Friday v. Scherer
| Decision Date | 07 December 1937 |
| Docket Number | No. 24150.,24150. |
| Parties | FRIDAY v. SCHERER. |
| Court | Missouri Court of Appeals |
Appeal from St. Louis Circuit Court; J. W. McAfee, Judge.
"Not to be published in State Reports."
Action by Jesse T. Friday against Matt J. Scherer. From a judgment for plaintiff, defendant appeals.
Affirmed.
Stanley Weiss, of St. Louis, for appellant.
Oscar Habenicht, of St. Louis, for respondent.
This is an action on a promissory note. The petition is in conventional form and alleges that there is a balance of $3,973.16 due on a demand note for the original sum of $4,238.60, executed by defendant in favor of plaintiff, dated, May 1, 1929, with interest from date at the rate of 6 per cent. per annum. The note in question was filed with the petition as an exhibit.
Defendant's original answer, among other things, sought to set up as a defense that at the time plaintiff gave the defendant the sums referred to in plaintiff's petition, and upon which the promissory note referred to in said petition was based, the parties agreed that said money should be used for the purchase of two lots, and that the defendant would erect two flats upon the lots, and that the money advanced by plaintiff to defendant, and evidenced by the note sued upon, was to be paid back to the plaintiff only out of the proceeds of the sale of the flats and lots upon which they were erected; that the defendant erected the flats upon the lots, as agreed; that defendant never received anything out of the proceeds of the sale of said property due to the fact that one of the flats was sold and the proceeds of such sale were applied as a part payment on a deed of trust upon the property; and that the second flat was lost by foreclosure proceedings.
Plaintiff filed a motion to strike out this portion of defendant's answer on the ground that it did not state facts sufficient to constitute a defense, on the theory that said defense was an attempt by defendant to vary the terms of a written agreement, to wit, the promissory note. At this juncture, the suit being an action at law, the court sustained plaintiff's motion to strike out such pleaded defense. Thereafter defendant filed additional answers and the case ultimately went to trial upon defendant's third amended answer.
Defendant's third amended answer admits the execution of the note referred to in plaintiff's petition, but denies each and every other allegation thereof, and sets forth the following affirmative defenses: First, an equitable defense praying for reformation of the note in suit to make it conform to the original intention and agreement of the parties, namely, that the note should be paid only out of the proceeds of the sale of the lots and flats erected thereon; second, usury; third, payment.
Plaintiff's reply was a general denial.
Upon trial of the case a decree resulted in favor of plaintiff and against defendant for the full amount sued for. Defendant in due course appealed.
The case was tried as a suit in equity. Plaintiff offered in evidence the note described in his petition, bearing the following indorsements on the back thereof: "Interest on this note has been paid up to March 1, 1930." Under each of these indorsements appeared the signature of plaintiff.
Defendant testified in effect that he was a teacher in a public school, and an attorney at law, practicing his profession only in the afternoons and on Saturdays, and during the summer months; that he had known plaintiff for many years and had been occupying an office in the same suite with the plaintiff in the practice of law, and that on frequent occasions he had associated plaintiff with himself in the handling of litigation, especially in matters which required the institution of suits; that in 1923, defendant had entered into a real estate venture with a third party, whereby vacant lots were purchased and improvements erected thereon, and the property had been sold at a profit; that plaintiff had knowledge of such deal. Defendant contends that he and plaintiff decided to enter into such a real estate venture; that plaintiff was to advance the money for the purchase of the lots, and that the defendant was to erect two flats thereon; that the money advanced by plaintiff was to be repaid only out of the sale of the lots and flats; that on December 1, 1923, plaintiff advanced him the sum of $200, $150 of which was to be applied as earnest money on the purchase of the lots. Defendant was not able to explain for what purpose the additional $50 was used; that on January 10, 1924, plaintiff gave defendant two checks, one a cashier's check in the sum of $2,425, the other his personal check in the sum of $50, which together aggregated the balance due on the purchase price of the lots; that these three items totaling $2,625 constituted the total amount advanced by plaintiff in the real estate transaction, which was the amount actually paid for the lots; that the plaintiff, at the time in question, had on occasions purchased second deeds of trust which netted him "about fifteen per cent on his money," and it was agreed between plaintiff and defendant, in order that plaintiff should have the same return in their venture, that 9 per cent, should be added to the costs of the lots, and an additional $100 added thereto, totaling $2,961.25, for which sum defendant executed his promissory note dated January 10, 1924, payable six months after date, with interest at the rate of 6 per cent. per annum, with the understanding and agreement that the note should be paid only out of the proceeds of the sale of the two flats; that defendant borrowed money to build the two flats upon the lots, the money so borrowed by defendant evidently being secured by deeds of trust upon the lots and flats. The buildings were completed in October, 1924, but, not having been able to dispose of the flats, on March 30, 1925, defendant obtained an additional sum of $670 from plaintiff for the purpose of building a garage and certain granitoid work in the rear of the flats. For this sum defendant gave plaintiff his personal note payable on demand, with interest at the rate of 6 per cent. per annum. No 9 per cent. nor any additional sum was added to this sum so borrowed. According to defendant it was agreed that this additional sum should be added to the amount that plaintiff was to receive only out of the sale of the flats; that on May 1, 1929, at the request of plaintiff, he executed the note herein sued upon in lieu of the two notes hereinabove described, which two notes were then surrendered by plaintiff to defendant. Defendant admitted that at the time he signed this last note plaintiff submitted for his consideration a statement purporting to cover the several items in the transaction between them, going to make up the balance of $4,238.60, for which he executed his note and obtained the surrender of his two prior notes, but that he "didn't go over the statement very carefully."
Defendant testified further that he had made a number of payments upon the several notes. No purpose would be served in setting out such testimony in detail as our reading of the record has brought us to the conclusion that it has, to say the least, no probative value. As to these payments the defendant's testimony in chief is neither clear nor convincing, and on cross-examination defendant voluntarily withdrew many items, and others, which he did not voluntarily withdraw, lacked corroboration either by way of canceled checks or receipts.
In contrast to the defendant's testimony that offered on behalf of plaintiff is clear, cogent, and convincing. Plaintiff corroborated defendant to the effect that he and defendant had been friends for many years, and that the defendant on various occasions employed him in cases, on the basis of dividing the expenses and the fee in the case equally between them; that he had on various occasions loaned defendant sums of money prior to the transaction out of which the instant case arose; that some time in the fall of 1923, defendant told him of his desire to purchase some lots and erect flats thereon, in the belief that he could make a handsome profit by the sale thereof, and asked plaintiff to lend him a sum sufficient to purchase the lots, mentioning two specific lots which defendant stated he then had in mind. Plaintiff agreed that he would lend him the amount needed for the purchase of the lots; that thereafter, on December 1, 1923, at defendant's request, he advanced defendant $200, to be used as earnest money on the purchase price of the lots, and to have the title on the lots examined; that on January 10, 1924, defendant telephoned plaintiff that he intended to close the deal for the purchase of the lots that afternoon, and requested plaintiff to obtain a cashier's check for him for $2,425; that he purchased the cashier's check with his own personal check, and when defendant called for it in the afternoon, defendant informed him that he was $50 short on the amount necessary to close the deal, and requested plaintiff to give him his personal check for an additional $50, which plaintiff did. At the time defendant was already indebted to the plaintiff in the sum of $200, for which amount plaintiff introduced in evidence his cancelled check payable to defendant, dated August 15, 1923; and in addition thereto plaintiff had advanced the sum of $172.50 as and for expenses for a client of the defendant named Mansfield, in a personal injury case in which defendant had associated plaintiff as counsel, upon agreement to divide the expenses and any fee that might result therefrom equally between plaintiff and defendant; that the Mansfield case had been tried and a verdict rendered in plaintiff's favor, but that the court had granted defendant a new trial therein, and...
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