Opinion
No. 43185.
July 13, 1953.
APPEAL FROM THE CIRCUIT COURT OF PERRY COUNTY, J. O. SWINK, J.
Henri Sursa, Melvin Englehart, Fredericktown, for appellant.
Roberts Roberts, Farmington, for respondents.
Action for $8,000 damages for breach of a written contract and to recover $5,000 on a promissory note. The cause was instituted in Madison county and went on change of venue to the circuit court of Perry county. At the close of all the evidence the court directed a verdict for defendants, the verdict was returned and judgment was entered thereon. Plaintiff has appealed.
Plaintiff is a Missouri corporation organized for the purpose of developing industry in the Marquand Community in Madison county. On the 24th day of March 1948, it entered into a contract with the defendant Maisak-Handler Shoe Company, a corporation engaged in the manufacture of shoes (hereinafter referred to as Shoe Company). Plaintiff agreed to construct a concrete block building of a stated size and design, on specifically described premises, and to lease the building to Shoe Company at a rental of $1 per year so long as Shoe Company operated the building as a factory and complied with the conditions set out in the contract.
Shoe Company agreed "to occupy said building immediately after the same is completed and to begin business operations in a reasonable time after occupying said building." The contract contained no provision requiring Shoe Company to occupy and use the building as a factory for any specified period of time. Shoe Company agreed to pay all taxes on the building, to use care in the protection of said premises, to keep same in good order and repair, to keep the premises free from filth or any nuisance and to deliver to plaintiff two promissory notes for $5,000 each, each note to be signed by Shoe Company and by defendants Oliver E. Maisak and Robert Handler. The first note was to be due "on or before one year after date" and the second note "on or before four years after date." The $5,000 for which this second note was to be given to plaintiff was for cash to be loaned, such cash to be placed in the Bank of Marquand to Shoe Company's credit and to be expended for machinery, materials, labor and training labor for the Shoe Company's factory located at Marquand. The contract provided that "said building shall be used as a shoe factory and at no time shall said premises or any part thereof be used other than the (sic) herein specified without the written consent of the first party." The first $5,000 note was to be marked paid and returned to Shoe Company, if and when it occupied the building and began business operations within a reasonable time after the building was completed, otherwise to remain in effect. The second $5,000 note, dated March 24, 1948, was to be marked "paid in full" and returned to the Shoe Company, if within three years from the date Shoe Company occupied the building it paid out at Marquand $225,000 in wages, otherwise the note was to remain in full force and effect.
Plaintiff alleged in its petition that it had "duly performed all the conditions of the aforesaid contract * * * on its part to be performed"; that the Shoe Company occupied the building on September 29, 1948; and that, without just cause or reason, Shoe Company had breached the contract in the following respects: (1) That on or about December 1, 1950, it had removed all of its machinery, material and personal property from plaintiff's factory building to a place or places unknown to plaintiff; (2) that it had ceased operation as a factory before paying out the sum of $225,000 in wages at Marquand; (3) that it had not paid the state and county taxes assessed against the factory building for 1950; (4) that it had failed to remove accumulated rubbish in and about the said factory building; (5) that it had removed from the factory building parts of the vacuum blower system, which had been installed and paid for by plaintiff; (6) that it had damaged and destroyed fixtures and portions of the building in removing machinery and material; and (7) that, in violation of the lease, it had subleased a part of the leased premises without plaintiff's consent.
Plaintiff further alleged that by reason of the Shoe Company's breach of the terms of the contract, the second note had become due and payable; that demand for payment had been made; and that the whole amount of the note was due and unpaid. Plaintiff prayed judgment for $5000 against Shoe Company, Maisak and Handler on the note and for $8000 damages against Shoe Company for breach of contract. Appellant now construes the action as one "for the recovery of money advanced by" plaintiff to Shoe Company on a secured note, "a contract and for damages to the building leased by appellant to respondents."
Shoe Company's answer admitted the execution of the contract, the construction of the building and the execution and delivery of the notes, but it denied the alleged breaches of the contract or that the second note became due and payable. Shoe Company alleged that it had performed all of the obligations incumbent upon it by virtue of its contract and further alleged that, while engaged in the operation of its shoe factory at Marquand, the plaintiff, without just cause or reason, entered into the premises, forcibly evicted defendant Shoe Company and locked it out of the premises, and thereby breached the contract on plaintiff's part and rendered it impossible for defendant Shoe Company to operate a shoe plant in accordance with the terms of the contract. The answer of the individual defendants also denied that the note was due and payable and alleged the forcible eviction of the Shoe Company from the building. They alleged that such eviction made it impossible for the company to perform its contract or meet its provisions as to payroll payments; that, except for plaintiff's acts, the Shoe Company would have met the payroll requirements of the contract and the note would have been paid in accordance with the terms of the contract; and that by reason of the acts of the plaintiff, the note sued on was null and void.
In view of the issues presented upon this appeal and the condition of the record, it will not be necessary to make a detailed review of plaintiff's evidence.
Plaintiff built the building and the Shoe Company occupied it and began operations. The notes were duly executed and delivered. The first note was subsequently marked paid and returned to the Shoe Company, as agreed. Plaintiff's evidence shows a total of $164,439.30 was paid out at Marquand by the Shoe Company by December 11, 1950; and that under Shoe Company's "payroll record" for Marquand for the week ending March 27, 1950, a maximum of $4,524.14 was paid out; and that thereafter, the expense declined until for the week ending December 4, 1950 it was $1,000.82, for the week ending December 11, 1950 it was $382.34 and for the week ending December 18, 1950 it was $27.14.
Much evidence was directed to the breaches of the contract, as alleged, to wit, that the Shoe Company, in December 1950, began to remove machinery to Senath, Missouri, where Shoe Company opened and, later, operated a shoe factory. Plaintiff's officers were unable to get definite evidence from Handler, the president of Shoe Company, with reference to Shoe Company's plans, but they did know of the removal of much of the machinery from the factory building. On December 11, 1950, the board of directors of the plaintiff corporation received a report on the situation and ordered a designated agent of the plaintiff to repossess the building on the following day. This was done. At the time the building was repossessed there were only twelve sewing machines and two cutters in the building and some five employees of the Shoe Company. There was no direct evidence that the Shoe Company was not then operating "said building as a factory." There was evidence that the amount and kind of machinery in the building at the time was insufficient to manufacture shoes. Thereafter, Shoe Company's president obtained a key to the building from plaintiff's agent and the remaining machinery was removed from the factory building. On December 12th or on December 21st, it is not clear which, but after the building was repossessed, there was "a lot of shoe glue on the floor and walls" and a part of the vacuum blower system was gone, to wit, some of the downspouts or drops from the main trunk line to the machines. There was quite a bit of rubbish about the exterior of the building. "The roof needed repair and needed some paint." Plaintiff also offered in evidence a certified copy of what purports to be a field warehouse lease of the factory building and premises in question by Shoe Company to the St. Louis Terminal Warehouse Company. The instrument is dated the fourth day of November 1949, and it had been of record in Madison county since November 10, 1949. There was no evidence of any occupancy or use by the lessee of any part of the premises under this sublease.
The note and contract sued upon in this case contained no provision for the acceleration of the due date of the second note in the event of any breach of the term of the contract by Shoe Company. The present action was instituted on June 30, 1951, which was, of course, prior to the due date of the note. The contract did not contain any provision that the Shoe Company would continue to occupy and use the factory building until it had paid out a total of $225,000 in wages at Marquand, or for any specific time. The inducement provided by the contract for the continued occupation of the building as a factory, and for the payment of a total of $225,000 in wages within three years from the date Shoe Company occupied the building, was the return of the second note to the Shoe Company with the notation "paid in full."
At the close of all the evidence defendants filed what was designated as a motion to dismiss, but what was construed to be a motion for a directed verdict. It assigned the following grounds, to wit, that "plaintiff has wholly failed to show that the defendants or either of them rescinded the contract set out in plaintiff's petition; that plaintiff has failed to comply with the statutes made and provided in such cases for notice to the defendants; and that the evidence introduced on behalf of plaintiff on its face shows that the plaintiff violated the contract and rescinded the same and not the defendants." See Sections 510.140 and 510.280 RSMo 1949, V.A.M.S., and Merit Specialties Co. v. Gilbert Brass Foundry Co., 362 Mo. 325, 241 S.W.2d 718. The court sustained defendants' motion and directed the jury that, under the law and evidence, their verdict must be for defendants and against the plaintiff and to return a verdict for defendants. Such a verdict was, thereupon, returned and judgment was entered thereon for defendants.
In the motion for a new trial plaintiff complained only of the admission and rejection of evidence; that no sufficient motion for a directed verdict, which assigned specific grounds, had been filed; and that the "judgment of the court is against the evidence, against the weight of the evidence, and against the evidence under the law, and against the law under the evidence." Since the verdict was for defendants, it was unnecessary that such a verdict be supported by affirmative or substantial evidence, as the burden rested upon plaintiff to show a breach of the contract and a right to recover therefor. As to the necessity for a defendant's verdict to be supported by affirmative and substantial evidence, see Conley v. Crown Coach Co., 348 Mo. 1243, 159 S.W.2d 281. Plaintiff did not complain of the court's action in sustaining the motion to dismiss or in directing a verdict for defendants, nor allege that a submissible case was made out and that the court had erred in not submitting the case to the jury on its merits. See Supreme Court Rule 3.23.
Appellant's brief contains no direct assignment of or any specification of error with reference to the court's action in sustaining the defendant's motion to dismiss, or in directing a verdict for defendants and, even if these matters had properly been preserved for review in the motion for new trial, there is no assignment with reference thereto sufficient to comply with the rules of this court. See Supreme Court Rule 1.08(a) (3). However, a review of appellant's theory is necessary to a proper consideration of appellant's assignments of error with reference to the exclusion of evidence.
It clearly appears from the points briefed by appellant on this appeal that it sought to recover in this case upon the theory of an "anticipatory breach" of Shoe Company's contract with appellant. Appellant says that "where a party bound by an executory contract repudiates his obligation before the time for performance, the promisee may treat the contract as ended, so far as further performance is concerned, and sue at once for damages for such anticipatory breach"; that "the contract may be repudiated either by an overt act, abandonment or declaration of intent not to perform"; that "under either of these acts of repudiation the appellant's rights are invaded and a failure of consideration occurs when the promisor fails to perform or puts it out of his ability to perform"; that "the statements and conduct of the respondents were a sufficient intimation of an intention of the respondents to abandon and refuse to perform the contract"; that "appellant was justified in abandoning the contract without notice"; that "the contract between appellant and respondents did not create a land-lord-tenant relationship and no notice was necessary as provided in § 441.060 RSMo 1949 [V.A.M.S.]"; and that the question whether the acts and conduct of the respondent Handler amounted to an intimation of an intention to abandon and refuse to perform the contract, was for the jury to determine."
In argument appellant says that "the acts and statement of respondent Handler and respondent corporation justified the appellant in treating the contract * * * as repudiated and abandoned by respondents, giving appellant the right to file an action for damages immediately"; and that the action of Shoe Company, by its president, Handler, made the subsequent operation of the shoe factory at Marquand, so difficult, expensive and impractical that appellant "was justified in believing that respondents had repudiated the contract * * * and did not intend to perform." Appellant refers to the removal of machinery from Marquand to Senath and to Shoe Company's action in establishing and operating a shoe factory in the new location and then says that the removal of the machinery from Marquand made the manufacture of shoes impossible at Marquand and made it impossible and impracticable for Shoe Company to meet the payroll of $225,000 by September 27, 1951. Appellant insists that Shoe Company violated the contract by subletting a part of the premises, by failing to pay the state and county taxes, by removing parts of the property, by permitting rubbish to gather on the premises and "by refusing to advise appellant corporation officers about future operations at Marquand, Missouri, when direct inquiry was made."
By the record in this case we are precluded from a consideration of the action of the court in sustaining defendant's motion to dismiss or in directing a verdict for defendants or from determining on this appeal whether appellant made out a submissible case and whether the court erred in refusing to submit such case to the jury. These matters were not preserved for review in plaintiff-appellant's motion for a new trial. Supreme Court Rule 3.23. We may say, however, that the contract contains no express provision against "subletting" and there was no evidence that the lessee in the alleged sublease had ever occupied or used any part of either the building or the premises under the sublease. No provision of the contract required Shoe Company or its officers to advise appellant about their intentions as to the future operations of its factory at Marquand. No provision prevented the removal of machinery from the factory at Marquand or prevented Shoe Company from voluntarily terminating its factory operations at Marquand. Nor did the evidence show the condition of the factory building, the fixtures and amount of machinery therein or the presence of rubbish, prior to the time that appellant decided to terminate the contract and authorized its agent to repossess the building. The evidence offered, to show that the state and county taxes for the year 1950 on the building and premises were unpaid, was excluded by the court, as hereinafter reviewed.
Appellant contends that the court committed reversible error in refusing to admit in evidence plaintiff's exhibits Nos. 7, 8 and 10. No grounds, reasons or allegations of error are set out under points and authorities as required by Supreme Court Rule 1.08(a) (3). See Ambrose v. M.F.A. Cooperative Ass'n of St. Elizabeth, Mo. Sup., ___ S.W.2d ___, handed down herewith.
Exhibit No. 7 was the record (minutes) of a meeting of the board of directors of plaintiff corporation held on November 29, 1950. The minutes recite that the meeting was held in Shoe Company's factory building; that the board members requested permission to enter the office for a general discussion with Shoe Company's president, Mr. Handler; that, receiving his permission, they entered and asked him direct to give them information "as to why he was moving his factory from our building to another building in Senath, Missouri"; that Mr. Handler gave them no information but became indignant; and that, "upon being highly insulted," the board left the building. The trial court excluded the exhibit because not binding on defendants, not material or relevant to the issues and because it was highly inflammatory, prejudicial and self-serving. Appellant now contends the exhibit was admissible under § 490.250, as the record of the corporation, and because other minutes showing the authorization of the agent to repossess the building were admitted without objection. The court did not err in excluding the exhibit. It was in nowise binding upon defendants. Clearly it was a hearsay report of a conference and it evidenced the conclusions of the secretary who wrote the minutes. It contained purely self-serving statements on behalf of the plaintiff which were not binding on defendants and would have been prejudicial to them. Neither Shoe Company nor defendant Handler were under any contractual duty to assign any reasons for Shoe Company's alleged intention to terminate its factory operations at Marquand. The evidence did not tend to establish any breach of Shoe Company's contract.
Exhibit 8 was a bank ledger sheet showing that $5,000 had been deposited in the Bank of Marquand to the credit of Shoe Company on April 3, 1948 and showing the amounts of subsequent withdrawals until the fund was exhausted on January 25, 1949. The offer was rejected because defendants by their counsel had admitted that the $5,000 was paid as alleged and because the check by which the payment was made was already in evidence. Since the fact of payment by plaintiff and receipt of the money by Shoe Company was admitted and the cancelled check was before the jury, the additional evidence was cumulative and properly refused. Steffen v. Southwestern Bell Telephone Co., 331 Mo. 574, 56 S.W.2d 47, 48. The exclusion of the exhibit was not prejudicial to appellant because no issue had been raised by defendants' answer that the note was without consideration. Defendants denied that the due date had been accelerated, as alleged, denied that the note was due and payable, and pleaded an affirmative defense, as stated, but not with reference to the consideration for the note. The court did not err in excluding the exhibit.
Exhibit 10 was a certified copy of a statement for taxes rendered by the Collector of Revenue of Madison county to plaintiff corporation, dated January 12, 1952, showing that the 1950 state and county taxes on the factory property were unpaid. Plaintiff had pleaded the non-payment as a breach of the contract and it offered the exhibit for the purpose of showing that 1950 taxes were unpaid at the time of the trial, although Shoe Company had by contract agreed to pay them. Defendants objected to the offer on the ground that, prior to the time the said taxes had become delinquent, the plaintiff had on the 12th day of December 1950, through its agent and as a result of its orders, locked the factory doors and locked Shoe Company out of the premises. The Court excluded the exhibit on the stated ground that the evidence was contrary to plaintiff's theory of the case, to wit, that plaintiff had proceeded upon the theory that the contract had been breached on and prior to December 11, 1950, and at a time when the 1950 taxes were not delinquent; and that the failure to have paid the taxes prior to December 11, 1950 was no evidence of a breach of the contract on that date, or prior to the time plaintiff repossessed the factory building. Plaintiff's theory, as hereinbefore shown, and as appears from appellant's brief, was that the contract was breached prior to December 11, 1950 by defendants' acts and conduct evidencing the repudiation and abandonment of the contract and by acts and statements showing an intention to be no longer bound thereby; and, therefore, that plaintiff could lawfully repossess the building without being guilty of a breach of the contract on its own part.
The exhibit did not tend to show a breach of contract by Shoe Company at the time plaintiff contends that the breach occurred and plaintiff repossessed the property. If Shoe Company's alleged breach of the contract in not paying the 1950 taxes before they became delinquent occurred after and because of plaintiff's prior breach of the same contract in taking possession of the premises and ousting Shoe Company from possession as alleged by defendants, the failure to so pay the taxes could not be made the basis of Shoe Company's liability to plaintiff, nor could it prevent Shoe Company from maintaining an action against plaintiff. Trippennsee v. Schmidt. Mo. App., 52 S.W.2d 197, 199. While the amount of the 1950 taxes may have been an item for the consideration of the jury, if plaintiff had made a case for the jury, errors affecting the measure of damages are not material when the issue of liability has been determined against the plaintiff and not preserved for review on appeal. The exclusion of the exhibit was not reversible error.
Finding no reversible error in the record, the judgment should be affirmed. It is so ordered.
All concur.