Jos. Greenspon's Son Pipe Corp. v. Hyman-Michaels Co.

• Decision Date: 07 November 1939
• Docket Number: No. 25064.,25064.
• Citation: 133 S.W.2d 426
• Parties: JOS. GREENSPON'S SON PIPE CORPORATION v. HYMAN-MICHAELS CO.
• Court: Missouri Court of Appeals

133 S.W.2d 426

JOS. GREENSPON'S SON PIPE CORPORATION v. HYMAN-MICHAELS CO.

No. 25064.

St. Louis Court of Appeals. Missouri.

November 7, 1939.

Rehearing Denied December 6, 1939.

Appeal from St. Louis Circuit Court; Ernest F. Oakley, Judge.

"Not to be reported in State Reports."

Action by the Jos. Greenspon's Son Pipe Corporation against the Hyman-Michaels Company for alleged fraud and deceit in connection with sale of engine flues. From a judgment for plaintiff for $513.25, defendant appeals.

Judgment reversed, and cause remanded.

Lewis, Rice, Tucker, Allen & Chubb, A. J. Garland, and R. T. Burch, all of St. Louis, for appellant.

Taylor, Mayer & Shifrin and Herman Willer, all of St. Louis, for respondent.

BENNICK, Commissioner.

This is an action for damages for fraud and deceit growing out of an alleged false and fraudulent representation made by defendant to plaintiff concerning the sizes of a certain lot or assortment of locomotive engine flues which plaintiff purchased from defendant under a written contract entered into between the two on March 25, 1937.

Originating in a justice's court, the case went on appeal to the circuit court, wherein, upon a trial to a jury, a verdict was returned in favor of plaintiff, and against defendant, for the sum of $513.25. Judgment was thereupon entered for plaintiff in conformity with the verdict, following which defendant's appeal to this court has been perfected in the usual course.

The alleged misrepresentation which is counted upon by plaintiff as the ground for his complaint was to the effect that the lot or assortment of flues purchased would contain 2¼-inch flues as well as 2-inch flues, whereas the conceded fact was that when the particular locomotive engines were dismantled they were found to contain only 2-inch flues.

Plaintiff's theory was that in reliance upon such alleged misrepresentation it was induced to enter into the contract with defendant whereby it was caused to purchase an aggregate of 102.65 tons of the flues at a contract price of $5 a ton in excess of the market price of the flues actually received.

Defendant's theory, on the other hand, was, first, that it had made no representation to plaintiff in regard to the size of the flues, but instead had informed plaintiff that it did not know which size flues were contained in the locomotives except that they would be 2-inch or 2¼-inch flues, or both; and second, that in any event there was no difference in value between 2-inch flues and 2¼-inch flues when sold by weight as was the case in the transaction out of which this controversy has arisen.

As a matter of chief insistence, defendant argues that its demurrer to all the evidence should have been sustained upon the ground that there was no substantial evidence in the case to support the charge of fraud which formed the gravamen of plaintiff's cause of action.

The flues in question were contained in 66 outmoded and abandoned locomotives which defendant had purchased from the Louisville & Nashville Railroad Company in the early part of 1937, and which were to be dismantled by defendant and the parts sold as junk. No inspection of the locomotives was made before their purchase by defendant, the transaction having been consummated with the railroad company on the customary "scrap value per ton" basis, by which was meant that defendant accepted the locomotives in whatever condition they might be found and then paid the railroad company so much a ton for the scrap that it took from them. Under this arrangement it was of no consequence to defendant that the parts of the locomotives should be of any particular size, or, for that matter, that all the parts should even be intact, and so it was that in purchasing the locomotives defendant concededly lacked all knowledge concerning their parts and the size or condition of the same which an inspection of the locomotives would have otherwise revealed.

The controversy in the trial of the case was primarily one of fact between Louis Greenspon, plaintiff's president, and William Rosenthal, defendant's vice-president in charge of sales and purchases.

It appears that in response to an inquiry which Rosenthal had made of plaintiff company over the telephone, Greenspon went to defendant's local office in the City of St. Louis in regard to the purchase of the flues from the locomotives which were then standing in the yards of the railroad company in Louisville, Kentucky, and at various other points on its line.

According to Greenspon's version of what occurred, Rosenthal opened up the conversation by telling him that defendant had available 250 tons of 2-inch and 2¼-inch flues that would come out of the 66 locomotives in question, and that when asked how the flues would run as to various sizes, Rosenthal had replied that they would run approximately 50% of each, recalling to Greenspon, by way of illustration, that the latter had previously handled shipments of flues from similar locomotives and knew from his own experience that they were to be found in such approximate proportions.

Greenspon thereupon informed Rosenthal that inasmuch as his company was already overstocked with 2-inch flues, he was only interested in purchasing 2¼-inch flues, for which he was willing to pay the market price of $36 a ton. Rosenthal replied that since the flues were mixed and his company had no time to assort them, he could only sell them "just the way they run", to which Greenspon answered that if he was to be compelled to buy the 2-inch flues which he did not want in order to get the 2¼-inch flues which he did want, he could only pay a price of $26 a ton for the whole lot, that being the then market price of 2-inch flues. Rosenthal declined to accept such a price, whereupon, after further dickering, he and Greenspon finally agreed upon a price of $31 a ton as a compromise figure between the market price of $26 a ton for 2-inch flues and $36 a ton for 2¼-inch flues, and a written contract was forthwith prepared and executed embodying the agreement thus reached between the parties.

Greenspon testified further that in the course of the negotiations he had had no discussion with Rosenthal as to whether the latter had...