Baier v. Berberich

• Decision Date: 18 February 1879
• Citation: 6 Mo.App. 537
• Parties: JOHN T. BAIER ET AL., Appellants, v. SEBASTIAN BERBERICH ET AL., Respondents.
• Court: Missouri Court of Appeals

6 Mo.App. 537

JOHN T. BAIER ET AL., Appellants,

v.SEBASTIAN BERBERICH ET AL., Respondents.

St. Louis Court of Appeals, Missouri.

Feb. 18, 1879.

1. Constructive trusts are not within the Statute of Frauds.

2. In cases of constructive trust, the relief which equity will grant depends on the circumstances; it is not necessarily the specific performance of what the parties may have agreed on the subject.

3. A combination to prevent bidding at a sale of real estate is fraudulent, and will raise a constructive trust.

4. It is not always essential that the party entitled to relief shall place the other party in statu quo ante injuriam. Equity will make such decree as is just, in view of all the circumstances.

5. A party who is found a constructive trustee cannot escape the consequences by showing that third parties not before the court would be prejudiced by such decree.

APPEAL from St. Louis Circuit Court.

Reversed and remanded.

KEHR & TITTMAN, for appellants: Where one becomes a purchaser under circumstances which would make it a fraud to permit him to hold on to his bargain, he will be converted into a trustee for those who have been injured thereby.-- McNew v. Booth, 42 Mo. 189; Rutherford v. Williams, 42 Mo. 18; Slowey v. McMurray, 27 Mo. 118; Hammond, Admr., v. Cadwallader, 29 Mo. 170; Grumley v. Webb, 44 Mo. 444; Peacock's Administrator v. Nelson, 50 Mo. 261.

J. M. & C. H. KRUM, for respondents: A trust results only to the person whose money pays the consideration.-- Bostleman v. Bostleman, 24 N. J. Eq. 103. If the party for whom the purchaser pretends to buy has no interest in the property, a trust cannot be established.-- Rogers v Simmons, 58 Ill.--.

HAYDEN, J., delivered the opinion of the court.

This is a proceeding brought by a husband and wife, to have one of the defendants, who are father and son, declared a trustee, for the wife, of two pieces of realty (which for the purposes of this opinion may be treated as one) which were bought at public vendue, and the legal title to which was placed in the name of the son. The substantial ground, as proved, is that the father, Sebastian Berberich, being accommodation indorser for the plaintiff, John T. Baier, who was in failing circumstances in 1877, and who had given deeds of trust under which the property here in question was about to go to sale, agreed with the plaintiffs to buy in the property at the sale for the benefit of Mrs. Baier, and convey it to her. To carry out this plan, both the plaintiffs and defendants took steps to induce strangers to refrain from bidding at the sales, and persons who intended to bid were thus kept away; and in this manner defendants obtained the property at considerably less than its value. This agreement wa denied by the defendants, but was proved by disinterested witnesses. The plaintiff John T. Baier and the elder defendant went to Mr. Porter, a realestate agent in St. Louis, in pursuance of the agreement, and Porter inspected the property, and agreed to advance money upon it to carry out the arrangement. Porter testifies that Berberich said that he would raise the money in bank to buy in the property, and that the sum wanted from Porter was to replace the money to be borrowed from the bank; that Berberich said he was to convey the property to Mrs. Baier, and was doing it for her protection; that she was to give the deed of trust, and make the note for the money borrowed through Porter. It was a part of the plan that it should be made known as widely as possible that Berberich was to buy the property for Mrs. Baier, and both Baier and Berberich took steps to have this understood. Berberich saw, among others, one Fath, as the latter testifies, and asked him to be present at the sale and use his influence in trying to keep bidders from running up the property, requesting him to try to keep one Stultz and one Coellen from bidding, they being expected bidders. At this interview Baier was present, and this is one of many circumstances tending to show concert of action in carrying out the plan, and that Baier confided in Berberich. The same witness, Fath, testifies to other efforts of the same kind on Berberich's part, and it is clearly proved that these efforts were successful; that the impression was conveyed that Berberich was acting for Mrs. Baier, and that thus intending bidders refrained from bidding. At the sale of the corner property, in May, 1877, it was stated, in Berberich's presence, that there was no use for any outsider to bid, as the matter was all arranged. The other defendant was clearly a party to this action on the part of his father, and the conduct of the two seems to have been the result of an arrangement between them. The defendant bought the property first sold for $700, the deed being made to the younger defendant. At the sale of the second lot, the father, for the son, bid $4,350, and bought the property, the son soon after raising $4,000 upon it by loan. It is not necessary to here compare the actual value of the property at the time of these sales with the amounts thus paid for it. The defendants evidently got the property at much less than its actual value, and the fair inference is that but for the contrivance of the defendants both lots would have sold for considerably more than they brought. One of the defendants' own witnesses, for example, a real-estate agent, says that he offered to lend $10,000 on the security of the two houses, his rule being to lend two-thirds of the value of the property. Judgment went below for defendants.

The conversion into...