ROCKHILL TENNIS CLUB OF KANSAS CITY v. WILLIAM VOLKER ET AL., Trustees of Nelson Estate, Appellants.
Division One
December 20, 1932.
56 S. W. (2d) 9
“A judgment rendered against an insane person without the intervention of a guardian; where a defendant dies after service of process and before judgment; where a married woman was sued without her husband being joined and judgment rendered against her (before the Married Women‘s Act); judgment against an infant without a guardian ad litem.”
If appellants can prove their allegations of fraud, collusion and conspiracy they have a remedy by a timely suit in equity to set aside the judgment. [See Spotts v. Spotts, 331 Mo. 917, 55 S. W. (2d) 977, and cases there cited.]
The judgment is therefore affirmed. Ferguson and Sturgis, CC., concur.
PER CURIAM: - The foregoing opinion by HYDE, C., is adopted as the opinion of the court. All of the judges concur.
Wilson, Bundschu & Bailey for appellants.
STURGIS, C.- This suit is for the specific performance of a contract to convey real estate, something over three acres of land in Kansas City, part of the estate of the late William Rockhill Nelson, well known editor and philanthropist. The plaintiff, as its name indicates, is a tennis club organized and incorporated by a pro forma decree of the Circuit Court of Jackson County under our statutes relating to the incorporation of organizations for benevo-
Plaintiff‘s claim to this tract of land arose in this way: The original trustees of the Nelson estate were his wife, Ida H. Nelson, and daughter, Laura Nelson Kirkwood. The gallery of art was not to be established till after the death of such wife and daughter, they having a life estate and certain contingent interests in part of the property, and the will of William R. Nelson gave the trustees large powers in reference to the management, sale, and investment of the trust property, being in part, to-wit:
“Said trustees shall have the management and control of all the property of every kind and nature constituting said trust estate and may continue, conduct, and carry on for such length of time as they shall deem proper any business owned or that is being carried on by me at the time of my death; they shall pay all debts, expenses, and liabilities incurred by them in the management and control of said trust estate and collect all moneys owing at any time that are part of the trust estate; they may sell or lease at such times and on such terms as they think proper any property, real, personal, or mixed, that is at any time a part of the trust estate and execute contracts of sale, deeds of conveyances or leases for any property so sold or leased.”
William R. Nelson died in 1915. The trustees qualified, and on December 31, 1915, gave a ten-year lease on the property in controversy covering the years 1916 to 1925 inclusive. Said lease provided for the payment of $100 per month rent by the lessee and contained, among other provisions, agreements not to sublet the premises without consent of the lessors; that the lands described and the improvements now thereon and those hereafter to be erected thereon shall, during the continuance of this lease, be used only for tennis, squash, and allied games; to keep the premises and improvements now or hereafter placed thereon in good repair, all such improvements to belong to the lessors at the termination or any forfeiture of the lease; the lessee is not required to, but is given the privilege to erect squash courts, a tool house, and seating stands about the championship courts,
“During the continuance of this lease, should the lessee desire to purchase this property, it shall have the right and option to do so by paying to the lessors the then appraised value of the land described hereinbefore separate and apart from the improvements which may at that time be thereon. Such valuation shall be determined by three appraisers, one of whom shall be selected by the lessors, one of whom shall be selected by the lessee, and the third shall be selected by the two appraisers so selected by the lessors and by the lessee.”
Under this lease the plaintiff tennis club took possession and used and improved the tract of land in question as a tennis court and club grounds, becoming perhaps the leading tennis club of Kansas City, numbering among its members men of large wealth and prominence. Before the expiration of this lease and on May 10, 1924, the surviving trustee, Laura Nelson Kirkwood, the wife, Ida H. Nelson, having died leaving the daughter as the sole surviving trustee in charge of the Nelson estate, executed the following extension of the lease, which was indorsed thereon, to-wit:
“May 10, 1924. By mutual consent this lease is hereby extended for a term of five years from January 1, 1926, to December 31, 1930.”
Up until the time of this extension it seems nothing had been said or done by either party as to carrying out the option or purchasing clause of this lease. As this other original trustee, the daughter, Laura Nelson Kirkwood, who signed the extension of the lease, had also died before the present controversy and suit arose, it is not known whether or not she had in mind, when giving this extension of the lease, the giving also of an extension of the option to purchase. In any event, matters with reference to the tennis club went on as usual till about the first of the year 1928, when this question of the purchase of this tract of land by the tennis club became a matter of consideration and controversy by the respective parties, and, failing to reach an adjustment, culminated in this suit brought in April, 1929, and tried
It should be said here that during the time of this lease and before the plaintiff tennis club actively asserted its election to purchase this land in 1928 under the option clause of its lease, matters of great and far reaching importance had developed and taken or were taking definite shape and form with reference to the trust estate of William R. Nelson, of which the plaintiff‘s tennis courts and ground was only a small part in value, but assumed large importance in carrying out what is called the “larger scheme” of the William Rockhill Nelson Art Gallery. The trust fund created by the will of William R. Nelson was to be used to the extent of the net income, amounting to about a half million dollars annually, in purchasing works of art or reproductions of same for exhibition in the gallery of art, but no building or site for same was designated or provided for therein, further than that same should permanently remain in Kansas City. Other trust funds were later provided for that purpose, particularly by the wife and daughter of William R. Nelson and by his son-in-law, Irvin Kirkwood, making a total of some three million dollars available for that purpose. Lot six of Rockhill Addition to Kansas City, consisting of about twenty acres, the old homestead of William R. Nelson, had been devised to his wife and daughter for life, with power of sale, and by mesne conveyances passed to and vested in the municipality of Kansas City as a site for the building to house the Nelson Art Gallery. The city had accepted this gift under an appropriate conveyance and ordinance insuring and protecting its use for that purpose. So that at the time this suit was instituted and tried it was definitely determined that the William Rockhill Nelson Art Gallery would be built on the twenty acres of land known as Oak Hall, and a building to house the art treasures to cost some two million, five hundred thousand dollars was provided for.
The Nelson trust estate, as we have noted, was vested in his wife and daughter as trustees so long as the survivor of them lived, but on the death of such survivor, which occurred in 1926, this trust devolved on three trustees, defendants herein, designated in the Nelson will as university trustees, selected and appointed by a board composed of the then presidents of the state universities of Missouri, Kansas, and Oklahoma. This board of trustees, the defendants herein, which is to have perpetual succession, appointed in the same manner, came into possession of the Nelson trust estate in 1926 and then entered upon the duties of managing the trust estate and seeing to it that the trust funds were actively used for the purposes designated in the Nelson will, to-wit, the purchase of works of art. Very naturally
At the time this site for the art gallery was selected, acquired, and vested in Kansas City, and the surveys, plans, and specifications, blue prints, models, etc., were being prepared, and the whole scheme and plant constructed on paper, the university trustees, as well as the trustees of the building fund, had no actual knowledge of the lease in question and certainly not of the option clause therein giving the plaintiff the right to purchase this tennis club tract. The lease had never been recorded and no copy was with the papers and records turned over to the university trustees on taking charge of the Nelson trust estate. These university trustees knew, of course, of the occupation and use of this land by the tennis club, but supposed from the small rental paid; and they acted on the theory, that it was so possessed and being used under a short term or a month to month tenancy. Such trustees and the trustees of the other allied trust estates were planning the buildings and grounds to be used and occupied for and in connection with the Nelson Gallery of Art to include the tennis club grounds, and they were greatly surprised and disturbed when they learned that plaintiff claimed the right to purchase this tract of ground under an option contract. They are not, however, claiming that they are not bound by any legal contract of the former trustees, nor are they in the attitude of repudiating any such valid contract, but they are acting as trustees of a public trust under a will which requires them to conserve and use the trust funds for the public purposes designated, and they have no right to dispose of any property except for the benefit of the trust estate in accomplishing its beneficent purpose.
We note here that the central and dominating idea in creating and carrying out the altruistic scheme of William R. Nelson and those aiding him in doing so, is that of beauty. This is to be reflected not only in the contents in the gallery of art, but in the buildings and grounds. The desire is to make the Nelson Gallery of Art, not only in the treasures there to be collected, but in the architecture of the buildings, its landscape setting, and whole surroundings, a harmonious unit of surpassing beauty. To this end the Mary Atkins Museum of Fine Arts, for which some eight hundred thousand dollars is available, is to be combined with the Nelson Art Gallery. Nearby is located the Kansas City Art Institute, a gift to the city for the benefit of the public. The Jewish Hospital, with ample grounds, is also located in that neighborhood, and it is planned that the Kansas City University will occupy an adjoining tract of sixty acres.
All the evidence is to the effect that the inclusion of the tennis club grounds is essential to the carrying out of this plan of extending and beautifying the art gallery grounds and surroundings. No mirror lake can be constructed without it. The extension of the grounds and construction of the mirror lake has the unqualified approval not only of all the trustees of the various trusts, but of the city manager, superintendent of public buildings, and superintendent of the public parks of Kansas City. The eminent architect who formulated and drew the plans for the buildings and grounds of the art gallery made much study of the plans, buildings, and grounds of similar institutions both in this country and in Europe and stated that the inclusion of the additional grounds and this mirror lake would add immensely to the value and beauty of the project as a whole, and cited the Lincoln Memorial at Washington, D. C., and the palaces of Versailles and Luxembourg as exemplifying the beauty of mirror lakes.
J. C. Nichols, one of the defendant trustees, who was called to the stand, was characterized by the trial judge as a man of national repute and fame as a city planner and city builder, and he had been appointed by President Coolidge as one of the four men for planning the city of Washington, D. C. He testified that he had studied carefully the elevations and topography of the lands with reference to the plans for the site and grounds of the Nelson Gallery of Art, and said with reference to such plans that same could not be carried out at all unless the tennis club ground was included; that he had this
“No corporation, company, or association, other than those formed for benevolent, religious, scientific or educational purposes, shall be created or organized under the laws of this State, unless the persons named as corporators shall, at or before the filing of the articles of association or incorporation, pay into the State treasury fifty dollars for the first fifty thousand dollars or less of capital stock, and a further sum of five dollars for every additional ten thousand dollars of its capital stock. And no such corporation, company or association shall increase its capital stock without first paying into the treasury five dollars for every ten thousand dollars of increase: Provided, That nothing contained in this section shall be construed to prohibit the General Assembly from levying a further tax on the franchises of such corporation.”
By the plain and positive terms of this section of the Constitution, no corporation can be formed in this State in the manner provided by the statutes mentioned, that is, without paying into the State treasury at least fifty dollars on its capital stock, except “those formed for benevolent, religious, scientific or educational purposes.” There
It is true that the courts have given the words “benevolent, religious, scientific or educational,” as used in the Constitution, a broad and liberal meaning, as shown by State ex rel. v. Lesueur, 99 Mo. 552, 557, 13 S. W. 237, where the court held that a society whose corporate charter declared its main purpose to be “the encouragement of debating, reading and literature,” and incidentally the playing of tenpins, chess, checkers, and other lawful games, was essentially educational in purpose and rightfully incorporated under the statutes in question (two of the five judges dissenting), but the court was particular to say: ”
In State ex inf. v. Rod & Gun Club, 121 Mo. App. 364, the purpose of defendant club, as declared by its charter, was “to promote the physical development of its members, to educate and train them in athletics, field sports, and gymnastics, such as baseball, football, running, jumping, lifting, throwing, wrestling, bowling, vaulting, hunting, and fishing, and to engage in and take part in athletic contests, and make public exhibition of any of the above named gymnastics and field sports, and to obtain by written lease or privilege suitable grounds for a club house and gymnasium, and to engage in social intercourse with its members.” The court said, in the course of its opinion, “that it is a grave question indeed, whether this charter on its face, reveals in its declaration of purpose, a proper object authorizing it to have and enjoy a corporate existence under the statutes mentioned, and thereby escape the incorporation tax mentioned in the constitutional provision referred to, so as to render it immune from successful attack in quo warranto by the Attorney-General as being unauthorized by the very law upon which it predicates for an existence.”
In State ex rel. v. Men‘s Club, 178 Mo. App. 548, 564, the charter of the Business Men‘s Athletic Club, incorporated by pro forma decree of the circuit court under what is now Article 10 of Chapter 32 of our statute, provided by the second paragraph thereof that same was organized for the purpose of “providing for and giving to its members entertainment and lawful exhibition feats of strength,
The charter of the plaintiff tennis club states the purpose of the corporation to be “for the purpose of owning or leasing, establishing or maintaining a club house, tennis courts and facilities for other games, and necessary suitable and convenient grounds surrounding or in the vicinity thereof, and of obtaining and enjoying a place of common and friendly intercourse and of advancing by rational amusement the mental and bodily health of themselves and their associates.” The purpose of the club is purely and clearly athletic and the incidental purpose of obtaining and enjoying a place of common and friendly intercourse and of advancing by rational amusement the mental and bodily health of the members is such only as grows out of and connected with games of tennis—an athletic sport pure and simple, as is fishing, hunting, baseball, golf, wrestling, boxing, etc. It is true that the incorporation of what are termed social clubs under this method of incorporation has been tolerated by the courts under what Judge WALKER, in State ex inf. v. Missouri Athletic and St. Louis Clubs, 261 Mo. 576, 170 S. W. 904, termed “judicial legislation or construction.” In that case this was said: “The respondents were incorporated, as shown by the pleadings and agreed statement of facts,
A reading of the Lesueur case, 99 Mo. 552, as we have seen, gives no sanction whatever to the incorporation of clubs for social or athletic purposes, under the statute in question, without payment of the incorporation fees required by our Constitution, but the majority opinion in that case went no further than to hold that when the chief purpose of the corporation is educational, the incidental purpose of social intercourse and playing games for amusement would not bar the incorporation.
We hold, therefore, that the plaintiff tennis club was and is not properly incorporated or possessed of the powers and franchises of a corporation, and should its corporate existence and franchise be called in question by the State by quo warranto, or in any proper proceeding, its incorporation should be declared void. It is, however, the province of the State to call in question the right to exercise the powers of a corporation or to challenge and oust a corporation from its right to exist and function as such. This will not
In this connection it is pointed out that by
That plaintiff tennis club has not the power to enforce conveyance to it of the land in question is decided in Fishing & Hunting Club v. Kessler, 252 Mo. 424. The plaintiff club in that case had been incorporated by a pro forma decree of the circuit court with a charter declaring that “the purposes of this corporation are benevolent, scientific and educational; they are to promote fish culture, to promote and facilitate fishing and hunting, boating, field sports and other rational amusements, and to promote and provide for intellectual recreation for its members and guests, and to acquire
There is no material difference between that case and this one. There, as here, an essentially athletic club with educational and scientific features merely ancillary, incorporated by a decree of the circuit court under the statutes mentioned, was asking a court of equity to compel conveyance to it of certain real estate. It can make no difference that in one case the plaintiff there based its suit on the enforcement of a trust and here on the enforcement of a contract.
Nor do we think that the ruling in the Fishing & Hunting Club case, supra, is in any way impaired by the ruling in Helpers of the Holy Souls v. Law, 267 Mo. 667, 186 S. W. 718, where it was held that a society incorporated in this manner for benevolent purposes, as plaintiff was there held to be, could take and administer for charity a devise to it of land for benevolent purposes. The court noted the Hunting & Fishing Club case and said that “nothing ruled in that case bears upon the constitutional validity of the charter presented in the present record. . . . The theory (of that case) being that the corporation in question was not authorized to acquire that sort of property,” and Judge GRAVES in his dissent, on the ground that plaintiff was shown to be a religious corporation, said: “If the circuit court in entering the pro forma decree attempted to and did organize a religious corporation, when it chartered respondent, then the act of such court was futile in view of the constitutional inhibitions, and respondent has no standing in this case.”
The plaintiff here, as did plaintiff in Fishing & Hunting Club v. Kessler, 252 Mo. 424, invokes the rule of law that where a defendant deals and contracts with a plaintiff as a corporation and in its corporate name, it cannot, when sued on such contract, interpose the defense of ultra vires; that only the State in its sovereign capacity can question the unwarranted exercise of corporate powers. This rule, however, has its limitations, one of which is that it does not apply in equity to suits for specific performance of executory contracts. As said by the court in the case just cited, “It is true that an unwarranted exercise of corporate power ordinarily cannot be questioned in a collateral or indirect way by an individual. A careful review of the authorities, however, discloses that this rule is applied to situations quite different from the present one. After the corporation has transgressed its powers and acquired the property, then the general rule above referred to prevails, but where, as here, the corporation has not yet acquired the property, a court of equity will not lend its aid and power to cause to be conveyed to the corporation that which by its charter law it is not permitted to hold, and such a defense is available to an interested individual.” The cases there cited and quoted from, including two Missouri cases, uphold this theory.
In 3 Thompson on Corporations (2 Ed.) section 2393, the law is stated thus: “A corporation cannot compel the specific performance of a contract to convey land to it where it has no power to take real estate for the purpose stated in the contract; and in such case the owner of the land, or his heirs, may defend on the ground of the in-
In the recent case of Title Guaranty Trust Co. v. Sessinghaus, 325 Mo. 420, 28 S. W. (2d) 1001, 1006, this court said: “After the conveyance is consummated, the doctrine of ultra vires cannot be invoked by either party, much less by third persons—except the State and perhaps sometimes the stockholders. Performance on one side will exclude that defense, especially where the other party has reaped the benefit thereof, if the transaction is not malum in se or malum prohibitum.”
It is urged, however, that the contract sued on here, being an option to purchase land engrafted on a lease of the same, is an executed and not an executory contract. When we consider the purpose of this suit and the relief asked for, it hardly seems consistent with the idea that the contract is fully executed on either side. Certainly no conveyance of the land has been made to plaintiff, nor has any part of the purchase price been paid by it or even ascertained. The contract of lease may be said to have been fully performed, the rent being paid and the terms of the lease complied with, but not so of the option contract of purchase engrafted thereon, which is in most respects at least a separate and distinct contract. While a valid option contract to purchase land requires an independent consideration separate and apart from the purchase price to be paid for the land [Warren v. Castello, 109 Mo. 338, 19 S. W. 29], where such option is engrafted on or incorporated in the lease as part thereof, such lease supplies the necessary consideration for giving the option [25 R. C. L. 238], but the contract of purchase is otherwise a distinct contract. The performance of one is not performance or part performance of the other. The law as declared in 13 Corpus Juris 245, reads: “An executed contract is one where nothing remains to be done by either party. An executory contract is one in which a party binds himself to do or not to do a particular thing in the future. An executory contract conveys a chose in action; an executed contract, a chose in possession. A contract may be partly executed and partly executory, and may be executory as to one party and executed as to the other.” In 27 Ruling Case Law, 346, it is said: “On the exercise of an option, though not before, an executory contract of sale arises.” Under the title of “Contracts,” 6 Ruling Case Law, section 9, page 590, this is said: “Another distinction between an executory and an executed contract is that the former requires affirmative action for
The plaintiff cites and relies on Hunting & Fishing Club v. Hackmann, 172 Mo. App. 549, which was a suit for specific performance of a covenant of a lease on certain lands for fishing and hunting purposes to renew or extend same for a further term of years on or before the expiration of the first lease. The defense was that of ultra vires in that plaintiff, incorporated as it was by decree of the circuit court under the statute, now Article 10, Chapter 32,
In Bowman Dairy Co. v. Mooney, 41 Mo. App. 665, the plaintiff contracted to employ the defendant to carry on a business not allowed by its charter. Defendant worked a short time and then quit and the suit was to enforce performance of the contract. The court held the contract executory as to the unexpired portion of the time of employment, and said: “So long as such a contract is executory, that is, when it has not been fully performed by either party, the courts will
There is another view of this case leading to a refusal to award specific performance of the contract here sued on. This is a case in equity and plaintiff is asking a court of equity to decree specific performance of a contract to convey land. All the cases hold that specific performance in such cases is not a matter of strict right, but rests in the sound discretion of the court. Such discretion must be exercised in view of the particular facts of each case. A court of equity is never compelled to render an inequitable decree, however plain and valid may be the contract sued on. He who seeks equity must be willing to do equity and to have equity done to him. Equity may require that a party accept damages in lieu of specific performance, and may refuse the equitable remedy of specific performance and remit the party asking it to an action at law for damages. Such discretion is not to be used capriciously, but soundly and sparingly, and only when it is clear that a wrong would be done to grant specific performance. As stated in 25 Ruling Case Law, 214, section 16, “A decree for the specific performance of a contract is not a matter of right, but rests in the sound discretion of the court. This discretion is not arbitrary or capricious but judicial, and is controlled by the established doctrines and settled principles of equity. The desired relief will be granted or withheld by the court upon a consideration of all the circumstances of each particular case, and no positive rule can be laid down by which the action of the court can be determined in all cases. . . . This latitude is implied in judicial statements that the granting of specific performance is an extraordinary power which is not to be exercised when in a given case it would be contrary to equity and justice to exercise it, and that it is discretionary with the court to grant or withhold specific performance in furtherance of justice or to prevent injustice.” Specific performance of a contract will be denied in any case where such a decree would be inequitable under all the circumstances. [Hilgedick v. Northstine, 316 Mo. 333, 334, 289 S. W. 939; Brevator v. Creech, 186 Mo. 558, 572, 85 S. W. 527.] It may be refused where its enforcement would work a hardship on innocent third parties [McGinness v. Brodrick (Mo.), 192 S. W. 420], or where detrimental to public welfare. [36
One of the well-recognized instances in which specific performance of a contract will be refused is that its enforcement will be detrimental to the public. In 58 Corpus Juris, 899, the rule is stated to be: “The fact that the contract, although not illegal, is nevertheless detrimental to the public welfare is often a ground for refusing its enforcement in equity.” In Pomeroy‘s Specific Performance of Contracts (3 Ed.) 464, section 181a, it is said that this ground of defense has assumed considerable importance in recent years. “The court may also consider the public inconvenience which would result from the enforcement of a contract. Thus, where a board of education made a contract to sell a tract of school ground, intending to purchase other lands for school purposes, but later decided to retain the land sold
In Pomeroy‘s Equity Jurisprudence, section 796, this is said: “Specific performance not being an absolute right, the fact that enforcement would be of little or no benefit to the complainant, and a burden upon the defendant, is sufficient to constitute performance oppressive, and it will not be given. The disproportion between the burden upon the defendant and the gain to the plaintiff makes performance inequitable.”
In Ford v. Oregon Electric Ry. Co. (Ore.), 36 L. R. A. (N. S.) 358, it is held that, “A railroad company, being a public service corporation, owes its first and highest duty to the public, and any agreement having a tendency to interfere, or which may interfere, with that duty, is against public policy, and should not be enforced in a suit in equity. . . . Where the consequence of enforcement of the contract is to inconvenience the public, the discretionary power of equity is exercised to refuse its aid.” [This last sentence is quoted from Pomeroy‘s Equity Jurisprudence.]
In Seaboard Air Line Ry. Co. v. Atlanta, B. & C. Railroad Co., 35 F. (2d) 609 (C. C. A.), the court said: “In the exercise of its discretion, a court of equity may refuse specific enforcement of a valid contract where, by granting that relief, a paramount public interest will or may be interfered with. . . . We think that in the circumstances disclosed there was warrant for the inference that a paramount public interest might be interfered with by granting the relief sought. This being so, the court‘s refusal to grant that relief was not reversible error.”
This case presents a strong appeal to a court of equity to deny specific performance. No private interests are involved so far as defendants are concerned. They are acting solely as trustees of a trust fund for a purely public purpose. The Nelson Gallery of Art and allied institutions are being erected purely for the benefit of the public. The site of this institution is already vested in the city and the title to the additional grounds, inclusive of the tract now in question, is to be vested in the same way. That the conveyance of this tract in fee to the plaintiff tennis club, with power to sell ad libitum, will seriously mar and hamper the plan of development of this gallery of art as a thing of beauty, is not denied. Kansas City has manifested its interest in this matter by asking and being allowed to file a brief
Plaintiff is not, however, to be turned out of court without remedy. We could deny the relief prayed for and remit plaintiff to an action for damages, but it is a well-settled rule that when equity is rightfully possessed of a case, as here, it will not relinquish jurisdiction short of doing complete justice. [10 R. C. L. 370; 25 R. C. L. 341; Pomeroy‘s Specific Performance of Contracts, sec. 474; Munford v. Sheldon, 320 Mo. 1070, 1070, 9 S. W. (2d) 907, 911; Marston v. Catterlin, 290 Mo. 185, 193, 234 S. W. 816; Seested v. Dickey, 318 Mo. 192, 300 S. W. 1088, 1101.] “In certain cases a court of equity when unable to grant specific performance of a contract will not dismiss the bill, but will retain jurisdiction and award damages in place of such performance.” [25 R. C. L. 345.] “In an action for the specific performance of a parol contract for the sale of land, where plaintiff fails to make out the contract or the acts of part performance with the high decree of proof required, the case may be retained to decree restitution of the purchase price or part thereof paid by him, and compensation for the improvements made in good faith upon the land.” [36 Cyc. 751.] The reason of the rule is stated in 25 Ruling Case Law, 347, thus: “This rule rests upon the broad principle that it is against conscience that one man should be enriched to the injury and cost of another, induced by his own act. In such cases, to prevent injustice, compensation may be awarded for the improvements, and where a bill for specific performance of a parol agreement is denied because of failure to make out a proper case, it may be retained by a court of equity for this purpose, provided it appears that the purchaser went into possession and made valuable improvements on the land upon the faith of the contract and that he has no adequate remedy at law. In such cases where specific performance cannot be decreed, the court may decree the repayment of the purchase price and interest, together with the value of the improvements.”
The pleadings in this case, while drawn primarily on the theory of specific performance, are broad enough to permit the court, in refusing specific performance, to ascertain and award damages for the improvements placed on the land by plaintiff. [Gibson v. Shull, 251 Mo. 480, 490, 158 S. W. 322; McLure v. Bank of Commerce, 252 Mo. 510, 518, 160 S. W. 1005.] In this case the evidence shows that plaintiff has made substantial and valuable improvements on the tract of land in question. A dozen or more tennis courts have been constructed, seating facilities provided, and a club house erected. There is no reason to hold that plaintiff did not make these improvements in good faith under its supposed valid option to purchase the
Some evidence was taken in the case as to the value of these improvements. This evidence was heard, however, because of its bearing on the question of plaintiff‘s right to specific performance, and the evidence goes to the actual cost of reproduction cost of the improvements rather than the increased value of the land by reason thereof. Most of the improvements were made on the land soon after the commencement of the ten-year lease, and the cost does not show the present value. The court in its preliminary findings as a basis for its decree for specific performance found the value of the improvements to be thirty thousand dollars, but does not find that same has added that much value to the land. If so, we think the value is excessive under the evidence as now presented by some ten thousand dollars. Following the precedent laid down in McLure v. Bank of Commerce, 252 Mo. 510, 524, we will reverse and remand the case to the end that the issue of the increased value of the land by reason of the improvements may be more thoroughly tried, and that the new trial be confined to that issue. The pleadings may be amended, if desired, so as to present that issue more clearly.
The judgment is, therefore, reversed and the cause remanded to the circuit court with directions to retry the question of the increased value of the land for tennis club or other purposes, and to confine the new trial to that issue, and on ascertaining such value to enter judgment refusing specific performance of the contract sued on, but awarding plaintiff judgment for the ascertained value of such improvements, and for costs. Ferguson and Hyde, CC., concur.
PER CURIAM: - The foregoing opinion by STURGIS, C., is adopted as the opinion of the court. All of the judges concur.