Euneau v. Rieger

• Decision Date: 30 June 1891
• Parties: Euneau v. Rieger et al., Appellants
• Court: Missouri Supreme Court

16 S.W. 854

105 Mo. 659

Euneau v. Rieger et al., Appellants

Supreme Court of Missouri, Second Division

June 30, 1891

Appeal from Jackson Circuit Court. -- Hon. R. H. Field, Judge.

Affirmed.

C. O Tichenor for appellants.

(1) Plaintiff can only recover upon the allegations in his petition. It is said in N. B. & C. R. & L. Co. v Conybeare, 9 H. L. C. 724: "But it is most essential, in the administration of justice in a court of equity, that the nature of the case, when it is constituted of fraud, should be most accurately and fully stated in the bill of plaintiff. It is impossible to give relief merely upon a general charge that something has been done by a party, or has been obtained from a party, under the influence of fraud. It must be shown in what the fraud consists, and how it has been effected. And, if the fraud is alleged to consist in certain representations which were untrue, and other facts are relied upon for the purpose of showing that they were untrue, those facts must undoubtedly constitute a part of the case made by the plaintiff." (2) This case stands solitary and alone in this, that the plaintiff had to be bought to bring it. As a rule, men are very willing to take the chances of litigation if they are furnished lawyers and are protected against costs. A person engaged in fomenting suits at common law was a criminal (Duke v Harper, 66 Mo. 60), and, under our statutes, to be thus employed is a crime, 1 R. S., sec. 3713, p. 892. (3) In Dobson v. Racy, 8 N.Y. 216, it was held that one to whom a power of attorney to sell was given could buy with the assent of the owner; to do so, he can convey, under the power of attorney, to a third party, who conveys to the agent. (4) A mere suspicion of fraud is not sufficient to set aside a deed. United States v. Hancock, 133 U.S. 197. The burden was on plaintiff to show fraud, "and, to justify a cancellation of the deed, the evidence adduced to establish the fraud must be clear and convincing." Evans v. David, 98 Mo. 411. As to the weight to be given to the evidence of values, see Boyd v. Wyly, 124 U.S. 98.

T. B. Buckner also for appellants.

(1) Sales of property made with full knowledge of all the facts by the vendor cannot be recovered back in equity. (2) A principal can sell his property to his agent, and such sale cannot be avoided in equity when the agent has been guilty of no fraud inducing the sale. (3) If a principal with full knowledge of all the facts acts on his own judgment and against the advice of his agent and effects a sale, even to his agent, then he cannot avoid the sale in equity, when the agent has been guilty of no fraud, simply because he afterwards finds it to his advantage to do so. (4) When a principal has a full knowledge of all the facts and makes a sale to his agent, or, after having received full knowledge of all the facts, receives purchase money, he thereby ratifies and confirms his previous acts. (5) Equity will not grant relief unless the plaintiff comes into court with clean hands. (6) The suit must be prosecuted in the name of the real party in interest. In this case McElroy was, and is, the real party in interest. (7) The agreement between McElroy and Euneau was a champertous contract. "A bargain with the plaintiff compum partire to divide the land sued for between them if they prevail at law; whereupon the champerter is to carry on the suit at his own expense." 4 Bl. Com. 135. The complainant in this case is not only to suffer no loss in case of failure, but is to come out of the conflict with $ 1,000 ahead! (8) When a champertous agreement exists, and it is brought to the attention of the chancellor trying the case, the complainant's bill should be dismissed. Barker v. Barker, 14 Wis. 142; Allord v. Launrande, 29 Wis. 502; Andmos v. Thayer, 30 Wis. 228; Weedon v. Wallace, 19 Tenn. 286; Webb v. Armstrong, 24 Tenn. 378; Hunt v. Lyle, 16 Tenn. 142; Greenman v. Cohee, 61 Ind. 201.

Peak, Yeager & Ball for respondent.

(1) The contract between McElroy and the plaintiff, although it may have been champertous in its nature, should have been excluded by the court. It does not excuse, palliate nor explain the conduct of defendant, and cannot impair the rights of the plaintiff. The plaintiff's right, which he is attempting to enforce, is not infected by the champertous contract, and, therefore, the contract should not be considered by this court in determining the questions involved here. Pike v. Martindale, 91 Mo. 268; Bent v. Priest, 86 Mo. 475-490. (2) There can be no doubt, from all the evidence in this case, that the defendant, L. F. Rieger, was the real purchaser of the property under the contract of sale between the plaintiff and Mills of date March 14, 1887. An agent or trustee cannot avail himself of any advantage of a contract made with his principal or cestuique trust, unless he has observed the utmost candor, honesty and fair dealing. Bogie v. Nolan, 96 Mo. 85; Bridewell v. Swanks, 84 Mo. 456; Casperi v. Church, 82 Mo. 649; Miller v. Simonds, 72 Mo. 669; McClure v. Lewis, 72 Mo. 326; Rankin v. Patten, 65 Mo. 378; Garvin v. Williams, 50 Mo. 206; Street v. Goss, 62 Mo. 226; Blair v. Shaeffer, 33 F. 218. (3) The court was more lenient in its judgment than the conduct of the defendant deserved. The decree provides for the repayment to the defendant of all moneys expended by him in the repair of the building. Such a provision would have been proper if the defendant had been innocent of fraud. Shroyer v. Nickell, 55 Mo. 264. (4) In this case, where the defendant was guilty of practicing fraud and deception upon his principal, the court would have been justified in refusing to allow him any compensation for moneys expended in repairing the building and stripping him of all benefits derived from his contract. Blair v. Shaeffer, 33 F. 218. (5) The facts in this case were found by the chancellor in favor of the plaintiff. The credibility of the witnesses could best be determined by the chancellor, who heard them testify; and the supreme court will defer somewhat to his finding. Cox v. Cox, 91 Mo. 71.

Wash Adams also for respondent.

(1) The record discloses that the agent Rieger, by using one Mills as an ostensible purchaser, has obtained the property of his principal at about one-third of its real value. (2) The authorities seem unanimous in refusing to permit an agent to enter into a contract in which his own interest may clash with that of his principal. Pomeroy Eq. Jur., sec. 902; Grover v. Arnes, 9 F. 356. (3) The defense of champerty or maintenance at law or in equity is only available when the champertous contract itself is sought to be enforced. The existence of a champertous agreement between the plaintiff and any other person other than the defendant is no defense to a pending action. Bent v. Priest, 86 Mo. 475; Pike v. Martindale, 91 Mo. 268; Hilton v. Goods, L. R. 4 Eq. Cas. 432; Elborough v. Ayers, L. R. 10 Eq. Cas. 367; Knight v. Bowger, 2 De G. & J. 446; Whitney v. Kirtland, 27 N.J.Eq. 333; Robinson v. Beale, 26 Ga. 17; McMullen v. Guest, 6 Tex. 275; Fetrow v. Merriweather, 53 Ill. 275; Railroad v. Botler, 7 Brad. (Ill.) 625; Gilbert v. Holmes, 64 Ill. 548; Torrence v. Shed, 112 Ill. 466; 21 Cent. L. J. 37; Burns v. Scott, 6 S.Ct. (U. S.) 865; Boone v. Chiles, 10 Pet. (U. S.) 177; Knadler v. Sharp, 36 Ia. 232; Allison v. Railroad, 42 Ia. 274; Small v. Railroad, 55 Ia. 582; 8 N.W. (U. S.) 437; Ross v. Railroad, 55 Ia. 691; Timont v. Railroad, 28 N.W. 612; Courtwright v. Burns, 3 McCrary, C. C. 60; Lackland v. Smith, 7 Mo.App. 593, Million v. Ohnsorg, 10 Mo.App. 432; Bent v. Priest, 10 Mo.App. 547; Burns v. Scott, 117 U.S. 582; Hovey v. Hobson, 51 Me. 62; Brinley v. Whiting, 5 Pick. 348. (4) If this were not so and the charge of champerty material, the trial court purged the demand of all illegal taint, by requiring McElroy to surrender and cancel the obnoxious agreement. Hall v. Trid, 7 Hill (N. Y.) 586. (5) While the supreme court has not abdicated its supervisory control over questions of fact in equity cases (Benne v. Schnecko, 100 Mo. 250; McElroy v. Maxwell, 101 Mo. 294), yet, where there is a conflict of testimony much deference is paid to the finding of the court, who had the opportunity of seeing the witnesses face to face and observing their demeanor and conduct on the stand. Mathias v. O'Neil, 94 Mo. 520; Sharpe v. McPike, 62 Mo. 300; Snell v. Harrison, 83 Mo. 651; Erskine v. Lowenstein, 82 Mo. 301.

OPINION

Thomas, J.

This was a suit in equity to set aside three certain conveyances to the north twenty feet of lot 284, in block 29, Old Town, Kansas City, Missouri; the one a conveyance made by respondent to Frank V. Mills, March 14, 1887, another a conveyance made by said Mills to C. Frank Rieger, and the third a conveyance made by C. Frank Rieger to L. F. Rieger, and to reinvest the title to said lot in respondent.

The petition charges that on March 14, 1887, the plaintiff was the owner of the said property; that defendant, Lawrence F Rieger, was then and had been for a number of years the agent of plaintiff for the purpose of looking after the repairs, paying the taxes and collecting the rents on the property; that plaintiff then lived and had for three or four years lived in the Indian Territory; that defendant, Lawrence F. Rieger, by false representations and by concealment of material facts, induced plaintiff on the fourteenth day of March, 1887, to sell and convey this property to one Frank V. Mills for the sum of $ 4,500, when it was worth $ 12,000; that Mills was not a bona fide purchaser of the property, but the conveyance was procured to be made to him for the benefit of said Rieger; that said Mills on March 19, 1887, conveyed the property to C. Frank Rieger, brother of said Lawrence F. Rieger,...