Cossairt v. Reich, 49746

• Decision Date: 09 September 1963
• Docket Number: No. 2,No. 49746,49746,2
• Citation: Cossairt v. Reich, 370 S.W.2d 291 (Mo. 1963)
• Parties: Karol COSSAIRT and Gloria Cossairt, his wife, Appellants, v. Marie REICH and Frue Reich, Respondents, M. F. A. Mutual Insurance Company, Respondent
• Court: Missouri Supreme Court

Page 291

370 S.W.2d 291

Karol COSSAIRT and Gloria Cossairt, his wife, Appellants, v.Marie REICH and Frue Reich, RespondentsM. F. A. Mutual Insurance Company, Respondent.

No. 49746.

Supreme Court of Missouri, Division No. 2.

Sept. 9, 1963.

Green & Green, H. D. Green, West Plains, for appellants.

R. D. Moore, A. W. Landis, West Plains, for respondents.

STOCKARD, Commissioner.

This is a suit by the purchaser for specific performance of a contract for the sale of real estate.From an adverse judgment plaintiffs have appealed.Title to real estate is involved within the meaning of Art. V, Sec. 3, Constitution of Missouri, V.A.M.S. Barr v. Snyder, Mo., 294 S.W.2d 4.

In June 1961respondentsFrue Reich and his wife Marie Reich listed their 334 acre Howell County farm for sale with the United Farm Agency at West Plains, Missouri, of which Jack Sayre was agent and Charles Franks was salesman.Associated with Mr. Sayre was his wife, Marie Sayre, who was licensed as a real estate agent.The terms of the listing included the requirement that one half of the purchase price, or $10,000, be paid at the time of the sale.The method of and time for payment of the balance was to be arranged.Shortly thereafter Frue Reich went to Idaho to work.In the early part of July Mr. Sayre showed the Reich farm to Mr. and Mrs. Karol Cossairt, residents of Indiana, and a proposed contract of sale was drawn by Charles Franks on terms requested by the Cossairts which were different from those in the listing in at least two respects.Pursuant to this proposed contract the buyers were to receive one half the corn crop, and instead of a down payment of $10,000 the buyers would pay $3,000 and assume a $7,000 F.H.A. mortgage.Mrs. Reich was contacted, and a telephone call was made to Frue Reich at Rupert, Idaho.According to Mr. Reich, Mr. Franks told him that he had 'what you want' in a purchaser except that as part of the transaction he wanted one half of the corn crop.According to Mr. Franks he told Mr. Reich that he had an offer of '$20,000; $3,000 in cash down, assume F.H.A. loan and him to carry the balance at $2,000 a year including six per cent interest,' but there was no discussion about the purchaser assuming the mortgage.Mr. Franks further testified that he read the proposed contract over the telephone, but Mr. Reich denied this.Mr. Reich refused to include one half of the corn crop in the sale.During the conversation he told his wife that if she could get $10,000 down she should sell the farm; otherwise she was not to sell.The following day, which apparently was July 6, Mr. Sayre and Mr. Franks went to Mrs. Reich and offered to reduce the real estate commission from $2,000 to $1,500 (the commission was 10% of the sale price) if the sale could be completed with the purchaser receiving one half of the corn crop.This would have resulted, in effect, in Mr. and Mrs. Reich selling one half of the corn crop for $500.Without reading all of the proposed contract of sale and without again calling Mr. Reich, Mrs. Reich signed the proposed contract and placed her husband's name on it.No issue is made concerning her authority to do so.

There is no question but that both Mr. Sayre and Mr. Franks knew and understood that Mr. and Mrs. Reich wanted to receive $10,000 as a down payment, and that the listing called for such payment.Mr. Franks said he drew the proposed agreement and that he knew it was not drawn according to the terms of the listing.Mr. Sayre's position was that in his opinion the payment of $3,000 down and the assumption by the purchaser of the $7,000 F.H.A. mortgage constituted 'paying half down.'Mrs. Reich testified that when Mr. Sayre and Mr. Franks came to see her on July 6, Mr. Sayre asked her if what she and Mr. Reich wanted was to pay off the F.H.A. loan and then take a first mortgage and she said it was.However, Mr. Sayre made no explanation to her of what was meant by the purchaser assuming the F.H.A. mortgage, and Mr. Franks testified that the meaning of this provision was not discussed because shs did not 'question what 'assume' means.'When asked on cross-examination who was to carry the first mortgage Mr. Sayre said 'there wasn't to be any first mortgage.It was to be sold on a contract for a deed.'What he meant by this is not clear because the F.H.A. mortgage would have constituted a 'first mortgage' even if no second mortgage was to be given.The terms of the contract of sale are equally confusing.It was there expressly provided that 'all deferred payments, not already secured by deed of trust or mortgage, are to be evidenced by note or notes signed by second party[the Cossairts], secured by mortgage or deed of trust on said real estate with interest from date of deed at the rate of 6% per annum,' and that 'on receiving such payment' the sellers should 'deliver, to said [buyers] * * * a proper deed containing a general warranty and the usual full covenants for the conveying and assuring to them merchantable title to said premises, free from all encumbrances except those mentioned herein.'It is not clear what was meant by 'such payment,' but if there was to be a deed of trust executed by the buyers to the sellers, as the above language clearly provides, the reference must have been to the payment of the $3,000.However, at another place the contract provided that a 'deed shall be delivered' on October 5, 1961'at the office of the 1st National Bank in the City of West Plains, Mo.'It did not state to whom delivery was to be made or for what purpose, and there was no escrow agreement in the contract.

About two weeks after Mrs. Reich signed the contract of sale she first received a copy of it, and after reading it and perhaps receiving legal advice as to its effect and meaning, but this is not clear, she notified Mr. Sayre and Mr. Franks that it was not drawn up the way she and her husband had wanted it.Mr. Sayre told her, according to Mrs. Reich, that she was getting upset over nothing.That weekend she called her husband in Idaho, and he then called Mr. Sayre and told him that the contract was not drawn the way he had understood it, and that he was not going to sell the property.

On September 18 there was another telephone call made to Frue Reich.Present at the West Plains end of the conversation were Mr. Franks, Mr. and Mrs. Sayre, Mr. and Mrs. Cossairt and Mrs. Reich.This telephone conversation lasted almost an hour, and there is much dispute in the testimony not only as to the subject matter of the conversation but as to what was said.According to Mr. and Mrs. Reich they were protesting the entire transaction.Mrs. Reich told her husband that 'they are all jumping on me,' and there was testimony to the effect that Mr. Sayre was threatening to sue the Reichs if they did not go through with the sale, that some threat or statement was made that Mrs. Reich 'could be gotten for forgery,' and that Mrs. Reich was upset and crying.Mr. Franks testified that 'I told him [Mr. Reich] that she[Mrs. Reich] signed the contract and both sides were expected to live up to it just the same,' apparently referring to the fact that Mr. Reich told him that 'he didn't like what was going on.'According to Mr. Sayre, however, the entire conversation pertained to a proposed change in the date for the purchasers to take possession.He said that he knew of no misunderstanding about the terms of the contract of sale.Notwithstanding the admitted terms in the listing, and that he attempted to justify the terms of the contract on the basis that it did in fact provide for a down payment of one half the purchase price, he testified that Mrs. Reich never told him that she and her husband wanted one half of the purchase price as down payment.He also testified that during the telephone conversation Mrs. Reich did not cry, that there was no threat of a lawsuit, and that he knew nothing about a threat of a charge for...