Wilner v. O'Donnell, No. 42500

CourtCourt of Appeal of Missouri (US)
Writing for the CourtSTEPHAN
Citation637 S.W.2d 757
Parties35 UCC Rep.Serv. 200 Burton J. WILNER and Doris Wilner, Plaintiffs-Respondents, v. William G. O'DONNELL, et al., (Deceased), Arthur Stine, (Deceased) App., Albert H. Feldt, Administrator de bonis non, Defendant-Appellant.
Decision Date27 July 1982
Docket NumberNo. 42500

Page 757

637 S.W.2d 757
35 UCC Rep.Serv. 200
Burton J. WILNER and Doris Wilner, Plaintiffs-Respondents,
v.
William G. O'DONNELL, et al., (Deceased), Arthur Stine,
(Deceased) App., Albert H. Feldt, Administrator de
bonis non, Defendant-Appellant.
No. 42500.
Missouri Court of Appeals,
Eastern District,
Division One.
July 27, 1982.

Page 759

William G. O'Donnell, Anthony L. Anderson, Clayton, for defendant-appellant.

Marvin Klamen, John L. Davidson, Clayton, for plaintiffs-respondents.

STEPHAN, Presiding Judge.

This case involves four notes and deeds of trust. Judgment was entered in favor of plaintiffs whereby: plaintiffs were to recover actual and punitive damages from defendants for tortiously conspiring and threatening to foreclose on the first two notes and deeds of trust; defendants were enjoined from attempting to foreclose on those notes and deeds of trust; plaintiffs were to recover from defendant Stine an amount equal to excessive interest and twice the amount of usurious interest paid on the fourth note and deed of trust; the fourth note and deed of trust were to be reformed; and plaintiffs were to recover their reasonable attorney's fees and costs. Defendants appealed. We reverse the award of actual and punitive damages for threatened foreclosure. In all other respects the judgment is affirmed.

Plaintiffs, husband and wife, own and live in a single family home in St. Louis County, Missouri. In 1974 that home was subject to two deeds of trust held by Lafayette Federal Savings and Loan, or its predecessor, as security for two notes. That year they gave a third deed of trust on their home in the amount of $40,000 to one Alice M. Bub (not a party to this suit) as partial security for a loan of $125,000 guaranteed by plaintiffs. That loan was made to a corporation owned by plaintiffs, Audio Panorama, Inc., and the proceeds were to be used for the corporation's audio equipment business.

Plaintiffs still needed money for their corporate business and defendant Stine agreed to lend them $25,000. On August 8, 1976 plaintiffs, as individuals, executed a promissory note in the principal amount of $30,000 payable to defendant Stine, doing business as Art Stine Realty Co., in thirty-six monthly installments of $940.10. On its face, the note bore interest at the rate of eight percent per year. We refer to this as the Art Stine note. Plaintiffs also gave a deed of trust on their residence in St. Louis County and the business property in St. Charles County. In return, defendant Stine gave a check for $29,000 which was deposited in the bank account of Audio Panorama, Inc. Simultaneously, $4,000 was withdrawn and returned to defendant Stine. Plaintiffs' residence then was encumbered by the following deeds of trust:

Priority Amount Owner/Grantee
                -------- ------- --------------------
                 1 $30,000 Lafayette Federal
                 2 12,500 Lafayette Federal
                 3 40,000 Alice M. Bub
                 4 30,000 Art Stine Realty Co.
                

Page 760

Eleven monthly payments 1 were made on the Art Stine note by checks drawn on the account of Audio Panorama, Inc. Then payments stopped. Plaintiffs also defaulted on the $125,000 loan and, as a result, lost their corporate business property in St. Charles County. The third deed of trust on their residence, which was given to secure that loan, was not cancelled and there was no foreclosure.

In August of 1978 the Lafayette Federal notes and the first and second deeds of trust were purchased by defendant Frances Mueller. Plaintiffs received notice of this transaction from the savings and loan. Thereafter defendant Mueller called plaintiffs at home and demanded payment of those notes, threatening foreclosure. Plaintiffs contacted their attorney who wrote to defendant Mueller requesting that arrangements be made to exhibit the notes to Mr. Wilner to verify her ownership and to allow for recording payments on them.

Thereafter defendant Stine telephoned plaintiffs and he threatened to foreclose on the first two deeds of trust if timely payments were not made on the Lafayette Federal notes. In response, he received a letter from one of the Wilners' lawyers, essentially the same as the one sent to defendant Mueller, offering payment upon exhibition of the notes and evidence that Mueller was Stine's straw party.

When no response to the letters was forthcoming, plaintiffs brought this action. The parties first appeared at a hearing to determine if a temporary injunction barring foreclosure should issue. Both defendants testified. Initially, they agreed that defendant Mueller bought the Lafayette Federal notes and deeds of trust as a personal investment, and that she used her own funds as well as a gift from defendant Stine. Later, however, under questioning from plaintiffs' counsel, it was admitted that the entire purchase price was furnished by defendant Stine and that defendant Mueller acted at his direction. Only plaintiffs offered evidence at trial on the merits of their petition; defendants did not testify. 2

In due course judgment was entered with findings of fact and conclusions of law. The trial court specifically found that defendants conspired to force plaintiffs into a "manufactured" default on the Lafayette Federal notes and acted in furtherance of this conspiracy. The aim was to foreclose on the first deeds of trust, thus acquiring the plaintiffs' equity in their home and extinguishing the Alice M. Bub third deed of trust, which was an apparent barrier to the Art Stine Realty Co. fourth deed of trust. The existence of the third deed of trust presumably reduced the value of the right to foreclose thereunder even though the Art Stine note was long in default. Furthermore, the court found that defendants' threats of foreclosure caused plaintiffs "substantial mental suffering" and induced them to bring this suit.

The court found that § 400.3-505 RSMo 1969 3 applied, so that plaintiffs could require, without dishonor, exhibition of the Lafayette Federal notes in order to identify who had the authority to accept payment. Therefore, the trial court entered a permanent injunction restraining the defendants from attempting to foreclose on the Lafayette

Page 761

Federal notes and deeds of trust until they complied with plaintiffs' demands. The trial court further found that defendants wrongfully and willfully threatened foreclosure while the requirements of § 400.3-505 remained unsatisfied, and concluded that plaintiffs were entitled to recover actual damages of $1.00 for their mental suffering and $5,000 for their attorney's fees. In addition, plaintiffs were awarded $10,000 in punitive damages.

With respect to the $30,000 Art Stine note and deed of trust, the trial court found a "partial failure of consideration" and concluded the note and deed of trust should be reformed to show an initial principal amount of $25,000. The trial court rejected defendant Stine's arguments that this transaction was a "business loan" or a "real estate loan" but found it to be a "residential real estate loan" under § 408.035 RSMo Supp. 1975. Thus, the maximum lawful rate of interest was found to be 10% per year under § 408.030 RSMo Supp. 1975. The court determined what the monthly payments would be to amortize a $25,000 loan over a three year period at 8% per year, and at 10% per year. By comparing these figures with the monthly payments actually made, the trial court calculated that excessive interest (more than 8%) had been paid and that a portion of this amount (more than 10%) was usurious interest, which was doubled. Thus judgment was entered in favor of plaintiffs and against defendant Stine in the amount of $3247.81 4, "together with $5,000 attorneys' fees previously awarded" pursuant to § 408.030 RSMo Supp. 1975. Costs were charged to both defendants.

We review this case upon both the law and the evidence, giving due regard to the opportunity of the trial court to have judged the credibility of the witnesses. Rule 73.01(c)(1, 2)....

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12 practice notes
  • State ex inf. Ashcroft v. Kansas City Firefighters Local No. 42, No. WD
    • United States
    • Court of Appeal of Missouri (US)
    • May 1, 1984
    ...from the individual defendants. An award of punitive damages rests only on a predicate of compensatory damages. Wilner v. O'Donnell, 637 S.W.2d 757, 762 (Mo.App.1982); Adelstein v. Jefferson Bank and Trust Co., 377 S.W.2d 247, 252[4, 5] It is evident that the $25,000 amount of the exemplary......
  • Messing v. Bank of America, No. 2646
    • United States
    • Court of Special Appeals of Maryland
    • February 28, 2002
    ...that no word, clause, sentence, or phrase is rendered surplusage, superfluous, meaningless or nugatory."). 8. Wilner v. O'Donnell, 637 S.W.2d 757, 760 (Mo.App.1982)(noting that under former UCC § 3-505(1)(b) the maker of a note may require, without dishonor, ... "reasonable identi......
  • State v. Draper, No. 65816
    • United States
    • United States State Supreme Court of Missouri
    • September 11, 1984
    ...dire did not indicate an improper preference toward police testimony, and police testimony was of only relatively minor importance. 637 S.W.2d at 757. Here there was no questioning by the court, the entire voir dire does not show Martin to be unbiased, and the police testimony was important......
  • Zytniak v. Zytniak, No. 50152
    • United States
    • Court of Appeal of Missouri (US)
    • October 28, 1986
    ...in the reply brief, are not preserved for appeal. Application of Gilbert, 563 S.W.2d 768, 771 (Mo. banc 1978); and Wilner v. O'Donnell, 637 S.W.2d 757, 764 (Mo.App.1982). The motions to strike the brief and dismiss the appeal are denied. The motion to strike the reply brief is In custody ca......
  • Request a trial to view additional results
12 cases
  • State ex inf. Ashcroft v. Kansas City Firefighters Local No. 42, No. WD
    • United States
    • Court of Appeal of Missouri (US)
    • May 1, 1984
    ...from the individual defendants. An award of punitive damages rests only on a predicate of compensatory damages. Wilner v. O'Donnell, 637 S.W.2d 757, 762 (Mo.App.1982); Adelstein v. Jefferson Bank and Trust Co., 377 S.W.2d 247, 252[4, 5] It is evident that the $25,000 amount of the exemplary......
  • Messing v. Bank of America, No. 2646
    • United States
    • Court of Special Appeals of Maryland
    • February 28, 2002
    ...that no word, clause, sentence, or phrase is rendered surplusage, superfluous, meaningless or nugatory."). 8. Wilner v. O'Donnell, 637 S.W.2d 757, 760 (Mo.App.1982)(noting that under former UCC § 3-505(1)(b) the maker of a note may require, without dishonor, ... "reasonable identi......
  • State v. Draper, No. 65816
    • United States
    • United States State Supreme Court of Missouri
    • September 11, 1984
    ...dire did not indicate an improper preference toward police testimony, and police testimony was of only relatively minor importance. 637 S.W.2d at 757. Here there was no questioning by the court, the entire voir dire does not show Martin to be unbiased, and the police testimony was important......
  • Zytniak v. Zytniak, No. 50152
    • United States
    • Court of Appeal of Missouri (US)
    • October 28, 1986
    ...in the reply brief, are not preserved for appeal. Application of Gilbert, 563 S.W.2d 768, 771 (Mo. banc 1978); and Wilner v. O'Donnell, 637 S.W.2d 757, 764 (Mo.App.1982). The motions to strike the brief and dismiss the appeal are denied. The motion to strike the reply brief is In custody ca......
  • Request a trial to view additional results

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