Gorman v. Mercantile-Commerce Bank & Trust Co.

• Decision Date: 06 March 1940
• Docket Number: 36029
• Citation: 137 S.W.2d 571,345 Mo. 1059
• Parties: Mary H. Gorman and Catherine E. Gorman, Appellants, v. Mercantile-Commerce Bank & Trust Company, a Corporation, Trustee Under the Will of Gottlieb J. Stocker, also known as George J. Stocker, Mercantile-Commerce Bank & Trust Company, a Corporation, Anthony Canzoneri, Joseph Riggio and Ignazio Riggio
• Court: Missouri Supreme Court

137 S.W.2d 571

345 Mo. 1059

Mary H. Gorman and Catherine E. Gorman, Appellants, v. Mercantile-Commerce Bank & Trust Company, a Corporation, Trustee Under the Will of Gottlieb J. Stocker, also known as George J. Stocker, Mercantile-Commerce Bank & Trust Company, a Corporation, Anthony Canzoneri, Joseph Riggio and Ignazio Riggio

No. 36029

Supreme Court of Missouri

March 6, 1940

Appeal from Circuit Court of City of St. Louis; Hon. John W Joynt, Judge.

Affirmed.

Cullen Storckman & Coil, Frank L. Ramacciotti and Hyman G Stein for appellants.

(1) A trustee is a principal and not an agent in the management and control of property committed to it. Darling v. Buddy, 1 S.W.2d 163; Huntington Real Estate Co. v. Megaree, 280 Mo. 49; Hayden Planing Co. v. Wood, 275 P. 248; Betts v. Hackathorn, 253 S.W. 602; O'Keefe v. Wesphal, 123 N.Y.S. 817. (2) A corporate trustee as principal is bound by the acts of those whom it holds out as being authorized to act for it when such acts are within the apparent authority of such persons. Restatement of the Law of Agency, sec. 8, p. 25; 13 Am. Juris., sec. 1106, p. 1033; Union Indemnity Co. v. Home Trust Co., 64 F.2d 906; 2 Fletcher on Corporations (Perm. Ed.), sec. 449, p. 255; Fink v. Gregg Realty Co., 296 S.W. 838; Wind v. Bank of Maplewood & Trust Co., 58 S.W.2d 332; Johnson v. Hurley, 115 Mo. 523; Hazard v. Chase Natl. Bank, 287 N.Y.S. 560. (3) The contract sued upon cannot be held void on account of alteration because (a) Where the contract sued upon has been repudiated, the cause of action has accrued and the rights of the parties become vested and the rights of the parties are not affected by any change subsequent to the accrual of the cause of action. Sperry v. Cook, 247 Mo. 139; 1 C. J. S., sec. 124b; 16 C. J. S., sec. 254, p. 675. (b) Where the added writing is not upon the face of the contract, but appears on the margin or after the signature of the parties, the change is immaterial and will not avoid the instrument. Bruegge v. State Bank of Wellston, 74 S.W.2d 835; American Natl. Bank v. Bangs, 42 Mo. 450; Barnes-Smith Mercantile Co. v. Tate, 137 S.W. 619, 156 Mo.App. 236; Mohr v. Macon Savs. Bank, 22 Mo.App. 684. (c) Where the agent's authority extends only to the negotiation of a contract of sale and the transmission of the contract to his principal, the agent's alteration of the contract is to be considered an alteration by the wrongful act of a stranger for which the seller is in no way responsible and therefore such alteration does not vitiate the contract. 2 Am. Jur., sec. 13, p. 607. (d) Contract for the sale of real estate does not require an attestation or acknowledgment and the addition of such does not add to or detract from its validity, especially so far as the defendant Mercantile-Commerce Bank & Trust Company as trustee of the estate of George J. Stocker, deceased, is concerned. Sec. 2967, R. S. 1929; Koobe v. Ousley, 240 S.W. 102; Peetz Bros. v. Vahlkamp, 11 S.W.2d 26, 321 Mo. 287; Sec. 3029, R. S. 1929.

Thompson, Mitchell, Thompson & Young, Samuel A. Mitchell, Richmond C. Coburn, Robert Neill, Jr., and Richard D. Shewmaker for respondents.

(1) The instrument upon which suit was brought shows on its face that it is not a completed contract between the plaintiffs and the defendant Mercantile-Commerce Bank & Trust Company, Trustee. Even if the instrument sued on is regarded as being ambiguous with respect to its completion, such ambiguity will be resolved in accordance with the interpretation of the instrument placed upon it by the parties. Schweizer v. Patton, 116 S.W.2d 39. (2) Even if it be determined that the instrument sued on is a completed contract of sale, it was not binding upon the defendant Mercantile-Commerce Bank & Trust Company, trustee of the George J. Stocker estate, because it was not executed for the Trust Company by anyone having authority to execute a contract of sale of real estate owned by the Trust Company as trustee. Restatement of Agency, secs. 8, 27; 2 Amer. Juris. 85; Edwards v. Duley, 120 N.Y. 540, 24 N.E. 827. Even an individual trustee is not, except in very exceptional circumstances, permitted to appoint an agent to sell real estate. Restatement of Trusts, sec. 171. The board of directors of a corporation organized under the Trust Company Statutes of the State of Missouri are invested with certain express powers and duties. R. S. 1929, secs. 5435, 5440. The apparent authority even of officers of a banking corporation is very strictly limited. Wind v. Bank of Maplewood & Trust Co., 58 S.W.2d 332; Bankers Utilities Co. v. Farmers' Bank of Union, 258 S.W. 17; Fitzsimmons v. Commerce Trust Co., 200 S.W. 437; Peoples Bank v. Bennett, 159 Mo.App. 1, 139 S.W. 219; Peoples Savs. Bank v. Hughes, 62 Mo.App. 576; Winsor v. Lafayette County Bank, 18 Mo.App. 665; Ashland Towsend Corp. v. West Side Savs. Bank, 248 N.W. 336; Kelly, Murray, Inc., v. Lansdowne Bank & Trust Co., 209 Pa. 236, 149 A. 190. The real estate agent or broker has no authority, implied or apparent, to make a contract of sale on behalf of his principal unless he is expressly given such authority. 48 A. L. R. 634. (3) Even if Matthews had had apparent authority, the plaintiffs could not enforce this contract because they did not rely upon any apparent authority of Matthews. 2 C. J., sec. 1217; Hansche v. Conroy, Inc., 222 Wis. 553, 269 N.W. 309.

Hyde, C. Bradley and Dalton, CC., concur.

OPINION

HYDE

This is an action for specific performance of an alleged contract to convey real estate. The trial court found in favor of defendant Trust Company, and also in favor of the individual defendants (claiming title as bona fide purchasers) on their cross-bill affirmatively seeking adjudication of the title. Plaintiffs have appealed from the court's decree dismissing their bill.

Plaintiffs' second amended petition, upon which the case was tried, alleged that Gottlieb (George) J. Stocker, at the time of his death was the owner of the real estate described in said petition; that the Trust Company was his executor; and that his will appointed the Trust Company trustee with the right and duty to sell this land. The petition further alleged that on July 26, 1934, the defendant Trust Company, as such trustee, by an agreement in writing, sold said real estate to the plaintiffs for $ 9750; that thereafter the Trust Company refused to carry out the agreement and informed the plaintiffs that it would not convey said property to them; that the agreement was recorded in the office of the Recorder of Deeds on August 2, 1934; that thereafter the Trust Company conveyed the property to defendant Canzoneri; and that said Canzoneri had stricken out his own name in the deed and inserted the names of defendants Joseph Riggio and Ignazio Riggio. The petition further alleged that Canzoneri and the Riggios had either actual or constructive notice of the existence of plaintiffs' agreement, and that they acquired no right, title or interest in the real estate against plaintiffs by reason of said purported deed. The prayer was for specific performance by the trustee of the agreement and a decree that the other defendants had no interest in said real estate, and for general relief.

The Trust Company's answer denied that a binding contract of sale to plaintiffs was executed, denied that it was entitled to record, set up alteration of the contract by plaintiffs, and Statute of Frauds, and stated that it had sold and conveyed the property to defendant Canzoneri, who acted for defendants Riggio, the real purchasers; that these defendants had no knowledge of plaintiffs' claim; and that fee simple title should be vested in them. The answer and cross-bill of the individual defendants was substantially the same as the answer filed on behalf of the Trust Company, except that it contained a cross-bill wherein it was alleged that the defendants Riggio had made extensive improvements to the property and had enhanced its value to $ 25,000. The prayer of this cross-bill asked that specific performance be not declared, except on condition of reimbursement of defendants for their improvements, but asked that the defendants Joseph Riggio and Ignazio Riggio be adjudged the owners in fee simple of said real estate.

The decree of the court found that title to the real estate in issue was vested in the Mercantile-Commerce Bank & Trust Company as trustee under the will of George J Stocker, deceased; that plaintiffs, by the instrument of July 26, 1934, offered to purchase this real esstate; that this instrument did not become a valid and binding contract for the reason that R.E. Matthews, signing for the Trust Company, was not expressly authorized to bind the Company as such trustee in the sale of this real estate; and that the plaintiffs and their duly authorized agent, John K. Gorman, showed by their course of conduct before and after the signing of this instrument that they did not believe or rely upon the fact that Matthews had any apparent authority to bind the Trust Company. The decree further found that the Trust Company had, by its authorized officers, accepted the offer of defendant Canzoneri for said property and conveyed the same to him; that John K. Gorman learning there was another bidder on August 2, 1934, had attached his name as a subscribing witness, without the knowledge or consent of the Trust Company, for the purpose of proving execution by its agent; that on the same date the plaintiff Mary H. Gorman had attached her acknowledgment, but did not attach the acknowledgment by herself as agent of Catherine E. Gorman; that this was done for the purpose of admitting the instrument to record, but was not done contemporaneously with the signing of the instrument; and that the individual defendants did not have any actual...