Scott v. Kempland
| Decision Date | 11 January 1954 |
| Docket Number | No. 1,No. 43490,43490,1 |
| Citation | 264 S.W.2d 349 |
| Parties | SCOTT v. KEMPLAND et al |
| Court | Missouri Supreme Court |
Joseph Boxerman, Joseph Nessenfeld, St. Louis, for appellants.
Jerome F. Duggan, Edward A. Dubinsky, St. Louis (Dubinsky & Duggan, St. Louis, of counsel), for respondent.
Action at law to recover one-third of the not profits realized from the purchase and sale of a tract of real estate in the City of St. Louis. Plaintiff alleged that he and defendants purchased the described real estate; that the 'property was sold for the joint account of plaintiff and defendants at a profit of $25,000,' which profit was to be equally divided between the parties, but that the defendants collected and retained the said sum and refused to pay plaintiff his share. Plaintiff asked judgment for $8333.33 and interest. The cause was tried to the court without the aid of a jury and judgment was entered for plaintiff and against the defendants for $9533.30. Defendants have appealed.
No questions are raised concerning the sufficiency of the petition or the amount of the judgment, but defendants-appellants insist that plaintiff failed to make a submissible case, and the court erred in finding for plaintiff. The essentially disputed question is whether plaintiff and defendants engaged in a joint adventure for profit under which the property was purchased and sold for the equal benefit of each of the three adventurers.
The defendants, Watson and Kempland, were independent real estate brokers, each maintaining an office in the City of St. Louis. They frequently purchased and sold real estate together. Plaintiff Scott was also a real estate broker in Watson's office. He had had no previous dealings with either Watson or Kempland in which he was a partner in the purchase of real estate.
For some time prior to May, 1947, the real estate located at 2014-2020 Delmar Boulevard in St. Louis was on the market for sale at an asking price of $175,000. It was owned by McRoberts and Richardson. Richardson, a friend of Watson, had submitted a statement on the property showing its price and rental and other relevant facts, and Watson had given out copies of the statement in 1946 to a number of brokers and other persons, including Kempland and Scott. The property was occupied at the time under lease by the Majestic Stove Company and one of the questions affecting the sale of the property was whether the lessee would continue its occupancy.
In April, 1947, Kempland heard that Richardson was very anxious to sell the property, and another real estate man told him that it was his understanding that the price had been reduced to $87,500. Kempland reported this conversation to Watson, stating that he would be interested in purchasing the property at that figure. He asked Watson to find out for him what the facts were as to the price and also about the possibility of cancelling the Majestic lease. Watson learned that the lease was to be given up. He then conferred with Richardson, who asked $100,000 for the property, but subsequently told Watson that he would take the sum of $90,000 net cash. Watson reported this conversation to Scott but, apparently, did not report it at the time to Kempland.
Scott testified that Watson asked him whether he would be interested in purchasing the property with him (Watson) at $90,000. Scott 'studied the matter over' and agreed that he would do so on the basis that the property should be equally divided between them. It was agreed that both of them would then see if they could make a profitable disposition of the property.
In a deposition prior to the trial, Watson testified that he told Scott before Scott got an offer from Bennett, as hereinafter mentioned, that he (Watson) could get the property at $90,000 and that if he (Scott) could get an offer above $90,000 that 'we could make some money possibly out of the deal' and divide the profits three ways. At the trial, Watson's version of the conversation was that he merely told Scott that he thought the property could be bought for $90,000 and stated to Scott, 'Here is something worth while if you want to go out and work on it, if you can make a deal.' Shortly thereafter (on May 1st), Scott brought to Watson an offer, in the form of an earnest money contract from a Mr. Bennett, together with an earnest money check of $6000. The Bennett proposal was an offer of $105,000 of which $75,000 was to be secured by a first mortgage.
When the Bennett proposal was brought to Watson, he promptly called Kempland to his office. Kempland complained because he had previously requested Watson to obtain information for him relative to the property, and it was his view that the property should have been first submitted to him so that he could purchase directly from Richardson. Scott had not previously heard of Kempland's interest in the property. A discussion thereupon ensued between the three men, with the result (according to Watson) that the three agreed that, if the Bennett deal could be put over, the three of them would divide the profit three ways. Scott, however, testified that he and Watson agreed to take Kempland in as an equal participant and each of the parties had the privilege of submitting the property to anyone. Watson admitted at the trial that he brought Kempland into the deal with Scott 'on a profit sharing basis.'
As stated, Richardson wanted all cash for the property and the Bennett proposal involved taking back a $75,000 deed of trust. This meant that it would be necessary to procure a loan in the amount of $75,000 in order to put over the Bennett deal. Each of the three men agreed that he would try to obtain a commitment for a $75,000 loan, in which event the Bennett offer would be accepted and the property would then be purchased from Richardson for $90,000 cash. Watson took the Bennett contract to the First National Bank, but the bank rejected the loan. According to the defendants, the reason for agreeing to pay Scott one-third of the profit, if the Bennett deal could be put over, was that Scott had obtained the Bennett offer and, therefore, would be entitled to compensation. No risk was involved, because the property would be purchased only if the $75,000 mortgage could be obtained.
Each of the three men made an effort to obtain the $75,000 loan from different sources, but none of them was successful in this attempt. The Bennett offer was required to be accepted within six days. The document itself, however, was not offered in evidence and Bennett did not testify. When the $75,000 loan proved to be unobtainable, Watson gave the contract and the check back to Scott for return to Bennett. There is a conflict in the evidence as to when it was returned to Bennett.
Subsequently, on May 8, 1947, Richardson telephoned Watson that he had a 'hot deal' on with a Mr. Dubinsky, and said that if Watson wanted to do anything with the property he had better get busy. Both Kempland and Scott were in Watson's office at the time. It was defendants' version of this incident that Watson turned to Kempland and said, 'George, let's you and I buy this property' and Kempland said 'all right.' According to defendants, Scott's name was not mentioned and Scott had said nothing when Watson and Kempland agreed to buy the property for themselves. Watson then drew up a contract in the name of E. Van Pelt and obtained her signature. She was Kempland's stenographer and, in this case, a straw party having no personal interest whatever in the transaction. According to Watson and Kempland, she only represented them. Watson and Kempland took this proposed contract and Watson's check for $2500 earnest money and both went to Richardson's office on the same date, May 8, 1947, where they submitted the proposition to him. About four o'clock in the afternoon of that date the contract was signed by Richardson for himself and for McRoberts. The following morning Kempland gave Watson a check for $1250 to reimburse him for one-half of the earnest money advanced. Richardson testified that Kempland and Watson told him that they were purchasing the property.
Scott's version of what occurred was that while he was attempting to obtain the $75,000 loan, information reached him that some other broker was ready to pay Richardson $110,000 for the property, and that he so reported to Watson and Kempland. Scott testified that when he told them about this other prospective purchaser, 'it was agreed' then and there 'as a matter of protection' to themselves to purchase the property for the three of them; and it was also agreed that Watson would put up $2500 as 'option money, or bonus money or whatever it was, in order to obtain the property.' Scott said: 'We authorized Watson to purchase, I did not see the contract, he was acting for us three and that was his part of the transaction.' Scott further testified that the three of them, Watson, Kempland and Scott, Purchased the property for $90,000. Scott put up no part of the money and was not asked to do so, claiming that that was Watson's part of the transaction. Scott testified that Watson asked him not to go to Richardson's office when the purchase was made and assured him that 'his interest would be protected in every way, shape and form, and that it was not necessary.' According to Scott, the Bennett contract and check were not returned to Bennett until after the contract of purchase from Richardson and McRoberts had been signed, nor until after a subsequent offer of Bumiller to buy the property had been submitted to and accepted by defendants and Scott.
As stated, the purchase contract between the straw party and Richardson was executed on May 8, 1947. About noon the following day, May 9th, Watson left town for a weekend visit in Illinois. Before he left he talked to a broker, R. Vernon Clark, about the property and Clark asked him to give him until...
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