Dierks & Sons Lumber Co. v. Morris

• Decision Date: 06 June 1966
• Docket Number: No. 24323,24323
• Citation: 404 S.W.2d 229
• Court: Missouri Court of Appeals
• Parties: DIERKS & SONS LUMBER COMPANY, Appellant, v. Keith MORRIS et al., Respondents.

Page 229

404 S.W.2d 229

DIERKS & SONS LUMBER COMPANY, Appellant, v.Keith MORRIS et al., Respondents.

No. 24323.

Kansas City Court of Appeals, Missouri.

June 6, 1966.

Gene A. DeLeve and Casemore, Berman & DeLeve, Kansas City, for appellant.

Thomas M. Sullivan, Downey, Sullivan & McCormick, Kansas City, for respondent.

L. F. COTTEY, Special Judge.

Plaintiff is a corporation engaged in the manufacture and sale of prefabricated houses.It sold such a house for erection at 207 Morningside Terrace, Richmond, Missouri, at an agreed price of $7,250.16, and, when the account went unpaid, brought this action to impress a materialman's lien on the premises.Although there are a number of defendants with peripheral interests in the litigation, our principal concern is with but two of them, the Morrises, since it is conceded that the controlling issue is whether Mrs. Morris 'had constituted her husband her agent, to act for her as well as for himself, in his dealings relating to the erection of the house upon their jointly owned property.'It is not contended that the alleged agency was an express one.On the contrary, plaintiff's position is that it arose by implication of law, or, to the same end, that is existed in legal effect by reason of Mrs. Morris's estoppel to deny it, or by reason of her ratification of her husband's acts.The trial judge, to whom the cause was submitted without a jury, ruled that issue adversely to plaintiff.We have reviewed the record in conformity with CivilRule 73.01(d), V.A.M.R. and have concluded that the alleged agency, if it ever existed in fact or in legal effect, must depend for its proof on the following circumstances.

DefendantKeith Morris had for some time been engaged as a 'contractor' in the business of acquiring unimproved lots and erecting prefabricated homes thereon for resale.Mrs. Morris's occupation was described simply as 'housewife'.She had no investment in her husband's business and no role in its management, so far as the record discloses.

Sometime prior to May 19, 1962, Mr. Morris contracted to buy the lot in Richmond for $1,000, and thereafter accepted a deed to it in his name and his wife's as tenants by the entirety.Mrs. Morris did not participate in those negotiations.Promptly thereafter Mr. Morris placed a written order with plaintiff for the house in question, reciting that it would be erected on the newly acquired lot.He described himself in that order as the 'buyer', and directed that the house components be delivered to him at the building site.Mrs. Morris did not sign the order and is nowhere mentioned in it.All of plaintiff's records in connection with the transaction were carried in the name of Mr. Morris alone.

At about the same time Mr. Morris made application for an FHA insured 'end loan' on the property; that is, a loan to be made when the improvement was completed.He described himself in that application as the 'builder'.Mrs. Morris neither signed nor was mentioned in it; although some ten months later, when the loan was actually made, she joined her husband in executing the note and deed of trust securing it.

Meanwhile, it was necessary to obtain interim financing of the project in order for construction to proceed.Accordingly, Mr. Morris applied to Home Savings & Loan Association of Hardin for a $10,000 'construction loan' on the premises.Mrs. Morris signed that application with him, and, when it was approved, both of them signed the note and deed of trust securing it.The proceeds of the loan were retained by the lender, however, to be paid out on Mr. Morris's requisition from time to time as construction progressed; and over a period of several months the money was paid out in that fashion to various workmen and suppliers, including the seller of the lot, until the entire proceeds were exhausted together with an additional 'advance' of $1,000.Mrs. Morris did not participate in any way in those disbursements; the lender, in all aspects of the transaction, 'dealt exclusively with Keith Morris'.Unfortunately, none of the money was ever paid to plaintiff, for reasons now to be examined insofar as the record supplies them.

On the day following approval of the construction loan, the order previously placed by Mr. Morris came to the attention of plaintiff's credit manager.That officer instructed an employee to find out 'how the package would be paid for'.The employee called Home Savings & Loan Association, identified the lot by number but not the owners by name, advised the Association that plaintiff was furnishing the house to be erected on it, and inquired if a construction loan for the project had been made.The answer was that it had.Only that and nothing more.No inquiry was made and no information divulged as to the amount of the loan, or by whom it had been negotiated, or whether its terms included a provision for the payment of plaintiff's account, so far as the record discloses.Only the skeletal fact of the loan's approval was reported to the credit manager.He fleshed it out with imagination: he'assumed' that the account would be paid from the loan proceeds, and he'relied' on that assumption in accepting the order on plaintiff's behalf.The assumption turned out badly.But neither its inspiration nor its disappointment can be ascribed to Mrs. Morris.She did not induce it by any act on her part of which plaintiff had knowledge, and she did nothing to frustrate it.The fact is that plaintiff shipped the first load of materials on August 20, 1962, and, although the account became delinquent by its terms twenty days thereafter, continued to make further shipments to Mr. Morris over a period of more than seven months without ever inquiring as to the status of the loan fund, or requesting payment from it, until it had been exhausted by the intervening requisitions drawn against it.It will not offend the precepts of experience to...