Shepherd v. Woodson

Decision Date14 September 1959
Docket NumberNo. 46839,No. 2,46839,2
Citation328 S.W.2d 1
PartiesConnie SHEPHERD, Respondent, v. Robert L. WOODSON and Thomas E. Woodson, Appellants
CourtMissouri Supreme Court

Walter A. Raymond, Kansas City, for appellants.

James W. Benjamin, Rogers, Field, Gentry & Jackson, Butler Disman, Kansas City, for respondent.

BOHLING, Commissioner.

Mrs. Connie Shepherd, plaintiff, sued Robert L. Woodson and Thomas E. Woodson, defendants, in three counts for alleged fraud and deceit arising out of her purchase of the property known as 1212 East Forty-fourth Street in Kansas City, Missouri, subject to the payment of a first deed of trust securing an indebtedness of $8,300 and a second deed of trust securing an indebtedness of $4,200. Count I was to set aside a foreclosure sale and sheriff's deed of August 23, 1957, under the second deed of trust to defendant Thomas E. Woodson, and to cancel the deed of trust and note secured thereby. Plaintiff asked for actual damages in Count II and punitive damages in Count III. Defendants filed a joint answer, admitting that plaintiff assumed the aforesaid notes and deeds of trust, the foreclosure and deed under said second deed of trust, and denying each and every other allegation in the respective counts of plaintiff's petition; and a counterclaim for the conversion of described household furniture located on the said real estate. Plaintiff filed a general denial to the defendants' counterclaim. All issues were tried at the same time. The court submitted to the jury an issue of fact whether defendants had agreed not to foreclose the second deed of trust as alleged in plaintiff's petition. The jury answered this fact inquiry in the affirmative, and returned a verdict for plaintiff for $6,500 actual and $7,200 punitive damages; and a verdict for plaintiff on defendants' counterclaim. Judgment was entered for plaintiff in the total sum of $13,700; against defendants on their counterclaim; and on Count I of plaintiff's petition the court voided, cancelled and set aside the foreclosure proceedings and deed of August 23, 1957, and decreed the title to said property held by plaintiff on or before August 23, 1957, to be unaffected by said sale and deed. Defendants' motion for judgment notwithstanding the verdict or for a new trial was overruled and defendants have appealed. They brief only the issues involved in Counts II and III of plaintiff's petition, and contend plaintiff failed to make a submissible case for actual or punitive damages and that certain instructions were erroneous.

Robert L. Woodson purchased 1212 E. 44th Street, Kansas City, Mo., an 8-unit building, on September 12, 1956, for $9,500, in response to a telephone call from his brother, Thomas E. Woodson, of Goff, Kansas, asking him to purchase the building if a good buy. Robert deposited $100 earnest money, paid another $400 when the real estate contract was signed and an additional $500 at the time of receiving the deed, at which time he executed a deed of trust on the property securing a note for $8,500. He took the title in his name. Thomas paid Robert the $1,000 September 17th. Thomas instructed Robert to remodel the building for six apartments with baths to secure a rental income. Thomas was injured in an automobile accident January 7, 1957, and told Robert to sell the property.

Plaintiff had operated beauty shops on rented premises. A short time prior to the instant transaction, she had a child and, desiring to stay at home, sold her beauty shop for $3,500 and wanted to invest the money in property that would yield an income and provide a home. Mrs. Zelma Marshall kept books for plaintiff and was auditor for the Tucker Realty Company (hereafter sometimes referred to as Tucker), a Kansas City real estate brokerage firm of long standing. She referred plaintiff to Tucker. Mrs. Virginia Tucker, president, Earl Aull, Jr., sales manager, and Mary Aull owned all the stock of Tucker.

Defendant Robert L. Woodson was a real estate salesman employed by Tucker. Real estate brokers employ salesmen as agents, and the salesman's license is issued under the broker's license.

Earl Aull, Jr., was acquainted with plaintiff. About three days before plaintiff met Robert Woodson, Aull showed plaintiff a small house. At his suggestion she made an offer of $4,000 for it. The owner rejected the offer. This was the only real property plaintiff ever made an offer on prior to meeting Robert Woodson.

Mrs. Virginia Tucker testified that Mrs. Marshall put plaintiff in touch with her; that Robert Woodson was present when she and Mrs. Marshall discussed plaintiff having $3,500 with which to make a down payment and being interested in securing property where she could live and have some income; that she gave Robert Woodson all the details and told him he was to represent Connie Shepherd and find her a suitable property.

Plaintiff testified that she had explained her situation to Mrs. Tucker; that Mrs Tucker appointed Robert Woodson as plaintiff's agent to show her property; that plaintiff told Robert she 'was relying on him to show me some property that I could handle'; and that when she went with him to look at property she believed he represented her and relied on what he told her, and at the time she signed the contract to purchase she still relied on his being her agent, but she did not employ Robert Woodson to look at properties for her, never discussed paying him for his services and did not know she was supposed to pay 'them.'

Robert showed plaintiff several apartments and the Hawthorne Hotel on February 7, 1957. She told him she wanted to think about the hotel, but when she inquired on February 8th Robert informed her the hotel had been sold the previous night. Mrs. Trucker stated Robert brought plaintiff to the Tucker office after showing her the hotel. On February 8th he showed plaintiff three properties, including 1212 E. 44th Street. The building was vacant and was being remodeled for six apartments. Plaintiff testified Robert stated that the reasonable market value of the property was $16,000; that it could be finished for $2,500, the apartments would rent for $65 to $75, and when finished would be worth $25,000; that he could get plaintiff a $2,500 loan; that she could handle it with the money she had; that this was plaintiff's best buy; and that he would have to consult the owner by long distance, but was sure the owner would take the $3,500 down payment. The day was cold and they looked at 1212 E. 44th Street for about only thirty minutes.

Robert then took plaintiff to the Tucker Realty Company, where plaintiff, as buyer, contracted to purchase from Robert L. Woodson, as seller, 1212 E. 44th Street for $16,000, paid $3,500 down, which was deposited with Tucker, and assumed the existing loans, which were stated to be a first mortgage of $8,300, payable $100 monthly, including interest, and a second mortgage of $4,200, payable $50 monthly, including interest. The contract provided: 'Possession with closing of sale.' After plaintiff had signed the contract and made the $3,500 down payment, Robert stated the owner would rather not deliver the warranty deed until after March 25th.

Mrs. Tucker testified that Robert Woodson furnished all the information for the contract. She, as did plaintiff, testified that Robert, when asked about his name being on the contract, said that he was acting as a 'straw'; that the seller was a friend of his who was out of the city and he would contact him. Mrs. Tucker testified she had no reason to doubt him at that time. Plaintiff testified she had not purchased property before and did not know what it was all about; that Robert never asked for her husband's signature, and never told her that his brother or that he, Robert, was interested in the ownership of the property.

Plaintiff desired to proceed with the remodeling to secure rental income, and under a contract with Robert of February 22nd she was given 'access to the property to make needed redecorating and remodeling,' she to pay all costs incurred therefor after said date, loan payments due April 1, and the costs of a title policy and mortgage policy.

On February 25, 1957, Robert L. Woodson executed a second deed of trust against the property to Henry H. Fox, Jr., for Thomas E. Woodson to secure the payment of a $4,225 promissory note.

Plaintiff went ahead with the remodeling about February 27th. Robert Woodson testified the building needed new floors, baths, kitchens, bathroom partitions, front door, outside exit for the second floor, three specially made windows and other miscellaneous carpentry, cement and other work. Plaintiff stated defendants had performed some of the remodeling; for instance, partitions had been put in; plumbing had been roughed-in; a new door installed; work on the windows and outside stair had been started but not finished. Plaintiff testified it took a carpenter three weeks to put it in shape for other workmen. She had to replaster and repaint. The woodwork had rotted out. She furnished fixtures for four new bathrooms and a kitchen sink. She had papering, flooring, electrical and plumbing work done, and put cabinets in the kitchens. She paid for the special windows. She introduced in evidence an itemized statement, supported by receipted bills and cancelled checks, showing payments of $2,250.35, and unpaid bills of $1,482.26, a total of $3,732.61. She stated there were other items. Robert testified that he and his brother put $4,000 to $4,500 in remodeling the building. Plaintiff's pretrial motion for defendants to produce their records showing their expenditures was sustained by the court. Robert stated these checks were available in the court room. When plaintiff's counsel asked Robert if the records defendants produced under the court's order just prior to the trial showed expenditures of only $1,657.23, Robert answered: '...

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