Drake v. Hicks

261 S.W.2d 45
CourtSupreme Court of Missouri
DecidedSeptember 14, 1953
Docket43472
StatusPublished
Cited by8 cases

This text of 261 S.W.2d 45 (Drake v. Hicks) is published on Counsel Stack Legal Research, covering Supreme Court of Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Drake v. Hicks, 261 S.W.2d 45 (Mo. 1953).

Opinion

261 S.W.2d 45 (1953)

DRAKE et al.
v.
HICKS et al.

No. 43472.

Supreme Court of Missouri, Division No. 2.

September 14, 1953.
Rehearing Denied October 12, 1953.

William C. Connett IV, Thomas V. Connelly, St. Louis, Bryan, Cave, McPheeters & McRoberts, St. Louis, of counsel for appellants.

Witherspoon, Lewis & Draper, St. Louis, for respondents.

ELLISON, Judge.

This is a second appeal in a suit for specific performance of a written contract to convey certain real estate in St. Louis designated in the record as 4460-62 Enright *46 Avenue. The plaintiffs Drake, husband and wife, were the contract purchasers of the property. The defendant Fred Hicks was the owner. The two other defendants, Parker and Matthews, were purported lessees. Hicks contended the plaintiffs Drake had failed to carry out the contract on their part. The trial court found they had, and divested the title out of Hicks and vested it in them. Hicks appealed, and in 249 S.W.2d 358 this court reversed and remanded the cause with directions to reinstate the interlocutory decree as a basis for further proceedings consistent with the opinion. The second hearing was on the same record.

The contract of sale was unusual. It was a written "Receipt For Earnest Money" dated September 9, 1950, marked "Accepted" by the plaintiff purchasers Drake and "Approved" by the defendant vendor Hicks. It stated the total purchase price of the property was $12,000, of which $300 was a down payment of earnest money, and $8,700 was to be paid in cash at the closing of the sale on or before October 2, 1950, at the office of Oren E. Scott. Time was to be of the essence of the contract. The remaining $3,000 was to be paid monthly in 36 notes of which 35 were for $90 each, and the remaining note for $139.80 drawing 6% interest, all secured by a second deed of trust, subject to an outstanding first deed of trust for $7,500 due in three years, drawing 5% semi-annual interest. Hicks guaranteed the title.

The plaintiffs Drake did not appear at the office of Oren E. Scott on October 2, as stipulated, to close the contract but went there the next day and completed the arrangements for financing the transaction. The defendant vendor Hicks refused to execute the deed and the plaintiffs Drake instituted this suit for specific performance. The trial court found for them and on April 20, 1951, entered an interlocutory decree for specific performance of the contract of sale conditioned on their compliance therewith in ten days by deposit of the money, notes and second deed of trust called for therein. On proof of that compliance and of defendant Hicks' refusal to perform the trial court entered a final decree on April 24, 1951, divesting title to the real estate out of the defendant Hicks and vesting it in the plaintiffs Drake.

In the interlocutory decree the trial court found that after the defendant Hicks had on September 9, 1950, contracted in writing in the "Receipt for Earnest Money" to consummate the sale on October 2, 1950, and sell the land to the plaintiffs Drake, he [Hicks] had on October 3, 1950 fraudulently entered into 5-year leases on two separate parts thereof respectively to the defendants Parker and Matthews, both leases to be effective September 1, 1950. In other words, the two leases were backdated. And they were at a depreciated rental of $50 per month for one part and $40 per month for the other, whereas the reasonable rental value of the whole property was $100 per month. The interlocutory decree found these leases were entered into by Hicks in bad faith for the sole purpose of thwarting the sale of the property to the plaintiffs Drake, and that no rentals had actually been paid by the lessees Parker and Matthews.

Continuing, the interlocutory decree held the plaintiffs Drake were entitled to specific performance of their contract as expressed in the "Receipt for Earnest Money", and directed them within 10 days to deposit with the clerk of the court $9,000 [their down payment of $300 plus $8,700 obtained on a second deed of trust] and also the $3,000 in $90 notes payable monthly called for by the contract and secured by a second [third?] deed of trust. Further the interlocutory decree ordered the clerk of the court upon the receipt of said purchase money, notes and second deed of trust on the property, to pay off a prior deed of trust thereon held by the Home Owners Loan Corporation on which $7,500 was due, and to release the same of record.

Still further the interlocutory decree directed the clerk to withdraw so many of the plaintiff Drake's $90 notes as had been accruing monthly since the execution of the contract on October 2, 1950 and until *47 the decree had become final and possession of the property delivered to the plaintiffs, the same to be marked cancelled and paid and returned to plaintiffs as an off-set to the $100 per month rental value of the property they had lost by reason of being deprived of possession thereof.

The remainder of said $90 notes together with the second deed of trust covering them and the remaining balance of the purchase price of $9,000 were to be paid to the defendant Hicks, after deduction therefrom of all payments on the prior deed of trust [held by the Home Owners Loan Corporation?] and the costs of the lawsuit.

In its final decree the trial court repeated and adopted all or most of the foregoing findings in the interlocutory decree, and found the plaintiffs Drake had complied with them. It ordered that after the making of the disbursements directed in that decree, payment of the costs in the case and the adjustment of taxes for 1950, the balance remaining should be paid to the defendant Hicks. And finally it divested Hicks' title in the land and vested it in the plaintiff Drake, and cancelled the leases thereon of the defendants Parker and Matthews.

Defendant Hicks appealed. He objected to completion of the sale for two reasons. The first was that a provision had been inserted in the deed of trust securing the $3,000 in monthly installment payment notes, granting the plaintiffs Drake the privilege of paying the secured indebtedness in full or in part at any time upon notice to Scott, the trustee in the deed of trust, the interest on the principal amount of such payments to cease from the date of payment thereof. It was held on the former appeal, 249 S.W.2d loc. cit. 360 (5) that this was a violation of his [Hicks'] rights, since the contract of sale did not contain a prepayment privilege clause.

Further, the installment notes were not made payable to Hicks, the vendor, but to a straw party John F. Schrontz, who was named as third party, or beneficiary, in the deed of trust. Oren E. Scott was trustee. It appears the intention was to have Schrontz endorse the notes without recourse to defendant Hicks. The deed of trust securing the notes to Schrontz was filed in the recorder's office, and thereafter tendered with the notes to Hicks, who refused to accept them because they were not payable to him, the seller, as the contract required. But when the plaintiff-appellant Drake tendered them into the circuit court on the trial of their specific performance case the court ruled the notes were such "as called for in the terms of the sale contract."

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Bluebook (online)
261 S.W.2d 45, Counsel Stack Legal Research, https://law.counselstack.com/opinion/drake-v-hicks-mo-1953.