Ebel v. Roller

• Decision Date: 08 October 1929
• Docket Number: No. 20813.,20813.
• Citation: 21 S.W.2d 214
• Parties: EBEL v. ROLLER et al.
• Court: Missouri Court of Appeals

21 S.W.2d 214

EBEL v. ROLLER et al.

No. 20813.

St. Louis Court of Appeals. Missouri.

October 8, 1929.

Rehearing Denied November 8, 1929.

Appeal from St. Louis Circuit Court; George E. Mix, Judge.

"Not to be officially published."

Suit by Anna Ebel against Louis John Roller and wife and Vernon Laux and others. Decree for plaintiff, and defendants named appeal. Motion to dismiss appeal overruled, and judgment reversed, and cause remanded.

Christian F. Schneider, of St. Louis, for appellants Roller.

Leon M. Feigenbaum, of St. Louis, for appellant Laux.

James H. Linton and Arnot L. Sheppard, both of St. Louis, for respondent.

BENNICK, C.

This is a suit in equity growing out of the alleged fraud of the defendants in connection with the exchange of certain real property between themselves and plaintiff. Anna Ebel, the plaintiff, is the widow of Charles A. Ebel, who died shortly subsequent to the consummation of the transaction involved in this suit. Of the defendants, Louis John Roller and Nancy Jane Roller are husband and wife; Vernon Laux is the real estate agent who purported to represent all parties in the deal; and Frank Laux is the husband of Nellie Laux, and was the trustee for her in a second deed of trust placed against the property conveyed by plaintiff to the Rollers.

In her petition, plaintiff alleged that on March 18, 1926, she and her husband were the owners by the entirety of certain real property in the city of St. Louis, known as 1542-44 Lafayette avenue, subject to a deed of trust for $6,500; that on said date she and her husband conveyed said property to the Rollers in pursuance of a contract under the terms of which the latter agreed to and did convey to her and her husband as tenants by the entirety a certain lot in Gravois-Loughborough place in the city of St. Louis; and that in addition to such conveyance she and her husband received from the Rollers the sum of $1,500 in cash, and 18 promissory notes numbered from 7 to 24 inclusive, executed by one Martin P. Sherman, of the total face value of $2,160, and secured by a second deed of trust subject to a prior deed of trust for $5,000 on certain property known as 7 Market street, in the city of St. Louis.

Plaintiff further stated that the real estate conveyed by her and her husband to the Rollers was of the reasonable value of $11,500; that the reasonable value of the real estate she and her husband acquired in the exchange was $1,120; and that the promissory notes executed by the said Sherman, and the second deed of trust given to secure the same, were all wholly worthless.

Plaintiff further alleged that prior to the consummation of the transaction she and her husband inquired of and were assured by the Rollers that the said Sherman was financially responsible, and that notes 1 to 6 had been paid by him at maturity, all of which representations were false, and were known to be false, and were relied on by plaintiff and her husband to their damage.

It was further alleged that Vernon Laux, the real estate agent, acting in the capacity of agent for his parents, Frank and Nellie Laux, after the transaction between plaintiff and the Rollers had been completed, made an additional loan of $2,000 covered by a second deed of trust on the Lafayette avenue property, although he knew that the Sherman notes and the deed of trust on the Market street property were worthless; that he concealed his knowledge of such facts from plaintiff and her husband, although he was acting as their agent in the transaction, and occupied a fiduciary relationship to them; and that at the maturity of the several notes, Sherman, the maker, could not be found, nor had any of the notes been paid.

Plaintiff further averred that the Market street property was sold at a foreclosure sale under the first deed of trust, and that her second deed of trust was thereby rendered of no value; and that, by reason of the placing of the deed of trust for $2,000 against the Lafayette avenue property, there was a total charge against it for $8,500, together with accrued interest.

The prayer of the petition was that the court set aside the conveyance from plaintiff to the Rollers, the second deed of trust held by defendants Laux, and the conveyance from the Rollers to plaintiff; for an accounting between the parties; and for such other and further orders in the premises as to the court should seem meet and proper.

Separate answers were filed by the defendants, each in the form of a general denial.

After a hearing upon the issues joined, the court rendered its decree, finding that defendants Frank Laux and Nellie Laux were in no wise concerned in any of the fraudulent transactions shown by the evidence, but that the fraud upon plaintiff had been perpetrated by defendants Louis John Roller, Nancy Jane Roller, and Vernon Laux; and that, inasmuch as the title to the real property involved in the suit had meanwhile become vested in the hands of third parties who were innocent purchasers for value, it was impossible for the parties to reconvey to each other the property owned by them respectively at the time the contract for the exchange thereof was executed, in consequence of which the court found it necessary, in lieu of the grant of purely equitable relief, to render a money judgment in favor of plaintiff and against the defendants to be charged with liability. Accordingly, the court rendered a judgment in favor of plaintiff, and against the Rollers, in the sum of $2,569.85, representing the face value of the Sherman notes, together with accumulated interest thereon; and in favor of plaintiff, and against defendant Vernon Laux, for the sum of $385.05, the amount of the commission, with interest, paid him by plaintiff for his services in connection with the transaction. From the judgment so rendered defendants Louis John Roller, Nancy Jane Roller, and Vernon Laux, after the filing of unavailing motions for a new trial, have perfected separate appeals to this court, which, by agreement of counsel, have been duly consolidated.

Generally speaking, the evidence for plaintiff bore out the allegations of her petition. There was some dispute between the parties as to the value of the Lafayette avenue property conveyed by plaintiff to the Rollers, but not only do we have the testimony of plaintiff herself that it was reasonably worth the sum of $11,500, but also that of defendant Laux, who acted as the agent for both sides in the transaction, that it was valued at that figure in the trade. It should be further noted that the series of notes which were transferred to plaintiff were of the aggregate value of $2,359.75, and were so accepted by plaintiff in the exchange.

The evidence of the record before us seems decidedly to support plaintiff's claim that at the time the deal was consummated between herself and the Rollers, the latter, as well as defendant Laux, assured her that the maker of the notes was solvent, and that Mrs. Roller went so far as to advise plaintiff that the first six of the notes had already been paid. As a matter of fact, however, they had not been paid, and Mrs. Roller admitted on the stand that she canceled three of them on the day the deeds were executed for the very reason that they were past due and had not been collected. The evidence clearly indicates that both plaintiff and her husband relied upon the representations made to them in regard to the value of the notes, and it was the fraud of defendants in this particular respect which formed the basis for the decree rendered by the lower court.

It was further shown that the Market street property was of slight value beyond whatever value the land itself may have had, and that the sum realized at the trustee's sale was inadequate to satisfy even the first deed of trust, thus rendering plaintiff's second deed of trust wholly worthless.

The evidence also disclosed that defendant Laux collected and received commissions from all of the parties, having been paid a total sum of $346 by plaintiff; that he had had a prior acquaintance and seemingly some business connection with Mrs. Roller; and that, when Mrs. Roller learned that the Sherman notes were not being collected by the bank with which she had pledged them as security for a loan made by the bank to her, Laux had gone to the bank and paid her indebtedness, and had taken up the notes in her behalf.

The evidence for defendants was largely a denial of any representations to plaintiff as to the solvency of the maker of the notes, and further tended to show that the Lafayette avenue property was worth considerably less than plaintiff claimed, and that the Market street property was a valuable piece of real estate, although it was vacant at the time of the trade and had been for years prior thereto.

While he disputes most vigorously the propriety of the finding that his clients were guilty of any fraud in connection with the transaction, counsel for the Rollers insists in support of a reversal of the judgment that, even though the misrepresentations relied upon were made, yet the facts and circumstances of the case are such as to preclude relief to plaintiff on the equity side of the court. We have given careful thought to the suggestions of the respective parties upon the merits of this question, and, while we are frank to confess that the case is by no means an easy one for determination, we are nevertheless brought to the conclusion that plaintiff's remedy (assuming her to have suffered damage, as to which the evidence on this hearing seems to preponderate) is at law, and that the decree rendered was erroneous, and may not be allowed to stand.

There can be no doubt about the fact that the petition upon its face stated a clear case for the interposition and aid of a court of equitable jurisdiction, inasmuch as the relief...