Craig v. Rhodes

• Decision Date: 10 October 1927
• Docket Number: No. 26250.,26250.
• Citation: 298 S.W. 756
• Court: Missouri Supreme Court
• Parties: CRAIG et ux. v. RHODES.

298 S.W. 756

CRAIG et ux. v. RHODES.

No. 26250.

Supreme Court of Missouri, Division No. 2.

October 10, 1927.

Appeal from St. Louis Circuit Court; A. Frey, Judge.

Action by John Craig and wife against M. C. Rhodes, doing business as the Rhodes Realty Company. From a judgment in favor of defendant, plaintiffs appeal. Affirmed.

Albert E. Hausman, of St. Louis, for appellants.

Hensley, Allen & Marsalek, of St. Louis, for respondent.

DAVIS, C.

This is an action for money had and received. The petition concretely alleges that defendant, while representing plaintiffs as agent, concealed, upon settlement, that he had received and retained, out of the purchase price of real estate sold by them, the sum of $8,500, for which sum, together with a commission of $2,000 paid to him and thus forfeited, in good conscience and of right defendant ought to account to plaintiffs. Upon the waiver of a jury, the cause was submitted to the court, resulting in judgment for defendant, plaintiffs appealing therefrom.

A perusal of the evidence warrants the following finding of facts. Prior to June 11, 1923, plaintiffs possessed in fee contiguous parcels of real estate, in the city of St. Louis, on which two apartment buildings were erected, lying at the northeast corner of Waterman and Clara avenues. The parcel fronting Waterman avenue carried a 12-family apartment building and was burdened with a first deed of trust for $34,750, and a second for $8,550. The parcel facing Clara avenue held a 3-family apartment building and was subject to a first deed of trust for $10,500, and a second for $5,500. Plaintiffs were represented by defendant in the acquisition of both parcels, the evidence developing that in February, 1923, the Clara avenue frontage was acquired, at which time defendant, in order to provide funds to enable plaintiffs to purchase same, rearranged and refinanced the deeds of trust upon both parcels.

In April, 1923, one Giles, a real estate agent, without the knowledge of defendant, communicated with plaintiff John Craig, by telephone, relative to the sale of the parcels, thereupon going to his home to see him. It appears from plaintiffs' evidence that Craig informed Giles that defendant was handling the property, referring Giles to defendant, but he further advised that he wanted $110,000 for the property, Giles responding, when informed of the aggregate of the four mortgages, that to handle a sale the mortgages were not sufficient in amount, and that the properties would have to be refinanced and new mortgages executed. Giles testified that he told plaintiffs it was impossible to sell the property with the two small first deeds of trust on the parcels, suggesting that the parcels be subjected to a $75,000 first deed of trust, as he had in mind a client with only $15,000 in cash, and that plaintiffs would have to take back a $20,000 second deed of trust; that upon those terms he could get $110,000. Following the conversation at Craig's home, both Craig and Giles separately visited defendant at his office in regard to the subject, subsequently seeing him frequently. The matter dragged on, Giles and defendant endeavoring to ascertain whether the refinancing of the deeds of trust was feasible. It appears that Craig was unwilling to obligate himself to pay a commission of $3,750 on a $75,000 loan, as the deal might fall through. It developed that the owners of the four existing mortgages had to be located, and penalties for taking them up before they were due had to be paid as well as the commission on the $75,000 loan. Giles and defendant continued working on the deal, and Craig and defendant continued conferences and discussions. Plaintiffs finally decided to sell the properties for $103,000, and pursuant thereto, on May 14, 1923, entered into a written contract to sell for that price to one Seeley, a straw man furnished by Giles. The contract provides that the sale is to be subject to the four deeds of trust, aggregating $59,300, but that the seller agrees to permit the placing of a $75,000 loan thereon, and to take a $20,000 second deed of trust, the balance to be paid in cash, with a further provision for a $2,000 commission to defendant for negotiating loans.

The record evidence in defendant's behalf develops that the contract to sell for $103,000 resulted from the fact that commissions, expenses, and penalties were involved In refinancing the properties to be sold to Giles' customer, with respect to which plaintiffs were unwilling to become obligated, preferring to take a net price and to permit Giles and defendant to attend to the finances and the disposition of the property and take whatever compensation for their work an excess over the net price gave them. Giles was planning to ultimately sell to one Yawitz, his customer, who was willing to pay $110,000 for the properties, provided they could be subjected to a $75,000 first and a $20,000 second deed of trust. Giles and defendant, co-operating, obtained the promise of a $75,000 loan from a real estate firm, to be secured by a first deed of trust, agreeing to a commission of $3,750, and arranging to take up the four deeds of trust with accrued interest and penalties. It seems that Giles was unwilling to agree upon the purchase price of $103,000 for the parcels until he induced Yawitz to increase his offer for the properties to $111,500. Thereupon a contract was executed by plaintiffs and Seeley whereby plaintiffs agreed to sell the properties for $103,000. Subsequently Seeley and Yawitz entered into a contract for the sale of the properties to Yawitz for $111,500, subject to a first deed of trust for $75,000 and a second for $20,000, the balance to be paid by Yawitz in cash. At the consummation of the transactions, however plaintiffs executed a warranty deed direct to Yawitz.

The deal was closed June 11, 1923, at defendant's real estate office, there being present Messrs. Craig, Rhodes, Giles, Yawitz, and Hauschulte, the latter providing and loaning the amount of $75,000, secured by a first deed of trust. Mr. Hauschulte had five checks, four checks being for the respective sums required to be paid to take up the four deeds of trust then on the properties, with accrued interest and penalties, and the fifth check being the balance due plaintiffs, the difference between the four loans then on the properties, interest, and penalties and the $75,000 loan, less a commission of $3,750 due Hauschulte for making the loan, and less recording fees and revenue stamps.

The defendant stated that he explained the entire details of the transaction to Craig, informing him that it would be satisfactory for him to pay the commission of $2,000 mentioned in the contract signed by Craig to cover prior services of defendant and services in connection with finding the owners of the deeds of trust and financing the deal, and that he was to get his commission for making the sale from Giles. He told Craig that he was getting a commission in addition to the commission of $2,000 mentioned in the contract, and that the building was selling for $111,500, Craig replying that he did not care what the building was selling for. Craig, in the early part of his testimony, denied knowledge of the various checks that passed when the deal was closed in defendant's office. The testimony develops, however, that, in addition to the checks passed and delivered by Hauschulte, Yawitz delivered to Craig a check for $9,000 and that, in order to consummate the deal, Giles made a loan of $6,500 on the properties, secured by a third deed of trust, giving a check for that sum to defendant for plaintiffs' benefit, all of...