Tedesco v. Bekker
| Decision Date | 29 December 1987 |
| Docket Number | No. 52996,52996 |
| Citation | 741 S.W.2d 896 |
| Parties | Jo TEDESCO, Norman E. Koelling, Jr., Donna L. Koelling, and West Central Financial Corporation, Plaintiffs-Respondents, v. Vladimir O. BEKKER, Nina D. Bekker, James J. Kirchoff and Carol J. Kirchoff, Defendants-Appellants. |
| Court | Missouri Court of Appeals |
Blemenfeld, Sandweiss, Marx, Tureen, Ponfil & Kaskowitz, P.C., Mark A. Brittingham, St. Louis, for defendants-appellants.
Dan LaGear, St. Louis, for plaintiffs-respondents.
This is an action to determine whether respondents' payment to Creative Funding, Inc. [hereinafter CFI] of the balance on a promissory note owned by appellants, Vladimir and Nina Bekker, Trustees for Simon Bekker, satisfied all indebtedness to the appellants and required the appellants to release the deed of trust on certain realty secured by the note. The trial court found that CFI was the agent for the appellants and had express authority to collect the payment. We affirm.
In April 1985, CFI arranged an investment for appellants, who thereby loaned $27,000 to Louise Daniels as evidenced by an appropriate promissory note. The note was secured by a first deed of trust on real estate located at 4171 Shaw Avenue in the City of St. Louis, and the deed was properly recorded on May 21, 1985.
The appellants executed a Management Agreement with CFI. It provided that CFI "was appointed as exclusive agent to manage said loan for Lender," and that CFI "shall use all reasonable efforts to collect all funds due under the terms of said Note and Deed of Trust." In May, June, July and August, appellants received the monthly payments from CFI as agreed.
The promissory note provided for interest at the rate of 16.75 percent per annum. The appellants were to receive 14.13 percent per annum; the difference represented the servicing fee charged by CFI. In addition, the note required a balloon payment of the principal amount in three years. Also included in the body of the note are the following provisions:
Any unpaid balance may be paid without penalty, and any unearned finance charge will be refunded pro rata.... If default be made in the payment of any said debt when due, or in the event said real estate is conveyed or transferred, or should default be made in the performance of any covenant or agreement contained in the Deed of Trust given to secure this indebtedness, Lender, at its option, may declare all unpaid indebtedness evidenced by this Note and by said Deed of Trust immediately due and payable, and, thereupon, the undersigned agree to pay all costs of collection, including a reasonable attorney's fee. Failure at times to exercise such option shall not constitute a waiver of the right to exercise it later.
On June 3, 1985, CFI entered into an installment sales contract with respondents Tedesco and Koelling who had agreed to purchase the property. Although appellants had been told that there was a possibility that the property might be sold, they were not informed of the actual agreement.
The installment sales contract provided that respondents Tedesco and Koelling need only make monthly interest payments of $541.48 to CFI for three years until the principal became due. Tedesco and Koelling secured a loan from respondent West Central Financial Corporation [hereinafter "West Central"] to pay off the sales contract. West Central, Tedesco and Koelling were all aware of appellants' deed of trust prior to the closing, but West Central did not request that CFI provide appropriate documentation to release the appellants' deed of trust until it had remitted the purchase price. At that time, West Central requested that CFI send a recorded release of mortgage in return.
CFI never provided an appropriate release of the appellants' deed of trust nor did it distribute any proceeds to the appellants. Thus the appellants did not learn of the sale of the property until CFI filed for bankruptcy on October 3, 1985.
The bankruptcy court declined to decide the validity of the appellants' deed of trust; therefore, the appellants declared the loan in default and initiated foreclosure proceedings. The respondents filed suit in the Circuit Court of the City of St. Louis to enjoin the foreclosure and have the court determine the status of the property.
On September 23, 1986, the trial court found that West Central's payment to CFI fully satisfied the indebtedness to the appellants and that their deed of trust no longer constituted a valid and enforceable lien on the property. In addition, the court ordered that appellants pay respondents a penalty of ten percent of the value of their deed of trust ($2,700) pursuant to Section 443.130, RSMo 1986. A request by respondents for attorney's fees was denied.
Appellants assert that the trial court erred in holding that appellants' deed of...
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