Court Opinion

ID: 5019976
Source: CourtListenerOpinion
Date Created: 2021-10-01 03:59:35.599519+00
Date Added: 2024-06-11T08:17:43.837345
License: Public Domain

FRANKLIN FERRISS, Special Judge
(dissenting).
It does not appear just to me to bar the plaintiffs from any recovery at all and to permit defendant Gershman to retain the entire earnest money deposit.
The facts in this case are most unusual, and the decision should be limited carefully to these facts and not extended to promulgation of general principles of law.
It is true that the conduct of plaintiff Glick Real Estate Company has not been above reproach. Their action in using plaintiff Huber, a straw-party, as apparent purchaser and obtaining a share of the commission for selling the property to themselves does not invite sympathy, but the persons presumably misled by this device and entitled to complain are the sellers. Yet in this case the outstanding fact is that the sellers did not complain and have made no effort to resist the plaintiffs’ effort to recover the earnest money deposit. On the contrary, the sellers thought the plaintiffs should get their deposit back and so expressed themselves.
This is not a suit for, a share of the agreed commission, as if it had been earned by plaintiff, Glick Real Estate Company. It is a suit for return of the earnest money deposit which plaintiffs claimed should not be forfeited because of either lack of a meeting of the minds or a mutual rescission of the contract by purchasers and sellers. I agree that the first ground of complaint is *563not available to plaintiffs. But'there is substantial evidence that the sellers acquiesced in the plaintiffs’ refusal to complete the contract and urged the return of the earnest money deposit, thus bringing about a rescission by mutual consent. 91 C.J.S., Vendor & Purchaser, § 124, pp. 1052-1053.
It seems clear that the sellers had this right subject to their agent Gershman’s interest in the deposit. Gershman produced a' purchaser ready, willing and able to buy at the price the sellers agreed to take for their property. He is, therefore, entitled to the share in the earnest money deposit which the contract gave him in the event of a forfeiture, namely, his expenses as agent plus one-half the remainder of the deposit. The other one-half would have gone to the sellers except that they disclaimed any interest in it in favor of plaintiffs. What right has Gershman to complain if this Court, recognizing the sellers’ disclaimer, awards the remaining one-half to plaintiffs? Gershman has no just claim to any more than his contract gives him for his services. I believe that substantial justice will be done if the plaintiffs are allowed to recover that portion of the earnest money deposit remaining after Gershman retains the amount due him, namely, his expenses plus one-half the balance.
I am reinforced in this view by a reading of the cases of Larner-Diener Realty Co. v. Fredman, Mo.Sup., 266 S.W.2d 689, and Houtz v. Hellman, 228 Mo. 655, 128 S. W. 1001. In the Houtz case plaintiff ven-dee was denied specific performance of his contract on the ground that he came into Court with unclean hands. Also, in the Larner-Diener Realty Co. case the Supreme Court refused to grant specific performance, this time on the ground that the plaintiff-vendee was the agent for the defendant-vendor and made no disclosure to defendant-vendor of plaintiff’s interest as vendee in the transaction. In both cases the Supreme Court ruled that the plaintiff-vendees should recover their earnest money deposits, which were held by the vendors.
It is true that in those cases the earnest money deposits were not and could not have been forfeited on the ground of the vendees’ failure to consummate the sale (the ven-dees were seeking to perform), and hence the Court’s order to return the earnest money merely proves that the plaintiffs were not disentitled to the return of the money because of their unclean hands or their failure to disclose’ their true position, namely, that of purchaser. Applied to the facts in the instant case, this rule means that where plaintiffs are otherwise entitled to the return of their earnest money, or at least a portion thereof, on account of the sellers’ waiver of any forfeiture and their acquiescence in a rescission of the. contract, then plaintiffs’ concealment of their position will not bar such a recovery by them.
The reason for this rule is not hard to discover. A contrary rule would mean that a purchaser violating a duty of disclosure not only could not enforce his contract, but no matter how much hq had deposited as earnest money or had paid to the seller on the purchase price, he would forfeit all of it to a seller who refused to go through with the contract or who acquiesced in a mutual rescission thereof. Neither the law of contracts nor the law of agency requires such a harsh and punitive rule. In holding otherwise, the majority opinion in my judgment conflicts with the opinions of the Missouri Supreme Court in Larner-Diener Realty Co. v. Fredman, Mo.Sup., 266 S.W.2d 689, and Houtz v. Hellman, 228 Mo. 655, 128 S.W. 1001. For that reason, I request that the case he certified to the Supreme Court of Missouri for final and authoritative determination.
PER CURIAM.
The opinion in this cause, reversing the decision of the court below, being deemed by one of the Judges of this court to be contrary to previous decisions of the Supreme Court of Missouri, the cause is hereby transferred for final determination to the Supreme Court of Missouri.