Condit v. Bodding

• Decision Date: 29 May 1934
• Parties: CONDIT v. BODDING et al.
• Court: Oregon Supreme Court

33 P.2d 240

147 Or. 299

CONDIT v. BODDING et al.

Supreme Court of Oregon

May 29, 1934

In Banc.

Appeal from Circuit Court, Multnomah County; Jacob Kanzler, Judge.

Action by Elvin C. Condit against Hazel Bodding, executrix of the estate of A. Neppach, deceased, and another. From an adverse judgment, the named defendant appeals.

Reversed and remanded, with directions.

Frank C. Hanley and Joseph F. Hodler, both of Portland, for appellant.

Charles W. Robison and Hy Samuels, both of Portland, for respondent.

BAILEY Justice.

This action was started by Elvin C. Condit in October, 1929 against A. Neppach and Thomas Mannix as defendants, to recover general and punitive damages for alleged conspiracy on the part of the defendants to ruin plaintiff's business. Trial of the case was not had until May 31, 1933. In the interim both defendants died and Hazel Bodding executrix of the estate of A. Neppach, deceased, was substituted for her decedent as defendant. No substitution was made for the late Mr. Mannix.

On the trial the matter of punitive damages was eliminated. Judgment for general damages was entered for the plaintiff and against the defendant Hazel Bodding, as executrix of the estate of A Neppach, deceased, from which judgment she appeals.

The appellant assigns as error, among other matters, the failure of the trial court to sustain her general demurrer to the complaint, and its denial of her motions for a nonsuit and for a directed verdict. Two of the grounds relied upon for a directed verdict were the insufficiency of the evidence and a former adjudication. Certain other errors are alleged, consideration of which is not necessary to this opinion.

The plaintiff summarizes his right of recovery by referring to and quoting from a past decision of this court, as follows: "A series of wrongful acts, all aimed at a single result and contributing to the injury complained of, to wit, the destruction of one's business, credit, and reputation, may be counted upon collectively, as producing that result, in an action on the case." ^[1] Briefly stated, the plaintiff contends that the decedent defendants entered into a conspiracy to acquire for themselves plaintiff's business and that through a series of wrongful acts, they had succeeded in their object, thereby causing to plaintiff great monetary loss and other injurious results of which he complains.

The complaint contains, among others, the following allegations: That in the year 1925 the plaintiff and one Homer Conser were copartners engaged in Portland in the general business of buying and selling automobiles, under the name and style of Condit & Conser; that said partnership at that time had a large and growing business, owned physical assets of a value exceeding $60,000, held leases on two pieces of business property, and had an established credit at Portland banks; that in addition to his interest in the copartnership, the plaintiff owned a home and household furnishings in Portland of the value of $15,000; and that said partnership was formed in 1922 and had made a net profit of $18,187.14 in the year 1923, $20,273.85 in 1924, and during the year 1925 was making an average net profit in excess of $2,000 per month.

Paragraph II of the complaint, which states what seems to be the gravamen of plaintiff's cause of action, is as follows:

"That the month of February, 1925, the exact date being to the plaintiff unknown, A. Neppach and Thomas Mannix, the defendants above named, entered into an unlawful and fraudulent conspiracy and agreement to acquire said partnership business and the interest of the plaintiff therein, by false, fraudulent and unlawful means and to cheat and defraud the plaintiff of his interests and property in said business, and cause said business and property to be transferred to the use and benefit of defendant Neppach. That it was part and parcel of said unlawful and fraudulent conspiracy and agreement that said defendants should gain the confidence of the plaintiff and place him within their power and under their control and cause him to act under their, the said defendants', advice and direction in handling his, the plaintiff's, business affairs, and transfer the same to the defendant Neppach. That said unlawful and fraudulent conspiracy and agreement was by said defendants put into operation, pursued, and carried out, and plaintiff was by said defendants defrauded of his said interests in said business and other property and the same was taken by said defendants for the use and benefit of defendant Neppach in the way and manner and by the devices and means hereinafter set forth."

Several paragraphs of the complaint are given over to the recital of matters which plaintiff now claims are not in any way important or material to his cause of action, with the exception of certain allegations therein to the effect that the decedent, Neppach, represented that he was a man of large business affairs, had all the money he needed, and would like to see plaintiff succeed; and that said decedent would interest himself in plaintiff's affairs and would make plaintiff a rich man, if the plaintiff would place himself under Neppach's guidance and follow his advice.

Plaintiff avers that in May, 1926, the corporation of Condit & Conser, Inc., was organized with a capitalization of $100,000 consisting of 1,000 shares, and the assets of the copartnership were transferred to the corporation, presumably in exchange for the capital stock of the latter; and that plaintiff and Homer Conser each owned one-half of the capital stock, with the exception of 2 shares held by one of their employees. It is then alleged that on or about June 1, 1926, Neppach, in furtherance of said conspiracy, represented to plaintiff that if the latter would purchase Conser's stock, Neppach would furnish the money required by plaintiff for such purpose and would take the stock himself; that thereafter Neppach and plaintiff would expand the business; and that Neppach would furnish the finances therefor so that it would not be necessary to borrow from banks thereafter in order to conduct the business. Plaintiff claims that in reliance on such promises and believing them to be true, he purchased the stock owned by Conser and borrowed from Neppach the money with which to pay for it. He charges that in furtherance of the conspiracy Neppach went with the plaintiff to the Citizens' Bank of Portland, where the corporation of Condit & Conser, Inc., had been accustomed to do its banking business, and there, in the presence of plaintiff, Neppach informed the officers of the bank that he would finance plaintiff's business and that the bank should make no more loans to said corporation; that in reliance upon those representations to the bank, and others made by Neppach that he would finance the business and would purchase one-half of the capital stock of the corporation, the plaintiff consented to the cancellation of the corporation's credit at that bank.

The complaint further recites that Neppach loaned to the corporation $3,000 in July, 1926, and a similar sum in October of that year, but failed and refused to make any further loans or advances to the corporation: that during the year 1926 the corporation, by reason of its failure to obtain sufficient funds to handle used cars, was unable to show a profit; and that on December 31, 1926, the plaintiff insisted that Neppach take a transfer of the stock in the corporation formerly belonging to Conser, at which time the defendant Mannix, in furtherance of the conspiracy, advised plaintiff as plaintiff's attorney to execute and deliver to Neppach a chattel mortgage "on all the stock in trade, furniture, fixtures and equipment of said corporation to secure the advances made by said Neppach, and that said transfer of stock be delayed until a later date." Plaintiff claims that, relying on the advice of Mannix, he caused the execution of such chattel mortgage; and that later, actuated by such advice, he delivered to Neppach a mortgage from himself and his wife on certain farm lands, as further security for the loans made by Neppach.

The complaint next alleges that during the years 1926 and 1927 the plaintiff conducted the business of the corporation without any further loans from Neppach and that through lack of financing from Neppach and because of his inability to borrow money from the Citizens' Bank plaintiff's business was curtailed, but that in the spring of 1928 the business of the corporation began to show a substantial profit; that in March, 1928, the mortgage given by plaintiff and his wife on the farm land was canceled and in lieu thereof a mortgage in the form of a deed was given on plaintiff's residential property in the city of Portland; that thereafter, in furtherance of the conspiracy, Neppach represented to plaintiff that if the latter would deliver to him a bill of sale of plaintiff's furniture, Neppach would advance further moneys to carry on the corporation's business; that in reliance upon such promises the plaintiff executed such bill of sale; but that Neppach refused to advance any further money for plaintiff's business.

Plaintiff avers that in May, 1928, in furtherance of the alleged conspiracy, the decedent defendants employed one Harry McDonald and entered into an agreement with him by the terms of which McDonald should take over the corporation's business and manage it; that later, on May 18, McDonald took charge of the business; that on May 24 Mannix informed plaintiff that numerous creditors of the corporation were about to file an involuntary petition in bankruptcy against Condit & Conser Inc.; and that Mannix advised plaintiff to file on behalf of the corporation a voluntary petition in bankruptcy. It is alleged...