Kramer v. Johnson, No. 42001

CourtMissouri Supreme Court
Writing for the CourtDALTON
Citation361 Mo. 1085,238 S.W.2d 416
PartiesKRAMER et al. v. JOHNSON et al
Docket NumberNo. 1,No. 42001
Decision Date12 March 1951

Page 416

238 S.W.2d 416
361 Mo. 1085
KRAMER et al.
v.
JOHNSON et al.
No. 42001.
Supreme Court of Missouri, Division No. 1.
March 12, 1951.
Motion for Rehearing or to Transfer to Court En Banc Denied
April 9, 1951.

[361 Mo. 1086]

Page 417

Lester W. Spilker, Joseph Boxerman and Joseph Nessenfeld, all of St. Louis, for appellants.

[361 Mo. 1088] Ninian M. Edwards, N. Murray Edwards, St. Louis, for respondents.

[361 Mo. 1089] DALTON, Judge.

Action to enjoin the foreclosure of a second deed of trust on described real estate in the City of St. Louis and for cancellation of the deed of trust and the notes secured thereby, with a cross-action for judgment on the notes. The trial court found the issues for the defendants, dismissed plaintiffs' petition with prejudice and entered judgment for defendant A. Marie Johnson for the amount due on the notes. Plaintiffs have appealed and it is contended that the notes and deed of trust were void ab initio. Title to real estate is, therefore, directly involved and this court has jurisdiction of the appeal. Cannon v. Blake, 353 Mo. 294, 182 S.W.2d 303.

Some facts are not in dispute. Appellants have owned the described real estate since 1928. In 1934 the property was subject to two deeds of trust securing a balance of principal in the sum of $11,500. Interest and taxes were delinquent. The notes secured by the deeds of trust were owned by Gurde M. Johnson and A. Marie Johnson, husband and wife, who were demanding payment of the indebtedness. Appellants made application to the Home Owners' Loan Corporation (HOLC) for a loan. The property was duly appraised through the St. Louis office and the preliminary appraisal showed a valuation of $13,210.04. Appellants were advised that the property 'would stand for a bond loan of $10,568.03, however, this amount must include all liens of every description against the property, as well as other items necessary to be included in the loan * * *.' The loan application was denied with the statement that, 'if the mortgagee will write down or reduce his lien so as to bring the entire indebtedness within the 80% appraised value, then this file might be reopened and the loan proceeded with to a final determination.'

On March 10, 1934, the HOLC closed a loan on appellants' described property for $10,568. Appellants approved a disbursement sheet purporting to include an item

Page 418

of $10,286.08 'advanced to lien holders * * * G. M. and A. Marie Johnson,' the approval being as follows: 'The undersigned owners of the real estate for whose benefit the above expenditures in cash and bonds were made by the Home Owners' Loan Corporation, do hereby acknowledge receipt of the cash and bonds, as described above, and approve the disbursements [361 Mo. 1090] as shown.' The HOLC received and holds a first lien on the described real estate.

Thereafter, the appellants executed a second deed of trust, dated March 10, 1934, to A. Marie Johnson and Gurde M. Johnson, her husband, as beneficiaries to secure the payment of one note of that date for the principal sum of $1435, due and payable 3 years after date, and six interest notes, each in the amount of $43.05, due and payable, respectively in 6, 12, 18, 24, 30 and 36 months after date. This deed of trust was made subject to a first deed of trust to the HOLC. Thereafter, the appellants paid the first and second interest notes secured by this second deed of trust and, on September 30, 1936, made a $20 payment on the third interest note. In 1948, at the direction of respondent A. Marie Johnson, respondent Julius C. Garrell, Jr., successor trustee in the deed of trust, began foreclosure proceedings. The described property was advertised for sale on the second day of September 1948 for the purpose of discharging the alleged indebtedness evidenced by the described notes. On August 26, 1948, appellants instituted this action. Thereafter, the death of defendant Gurde M. Johnson was suggested and appellants dismissed as to him.

In the second amended petition upon which the cause was tried, the appellants sought relief on the following grounds: (1) that the notes and deed of trust were obtained by fraud, misrepresentation, duress and coercion on the part of Gurde M. Johnson and A. Marie Johnson; (2) that Gurde M. Johnson and A. Marie Johnson 'did agree in writing with the Home Owners' Loan Corporation 'to accept in full settlement * * * the sum of $10,568.03, less taxes, face value of the bonds of Home Owners' Loan Corporation'' and to release all claims against the said property; (3) that 'Gurde M. Johnson and A. Marie Johnson did accept the bonds of said corporation in full satisfaction of their claim as aforesaid'; (4) 'that said notes were executed without consideration and by reason thereof the same are null and void'; (5) that 'said notes and second deed of trust are of no value by reason of the 10 year statute of limitations in Missouri * * *'; and (6) 'that said second deed of trust taken in connection with such financing vitiates the intent and purpose of the Home Owners' Corporation Act of 1933 [12 U.S.C.A. Sec. 1461 et seq.] and as a result is contrary to public policy and void * * *.'

The answer of respondent A. Marie Johnson admitted her ownership of the notes secured by the second deed of trust and that she was threatening foreclosure. She alleged the payment of the two interest notes mentioned, charged that appellants had, in 1940, made a further payment and promised and agreed to pay the other notes, pleaded the five year statute of limitations as a bar to any recovery against her for the alleged fraud, denied want of consideration for the notes in question, alleged that the notes were executed for a good and valid consideration and that appellants were estopped to assert [361 Mo. 1091] the bar of limitations. She prayed the court 'to give this defendant a judgment against plaintiffs for the amount of said second deed of trust of principal and interest and for attorney's fee and all other expenses caused by the filing of this suit * * *.'

A review of the evidence on the issue of fraud is not required, since appellants now insist that 'the present is not such a case'; and that 'this action is founded on the violation of the Home Owners' Loan Act of 1933, public policy, want of consideration and coercion.'

There was conflicting oral evidence concerning an alleged payment of $4, on or about July 1, 1940, by appellants to an agent of the Johnsons for application on the entire indebtedness evidenced by these notes. Credit for this sum was distributed on the notes. The trial court resolved the conflicts in the evidence by a finding that the payment was made 'sometime during the

Page 419

month of either June or July, 1940'; and that the notes, evidencing 'the entire debt,' were not barred by the 10 years statute of limitations.

There was conflicting evidence as to whether appellants or the Johnsons had first suggested refinancing the indebtedness through the HOLC and as to whether or not respondent A. Marie Johnson was present with appellants and Mr. Johnson when the HOLC loan was closed and when the second deed of trust and notes were executed. Mrs. Johnson disclaimed any personal contact with these matters and the general finding in her favor sustains her testimony on that issue. Appellants' evidence tended to show that nothing was said in the HOLC office about a second deed of trust, or prior to the closing of that loan, but that, as soon as the parties 'got downstairs,' Mr. Johnson said he had some papers for appellants to sign 'to complete the Home Owners' loan,' and the parties proceeded to a place on Chestnut street where the second deed of trust and notes were executed. Respondents' evidence tended to show that the second deed of trust was not signed and acknowledged by appellants until April 7, 1934. The court found that the evidence was 'insufficient to show any fraud, misrepresentation, duress or coercion on the part of * * * A. Marie Johnson.'

The evidence on behalf of both the appellants and the respondents shows that no new consideration was paid or given for the second deed of trust and notes in question. Appellants testified that they owed the Johnsons nothing after the HOLC loan was closed, but that the $1435 note represented the difference between the HOLC bonds and the debt to the Johnsons. Mrs. Johnson testified that the $1435 note represented 'the deficit between the HOLC loan and ours. * * * Q. I say, adding the $1435 to the amount of the HOLC bonds, that would pay you and your husband in full? A. Yes. Q. For the amount they owed you? A. Yes.' Mrs. Johnson further testified that her husband died July 5, 1947 and that she now owned the notes secured by...

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11 practice notes
  • Liddy v. Lamone, No. 71, September Term, 2006.
    • United States
    • Court of Special Appeals of Maryland
    • March 29, 2007
    ...292 P.2d 319, 321 (1956) (asserting that where laches was not pleaded as an affirmative defense, it was not available); Kramer v. Johnson, 361 Mo. 1085, 238 S.W.2d 416, 421 (1951) (holding that where defense of laches was not pleaded, denial of equitable relief on grounds of laches was 14. ......
  • Dugan's Estate, In re, No. 7635
    • United States
    • Court of Appeal of Missouri (US)
    • December 17, 1957
    ...of the courts not to reverse outright and without remand where the evidence on the issues has not been fully developed. Kramer v. Johnson, 361 Mo. 1085, 238 S.W.2d 416, 423; Feinstein v. McGuire, Mo., 297 S.W.2d 513; see Hanley v. Holton, 120 Mo.App. 393, 96 S.W. 691, As to the ultimate que......
  • Schoene v. Hickam, S-T
    • United States
    • United States State Supreme Court of Missouri
    • December 13, 1965
    ...involved and this court has jurisdiction, since the ultimate issue is whether the instruments were void ab initio. Kramer v. Johnson, 361 Mo. 1085, 238 S.W.2d 416; Cannon v. Blake, 353 Mo. 294, 182 S.W.2d We find these to be the pertinent facts: Owen, a resident of Phoenix Arizona, advertis......
  • State ex rel. Carter County v. Lewis, No. 7498
    • United States
    • Court of Appeal of Missouri (US)
    • August 27, 1956
    ...of alleged error in the admission or rejection of evidence [Hussey v. Robison, Mo., 285 S.W.2d 603, 604(1); Kramer v. Johnson, Page 959 361 Mo. 1085, 1095, 238 S.W.2d 416, 421-422(6); Middleton v. Reece, Mo., 236 S.W.2d 335, 341(1)], for, in our review of the case de novo, we consider such ......
  • Request a trial to view additional results
11 cases
  • Liddy v. Lamone, No. 71, September Term, 2006.
    • United States
    • Court of Special Appeals of Maryland
    • March 29, 2007
    ...292 P.2d 319, 321 (1956) (asserting that where laches was not pleaded as an affirmative defense, it was not available); Kramer v. Johnson, 361 Mo. 1085, 238 S.W.2d 416, 421 (1951) (holding that where defense of laches was not pleaded, denial of equitable relief on grounds of laches was 14. ......
  • Dugan's Estate, In re, No. 7635
    • United States
    • Court of Appeal of Missouri (US)
    • December 17, 1957
    ...of the courts not to reverse outright and without remand where the evidence on the issues has not been fully developed. Kramer v. Johnson, 361 Mo. 1085, 238 S.W.2d 416, 423; Feinstein v. McGuire, Mo., 297 S.W.2d 513; see Hanley v. Holton, 120 Mo.App. 393, 96 S.W. 691, As to the ultimate que......
  • Schoene v. Hickam, S-T
    • United States
    • United States State Supreme Court of Missouri
    • December 13, 1965
    ...involved and this court has jurisdiction, since the ultimate issue is whether the instruments were void ab initio. Kramer v. Johnson, 361 Mo. 1085, 238 S.W.2d 416; Cannon v. Blake, 353 Mo. 294, 182 S.W.2d We find these to be the pertinent facts: Owen, a resident of Phoenix Arizona, advertis......
  • State ex rel. Carter County v. Lewis, No. 7498
    • United States
    • Court of Appeal of Missouri (US)
    • August 27, 1956
    ...of alleged error in the admission or rejection of evidence [Hussey v. Robison, Mo., 285 S.W.2d 603, 604(1); Kramer v. Johnson, Page 959 361 Mo. 1085, 1095, 238 S.W.2d 416, 421-422(6); Middleton v. Reece, Mo., 236 S.W.2d 335, 341(1)], for, in our review of the case de novo, we consider such ......
  • Request a trial to view additional results

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