236 Mo. 470 | Mo. | 1911
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 Kingshigh
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. PI. 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 Kingshighway property to pay off all liens on both parcels so that, in the end, appellant would have left a part of the Kingshighway property, on which it appears she expected to reside, and the whole of the improved Jefferson Avenue property, unencumbered.
In order tliat Storm & Farish might carry out these plans, it was agreed that the sales under the existing deeds of trust were to he -permitted to he made, and appellant executed a power of attorney authorizing Storm & Farish to negotiate new loans on the properties, from thirty to thirty-five thousand dollars on that on Kingshighway, and from ten to fourteen thousand dollars on that on Jefferson Avenue, as might he required. Storm & Farish 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 ghe appointed
The Jefferson Avenne property was sold under deed of trust on March 1, 1897, and that on Kings-highway was similarly sold April 13, 1897, the title being taken, in both cases, at the instance of Storm & Parish, 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 & Parish 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 eleven thousand dollars was negotiated on the Jefferson Avenne property, and one of thirty-one thousand five hundred dollars on that on Kingshighway, 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 Parish for two thousand dollars. . 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 five hundred dollars. 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 & Parish. This Storm denies.
In November, 1897, Brockmeyer conveyed to Richard D. Hatton a portion of the Eingshighway property, seventy feet fronting on Forest Park Boulevard, for an expressed consideration of one dollar, and January 19, 1898, Hatton conveyed this lot to John F. and Lizzie Storm. Hatton was, respondents Storm and Farish admit, a mere conduit and Storm-was the real purchaser, paying for the lot sixty-five dollars per front foot, fifteen dollars per .front foot less than the minimum price fixed by the power of attorney given his firm by appellant. In April, 1898, all the property was sold under the Leonori judgment, of the existence of which judgment Storm & Farish had been advised for over a year by the certificate of title used in procuring the loans in the spring of 1897, and the payment of which judgment they had guaranteed in writing April 16, 1897, to the St. Louis Trust- Company, from which institution the $31,500 loan on the Kingshighway property was procured.
In May, 1898, the whole of the property in controversy was sold under the $2000 deed of trust above mentioned, the note secured thereby never having been negotiated by Storm & Farish, and C. J. Kehoe, the answer admits, bought at this sale for Storm. Farish was the payee in the note, and- Storm as trustee -in the deed of trust made the sale and execnted the trustee’s deed to Kehoe. Appellant was present at the sale but the fact that Kehoe was buying for Storm was concealed from her until after this suit was brought. Storin testified that he concealed this fact from her because he “did not want her to know it.”
Immediately after this sale Storm, & Farish, wrote appellant as follows:
“The property has, as you are aware, been sold
■He has further instructed us to say to you that for the months of June, July and August, he is willing that you should retain possession of the property, and probably longer,. at a rental anywhere from one to five dollars a month. Of course, he could not treat you more leniently in the matter than by a proposition of this kind.
He also stated that one of his reasons for so doing was that you would use your best efforts in showing the property and endeavoring to find a purchaser. Mr. Kehoe has vested us with full authority to act for him, and we would be very much pleased to have you call at the office at your very earliest convenience, and see our Mr. Storm, in reference to this matter.
Anticipating an early visit, we remain,
Yours very respectfully.”
In a short time Storm, after failing in his efforts to induce appellant to attorn to Kehoe, instituted, in Kehoe’s name, a suit'in ejectment against appellant, and prosecuted it to judgment, thereby securing in May, 1899, possession of all the property.
Whatever title passed by the sale under the Leonori judgment was conveyed March 18, 1901, to Brockmeyer for Storm & Farish. On the same day Kehoe executed a deed, to the same grantee, to all the property in controversy except fifty feet on Duncan Ave
In May, 1901, Brockmeyer conveyed to Eda K. Meyer all of the Kingshighway property except the lots sold to Mrs. Yonng and that which Storm sold to Hatton for himself. Storm organized the Storm Real Estate Company, of the capital stock of which he owns all save two shares, and two of his sons own' one share each. • The Jefferson Avenue property was conveyed to this corporation and the title now stands in its name. The title to the seventy-foot lot on Forest Park Boulevard is now in the name of Frank P. Storm, son of John F. Storin, and clerk and bookkeeper for Storm & Farish during these transactions, having been conveyed to him by the Storm Real Estate Company in 1904 for a recited consideration of $5, to which company it had been conveyed by Brockmeyer in 1903.
Frank P. Storm paid nothing for the lot, John P. Storm having furnished the money therefor, and Frank P. has no beneficial interest in it. Brockmeyer acted at all times under, the direction of Storm and Farish and at no time claimed any interest in any of the property, the legal title to which was taken in his name merely to facilitate the performance by Storm and Farish of their duties as appellant’s agents.
The evidence discloses, and appellant concedes, that Lula Young and Eda K. Meyer purchased and paid for the portions of the Kingshighway tract which they acquired, without knowledge of appellant’s interest or of any facts putting them on inquiry. They did not participate in or have any knowledge of the fraud practiced upon appellant, but purchased in good faith, for a valuable consideration and without notice.
There is practically no controversy as to the principal facts in the case. Other facts necessary to a determination of the cause will be mentioned in the course of the opinion.
Advanced in years, unable to read or write the language in which her business must be transacted, deprived, by reason of his insanity, of the aid and counsel of her husband, overwhelmed by the apparent imminence of the loss of all her property, appellant, in her extremity, applied to Storm & Parish to extricate her from her financial difficulties.
Under these conditions Storm & Parish undertook the management of appellant’s affairs and properties, the ultimate object of their agency being to pay off all liens against both tracts out of the proceeds of sales of parts of the Kingshighway block, so that appellant would, in the end, come into the enjoyment of the residue of that block and the whole of the Jefferson Avenue property, unencumbered.
That Brockmeyer, at the instance of Storm & Parish, his employers, took title to the property as trustee for appellant is evidenced by express declarations, written and oral, of Storm and Parish and of Brockmeyer, testified to on the trial by Storm and Brockmeyer, conceded by Parish in his testimony, and not questioned in respondent’s brief. That Brockmeyer took the title by direction of Storm & Parish and in all respects acted at their instance, under their guidance and as their alter ego, is undisputed and indisputable.
The net result of the numerous transactions and conveyances disclosed by this record is that Storm, the agent, now occupies the position with respect to the property in suit in which he undertook, as her agent, to place appellant, his principal.
Respondents’ counsel do not controvert the familiar rule that an agent is wholly prohibited from acquiring, to the prejudice of his principal, directly or indirectly, any interest in property which is the subject-matter of his agency (Grumley v. Webb, 44 Mo.
As to tke contention tkat this is a suit merely for an accounting, tkat it was tried on tkat theory and tkat course precludes tke presentation and consideration of any other theory here, it will suffice to say tkat tke pleadings and tke evidence disclose tke contrary. It is from tke record as made tkat this court must reach its conclusions as to tke theory on which tke case was tried. As to rents, other receipts, and expenditures an accounting is involved, but simply as an incident to tke main relief prayed. So muck for tke trial theory.
In considering tke effect of tke sale under tke two thousand dollar deed of trust upon tke agency of Storm & Farish, it is to be noted tkat this trust deed was executed by Brockmeyer, at tke instance of Storm & Farisk, to Storm as trustee for Farisk; tkat Storm made tke sale as trustee; tkat Kekoe bid in the property for Storm, and tkat Storm & Farisk concealed from appellant this last mentioned fact. Nor did Storm content himself with mere silence, but deliberately deceived appellant by means of letters writ
Certainly Storm conld not purchase at his own sale made in his capacity as trustee in the two thousand dollar deed of trust and hold- the property so purchased against appellant who was the owner of the equitable title. Nor could he do' by indirection what he might not directly do. The “trust was not advanced as between the parties by the sale” (Giraldin v. Howard, 103 Mo. l. c. 46; Reddick v. (Pressman, 49 Mo. l. c. 392), and the relation of the parties was unchanged thereby. We are not impressed with the argument that this sale, though not changing the relation of the parties as fixed by the deed of trust itself, nevertheless terminated the agency of Storm & Farish and destroyed all rights of appellant dependent upon that relation and upon the trust relation arising out of the utilization by Storm & Farish of their employee and representative, Brockmeyer, as the depositary, for the purpose of facilitating the accomplishment by them of the objects of that agency, of the legal title for appellant’s use.
Before an agent can be permitted to acquire an interest adverse to his principal in the subject-matter of his agency, there must have been a previous unequivocal and absolute renunciation of the agency. [Fountain Coal Co. v. Phelps, 95 Ind. l. c. 275; McMahon v. McGraw, 26 Wis. l. c. 623; Bowman v. Officer & Pussey, 53. Iowa, l. c. 642.]
The evidence in this case does not disclose any such renunciation' brought home to appellant.- The renunciation relied on here, construed in the light of Kehoe’s purchase for Storm, was made “simply for the purpose of acquiring an interest in the principal’s property; . . . such relation will be deemed to continue, and such agent treated as a trustee.” [Fountain Coal Co. v. Phelps, supra.]
Nor can it be held otherwise than that whatever title may have been acquired by the purchase of the' interest conveyed by the sale under the Leonori judgment accrued to appellant’s benefit and further fortified her equitable title by strengthening, in the hands of her trustee, the legal title to the properties. [Quackenbush v. Leonard, 9 Paige’s Ch. l. c. 344; Ringo v. Binns, 10 Pet. l. c. 281.]
Some effort is made to contend that the Leonori judgment was not mentioned hy appellant in her preliminary negotiations with Storm & Farish and that,.
The evidence discloses beyond a reasonable doubt, and Storm in his testimony admits, that the purpose of the agency was to so manage the properties as to pay off all liens of every kind. The Leonori judgment has already been rendered and was then a public record. In addition, in procuring the loans on the Kingshighway property, Storm & Farish guaranteed the St. Louis Trust Co., in writing, dated April 16, 1897, against loss by reason of this identical judgment. Further, the sale under the Leonori judgment could not have conveyed the legal title which was in Brockmeyer’s name and under the control of Storm & Farish. Appellant was still in possession of the prop•erty. With the knowledge they possessed, and in the position they occupied, Storm & Farish could not violate thejr agreement to protect the properties from the Leonori judgment, permit the sale thereunder to be made and then by purchase of the title so conveyed add to the legal title held in trust by them the equitable title they thus attempted to acquire and deny that the trust traveled with the whole. [Chaffin v. Hull, 49 Fed. l. c. 528; Newcomb v. Brooks, 16 West Va. 32; Ringo v. Binns, 10 Pet. l. c. 281.] Nor is it important out of whose funds the consideration was paid for the title conveyed under the judgment sale. “An agent cannot acquire his principal’s property by using his own funds to make what was in effect a redemption of the subject-matter of the agency.” [DeMallagh v. DeMallagh, 77 Cal. l. c. 128.]
Beyond all doubt the protection of the property from the lien of this judgment was one of the things which Storm & Farish undertook to accomplish, and under the principles applicable here respondents can-mot be permitted to set up this title against appellant. [Rothwell v. Dewees, 2 Black 613.]
In truth, since Kehoe was a figurehead and held or attempted to hold for Storm, and since Storm was-at all times trustee for appellant and held or controlled the title for her, the judgment in the ejectment suit, as between the parties to this, possesses exactly the same efficacy to bar appellant’s present claim against Storm and Parish as it would have had had appellant been named in that case as both plaintiff and defendant.
Judgments in ejectment avail but little as» a basis for a plea of res adjudicata (Davidson v. Mayhew, 169 Mo. l. c. 265; Garland v. Smith, 164 Mo. 1; Speed v. Railroad, 163 Mo. 111), and that referred to in this record is worthless for such purpose.
Appellant might, had she known of the fraud practiced upon her, have set up as a defense in the suit in ejectment the facts she now alleges as the basis of her cause of action, but she did not have knowledge of the fraud then and had she known of it was entitled to let the judgment go at law and then institute her suit in equity, as she has done. [23 Cyc. 1200; Clark v. Hindman, 46 Ore. l. c. 70; Lorraine v. Long, 6 Cal. 452.]
So far as concerns the averments of the answer and some observations in the briefs to the effect that appellant did not own the Jefferson Avenue property when she constituted Storm & Parish her agents to manage it for her, no such proof was made, but the contrary. Besides it does not lie in the mouth of agents and trustees, such as Storm & Parish early in
The Statute of Limitations has no place in this case. [R. S. 1909, secs. 1889 and 1894; Bent v. Priest, 86 Mo. l. c. 487.] Nor was appellant guilty of any laches. The facts were concealed from her and laches cannot be imputed save when delay is united with notice, actual or constructive (Butler v. Lawson, 72 Mo. l. c. 249, 250), and this observation is especially pertinent when the intentional concealment of the facts constitutes part of the fraud which gives rise to the cause of action to which the defense of laches is urged as a bar. Further, there is no evidence that the situation of the parties with respect to the property in suit has'been changed.
In the consideration of this case the rule as to the deference to be paid to the finding of the chancellor has little part to play.
The principal facts upon which our decision rests are uncontroverted. All others which enter into the minor premises on which we base our conclusion are established by the evidence beyond question. Doubtless the learned chancellor gave, on the trial, a more attentive ear to counsel’s contention that this was merely a suit for an accounting than we have been able to offer on the cold record here, and disposed of the case on that theory. In that case his decision involved no finding of fact, save one, which it is necessary for us to consider. The correctness of the statements furnished appellant by Storm & Farish showing the various amounts received and expended by them as her agents was not at any time conceded, but was denied by her. Nor do these statements purport to be final in their character, nor to cover any thing sub
For these reasons these accounts cannot be relied upon as stated accounts (Powell v. Railroad, 65 Mo. l. c. 661) and as a bar to a re-examination and reopening of them in this case, even as to rents, etc., prior to May, 1898. They amounted to nothing more than information furnished appellant of the manner in which Storm & Farish were using her funds in furtherance of the accomplishment of the purpose of their agency.
As to the respondents other than Storm & Farish, it cannot be questioned that the trust follows the trust estate into the hands of all save those who purchase in good faith, for a valuable consideration and without notice (Coffee’s Admr. v. Crouch, 28 Mo. 106; Paul v. Fulton, 25 Mo. l. c. 162; Darling v. Potts, 118 Mo. 506), nor that those who do so purchase, the trustee being in the actual possession of the trust estate, and empowered to sell, take good title as against the cestui que trust (Grove v. Heirs of Robards, 36 Mo. 523), nor that these principles are as applicable to corporate grantees as to others. [Farmers’ & Traders’ Bank v. Kimball Milling Co., 1 S. D. 388, and cases cited; Bank v. Peyton, 15 Tex. Civ. App. 189.] And, as far as the trust follows the property, so far will equity follow the trust, retake the trust estate and restore it to its rightful owner. [Oliver v. Piatt, 3 How. l. c. 401.]
As already stated, it is conceded that Lula Young and Eda K. Meyer bought in good faith, for a valuable consideration, and without notice, and took good title to the lots they purchased.
Frank P. Storm, one of the defendants, in whose name the title to the seventy-foot lot in the northeast corner of the Kingshighway tract now stands, was the
John F. Storm and Frank P. Storm own one hundred and ninety-nine of the two hundred shares of the Storm Real Estate Company, in the name of which corporation the title to the Jefferson Avenue property now stands. John M. Storm, a son of John F. Storm owns the other share of stock in that company. John F. Storm conducted for both himself and the company the exchange of properties whereby the Jefferson Avenue property was conveyed to the Storm Real Estate Company. He owned the property exchanged by the company and is and was the owner and manager of' the company itself. The Storm Real Estate Company took title with notice, paying nothing. Besides, the deeds to the Storm Real Estate Company and to Frank P. Storm were deeds of quitclaim, and, by force of that fact also, the title in their hands is subject to the equities with which it was impressed in the hands of their grantors. [Eoff v. Irvine, 108 Mo. l. c. 385, 386; Condit v. Maxwell, 142 Mo. 266; Zweigart v. Reed, 221 Mo. l. c. 46.]
Under the circumstances of this ease no commissions can be allowed Storm & Farish or either of them for any of their services in respect to the property in controversy. “It is settled law in this State that an agent who has been guilty of fraud in the transaction of his principal’s business forfeits his rights to commissions as such.” [Van Raalte v. Epstein, 202 Mo. l. c. 196; Harrison v. Craven, 188 Mo. l. c. 610.]
Since Storm & Farish were authorized by the. terms of their agency to sell, therefore as to that portion of the property which they sold to Lula Young and Eda K. Meyer, they are not chargeable with the present value of the property, but with its value at
The judgment in this case is reversed and the case remanded with directions to the trial court to enter its judgment declaring all conveyances of the properties in controversy,'whether at trustee’s sales or otherwise, to Brockmeyer, John P. Storm, Prank P. Storm, John M. Storm, The Storm Real Estate Company and Kehoe to have been conveyances in trust for the use and benefit of appellant; and also divesting Prank P. Storm of the title to the lot fronting seventy feet on Forest Park Boulevard, conveyed by Brockmeyer to TIatton, by Hatton to-John P. and Lizzie J. Storm, by John P. and Lizzie J. Storm and John M. Storm to the Storm Real Estate Company, and by the Storm real Estate Company to Prank P. Storm, vesting the same in appellant; also divesting the Storm Real Estate Company of the title- to the Jefferson avenue properties and vesting the same in appellant. Further, judgment will be entered canceling the four thousand dollar deed of trust on the properties in controversy and the Laclede avenue property and the note secured thereby, and canceling the $3500 deed of trust on the lot fronting seventy feet on Forest Park Boulevard.
Storm & Farish must also be charged with the $5500 received from Lula Young, as of the date of the deed to her, and with $46,265, as of date of the deed to Eda K. Meyer.
Credits are to be allowed for interest on the original deeds of trust executed by Brockmeyer and for the amounts paid on the principal thereof, for taxes, special taxbills, and necessary repairs, not including any repairs on the house on the Kinghshighway property and not including any amount expended in removing that house to the lot sold to Lula Young.
No credit is to be made or charge allowed in connection with the sale to Hatton for Storm of the seventy-foot lot on Forest Park Boulevard. Credit.must also be given for the sum of $500 and costs of suit in taking account of the purchase o'f the title conveyed by the sale under execution on the Leonori judgment, unless the amount actually paid was less than that sum, in which event credit should be given for the amount paid.
No commissions of any kind will be allowed Storm & Farish and no commission allowed on the loan negotiated on the lot sold Hatton for Storm. Interest at eight per cent per annum is to be allowed appellant against Storm & Farish and the Storm Real Estate Company on any balance in their hands at any time belonging to appellant.
With these directions, the judgment is reversed and the cause remanded for further proceedings not inconsistent with this opinion.
PER'CURIAM. — The foregoing opinion of Blair, C., is adopted as the opinion of the court.
