Witte v. Storm

• Decision Date: 01 July 1911
• Citation: 236 Mo. 470,139 S.W. 384
• Parties: WITTE v. STORM et al.
• Court: Missouri Supreme Court

139 S.W. 384

236 Mo. 470

WITTE v. STORM et al.

Supreme Court of Missouri. Division No. 1.

July 1, 1911.

Rehearing Denied July 12, 1911.

1. PRINCIPAL AND AGENT (§ 69) — DUTIES OF AGENT.

An agent cannot, to the prejudice of his principal, directly or indirectly acquire any interest in property which is the subject-matter of his agency.

2. TRUSTS (§ 101) — CREATION — CONSTRUCTIVE TRUST — PREJUDICE BY TRUSTEE.

Two agents who had charge of plaintiff's property had the legal title placed in one of their clerks to facilitate transactions. They then had the clerk make a deed of trust wherein one of them was trustee. In a sale under this deed of trust, the trustee had a third party buy in the land for him. Held, that the title so acquired was held in trust for the real owner, since a trustee cannot purchase at his own sale.

3. PRINCIPAL AND AGENT (§ 69) — TERMINATION OF AGENCY — RENUNCIATION BY AGENT — INDIVIDUAL INTEREST.

Two agents took over the management of plaintiff's property taking the title in the name of one of their clerks. The property was sold under a deed of trust and bought in by a third party acting for the agents. Held, that the purchase by such third party at the sale under the deed of trust was not such a renunciation of the agency as to entitle the agents to subsequently acquire an interest in the subject-matter of the agency, adverse to their principal, since an agent cannot acquire such an interest until there has been an unequivocal renunciation of the agency, and under the circumstances of this case, the agents could not abandon their agency without an attempt to restore their principal to the same status she was in at the inception of the agency.

4. TRUSTS (§ 101) — CREATION — CONSTRUCTIVE TRUST.

Where agents, having entire charge of the property of their principal under an agreement whereby they were to sell off part of the property and discharge all the liabilities thereon, purchased the property at an execution sale against the principal, the title so acquired is held in trust in favor of the principal.

5. PRINCIPAL AND AGENT (§ 69) — DUTIES OF AGENT — INDIVIDUAL INTEREST OF AGENT — PURCHASE BY AGENT FOR HIMSELF.

Where an agent was given charge of his principal's property to discharge it from certain liabilities, he cannot, by purchasing the property with his own funds at an execution sale, acquire an interest adverse to his principal.

6. JUDGMENT (§ 715) — CONCLUSIVENESS — MATTERS CONCLUDED.

Where the owner of land intrusted its management to an agent, and upon the foreclosure of a deed of trust the agent procured a third person to buy in the land for him, a judgment in ejectment recovered by such third person against the owner, who at the time did not know of the fraud of her agent, does not preclude her from bringing an action against the agent to compel him to hold in trust property so acquired; the issues in each case being entirely different.

7. JUDGMENT (§ 747) — CONCLUSIVENESS — JUDGMENTS IN ACTIONS RELATING TO REAL PROPERTY — EJECTMENT.

Judgments in ejectment avail but little as a basis for a plea of res adjudicata.

8. PRINCIPAL AND AGENT (§ 76) — ESTOPPEL OF AGENT.

Where agents accepted the management of certain property belonging to their principal they are estopped from denying the title of the principal.

9. LIMITATION OF ACTIONS (§§ 100, 73) — LIMITATIONS APPLICABLE TO PARTICULAR ACTION — RECOVERY OF REAL PROPERTY.

Where a married woman intrusted her property to the management of agents, and such agents, by fraud, acquired the title to the property, the statute of limitations has no application to an action brought by her after the fraud was discovered, for Rev. St. 1909, § 1889, provides that an action for relief on the ground of fraud shall not be deemed to have accrued until the discovery of the facts constituting the fraud, and section 1894 provides that, where a cause of action accrues to a married woman, she may have her right of action after the disability of coverture has been removed.

10. PRINCIPAL AND AGENT (§ 79) — ACTION AGAINST AGENT — LACHES — WHAT CONSTITUTES.

Where agents to whom a married woman had confided the management of her property defrauded her out of her property, and concealed the facts of their fraud, her delay in bringing an action against them did not constitute laches, particularly as the position of the parties was not changed during the lapse of time.

11. ACCOUNT STATED (§ 5) — ASSENT TO STATEMENT RENDERED.

Where agents in charge of plaintiff's property furnished accounts which plaintiff did not admit, and these statements of account did not purport to be final, but only covered the transactions up to the time when the agents defrauded plaintiff out of her property, such statements were not accounts stated, but could be re-examined.

12. TRUSTS (§ 203) — ENFORCEMENT OF TRUST — RIGHT TO FOLLOW TRUST PROPERTY — PURCHASERS IN GOOD FAITH.

While purchasers in good faith, for value and without notice, from a trustee in the actual possession of the trust estate, and with authority to sell, take the trust property discharged from the trust, purchasers not in good faith and with notice take the property subject to the trust; this being true as to corporate grantees as well as individuals.

13. VENDOR AND PURCHASER (§ 224) — BONA FIDE PURCHASERS — QUITCLAIM.

One acquiring title to land under a quitclaim deed takes the title subject to the equities with which it was burdened in the hands of the grantor.

14. PRINCIPAL AND AGENT (§ 84) — MUTUAL RIGHTS — COMPENSATION OF AGENT.

Where agents having charge of property for their principal attempted to acquire that property by fraud, they are not entitled to compensation for services rendered with respect to the property.

Appeal from St. Louis Circuit Court; Jesse A. McDonald, Judge.

Action by Johanna Witte against John F. Storm and others. From a judgment for defendants, plaintiff appeals. Reversed and remanded, with directions.

In February, 1897, at the inception of the various transactions which resulted in this litigation, appellant was the owner of the equitable title to a tract of ground in the city of St. Louis at the intersection of Forest Park boulevard and King's Highway, designated as the King's Highway property, and certain lots, and improvements thereon, on Jefferson avenue in the same city. At the time mentioned deeds of trust executed by appellant and her husband on both these properties were about to be foreclosed; the total indebtedness of all kinds against both plots being $43,305. In her extremity appellant applied to respondents, John F. Storm and J. H. Farish, then partners in the real estate business, to assist her in devising a means to save the properties, and the upshot of her negotiations with them was that Storm and Farish undertook to manage the property for appellant, negotiate loans thereon sufficient to discharge all existing liens and indebtedness against the two tracts, and then to collect the rents on the Jefferson avenue property to meet interest charges, taxes, etc., and to sell enough of the King's Highway property to pay off all liens on both parcels so that in the end appellant would have left a part of the King's Highway property, on which it appears she expected to reside, and the whole of the improved Jefferson avenue property, unincumbered. In order that Storm & Farish might carry out these plans, it was agreed that the sales under the existing deeds of trust were to be permitted to be made, and appellant executed a power of attorney authorizing Storm & Farish to negotiate new loans on the properties, from $30,000 to $35,000 on that on King's Highway, and from $10,000 to $14,000 on that on Jefferson avenue, as might be required. Storm & Farnish were also authorized to "do any and all acts necessary in order to carry out the above instructions and perfect the title by the payment of any taxes or costs that may accrue." On the same day, February 27, 1897, appellant also executed an instrument whereby she appointed Storm & Farish her sole agents to collect rents and sell both the King's Highway and Jefferson avenue properties, fixing therein the minimum prices per front foot at which the several portions of the King's Highway tract were to be sold, and leaving the selling price of the Jefferson avenue property to be determined by subsequent agreement. The Jefferson avenue property was sold under deed of trust on March 1, 1897, and that on King's Highway was similarly sold April 13, 1897, the title being taken, in both cases, at the instance of Storm & Farish, in the name of E. H. Brockmeyer, collector for that firm. The purpose of this was to facilitate the transaction of the business which Storm & Farish had undertaken for appellant, and it is affirmed by all parties that Brockmeyer held the legal title at all times until May, 1898, for appellant.

A loan of $11,000 was negotiated on the Jefferson avenue property, and one of $31,500 on that on King's Highway; Brockmeyer in each instance executing deeds of trust to secure the loan. Brockmeyer then executed to Storm as trustee a deed of trust on both pieces of property, securing a note payable to Farish for $2,000. Appellant testified that she was assured that the execution of this last-mentioned deed of trust was "a matter of form," and respondent Storm testified that it was executed to secure his firm for funds advanced by it in clearing up the indebtedness against the properties.

In 1896, one Leonori had obtained judgment against appellant and her husband for $500. Appellant testified that she mentioned this judgment specifically in detailing the liens against the properties preparatory to the execution of the powers of attorney to Storm & Farish. This Storm denies. The rents of the Jefferson avenue property amounted to about $1,800; to $2,000 per annum, according to Storm's testimony, and to about $2,400 to $2,500, according to appellant.

In November, 1897, Brockmeyer conveyed to ...