Donnell v. Stein

• Decision Date: 22 October 1932
• Docket Number: No. 30318.,30318.
• Citation: 53 S.W.2d 903
• Parties: J.F. DONNELL v. S.R. STEIN, R.G. NAYSMITH and P.J. BRECKENRIDGE, Appellants.
• Court: Missouri Supreme Court

53 S.W.2d 903

J.F. DONNELL v. S.R. STEIN, R.G. NAYSMITH and P.J. BRECKENRIDGE, Appellants.

No. 30318.

Supreme Court of Missouri, Division One.

October 22, 1932.^*

Appeal from Circuit Court of St. Louis City. — Hon. James F. Green, Judge.

AFFIRMED.

Buder & Buder and J. Hugo Grimm for appellants.

(1) The false representation, in order to be actionable, must have been of a material fact which the party claiming to have been deceived not only believed to be material, but which was, in fact, material. Byrd v. Rautman, 85 Md. 414; Davis v. Davis, 97 Mich. 419; Hall v. Johnson, 41 Mich. 286; Wann v. Scullin, 210 Mo. 487; Tinker v. Kier, 195 Mo. 199; Bowman v. Branson, 111 Mo. 343; Baugh v. Houston, 193 S.W. 242. (a) If the party claiming to have been deceived would have done what he did, even if the alleged misrepresentation had not been made, it cannot be deemed material. 26 C.J. 1104; Brenard Mfg. Co. v. Citornelle Merc. Co., 140 Ala. 602; Byrd v. Rautman, 85 Md. 414; McAleer v. Horsey, 35 Md. 439; Gittings v. Von Dorn, 136 Md. 16; Hale v. Philbrick, 47 Iowa, 217; Farmers' Ass'n v. Scott, 53 Kan. 534. (b) In deciding whether parties have regarded a representation as material, its omission from a written memorandum of the transaction is an indication that the representation was not so regarded. Palmer v. Bell, 85 Me. 352; Nounnan v. Sutter County Land Co., 81 Cal. 7; Reynolds v. Palmer, 21 Fed. 433; Wightman v. Tucker, 50 Ill. App. 80; 26 C.J. 1104, note 8. In this case the agreement was embodied in the option contract dated September 15, 1926. (c) A representation which is either in form or substance nothing more than a statement of opinion cannot constitute a fraud, and this is especially true where the opinion expressed is honestly entertained. To be actionable a false representation must be one of fact as distinguished from an expression of opinion, which ordinarily is not presumed to deceive or mislead or to influence the judgment of the hearer and upon which he has no right to rely, and this is particularly true as to opinions of value. McCaw v. O'Malley, 249 S.W. 41; State ex rel. Burton v. Allen, 278 S.W. 772; Zeitinger v. Steinberg, 277 S.W. 953; 26 C.J. sec. 20, pp. 1079-1085; Brown v. South Joplin Lead etc., Mining Co., 194 Mo. 681; Dalrymple v. Craig, 149 Mo. 345; Wilson v. Jackson, 167 Mo. 135; Anderson v. McPike, 86 Mo. 293; Putnam v. Bronwell, 73 Tex. 465. (d) To be actionable representations must not only be false, but also must be made scienter — with a knowledge of their falsity on the part of the person making them — and with the intent that they be acted upon by the other party. Dunn v. White, 63 Mo. 181; Lovelace v. Suter, 93 Mo. App. 429; Walsh v. Morse, 80 Mo. 568; Morrow v. Franklin, 233 S.W. 224; Peoples Natl. Bank v. Central Trust Co., 179 Mo. 661; Bank v. Hutton, 224 Mo. 65. (e) A statement, in order to constitute a false representation, must relate to a past event or an existing fact, not to what the party intends or expects to do in the future. Stocking v. Howard, 73 Mo. 25; Younger v. Hoge, 211 Mo. 444, 18 L.R.A. (N.S.) 94; Met. Paving Co. v. Brown-Crummer Inv. Co., 274 S.W. 815; Palmer v. Bell, 85 Me. 353; Putnam v. Bronwell, 75 Tex. 465; Baugh v. Houston, 193 S.W. 242. (f) Fraud without damage, or damage without fraud, gives no cause of action; both must concur, 26 C.J. 1167, note 62; Atchison County Bank v. Byers, 139 Mo. 627; Bailing v. Merrill, 3 Bulstr. 95; Hale v. Philbrick, 47 Iowa, 217. (2) The gist of the action for conspiracy consists not in the conspiracy, but in the damages inflicted in pursuance thereof. Epps v. Duckett, 223 S.W. 572; Darrow v. Briggs, 261 Mo. 276, 169 S.W. 118; Carder v. Drainage Dist., 262 Mo. 588, 172 S.W. 13; Martin v. Reilly, 109 Wis. 464; Hunt v. Simonds, 19 Mo. 585; Hansen v. Nicoll, 40 App. D.C. 228, Ann. Cases 1914 C, 759.

Jeffries, Simpson & Plummer for respondents.

(1) Tortfeasors sued as conspirators are jointly and separately liable whether acting in concert or independently. Roger v. Roger, 265 Mo. 209; Hubbard v. Railroad Co., 173 Mo. 256; Leimkuehler v. Wessendorf, 18 S.W. (2d) 452; Johnson v. Bray, 31 S.W. (2d) 1002 (2) One who joins a conspiracy at any stage becomes liable for all acts done prior or subsequent to his entry therein. State ex rel. v. People's Ice Co., 246 Mo. 216; Kennish v. Safford & Ray, 193 Mo. App. 372; McCarty v. Hemker, 4 S.W. (2d) 1092. (3) Conspiracy and fraud may be shown by circumstantial evidence. Dietrich v. Cape Brewery & Ice Co., 315 Mo. 520; Belt v. Belt, 288 S.W. 107; Kennish v. Safford & Ray, 193 Mo. App. 369; Allen v. Forsythe, 160 Mo. App. 269; Burton v. Maupin, 281 S.W. 90. (4) To sustain a charge of fraud or conspiracy it is not necessary to show that the tortfeasors profited by their wrong. Wolfsberger v. Miller, 39 S.W. (2d) 764; 12 C.J. 612; 26 C.J. 1180. (5) Misrepresentations of value are actionable when coupled with other deceit. 26 C.J. 1217; Wagner v. Binder, 187 S.W. 1150; Zeitinger v. Steinberg, 277 S.W. 953; Davis v. Forman, 229 Mo. 27; Brigham v. T.D. Judy Invest. Co., 186 S.W. 15; Stonemets v. Head, 248 Mo. 243; Ruddy v. Gunby, 180 S.W. 1043; Parish v. Casner, 282 S.W. 410. (6) A misrepresentation in the form of a forecast of what will happen in the future made by one possessing peculiar knowledge of the matter is actionable. State ex rel. v. Daues, 316 Mo. 482; Stonemets v. Head, 248 Mo. 268; Wendell v. Ozark Orchard Co., 200 S.W. 749. (7) Misrepresentations as to the identity of a purchaser where coupled with other deceit constitute actionable fraud. Davis v. Forman, 229 Mo. 27; Brigham v. T.D. Judy Invest. Co., 186 S.W. 15. (8) A qualified witness may give his opinion as to the value of corporate stock. Moffett v. Hereford, 132 Mo. 520; Railroad Co. v. St. Louis Union Stock Yards, 120 Mo. 550; Steinberg v. Levy, 236 S.W. 909; Harris v. Railroad Co., 115 Mo. App. 533; Railroad Co. v. Norcross, 137 Mo. 431. (9) In determining the value of corporate stock sold, it is proper to consider matters happening after the date of the sale. Addis v. Swofford, 180 S.W. 548; Morrow v. Franklin, 289 Mo. 549. (10) Where regardless of the truth or falsity of a statement, the fact that it has been made is relevant, the hearsay rule does not prevent its admission. 22 C.J. 259; Looff v. K.C. Ry. Co., 246 S.W. 580. (11) Representations made by one conspirator prior to the consummation of the object of the conspiracy are considered as the representations of all conspirators. Day v. Lusk, 219 S.W. 598; Gebhardt v. United Rys. Co., 220 S.W. 680; State ex rel. v. People's Ice Co., 246 Mo. 216; Kennish v. Safford & Ray, 193 Mo. App. 372; McCarty v. Hemker, 4 S.W. (2d) 1088. (12) Mere negligence of the defrauded party constitutes no defense to the wrongdoer. Kelly v. Peeples, 192 Mo. App. 439; Thaler v. Niedermeyer, 185 Mo. App. 274: Laird v. Keithley, 201 S.W. 1142; Judd v. Walker, 215 Mo. 337.

GANTT, P.J.

Action for fraud by false and fraudulent representations. Verdict for $17,500 actual and $10,000 punitive damages. On motion for a new trial plaintiff remitted $9,000 of the punitive damage. Judgment for $18,500 and defendants appealed.

In substance the petition alleged that plaintiff was the owner of the capital stock of the Donnell Milk Company of the value of $60,000: that defendants falsely and fraudulently represented to plaintiff that defendant Stein was the agent of an Eastern dairy company of large financial means that had decided to engage in business in St. Louis; that said company would establish milk stations in the city; that the Donnell Milk Company could not compete with it; that its capital stock would for that reason become worthless and that the Eastern company was willing to purchase said stock through Stein and pay therefor $35,000 if plaintiff waived the indebtedness of the Donnell Milk Company to him.

It further alleged that defendant Naysmith, acting in collusion with the other defendants, falsely and fraudulently pretended to act as the trusted employee of plaintiff in determining the value of said stock, and falsely and fraudulently represented to plaintiff that the milk company was not making progress and that the value of its stock was only $35,000 if plaintiff waived its indebtedness to him. It further alleged that plaintiff was by said false and fraudulent representations induced to sell said stock to defendants for said sum.

The answer was a general denial with pleas of estoppel, which pleas are abandoned on this review. The reply was a general denial.

[1] Defendants challenge the ruling on the demurrers to the evidence. They seek to have the question determined on the weight of the evidence. It must be determined on the evidence favorable to plaintiff. There was evidence tending to show the following: In 1914 plaintiff incorporated the Donnell Milk Company with a capital stock of 150 shares of the par value of $100, all of which he owned. The company located in St. Louis and engaged in selling milk. Plaintiff was a physician residing at Crystal City, Missouri, and could not conduct the business. He employed defendant Breckenridge and others for that purpose. Plaintiff continued to practice medicine in said city but allotted a few hours to the management of the business. This continued until 1916. He then employed defendant Naysmith as treasurer and manager of the company. He gave him control of all departments, authorized him to collect and pay money, sign checks, supervise the books and accounts, pay income tax and employ and discharge the help. He was given absolute control of the business. Defendant Breckenridge continued as an employee under Naysmith. He had charge of the milk room and was an assistant to the manager. Plaintiff had known him many years and made him secretary of the company. He also was authorized to sign checks, if necessary, in the absence of Naysmith. Plaintiff did not require them to give bond. They were trusted employees of the company....