Mills v. Keasler

• Decision Date: 08 November 1965
• Docket Number: No. 50988,No. 1,50988,1
• Citation: 395 S.W.2d 111
• Parties: Russell D. MILLS, Sr., and Norma J. Mills, His Wife, Appellants, v. W. H. KEASLER and Rebecca A. Keasler, His Wife, and Felix Hampton, Jr., Respondents
• Court: Missouri Supreme Court

Page 111

395 S.W.2d 111

Russell D. MILLS, Sr., and Norma J. Mills, His Wife, Appellants, v. W. H. KEASLER and Rebecca A. Keasler, His Wife, and Felix

Hampton, Jr., Respondents.

No. 50988.

Supreme Court of Missouri, Division No. 1.

Nov. 8, 1965.

Edwin Rader, Herbert Lasky, Clayton, for appellants.

Veryl L. Riddle, Riddle, O'Herin & Newberry, Malden, for respondent, Felix Hampton, Jr.

HOUSER, Commissioner.

This is a suit in equity to rescind a contract for the exchange of real estate and for $75,000 actual and $750,000 punitive damages for breach of contract and fraud. The court found the issues for the defendants and the plaintiffs have appealed.

Respondents have filed a motion to dismiss the appeal for violation of the rules governing the preparation of appellate briefs. Respondents attack the statement of facts as improper and nothing but a resume and find fault with the statement of the points and authorities and appellants' failure to develop them, and appellants' failure to key the argument to the transcript with page references. Notwithstanding the brief is subject to most of respondents' criticisms we overrule the motion to dismiss. The brief has been sufficient to enable respondents to identify the issues presented and to answer appellants' contentions, and is sufficient to enable the court with reasonable certainty and effort to ascertain what the issues on appeal are and appellants' contentions with reference thereto.

As a suit in equity this case is to be reviewed de novo on the record made in the trial court, Smith v. Mitchell, Mo.Sup., 394 S.W.2d 308 (No. 51002 decided September, 1965), and we make our own findings of fact, draw our own conclusions of law, and render or direct the rendition of such judgment as equity and justice may require, giving proper deference to the findings and conclusions of the trial judge in the case of conflicting testimony.

These are the pertinent facts as we find them: Plaintiffs are Mr. and Mrs. Russell D. Mills, Jr., former owners of a motel at Eldon, Missouri. Defendants are Mr. and Mrs. W. H. Keasler, former owners of a 2,000 acre tract of land in Jackson County, Illinois, and Felix Hampton, Jr., a real estate broker. Desiring to sell the motel the Mills listed it with Hampton. Keasler had previously agreed to give Hampton a finder's fee if he sold the farm. Hampton got in touch with Keasler and interested him in a trade. Both properties were heavily encumbered. In September, 1961 when these negotiations began and on October 4, 1961 when the exchange contract was executed there was a first deed of trust on the 2,000 acres held by Connecticut General Life Insurance Company to secure a debt which then amounted to $88,000 and there was a second deed of trust on the 2,000 acres held by Loyd Bentsen, on which there was a balance due of $79,000. Keasler had a contract to sell 800 acres of the 2,000 acres to an eastern syndicate. Hampton tried to interest Mills in the remaining 1,200 acres. While not interested in a deal of that size Mills expressed interest in a trade when Keasler agreed to divide the 1,200 acres into two tracts of 560 and 640 acres. On September 27, 1961, after Keasler had inspected the motel and after Mills had viewed the 640 acre tract, the parties had a discussion in which Keasler told Mills that he had 2,000 acres encumbered by mortgages; that he had a contract for the sale of 800 acres and would have to secure new loans, take off the mortgages against the 2,000 acres 'and cut it down to the difference' so as to 'cut the mortgage to not exceed eighty-two five against the 640' and Mills would give Keasler his note back for the difference between the value of the 640 acres and the motel. Keasler testified that prior to the signing of any contract he discussed with Mills the amount of the encumbrances or mortgages against the land in Illinois and who owned or held the mortgages, giving their names. Mills, on the contrary, testified that he was informed by Keasler and Hampton and understood that there was one debt of $88,000 against the 640 acres, a loan made by Connecticut General Life Insurance Company, and that that was the only deed of trust against the place. Mills denied knowledge prior to the execution of the exchange contract of a deed of trust in favor of Loyd Bentsen. On this direct conflict in the testimony we defer to the finding of the trial chancellor, who saw and heard the witnesses and had the best opportunity to judge of their credibility, and find that Mills was fully informed as to the existence of both deeds of trust and was given the names of the holders of the notes prior to the execution of the exchange contract. After further discussion the parties came to an oral understanding for an exchange of the properties on these terms: Keasler was to get the motel subject to a first deed of trust for $36,000, a second deed of trust for $133,600 and a third deed of trust for $2,750. Mills was to get the 640 acres subject to encumbrances not to exceed $82,500. It was understood that the 2,000 acre farm was to be split up into three separate tracts: the 800 acre tract sold to the syndicate, the 640 acre tract, and the remaining 560 acres. The encumbrances on the 2,000 acre farm were to be removed from the whole tract, the deeds of trust changed and new loans negotiated. Keasler's equity in the 640 acres over and above the $82,500 was agreed to be worth $36,650 more than Mills' equity in the motel. Mills was to give Keasler a note for the difference, secured by a deed of trust on the 640 acres. Keasler was to lease the 640 acres for 2 years and pay as rent the installments of principal and interest to come due on notes in the amount of $82,500 and $36,650, and pay the insurance and taxes on the land.

The parties went to the office of Jack Edwards, a lawyer in Sikeston, to reduce the agreement to writing. Keasler wanted possession of the motel the following Monday, October 1. Mills objected, preferring to wait until October 22 for closing in order to allow time for the examination of the title. Hampton assured Mills that this was not necessary and could be 'worked out'; that Mills had nothing to worry about; that Hampton knew Keasler and had had previous dealings with him, and knew him to be a very wealthy man; that Mills should let Hampton handle it; that he was Mills' broker and Mills was paying him to handle it. Mills then agreed to enter into the contract without a prior examination of the abstract of title. The lawyer had his secretary prepare a rough draft of a contract containing the provisions orally agreed upon and among other things the following: An agreement by the parties each to convey to the other titles good in fact and merchantable of record by general warranty deed free and clear of encumbrances, except as noted in the contract; to furnish each other with a complete abstract of title within 20 days showing well vested merchantable title, with 10 days allowed for examination and a reasonable time to correct defects found. Following the lease provisions there was a provision reserving to Mills the right to sell the 640 acres during the term of the lease, in which event the Keaslers agreed to surrender possession on December 31 of the year in which the sale was made. Possession of the motel was to be delivered upon execution of the contract. Deeds were to be delivered on December 15, 1961.

The matter of real estate commissions was discussed by Mills, Keasler and Hampton at that meeting. It was agreed that Mills was to pay Hampton a commission of $13,250 as follows: $3,250 cash and a $10,000 note secured by a deed of trust on the 640 acres. Hampton and Keasler made it known to Mills that Keasler owned Hampton a $5,000 commission or finder's fee for Hampton's services in connection with this exchange of properties. Keasler did not have the money to pay the $5,000. At first the giving of a note by Keasler to Hampton was considered. Then it was decided to deduct $5,000 from the amount of the note from Mills to Keasler and add $5,000 to the note from Mills to Hampton. Mills consented to this arrangement, whereupon the figure $36,650 in the contract was changed to $31,650. ¹ At Mr. Edwards' office each of the parties signed a warranty deed form in blank. The blanks were not filled in at the time because the legal descriptions of the lands were not immediately available. On the same day, September 27, Keasler delivered ten abstracts of title to the 640 acres to Mills, who took them the next day to Eldon and Tuscumbia, looking for a lawyer to examine them. He went to the offices of three lawyers, all of whom were out of town on the weekend. Mills at that time wanted to ascertain the condition of the title to his own satisfaction and was not at that time depending on Hampton to find out about the title. Mills thought that it would take 2 or 3 weeks to have the title examined. Before signing the exchange contract Mrs. Mills questioned Hampton about running the abstract of title. Hampton said there was no point in doing that because he knew Keasler and had done business with him and that Hampton could 'handle it.' The Mills trusted Hampton because they had known him for many years. He had previously transacted business for the Mills. The Mills knew that under the exchange contract they had until December 15 to have the abstracts examined. The Mills themselves made no further efforts to have the abstracts examined because after they executed the exchange contract, notes and deeds of trust, Hampton took from them the papers and abstracts of title and told the Mills to go ahead and make their planned move to St. Louis, assuring them that he would handle it. Relying upon Hampton's promises the Mills left in Hampton's hands the matter of accomplishing the division of the 2,000 acres into three tracts, the rearrangement of the deeds of trust, getting an abstract 'of their own' on the 640 acres and the examination of the...