Toedtman v. Grass, 24353.

• Decision Date: 03 May 1938
• Docket Number: No. 24353.,24353.
• Citation: 116 S.W.2d 153
• Parties: TOEDTMAN et al. v. GRASS et al.
• Court: Missouri Court of Appeals

116 S.W.2d 153

TOEDTMAN et al. v. GRASS et al.

No. 24353.

St. Louis Court of Appeals. Missouri.

May 3, 1938.

Appeal from Circuit Court, Ste. Genevieve County; Taylor Smith, Judge.

"Not to be published in State Reports."

Action on promissory note by John Toedtman and another against Frank X. Grass and another. From a judgment on a verdict for defendants, plaintiffs appeal.

Affirmed.

Charles L. Long, of St. Louis, for appellants.

Raymond S. Roberts, of Farmington, for respondents.

McCULLEN, Judge.

This suit was brought by appellants, hereinafter referred to as plaintiffs, against respondents, who will be referred to as defendants, on a promissory note executed by defendants in the sum of $2,500 in connection with a trade of real estate owned by plaintiffs in Hidalgo county, Tex., for real estate located in the city of St. Louis, Mo., and owned by Monroe L. Schilli of said city. A trial before the court and a jury resulted in a verdict and judgment in favor of defendants. Plaintiffs have brought the case to this court by appeal.

The petition of plaintiffs was in two counts. At the conclusion of the evidence, plaintiffs dismissed count No. 2. It will therefore, be unnecessary to discuss that count. In count No. 1 of their petition, plaintiffs alleged that defendants, by their promissory note executed by them and delivered to plaintiffs dated January 12, 1933, promised, for value received, to pay to plaintiffs $2,500 on January 12, 1936, together with interest thereon at the rate of 6 per cent. per annum from date, payable semiannually, as evidenced by interest notes, together with 10 per cent. of principal and interest as an attorney's fee if placed with an attorney for collection; that said $2,500 note is one of a series of seven negotiable promissory notes, the other six being semiannual interest notes payable respectively in six, twelve, eighteen, twenty-four, thirty, and thirty-six months after date; that said notes provide that, if default be made in payment of principal or interest on any note, the holder thereof may, at his option, declare all notes due and payable immediately; that defendants neglected and refused to pay note No. 3, which was due and payable July 12, 1934; and that plaintiff accordingly declared the entire balance due and demanded payment, but defendants refused to pay the same, or any part thereof. The said principal note of $2,500 was attached to the petition and made a part thereof as Plaintiffs' Exhibit A. Plaintiffs prayed judgment against defendants in the sum of $2,500, with interest at the rate of 6 per cent. per annum from July 12, 1934, with 10 per cent. of principal and interest as an attorney's fee.

The amended answer of defendants admits that they signed the promissory notes mentioned in count 1 of plaintiffs' petition; and for further answer defendants state that said notes were entirely without consideration; that they were signed by defendants inadvertently and without any intention of binding themselves; that they never delivered or authorized said notes to be delivered to plaintiffs or to any one else; that plaintiffs knew all these facts when they obtained possession of said notes; and that the defendants did not know that they were in fact signing notes at the time the same were signed. The answer of defendants was duly sworn to.

The reply of plaintiffs was a general denial.

It appears from the evidence that Monroe L. Schilli was the owner of real estate located in the city of St. Louis, Mo., but that the property was in the name of Lawrence Huck. Plaintiffs entered into a written contract to trade property owned by them located in Hidalgo county, Tex., for the Schilli property in St. Louis. The notes mentioned were made in connection with said trade and were secured by a deed of trust on said Texas property. It appears from the evidence that said deed of trust was foreclosed on August 6, 1935, and, after the interest and costs of the foreclosure were paid, the balance of the amount remaining from the foreclosure sale was applied on the payment of the note, which left a balance of $1,732.95, plus interest from July 12, 1934, and an attorney's fee unpaid.

Plaintiff John Toedtman testified that he first talked to defendant Grass at his home in Bloomdale, Mo., in the spring of 1934, which was more than a year after the note was signed by defendants; that the witness did not receive the note from defendants but that it was given to him either by Mr. Schilli or Mr. Kaul; that they were together at the time; that the negotiations in connection with the trade of plaintiffs' property in Texas for the real estate in St. Louis, Mo., which was then in the name of Mr. Huck, were handled by Mr. Schilli; that, prior to the time the deal was closed, plaintiffs were not advised that Mr. Schilli was the owner of the St. Louis property, or that the Texas property was being deeded to defendants because Mr. Schilli had a judgment against him; that Mr. Schilli brought to plaintiff the money for the two interest payments which had been made, but that Mr. Schilli did not tell plaintiffs who sent the money or why he (Schilli) was paying it; that plaintiffs at no time told Mr. Schilli that plaintiffs were making the deal with Mr. Schilli and that they did not expect to hold defendants; that, at the time the notes in question were signed by defendants, plaintiffs deeded to defendants the real estate in Hidalgo county, Tex.

Defendant Frank X. Grass testified that Mr. Schilli is his wife's brother-in-law; that he had known plaintiff Mr. Toedtman for about a year; that he, the witness, signed the note on which the suit was instituted; that Mr. Schilli brought it to him for him to sign; that when he signed the papers he did not know what he was signing; that he did not read them; that he did not authorize Mr. Schilli to deliver them to Mr. Toedtman or any one else; that he did not know at that time that he was signing a note; that he was not given any money or anything of value for signing the papers.

Frank D. Kaul testified on behalf of defendants that he knew Mr. Schilli prior to January 12, 1933, but did not know Mr. Toedtman prior to that date; that he had business dealings with Mr. Schilli prior to that date; that he was present at a meeting between Mr. Schilli and Mr. Toedtman prior to January 12, 1933, at which time they discussed the real estate trade involving the St. Louis property for the Hidalgo county, Tex., property; that Schilli told Toedtman that he (Schilli) had a judgment against him as a result of an automobile accident and for that reason could not have the property in his name; that Schilli would not sign the papers because, in the first place, he had no title, and, in the second place, because that judgment was against him. The witness testified that, at a subsequent meeting, Mr. Schilli told Toedtman that he would get Mr. Grass to sign the papers. The witness was asked if there was any conversation in his presence between Mr. Schilli and Mr. Toedtman relative to having the real estate put in Mr. Grass' name so the title might be cleared up, and answered: "That was the purpose, to clear title." The witness further testified:

"Q. Did Schilli tell Toedtman that? A. Yes, he told him that.

"Q. State whether or not Toedtman agreed to that. A. They agreed to that. * * *

"Q. State whether or not Mr. Schilli, while in conversation with Mr. Toedtman, told him he was coming down to get Mr. Grass to sign the notes. A. He did tell him.

"Q. Did he tell him what he was to tell Mr. Grass relative to the property in connection with the judgment? A. He did tell him. He was going to get Mr. Grass to sign it in order that he could clear up the real estate and later on take the title back to the property himself."

The witness further testified that he heard Mr. Schilli and Mr. Toedtman discussing who was to be the real party in interest on these notes and deed of trust; that they had several conversations prior to the closing of the deal. In this connection the witness testified: "Q. Was there any discussion or conversation between them as to who was to pay these notes?"

An objection by plaintiffs being overruled by the court, the witness answered: "Yes, sir," and further testified:

"Q. When and where was that conversation? A. At Schilli's residence.

"Q. The first one, or subsequent? A. Subsequent ones.

"Q. Do you remember the date of it? A. I don't remember the exact date.

"Q. Was it before the deal was closed? A. Yes.

"Q. Now, then, as near as possible tell what Schilli said to Toedtman, and Toedtman said to Schilli, relative to who was to pay these notes. A. He said—Schilli said, `I will have Grass sign the notes, but I will be responsible for the payment of principal and interest.'

"Q. What did Toedtman say? A. `O.K.' It was all right."

Mrs. Hannah Grass, wife of defendant Frank X. Grass, testified that, at the time she signed the papers brought to her house by Mr. Schilli, she didn't know what she was signing; that she didn't read them; that she did not authorize Mr. Schilli or any one for him to deliver those papers to Mr. Toedtman.

Monroe L. Schilli, a brother-in-law of defendant Frank X. Grass, testified that he made a trade of property owned by him for the property owned by plaintiffs; that he told Mr. Toedtman why he was going to have Mr. and Mrs. Grass sign the note and deed of trust, and why he was not having the property put in his own name; that he paid the interest up until the last half year, and then lost everything he had and could not pay further; that he paid the taxes on the property in Texas; and that Mr. Grass acted in the real estate deal "simply as a straw man." When asked if Mr. Toedtman knew that Mr. Grass was acting as a straw man at the time the deal was made, the witness answered: ...