Blakeley v. Bradley

• Decision Date: 11 July 1955
• Docket Number: No. 1,No. 44519,44519,1
• Citation: 281 S.W.2d 835
• Parties: Lenah L. BLAKELEY, Appellant, v. Harold S. BRADLEY: Harold S. Bradley, Inc., a Corporation, and Vera J. Hanlon, Respondents
• Court: Missouri Supreme Court

Page 835

281 S.W.2d 835

Lenah L. BLAKELEY, Appellant, v. Harold S. BRADLEY: Harold S. Bradley, Inc., a Corporation, and Vera J. Hanlon, Respondents.

No. 44519.

Supreme Court of Missouri, Division No. 1.

July 11, 1955.

Motion for Rehearing or to Transfer to Court en Banc Denied

Sept. 12, 1955.

W. Raleigh Gough and Claude McFarland, Kansas City, for appellant.

Stanley Garrity, Caldwell, Downing, Garrity & Eastin, Kansas City, for respondents Harold S. Bradley and Harold S. Bradley, Inc., a Corporation.

HYDE, Judge.

Action to rescind sale of land in Jackson County and to cancel the deed executed by plaintiff. The court denied rescission because of delay in attempting to rescind but found it inequitable for plaintiff's real estate agent to retain the commission of $265 paid for making the sale and entered judgment in favor of plaintiff for that amount against the corporate defendant, with costs taxed against all defendants. Plaintiff has appealed, claiming the entire transaction should be set aside.

Plaintiff's claim is that the real estate agent, employed by her, was the real purchaser and that the title was taken in the name of his employee's mother as a straw party for the benefit of the agent. The property involved is a 53 acre tract on the west side of U. S. Highway 71 south of Kansas City. The southern boundary of the City was then at 85th Street and this property is at 103rd Street. (Defendants' brief says the area has been annexed to Kansas City since the trial.) The contract of sale was dated July 22, 1944 and plaintiff's deed was delivered September 13, 1944. This action was commenced March 21, 1947. The court's decree states 'that said attempted rescission was too long delayed; and that the purchaser equitably could not be placed in status quo; but the court finds it would not be equitable for defendant, Harold B. Bradley, Inc., to retain the Two Hundred Sixty-five Dollars * * * received as a commission for making the sale of said property.' As hereinafter shown, regardless of whether the actual purchaser was the real estate agent, or his employee, defendant Vera J. Hanlon and her mother, if full and fair disclosure of the facts was not made to plaintiff (as the court must have found) then plaintiff was entitled to rescind if she acted in time. Clearly, the basis of the trial court's decision was not that plaintiff had no right to rescission but was instead that it was lost by unreasonable delay.

Plaintiff, who was 80 at the time of the trial in 1952, owned real estate both in Kansas City and in Jackson County outside the City. (This case was held under advisement until 1954.) Her husband, who was a real estate dealer, died in 1930. Their daughter was of unsound mind and was kept in an institution. Plaintiff owned a larger tract (107 acres) of which the 53 acres herein involved was a part, and had defendant Bradley sell the south 40 acres about two years before. Bradley lived in that part of the county and dealt mainly in county real estate. Bradley made a sale of the 40 acres for $4,500 to Wm. Dugan but plaintiff was not able to give a good title because of her daughter's condition. Plaintiff had her lawyers (including her lawyer in this case) bring a partition suit in which she purchased that 40 acres. Thereafter, in 1943, Bradley made a sale of the 40 acres to Mrs. Teefey for $4,750. (Plaintiff had paid Bradley a commission of $250 on the first sale which she could not complete.) Then plaintiff had her lawyers bring another partition suit, involving the remaining 67 acres of her land and some city properties, to get the title so that she could sell them. Bradley testified in that suit that the value of the 67 acres was $100 per acre and plaintiff purchased it for $6,700. Plaintiff sold about five acres of the northeast part to Mr. Rooney, who was operating a tavern and filling station on it. Plaintiff intended to retain the part of the tract on the east side of Highway 71 but wanted to sell the remaining 53 acres on the west side of the Highway and talked to Bradley about it. Plaintiff had an offer from Rooney of $150 per acre for ten acres adjoining his tract and an offer of $5,000 from Mr. Walter Page (another real estate dealer) for the whole 53 acres. In July 1954, at Bradley's office, she agreed to a price of $5,300; and signed a contract to sell it for that amount. There is a sharp conflict in the evidence as to what occurred in making that contract.

According to plaintiff, she talked to Bradley about dividing the land into smaller tracts and she had a survey made. He thought at first it might be done but later said it was not advisable because of the lay of the land. Thereafter, in his office, Bradley told her he had a buyer and handed her a contract all drawn up with the signature 'Mary C. Reese' on it. Plaintiff asked about selling part to Rooney but Bradley said Mrs. Reese wouldn't take any of it if she couldn't get it all. Plaintiff signed the contract and took a copy to her lawyers. When it was learned that the county would not build a road along the north side of the tract as expected (and stated in the contract) there were negotiations about an easement through the tavern property. This matter was finally settled by including in the deed a 30 foot strip for access to that part of the 53 acres. Plaintiff said she asked Bradly why she could not meet the buyer and he said she lived out of town; 'but when she comes to town, he says, she stopped at the Rockhill Manor.' Mrs. Reese, about 84 years of age at the time, was the mother of Mrs. Hanlon, who was employed in Bradley's office, and her name had been signed to the contract by Mrs. Hanlon. Plaintiff said she had seen Mrs. Hanlon in the office but did not know her name or who she was. The deal was closed in plaintiff's lawyers' office, September 13, 1944, the papers having previously been sent to Bradley's office for Mrs. Reese to sign. Bradley delivered his company's check for $1,560 ($1,800 less commission with tax adjustments) on which was marked 'Payment Reese Escrow Acct.' He also delivered a $3,500 note and trust deed signed by Mrs. Reese; the note providing for principal and interest payments on February 10th and August 10th of each year. The deed from plaintiff to Mrs. Reese was delivered to Bradley and recorded. However, Mrs. Reese had previously executed a deed to Mrs. Hanlon for this property, which was never recorded. Mrs. Reese died before the trial of this case and Mrs. Hanlon, as her sole heir, inherited her property.

According to Bradley and Mrs. Hanlon, plaintiff fixed a price of $5,300 for the 53 acres, while in his office, and he said to Mrs. Hanlon in the presence of plaintiff: 'Do you think your mother would be interested in buying this piece of property?' They said that, after further discussion in plaintiff's presence, Mrs. Hanlon said she would talk to her mother about it. Mrs. Reese lived in Wellsville, Kansas, and they said she did go with Mrs. Hanlon to look at the land; and that after they had done so, plaintiff was told that Mrs. Reese would buy it. Mrs. Hanlon signed the name of Mrs. Reese to the contract but said plaintiff was present at the time. Plaintiff denied that there was ever any conversation in her presence to indicate that Mrs. Reese was Mrs. Hanlon's mother. Plaintiff also had evidence of four other transactions handled by Bradley afterwards in which conveyances were made to or by Mrs. Reese.

It seems apparent from the specific findings the court made and the result reached, that defendants' version was not accepted. It likewise seems apparent from the whole record that plaintiff was never told who Mrs. Reese was or where she lived. The deed to her, executed by plaintiff, states the grantee to be 'Mary C. Reese of Jackson County, Missouri.' This same residence is shown on deeds to or from her in the other subsequent transactions. The first information to plaintiff that Mrs. Reese was Mrs. Hanlon's mother, definitely shown by the record, was in a September 1946 letter sending a check signed by Mrs. Hanlon for the interest and principal payment then due. Even that letter did not show the actual residence of Mrs. Reese, but indicated she had a Kansas City address, and did not show that Mrs. Hanlon had any connection with the Bradley Company. This letter and two following it were on blank stationery. The rule that a broker employed to sell property cannot sell to himself extends also to employees or near relatives, Curotto v. Hammack, 362 Mo. 457, 241 S.W.2d 897, 26 A.L.R.2d 1302, annotation 26 A.L.R.2d 1307; 12 C.J.S., Brokers, Sec. 42, page 103; 2 Am.Jur. 208, Sec. 257; Restatement of Agency, Sec. 389; as to agents selling for their own benefit see Utlaut v. Glick Real Estate Co., Mo.Sup., 246 S.W.2d 760 and cases cited. This rule should be especially applicable in this case where the testimony of Bradley was that, since he paid Mrs. Hanlon a very small salary, if he got a chance to make her some money on a deal he did so. (Mrs. Hanlon said she used her mother's money 'seeing that if we could make a little money on it, and if an investment came in, I was there in the office, we could use the money for investments with the consent of Mr. Bradley that the property was good.') Furthermore, at all times, Mrs. Hanlon was an actual owner, holding a deed for the 53 acres made to her by her mother. Thus it is immaterial to plaintiff's right of relief whether or not Bradley had an actual interest in the transaction.

Defendants' explanation did not convince the trial court and it is certainly far from convincing. Mrs. Reese was 89 when she died in 1950. She was deaf and when her deposition was taken in 1947 she only gave such answers to questions concerning the amount of money she had as were suggested to her by Mrs. Hanlon. However, she stated without prompting that she owned the house in Wellsville where she lived and also owned some town lots there. Mrs. Reese and Mrs. Hanlon also owned...