Gerardi v. Gardner
| Decision Date | 03 March 1914 |
| Citation | 164 S.W. 568,255 Mo. 538 |
| Parties | JOSEPH GERARDI, Jr., Appellant, v. HARRY B. GARDNER; HENRY W. FEMMER, Trustee, Intervener |
| Court | Missouri Supreme Court |
Appeal from St. Louis City Circuit Court. -- Hon. George H Williams, Judge.
Reversed and remanded (with directions).
R. M Nichols for appellant.
(1) In considering the action of the court in directing the verdict the plaintiff is entitled to every inference of fact which the jury might have drawn from the evidence. Lee v. Geo Knapp & Co., 137 Mo. 385; Barth v. Elevated Ry. Co., 142 Mo. 536; Young v. Webb City, 150 Mo. 341. (2) If the representations were made it was for the jury to say whether the representations were false and fraudulent. Mooney v. Davis, 75 Mich. 188; Bigler v. Atkins, 118 N.Y. 671; Bartlett v. Smith, 17 F. 668. (3) The jury would have inferred, from the fact that Gardner immediately used plaintiff's money to pay labor and material bills on his wife's house and appropriated large sums to his own use (as conclusively shown by his bank account and returned checks), that the receipt of November 1, 1906, was fraudulently designed and intended by him to protect himself from his acts of embezzlement; and the jury had the sole right to pass on this fraudulent intention. Fraud is a question for the jury. 14 Am. & Eng. Ency. Law (2 Ed.), p. 205; 1 Am. & Eng. Anno. Cas., 446; Kuykindall v. McDonald, 15 Mo. 416, 57 Am. Dec. 212 and note; Bidault v. Wales, 19 Mo. 36, 59 Am. Dec. 327 and note; Owens v. Rector, 44 Mo. 390; 2 Thompson on Trials, p. 1440, sec. 1945. (4) The receipt in itself was a badge of fraud, when it was shown to have no consideration and to have been extorted from the Gerardis under the promise of vesting the corporation with the title, which had been taken contrary to the instructions, by Gardner in his own name, and when connected with the act of Gardner, before he vested the corporation with the title, in placing a mortgage thereon in favor of his brother for $ 600,000. These fraudulent acts should have been submitted to the jury. Fout v. Giraldin, 64 Mo.App. 165; Brown v. Worthington, 162 Mo.App. 508; Lappin v. Crawford, 186 Mo. 463; Hackley v. Headley, 45 Mich. 517; Adams v. Schiffer, 11 Colo. 15. (5) A false representation as to the ownership of property, and of solvency for the purpose of inducing credit, is actionable. Ring v. Paint Co., 44 Mo.App. 111; Judd v. Weber, 55 Conn. 267; Kane v. Dickenson, 60 N.H. 371; Childs v. Merrill, 63 Vt. 463; Rothschild v. Mack, 115 N.Y. 1; Eaton, etc., Co. v. Avery, 83 N.Y. 31; Orr v. Moore, 105 Iowa 409; Note to Childs v. Merrill, 14 L.R.A. 264. (6) A receipt is evidence of payment therein recited, but always open to explanation, and when it was shown that no money passed but was given for the purpose of getting Gardner to convey the title of the property to the Monarch Realty Company, the court should have declared as a matter of law that it was not given in discharge of the previous moneys received by Gardner and did not constitute an estoppel in this case. 30 Cyc. 1288; 17 Cyc. 630; Squier v. Evans, 127 Mo. 514; Wagmann v. Rothwell, 121 Mo.App. 413; Strawn v. Railroad, 120 Mo.App. 142. (7) Fraud may be inferred; it may be established by circumstantial as well as by direct evidence, and proof of it may be inferred from the surrounding facts and circumstances. State to use v. Estate, 6 Mo.App. 6; Groshke v. Brandenheimer, 15 Mo.App. 553; Spangler v. Kaufman, 46 Mo.App. 652; Blackwell v. Frey, 49 Mo.App. 638; Ridge v. Green, 53 Mo.App. 483; Gordon v. Ismay, 55 Mo.App. 325; Muenke v. Bunch, 9 Mo. 409; Hopkins v. Stewart, 58 Mo. 201; Bogort v. Borchert, 59 Mo. 83. (8) If it be conceded that the receipt of November 1, 1906, for the stock had anything to do with the release of the two sums of money, it was proper for plaintiff to set up its fraudulent procurement in the reply, and the question of its fraudulent procurement should have been submitted to the jury. R.S. 1909, sec. 1812; State ex rel. v. Stuart, 111 Mo.App. 478; Girard v. Car Wheel Co., 123 Mo.App. 358; Roberts v. Lead Co., 95 Mo.App. 581. (9) Whether the money was turned over to Gardner upon a contract, either express or implied, under which he was to purchase the real estate and build a hotel thereon at a cost of $ 725,000, or whether, as claimed by plaintiff, it was turned over to him for the purpose of purchasing a lot for plaintiff and for the purpose of paying off an alleged deed of trust, if it was shown, as we claim it was, that the false representations made by Gardner to the plaintiff were the superinducing cause of entering into either contract, then plaintiff was entitled to recover, under the form of action of money had and received, all such sums of money that did not go into the purchase of the lot, or which were not by Gardner applied upon the alleged contract to build said hotel, but appropriated to his own use; and this without any rescission of contract. 27 Cyc. 863, 866; Note to Martin v. Hutton, 36 L.R.A.(N.S.) 603; Johnson v. Continental Ins. Co., 39 Mich. 33; Wilson v. Ranch Co., 22 C. C. A. 244; Lockwood v. Kelsea, 41 N.H. 185; Stout v. Caruthers Hdw. Co., 131 Mo.App. 220. (10) The action for money had and received was an appropriate remedy for moneys obtained by the deceit and fraudulent representations of the defendant and no rescission was necessary. Richardson v. Drug Co., 92 Mo.App. 515; Henderson v. Koenig, 192 Mo. 690; Brooks v. Church, 128 Pa. St. 408; Note to Weber v. Lewis, 35 L.R.A.(N.S.) 364.
Marion C. Early for intervener.
(1) The burden is upon appellant to establish error, as all presumptions are indulged in favor of the judgment in the lower court. Rankin v. Railroad, 150 Mo.App. 32. (2) The judgment of the lower court directing a verdict is supported by incontrovertible evidence and the inconsistent, contradictory oral testimony when opposed to physical law and facts is without probative force. Shipley v. Railroad, 144 Mo.App. 7; Dilly v. Railroad, 55 Mo.App. 123. (3) Upon the admitted facts appellant acquired 1,500 shares of stock in a corporation, which at the time was the owner of property on which $ 20,000 cash had been paid and many other expenditures made for the benefit of the company. Appellant over his own signature had certified that the stock was one-half paid. The stock admittedly was therefore of value and a rescission of the contract of sale was a condition precedent to his right of recovery in this action. Blount v. Spratt, 113 Mo. 48. (4) Appellant testified that when he signed the agreement for the purchase of the 1,500 shares of stock on November 1, 1906, he did so deliberately without any intention of paying anything for it, and for the sole purpose of securing to himself the title to the property. His purpose was therefore admittedly fraudulent. A court will grant no relief under such circumstances. The court should leave him where it found him. King v. Ordway, 73 Iowa 735. (5) The reply admits that the stock was retained and has never been tendered back. A conditional tender is no tender at all. Upon the admitted facts the sale of stock is binding upon appellant, and the contract being in full force nothing is due from Gardner to appellant, and the court was correct in declaring that appellant was not entitled to recover. Gerardi v. Christie, 148 Mo.App. 75. (6) It was immaterial whether or not Gardner was worth a large sum of money. There is no averment that he agreed personally to build the hotel. It was immaterial whether the title was in the name of Gardner or some other trustee for the corporation. (7) Upon the record the judgment is for the right party. The evidence of the Gerardis is entitled to no weight being in conflict with undisputed facts and necessary conclusions. Comm. Co. v. Aaron, 145 Mo.App. 307. (8) The pleadings filed by appellant admit the execution of the instrument dated November 1, 1906, the delivery to and continued retention by him of the certificate for 1500 shares of stock and his fraudulent intent not to pay a cent of what he agreed to pay. His position was the result of his own fraud, and the lower court properly held he was not entitled to recover. Bell v. Campbell, 123 Mo. 1; Morrison v. Juden, 145 Mo. 282. (9) The pleadings and testimony offered by plaintiff recognize the necessity of the avoidance by appellant of the agreement of sale dated November 1, 1906, to entitle him to recover. The case was tried upon that theory, and it will be disposed of by this court on the same theory upon which it was tried in the court below. Manzie v. Galdenberg, 149 Mo.App. 12; Hume v. Hale, 146 Mo.App. 659.
OPINION
The plaintiff instituted this suit in the circuit court of the city of St. Louis; the first count was to recover the sum of $ 36,702.79, for money had and received, and the second, to set aside and cancel a certain written instrument, dated St. Louis, Mo., November 1, 1906, "certifying" that the defendant had sold to plaintiff 1500 shares of stock in the Monarch Realty and Building Company, for the sum of $ 30,000, a part of the money mentioned in the first count, and signed by both plaintiff and defendant, which will be presently copied in full.
The suit grew out of an alleged fraudulent scheme, on the part of defendant Gardner, to defraud the plaintiff out of said money, which will subsequently appear from a summary of the pleadings.
Pending the litigation, the defendant went into bankruptcy, and defendant Femmer, the trustee in bankruptcy, was substituted for the defendant Gardner, and the suit has ever since been conducted against him as such trustee.
A trial was had before the court and jury, and at the close of the introduction of the plaintiff's evidence, the defendant...
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