State Ex Rel. State Highway Commission of Missouri v. Morganstein

649 S.W.2d 485
CourtMissouri Court of Appeals
DecidedMarch 29, 1983
DocketWD 33122, 33123
StatusPublished
Cited by27 cases

This text of 649 S.W.2d 485 (State Ex Rel. State Highway Commission of Missouri v. Morganstein) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State Ex Rel. State Highway Commission of Missouri v. Morganstein, 649 S.W.2d 485 (Mo. Ct. App. 1983).

Opinions

TURNAGE, Judge.

This case arose out of the State Highway Commission’s attempt to recover part of a condemnation award which was made to Ardeis and Flora Myers. The trial court ruled that the estate of Mrs. Myers was obligated to repay $119,500. Both parties have appealed this result, the Highway Commission contending that Mrs. Myers’ estate should be held liable for the full overpayment of $237,000, and Mrs. Myers’ executors contending that she should be liable for either $2,000 or for nothing. Reversed and remanded.

This case began in July of 1970, when the State Highway Commission petitioned to condemn certain land owned by Ardeis Myers and Flora Myers as tenants by the entirety. On February 2,1971, the commissioners assessed damages for the appropriation of the land at $387,000, and on February 25,1971, the Myers were issued a check in that amount.1 Both the Myers and the Highway Commission filed exceptions to the Commissioners’ award, and the case was set for trial. On January 20, 1974, Ardeis Myers died. Notice of letters testamentary in his estate was first published July 10, 1974, and the Highway Commission’s motion to substitute Mr. Myers’ co-executors was made and sustained on May 13, 1975. The case was tried on May 24,1976, and the jury returned a verdict assessing the Myers’ damages at $150,000. The court ordered [487]*487Mrs. Myers and the executors of Mr. Myers’ estate to pay the Highway Commission the difference of $237,000 plus six percent interest from February 21, 1971. The case was appealed. State of Missouri ex rel. State Highway Commission v. Morganstein, 588 S.W.2d 472 (Mo. banc 1979). While the appeal was pending Flora Myers died, and three months later her executor was substituted in her place.

The Supreme Court ruled that the substitution of Mr. Myers’ co-executors was untimely in that it had not been made within nine months after the first publication of letters of administration pursuant to § 507.100.1(3) RSMo 1969, and for that reason Mr. Myers’ estate could not be held liable for any part of the $237,000. The Supreme Court concluded, however, that Mr. Myers’ estate was not a necessary party to the proceedings. The Supreme Court then questioned the extent of Mrs. Myers’ liability for the excess amount of the award, concluding that the case should be remanded for further evidentiary proceedings to explain what use was made of the original award, and specifically to determine to what extent Mrs. Myers actually or beneficially received the excess amount of the award, which amounted to $237,000.

On July 7,1981, the trial court on remand made the following findings:

I find that Mr. and Mrs. Myers operated as a joint enterprise. They held their property jointly ... [Everything they did was for their joint benefit ... All of the proceeds of the check for this condemned property, except $2,000, was accounted for by purchases from which they both benefited, or to pay off obligations that benefited both...

The trial court concluded that the estate of Mrs. Myers was liable for one-half of the excess amount, or $119,500. Both parties have appealed this result. The Highway Commission contends that Mrs. Myers’ estate should be liable for all of the excess amount because Mr. and Mrs. Myers benefited jointly from the use of the proceeds. The executors of Mrs. Myers contend that she should be liable either for $2,000 2 only or for nothing, on the grounds that she received no portion of the award either while her husband was alive, or as the surviving tenant by the entirety when he died.

In its earlier decision in this case, the Supreme Court stated that this case resembles the situation in which an already satisr fied judgment is reversed on appeal, and the successful appellant is entitled to restitution of the money it lost by reason of the erroneous or void judgment. 588 S.W.2d at 477[3]. The Supreme Court further stated that such a proceeding is governed by equitable considerations, Hurst Automatic Switch & Signal Co. v. Trust Co. of St. Louis Co., 291 Mo. 54, 236 S.W. 58, 62[6] (Mo.1921), and that equity holds such a defendant liable to repay only that which he received of the proceeds, either directly or beneficially. 588 S.W.2d at 477[3], citing White v. McCoy Land Co., 101 S.W.2d 763, 765[2] (Mo.App.1936), Aff’d sub nom. White v. Scarritt, 111 S.W.2d 18 (Mo.1937).

It is well established that equity follows the law, and that a court of equity just as a court of law is bound by established rules and precedents. Hall v. Hall, 506 S.W.2d 42, 45[11] (Mo.App.1974) and Milgram v. Jiffy Equipment, 362 Mo. 1194, 247 S.W.2d 668, 676[18] (Mo.1952). Thus, this case must be decided on the basis of equitable considerations in combination with the doctrines of tenancy by the entirety and joint liability.

The following facts regarding the use of the original award were revealed in the course of the second trial of this case.3 Pursuant to the Myers’ request, they were issued a check in the amount of $387,000 in [488]*488both of their names on February 23, 1971. On or about that same date, this cheek was deposited by the Myers into their joint checking account at the Suburban Bank and Trust Company. The balance in Mr. and Mrs. Myers’ Suburban checking account before February 23, 1971, was $492. Shortly after the check for $387,000 was deposited, Mr. Myers wrote a check on the account in the amount of $211,454 to pay off the principal and interest on a note secured by a deed of trust signed by him and Mrs. Myers on the property which was the subject of the condemnation suit. On February 24, 1971, Mr. Myers wrote a check on the joint Suburban Bank account for $17,500 to Trimble Manor Farm, a property which was owned by Mr. and Mrs. Myers. Between March and August Mr. Myers spent $9,889 of the funds in the joint checking account on stocks purchased in both his and Mrs. Myers’ names.

The total sum involved in the above transactions is $238,833. Since the jury’s award of $150,000 was $237,000 less than the amount which the Myers had previously received for the condemnation, the use of the award need be examined only to that extent for the purpose of this case, rather than to the extent of the full $387,000.4 As of December of 1971, nearly all of the original condemnation award had been disposed of, and the balance in the Suburban Bank account was down to $1,282. On August 15, 1973, Mr. and Mrs. Myers executed separate trust agreements, dividing all their properties into two equal halves and conveying it to a trustee.

The Supreme Court’s opinion offers two alternatives for resolving this case, depending on the parties’ explanation on remand as to how the funds were disposed of. One possibility which the court considered was that Flora Myers might have received all or part of the condemnation award as a tenant by the entirety upon her husband’s death. In order to understand why this alternative is not applicable in light of the facts as revealed on remand, the doctrine of tenancy by the entirety must be examined.

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Bluebook (online)
649 S.W.2d 485, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-state-highway-commission-of-missouri-v-morganstein-moctapp-1983.