Case Title: Commercial Asphalt v. Smith

Citation: 196 Kan. 164, 409 P.2d 796

Docket Number: 44,294

State: kansas

Court: Kansas Supreme Court

Date: 1966-01-22T00:00:00Z

Document:
196 Kan. 164 (1966)
409 P.2d 796
COMMERCIAL ASPHALT, INC., Appellee,
v.
MILO G. SMITH and FRANK L. SMITH d/b/a BIG THREE SAND & GRAVEL COMPANY, Appellants.
No. 44,294

Supreme Court of Kansas.
Opinion filed January 22, 1966.
Ralph E. Gilchrist and Harry E. Robbins, Jr., both of Wichita, argued the cause, and Lyndon Gamelson and Donald C. Tinker, Jr., both of Wichita, were with them on the briefs for the appellants.
Benjamin C. Langel, of Wichita, argued the cause, and George B. Powers, Carl T. Smith, John F. Eberhardt, Stuart R. Carter, Robert C. Foulston, Malcolm Miller, Robert W. Partridge, Robert M. Siefkin, Richard C. Harris, Gerald Sawatzky, Donald L. Cordes, Robert L. Howard, Charles J. Woodin and Mikel L. Stout, all of Wichita, were with him on the briefs for the appellee.
The opinion of the court was delivered by
HATCHER, C.:
This action was brought for the purpose of having a sand lease declared unenforceable and the lessees removed from the leased premises.
The case was tried to the court on stipulated facts which will be summarized.
On February 20, 1954, Henry and Emma Koster, husband and wife, entered into a written agreement with the Big Three Sand and Gravel Company which was executed by the defendant, Frank L. Smith. The agreement specifically described 40 acres in Sedgwick County, Kansas, and continued:
The second paragraph provided for the payment of five cents per ton for the sand removed and an automatic termination of the contract in event the payments were overdue for 45 days. The third paragraph provided for payment of $100.00 per month as rental if pumping operations ceased for a period of sixty days or longer.
The contract further provided:
Omitting other provisions of the lease agreement, one of which prohibited assignment without written consent, the lease agreement concluded by making the contract binding on the heirs and assigns of both parties.
The lessees took possession of the property and placed thereon such equipment as was necessary to pump and remove the sand. They complied with all the terms of the lease agreement. The lessees operated the lease to the apparent satisfaction of the lessors for a period of eleven years.
On January 22, 1964, the plaintiff, Commercial Asphalt, Inc., purchased the land covered by the sand lease agreement. The knowledge of the purchaser as to the existing lease agreement is well expressed by the stipulation which reads:
On January 30, 1964, the plaintiff addressed a letter to Milo Smith informing defendants that they were cancelling the contract because it was unilateral and because the addition of Milo, the son of Frank, to the partnership constituted an unlawful assignment.
*166 Sometime later, the date is not disclosed by the record, this action was brought. The trial court concluded:
Judgment was entered for plaintiff and defendants have appealed.
Appellants contend that if there was lack of mutuality in the agreement, the defect was cured by prompt performance. As we are inclined to agree with appellants, we will give attention to the argument of appellee in support of the judgment.
The appellee first contends that, there being no independent consideration, the contract is void for lack of mutual obligation to perform. Appellee suggests that the lessees could have walked away without making any attempt to perform the contract and the lessors would have had no recourse. There is merit to appellee's contention. However, the lessees did not choose to walk away. They proceeded immediately to move the necessary equipment on the leased premises, produce sand and pay royalty to the lessors. It would appear from the lease agreement that the lessees wanted sand; the lessors wanted the royalty money for the sand produced. Everything was performed as and when the contract anticipated.
This court adheres to the rule that if an agreement is unilateral, and not originally binding on one of the parties, but has been performed by the party not bound so that the other party has received the promised benefits, the contract becomes binding on the benefited party. The lack of mutuality is cured where the contract is executed.
The rule was recognized in Connell v. Kanwa Oil, Inc., 165 Kan. 241, 194 P.2d 950, where we stated:
Again in Braniff v. Baier, 101 Kan. 117, 165 Pac. 816, we stated:
Appellee next contends that the contract is terminable at the will of the appellee because it is terminable at the will of appellants. Appellee states:
We cannot agree with appellee's contention under the facts and circumstances in this case.
Once the parties have in good faith entered into the performance of a contract and are doing everything possible to complete it, any reasonable consideration will be sufficient to protect it against an attack of lack of mutuality. The appellee concedes that one dollar would be sufficient independent consideration. In a lease such as the one before us, in the absence of mutuality of obligation, the consideration may be either a benefit passing to the lessors or a detriment to the lessees.
*168 Before the lessees could start producing, equipment for pumping and loading the sand had to be moved on the premises. This was a benefit to the lessors if they wanted the sand produced and the royalty paid. It was some detriment to the lessees. Once the equipment was moved on the premises and development started, the lessees could not cease operations without written notice to the lessors and the removal of all the equipment from the premises. This again was a detriment to the lessees.
The appellee would belittle the above mentioned consideration. However, it is in no position to question the adequacy of the consideration. The original lessors were satisfied with the performance of the lessees over a period of eleven years. They had never questioned the adequacy of the consideration which grew out of the performance by the lessees.
This court had a somewhat similar situation under consideration in Compton v. Gas Co., 75 Kan. 572, 89 Pac. 1039, where it was said:
..............
A careful examination of the record discloses no reason for a court of equity interfering with defendants' peaceful possession and enjoyment of the leased premises as provided in the lease agreement.
The judgment is reversed.
APPROVED BY THE COURT.