Peck v. Rea , 217 Mo. App. 578 ( 1925 )

^* Headnotes 1. Ejectment, 19 C.J., Section 363; 2. Ejectment, 19 C.J., Section 391. Plaintiff filed his petition in ejectment to recover possession of certain described lands in Dallas county. Defendant answered by a general denial, and an equitable counterclaim. Plaintiff moved to strike the counterclaim, and his motion being overruled, he saved exception and filed a reply putting in issue the new matter set up in the answer. The whole cause was tried on the theory that the pleadings carried the cause to the equity side of the court. The conclusion was reached that under the issues plaintiff was entitled to judgment for possession and that defendant was entitled to a judgment for $500 against plaintiff. Defendant's Judgment was based upon what the court designated as "an equitable accounting between the parties." Plaintiff filed motion for a new trial on the accounting wing of the case, and a new trial being denied he appealed.

Plaintiff contends that a counterclaim will not lie in ejectment, and that is the question presented for determination. January 26, 1920, plaintiff and defendant entered into a contract whereby defendant was purchasing plaintiff's farm for $12,000. Two thousand dollars was paid in cash, and another $2000 was to be paid March 20, 1920, when possession was to be delivered. The remaining $8000 was to be paid when a loan company approved the abstract and made a loan to defendant. Conditions came about whereby the parties realized that the contract would not be consummated by March 20th, so on March 16, 1920, a second contract was entered into abrogating the first one and reciting payment of the $2000, and providing that another $2000 should be paid "on next Monday, March 22, "if possession was delivered by that date, and if possession was not delivered by March 22nd, then the $2000 was to be paid when possession was delivered. The remaining $8000 was to be paid "as soon as abstract on property is approved by loan company from which party of the second part is securing a loan." By the second contract it was provided that the deed from plaintiff to defendant should "remain in escrow with Charity State Bank until the remaining $10,000 is paid in full."

On March 23, 1920, defendant went into possession of the lands involved, but did not pay the $2000 to be paid when possession was given. Matters were not settled as contemplated and plaintiff brought ejectment, and in that suit asked for the appointment of a receiver. A change of venue was taken in that cause, and on the eve of its trial a third contract was entered into and that cause was dismissed. The third contract was entered into on March 7, 1921. This third contract recited that defendant had purchased plaintiff's farm, and that the deed was in escrow and that there was then due plaintiff "the sum of ten thousand dollars with interest and taxes amounting to the sum of $535." By the third contract defendant was to pay $6000 on or before May 5, 1921, and on that date was to deliver to plaintiff certain notes amounting to $4535, four thousand dollars of which notes was to be secured by second trust deed on the farm, "which said notes and deed of trust are held by W.D. Blankenship in escrow." It was further provided that in the event defendant failed to comply with the contract then he was "to hold possession of said land as the tenant" of plaintiff, and was to pay certain portions of the crops as rent, and without notice deliver possession of January 1, 1922. Again consummation was not reached and the cause at bar was filed February 15, 1922.

In the evidence it appears that each party blamed the other for the failure to finally consummate the deal, but we do not deem it necessary to set out the evidence in detail as such is not necessary in order to make disposition of the question presented. When the trial started, the record recites, "the court held that under the pleadings the burden was upon defendant whereupon the defendant to sustain the issues introduced," etc. All these contracts were pleaded and we take it by the recitation, supra, that the court considered, and that the parties acquiesced therein, that plaintiff was entitled to judgment for possession on the pleadings, and that there was nothing to litigate except the issues on defendant's counterclaim.

Defendant's counterclaim is based on the alleged difference between the value of the rents during the two years the lands were in his possession and the $2000 payment made by him when the first contract was entered into. This difference is alleged to be $1000, and for this sum defendant asked judgment. The court, however, found that the value of the rents for the two years was $1500, and gave defendant judgment for $500. Insurance Company v. Carson, 186 Mo. App. 221, 172 S.W. 69, was a cause in ejectment. Defendant interposed an equitable counterclaim. The point was strongly urged in that case that a counterclaim could not be interposed as a defense in a cause in ejectment. The counterclaim there, it is stated, was considered by the trial court as an equitable action for rescission. The question of a counterclaim in ejectment was considered somewhat at length by Judge FARRINGTON in the Carson case wherein he shows when an equitable counterclaim may and may not be pleaded as a defense in ejectment. The distinction between the two classes of cases is stated as follows: "The distinction is clearly shown to be that where it is sought to eject a defendant who went into possession under the title of plaintiff and for some reason should be ejected, he may, if he had an equitable counterclaim against such plaintiff, interpose and try it in the ejectment suit; but, on the other hand, where he went into possession or is claiming title or possession through a stranger to the plaintiff, then he must recover the value of improvements made, which in equity he should have, by an independent action as provided by the statutes." The statutes referred to in the excerpt quoted from the Carson case are sections 1834, 1835 and 1836, Revised Statutes 1919, and are generally known as the occupying claimant statutes. Henderson v. Langley, 76 Mo. 226, was in ejectment, and defendant's possession was under a stranger to the title of plaintiff. In that case the defendant sought to recover for improvements and for taxes paid, and it was held that such recovery could not be had, that the defendant would have to proceed for such demands under the occupying claimant statutes. But the court in considering the question used this language: "It has been repeatedly held by this court that when it appears in an action of ejectment, that the defendant had purchased land from the plaintiff, or in administration proceedings, or at sales under mortgages, and has paid the purchase money, entered into possession and made improvements in good faith, but failed to obtain the legal title intended to be sold, and could not have specific performance, the owner of such legal title, or his grantee having notice of such facts, will not be permitted to eject such purchaser without accounting for the purchase money and paying for the improvements. [Citing cases.] But where, as in the case at bar, the defendant enters into possession under a stranger to the title of plaintiff in order to obtain the value of any improvemens made by him, he must proceed as provided by sections 2259, 2260, and 2261 of the Revised Statutes." The sections of the statute referred to in Henderson v. Langley, are in the Revised Statutes of 1879 and are the same as sections 1834, et seq., in the Revised Statutes of 1919, referred to, supra.

In the cause at bar defendant was put into possession by plaintiff. There is no question of the rights of a stranger to defendant's claim involved. We are clear that the distinction made by Judge FARRINGTON in the Carson case states the law on the point in this State. [Hannibal St. Joseph R. Co. v. Shortridge,86 Mo. 662; Foote v. Clark, 102 Mo. loc. cit. 408, 14 S.W. 981; Hutchinson v. Patterson, 226 Mo. loc. cit. 182, 126 S.W. 403; Patillo v. Martin et al., 107 Mo. App. loc. cit. 659, 83 S.W. 1010.]

The judgment below should be affirmed and it is so ordered.Cox, P.J., and Bailey, J., concur.