Finke v. Boyer

• Decision Date: 31 December 1932
• Citation: 56 S.W.2d 372,331 Mo. 1242
• Parties: Bernard Finke et al. v. William T. Boyer et al., Appellants
• Court: Missouri Supreme Court

56 S.W.2d 372

331 Mo. 1242

Bernard Finke et al. v. William T. Boyer et al., Appellants

Supreme Court of Missouri

December 31, 1932

Appeal from Circuit Court of St. Louis County; Hon. Jerry Mulloy, Judge;

Affirmed.

A E. L. Gardner for appellant.

(1) Fraud is never presumed, but must be proved, by the party charging it. And when a transaction under consideration may as well consist with honest and fair dealing as with a fraudulent purpose it is to be referred to the better motive. Garesche v. McDonald, 103 Mo. 1; Hardwicke v Hamilton, 121 Mo. 465; Warner v. Ritchie, 128 Mo. 311; Walsh v. Walsh, 285 Mo. 205; Woolsey v Wells, 281 S.W. 700; Elliott v. McCormick, 19 S.W.2d 660. (2) Misrepresentations as to value do not ordinarily constitute actionable fraud, especially where they are apparently expressions of opinions. Collins v. Lindsay, 25 S.W.2d 90; McCall v. O'Malley, 298 Mo. 401; State ex rel. Burton v. Allen, 312 Mo. 111. (3) Respondents, in their petition, charge a conspiracy on the part of appellant William T. Boyer, Raymond L. Kelly and one C. T. Morelock, to defraud respondents. In order to establish such a conspiracy evidence must be produced from which a party may reasonably infer the joint assent of the minds of those charged with the prosecution of the unlawful enterprise. The evidence must do more than raise a suspicion. It must lead to belief. 12 C. J. 639; Woolsey v. Wells, 281 S.W. 700; Reed v. Gill & Sons, 201 Mo.App. 461; Homath v. Street Ry. Co., 129 Mo. 643; Elliott v. McCormick, 19 S.W.2d 660. (4) In order to recover damages for fraudulent misrepresentations the party complaining must have relied upon and have been deceived by such representations. Williamson v. Harris, 167 Mo.App. 347; Birchtree State Bank v. Dowler, 167 Mo.App. 373; Anderson v. McPike, 86 Mo. 293. (5) The measure of damages in this case is the difference between the actual value of the note secured by the second deed of trust in question when purchased and what said note would have been worth if as represented. Kendrick v. Ryus, 225 Mo. 150; Addis v. Swofford, 180 S.W. 555; Boyd v. Wahl, 175 Mo.App. 185; Boyce v. Gingrich, 154 Mo.App. 203; Maiden v. Fisher, 17 S.W.2d 565; Blates v. Catsigianis, 202 S.W. 441. (6) Punitive damages are not recoverable in this suit, for the reason that such damages are recoverable only where the act from which plaintiff suffered injury partakes of the nature of a public, as well as of a private, injury. Wingate v. Bunton, 193 Mo.App. 478. (7) Respondents having exchanged for its face value the second deed of trust in question for the Kossuth avenue property, with full knowledge of all the facts, suffered no damage; and, furthermore, having assigned and transferred the deed of trust in question, waived their right to recover damages for the fraud and deceit, if any, which induced the original contract. Brown & Pounds v. Lead and Zinc Mining Co., 231 Mo. 173. (8) Fraud, to be actionable, must result in damages to the parties suing therefor. Blates v. Catsigianis, 202 S.W. 441; Stacey v. Robinson, 184 Mo.App. 64.

Taylor R. Young and Wurdeman, Stevens & Hoester for respondent.

(1) The parties to this contract did not stand on the same footing, and even if they had been on equal terms at the commencement of negotiations, defendant Boyer disarmed the vigilance of plaintiffs, corrupted their agents and financial advisors and thereby secured the property of plaintiffs without any substantial consideration. (a) Under such circumstances, misrepresentations as to value made by Boyer are fraudulent. Stonemets v. Head, 248 Mo. 268; Brigham v. Investment Co., 186 S.W. 15; Goard v. Belinder, 249 S.W. 977. (b) A principal may at all times rely upon the representations of value made to him by his own agents because of the existence of a confidential relation, and when false are actionable. Points and authorities, supra, paragraph a. (2) The courts did not err in refusing defendant's instruction. It invited the error of the court in granting Instruction 4, and was highly beneficial to the defendant and prejudicial to plaintiffs. Ryan v. Miller, 236 Mo. 508; Cooley on Torts, p. 64. (3) Appellants were successful in leading the trial court into two errors: (a) That the gist of plaintiffs' cause of action was the conspiracy of defendants and not the damage done plaintiffs as a direct result of the fraudulent representations alleged and aggravated by the conspiracy. Stewart Land Co. v. Perkins, 290 Mo. 204, 234 S.W. 654; Hughes v. Kansas City, 282 Mo. 331, 221 S.W. 103; Holt v. Williams, 240 S.W. 866; McCarty v. Hemker, 4 S.W.2d 1088; Cooley on Torts, p. 143. (4) Punitive damages were properly recoverable under the pleadings and the evidence in this case. 13 Cyc. p. 105; Peak v. Taubman, 251 Mo. 425; Callahan v. Ingraham, 122 Mo. 370; Summers v. Keller, 152 Mo.App. 626; Lampert v. Judge & Dolph Drug Store, 238 Mo. 409; Deck v. Dowell, 111 Mo. 506; Green v. Craig, 47 Mo. 90; Goetz v. Ambs, 27 Mo. 28; Corwin v. Walton, 18 Mo. 71; Milborn v. Beach, 14 Mo. 104; Gildersleeve v. Overstolz, 90 Mo.App. 518; Lyddon v. Dose, 81 Mo.App. 64.

Fitzsimmons, C. Cooley and Westhues, CC., concur.

OPINION

FITZSIMMONS

Defendant, William T. Boyer, appeals from a judgment of the Circuit Court of St. Louis County in the sum of $ 8,000. The judgment was against Boyer and defendant Raymond L. Kelly, and was rendered upon a verdict for $ 6,000 actual damages and $ 2,000 punitive damages. The action was for fraud and deceit charged to have been practiced upon the plaintiffs Bernard Finke and wife by defendants and one Morelock, now dead. Finke is a cobbler. Defendants Boyer and Kelly are real estate dealers and traders. Morelock also dealt in real estate and mortgages. The gist of the complaint is that Finke and wife on May 7, 1926, sold their two-family flat building at No. 1125 Louisville Avenue, in the city of St. Louis, free and clear of encumbrances, and worth $ 15,000 for part cash and balance in promissory notes of the face value of $ 12,900 secured by a second deed of trust upon improved real estate at the northwest corner of Compton and Franklin Avenues in St. Louis. Plaintiffs charge that they employed defendant Kelly as their agent to sell their Louisville Avenue flat; that Kelly, acting in combination with defendant Boyer and Morelock, falsely and fraudulently represented to plaintiffs that the Franklin Avenue property was worth $ 68,000 and was ample security for the second deed of trust for $ 12,000 whereas in fact it had little, if any, value in excess of the first deed of trust amounting to $ 40,000; that they falsely represented to plaintiffs that the monthly income from rents of the Franklin Avenue property was $ 860, sufficient to enable the owner to pay all carrying charges and the monthly notes secured by the second deed of trust; that relying upon and under the inducement of these representations, plaintiffs conveyed their Louisville Avenue property to one Mary Stringer, whom the defendants and Morelock declared to be owner of the second deed of trust notes whereas defendant Boyer was the owner. Plaintiffs sued for $ 12,000 actual and $ 12,000 punitive damages, alleging that the acts and conduct of defendants and Morelock was willful and malicious.

I. Appellant Boyer complains that the trial court erred in refusing to sustain his demurrer to the evidence. Finke was of German birth and from the day of his arrival in this country he had no trade or business but that of mending shoes. He knew nothing about dealing in real estate. Morelock, a realty and mortgage dealer, was a neighbor of fifteen years acquaintance, and Finke and wife placed much faith in him. In 1925 the Finkes listed for sale their four-room flat at 1126 Louisville Avenue, St. Louis, with a real estate firm, for which Kelly worked at the time, and Kelly on behalf of his employers called on the Finkes. Boyer testified on cross-examination that he bought the property at Compton and Franklin Avenue for $ 55,200 in May, 1924, subject to a first deed of trust for $ 40,000 and paying the balance in cash. On direct examination he gave the purchase price as $ 54,000. Boyer took title to the property in the name of R. F. Pritchard, his brother-in-law, and, on September 15, 1925, he caused Pritchard to put on a second deed of trust for $ 15,000 made up of a series of thirty-six monthly notes. The first note was for $ 375 and each succeeding note was $ 1.50 less than the preceding note, except the last note, due thirty-six months after date, which was for the full balance due, namely $ 4,522.50. In the same month, September, 1925, Boyer traded the Franklin Avenue property subject to the two deeds of trust amounting together to $ 55,000, to a man named Bachman, who gave Boyer in exchange a home place in St. Louis County. In this transaction Boyer appears to have placed a trading value of $ 68,000 on the stores and flats. The second deed of trust obviously was put upon the property in anticipation of the trade with Bachman. This second deed of trust, executed by Pritchard and retained by Boyer, originally for $ 15,000 and paid down to $ 12,900 was the security which in May, 1926, Boyer gave to the Finkes for their clear flat. The Franklin Avenue property encumbered with the second deed of trust in question, was improved with a two-story building, having on Franklin Avenue on the first floor a store and two living rooms and on the second floor a four-room flat and having on Compton Avenue sixteen four and five-room flats. The building was about forty-five years old. It had a frontage of 93 feet on Franklin Avenue and 180 feet on Compton Avenue, and had nine-inch side walls.

Kelly having managed the Bachman deal and having knowledge that Boyer owned the second deed of trust on the...