Hardwicke v. Wurmser.

• Citation: 180 S.W. 455
• Decision Date: 04 October 1915
• Docket Number: No. 9701,9701
• Parties: HARDWICK v. WURMSER
• Court: Court of Appeal of Missouri (US)

180 S.W. 455

HARDWICK v. WURMSER

No. 9701

Kansas City Court of Appeals, Missouri.

October 4, 1915.

On Rehearing, November 22, 1915.

Appeal from Circuit Court, Jackson County.

Action by Ada H. Hardwicke against Albert C. Wurmser. From a judgment for plaintiff, defendant appeals. Reversed.

See, also, 174 S. W. 808.

Scarritt, Scarritt, Jones & Miller, of Kansas City, for appellant. Charles R. Pence, of Kansas City, for respondent.

ELLISON, P. J.

This is a proceeding in equity whereby plaintiff seeks to charge defendant as a trustee and to compel him to account to her for certain profits in the purchase and sale of real estate, in which she claimed an interest. The finding and decree were for the plaintiff.

It appears that a certain hotel company became embarrassed, and that it turned over to its creditors, including both plaintiff and defendant, a lot of property. A part of this property was a promissory note, which the creditors traded for a piece of real estate near Ft. Wayne, Ind., which was incumbered with a mortgage. The latter property is involved in this action. The creditors formed what is termed a "syndicate." They appointed one of their number as treasurer and secretary; and he with two others, the defendant herein being one, were made an executive committee in direct charge and management of the property. It appears that this Indiana property was sold under the mortgage aforesaid, and title put in the name of S. W. Allen, who held it until 1899, when he made a quitclaim deed to this defendant, subject to a mortgage to himself of $2,000. Defendant held it for himself and the other creditors, including plaintiff. Before the foreclosure, in order to pay interest on the incumbrance and taxes on the property, it became necessary to assess the members of the syndicate proportionately for their share, and a number failed or refused to pay. In consequence the property was sold under the mortgage. Before the sale several of the creditors, plaintiff among them, agreed to buy it and contributed proportionately for that purpose. Plaintiff contributed $1,134, and thereby became the equitable owner of 1890/5116 of the property. But on account of giving Allen a mortgage back for part of the purchase money, less cash was used than at first contemplated, and a part of plaintiff's cash was returned to her. Allen afterwards demanded his money, and assessments were made on the members of the syndicate, proportionately, to pay it. Some of the members refused to pay, and therefore nothing was collected. In consequence of not paying these assessments, defendant and two other creditors (not plaintiff), gave their note, with a mortgage on the property, to the National Bank of Commerce of Kansas City, for the money, with which they paid Allen and discharged his mortgage. In a year this note was renewed to the bank for another year. At the end of the second year, the bank demanded payment. There was no money in the hands of the syndicate to pay. The bank then began proceedings to foreclose, resulting in a foreclosure sale, at which the bank's attorney bought the property. Afterwards some of the original creditors, including defendant, but not including plaintiff, bought the property of the attorney for the amount of the judgment and costs due the bank, and took the title in the name of this defendant. Afterwards the property was sold by the new owners for $5,000, which left, after taking out taxes and expenses of sale, about $4,600. Defendant, at the direction of the others, made the deed to the purchaser. Afterwards in September, 1903, plaintiff brought suit against the executive committee of the original syndicate for damages for their alleged failure to perform their duties, and for failing to give her notice of the foreclosure proceedings, and was so far defeated at a trial that she took a nonsuit. In May, 1905, she brought another action against the same parties, and again failed. Finally, in May, 1908, she instituted the present action against this defendant.

During the time the bank was trying to get its money, including the time of the foreclosure proceedings, plaintiff, who was represented by her son, who was her attorney and agent, was several times notified, in writing, of the situation. On the 25th of September, 1902, the treasurer of the syndicate wrote him that the bank had demanded the money, and of the amount of her assessment to prevent foreclosure. On November 10th following, he wrote him that foreclosure proceedings had been begun because of no sufficient response to assessments, and that such refusal left him helpless to prevent foreclosure. Then, on November 22d, he wrote the agent as follows:

"I have received notice that the Ft. Wayne, Ind., property belonging to the Reed Springs hotel syndicate will be sold by the sheriff at Ft. Wayne on December 15, 1902, to satisfy the mortgage on this property. As I have heretofore advised you, the stockholders failed to pay the assessment ordered for the purpose of paying this indebtedness, and I have no other recourse than to allow the suit to proceed."

Plaintiff's agent admits having received these notices, and testified that he refused to pay assessments and wanted the property to sell—

"and to be advised when the sale took place, and to be there and one or the other of us, or somebody, would get the property. I wanted the property sold."

Again, in his testimony, he said he wanted the property sold under the mortgage, and that all—

"I wanted to know was when the thing was coming off, when the matter was coming up in court, and when the sale would tale place, and I would be there."

He testified that he knew the foreclosure proceedings instituted by the bank would be in courts in Indiana, and that he, as a lawyer, knew the process of such legal proceedings. He again admitted his refusal to pay assessments, and that he wanted the property sold, and that it was to be sold under proceedings for foreclosure which he had been notified had been begun in the Indiana court. He was notified when the sale would be. With all this, and he a lawyer of experience, it seems from his testimony that he wanted still further information. It seems to us he was fully informed of the sale, and that if he was not represented thereat, it was his own fault. Certainly defendant and his associates had discharged every duty they owed to him.

We will therefore proceed to a consideration of the law of ...