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July 5, 1983


From the Circuit Court of Clay County; Civil Appeal; Judge R. Kenneth Elliott; Reversed and Remanded With Directions

Motion for Rehearing Overruled, Transfer Denied August 30, 1983. Application Denied October 18, 1983.

Before Somerville, C.j., P.j., Turnage, Manford, JJ.

The opinion of the court was delivered by: Turnage

Virgil Colley and his wife, Helen Colley, brought suit against David Tipton and Bill Roberts for negligence in the drafting of a real estate contract. The jury returned a verdict in favor of the Colleys and against both Tipton and Roberts in the amount of $23,935.80. On the motion of Tipton and Roberts, the trial court granted them a new trial on the stated ground that the court erred in giving instructions 6 and 10, the verdict directing instructions. The Colleys have appealed. Reversed and remanded with directions to enter judgment on the jury's verdict.

The Colleys owned a farm in Clinton County, Missouri, which they had listed for sale with David Tipton, a real estate broker in Smithville, Missouri. Bill Roberts was a salesman working for Tipton. The listing which Tipton had on the Colley farm provided that there would be 8% interest on any balance of the purchase price which the Colleys would carry. In May of 1979, Roberts was contacted by Steve Maples and his wife, Nancy, who said that they wanted to make an offer on the Colley farm. Tipton and Roberts took a a typewriter and a contract for deed form to the Maples' home. They discussed the terms of the Maples' offer and requested that Nancy type the contract. The contract provided that the sales price was to be $171,000, with $10,000 to be paid at the signing of the contract and $4,500 to be paid on December 31, 1979. The contract continued with the following provision, which is at the heart of the dispute in this lawsuit:

Thirty Five Thousand due and payable September 1, 1980. The balance to be carried by seller for a Period of 20 years at 8% interest(sic). Prepayment after five years at no peantly(sic). First payment to be made annaualy(sic) on December 31, 1981. Sellers will provide warranty deed on payment of the thirty five thousand dollars on September 1, 1980. Buyers will sign deed of trust for balance. Possession June 1, 1979.

After the contract was typed, the Maples signed it and Tipton and Roberts took it to the Colleys at their home in Plattsburg. When they arrived at the Colley's home, Mrs. Colley told them that Mr. Colley was at the farm. Tipton and Roberts drove out to the farm, found Mr. Colley, informed him that they had sold his farm, and requested that he return to his home so that they could meet with him and Mrs. Colley together and get the contract signed.

There was a dispute in the testimony at this point. Mr. Colley said that he had told Tipton and Roberts that he wanted to go by the bank in Plattsburg and have the banker look over the contract because he still owed the bank on the farm. Tipton and Roberts denied that Mr. Colley had requested to go by the bank, and stated that Mr. Colley had only said that he owed a balance and wondered if he could sell the farm, and they had assured him that he could.

In any event, the three did not go by the bank, but instead went directly from the farm to the Colley home. The Colleys testified that they were given the contract, but that they did not read it because Mr. Colley did not have his glasses, and because they believed that they would probably not understand it anyway. Tipton testified that the Colleys looked at the contract, and Roberts testified that Mr. Colley read the contract and afterwards asked Roberts what it said. Roberts testified that he went over the entire contract in detail with Mr. Colley, and explained that the Maples had sold a house and only had $10,000 to pay at that time, but that they were willing to pay $4,500 on December 31 of that year and $35,000 on September 1, 1980. Roberts said that nothing was said about interest from June 1, 1979, to September 1, 1980, on the balance due after the $10,000 downpayment.

After conferring with Tipton and Roberts for about thirty minutes, the Colleys signed the contract. The parties discussed the 6% real estate commission, and although the commission came to a little over $10,000, the parties agreed to round it off to $10,000, and that Tipton and Roberts would keep the downpayment as their commission.

Sometime after the contract had been signed, Mr. Colley called Roberts and inquired whether they would receive interest on all of their money from June 1, 1979, the date that the Maples took possession. Roberts replied: "Whoever loaned money and didn't pay interest on it?" Mrs. Colley testified that Roberts convinced her they would receive interest and that she didn't think about it anymore until the end of the year.

The Maples later took the position that the contract did not require them to pay interest between the date of possession on June 1, 1979, and September 1, 1980, when the $35,000 payment was due, and that the interest started on September 1, 1980, after the $35,000 payment had been made. Tipton testified that he had his attorney, Thomas Stahl, write the Maples a letter in response to their argument on this point. In this letter, which was introduced into evidence, Stahl informed the Maples that his client, Tipton, took the position that the 8% interest was payable on the total balance from June 1, 1979.

As a result of this dispute, the Colleys filed a suit against Tipton and Roberts in April of 1981. They alleged that Tipton and Roberts had breached their duties to the Colleys by carelessly, negligently, and unskillfully drafting the contract such that it deprived the Colleys of $15,859.99, which represented interest on the unpaid balance between June 1, 1979, and September 1, 1980. The jury found for the Colleys, and awarded them $23,935.80 in damages.

Tipton and Roberts seek to uphold the order granting them a new trial on the ground that it was error to give the verdict directing instructions, because such instructions required the jury to find that they knew that the Colleys had signed the contract for deed believing they would receive 8% interest on all unpaid amounts from June 1, 1979, to September 1, 1980. Tipton and Roberts contend there was no ...

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