B & T Distributors, Inc. v. Riehle

• Decision Date: 25 August 1977
• Docket Number: No. 887S605,887S605
• Citation: 266 Ind. 646,366 N.E.2d 178
• Parties: , Blue Sky L. Rep. P 71,370 B & T DISTRIBUTORS, INC., Clarence Kingery, Gene Schilling, Defendants-Counterclaimants-Appellants, v. Robert G. RIEHLE, Patricia L. Riehle, State of Indiana, ex rel. B & T Distributors, Inc., Plaintiffs-Counterclaimants-Appellees.
• Court: Indiana Supreme Court

Page 178

366 N.E.2d 178

266 Ind. 646, Blue Sky L. Rep. P 71,370

B & T DISTRIBUTORS, INC., Clarence Kingery, Gene Schilling Defendants-Counterclaimants-Appellants, v. Robert G. RIEHLE, Patricia L. Riehle, State of Indiana, ex rel. B & T Distributors, Inc. Plaintiffs-Counterclaimants-Appellees.

No. 887S605.

Supreme Court of Indiana.

Aug. 25, 1977.

John D. Raikos, Raikos, Martinet, Deal & Raikos, Indianapolis, for appellants

James W. Bradford, Indianapolis, Wm. C. Burns, Schultz, Ewan & Burns, Lafayette, for appellees.

ON PETITION TO TRANSFER

PIVARNIK, Justice.

This cause comes to us on a petition to transfer by plaintiffs-appellees Robert and Patricia Riehle from the First District, Court of Appeals. The trial court awarded plaintiffs-appellees damages of $12,635.05, cancelling an agreement whereby defendants-appellants Kingery and Schilling were to purchase 450 shares of common stock from the Riehles. The trial court ordered that Kingery and Schilling's down payment of $18,900 be forfeited, and found that Kingery and Schilling were entitled to no relief on their counterclaim. The Court of Appeals reversed the trial court and remanded the cause with instructions to enter judgment for Kingery and Schilling, to order all consideration paid by Kingery and Schilling returned, together with 6% Interest thereon from the date of payment, costs, and to award Kingery and Schilling reasonable attorney fees. B & T Distributors, Inc. v. Riehle, (1977) Ind.App., 359 N.E.2d 622. (See Appendix).

The Court of Appeals properly found that the antifraud provisions of the Indiana Securities Act applied to this transaction, and we adopt the opinion and findings of the Court of Appeals on that issue. However, we find the Court of Appeals was otherwise in error, and therefore grant transfer and reverse the Court of Appeals decision.

Under the provisions of the Indiana Securities Act, Ind.Code § 23-2-1-1 et seq. (Burns 1971), and under the evidence of this cause, the trial court found that the Riehles did not make false representations or commit fraud and thus entered judgment in their favor. The Court of Appeals erred in its reversal of these findings.

The following facts are necessary for a resolution of this matter. Clarence Kingery was approximately 42 years of age and was employed as a mortgage banker for American Fletcher Mortgage Company during the time of this transaction. Gene Schilling was also in his early 40's and was employed as a national sales manager for the Schwab Safe Company for a period of approximately eight years. Kingery and Schilling decided to pool their resources and look for a business to buy for purposes of investment. They learned that Bob Riehle might be interested in selling B & T company, and approached him with regard to purchasing the same. There were many conferences between these parties in the following months prior to entering into the agreement in question in January of 1972. In December of 1971, the transcript discloses that there had been much discussion and disclosure of the assets, income, and disbursements of the B & T company. Most of the conferences were at the instance of Kingery and Schilling, and by negotiation they finally agreed on the price. All of the The trial court heard all of the witnesses in this cause and had before it all the exhibits and documentation in evidence. Among the findings of fact by the trial court, findings 7 and 8 are two that are pertinent here:

parties were represented by counsel during all of these negotiations, and the contracts entered into were prepared by attorneys and were signed by all the parties upon consultation with their attorneys.

(7) That the individual plaintiffs made no representations of a material nature to the individual defendants which were false or known to be false prior to the execution of the agreement and that the individual defendants Clarence Kingery and Gene Schilling did not rely on any of such representations as such did not exist.

(8) That the transaction as to the sale of B & T Distributors Inc. by the plaintiffs Robert G. Riehle and Patricia L. Riehle to Clarence Kingery and Gene Schilling was an arms length transaction in all respects.

It is fundamental that in reviewing actions of a trial court, an appellate court can neither weigh the evidence nor determine the credibility of the witnesses. Soft Water Utilities, Inc. v. LeFevre, (1974) Ind.App., 308 N.E.2d 395; Nugent v. Smith, (1972) 153 Ind.App. 484, 287 N.E.2d 899; Englebrecht v. Tri-State Franchisers Inc., (1972) 153 Ind.App. 350, 287 N.E.2d 365. The considerations of the weight of the evidence and the credibility of the witnesses are left exclusively to the trier of the facts, in this case the trial judge, and they will not be disturbed on appeal if there is evidence in the record to sustain them. Neither the Court of Appeals nor the Indiana Supreme Court can reverse a trial court in its determination and finding of the facts and judgment thereon, unless the record discloses there were no facts nor inferences based therefrom to sustain its judgment.

Riehle testified that purchases and sales of beer products, by law, had to be for cash and that there would be no accounts receivable. For the same reason, there could be no major accounts payable of any size. He testified that there would be a bank account, fixtures and equipment, and perhaps material handling equipment. There were no bank loans, and the books of account of B & T Distributors, Inc., grossing $144,000 a year, did not amount to much under the circumstances. The books of account were largely the checkbook of B & T. The transcript of the testimony of the witnesses reveals that there was much exchange and discussion of the income of the company, together with the disbursements and expenses for operating that were pertinent to the running of the business. Riehle testified that very little other than that could be considered "the books of the company," and that Kingery and Schilling were well aware of this. It was impossible in December of 1971 to have a full report of the activities for the latter half of 1971, as this could not be prepared until some months later after the close of the year. Again it appears that all parties were aware of this and willing to execute this contract in spite of it. The trial court found that no false representations of fact were made to Kingery and Schilling. For the trial court to have gone further, and state in its findings that there was no omission to disclose pertinent facts, would have been in this cause nothing more than making the same statement in reverse. The facts amply show that this was a contract entered into by adults who were experienced businessmen and represented by counsel at every stage of the negotiations. Though there are conflicts in the evidence as to some of the facts involving this transaction, it appears that there were ample facts upon which the court could find that all of the parties entered into this contract willingly and fully advised of what it entailed. There is therefore no reason to disturb the judgment of the trial court.

The judgment of the trial court is affirmed.

HUNTER and PRENTICE, JJ., concur.

GIVAN, C. J., dissents.

DeBRULER, J., finds the opinion of Judge LOWDERMILK to be correct in all respects and therefore dissents.

APPENDIX

LOWDERMILK, Judge.

This case was transferred to this office from the Second District in order to help eliminate the disparity in caseloads among the Districts.

Defendants-appellants, Clarence Kingery, Gene Schilling and B & T Distributors, Inc. (Kingery and Schilling), appeal from the adverse judgment of the trial court awarding plaintiffs-appellees, Robert G. and Patricia L. Riehle (Riehle), damages of $12,635.05, cancelling an agreement whereby Kingery and Schilling were to purchase 450 shares of common stock from the Riehle's, declaring that Kingery's and Schilling's down payment of $18,900.00 be forfeited, and finding that Kingery and Schilling were entitled to no relief on their counterclaim.

We reverse.

The essential facts necessary for our disposition of this appeal are as follows:

In September, 1971, Kingery approached Mr. Riehle in an effort to purchase B & T Distributors, Inc., and a series of meetings ensued. At one of these meetings Riehle made an estimated profit and loss statement from his checkbook for Kingery and Schilling which showed a profit for the first six (6) months of 1971 of $5,824.81, and a gross profit margin on sales of approximately 33.4%.

In January, 1972, the parties executed a contract for the purchase and sale of B & T Distributors, Inc. The contract provided, inter alia, that the Riehles would transfer the stock of B & T Distributors, Inc. for a consideration of $70,000.00. Kingery and Schilling were to pay $18,900.00 down, and in addition pay to the Riehle's $12,635.05, said sum representing the value of the inventory and certain loans made to the corporation by the Riehles.

Kingery's and Schilling's profit and loss statement for the first six (6) months of 1972 showed a net loss of approximately $119.03, and a gross profit margin on sales of approximately 26.2%.

In July, 1972, Kingery and Schilling sought to rescind their contract with the Riehles claiming they had been defrauded. The Riehle's thereupon commenced this action by filing their complaint. The trial court's finding of fact which is central to this appeal provided as follows:

" * * * pr

7. That the individual plaintiffs made no representations of a material nature to the individual defendants which were false or known to be false prior to the execution of the agreement and that the individual defendants Clarence Kingery and Gene Schilling did not rely on any of such representations, as such did not exist.

* * * " di

Kingery...