Veney v. Furth
| Decision Date | 01 March 1913 |
| Citation | 154 S.W. 793,171 Mo.App. 678 |
| Parties | SARAH VENEY et al., Respondents, v. HENRY H. FURTH et al., Appellants |
| Court | Missouri Court of Appeals |
Argued and Submitted November 14, 1912.
Appeal from St. Louis City Circuit Court.--Hon. Daniel D. Fisher Judge.
AFFIRMED.
STATEMENT.--On or about the 25th of April, 1905, plaintiffs below, one of them the respondent here, being the owners of a one-story house situated at 2614 Glasgow avenue in the city of St Louis, executed a deed of trust to one George Dausman, as trustee, purporting to secure a principal note for $ 1500 as well as semi-annual interest notes for $ 45 each, the principal note due in three years after its date, the notes payable to one Henry J. Grimm. At the time of the transaction and for some time prior thereto, Dausman had been engaged in the real estate business at St. Louis, and plaintiffs desirous of adding one or more stories to their building, and not having the money with which to do it, went to Dausman to raise the necessary money on the property. Dausman appears to have examined the property and told them that the proposed improvements would cost between two thousand and twenty-one hundred dollars, and that he could raise that amount for them on the property. For some reason not disclosed, however, it was concluded to borrow $ 1500 on the property as a first loan, Dausman testifying that he intended to raise the other when necessary, by a second deed of trust. Thereupon he agreed with them to raise $ 1500 for the proposed improvements by means of a deed of trust on the property, and had this deed of trust and the notes drawn up, went out to the residence of plaintiffs with a notary public, and had them sign and acknowledge the deed of trust and sign the notes and they were all delivered to him. He thereupon placed the deed of trust on record and had Grimm, who at times did clerical work in his office, indorse the notes "without recourse." Grimm never paid anything for them, had no interest whatever in the matter and is designated in the testimony of the several witnesses as a "straw man." This all occurred in April, 1905.
One of the plaintiffs testified that Dausman told them at the time of the execution of the deed of trust and of the notes that the money to be raised on the deed of trust could not be used for any other purpose than for the rebuilding of the house converting it from a one-story into a two-story structure. Dausman neither furnished nor raised any money on these notes for that purpose nor did he make any arrangements for carrying on the proposed improvements, although repeatedly requested to go on by plaintiffs, until the summer of 1909, when he appears to have contracted with two men named Smith and Giesecke to remodel the house. As the evidence tends to show, their contract price was from two thousand to twenty-one hundred dollars. Smith and Giesecke began the work and when it was practically completed employed an attorney, former Judge Jesse A. McDonald, to file a lien on the property and commence proceedings for its enforcement, as none of the work done or material furnished by them had been paid for. They informed Judge McDonald that there was a deed of trust on the property, and on the suggestion that one Barney Schwartz, an attorney at law of St. Louis, held the deed of trust for collection or held it for some client of his, Judge McDonald called on Mr. Schwartz about the 1st of December, 1909, and told him that he represented Mrs. Veney, the owner, as also the contractors, and wanted to examine the deed of trust and the notes. Mr. Schwartz told Judge McDonald that they belonged to a man by the name of Gould but that he (Schwartz) did not at that time have possession of them but would have them later. Judge McDonald asked him when he could see them and Mr. Schwartz told him he could do so in a short time. About two weeks afterwards, Judge McDonald went back to Mr. Schwartz's office and the latter showed him the papers, the notes and deed of trust, including among the papers, a note of date September 14, 1907, signed by George Dausman, wherein he promised, one day after date, to pay to the order of J. S. Gould $ 515, with interest from date at six per cent per annum. The note, after the above reads:
"Payable at the office of Geo. Dausman Real Estate Co.
This note is secured by deed of trust. Geo. Dausman.
On property
2614 Glasgow Ave."
A payment of interest, $ 30.90, of date September 15, 1908, was indorsed on this note. After examining the papers and making a memorandum of them, Judge McDonald, as he testified, told Mr. Schwartz that the transaction seemed a suspicious one to him; that the owner of the property had gotten no benefit from the deed of trust; that it would have to be contested. Mr. Schwartz appears to have taken umbrage at this and the interview ended. Mr. Schwartz testifies substantially as does Judge McDonald as to the call on him, and testified that after he showed Judge McDonald the deed of trust and the notes, Judge McDonald said: "This whole thing is a fraud." Whereupon Mr. Schwartz remarked: "We will not discuss this thing further, Judge." That, according to Mr. Schwartz, was the end of their interview.
It appears that about the time Mr. Gould had placed the Dausman note and the deed of trust and notes of plaintiff in the hands of Mr. Schwartz, that Dausman was confined in jail in St. Louis, and that Schwartz and Gould went up to the Four Courts and saw Dausman and spoke to him concerning his own note and the deed of trust; that Dausman told him he was going to pay Gould. Mr. Schwartz told him that he would write to Mrs. Veney to see what condition the matter was in, because he (Schwartz) was worried at the time, as Dausman was then in jail under what he (Schwartz) considered a similar matter, as he testified, and he wanted to see how his client, Gould, stood with regard to the deed of trust. He thereupon wrote to the plaintiffs, who were sisters and living together on the property, to the effect that he represented the holder of the deed of trust on their property and asked them to call at his office at their earliest convenience, the letter concluding: "It is necessary to your interest and the interest of my client that you call immediately." This letter from Mr. Schwartz to plaintiffs was the first the latter heard of the deed of trust being in the hands of anyone other than Dausman. Mrs. Veney appears to have called on Mr. Schwartz a few days later and told him of the transaction between herself and sister and Dausman; told him she "didn't know how they owed that money;" that Dausman had always said he was going to give them a statement but had never done so. Whereupon Schwartz undertook to get one from Dausman; met him in the hall of the office building in which he and Schwartz had their offices and told him to give Mrs. Veney the statement he had promised. Dausman, apparently sometime after April 20, 1909, delivered to Schwartz for the plaintiffs a statement of account, of date March 26, 1909, wherein he claimed to have expended $ 37.05 for "repair on roof" and "improvement of Montgomery street," and $ 252.21 for filing papers, advertising, court costs, sheriff's bill, and "attorney," a total of $ 289.36, on which he gave a credit of $ 33.20 for "cash paid for costs."
Mrs. Veney testified that she had never authorized Dausman to employ an attorney for her and had never heard of these items until she saw them in this statement and knew nothing about them. About a month after Judge McDonald had called on Mr. Schwartz, Mr. Joseph A. Wright called on him concerning the transaction, acting as he told Mr. Schwartz, as representative and attorney for the plaintiffs. Some while after this, when does not clearly appear, Mr. Schwartz inserted an advertisement in an evening paper published in St. Louis, that the collateral to this note of Mr. Gould's would be sold at the court house in the city of St. Louis, ten days after the date of the notice. How often this was published is not in evidence. Mr. Schwartz testified that he handed Dausman a copy of the advertisement cut from the paper and that he had mailed a copy to Mrs. Veney through the United States mail in a stamped envelope. Mrs. Veney and Mr. Dausman denied ever having received any such notice, and Dausman testified that he had never seen the notice and never heard of the sale until it was over, although his office was on the floor immediately above that of Mr. Scharwtz and they had had more or less business dealings with each other.
Mr Schwartz admitted that although he knew before the sale that Judge McDonald was representing the contractors and had, on the first occasion of their interview, told him he represented plaintiffs, and knew that Mr. Wright represented them, further admitted that he had never notified either of them or these plaintiffs of the intended sale of the collateral to the Gould note. At this sale Max Haas, one of the defendants, purchased the collateral to the Gould note, that is, the deed of trust, the principal and interest notes, for about $ 580.50, that being a little over the amount of the Gould note, its accrued interest and the cost of advertising and sale. Prior to this sale it appears, according to the testimony of Mr. Schwartz, Mr. Haas came to the office of Mr. Schwartz and asked him about what the property was worth, and concerning the transaction, particularly whether the paper, meaning the principal note, had been "handled" before maturity, which Mr. Schwartz assured him was the fact. He also asked concerning Gould and who he was, all of which Mr. Schwartz informed him. He further asked Mr. Schwartz at that time whether he had sent notices to those several parties of...
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