Missouri Real Estate Commission v. Steger

• Decision Date: 13 May 1974
• Docket Number: No. 58431,58431
• Parties: MISSOURI REAL ESTATE COMMISSION, Appellant, v. Thomas W. STEGER and Realty Exchange of Kansas City, Inc., Respondents.
• Court: Missouri Supreme Court

Page 47

509 S.W.2d 47

MISSOURI REAL ESTATE COMMISSION, Appellant, v. Thomas W. STEGER and Realty Exchange of Kansas City, Inc. Respondents.

No. 58431.

Supreme Court of Missouri, En Banc.

May 13, 1974.

John C. Danforth, Atty. Gen., Leland B. Curtis, Harvey M. Tettlebaum, Daniel P. Card, II, Asst. Attys. Gen., Jefferson City, for appellant.

Martin Anderson, Kansas City, Michael P. Riley, Carson, Inglish, Monaco & Coil, Jefferson City, for respondents.

FINCH, Judge.

Pursuant to § 161.272, ¹ the Administrative Hearing Commission (hereafter Hearing Commission) held an evidentiary hearing on a complaint filed with the Missouri Real Estate Commission (hereafter Real Estate Commission) which sought revocation or suspension of respondents' real estate brokers licenses on the basis of alleged violations of the provisions of § 339.100. ² The Hearing Commission made findings, conclusions and recommendations, after which the Real Estate Commission entered an order suspending for six months the real estate brokers licenses held by respondents herein.

Thereafter, pursuant to Art. V, § 22, Mo.Const., V.A.M.S., and § 536.140, the implementing statute, judicial review was sought in the Circuit Court of Cole County. That court reversed the findings and decisions of the Hearing Commission and the order of the Real Estate Commission suspending respondents' brokers licenses. An appeal was taken by the Real Estate Commission to the Missouri Court of Appeals, Kansas City District, which affirmed. We then ordered the case transferred to this court and we now decide it as though here on direct appeal. We reverse and remand with directions.

At the outset we note the well established rule that judicial review of administrative decisions pursuant to § 536.140 is such that '* * * We may not substitute our judgment on the evidence for that of the Commissioner and we may not set aside his decision, unless it is not supported by competent and substantial evidence on the whole record, or it is not authorized by law, is arbitrary, capricious or involves an abuse of discretion. State ex rel. Favazza v. Ketchum, Mo., 367 S.W.2d 542, 546(2, 3); Pinzino v. Supervisor of Liquor Control, Mo., 334 S.W.2d 20, 26(4); Baker & Theodore, Inc., v. Quinn, Mo.App., 400 S.W.2d 477, 479--480(1).' Tom Boy, Inc. v. Quinn, 431 S.W.2d 221, 225 (Mo. banc 1968). We apply that rule in our review herein.

The decision of the Hearing Commission included these findings of fact:

'Respondent Thomas W. Steger is a real estate broker licensed by petitioner, and is also president of Realty Exchange of Kansas City, Inc. (hereinafter referred to as Realty Exchange). Respondent Realty Exchange is a Missouri corporation, and is also licensed by petitioner as a real estate broker.

'On July 7, 1968 Joseph Wilkins, Jr. of Kansas City, Missouri telephoned Realty Exchange and advised he was interested in buying a house. The same day Robert Greenwell, salesman for respondents, showed houses to Wilkins and his wife. The Wilkins told Greenwell they would like to buy one of the houses, at 2118 East 50th Street, but needed to sell the house they were living in at 4449 South Benton, as they could not afford to make two house payments. Greenwell referred the Wilkins to respondent Steger, who had Greenwell prepare an Offer to Purchase Real Estate, which the Wilkins signed. Written into the document were the words: 'R.E.K.C. to assume liability of home located at 4449 S. Benton as of Sept. 1, 1968.'

'On July 24, 1968 Wilkins met with respondent and Greenwell and signed a Real Estate Contract to buy the house at 2118 East 50th Street. The contract was conditioned upon Wilkins obtaining a Federal Housing Administration (FHA) insured loan in the amount of Thirteen Thousand Five Hundred Dollars ($13,500). At the meeting respondent told Wilkins that the Mid-America Mortgage Company would assume liability on Wilkins' house at 4449 South Benton. The same day Wilkins and respondent met with Orson Abbott, President of Mid-America Mortgage Company. Abbott's office was in the same building as respondent's, and Steger was a vice-president of Mid-America Mortgage Company at the time. Abbott and the Wilkins signed a typewritten Addendum to the Real Estate Contract, which stated:

'In connection with the above transaction it is hereby agreed by all parties that MID AMERICA MORTGAGE COMPANY will assume liability of buyers home located at 4449 South Benton as of September 1, 1968. Buyers agree to repair all screens on said property and patch the living room and kitchen ceilings.'

'On July 29 the Wilkins signed a firm commitment for mortgage insurance with the FHA. The commitment stated in part:

'A note and mortgage described above or as modified below will be insured under the National Housing Act provided one of the mortgagors will be an owner-occupant and all conditions appearing in any outstanding commitment issued under the above case number and those set forth below are fulfilled.'

Typed on as an additional condition was the following:

'Submit evidence prior to insurance that mortgagor has been released from all liability under outstanding mortgage on property at 4449 South Benton, Kansas City, Missouri, or consent to substitution of mortgagor, FHA Form 2210, be approved and evidence furnished that the property has been conveyed to and the mortgage obligation assumed by the substitute mortgagor; except when the mortgage is insured under escrow commitment procedure; or evidence is submitted that the property is being conveyed to an owner-occupant.'

'On July 30, 1968 the Wilkins signed a Missouri Warranty Deed deeding the property at 4449 South Benton to Verries Hall. The deed was notarized by Carolyn Abbott who is the wife of Orson Abbott, and warranted that the property was free and clear of any incumbrance. The following day Verries Hall signed an affidavit that 'she has purchased the property located at 4449 South Benton, Kansas City, Missouri and will be an owner-occupant.' Respondent testified that Verries Hall was a welfare recipient whose house was being condemned. Verries Hall subsequently occupied the house at 4449 South Benton. Wilkins made his last payment on this house in August, 1968 to City-Wide Mortgage Company.

'Thereafter, in September, 1968 the Wilkins moved into the house at 2118 East 50th Street and began making house payments on this house. In November, 1968 the City-Wide Mortgage Company, mortgagee of the house at 4449 South Benton, telephoned the Wilkins and advised that they were delinquent on house payments. Mrs. Wilkins called respondent, and he stated that there was nothing to worry about.

'In December, 1968 the Wilkins received a letter from City-Wide Mortgage Company demanding house payments for the 4449 South Benton property. Mrs. Wilkins called respondent and read him the letter. Respondent told Mrs. Wilkins that in some cases the previous owners of a house are billed by mistake and that she had nothing to worry about. In March, 1969 City-Wide Mortgage Company foreclosed on the property at 4449 South Benton and the property was subsequently sold. Thereafter the Wilkins were refused credit when they attempted to purchase a washing machine and dryer and were informed that their credit was inadequate. The Wilkins retained an attorney and filed a civil suit against respondents and others. The suit was dismissed upon payment of a Five Hundred Dollar ($500) settlement to the Wilkins. Respondent himself paid Two Hundred Fifty Dollars ($250) toward the settlement. Wilkins filed a complaint with petitioner.'

An examination of the transcript on appeal discloses that there was competent and substantial evidence to support the foregoing findings. Hence, we should not and do not disturb them.

From the foregoing facts the Hearing Commission then found and concluded in part as follows:

'The competent and substantial evidence upon the whole record does not support a conclusion that respondent Steger individually, or in his capacity as president of respondent Realty Exchange violated subparagraph (1) of § 339.100. The evidence indicates that Steger initially on July 7, 1968 planned to have Realty Exchange assume the liability on the 4449 South Benton property. Then subsequently on July 24, 1968 Abbott and the Wilkins signed the Addendum which provided that Mid-America Mortgage Co. would assume the liability of the property at 4449 South Benton. The FHA firm commitment specified that the Wilkins had to be released from liability on the 4449 South Benton property to...