Quinn v. Van Raalte

• Decision Date: 03 June 1918
• Docket Number: No. 18797.,18797.
• Citation: 205 S.W. 59,276 Mo. 71
• Parties: QUINN v. VAN RAALTE et al.
• Court: Missouri Supreme Court

205 S.W. 59

276 Mo. 71

QUINN v. VAN RAALTE et al.

No. 18797.

Supreme Court of Missouri, Division No. 2.

June 3, 1918.

Motion for Rehearing Denied July 16, 1918.

Appeal from St. Louis Circuit Court; William T. Jones, Judge.

Action by Margaret A. Quinn against Simon Van Raalte and others. From an order granting the named defendant a new trial, plaintiff appeals. Order set aside, with directions.

Glendy B. Arnold, of St. Louis, for appellant. Stern & Haberman, Ryan & Thompson, Morton Jourdan, and Thomas M. Pierce, all of St. Louis, for respondent.

WALKER, P. J.

This is an action based on section 7182, R. S. 1909, to recover for usury. It arises out of a real estate Transaction between the plaintiff and the defendants Simon Van Raalte, Otto L. Mersman, and the Excelsior Realty Company. The amount sued for, with interest is $21,000. A trial before a jury resulted in a verdict against the defendant Van Raalte for $21,-000. A motion for a new trial was granted, and from that order the plaintiff appeals.

At the close of the trial the plaintiff, in obedience to a ruling of the court, elected to stand on the second count of he: petition and dismissed as to the first count. The second count is, in substance, as follows: After a formal averment as to the corporate character of the Excelsior Realty Company, it is alleged that on the 25th day of May, 1909, plaintiff borrowed $10,000 from defendants Mersman and the Excelsior Realty Company, and, as a consideration therefor, gave them her promissory note for $60,000, payable in six months after date, with interest at the rate of 6 per cent. per annum; that, far convenience, the note was made payable to Ralph W. Coale and indorsed by him without recourse, and was delivered to defendants Mersman and the Excelsior Realty Company; that on the 27th day of May, 1909, the defendants transferred said note to their codefendant Simon Van Raalte, and that said Van Raalte acquired de same with knowledge that the note was given for a loan of only $40,000; that on March 29, 1910, plaintiff paid Van Raalte the principal and interest of said note, amounting to $61,200. Judgment for $21,000, with interest, is prayed for.

The answer of the defendants Mersman and the Excelsior Realty Company is in two counts, presenting substantially the same defense. We are concerned in this review only with the second count.

It is averred that James J. Quinn, the husband of plaintiff, on or about May 1, 1909, procured an option to purchase, on or before May 31, 1909, for $140,000, a tract of land in St. Louis county, containing about acres, and known as the "Forsyth Tract," lying between the Washington University grounds and the city of Clayton; that Quinn bought this option on a speculation, and being unable to pay the balance of the purchase money, $39,000, within the time prescribed, induced the Excelsior Realty Company to buy the option from him, with the understanding and agreement that if the Excelsior Company bought the land under the option it would sell it to Quinn for the advanced consideration of $160,000, payable upon the assumption by Quinn of two deeds of trust On the land for $50,000 each, and the balance in cash or notes satisfactorily secured, payable in six months; that Quinn was given a five-day option in which to buy the land from the Excelsior Realty Company, but was not obligated to do so; that Quinn was merely given an option to buy, while the Excelsior Realty Company bound itself for five days to sell to Quinn, in the event it bought the land under his option; that the Excelsior Realty Company bought the land under the option and sold it to Quinn, and that the conveyances were effected through Ralph W. Coale, as agent of the Excelsior Realty Company; that the land belonged to Janice J. Quinn, and that certain other property on which a deed of trust was given to secure plaintiff's note also belonged to Quinn; that prior to Quinn's exercising his option to buy said land no negotiations had been had between plaintiff and the Excelsior Realty Company or Otto L. Mersman, and that she was unknown to them; that Quinn directed that the papers be prepared in the name of Margaret A. Quinn, his wife, because of a lawsuit which he said was pending against him, or was about to be brought. Defendants deny that they loaned plaintiff any money, and aver that plaintiff's note "merely evidenced money due from the maker thereof on account of the purchase price of the property."

The answer of the respondent Van Raalte to the second count of the petition is a general denial, and pleads that he was a holder in due course of plaintiff's note, and that the same was not given for a loan of money. He does not plead the defense that plaintiff's note was given for a loan, but to evidence "money due from the maker thereof on account of the purchase price of the property." None of the defendants pleaded that the plaintiff was not the real party in interest, or that there was a defect of parties plaintiff. The reply was a general denial.

The contention of the plaintiff is that her husband's connection with this entire matter was as her representative, and that the contract of purchase was obtained by him for her. The contention of the defendants is that she was not the real party in interest.

James J. Quinn, husband of the plaintiff, on the 20th day of April, 1909, entered into a written contract with the agent of the owners of the Forsyth tract whereby the latter agreed to sell and the former to purchase, said tract of land for the sum of $140,000, to be paid as follows: $40,000 in cash, $1,000 of which was paid, as earnest money and part purchase money, upon the execution of the contract of sale, and the balance, $39,000, on or before May 31, 1909, purchaser to execute second deed of trust for $50,000, maturing March 31, 1910, and assume payment of an existing first deed of trust for $50,000, maturing April 30, 1910.

After attempting to interest a number of others in this deal, Quinn, the plaintiff's husband, was introduced to Mersman by Ralph W. Coale, Coale and Mersman then having offices in the real estate office of Cornet & Zeibig. Quinn at first sought a loan of Mersman of $39,000, which the latter refused to consider. Quinn then besought Mersman to buy the land for him, and, after numerous conferences, Mersman finally agreed to do so. In his direct examination Mersman testified on this point as follows:

"Quinn told me he had an option on the Forsyth property for $140,000, and he wanted to know if I would buy the property for him, or lend him the money to buy it, or make some deal with him by which he could avail himself of the option. I found him in my office every morning, and the final result was his giving me the option, assigning it to me or my agent, and my buying the property for him for $140,000. No question of my loaning him money to purchase was ever considered. It was asked for. The last proposition made by him was that he would assign the option to me if I bought the property, and he would buy the property back at 20,000 profit, if I would give him six months to pay for it, and he would give me what additional security he could dig up besides. That was his own suggestion, and we made a memorandum of that at the time. When we made our final arrangements, Quinn said to me, `I cannot handle this property in four days, but if I had six months I could make $75,000 or $100,000 on it.' I agreed with him, and I said, `All right, we will go ahead; I will buy it for you and sell it to you, and then you go ahead and make the balance and on the strength of that we drew up the memorandum of the agreement made at the time we came to this understanding. We were sitting at my desk together, at one of the later numerous conferences, when the memorandum was made. It is as follows: `I'll buy the property at $140,000.00, and sell it to you for $160,000.00. You to take it subject to $100,000.00, and I'll take your note for $00,000.00 secured by mtg. on the Forsyth tract and that on Ninth and Morgan and on 2735 Laclede avenue, Laclede clear. Ninth and Morgan subject to $36,000. Said $60,000.00 mtg. to be payable on or before six months at 6 per cent.' This memorandum must have been two or three days before the check was delivered to Rohan, the secretary of the Title Guaranty Company. Quinn repeatedly asked me to buy the property for him, etc. He made me numerous propositions. The last one was exactly in accordance with the memorandum I wrote down at the time. He kept asking me to buy the property for him, and telling me about the profit we could make or he could make on it if he had it. I didn't like to buy the property, and held back ten days before I did."

After making the foregoing agreement, the transaction was consummated in the following manner: On the 25th day of May, 1909, the Excelsior Realty Company, acting through Mersman, its president, delivered to Rohan, the secretary of the Title Guaranty Trust Company, a treasurer's check of the St. Louis Union Trust Company for $40,000, with instructions to pay it out in accordance with the terms of the following written receipt, to wit:

                             "St. Louis, Mo., May 25, 1909
                

"Received of Cornet & Zeibig, agents for the Excelsior Realty Company, treasurer's check No. 38693, of the St. Louis "Union Trust Company, for $40,000.00, payable to the Title Guaranty Trust Company, to be used in the consummation of the sale of property in United States survey 378, and conveyed by the Quality Realty Company to Ralph Coale, and by the said Ralph Coale to Margaret A. Quinn, and also for the purpose of perfecting the titles to the said property and other properties owned by Margaret A. Quinn, and carrying out the purposes set forth in directions from Otto L. Merman. This money to be used when all papers are found to be satisfactory to this company and to Henry L. Cornet.

                                 Title Guaranty Trust Company
                                       "By Jas. M.

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