Case Name: Helen R. HUBER, Glick Real Estate Company, a Corporation, and Eugene Glick, (Plaintiffs), Respondents, v. Solon GERSHMAN and Solon Gershman Realtors, Inc., a Corporation, Defendants (Solon Gershman Realtors, Inc., Defendant and Third-Party Plaintiff, Appellant, Hope Komm and Blanche Komm, Individually and as Executrix of the Estate of David R. Komm, Deceased, Third-Party Defendants.)
Court: St. Louis Court of Appeals
Jurisdiction: Missouri
Decision Date: 1955-10-18
Citations: 286 S.W.2d 558
Docket Number: No. 29249
Parties: Helen R. HUBER, Glick Real Estate Company, a Corporation, and Eugene Glick, (Plaintiffs), Respondents, v. Solon GERSHMAN and Solon Gershman Realtors, Inc., a Corporation, Defendants (Solon Gershman Realtors, Inc., Defendant and Third-Party Plaintiff, Appellant, Hope Komm and Blanche Komm, Individually and as Executrix of the Estate of David R. Komm, Deceased, Third-Party Defendants.)
Judges: ANDERSON, P. J., and SAM C. BLAIR, Special Judge, concur.
Reporter: South Western Reporter Second Series
Volume: 286
Pages: 558–563

Head Matter:
Helen R. HUBER, Glick Real Estate Company, a Corporation, and Eugene Glick, (Plaintiffs), Respondents, v. Solon GERSHMAN and Solon Gershman Realtors, Inc., a Corporation, Defendants (Solon Gershman Realtors, Inc., Defendant and Third-Party Plaintiff, Appellant, Hope Komm and Blanche Komm, Individually and as Executrix of the Estate of David R. Komm, Deceased, Third-Party Defendants.)
No. 29249.
St. Louis Court of Appeals. Missouri.
Oct. 18, 1955.
Motion for Rehearing or for Transfer to Supreme Court Denied Feb. 23, 1956.
Dissenting Opinion Filed Feb. 23, 1956 as Modified March 6, 1956.
Transferred to Supreme Court March 6, 1956.
Adolph K. Schwartz, St. Louis, Sievers, Reagan & Schwartz, St. Louis, of counsel, for appellant.
Kerth, Thies & Schreiber, Clayton, for respondents.

Opinion:
WOLFE, Commissioner.
This is an action to recover an earnest money deposit made by the plaintiffs who intended to purchase a parcel of real estate in the City of St. Louis. Plaintiffs, after making the deposit, declined to go through with the purchase and seek recovery of the deposited sum from the agent to whom the money was paid. The agent joined the principals, the owners of the property, as third-party defendants, with a prayer for judgment over against the principals if the plaintiffs should prevail. The trial was to the court on the main issue and resulted in a judgment in favor of the plaintiffs and against the agent defendant in the sum of $2,808.30. The issues as to the third-party defendant were submitted to a jury, which returned a verdict in favor of Solon Gersh-man Realtors, Inc., in the sum of $1,250 with interest. From the judgment entered on all issues defendant Solon Gershman Realtors, Inc., has appealed.
The facts of the case are as follows: Some property located on Ivanhoe Avenue in the City of St. Louis was owned by Hope Komm, Blanche Komm, and David R. Komm. It consisted of a city lot upon which was erected a theatre building known as the Ivanhoe Theatre. The theatre was under a lease to the Ivanhoe Theatre Corporation and the payment of the rentals were guaranteed by a guaranty agreement signed by Bess Schulter, who was president of the Ivanhoe Theatre Corporation. The rents were paid to a Louis Jablonow, who was the son-in-law of Hope Komm. Acting on behalf of his mother-in-law and the other owners of the property, Jablonow put it up for sale with a real estate agent by the name of Solon Gershman Realtors, Inc. A salesman named Shepard working for Glick Real Estate Company called upon Solon Gershman, president of Solon Gersh-man Realtors, Inc., and discussed the property and later requested a copy of the lease under which it was occupied. This was given to Shepard who subsequently submitted a contract to Gershman for the purchase of the property in the sum of $50,000 signed by Helen R. Huber as purchaser. Gershman in turn submitted the contract to Louis Jablonow, but it was not accepted by the owners and it was returned to Gersh-man. Shepard then submitted a contract signed by Helen Huber for $52,500, and this was accepted by the owners. Earnest money in the sum of $2,500 was paid by Glick Real Estate Company.
Glick testified that he had never had any conversation with Gershman about the property. He received a copy of the lease and guaranty agreement. He looked at the building and decided to buy it for the Glick Real Estate Company and his son, Eugene Glick, each taking half interest. He had a party by the name of Helen Huber working for him and he wanted to buy it in her name. The contract is a standard form real estate sales contract, acknowledging receipt of earnest money from Helen Huber as purchaser. The contract concluded with a typed-in addition that Solon Gershman Realtors, Inc., and Glick Real Estate Company are to be paid a commission of .$2,500, which is to be divided equally between them. Gershman did not know that Helen Huber was not the real purchaser when the contract was signed.
Glick said that he learned after the contract was entered into that rentals under the lease were in default and he demanded return of the $2,500 earnest money paid. Glick, according to Gershman, and not denied by Glick, advertised the theatre for sale after the contract was entered into. Later Eugene Glick told Gershman that they would sell the property at a profit if he could find a buyer for it. Shortly be-for time for closing the deal under the terms of the contract Glick informed Gershman that the purchase would not be made because the rents were in default and demand was made for the return of the $2,500. According to Gershman this was the first information that he had concerning the rents being in default, and Jablo-now who, as we have stated, collected the rents, while testifying on behalf of the plaintiffs, stated that he did not know whether or not the rents were in default at the time the contract of sale was entered into as it was a sort of "mixed-up affair". After the deal with Glick was not closed the property was sold for $52,500 to Bess Schulter, the guarantor on the lease, and all rents owing were paid up.
Blanche Komm was joined both as an individual and as executrix for David R. Komm who had since died and she was permitted to testify over the objection of the defendant that David Komm told Gersh-man at the time he signed the contract that he wanted Glick to know about the rents being in default and she said that Gersh-man at the time said that he would tell Glick. She said that they were friends of Glick and wanted him to have his money back. On cross-examination, she stated that she did not know that Glick was the buyer. Gershman denied that he had ever had any conversation with Dave Komm or the other owners about the rents.
Both Blanche Komm and Jablonow testified that they did not want the earnest money forfeited. Glick testified that he offered the property for sale to a Mr. Ben Shifrin who made an investigation of the lease by calling a Mr. Meyer Blocher. Blocher testified on behalf of Glick that he informed Shifrin that Bess Schulter was denying liability on her guaranty of the •lease because she had not been notified of the nonpayment of rent. Gershman, after receiving a demand for the return of the money, wrote a letter to Glick suggesting that the whole matter be submitted to the St. Louis Real Estate Board for arbitration, but Glick did not answer the letter and instead brought this suit in the name of Helen R; Huber, Glick Real Estate Company, a corporation, and Eugene Glick. It was admitted that Helen Huber had no interest in •the transaction.
The petition upon which the evidence was submitted 'alleged that Solon Gershman acting on behalf of the Solon Gershman, Inc., had fraudulently represented that the rents under the lease were paid up. However, Glick stated that no representations of any nature were made to him and he did not in fact talk to Gersham prior to entering the contract. The question of any fraudulent representations having been thus eliminated, plaintiffs at the close of all the evidence amended their petition and submitted' their case to the court on the theory that there was no meeting of the minds and consequently no valid contract existed. They reach this conclusion upon the premise that Glick would not have bought the property if he had known that the rents were in default and that David Komm wanted Glick to know this.
Blanche Komm was not barred as a witness because of the death of her husband who was a co-party to the contract with her. Here the contract sued on was made on one side by two or more persons having joint interests, one of whom has died. That fact of itself does not disqualify the surviving person having a joint interest from testifying. Wahl v. Cunningham, 320 Mo. 57, 6 S.W.2d 576, 67 A.L.R. 489; McConnon & Co. v. Kuhlmann, 220 Mo.App. 821, 278 S.W. 822; Kerr v. Prudential Ins. Co., 238 Mo.App. 972, 194 S.W.2d 706.
There was not, however, any credible evidence that the rents were in default. The man who was putting the property up for sale for all of the owners, Mr. Jablo-now, could not say that the rents were in default at the time the contract was entered into although he had collected the rents as agent for the owners. Then, too, the contract provides that it "is the entire contract" and that "neither party may be bound by representations as to value or otherwise". That there was a valid contract in writing for ,the sale of the property seems to be beyond question.
It was also the contention of the plaintiffs-respondents that Blanche Komm did not want the earnest money forfeited. This was doubtlessly true as Glick was a friend of hers and the owners had sold the property at the figure all of them had set and had collected the rents owing. It is asserted that she as one of the principals had a right to direct the agent. It may, of course, be generally asserted that an agent is the arm of the principal and subject to the principal's direction. But we have more than such a simple relationship here, for it is provided .in the contract as follows;
"Earnest deposit to be retained by Listing Agent, without interest, but agent not liable for earnest deposit until actually in form of cash in hands of agent; if sale is closed, earnest deposit to apply on sale commission; if purchaser shall fail to pay when due additional earnest deposit (if required by contract) or if sale be not closed by date fixed therefor owing to failure of performance by purchaser, earnest deposit shall be forfeited by purchaser, but purchaser shall nevertheless be bound to fulfillment of contract if so determined by seller, but this shall not entitle purchaser to enforce sale. Forfeited earnest deposit shall go first toward reimbursing expenses of agent, and balance to go one-half to seller and one-half to agent." (Italics ours.)
The owners therefore could only waive forfeiture of the earnest money by paying the sum due to the agent under the contract and were not free to direct the agent, who had procured the purchaser, to give the money back without any recompense for his efforts. Waltermire v. Stuart, Mo.App., 222 S.W.2d 945; Doerner v. St. Louis Crematory & Mausoleum Co., Mo.App., 80 S.W.2d 721; Sample v. Bank of Poplar Bluff, 239 Mo.App. 1152, 207 S.W.2d 55.
Moving now to the consideration of the position of the Glick Real Estate Company, a corporation, Eugene Glick and Helen Huber, we may eliminate from any interest Helen Huber, as it is admitted that she was a "straw party". The Glicks claim that their corporation and Eugene were the real intended purchasers. However, this is in denial of the contract where the Glick Real Estate Company appears as agent and it provides that the company shall get half of the commission. A buyer would be entitled to no share of the commission for a sale to himself, yet by this device the Glicks would have been able to cut the purchase price they were to pay by the amount of $1,250, or half the commission, and no one would have been the wiser. But the Glicks made, what they considered later, a bad bargain and they want all of their money back as purchasers. They are confronted with a contract that does not know them as purchasers. If the owners had sought to enforce the contract the Glicks could have said "Look to Helen Huber, she is the buyer". So they safely and with apparent profit concealed themselves behind a maze of their own construction. The difficulty in which they find themselves now is that they are hedged in without an opening. If they claim as agents they lose half of their money and if they claim as buyers, as they here do, they are confronted with a contract of their own procurement as agents for the owners of the property. They are without relief. When one assumes to act and declares himself to be the agent so that he may secretly buy to his own profit, neither law nor equity will relieve him, for an agent is required to make a full disclosure of his position. Utlaut v. Glick Real Estate Co., Mo.Sup., 246 S.W.2d 760; Curotto v. Hammack, 362 Mo. 457, 241 S.W.2d 897, 26 A.L.R.2d 1302; Meek v. Hurst, 223 Mo. 688, 122 S.W. 1022.
The situation in which Solon Gersh-man, Inc. was found is set forth by the contract. The underlined above-quoted sentence provides that the agent shall first recover his expenses from the earnest money forfeited by the buyers' failure to com elude the purchase. Next he shall have half of the remainder and the owners the other half. The owners are the only ones having a claim on the remaining half and they have made no demand for it and do not here do so. The only direction Gersh-man ever received was to give Glick back $2,500. Whatever sum that Solon Gersh-man, Inc., may now have over and above the amount due it under the contract belonged to the owners and not to the Glicks and therefore the latter are entitled to no judgment.
The action against the owners as third-party defendants was predicated solely upon the premise that if the agent was liable to the Glicks the owners were liable to the agent. Since it appears that the agent is not liable to the Glicks the judgment for $1,250 in favor of Solon Gersh-man Realtors, Inc., against the owners should not stand.
For the reasons stated, it is the recommendation of the Commissioner that the judgment in favor of the plaintiffs and against defendant Solon Gershman Realtors, Inc., and the judgment against Hope Komm and Blanche Komm, individually and as executrix of the Estate of David R. Komm, deceased, in favor of Solon Gershman Realtors, Inc., be reversed.
PER CURIAM.
The foregoing opinion of WOLFE, C., is adopted as the opinion of the court.
The judgment of the circuit court is accordingly reversed in accordance with the recommendation of the Commissioner.
ANDERSON, P. J., and SAM C. BLAIR, Special Judge, concur.