Wagner v. Mederacke

• Decision Date: 18 June 1946
• Docket Number: No. 27071.,27071.
• Citation: 195 S.W.2d 108
• Parties: WAGNER v. MEDERACKE.
• Court: Missouri Court of Appeals

195 S.W.2d 108

WAGNER v. MEDERACKE.

No. 27071.

St. Louis Court of Appeals. Missouri.

June 18, 1946.

Appeal from St. Louis Circuit Court; James F. Nangle, Judge.

"Not to be reported in State Reports."

Action by Joseph O. Wagner against Richard Mederacke to recover damages for fraud in inducing plaintiff to loan money to defendant. Judgment for defendant, and plaintiff appeals. Transferred to the Court of Appeals by the Supreme Court, 192 S.W.2d 865.

Affirmed.

Francis R. Stout, of St. Louis, for appellant.

Wm. J. Becker, of Clayton, for respondent.

BENNICK, Commissioner.

This is an action for damages for fraud and deceit allegedly practiced by defendant, Richard Mederacke, upon plaintiff, Joseph O. Wagner, by virtue of which plaintiff was induced to loan defendant the sum of $5,100 evidenced by two certificates of time deposit issued by the Bank of Altenburg at Altenburg, Missouri, the one certificate being for the face amount of $3,000 with accrued interest of $75, and the other for the face amount of $2,000 with accrued interest of $25. Judgment was prayed for the sum of $5,100 actual damages and $5,000 punitive damages.

The case was tried to the court alone without the aid of a jury, and resulted in a judgment in favor of defendant. Following the overruling of his motion for a new trial, plaintiff gave notice of appeal to the Supreme Court, which was assumed to have appellate jurisdiction of the case upon the ground that the amount in dispute, exclusive of costs, was $10,100, the full amount claimed in the petition. Ordinarily where the plaintiff appeals from a judgment for the defendant in an action wherein the plaintiff has sought to recover a sum in excess of $7,500, the Supreme Court does have exclusive appellate jurisdiction, the amount claimed in the petition being taken as fixing the amount in dispute between the parties. However such figure is not in all events conclusive upon the question; and the whole record may show that the amount actually in dispute is other than the amount claimed in the petition. In this instance the Supreme Court observed that at the pre-trial conference in the case, the parties had agreed that the amount in controversy was $5,000; and holding that such admission was in substitution of the jurisdictional fact alleged in the petition, the court consequently ordered that the case be transferred here. Wagner v. Mederacke, Mo. Sup., 192 S.W. 2d 865.

In his petition plaintiff alleged that on January 10, 1938, he loaned the sum of $5,100 to defendant; that defendant agreed to repay such sum within a reasonable time, and in all events within two years from the date of the loan, with interest at 6%; that defendant induced plaintiff to make the loan by falsely and fraudulently representing that he was the owner of a certain tract of land in St. Louis County upon which he intended to erect bungalows, and that he would be well able to repay plaintiff out of the profits and income from such construction work and the sale of the real estate so improved; that all of such representations were false in that defendant did not own the land and had no intention of improving the same, but made such false representations for the purpose of inducing plaintiff to believe that they were true and to make the loan to defendant; that plaintiff did believe such representations to be true, and in reliance thereon was induced to make the loan to defendant; that defendant's action was fraudulent, and was purposely, intentionally, wantonly, and maliciously done; and that the whole amount of the loan was due plaintiff from defendant.

The answer was a general denial, coupled with affirmative pleas, first, that the money in question was not given to defendant under such circumstances as to create the relationship of debtor and creditor, but was delivered to defendant pursuant to the terms of a partnership agreement entered into between plaintiff and defendant, which was thereafter terminated by consent of the parties on July 29, 1938, accompanied by plaintiff's execution of an instrument releasing defendant from all claims which plaintiff might have against him on account of the transaction between them; and second, that the action, having accrued more than five years before the institution of suit, was barred by the statute of limitations.

For his reply (which was apparently filed under the provisions of the old code), plaintiff alleged that the purported release referred to by defendant was secured by defendant's fraudulently misrepresenting the value and salability of certain real estate which defendant agreed to convey to plaintiff in consideration of the release, in that defendant represented that there was a prospective buyer ready, able, and willing to purchase such real estate, and that the reasonable market value of the same was $17,500; that such facts were false, and were relied upon by plaintiff; and that the release was subsequently canceled and rescinded by agreement of the parties.

Plaintiff was about sixty-six years of age at the inception of this controversy, and had come to St. Louis from Altenburg, where he had been engaged in farming as well as in the hotel and livery business. His experience had also included the buying and selling of farm properties and the making of loans on real estate.

In St. Louis he came in contact with one Michael A. Murphy, who was engaged in the real estate business, and had represented plaintiff's niece, Amanda Miller, and her husband, Ray Miller, in the purchase of a home. Murphy testified that he was employed by defendant at the time as office and sales manager of defendant's real estate office, which was then located at 3122 South Kingshighway in the City of St. Louis. Defendant testified, on the contrary, that Murphy was not employed by him in any capacity, but merely used the office for his own personal real estate transactions.

The parties agreed that it was through Murphy that plaintiff became acquainted with defendant. According to Murphy, plaintiff asked to be introduced to the people around the office so that he might have some place to go and occupy his time, and was thereafter made acquainted with defendant among others.

In the early part of 1938, or at least at some time shortly prior to the definitely fixed date of January 10, 1938, plaintiff and defendant entered into what was referred to as a partnership agreement for the improvement of a tract of five acres of land located in Glendale. There was some doubt as to whether such agreement had been reduced to writing, and a diligent search on defendant's part failed to disclose such a paper among his files. Murphy's testimony was that defendant represented himself to plaintiff as being the owner of the tract. Defendant's testimony was that his wife had at all times held title to the land, but had at first agreed to the plan for its improvement. However she later changed her mind, and after defendant had incurred certain preliminary expense in connection with the project, sold the land without his knowledge. Under the terms of the agreement, the profits realized from the improvements made upon the tract were to be divided equally between plaintiff and defendant; and such agreement was to remain in force until plaintiff had realized the $5,000, with interest, which he had contributed at the outset of the undertaking.

On January 10, 1938, the parties, at Murphy's insistance, executed a written agreement dictated by Murphy, which was obviously designed for plaintiff's protection. Such written agreement recited that to show sincerity in the performance of the prior agreement, defendant agreed to execute a deed of trust for $5,000 in favor of plaintiff, such deed of trust to be for a term of two years with interest at 6%, and to be given upon property located at the northwest corner of Ninth and Salisbury Streets, in the City of St. Louis. Plaintiff agreed for his part that if, by the close of 1938, defendant had faithfully kept the prior agreement, he would return the deed of trust to defendant marked paid. It was further agreed that in the event the original partnership agreement should thereafter prove mutually unsatisfactory, such agreement should be nullified, and the deed of trust stand of record.

The deed of trust was executed contemporaneously by one Hunecke, a straw party for defendant, and was delivered to plaintiff according to the terms of the agreement. It was a second deed of trust subject to an outstanding first deed of trust for $8,500, and was given on the property at Ninth and Salisbury Streets, which consisted of a hotel of fourteen rooms, a saloon on the first floor, one two-family flat of four rooms each, and a single residence of from nine to eleven rooms. Defendant testified that the property had actually cost him $17,500, and that at the time of the execution of the deed of trust in question its reasonable market value was from $15,000 to $18,000. The value of the land was enhanced by reason of the fact that it was situated in the block leading up to the entrance to the McKinley Bridge.

While there were no improvements made on the Glendale tract as contemplated by the partnership agreement, it was admitted by Murphy, who was plaintiff's chief witness, that defendant took steps towards obtaining a permit from the authorities for opening streets through the subdivision; that he had the ground surveyed; that he secured estimates as to the cost of grading; and that he had an architect draw plans for the erection of five-room bungalows. Both plaintiff and Murphy participated with defendant in such preliminary steps; and defendant testified that when he discovered that his wife had sold the land, he at once informed plaintiff, who was willing that another tract of land be bought upon which the project could be carried out. No substitute tract was ever purchased, however; and it appeared from Murphy's testimony that the $5,000 contributed by plaintiff was used by...