Gates Hotel Co. v. C. R. H. Davis Real Estate Co.

• Decision Date: 03 September 1932
• Parties: Gates Hotel Company, Appellant, v. C. R. H. Davis Real Estate Company. Gates Hotel Company v. C. R. H. Davis Real Estate Company, Appellant
• Court: Missouri Supreme Court

52 S.W.2d 1011

331 Mo. 94

Gates Hotel Company, Appellant, v. C. R. H. Davis Real Estate Company. Gates Hotel Company v. C. R. H. Davis Real Estate Company, Appellant

Supreme Court of Missouri

September 3, 1932

Appeal from Circuit Court of City of St. Louis; Hon. Victor H Falkenhainer, Judge.

Reversed.

Salkey & Jones for Gates Hotel Company; Benjamin C Klene of counsel.

(1) A trustee, especially one ex maleficio, will not be permitted to make a profit at the expense of the cestui que trust. 39 Cyc. 296; O'Day v. Annex Realty Co., 236 S.W. 25; Witte v. Storm, 236 Mo. 493; Van Raalte v. Epstein, 202 Mo. 196; Harrison v Craven, 188 Mo. 610; McGee v. Newton Burial Park, 290 S.W. 646; Patterson v. Booth, 103 Mo. 413; Grumley v. Webb, 44 Mo. 451. (2) When a commission for loaning one's own money such as in this case, amounting to $ 600, was included as part of the principal of the second deed of trust executed by the mortgagor and carrying interest thereon, the mortgagee was charging for services as a broker which it possessed no right under the law to make and brought the transaction within the statute against usury, which voids the contract as to interest and applies the legal rate, the difference being applied to the principal debt. R. S. 1919, sec. 6495; Osborne v. Payne, 111 Mo.App. 29; Johnson v. Grayson, 230 Mo. 380; Quinn v. Van Raalte, 276 Mo. 71; Arbuthnot v. Brookfield Loan & Bldg. Assn., 98 Mo. 382; Osborne v. Fridrich, 134 Mo.App. 449; Vandergrif v. Swinney, 158 Mo. 527; Kreibohm v. Yancey, 155 Mo. 85; Seaver v. Ray, 137 Mo.App. 78; Landis v. Saxton, 89 Mo. 375. (3) Attorney's fees may not be charged against a party unless authorized and especially absent any notice thereof or demand for the assumption or payment of same prior or subsequent to rendering the services. 39 Cyc. pp. 479, 484. (4) The court did not err in admitting the testimony of Lee F. Gates and Taylor R. Young as to conversations with W. H. Carroll. (a) Where one party to a contract was represented at the making thereof by two persons, the other contracting party is not disqualified because one of such representatives is dead at the time of the trial. Birdsall v. Coon, 157 Mo.App. 448; Short v. Thomas, 178 Mo.App. 413; Vandergrif v. Swinney, 158 Mo. 533; Hill-Dodge Banking Co. v. Loomis, 140 Mo.App. 74; Williams v. Perkins, 83 Mo. 385; Wahl v. Cunningham, 6 S.W.2d 586; McConnon v. Kuhlmann, 220 Mo.App. 824. (b) The statute is a qualifying, and not a disqualifying, statute. Rauch v. Metz, 212 S.W. 360. (c) An agent may testify for his principal as to a transaction had by him as such agent with one who is dead at the time he offers to testify. Clark v. Thias, 173 Mo. 628; Wagner v. Binder, 187 S.W. 1151; Bates v. Forcht, 89 Mo. 127; Orthwein v. Nolker, 234 S.W. 789, 290 Mo. 284; Spithover v. Bldg. & Loan Assn., 225 Mo. 660; Dawson v. Wombles, 104 Mo.App. 272; Darby v. Northwestern Mut. Life Ins. Co., 239 S.W. 68. (d) Incompetency of a witness is waived by extensive cross-examination. Tierney v. Hannon's Exr., 81 Mo.App. 488; Edwards v. Latimer, 183 Mo. 610, 82 S.W. 109; Pierce Loan Co. v. Killian, 153 Mo.App. 106, 132 S.W. 280; Ables v. Ackley, 126 Mo.App. 84, 103 S.W. 974; Stuyvaert v. Arnold, 122 Mo.App. 421, 99 S.W. 529; Meffert v. Lawson, 315 Mo. 1091, 287 S.W. 610; Humes v. Hopkins, 140 Mo. 75; Reitz v. O'Neil, 2 S.W.2d 178. (5) The Statute of Frauds has no application to constructive trusts as set up in this case. State ex rel. Cruzen v. Ellison, 278 Mo. 204; Prendiville v. Prendiville, 284 Mo. 131; Bryan v. McCaskill, 284 Mo. 602; Phillips v. Jackson, 240 Mo. 335; Phillips v. Hardenburg, 181 Mo. 475; Thierry v. Thierry, 298 Mo. 49; Harrison v. Craven, 188 Mo. 609; O'Day v. Annex Realty Co., 191 S.W. 48. (6) The evidence in this case justified the court in deciding that a constructive trust ex maleficio had been established. State ex rel. Cruzen v. Ellison, 278 Mo. 199; Prendiville v. Prendiville, 284 Mo. 116; Bryan v. McCaskill, 284 Mo. 583; Phillips v. Jackson, 240 Mo. 310; Phillips v. Hardenburg, 181 Mo. 463; Thierry v. Thierry, 298 Mo. 25; Harrison v. Craven, 188 Mo. 591; O'Day v. Annex Realty Co., 191 S.W. 41; Powell v. Crow, 204 Mo. 481; Williamson v. Frazee, 294 Mo. 332; Meek v. Hurst, 223 Mo. 698; McNew v. Booth, 42 Mo. 192. (7) Parol testimony was properly admitted to show what the actual agreement was. Brightwell v. McAfee, 249 Mo. 579; Phillips v. Jackson, 240 Mo. 310; Phillips v. Hardenburg, 181 Mo. 463. (8) The letter of August 6, 1919, from L. F. Gates to Mrs. E. F. Davis was properly admitted. 22 C. J. 905. (9) This cause of action is barred neither by laches nor by the Statute of Limitations. O'Day v. Annex Realty Co., 191 S.W. 48; State ex rel. v. Coon, 221 Mo.App. 992; Rollestone v. Natl. Bank of Commerce, 299 Mo. 76; Condit v. Maxwell, 142 Mo. 276; Keeton v. Keeton, 20 Mo. 541; Newton v. Rebenack, 90 Mo.App. 661; Johnson v. United Railways, 243 Mo. 296. (10) The court properly sustained the plaintiff's exceptions to the referee's report. (a) Interest on the debt after the foreclosure could be charged at the rate of six per cent only. Kessler v. Kuhnle, 176 Mo.App. 397. (b) The sale to C. F. Foy and to the defendant in 1920 amounted to a conversion of the property and therefore no interest was chargeable to plaintiff thereafter. Darling v. Potts, 118 Mo. 506; Lack v. Brecht, 166 Mo. 242; 14 C. J. 52, 58, 873; State ex rel. v. Standard Co., 218 Mo. 328; Bank v. Gillespie, 209 Mo. 251; Knott v. Fisher Vehicle Co., 190 S.W. 378. (c) Plaintiff is entitled to interest on the property converted from the date of the conversion: Darling v. Potts, 118 Mo. 526; Lack v. Brecht, 166 Mo. 242; Harbough v. Roofing Co., 281 S.W. 686; Asadorian v. Sayman, 233 S.W. 467; Sec. 3267, R. S. 1929.

Claud D. Hall and C. P. Berry for C. R. H. Davis Real Estate Company.

(1) The court erred in admitting the testimony of the plaintiff's president, Lee F. Gates, and of plaintiff's attorney, Taylor R. Young, as to their conversations and transactions with W. H. Carroll, vice-president of defendant, and with whom plaintiff claims to have entered into the alleged agreement to the effect that after the foreclosure the property would be held in trust by the defendant and when the indebtedness represented by the second deed of trust as paid out of rents and income from the property, defendant would reconvey the property to the plaintiff. Charles Green Real Estate Co. v. Building Co., 196 Mo. 358; Sanford v. Van Pelt, 282 S.W. 1022, 314 Mo. 175; Edmonds v. Scharff, 279 Mo. 78; Curd v. Brown, 148 Mo. 82; Taylor v. George, 176 Mo.App. 223. (a) The rule excluding such testimony is applicable where the agent who carried on the negotiation for the corporation is dead. Carroll v. United Rys. Co., 157 Mo.App. 288; Banking House v. Rood, 132 Mo. 264; Charles Green Real Estate Co. v. Building Co., 196 Mo. 358. (b) The object and purpose of the statute, Sec. 5410, R. S. 1919, is to insure the equality of the parties to the action. Lieber v. Lieber, 239 Mo. 14; Waltemar v. Schnick's Estate, 102 Mo.App. 133; Elsea v. Smith, 273 Mo. 396; Rector v. Goodloe, 298 Mo. 261; Davis v. Robb, 10 S.W.2d 680. (c) The rule applies even though the conversations of the deceased party were overheard by a third person. Jones on Evidence (2 Ed.) sec. 790, p. 993; Brunk v. Street Ry. Co., 198 Mo.App. 243. (d) The rule is that whenever an objection is once made and overruled, further objection to each question is unnecessary. Shoemaker v. Adair Coal Co., 255 S.W. 352; State v. Hicks, 3 S.W.2d 230. (2) Since the plaintiff's petition was based upon an express contract, it was necessary to prove the alleged contract to have been in writing, as required by the Statute of Frauds, Sections 2169 and 2263 of the Revised Statutes of Missouri, 1919. Curd v. Brown, 148 Mo. 92; Ferguson v. Robinson, 258 Mo. 132; Rogers v. Ramey, 137 Mo. 598; Miltenberger v. Morrison, 39 Mo. 71; Shelton v. Cooksey, 138 Mo.App. 389; Allen v. Richard, 83 Mo. 55; Mansur v. Willard, 57 Mo. 347; Taylor v. Von Schraeder, 107 Mo. 206; Ebert v. Myers, 9 S.W.2d 1066; Bender v. Bender, 281 Mo. 478. (3) There was no evidence upon which the court could find a resulting trust as to said real property, against the defendant and in favor of the plaintiff. Davis v. Holloway, 295 S.W. 105, 317 Mo. 246; Jacks v. Link, 291 Mo. 282; 22 C. J. 1074; Tracy v. Union Iron Works, 104 Mo. 193; Bender v. Bender, 281 Mo. 478; Heil v. Heil, 184 Mo. 676; Gammage v. Latham, 222 S.W. 469. There was no evidence of a consideration paid by plaintiff. Martin v. Martin, 250 Mo. 546. There was no confidential relationship between plaintiff and defendant. Chapin v. Cherry, 243 Mo. 401; Davis v. Holloway, 317 Mo. 246; Kansas City Stock Yards v. Fed. Grain Co., 279 S.W. 771. (4) The rule in its shortest form is that parol testimony cannot be received to contradict, vary, add to or subtract from the terms of a valid written instrument. 3 Jones on Evidence, p. 145; 22 C. J. 1070; E. R. Darlington Lumber Co. v. Railway Co., 243 Mo. 224; McPherson v. Kissee, 239 Mo. 664, 144 S.W. 410; Miller v. Municipal Elec., 133 Mo. 205, 34 S.W. 585; Boyd v. Paul, 125 Mo. 9, 28 S.W. 171.

OPINION

Frank, J.

This is an action in equity the purpose of which is to establish a trust in favor of plaintiff, Gates Hotel Company, in certain real and personal property located in the city of St. Louis. The decree below was in favor of plaintiff and both parties appealed.

Both plaintiff and defendant are Missouri corporations. Royal Investment Company, another Missouri corporation also figures in the transaction. It appears from the petition that plaintiff, Gates Hotel Company, was the owner of six eleven-room residence buildings located in the city of St. Louis; that each of said residence buildings...