Farasy v. Hindert

• Decision Date: 30 March 1935
• Docket Number: 32907
• Citation: 82 S.W.2d 573
• Parties: FARASY et al. v. HINDERT et al
• Court: Missouri Supreme Court

82 S.W.2d 573

FARASY et al. v. HINDERT et al

No. 32907

Supreme Court of Missouri, Second Division

March 30, 1935

Rehearing Denied April 25,1935.

Jesse L. England, of Kirkwood, and Villiers Farasy, of St. Louis for appellants.

Frank X. Hiemenz and Albert F. Muench, both of St. Louis, for respondents.

OPINION

COOLEY, Commissioner.

This suit, which was instituted and tried in the circuit court of the city of St. Louis, is an action to enjoin the foreclosure of a deed of trust on real estate situated in said city and to cancel said deed of trust and the notes secured thereby. Plaintiffs' petition also asked actual damages in the sum of $ 5,865 and punitive damages in the sum of $ 25,000. By mutual consent of the parties the cause was tried to the court without a jury. The court found the issues for the defendants and rendered judgment accordingly. Plaintiffs appealed.

Prior to the transaction herein involved, plaintiffs owned certain real estate on Pulaski street in St. Louis, and Robert W Teich owned six vacant lots on Oleatha avenue in Russell Park subdivision, being lots numbered 38, 39, 40, and 41 in city block 4121, and lots numbered 36 and 41 in city block 4129. Defendant Hindert, a real estate agent, negotiated an exchange of plaintiffs' Pulaski street property for Teich's vacant lots on Oleatha avenue. Hindert acted for plaintiffs as agent and also, it appears, for Teich; but plaintiffs knew of and consented to the dual agency, as apparently did Teich. No complaint is made regarding such dual agency. The exchange was consummated by deeds dated August 10, 1929. Plaintiffs then gave Hindert two notes, dated August 12, 1929, one for $ 430 and one for $ 12.90, the latter being for interest on the principal note, both due in six months, and to secure same executed a deed of trust on said lot 36 of city block 4129. The notes were made payable to defendants Charles and Ida Boresi, Hindert's father-in-law and mother-in-law, but were transferred to Hindert who, it is admitted, was at all times the owner thereof. When the notes matured plaintiffs failed to pay. The trustee named in the deed of trust refused to act, and the circuit court of the city of St. Louis, upon affidavit of defendant Harriet G. Marsh, appointed defendant Albert F. Muench as trustee pursuant to sections 3135 and 3137, R. S. 1929, Mo. St. Ann. §§ 3135, 3137, pp. 8167, 8169. It appears from admissions at the trial that at the time Miss Marsh filed said affidavit she had possession of the notes for the purpose of collection. Mr. Muench, at the request of Hindert, then owner and holder of the notes, started foreclosure of the deed of trust by advertising the property for sale pursuant to the terms of the instrument, whereupon this suit was filed. The defendants other than Hindert were made parties because of a supposed interest or claim of interest in the notes and deed of trust. At the trial it was admitted that they had and claimed no interest, and the case proceeded against Hindert as the only real defendant. Reference hereinafter to the defendant will mean Hindert unless otherwise indicated.

Plaintiffs contend that defendant misrepresented certain facts relative to the Oleatha avenue lots and fraudulently concealed other facts, thereby inducing them to make the exchange of properties. We quote the portions of the petition presenting that contention. The petition alleges: 'Plaintiffs state that at the time of the transaction herein related, said Leonard J. Hindert represented himself to the plaintiffs as being a duly qualified and licensed real estate broker and that he was an expert and familiar with the said real estate, the improvements thereon, its value, its utility, and its general demand in this, to wit, that the said Leonard J. Hindert stated and represented the facts to be that the said property aforesaid was of a marketable value of fifty-five ($ 55.00) dollars per front foot; that said real estate although vacant in character was improved with gas and water and streets and curbing, and ready to be utilized for building purposes. Plaintiffs further state that defendant, Hindert, stated and represented to them the facts to be at time of said transaction that he had a ready, able and willing purchaser for all of said Oleatha street lots, who would purchase them from the plaintiffs at the cash price of $ 52.50 per front foot.'

It is then alleged that plaintiffs, relying upon defendant's representations, purchased said lots at the price of $ 10,400, giving in exchange their Pulaski street property, which it is alleged was of the value of $ 22,500, subject to a $ 12,500 deed of trust, and gave to defendant the notes and deed of trust here in question. The petition then proceeds:

'Plaintiffs state that said notes and deed of trust were procured from said plaintiffs by the said Leonard J. Hindert wantonly and fraudulently and without consideration thereof, and with intent to deceive, mislead and defraud plaintiffs; that the said Leonard J. Hindert, at the time of the making of said notes and at the time of all transactions herein set forth, well knew that the statements, representations and inducements made as aforesaid and at the times aforesaid, were false and fraudulent, for thereafter plaintiffs discovered that said Leonard J. Hindert was not a licensed real estate broker, that the improvements that were stated and represented as aforesaid to be contained in said vacant lots did not exist, that the faith and confidence of the plaintiffs had been imposed upon fraudulently and deceitfully, and that the said Leonard J. Hindert, while acting as plaintiffs' agent and servant, had misled the plaintiffs by concealing and failing to disclose the fact that he was not a licensed real estate broker; that the improvements as aforesaid were not contained in the vacant lots aforesaid, and that the value of the vacant lots as aforesaid was wholly untrue and a mere invention for the purpose of misleading and inducing the plaintiffs to part with their property and to defraud and deceive them, and to lull plaintiffs in having confidence and faith in said Leonard J. Hindert and in his superior knowledge of and concerning said vacant lots, and that the representations and statements as to the fact that the defendant, Hindert, had a ready, able and willing purchaser at the cash price of $ 52.50 per front foot for all of said Oleatha street lots, were untrue and false.

'Plaintiffs state that for some time prior to the purchase by the plaintiffs of the vacant lots aforementioned, the city of St. Louis had instituted proceedings in the circuit court of said city and state for the purpose of improving and widening Gravois avenue, and which embraced the area wherein aforesaid vacant lots were located, in the benefit district thereof, and thereby subject to a great tax assessment; which fact was known to the said Leonard J. Hindert and which the said Leonard J. Hindert concealed and failed to disclose to the said plaintiffs while acting as the agent and servant of said plaintiffs.'

Other allegations of the petition relate to the supposed interest or claimed interest of defendants other than Hindert, and to damages sustained by plaintiffs because of having to lay gas mains, in erecting or starting to erect two buildings before discovering defendant's alleged fraud, and other items of damage. One item of alleged damage is $ 4,640, 'being the difference in the price paid for said vacant lots and the value thereof at the time of said transaction.'

Plaintiff V. Farasy, who had acted for himself and wife in the negotiations, testified that defendant told him that 'he had a ready, able and willing purchaser that was going to buy all of said lots on Oleatha Avenue and that as soon as this deed was consummated he would effect a three-cornered deal and get me $ 52.50 per front...