Blohm v. Krueger

• Decision Date: 10 May 1927
• Docket Number: (No. 8944.)<SMALL><SUP>*</SUP></SMALL&gt
• Citation: 297 S.W. 596
• Parties: BLOHM et al. v. KRUEGER.
• Court: Texas Court of Appeals

297 S.W. 596

BLOHM et al. v. KRUEGER.

(No. 8944.)^*

Court of Civil Appeals of Texas. Galveston.

May 10, 1927.

Rehearing Denied June 30, 1927.

Appeal from District Court, Burleson County; J. B. Price, Judge.

Action by A. G. Krueger against George E. Blohm and others. Judgment for plaintiff, and defendants appeal. Reversed and remanded.

Bowers & Bowers, of Caldwell, Riley Strickland, of Amarillo, and Peareson & Peareson, of Richmond, for appellants.

W. M. Hilliard, of Caldwell, and C. G. Krueger, of Bellville, for appellee.

GRAVES, J.

Pursuant to a jury's verdict on special issues and to stated additional findings of fact by the court, judgment for $13,000 was entered herein against appellants in favor of appellee as damages — $6,750 of it actual, and $6,250 exemplary — for the alleged fraudulent sale by them to him of the Republic Tire Company, a corporate concern, of Houston, Tex.; the fraud charged and found by the court and jury to have existed consisted, in general effect, of appellants' having so misrepresented and concealed the actual condition of the business as to have induced its purchase by appellee for more than it was worth, and to have been perpetrated in such a way as to also entitle him to the punitory recovery.

Appellants assail the judgment on many grounds, filing records, briefs, and arguments of such length as to entail inescapable drudgery upon the members of this tribunal; reduced to their ultimate effect, however, these simply assert, first, that the court had lost jurisdiction over them in consequence of having theretofore sustained the plea of privilege of an original codefendant with them, Waugh, to be sued in Harris county, and, second, that the pleadings and evidence were insufficient to support either class of damages allowed.

The trial court at preceding terms had not only sustained the plea of privilege of Waugh that forms the sole basis for the present claim for no jurisdiction against his original codefendants in the litigation, the appellants here, but had also separately overruled like individual pleas from the latter themselves, and all these orders were affirmed on appeals to this court, as reported in the cases of Krueger v. Waugh, 261 S. W. 196, and Ulrich et al. v. Krueger, 272 S. W. 824; the common theory throughout those causes of all three such original codefendants, as indeed it was of this court's opinions disposing of them, was that each of the parties separately was entitled to be sued in the county of his residence upon this same cause of action unless and until he was individually shown to be answerable elsewhere thereon, under some one of the exceptions to the general venue statute (R. S. article 1995); that theory is inconsistent with and, we think, overrides the argument that the transfer to Harris county as against Waugh drew the jurisdiction there as against appellants, too; being unconvinced of error in its application before, the present plea to the jurisdiction is overruled without further discussion.

The second presentment reaches the merits of the controversy. Appellee particularly averred that the tire company as a going enterprise at Houston — including its other assets and stock on hand — had been with intentional falsity represented to him by appellants both verbally and by a certain written statement of its financial condition dated August 30, 1920, which they presented to him in Burleson county, as having a net worth of $48,500. When in fact it was not worth above liabilities over $30,500; that he bought the business in reliance on these statements on September 20, 1920, and paid the $48,500 for it, thereby losing the $18,000 difference between its actual and represented values, which resulting sum he sought the recovery of as damages; that, contrary to what these statements reflected, losses had been incurred in the operation of the business, and its real worth at the time of his purchase reduced below the represented value in these respects: First, by thousands of dollars of loss so incurred when conducted on Main street, in Houston; second, by about $12,600 more after it moved during June or July, 1920, to Fannin and Dallas streets, in that city, through a special sale of over $38,000 worth of its stock of tires, tubes, etc., at a 33 1/3 per cent. discount below cost or wholesale price, all of which goods were sold under a guaranty; third, by $6,000 or more as a result of having to redeem many thousands of dollars worth of inferior goods, with which it had restocked its business after the 33 1/3 per cent. discount sale just referred to, and which it had sold under the same guaranty.

Further charges were that this written statement had been padded so as to make it appear that the company had more goods and stock on hand than it did have, in that it did not reflect any of the infirmities referred to.

The count for exemplary damages alleges in detail that appellants combined and confederated together to mislead appellee to his injury, and "that by reason of the false and fraudulent representations made to him by the defendants as aforesaid, with a view and for the purpose of defrauding, cheating, and swindling him, he is entitled to exemplary damages in the sum of $15,000."

Since the suit was exclusively one to recover the specified damages claimed to have flowed from the alleged fraudulent sale, and not for rescission thereof, this résumé of appellee's pleadings has been confined accordingly, no attempt having been made to restate the mere matters of fraudulent inducement to the sale otherwise declared upon.

The special issues elicited findings favorable to the appellee upon all the matters thus pleaded by him, except that the special sale at the 33 1/3 per cent. discount was found not to have resulted in a loss to the tire company, and his damages were fixed at $6,750 actual and $6,250 exemplary, as before stated, instead of the $18,000 and $15,000 claimed.

In our opinion, there was sufficient evidence to sustain this finding that no loss resulted to the business from this special sale, hence that item as a basis for damage must be eliminated.

Neither do the pleadings nor proof sustain any of the others, we think.

Had the action been for rescission, a general averment and showing that the condition and worth of the business was not in material respects what it had been fraudulently misrepresented to be, and that a justified reliance upon such representation had been the sole inducement of a purchase that would not otherwise have been made, would have entitled the buyer to nullification, without the necessity of pleading and proving specifically just how much and in what detail he had been injured; but, since the contract was alleged to have been performed on both sides and monetary damage alone is sought as the consequence of the the fraud, the opposite party having demanded the particularization both by special exceptions to the pleadings and objections to the sufficiency of the evidence, it was incumbent upon the appellee to both plead and prove the facts necessary to show the amount to which he was entitled. George v. Hesse, 100 Tex. 44, 93 S. W. 107, 8 L. R. A. (N. S.) 804, 123 Am. St. Rep. 772, 15 Ann. Cas. 456; Medley v. Lamb (Tex. Civ. App.) 223 S. W. 1048, and cited authorities.

The court charged the jury upon the actual loss alleged to have been sustained:

"The measure of actual damages, if any, is the difference between the reasonable market value on the day that the trade was consummated, of the property which the plaintiff parted with, and the reasonable market value of the property which he received from the defendants."

This accords with the rule laid down by our Supreme Court in the Hesse Case, and its applicability is not questioned by the appellee here.

We think appellee's allegation that he paid $48,500 for the tire company, without specifying in what particular form that was paid, was sufficient to let in proof of what he really did pay; the undisputed evidence showed that what he parted with was 133 shares of stock of the Caldwell Oil Mill Company and the promissory note of himself and appellant Blohm for $36,000; under the court's quoted charge, it was therefore necessary to show what the reasonable market...