Koehler v. Rowland

205 S.W. 217, 275 Mo. 573, 9 A.L.R. 107, 1918 Mo. LEXIS 93

• Court: Supreme Court of Missouri
• Decided: July 30, 1918
• Status: Published

Opinion

WHITE, C.

The plaintiffs brought this suit under Section 2535, Revised Statutes 1909, to determine the title to Lot 15, Block 2, Wirtman Place, an addition to Kansas City. The plaintiff Elizabeth Koehler and her brother, George Wirtman, were at one time own-' ers of all the property in blocks 1 and 2 in Wirtman Place. In conveying this property in 1905 to Henry Waters, plaintiffs inserted the following condition in their deed:

“This transfer is made subject to the following conditions, to-wit: It is agreed between the' parties hereto, their assigns and executors, and is made a part of this condition and consideration of this transfer, that above described property shall not be sold, leased or rented to any negro or negroes for twenty-five years from date hereof and in event of such transfer, lease or rental before expiration of said term of twenty-five years, said property shall revert to grantor or sellers without process of law or equity.”

The defendants Louis N. Rowland and William N. Rowland acquired the property through mesne conveyances from the plaintiffs’ grantee, and their deed stipulates that it is made subject to conditions and restriction contained in the deed to Waters. Deeds were introduced showing plaintiffs and George Wirtman conveyed other property in the same block and in Block 1, with the same restrictions. John B. Groves, trustee for the Groves Brothers Real Estate & Mortgage Company, and the Mortgage Company filed a separate answer setting up a deed of trust which the said Real Estate & Mortgage Company held on the property executed by the defendants Rowland. The defendants Rowland filed a separate answer. The defendants Fisher and Thompson were negroes — tenants of the defendants Rowland— and occupied a part, of the property in dispute; they filed no answer in the case.

The circuit court rendered a judgment for the plaintiff in which it found that the defendants Louis N. Rowland and William H. Rowland had acquired the property subject to the conditions mentioned, that the said deed of trust was subject to the same conditions, that the conditions had been breached, that- the defendants Rowland had been duly notified of the conditions of the said deed and requested to remove their negro tenants from the premises and failed to do so. The court then adjudged that the plaintiffs were the owners in fee simple, clear of all claims, that the defendants had no right, interest, lien or claim in said property, and that the plaintiffs were entitled to possession, and ordered a writ of' ouster directing the sheriff to deliver possession to the plaintiffs. Separate motions for new trial were filed by the several answering defendants. The court sustained these motions, giving this reason in the order sustaining each motion:

“The facts found in the court’s decree being true, nevertheless the court erred in its conclusion of the law; defendants are entitled to compensation' for improvements on the property.”

The plaintiffs' thereupon appealed from the order granting a new trial. Other facts will be noticed in considering the points involved.

of Action, I. At the outset it is important to settle the’character of this action. Respondents assuming that it is an equitable proceeding, very correctly argue that a court of equity will not enforce a forfeiture while it may rélieve against one. It has been settled by this court that the character of an action brought under Section 2535 is determined by the issues, which the pleadings raise. [Lee v. Conran, 213 Mo. 404; Hauser v. Murray, 256 Mo. 58, 1. c. 84-5; Minor v. Burton, 228 Mo. 558.] If the pleadings present issues of equitable cognizance, then it becomes a proceeding in equity. But a straight action under this statute, in the terms of the statute, is a suit at law. The petition in this case follows the statute substantially in the allegations of the plaintiffs’ rights and the defendants’ claim,, prays the court to hear and. determine all the rights, claims and interests whatsoever of the parties to the proceeding, to adjudge and decree that the plaintiffs are the owners and award plaintiffs the right of possession. The petition thus states purely an action at law.

Where the petition states an action at law, if the answer sets up an equitable defense, and asks affirmative relief, it converts the suit at once into a suit in equity, so that the rules of equity apply. But the setting up of an equitable defense does not convert the case into a proceeding in equity unless affirmative equitable relief is prayed. [Kerstner v. Vorweg, 130 Mo. 196, 1. c. 199; Carter v. Prior, 78 Mo. 222, 1. c. 224; Brooks v. Gfaffin, 192 Mo. 228, 1. c. 253; Kansas City v. Smith, 238 Mo. 323, l. c. 334; Withers v. Railroad, 226 Mo. 373, 1. c. 396.].

The answer of defendants Rowland set np the condition in the deed above mentioned and alleged facts which they claimed would prevent the occurrence of the forfeiture. They alleged that since the deed was made the conditions surrounding the neighborhood had so changed that the reasons for inserting that clause in the deed had ceased to exist, and therefore the consideration for such stipulation had wholly failed, and the plaintiffs were not damaged by the breach of the condition. The answer did not then ask affirmative equitable relief, but followed the language of the statute substantially and prayed the court to adjudge that the plaintiffs “have no right, title or interest in or to said property, and that the title to said property be quieted and confirmed in these defendants free from any claim of the plaintiffs, and for such other and further relief as to the court in equity and good conscience may seem meet and proper.”

The effect of this pleading was to pray the court to ascertain the title and enter a decree adjudging it as ascertained; that is, to find out who had the title and enter such judgment as that finding warranted. If the condition in the deed was broken plaintiffs had title; otherwise, the title remained in defendant. ■ The title would be affected by the facts and not by any decree of the court.

The case being purely an action at law, the findings of the trial court, if supported by substantial evidence, are binding upon this court.

occupation. II. The respondents assert that the evidence failed to show that the conditions of the deed were broken. The argument runs in this way: The condition provides “that the above described property [Lot 15, Block 2] shall not be sold, leased or rented to negroes;” whereas the proof shows that negroes occupied only an apartment in a flat building on the site, therefore, it could not be said that, “the above described property,” Lot 15, Block 2, was leased to negroes, because at most they leased only a part of it. Much evidence was introduced showing there were negro tenants in the premises, without any definite showing as to how far their oeenpancy of the premises was restricted, or to what extent the tenants may have controlled the entire lot. Doubtless the intention in inserting the restriction in plaintiffs’ deed was to prevent negroes from coming on the premises as tenants. It must be considered with that in view. The narrow and technical construction suggested by respondents, as against such manifest intention, would not accord with the decisions of this court in considering and passing upon the spirit and purpose of instruments of this character. [Sims v. Brown, 252 Mo. 58; Garrett v. Wiltsee, 252 Mo. 699, 1. c. 707; Mott v. Morris, 249 Mo. 137.] If the grantors fail to express their contract with completeness and precision, but the intention, nevertheless, clearly appears from the instrument; if its spirit and purpose are manifest from a consideration of the instrument as a whole, it will be given an interpretation in accordance with such intention. The answer of defendants alleges “that the original intent, purpose and object of inserting said provision was to preserve the property described therein, together with other property in the neighborhood ... as a district unoccupied by negroes. ’ ’ The answer then asserts that the conditions have so changed that there ceased to be any consideration for the condition, so that the grantor, plaintiff, was not damaged by the breach. This is a clear admission in the answer that the intention as expressed by its terms was to prevent any occupancy by negroes of the property described. The insertion of the words “or any part thereof” in the instrument would not have made that intention clearer. The trial court found that the premises were occupied by the tenants of the defendants Rowland in violation of the condition in the deed, and the evidence is entirely sufficient to support that finding. Hence we conclude that there was a breach of the condition which would work a forfeiture of the defendants’ title if the condition is a valid and enforcible one.

Forfeiture III. We come now to consider the character and effect of the condition in the deed. The plaintiffs, be-tore filing their suit, notified the defendants in writing to comply with the condition and remove the negroes, hut the notice was not heeded.

Forfeiture is a harsh remedy and where a stipulation can.be construed as a mere restrictive covenant and not a condition, so as to avoid a forfeiture, it will be so construed. The question is determined from the language used, the situation of the parties, their relation to the subject of the transaction, and the object in view. [Union Stock Yards Co. v. Nashville Packing Co., 140 Fed. 701.] But where the language is unmistakable, particularly where there is a provision for re-entry on breach of the condition, or where the right to re-enter is plainly implied, it is a forfeiture. Where the forfeiture is expressly reserved and the right of re-entry is not explicitly stated but is a necessary incident to the forfeiture, it will be implied; and in all such cases the stipulation is construed to be a forfeiture. [Berry on Restrictions on the Use of Real Property, pp. 77-8; Ruddick v. St. Louis, Keokuk & N. W. Ry. Co., 116 Mo. 1. c. 31; Brooks v. Gaffin, 196 Mo. 1. c. 357, 192 Mo. 1. c. 228; Smith v. Mercantile Co., 170 Mo. App. 1. c. 34.] The language in this case is perfectly clear in providing for a forfeiture on breach of the conditions, and the re-entry for condition broken; if not clearly expressed, is implied in the language used. It is apparent that in case of sale and conveyance to objectionable parties covered by the restriction, there would be hardly an adequate remedy except by forfeiture.

uponaint Alienation, Respondent asserts that it is an unlawful restraint upon the power of alienation incident to a fee simple title.' All the cases cited by respondent in support of the position, are where there is a stipulation directly prohibiting alienation. It is the rule that an absolute restriction in the power of alienation in the conveyance of a fee simple title is void, but it is entirely within the right and power of-the grantor to impose a condition or restraint upon the power of alienation in certain cases to certain persons, or for a certain time, or for certain purposes. [Cowell v. Springs Co., 100 U. S. 55; Devlin on Real Estate, sec. 965.]

The condition in the deed under consideration does not come within the rule prohibiting restraints upon alienation.

PoUcy. IV. It is further claimed that the condition is void as against public policy. The courts usually have upheld conditions and restrictions in deeds of property which prohibit the use of the property for certain purPoses. The Supreme Court of the United States in the case of Cowell v. Springs Co., supra, uses this language (page 57):

“The reports are full of cases where conditions imposing restrictions upon the uses to which property conveyed in fee may be subjected have been upheld. In this way slaughter-houses, soap factories, distilleries, livery-stables, tanneries and machine shops have, in a multitude of instances, been excluded from particular localities, which, thus freed from unpleasant sights, noxious vapors or disturbing noises, have become desirable as places for residences of families.”

The purpose of the restriction here, as admitted in the defendants’ answer, was to preserve the property, together with other property in the neighborhood, as a district unoccupied by negroes; it comes equally within the rule.

The discrimination against negroes has been recognized by the courts in other matters where their presence has been objected to for ■ reasons similar to the reasons advanced here. For instance, the law providing for a segregation of negroes in separate passenger coaches from those occupied by whites, has been held lawful and reasonable. [Plessy v. Ferguson, 163 U. S. 537.] In the recent case of Keltner v. Harris, 196 S. W. 1, where an owner of real estate made a contract for the sale of the same to a white man, and after mating his deed discovered that the deed was made to a colored man for whom the white man was merely an agent, although he had told the agent that he would not sell the property to a negro because he didn’t want a negro in that locality, this court held that the conveyance was properly avoided by the judgment of the circuit court on the ground of fraud. By a necessary inference the contract of sale could not have been transferred by the purchaser to a negro without the consent of the seller. The court said: “If it was distasteful to plaintiff to have the negro as his adjoining neighbor, he had the legal right to refuse to sell him or his agents the property in controversy,” which is equivalent to saying that the contract could not be enforced in favor of the negro if made in ignorance of his interest in it. From these authorities it is apparent that the restriction was one which the vendor had a right to mate and was not void on the ground that it was contrary to public policy.

J . Perpetuities. V. It is further urged that it is void because it violates the rule against perpetuities. That rule is that an estate which is granted must necessarily vest within a time limited by the lives of persons then , .. i 1 j. n , m being, and twenty-one years and ten months thereafter, and if it does not necessarily vest within that time it is void for remoteness. [Shepperd v. Fisher, 206 Mo. 208.] In this ease the stipulation runs for twenty-five years, within which time the estate might revert by forfeiture to the grantor. That, event might occur after everyone in interest then living was dead and more than twenty-one years and ten months thereafter had elapsed.

The rule applies in all cases where there is a limitation over by which an estate would vest contingently and might vest after the prohibited time. But there is a distinction between a conditional estate and a conditional limitation whereby the estate is determined upon the happening of some event. In the latter case the estate passes to the person to whom the limitation over is granted upon the happening of the event, without entry or other act. To snch limitation over the rule against remoteness applies. Bnt in this country it is generally held that a stipulation whereby the title is to revert to the grantor upon entry for breach of a condition subsequent, is not within the rule against perpetuities. -[First Universalist Society v. Boland, 155 Mass. 171, 1. c. 175; Hopkins v. Grimshaw, 165 U, S. 342, 1. c. 356; Wakefield v. Van Tassell, 202 Ill. 41, 1. c. 49; Gray on Rule Against Perpetuities, secs. 304-310.] In fact, there are many cases in the books, noted expressly in the sections from Gray just cited, where the courts have enforced forfeitures for breach of condition subsequent in which there was no time limit wherein the forfeiture mig’ht occur. In those cases the question as to whether it was contrary to the rule against perpetuities was not considered or discussed.

Conduions. VI. It is true that where circumstances are changed, owing to the natural growth of a city or of the present use of a whole neighborhood, so that the purpose of a restriction in a conveyance no longer caiL accomplished, and it would be oppressive and inequitable to give effect to such restriction, the courts will not enforce it, whether it be a restrictive covenant to restrain the violation of which injunction is sought, or whether it is a condition providing for a re-entry in case of breach. [Moore v. Curry, 176 Mich. 456; Kneip v. Schroeder, 255 Ill. 621; Devlin on Real Estate, sec. 991c; Thompson v. Langan, 172 Mo. App. 1. c. 83.]

If the court upon sufficient inquiry had found, as claimed by defendants in this case, that the conditions had so changed since the conveyance was made, by negroes occupying the surrounding lots, that an enforcement of the restriction no longer could serve the original purpose, then it would have been improper to allow the forfeiture. However, the evidence was conflicting on that point. In fact, there was some evidence to the effect that the defendants themselves were the first ones to "introduce colored residents into the block where the lot was situated. The facts were found against the defendants upon that proposition upon sufficient evidence and that finding is conclusive upon this court.

YII. From what has been said it will be seen that the circuit court correctly determined plaintiffs’ rights under the facts. Was it right in awarding possession to plaintiff?

. ossession. It has been decided that Section 2535 did not repeal the ejectment statute and did not authorize a recovery of possession in an action brought under it. [Bedford v. Sykes, 168 Mo. 8; Randolph v. Ellis, 240 Mo. 216, p c. 220.] Those cases, however, arose before the amendment of 1909, whereby the Legislature added the last half of that section. We do not find that this amendment has enlarged the scope of the statute so as either to repeal the statutes relating to ejectment or to provide for giving possession in an action brought under it. The entire article relating to ejectment remains still in force and can be resorted to for the recovery of possession and for the recovery of the value of improvements by an unsuccessful defendant.

Usually a plaintiff in a case under Section 2535 if out of possession, adds a count in ejectment. That was not done in this case, but the petition, in addition to stating a complete cause of action showing plaintiff’s right to recover under Section 2535, alleges that the plaintiffs are the owners in fee simple of the property described and are entitled to possession of the same; that the defendants are in possession, and prays the court to adjudge the plaintiffs entitled to possession and to award a writ of possession in favor of the plaintiffs— a declaration in ejectment. Thus the petition states two causes of action in one count. No objection was made to this pleading by the defendant, by a motion to elect, or in any other way. The circuit court properly gave effect to the cause of action in ejectment pleaded by awarding' possession to the plaintiffs.

mprovements. VIII. It remains to consider whether the lower court erred in sustaining the motion for a new trial on the grounds stated, to wit, that the coi;ir£ fape¿ apow defendants compensation for improvements on the property.

Both the plaintiffs and the defendants in discussing the matter of improvements assume that Section 2401, Revised Statutes 1909, applies, and that defendants’ right to compensation for improvements upon the lot depends upon the application of that statute. Now that section, appearing in the article relating to ejectment, provides for compensation for improvements, put upon real estate by an unsuccessful defendant, after a judgment or decree of possession in any real action in favor of a person having a better title. Subsequent sections, immediately following, provide how recovery of such value may be had, and the party who would avail himself of it must bring his action and have the matter adjudicated before he is ousted from possession under the judgment against him. If he waits until after-wards he cannot recover. Section 2401 gives a right conditioned upon immediate action. It is not a recognition of a right which exists independent of the statute, but creates the right.

Manifestly, taking Section 2401 alone, compensation for improvements under it could not be assessed in favor of an unsuccessful defendant, in the same case, because by its very terms the right to meet compensation accrues only after judgment for possession, and can only be enforced in another action.

Respondents claim that the amendment of 1909 to Section 2535 permits recovery of such compensation in the same action. That amendment provides that, on a trial under that section, “if the same be ashed for in the pleadings of either party, the court may hear and finally determine any and all rights,” etc., and “may award full and complete relief,” etc., “as the court might or could in any other or different action.”

It is not necessary to determine whether the defendants would be entitled to compensation for their improvements under the circumstances. Nor is it necessary to determine whether the right created by Section 240Í would be available to a defendant by Section 2535, as amended, in the same case. It is clear that such compensation, under the latter section, cannot be allowed unless “asked for in the pleadings.” That would be true, whether a defendant’s right to such compensation arose by virtue of some equitable claim to the improvements, or by the operation of Section 2401. The answer here contains no mention of improvements and no averments beyond the claim of title and all matters affecting the title.

The .judgment is reversed and the cause remanded with directions to set aside the order granting a new trial, reinstate the judgment originally rendered, and overrule the motion for a new trial.

Boy, C., concurs.

PER CURIAM — The foregoing opinion by White, C., is adopted as the opinion of the court.

All of the judges concur.