Metropolitan Paving Company v. Brown-Crummer Investment Co.

• Decision Date: 18 July 1925
• Docket Number: 24011
• Citation: 274 S.W. 815,309 Mo. 638
• Parties: METROPOLITAN PAVING COMPANY v. BROWN-CRUMMER INVESTMENT COMPANY and FIDELITY NATIONAL BANK & TRUST COMPANY, Appellants
• Court: Missouri Supreme Court

274 S.W. 815

309 Mo. 638

METROPOLITAN PAVING COMPANY v. BROWN-CRUMMER INVESTMENT COMPANY and FIDELITY NATIONAL BANK & TRUST COMPANY, Appellants

No. 24011

Supreme Court of Missouri

July 18, 1925

Appeal from Jackson Circuit Court; Hon. Willard P. Hall Judge.

Affirmed.

Long Houston, Cowan & Depew, Leon M. Bailey and Miller Carnack, Winger & Reeder for Brown-Crummer Investment Company.

(1) The court erred in overruling appellant's demurrer to the petition and in overruling the objection of appellant to the introduction of any evidence at the commencement of the trial, for the reason that the petition does not state facts sufficient to constitute a cause of action. 26 C. J. 1169; Lomax v. Electric Ry. Co., 106 Mo.App. 551; Thornburgh v. Jones, 36 Mo. 514; 26 C. J. 1175; Austin v. Barrows, 41 Conn. 287; Hunt v. Simmonds, 19 Mo. 583; Epps v. Duckett, 284 Mo. 132; Remmers v. Remmers, 217 Mo. 541; Smith v. Mariner, 68 Am. Dec. 73; Cowan v. Fair Brothers, 118 N.C. 406, 54 Am. St. 733; Pile v. Bright, 156 Mo.App. 301; Matthews v. Eby, 149 Mo.App. 157; Younger v. Hoge, 211 Mo. 444; Mo. Loan Inv. Co. v. Trust Co., 175 Mo.App. 646; Bryan v. Ry. Co., 292 Mo. 535; Webb v. Ins. Co., 134 Mo.App. 576. (2) The contract between the Brown-Crummer Company and the Paving Company provided that the bonds in question were to be delivered by the Paving Company to the Brown-Crummer Company within approximately six months from July 29, 1919; and since it is admitted that no bonds were issued or delivered by the city within that time and no bonds were tendered to the Brown-Crummer Company within approximately six months from July 29, 1919, there is no cause of action against the Brown-Crummer Company. 13 C. J. 527, 688; 2 Elliott on Contracts, sec. 1557; Edgerton v. Peckham, 11 Paige (N. Y.) 352; Waterman v. Burks, 144 U.S. 394; 4 Paige on Contracts, sec. 2109; 2 Elliott on Contracts, secs. 1514, 1515; Calloway v. Henderson, 130 Mo. 77; Watkins v. Donnell, 192 Mo.App. 640. (3) The court erred in overruling the demurrer to the evidence interposed by appellant Brown-Crummer Company at the close of all the evidence in the case. Walsh v. Walsh, 285 Mo. 181; Jones v. Nichols, 280 Mo. 653; Garesche v. MacDonald, 103 Mo. 1; Hardwicke v. Hamilton, 121 Mo. 465; Warren v. Ritchie, 128 Mo. 311. (4) The court erred in admitting testimony as to the negotiations which occurred prior to the execution of the contract between the Paving Company and the bank on March 20, 1920, and the execution of the written assignment on the bottom of the contract between Paving Company and Brown-Crummer Company on July 29, 1919, because said contracts were complete and unambiguous on their face and the effect of such prior negotiations was to vary and contradict the express terms of such written contracts. Rigler v. Reid, 186 Mo.App. 111; Official Catalogue Co. v. Weber, 130 Mo.App. 650; Tracy v. Union Iron Works, 104 Mo. 193; Jolliffe v. Collins, 21 Mo. 338; England v. Houser, 178 Mo.App. 70; 17 Cyc. 661; Halferty v. Scearce, 135 Mo. 428. (5) The court erred in giving Instruction 3c on its own motion. 13 C. J. 527; 2 Elliott on Contracts, secs. 1514, 1515, 1528; Calloway v. Henderson, 130 Mo. 77; Watkins v. Donnell, 192 Mo.App. 640.

Bowersock & Fizzell for Fidelity National Bank & Trust Company.

(1) The petition states no cause of action. (a) There can be no fraudulent destruction of a cause of action by or on behalf of the party against whom it exists. Lomax v. Railroad, 106 Mo.App. 551; R. S. 1919, sec. 1238; Berry v. Railroad, 223 Mo. 358; Goodson v. Accident Assn., 91 Mo.App. 339; Logan v. United Railways, 166 Mo.App. 490; Perry v. Hayes, 215 Mass. 296; Howland v. Corn, 232 F. 35; Porter v. Mack, 50 W.Va. 381; Revere Water Co. v. Winthrop, 192 Mass. 455. (b) There are no sufficient allegations of fraud in the petition. Cowan v. Fairbrother, 118 N.C. 406; Haverland v. Lane, 89 Wash. 557; Ray County Bank v. Hutton, 224 Mo. 42; Younger v. Hoge, 211 Mo. 42; Estes v. Shoe Co., 155 Mo. 577. (c) Plaintiff had no cause of action under the contract of July 29, 1919, between it and the Brown-Crummer Company. Elliott on Contracts, sec. 1557; Waterman v. Banks, 144 U.S. 394; Vassau v. Campbell, 79 Minn. 167. (2) The court erred in admitting parol evidence of preliminary negotiations to vary the terms of the written contracts. Tracy v. Union Iron Works, 104 Mo. 193; Underwood v. Simonds, 12 Metc. 275; Wodoch v. Robinson, 148 Pa. 503; Dougherty v. Dougherty, 204 Mo. 228; Blakely v. Bennecke, 59 Mo. 193; Jones v. Shaw, 67 Mo. 667; Paris Mfg. & Imp. Co. v. Carle, 116 Mo.App. 581; Henderson v. Thompson, 52 Ga. 149; Towner v. Lucas' Executor, 13 Gratt. 705; Kreshover v. Berger, 116 N.Y.S. 20; Morgan's Assignees v. Shinn, 15 Wall. 105; Pacific Natl. Bank v. Bridge Co., 23 Wash. 425; 22 C. J. 1177. (3) The evidence was insufficient to go to the jury.

Cooper, Neel & Wright for respondent.

(1) The petition states a good cause of action. Jamison v. Copher, 35 Mo. 483; Hodgson-Davis Grain Co. v. Hickey, 200 S.W. 439; Scott v. Taylor, 231 Mo. 654. Section 1238 has reference to fraud as a defense which may be set up in a reply to prevent the defeat of the cause of action sued upon, and not to actions setting up fraud as the ground and basis of the suit. This statute adds nothing to the law as it stood prior to its passage. Fraud which rendered a release pleaded in an answer invalid could be set up in plaintiff's reply prior to the statute. Berry v. Railroad, 223 Mo. 358. And it is purely a matter of defense under this state of facts. Meeker v. Ry. Co., 255 S.W. 340. (2) Respondent is entitled to recover the benefits of its bargain upon the same basis and with the same remedial rights it would have had, had there been no fraud. 20 Cyc. 134; King v. White, 119 Ala. 429; Drake v. Holbrook, 78 S.W. 158; Krum v. Beach, 96 N.Y. 398; Bergeron v. Miles, 88 Wis. 397; Hicks v. Deemer, 187 Ill. 164; Pierson v. Holdridge, 92 Kan. 365; Sweet v. Morrison, 103 N.Y. 235; Jamison v. Copher, 35 Mo. 483. (3) But two questions remain to entitle respondent to recover: first, the validity of the contract between respondent and Brown-Crummer Company; second, the fraudulent procurement of an assignment thereof by appellants. St. Louis Assn. v. Delano, 108 Mo. 217. Breach of contract by plaintiff destroying its validity is an affirmative defense and must be affirmatively pleaded just the same as any other matter that contemplates that the claim once existed, but has been discharged by the acts of the parties. Rivers v. Plom, 163 Mo. 442; Ray v. Miller, 245 S.W. 584; Paxton v. Gast, 215 S.W. 515. When a contract between two parties refers to another contract, in respect to which their contract is made that both contracts must be read and construed together to get at the real meaning. Binz v. Hyatt, 200 Mo. 299; Fidelity Loan Co. v. Moore, 280 Mo. 315; National Bank v. Flanagan Mills Co., 268 Mo. 547. (4) The fraud resting in parol may be proved by parol evidence. 13 C. J. 395; Nauman v. Oberle, 90 Mo. 666; Horne v. Hotel Co., 184 Mo.App. 725; Judd v. Walker, 215 Mo. 312. The written contracts were merely steps in the proof of the fraud and of the resulting damages. 5 C. J. 1019; Wood v. Mathews, 73 Mo. 477; Lewis v. Dunlap, 72 Mo. 174; Wallace v. Wilson, 30 Mo. 335. Respondent's assignment to the bank constituted a transfer of a complete and absolute title to its contract with Brown-Crummer, subject to be defeated when all the municipal bonds were delivered to the bank; and in this respect it is similar to the delivery of a deed or bill of sale absolute on its face, but in reality a mortgage or collateral security. And in actions at law as well as in equity parol evidence may be received to show the true character of the transaction, and especially is this true where wilful and deliberate fraud is perpetrated to obtain an undue advantage. Wood v. Mathews, 73 Mo. 477; Book v. Beasly, 138 Mo. 455; Georhardt v. Tucker, 187 Mo. 46; Stumpe v. Kopp, 201 Mo. 412; Spalding v. Taylor, 1 Mo.App. 34; Newell v. Kesler, 13 Mo.App. 189; Zittlosen Tent Co. v. Exchange Bank, 57 Mo.App. 19. (5) Complaint is made of Instruction 3c for the reason that said instruction told the jury that it must find a verdict against both defendants, if at all. This instruction is correct, because it is upon this theory, and this theory alone, that a recovery can be had. Complaint is also made of the refusal of the court to give Brown & Crummer's Instructions 2, 3, 4, 5 and 7, because said instructions permit a recovery against one of the conspirators and not against the other. A joint cause of action is alleged against both defendants in their relation of principal and agent, not only for conspiracy, but for a joint fraud practiced by them pursuant to that conspiracy, resulting in damage to plaintiff. The bank at all times was not acting independently for itself, but for Brown-Crummer. The contract it made with respondent was Brown-Crummer's contract; the advances therein provided for were advanced by Brown-Crummer and the notes executed by respondent to the bank were immediately indorsed by the bank to Brown-Crummer without recourse and handed through the bank as a cash transaction and not a dollar was advanced by the bank (record, 182). This deception was practiced right up to the time the bonds were finally issued and delivered to the bank, and in turn delivered by it to Brown-Crummer. It is well-settled law that one party cannot defeat recovery by the other on the ground of fraud by the contention that he had no personal knowledge of the fraud accomplished by false representations of his agent. Garretzen v. Duenckel, 50 Mo. 104.

White, J. All concur, except Ragland, J., who dissents.

OPINION

WHITE

The Metropolitan Paving Company, hereinafter called the ...