Adrian v. Republic Finance Corporation
| Citation | 286 S.W. 95 |
| Decision Date | 30 July 1926 |
| Docket Number | 25484 |
| Parties | ADRIAN et al. v. REPUBLIC FINANCE CORPORATION et al |
| Court | United States State Supreme Court of Missouri |
J. R Weinbrenner, of St. Louis, for appellants.
Charles W. Rutledge, of St. Louis, for respondents.
The respondents, husband and wife, obtained a decree enforcing an option held by them for the repurchase of a certain residence property situated in St. Louis county, which, at a prior time, they had conveyed by a warranty deed to defendant Republic Finance Corporation, under conditions which are the subject of dispute between the parties, and which hereafter will be set forth.
The plaintiffs alleged their transfer of the property in question on January 27, 1922, by warranty deed, to defendant finance corporation, in settlement of an indebtedness of $ 319.60 due from Wm. J. Adrian to the finance corporation, and that in consideration of such transfer, the finance corporation, at the time, executed and delivered to plaintiffs an agreement by which the finance corporation agreed that, for the period of ten months ensuing, the plaintiffs, at their option, might repurchase the property for the sum of $ 319.60; that afterward, on June 8, 1922, the finance corporation, in violation of the agreement, transferred the property to defendant Field, who was its president and chief officer, and who had conducted the transaction of securing said deed from plaintiffs, and the giving of the option, and had knowledge of all the facts; that said Field procured the transfer to himself for the purpose of defrauding plaintiffs, and for his own personal benefit; that plaintiffs had been ready and willing to avail themselves of said option, and had so informed the finance corporation and said Field, and had offered to pay the said sum of $ 319.60 upon delivery to them of a sufficient warranty deed to the property, according to the terms of the option agreement; and in their petition they offered to accept the option and pay the consideration specified therein.
The answer of the defendant Field was a general denial. The finance corporation, after a general denial, alleged there was no consideration for said option, and that it was void; that, if there was a consideration, the plaintiffs had failed to carry out the terms of the option, and make payments on certain notes held by defendant finance corporation as they fell due, in accordance with the terms of the agreement; that plaintiffs, about June 1, 1922, voluntarily, and for a valuable consideration, had surrendered the alleged option.
The facts leading up to and attending the transaction are as follows: About November 29, 1921, Wm. J. Adrian purchased of Walsh Motor Company 10 Ford automobiles to be used, and which were thereafter used by him in the service car, or jitney business, and in part payment he gave 10 notes secured by a chattel mortgage on the automobiles. Each note was for the principal sum of $ 383.57, due in monthly installments, beginning one month after date, and ending 12 months after date. The monthly installment to be paid under each note was $ 31.96, making a total of installments falling due each month, on all the notes, of $ 319.60.
The Republic Finance Corporation, which was engaged in the business of buying and discounting commercial paper, acquired the notes about the time they were executed. The notes provided that, upon default of payment of any installment due, the whole amount remaining unpaid should become due.
Plaintiff Wm. J. Adrian began the operation of the automobiles, but the business did not immediately earn enough to meet the installments as they became due, and otherwise he did not have ready money. The first installment of $ 319.60, due December 29, 1921, was paid in weekly payments as he received money, but the complete payment of that installment was not accomplished until about January 5, 1922. Thereafter, urged by appellants, he made payments daily or as he earned money, upon the second installment to be due January 29th, but these payments were small, up to about the 25th of January. About that date he was told by Mr. Field that, if he did not meet the payment due on January 29th, the finance corporation would foreclose its mortgage on the automobiles. At that time plaintiffs owned the real estate involved in this suit, which was their place of residence, and was subject to a mortgage for $ 1,500. Their testimony tended to show this property was then worth $ 3,000, or more. Defendants' testimony was that it was worth, at the time, about $ 2,000. The testimony of the plaintiffs was that they agreed with Mr. Field that they should give, and the finance corporation was to accept, a second deed of trust on this real estate, to secure the payment of the installment of $ 319.60, due on January 29th; that plaintiff Wm. J. Adrian told Mr. Field he wanted to borrow the money on his equity, and Field said he would lend it to him; that on January 27th they went to the office of Mr. Field for the purpose of executing such deed of trust; that, when they came to his office he had a warranty deed already prepared, conveying their equity in the property to the finance corporation, for a consideration of $ 319.60; that at first they refused to execute the warranty deed, but, being threatened with foreclosure of the chattel mortgage, and upon consideration also that they be given an option to repurchase the property within 10 months, they executed the warranty deed, and an option in writing was given them, authorizing such repurchase within 10 months after January 27, 1922. The testimony for defendant was that there had been no agreement to accept a second deed of trust, that plaintiffs gave the warranty deed as a payment for the installment of $ 319.60, and that it was accepted as such, and credit given for it on the notes, but that, at the request of plaintiffs, an option in writing was given to them to repurchase the property or redeem it for $ 319.60 within 6 months, but that this option was conditioned that plaintiffs make prompt payments monthly, for 6 months, of the installments falling due. Following that, payments were made to defendant on the chattel mortgage notes, but not at a rate to meet the installments, except for a time, through the sale of part of the automobiles, as hereafter mentioned.
Plaintiffs' testimony was that in that situation Mr. Adrian took up with defendant Field, as president of the finance corporation, the question of selling the real estate, out of which Mr. Adrian thought as much as $ 1,000 could be realized from his equity to pay on the chattel mortgage indebtedness. Their testimony was that Field agreed for the company to sell the property, and insisted that the option must be returned so they would be free to sell it. Plaintiffs' testimony was that Field stated they (defendants) would guarantee the obtaining of $ 1,000 for the property for the purpose mentioned. It was agreed that the written document, called the option, and given by the finance corporation to plaintiff Wm. J. Adrian, was returned to defendants. This was done about March 2, 1922, and a receipt for it was given by defendant to plaintiffs. This receipt was introduced in evidence by plaintiffs. The receipt did not state the terms of the writing so returned, but merely recited the fact that the finance corporation had 'received of W. J. Adrian option papers for $ 319.60 of January 27, 1922.' The testimony for defendants was that Mr. Adrian, being behind in his payments, in the early part of March offered to return the option, provided his monthly payments were reduced to $ 275; that this was agreed to, and the option was returned by him upon that understanding.
The testimony for plaintiff was that the option was to remain in force, and that it was returned upon the insistence of Mr. Field that they must be free to sell the property, and upon this statement that $ 1,000 to apply on the notes was guaranteed from the sale of the property. Another transaction brought out in the testimony was that, in March, Mr. Adrian permitted defendants to sell four of the automobiles. Adrian's statement was that he desired only two of them to be sold, but that, under the threat of defendants to foreclose, and in fear of foreclosure of the mortgage, he permitted them to sell four. Four of them were sold by defendants, and the sum of $ 900, or $ 225 for each automobile, was applied upon the notes. Plaintiffs' testimony was that the automobiles sold were worth $ 300 each. The plaintiffs continued for some time to live in the property conveyed by the warranty deed.
On June 8, 1922, defendant finance corporation conveyed the property to defendant Field by warranty deed. The testimony for plaintiffs was that this was done without their knowledge or consent. Their testimony was that they did not pay any rent to defendant for the property, and that during the time they remained in the property they made the semiannual interest payment of $ 45, falling due under the mortgage debt of $ 1,500.
In August, 1922, upon demand of defendant Field, they gave him possession of the property. During the time plaintiffs were so occupying the property, defendant Field made certain repairs thereon which he testified cost about $ 420. Plaintiffs testified that these repairs were made over their protest. Their testimony was also that about August, 1922 defendants insisted that plaintiffs have the remaining automobiles repainted; that they were left at a place to be repainted, and defendants took advantage of that situation to secure possession of the automobiles, and plaintiff was obliged to replevy them; that, upon again securing possession of them, he found defendants had taken off new or good tires from the automobiles, and had replaced them...
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