Sunset Acres Motel, Inc. v. Jacobs
| Decision Date | 13 June 1960 |
| Docket Number | No. 2,No. 47190,47190,2 |
| Citation | 336 S.W.2d 473 |
| Parties | SUNSET ACRES MOTEL, INC., a Dissolved Corporation, Respondent, v. Sydney JACOBS and Sylvia Jacobs, Co-Partners d/b/a Sydney Jacobs Realtors, and William Goodman, Appellants |
| Court | Missouri Supreme Court |
Elmer Price, Milton I. Goldstein, St. Louis, for appellants.
Greensfelder, Hemker & Wiese, Forrest M. Hemker, Mark R. Gale, St. Louis, for respondent.
This is a suit by a dissolved corporation (see Sec. 351.565 RSMo 1949, V.A.M.S.) against the members of a real estate brokerage partnership and its employee for damages on account of fraudulent representations, concealment and breach of trust in connection with the sale of a motel. Plaintiff recovered $15,000 as actual damages; the jury allowed no punitive damages. Following the overruling of their motion for new trial, defendants appealed. We shall refer to the parties as plaintiff and defendants; and, since Frank Lama was the principal stockholder and chief representative of the plaintiff, we may at times refer to him as the plaintiff.
Mr. Lama had built this motel and operated it for three or four years; desiring to sell it, he employed the defendants Jacobs as his agents and gave them a ninety-day exclusive listing under date of June 23, 1955. The sale price was fixed at $300,000 with a 5% commission. This listing expired in September 1955 with no sale made, but Lama stated thereafter, in substance, that defendants might continue their efforts to make a sale. The salesman principally involved in this deal was William Goodman, one of the defendants. Except where a distinction is necessary, we shall occasionally refer to the defendants collectively as 'Jacobs.' In October 1955 Lama was advised by Jacobs that the Koch family was interested in purchasing the motel. This family consisted of Alphonse J. and Evelyn Koch, their son Vernon A. Koch and his wife June M. We shall merely refer to these persons as the Kochs, since they acted jointly in so far as we are concerned. The Kochs examined the motel and were definitely interested, but they were short on the financing. They owned a commercial property at Thrush and Lillian is St. Louis, consisting of a grocery store and two small shops, with living quarters above (which we shall refer to as the Thrush property) and a residence on Fontaine Avenue; they had $10,000 in cash. The equity in the Fontaine property was recognized to be $10,000. The value of the Thrush property was questionable. Goodman prepared a sales contract dated November 9, 1955, proposing to sell the motel to the Kochs for $300,000 by raising $150,000 on a first deed of trust, having plaintiff take back a second deed of trust for $80,000, deeding the Fontaine property to the seller at $10,000 and the Thrush property at $50,000, with the balance of $10,000 to be paid with the cash available. The Kochs signed that contract and made a $2,500 deposit with Goodman. At substantially the same time Goodman prepared a proposed form of contract (dependent on the closing of the principal sale) whereby Jacobs proposed to buy the Thrush property from plaintiff at an unstated amount. This was not signed by anyone. He also prepared a contract between the Kochs and Jacobs under date of November 10, 1955, which, upon the assumption that plaintiff would take the Thrush property at $50,000, provided that Jacobs agreed to repurchase it from plaintiff at an unspecified price, the Kochs agreed that if Jacobs resold the property for less than $40,000 net, they would pay him the difference between the proceeds of the sale and $40,000 (but not to exceed $15,000) in the form of a note secured by a third deed of trust on the motel property. The proposed note and deed of trust were particularly described. This agreement was executed by the Kochs only, but it remained in the possession of Jacobs. Goodman presented the $300,000 sales contract to Lama, along with the proposed agreement to repurchase Thrush at an unspecified sum; apparently Goodman then suggested a repurchase at $22,500. He admittedly did not show Lama at any time the agreement signed by the Kochs, as last described. Lama had examined the Thrush property and said that he did not want it at any price and he told Goodman, in substance, to 'work it out' himself, or to sell it themselves. The $300,000 contract was never given serious consideration by Lama because he did not want the Thrush property. Numerous conferences and negotiations followed. According to Mrs. Evelyn Koch, Goodman next suggested to them a purchase of the motel at $290,000 with the Thrush property valued at $40,000; then a purchase at $287,500 with Thrush valued at $37,500. In these negotiations Goodman eventually stated that since Lama did not want their Thrush property, Jacobs would guarantee them $22,500 for it and (according to Mrs. Koch) 'We would owe them fifteen thousand dollars,' with a credit for any overplus on resale. Goodman never discussed with the Kochs a purchase of the motel at $280,000, and when they first saw the $280,000 contract, that figure was lined out and $272,500 was substituted.
Goodman told Lama that $280,000 was the most that the Kochs would be interested in paying, and Lama then said that if he 'came down' to that price he would certainly pay no more than $5,000 as a commission. In a further conference Goodman got Lama to agree to a commission of $7,500 on the $280,000 figure. A sales contract was prepared at $280,000, dated November 16, 1955; this contract was originally drawn by Lama's attorney. It provided that the seller agreed to pay $7,500 'as full commission upon the closing of this sale.' Goodman then prepared a new form of contract (the one which was eventually signed) at $280,000, merely eliminating this quoted wording and leaving the matter of commission blank. About this time either Jacobs or Goodman called Lama and asked him if it would be satisfactory to show the sale price as $272,500 net; Lama called his attorney and then agreed, provided the wording 'no commission of any sort is due or payable by seller' was inserted in the contract. When Lama signed it these words were inserted. Prior to the meeting at which the contract was signed the typed sale price of '$280,000' had been changed in ink to $272,500; in that form it had previously been presented to the Kochs and the change initialed by them. Though dated November 16, 1955, the contract was signed on or about November 21st.
Under date of November 19, 1955, Jacobs had taken from the Kochs an agreement (somewhat similar to the one dated November 10th, and contingent upon the closing of the main deal) whereby: he agreed to buy the Thrush property from them at $22,500, and resell the same; if the resale was at less than $37,500 net, the $22,500 guaranteed price would be reduced accordingly; and the Kochs were to give Jacobs a note and third deed of trust on the motel property for $15,000 at 6% interest payable in monthly installments, to assure him a compensation of $15,000. Jacobs admitted that this agreement was procured at substantially the time when they were talking to Lama about the $272,500 net deal, but Goodman testified that it was actually executed after the sales contract, although prepared earlier. In connection with the negotiations of Goodman for the $15,000 note, Mrs. Evelyn Koch testified:
Goodman testified that he told the Kochs that Lama was selling for $272,500 net, that 'we had no commission,' and that they would have to pay it.
It is conceded that Lama was never told of the contract between Jacobs and the Kochs, nor did he know of the $15,000 note and deed of trust; he learned of them some months after the closing. He did not inquire of the Kochs as to whether they were paying any commission, nor did Lama and the Kochs ever discuss the purhase price directly. Just prior to the closing, and on the same day, Jacobs had the Kochs execute the $15,000 note and deed of trust. He eventually sold the Thrush property at a figure which netted $4,627.49 in excess of the $22,500 guaranteed figure and gave them credit by cancelling the $15,000 note and deed of trust and taking new ones for the adjusted figure. These called for payments of $195.95 monthly, all of which (23 in number) had been made to the time of trial. Jacobs had arranged temporary financing on the Thrush property pending the closing of the motel sale, so that $22,500 from that source was used in the closing. It is apparent that the Kochs were easily persuaded because they were unable otherwise to raise the cash necessary for the purchase of the motel, even at the $280,000 figure used in...
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