fund in controversy as against the demand of Kemp and those claiming under him. We quote a very pertinent passage from the opinion in Riggs v. Whitney, 15 Ab. Pr. 388, 390:

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Cite This Page — Counsel Stack

Bluebook (online)
93 S.W. 342, 118 Mo. App. 134, 1906 Mo. App. LEXIS 290, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kemp-v-san-antonio-catering-co-moctapp-1906.