Batson v. Peters
| Decision Date | 18 December 1935 |
| Docket Number | 33283 |
| Parties | BATSON v. PETERS et al |
| Court | Missouri Supreme Court |
Jesse L. England, of Kirkwood, for appellants.
C. A Johnson, of Linneus, and Lloyd W. Holmes, of Clayton, for respondent.
HYDE Commissioner.
This is an action in equity to cancel a deed of trust made December 1, 1927, conveying property in St. Louis county to secure to defendant Peters a note of the same date for $ 1,200, and ten semiannual interest notes (of $ 37.50 each); to cancel the trustee's deed, made January 30, 1931, for foreclosure of this trust deed, under which defendant Kessler claims title through subsequent conveyances from the grantee who took title at the sale; and for an accounting for rents and profits collected by defendant Peters since December 1, 1923. Cancellation was not specifically requested of the notes secured by the trust deed, although there was a prayer for 'all other equitable and proper relief.' However plaintiff's petition alleged that the notes were without consideration; that defendant Peters obtained the signature of plaintiff and his wife (since deceased) to the trust deed and notes secured thereby by fraudulently representing the purport and effect of the papers to them; that a prior trust deed of December 1, 1923, securing $ 1,100 (since released) had likewise been obtained by fraud; that defendant Peters took charge of plaintiff's property December 1, 1923, and collected all rents therefrom; that thereafter a fiduciary relation existed between them; that defendant Kessler, to whom the notes were transferred, was not the holder in due course thereof, but had knowledge of and participated in the fraud; and that Kessler's title under the foreclosure was therefore invalid. The answer of defendant Peters alleged that the trust deed represented bona fide indebtedness; that it was fully understood by plaintiff; and that he had fully accounted to plaintiff for all money received in his behalf. The answer of defendant Kessler set up that he was a holder in due course of the notes secured by the trust deed. No affirmative relief was asked by either defendant. The court found that the trust deed and foreclosure deed were both null and void and entered a decree setting both deeds aside, but found for defendants on plaintiff's claim for an accounting. Defendants have appealed from this decree.
It is conceded that on December 1, 1923, plaintiff executed a trust deed securing a note to defendant Peters for $ 1,000, and that this trust deed covered three separate tracts of real estate. The trust deed which was foreclosed (securing the $ 1,200 note of December 1, 1927) covered seven separate parcels of real estate which was all the property (except one lot) owned by plaintiff, and was a renewal of the original debt. The additional property came from the estate of the father of plaintiff's wife, but later plaintiff and his wife took title to all the property by entirety. Plaintiff claimed that he did not know that he signed a new trust deed which covered more property than the first one. Plaintiff could write his name, but said that he could not read. His wife could neither read nor write and signed by mark. After December 1, 1923, defendant Peters was in complete charge of all of plaintiff's property, collected the rents, paid the taxes, kept up the repairs, and gave plaintiff money from time to time when he asked for it. Peters had collected rents from some properties for plaintiff before 1923.
Plaintiff, testifying as a witness, admitted that he had signed the deed of trust of December 1, 1923; that the transaction grew out of a deal whereby Peters bought a piece of property for him; and that Peters held this property as security until the trust deed was made. Plaintiff said, when Peters asked him to sign the two others, that he told him he did not 'want to do that, the place ought to stand good for itself,' but that Peters insisted, saying, 'Suppose this house burned down and I didn't have nothing to get my money out of it?' r Plaintiff said: 'I don't like to do that,' but after further discussion he did sign the trust deed covering the place purchased and the two others which he then owned. Plaintiff said that he 'didn't know what else to do and took it that way'; that he asked Peters to collect his rents; that Peters 'said 'alright', he would take care of it and he would collect the rents and keep everything straight'; and that he further stated, 'You don't have to worry, the rent will pay the bills and when the place is paid for it all comes back to you.' Plaintiff said he understood that he was paying $ 600 for the place Peters had purchased for him, although he claimed Peters only paid $ 200 for it, but defendant Peters denied that he charged plaintiff with any more than the purchase price and taxes.
Plaintiff said he did not know what rent Peters got for his houses; that he did not know the names of all of his tenants; that he talked to Peters about the place he bought for him after he 'thought that the place was paid for'; that Peters said, 'You don't get a bit of that money of that house * * * I kept that to pay interest on the money'; and that he finally became dissatisfied and asked Peters to let him have some of his friends go over the business, but he would not permit it. This request was evidently made after the execution of the $ 1,200 deed of trust of December 1, 1927, in renewal of the original $ 1,100 trust deed. Plaintiff denied that he signed the deed of trust dated December 1, 1927, or the $ 1,200 note, which was secured by it, or any of the ten interest notes bearing the same date (His pleading was that he did sign them, but was induced to do so by fraud) Plaintiff did admit that he signed his name on some paper at the Kirkwood bank in the presence of Mr. Riemeyer, who as notary certified the acknowledgment to this trust deed, but plaintiff said that Peters told him he was signing a book so that he could get money from the bank. Plaintiff stated that Peters 'gave me money whenever I asked for it,' but said that he 'didn't ask him for much money'; and that he had taken money to Peters 'to help make money to pay taxes.' (Peters denied that plaintiff ever gave him money)
On August 7, 1930, plaintiff conveyed all of his property to a third party in order to get it out of Peters' hands. This man testified that he held it as trustee and undertook to collect the rents, but was only able to collect $ 60, all of which he spent in making repairs. He tried to get a new loan on the property to refinance the indebtedness, but was unable to do so. He deeded it all back to plaintiff on December 13, 1930, and this suit was commenced as foreclosure was about to proceed. Plaintiff had as a witness a tenant of one of the properties who testified he and his father-in-law, who occupied the place with him, had paid $ 840 rent to Peters since 1923. This witness also testified that Peters told him 'that the property was clear.' Plaintiff's evidence showed nothing more concerning the amounts Peters collected after the trust deed of December 1, 1923, was made. At the foreclosure sale, on January 30, 1931, all of the property described in the trust deed was bid in by Charles J. Harwood for the full amount of principal and interest accrued. Harwood later conveyed it by quitclaim deed to John Kessler, and he later conveyed it to defendant Kessler, his brother. Peters had arranged for Harwood to take title.
Defendant Peters testified that plaintiff owed all of the $ 1,200 note and all of the interest notes which had matured. To show how plaintiff became indebted to him, Peters produced what he said were his original account books. There were two of these books. The first account book contained an account for money paid out for or furnished to plaintiff to buy the property which he purchased for him; and also to pay delinquent taxes (some of which Peters said had been sued on), and to build a house on one of his properties. The total of this amount was $ 1,133.83, and it was for this that he said the $ 1,100 deed of trust was given. He said that he had no security for his advances until this deed of trust was given except that he held title to the property purchased (Whether the house was built on this or other property is not clear) Peters' account book also showed rents of plaintiff's property collected since December 1, 1923, and the payments made therefrom for interest on the trust deed, taxes, repairs, and for cash paid to plaintiff. According to this account, on December 1, 1927, there was due Peters the principal secured by the deed of trust $ 1,100, two unpaid interest notes thereon amounting to $ 88, and $ 12 cash paid to plaintiff in excess of collections. Peters said he had full charge of plaintiff's property and the rent collected from it only after December 1, 1923, when the original trust deed was made. Plaintiff introduced checks payable to Peters and receipts signed by him for rents prior to that time, but he claimed that he turned all money so collected (prior to December 1, 1923) over to plaintiff and kept no record of it because he 'did not keep any of that money' and 'wasn't his general agent at that time.'
Peters' second account book showed collections of rent and disbursements thereof for taxes, repairs, water bills, and cash paid to plaintiff after December 1, 1927, and up to August, 1930, when he was notified by plaintiff's grantee not to collect any more rent. Nothing was credited to the interest notes on the $ 1,200 trust deed, but cash averaging about $ 5 per week was shown to have been turned over to plaintiff. Peters said that he always consulted plaintiff about repairs, and claimed that he had given plaintiff all surplus over expenses. He also said that h...
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