Krost v. Kleg
| Decision Date | 17 February 1932 |
| Docket Number | No. 30017.,30017. |
| Citation | 46 S.W.2d 866 |
| Parties | KROST et al. v. KLEG et al. (BUSINESS MEN'S LOAN ASS'N, Intervener). |
| Court | Missouri Supreme Court |
Appeal from St. Louis Circuit Court; Frank Landwehr, Judge.
Suit by Morris Krost and another against Ben Kleg and another, in which the Business Men's Loan Association filed an intervening petition, answer, and cross-bill. From a decree for intervening petitioner, plaintiffs appeal.
Modified and affirmed.
Joseph Boxerman, of St. Louis, for appellants.
Max Sigoloff, of St. Louis, for respondents.
Plaintiffs filed a bill in equity, in the St. Louis circuit court on May 8, 1928, against defendants, asking the court to set aside, cancel, and to declare null and void certain notes and a deed of trust and to perpetually enjoin defendants from collecting the notes or enforcing the deed of trust.
Defendants filed an answer. The Business Men's Loan Association, a corporation, filed an intervening petition, answer, and cross-bill. Upon a hearing the court entered a decree finding in favor of the intervening petitioner. After an unsuccessful motion for a new trial the plaintiffs appealed to this court.
The basis of plaintiffs' petition is that the notes and deed of trust are spurious in that the signatures of plaintiffs are forgeries. Plaintiffs alleged in their petition that the defendants were about to foreclose the deed of trust and that the deed of trust constituted a cloud on plaintiffs' title. The answer of defendants is a general denial. The intervener's petition and answer asserts that the intervener is the owner and holder of the notes and deed of trust described in the petition; that without any knowledge of the facts stated in the petition it purchased the notes from defendants for a valuable consideration. The intervener also pleads facts, which are supported by the evidence. They will, therefore, not be related here but will be stated in our statement of facts. The intervener petitioned the court that, in the event it found the notes and deed of trust to be forgeries, intervener be granted an equitable lien against the real estate described in plaintiffs' petition.
The property which is the subject of this suit is described as follows: "Lot nine (9) in block thirteen (13) of Stoddard Addition and in block number nine hundred and seventy-eight (978) of said City of St. Louis, having an aggregate front of 25 feet on the north line of Stoddard street by a depth north of 118 feet and 3 inches to an alley; bounded east by the center line of party wall between houses Nos. 2717 and 2719 Stoddard street; the improvements erected upon said lot nine (9) being known and numbered 2719 Stoddard street."
The facts, as admitted and proven in the case, are about as follows: The plaintiffs, Morris Krost and Dora Krost, are husband and wife and are the owners of the property above described and also the owners of about twenty other parcels of real estate in the city of St. Louis. Defendant Kleg, the trustee in the deed of trust, had prior to the filing of the suit, inserted an advertisement in the Daily Record, a newspaper published in the City of St. Louis, advertising the property described, for sale. Maurice Hyman was the agent of plaintiffs for the purpose of collecting rents from the tenants of plaintiffs' estate. Charles Weber was the holder and owner of a note for $2,500 and a deed of trust securing the same, signed by plaintiffs, covering the property above described. The payment of the note of $2,500 was due. Plaintiff Morris Krost negotiated with Weber and reached an agreement that if Krost would pay $1,000 Weber would extend the date of payment of the balance of $1,500. Krost then took the matter up with Hyman and authorized him to negotiate a loan of $1,000 to be secured by a second deed of trust on the property mentioned. Hyman arranged with Dubman and Kleg, the defendants, a real estate firm, for this loan. A deed of trust and fifteen installment notes were prepared, aggregating $1,000, dated August 1, 1927, due and payable from one to fifteen months after date; one note falling due each month. Plaintiffs signed and acknowledged this deed of trust and the notes. Defendant Kleg testified that the notes Hyman first presented to him were incorrect, the interest having been miscalculated, and therefore the notes were rejected. The following day new and correct notes were delivered to him by Hyman. These notes were accepted as being genuine. The notes were later sold, before maturity, to intervener, Business Men's Loan Association. Hyman continued to collect rents, for plaintiff, for about five months. Each month Hyman and his successor would take up one of these notes, use part of the rent money to pay the same, and send the canceled note to plaintiffs. This continued until seven of the notes had been paid. Hyman testified that the first notes were incorrect and were destroyed, and that plaintiffs signed a second set, which were delivered to defendants. Plaintiffs testified that they did not sign the second set of notes. In this they were supported by other testimony, and the court found in its decree that the notes in controversy were forgeries. Plaintiff Morris Krost testified that his suspicion was aroused by the fact that the St. Louis Trust Company called and informed him that he was in default on the installments of a $1,000 note, which it held. On investigation he learned that this note was a forgery, and on further investigation also found that the notes, delivered to defendants and later passed into the hands of the intervener, were forgeries. He then refused to pay any of the notes remaining unpaid, aggregating $610.
The court in its decree made a finding that the signatures, appearing on the notes and deed of trust in question, were not the signatures of plaintiffs and enjoined defendants from further proceeding to foreclose the deed of trust. The court further decreed as follows:
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