Smith v. Mitchell

• Decision Date: 13 September 1965
• Docket Number: No. 51002,No. 1,51002,1
• Citation: 394 S.W.2d 308
• Parties: Fred B. SMITH and Faye L. Smith, Plaintiffs-Appellants, v. James Eldon MITCHELL and Goldie M. Mitchell, Defendants-Respondents
• Court: Missouri Supreme Court

Page 308

394 S.W.2d 308

Fred B. SMITH and Faye L. Smith, Plaintiffs-Appellants, v. James Eldon MITCHELL and Goldie M. Mitchell, Defendants-Respondents.

No. 51002.

Supreme Court of Missouri, Division No. 1.

Sept. 13, 1965.

Motion for Transfer to Court En Banc or for Rehearing Denied

Oct. 11, 1965.

H. Gregg Privette, Kansas City, Buford L. Shankel, Overland Park, Kan., of counsel, for appellants.

Joseph H. Glass, Kansas City, Cyrus Leland, Olathe, Kan., and Donald L. Dorei, Kansas City, for respondents.

HENRY J. WESTHUES, Special Commissioner.

This action was filed in the Circuit Court of Jackson County, Missouri, by plaintiffs seeking a rescission of a contract with defendants whereby plaintiffs agreed to convey property in Jackson County, Missouri, to the defendants and defendants agreed to convey a motel in Olathe, Kansas, to plaintiffs.

The defendants filed a counterclaim asking for specific performance of the contract. After hearing the evidence, the trial court entered a decree in favor of the defendants. Plaintiffs appealed. Title to real estate is directly involved, thus appellate jurisdiction is vested in this Court.

The plaintiffs, Fred B. Smith and Faye L. Smith, are husband and wife. At the time the contract was executed, they lived in a house in Raytown, Jackson County, Missouri. We shall refer to them as the Smiths. The defendants, James Eldon Mitchell and Goldie M. Mitchell, are husband and wife. At the time the contract was signed, they lived in a motel in Olathe, Kansas. We shall refer to them as the Mitchells.

In the contract, the Smiths' property was valued at $22,000; the motel was valued at $90,000. The Smiths agreed to assume a mortgage on the motel and also to execute a note and second mortgage for the balance to make up the $90,000.

The Smiths, as grounds for rescission of the contract, claimed that the title to the motel was defective and that the Mitchells had misrepresented the income and the expense of operating the motel.

The most vital issue in this case is whether the Smiths were induced to sign the exchange contract by virtue of misrepresentations made by the Mitchells. Before making a statement of the evidence in detail, we shall dispose of a number of points raised in the brief filed on behalf of the Smiths.

Under point one of the brief, it is stated that this is a case in equity and 'therefore triable de novo here.' That is the correct rule except strictly speaking the case is reviewed de novo on the record made in the trial court. Plaintiffs cited and quoted from the case of Townsley v. Thielecke, Mo., 349 S.W.2d 902. The rule was considered at length in that case at pages 906, 907(1)(2). While cases in equity are reviewed de novo, it is also the rule that where a decree is based upon conflicting evidence, an appellate court will usually defer to the findings of the trial judge who is in a better position to judge the credibility of the witnesses. 349 S.W.2d l. c. 906(2).

In the next point briefed, it is stated, 'The Jackson County Circuit Court was without jurisdiction of the subject matter as it was not authorized to decree specific performance of the real estate located in Johnson County, Kansas, and its decree herein is absolutely void.' It is our opinion that plaintiffs have misinterpreted the effect of the decree entered by the trial court. It must be noted that plaintiffs filed this suit thereby invoking the jurisdiction of the court for a rescission of the contract. Defendants filed a counterclaim asking for specific performance. It is a rule of law that when a court of equity acquires jurisdiction of a case, it may dispose of all issues therein involved. The decree in this case required plaintiffs to execute a deed conveying the Missouri property to the defendants and to execute a note and mortgage on the Kansas property to the defendants. It was decreed that when such deed and note and mortgage were deposited with the clerk of the court, then the clerk should deliver defendants' deed to the Kansas property to plaintiffs. According to the decree, the deed conveying the Kansas property to plaintiffs was in the possession of the clerk of the court. The decree further provided that in case plaintiffs refused to execute a deed conveying the Raytown property to defendants and refused to execute a note and mortgage on the motel the defendants should have judgment against the plaintiffs in the sum of $14,574.73 (the amount of the proposed note and mortgage). The decree further provided if and when the judgment was paid, then in that event, the decree should have the force and effect of a conveyance of the Missouri property to defendants and the clerk should deliver to plaintiffs a deed executed by defendants conveying the motel to plaintiffs. It is apparent that the court did not exceed its jurisdiction. The judgment or decree would upon certain events have the effect of conveying the Missouri property. The decree operated in personam in relation to the Kansas property. Plaintiffs cite and quote from the case of March v. Gerstenschlager, Mo., 322 S.W.2d 743. The quotation from that case, set out in plaintiffs' brief, illustrates the difference between the judgment in the case before us and the one entered in the March case. Note a portion of the quotation: 'The court found title to be in plaintiff in direct contravention of the deed in question, and ordered that the recorded judgment should operate as a conveyance if defendant failed to reconvey. Of necessity the recording would be in a different county.' 322 S.W.2d l. c. 744(2). In the March case, suit was filed in the City of St. Louis; the land was located in St. Francois County, Missouri. We rule the trial court possessed jurisdiction to enter the decree in question. See 81 C.J.S. Specific Performance Sec. 115a(2), p. 649, and 81 C.J.S. Specific Performance Sec. 135, p. 700.

Point three of the brief states that 'The trial chancellor erred in refusing to grant rescission because the contract had become void by its terms.' The assignment is a general statement and does not present any question for review. However, in the course of the argument, the plaintiffs stated, 'The contract in question demanded defendants furnish merchantable title. To date, defendants have failed to do so.' The main objection seemed to be that a personal injury suit was pending against the Mitchells which had been filed at the May 1961 Term of the Johnson County, Kansas, court. Olathe is located in that county. As explained in the evidence, if a judgment were entered during the May term, a lien on the property would date back to the day the suit was filed. The May term ended on September 2. Thereafter, no lien would attach if the motel had been conveyed or sold to another.

Mrs. Smith's testimony included the following:

'Q And you refused to go through with this deal because you didn't do any business at the motel, is that right?

'A That, and it had this lawsuit against it.'

The contract in question was signed June 17, 1961. Possession of the motel was to be taken by the Smiths on July 1 and the Mitchells were to take possession of the Raytown property on that same day. However, possession was not taken by either party until July 8. The contract provided that...