Underwood Typewriter Co. v. Century Realty Co.

146 S.W. 448, 165 Mo. App. 131, 1912 Mo. App. LEXIS 457

• Court: Missouri Court of Appeals
• Decided: April 2, 1912
• Status: Published

Opinion

NORTONI, J.

This is a suit for damages accrued on account of a breach of contract. Plaintiff recovered and defendant prosecutes the appeal,

Plaintiff was the tenant of defendant, and as such occupied room No. 309 Century Building, North Ninth street, St. Louis, under a written lease for a term of five years, commencing February 1, 1901, and expiring February 1, 1906. Because of the increment of its business, plaintiff desired to vacate the premises and obtain larger quarters, but by the terms of the lease it was forbidden to underlet the same to another. PIowever, plaintiff’s manager called upon defendant’s agent, McCormick-Kilgen-Rule Real Estate Company, and after having stated the facts in connection with its desire to vacate the premises, solicited'permission to underlet the same. Plaintiff requested defendant to indorse on'its lease in writing the privilege of subletting the premises. In answer to this request, defendant’s agent wrote plaintiff as follows:

“July 7th, 1903.

“Underwood Typewriter Company:

Gentlemen: Replying to yours of July 6th. we cannot give you a general permission to sublet the store now occupied hy you, but when you have a prospective tenant and submit the name to us, if the tenant is satisfactory and acceptable, we will then give you the written consent.

“(Signed) Tours very truly,

“McCormick-Kilgen-Rule Real Estate Co., By A. O. Rule, President.”

From this letter it appears that defendant agreed to give written consent for a sublease, upon plaintiff’s procuring a tenant for the premises who should be satisfactory ¡and acceptable to it. Relying on this promise, plaintiff expended time, labor and money in procuring a satisfactory and acceptable tenant for defendant. It finally succeeded in interesting the Book-lovers Library in the premises. The Booklovers Library agreed to occupy the room, No. 309, North Ninth street, as the under-tenant of plaintiff during the remainder of its term at a considerable increase in rent over that which plaintiff was then paying. Besides the increase in monthly rental which plaintiff was to receive from the Booklovers Library over the amount it was required to pay to defendant, under its lease, the Booklovers Library agreed to pay plaintiff a bonus of $500 ¡as additional compensation for the privilege.

For plaintiff the evidence tends to prove that it submitted the name of the Booklovers Library to defendant’s agent as a prospective tenant to whom it desired to underlease the premises, and defendant’s agent agreed that the Booklovers Library was both satisfactory and acceptable as a tenant. Indeed, it appears that the president of the McCormick-Kilgen-Bnle Real Estate Company, agent for defendant, had his pen in hand and was in the very act of indorsing consent on the lease for the underletting when he learned that under the arrangement plaintiff was to receive a bonus of $500 from the Booklovers Library for the privilege. Learning this through a remark made at the time by the manager of the Booklovers Library, the president of the real estate company laid down his pen and declined to indorse the consent for subletting unless the $500 bonus was paid to him. Upon plaintiff’s declining to permit the payment of such bonus to defendant’s agent, the agent utterly refused to indorse defendant’s consent upon the lease for the underletting of the premises, and this, too, though the Booklovers Library was in • all respects satisfactory and acceptable as a tenant. Through such refusal, plaintiff’s efforts to sublet the premises were defeated and in consequence thereof it suffered the loss of the $500 bonus and the monthly increase in rent as well for which it had arranged with the Book-lovers Library.

On demurrer to the petition in this same case,, both this court and the Supreme Court have heretofore declared that plaintiff was entitled to recover from defendant for its breach of contract touching the matter of indorsing consent on the lease for a subletting of the premises upon showing the facts above stated to the satisfaction of the jury. [See Underwood Typewriter Co. v. Century, 118 Mo. App. 197, 94 S. W. 787, 220 Mo. 522, 119 S. W. 400.] The question thus determined is concluded for the purpose of the case, and the present appeal presents but three propositions which merit consideration in the opinion. The first of these relates to the sufficiency of the proof with respect to the agency of the McCormick-Kilgen-Rule Real Estate Company to bind defendant, and the second pertains to the measure of damages, if any. The third touches upon an excessive recovery.

It is argued the court should have directed, a verdict for defendant because there is a dearth of evidence that the McCormick-Kilgen-Rule Real Estate Company was the agent of defendant for the purpose of granting permission for a subletting of the premises. It appears the Century Building, situated at Ninth, Olive and Locust streets in St. Louis, is owned by the Century Realty Company, a corporation, and there is no evidence in the record that such realty company ever at any time appointed the McCormick-Kilg'en-Rule Real Estate Company its agent. It appears that through a contract with the Century Realty Company the Mississippi Valley Trust Company had purchased the bonds of that company and as parcel of this transaction was. duly appointed attorney in fact for the Century Realty Company. The power of attorney is not in evidence, but the proof reveals that the Mississippi Valley Trust Company was given complete control in all respects of the Century Building through such instrument. The Mississippi Valley Trust Company appointed the McCormick-Kilgeh-Rule Real Estate Company its ag*ent to negotiate leases, collect rents, make repairs and have general charge of the Century Building and the different tenements therein. The McCormick-Kilgen-Rule Real Estate Company rented an office in the Century Building from the Century Realty Company and this office it occupied as its headquarters. On the door of the McCormick-Kilgen-Rule Real Estate Company’s office in the Century Building there was a sign as follows, “Century Building Company office or agents of Century Building,” and it appears this sign had been maintained there for several years.

The evidence is conclusive to the effect that the McCormick-Kilgen-Rule Real Estate Company collected the rents from the tenants in the Century Building, including plaintiff, made repairs, and it is to be inferred that it had general charge of the building. In this state of the proof, we regard it wholy immaterial as to whether' or not the Mississippi Valley Trust Company as attorney in fact possessed the power to appoint the McCormick-Kilgen-Rule Real Estate Company agent for the premises and confer authority upon it to indorse the lease as above mentioned. The instrument by which the Mississippi Valley Trust Company was appointed attorney in fact is not in evidence and we are unable to determine precisely what authority was conferred with respect to the delegation of power to another. But be this as it may, there can be no doubt that defendant Century Realty" Company should be required to answer here on the score of apparent authority for the act of the McCormick-Kilgen-Rule Real Estate Company as its agent. It may be, and no doubt is, true that an- agent with authority only to collect rents should not be regarded as possessing implied authority as well to execute leases or indorsements thereon, but obviously such is not the rule with respect to a general agent for the landlord, who, besides collecting the rents, receives complaints, makes repairs and has general supervision of the building. No one can doubt the powers which the law implies touching the authority of such an agent, unless notice of limitations thereon are otherwise afforded to one who deals with him. Concerning this matter, Mr. Underhill, in his recent work on Landlord and Tenant, Vol. I, p..95, says: “It has been held that an agent who has the general and exclusive charge of the business of his principal may have the power to modify the terms of existing leases. Thus, in New York it has been held that a general agent has power to modify tbe express terms of a lease wbicb was executed by his principal by agreeing that a tenant of premises which have been destroyed by fire may occupy the premises rent free until'repairs have been made or until the premises have been restored to a tenantable condition. The modification is valid and binding on the principal though not made with his - knowledge, as the remaining in possession of the tenant is the consideration of the agreement by the agent for under the New York statute the tenant has the right to abandon the premises and the rent ceases.” [See also Ireland v. Hyde, 69 N. Y. Supp. 889.]

On the proof made, the McCormick-Kilgen-Rule Real Estate Company should be regarded the general agent for defendant. The jury were warranted in so finding the fact to be. As before said, it was shown this real estate company collected the rents of the various tenants, received complaints, made repairs and looked after the building, and this, too, with respect to the premises occupied by plaintiff and involved here. Furthermore, this company occupied a room in the Century Building owned by defendant and on the door of its office constantly maintained a sign by which it proclaimed to one and all that the office was “The Century Building- Company Office” and that those in charge thereof were the agents of the Century Building. Here was undoubtedly a holding out of the McCormick-Kilgen-Rule Real Estate Company as agents for defendant with its full knowledge and consent, and nothing suggests any limitations whatever with respect to the power of such agent. As to third parties déaling with the agent, the principal is bound to the extent of the apparent authority conferred upon the agent, and not by the actual or express authority where that differs from appearances. [See 1 Am. & Eng. Ency. Law (2 Ed.), 986; Clark & Skyles on Agency, secs. 208, 209.] The authority last cited, section 208, says: “The apparent-scope of an agent’s authority is that authority which a reasonably prudent man, induced by the principal’s acts or conduct and in the exercise of reasonable diligence and sound discretion, under similar circumstances with the party dealing with the agent, and with like knowledge, would naturally suppose the agent to have.” Obviously, there is an abundance in the evidence above pointed out to warrant the jury in finding, as it did, under proper instruction, that McCormick-Kilgen-Rule Real Estate Company acted within the apparent authority which defendant suffered to be held out to the world in the office in its building when it contracted for defendant to indorse permission on the lease for the subletting.

For plaintiff the court gave the following instfuction on the measure of damages: “If you find for the plaintiff, you will assess its damages in such sum as you may find and believe from the evidence to be the mentioned in the evidence and the amount that plaintiff was to pay defendant under the terms of the lease mentioned in the evidence and the amount that plaintiff would have received from the subtenant procured by it as mentioned in the evidence under the terms of the subletting, which in no event shall exceed the sum of $4500 the amount sued for. ”' It is argued this instruction incorporates an erroneous view as to the measure of damages in a case such as this one, but we are not so persuaded. Where it appears, as here, that the contract was breached by defendant for no other reason than because it was unwilling to comply with' the agreement, the measure of the damages is the value of the bargain to the injured party. The case of Engel v. Fitch (see 3 L. R. Q. B. 314) and subsequently affirmed on appeal in the Court of Exchequer (see 4 L. R. Q. B. 659) is precisely in point on this question and is abundant authority for the instruction above given. But beyond this the authority of that case in both reports is quoted and approved by our own Supreme Court in Kirkpatrick v. Downing, 58 Mo. 32.

The jury awarded a recovery of $1500. The evidence tends to prove that the loss entailed upon plain-' tiff by defendant’s breach of the contract amounts to. $1049.97. Such is the amount which plaintiff would have realized as profits on the transaction, had defendant abided the contract and not breached it. It. is conceded that this amount, $1049.97, is all that plaintiff is entitled to recover unless interest may, be allowed thereon from, the date of the breach. Plaintiff argues that the additional $450.03 which, is incorporated in the verdict over and above the amount of $1049.97 should be sustained as interest thereon. There can be no doubt that under our statute (Sec. 7179, R. S. 1909) interest may be recovered for damages which accrue on the breach of a written contract in many cases. For instance, where a written contract was breached and the loss entailed was the difference between the contract price of goods sold and the market value of the same goods at the time defendant refused to receive them, this court declared interest was recoverable thereon. [See Nelson v. Hirsch & Sons, etc. Co., 102 Mo. App. 498, 517, 77 S. W. 590.] But be this as it may, our Supreme Court has pointedly declared that interest is not recoverable even for the breach of a written contract when the only damages sued for are the loss of profits shown to have been' available to plaintiff had the contract not been breached. [See Wiggins Ferry Co. v. Chicago & A. R. Co., 128 Mo. 224, 255, 27 S. W. 568, 30 S. W. 430.] The entire damage sought to be recovered here relate to the loss of profits entailed upon plaintiff because of defendant’s breach of the contract, and such profits are the measure of the damages recoverable. In view of the broad language employed by the Supreme Court touching this question in the case above cited, we incline to the view that no recovery of interest should be allowed when the measure of damages is the loss of profits. Because the verdict is excessive in the amount of $450.03, the judgment should he reversed, unless plaintiff sees fit to remit that amount, in which event it may he affirmed. Plaintiff having appeared in court and voluntarily remitted the amount of $450.03 recovered as for interest, the judgment should he affirmed as of the date thereof for $1049.97 together with interest thereon from its date at six per cent until paid. It is so ordered.

Reynolds, P. J., and Caulfield, J., concur.