Messina v. Greubel

• Decision Date: 13 December 1948
• Docket Number: 40626
• Citation: 215 S.W.2d 456,358 Mo. 439
• Parties: Peter Messina, Respondent, v. Alfred H. Greubel and Fannie Greubel, Appellants
• Court: Missouri Supreme Court

215 S.W.2d 456

358 Mo. 439

Peter Messina, Respondent, v. Alfred H. Greubel and Fannie Greubel, Appellants

No. 40626

Supreme Court of Missouri

December 13, 1948

Appeal from Circuit Court of St. Louis County; Hon. Raymond E LaDriere, Judge.

Affirmed.

Kramer & Chused and Simon Reznikoff for appellants.

(1) In failing to plead the exercise of ordinary prudence in relying upon defendant's alleged fraudulent representations plaintiff has failed to state facts upon which relief can be granted. McCaw v. O'Malley, 298 Mo. 401, 249 S.W. 41; Ralston Purina v. Swann, 161 S.W.2d 39; Conklin v. Mo. Pac. R. Co., 331 Mo. 734, 55 S.W.2d 306; 37 C.J.S. 215; Chandler v. Railroad, 251 Mo 592, 158 S.W. 35; General American Life Ins. Co. v. Leavenworth, 347 Mo. 876, 149 S.W.2d 360; New Code of Civil Procedure, sec. 140 (a); 2 Carr, Missouri Civil Procedure, 269. (2) In failing to prove that he had a right to rely upon defendants' alleged misrepresentations, plaintiff's case was subject to a motion for dismissal. Orlann v. Laederich, 92 S.W.2d 190; Stratton v. Dudding, 164 Mo.App. 22, 147 S.W. 516; Andrus v. St. Louis Melting & Refining Co., 130 U.S. 625, 32 L.Ed. 1056; Morbrose Inv. Co. v. Flick, 187 Mo.App. 528, 174 S.W. 189; Dalhoff Const. Co. v. Block, 157 F. 227, 85 C.C.A. 25; Krueger v. Licklider, 76 S.W.2d 113; 3 American Law Institute, Restatement of Torts, sec. 541. (3) By failing to make a finding of fact or conclusion of law that plaintiff had a right to rely upon the alleged fraudulent misrepresentations, the trial court failed to make a finding upon a controverted material issue. Pratt v. Rogers, 5 Mo. 51; 64 C.J. 1232; 53 Am. Jur. 1134. (4) Reversible error was committed by the trial court in refusing to make a finding of material facts whose truth was admitted by the parties. Clauson v. Tipton, 147 S.W.2d 148; 53 Am. Jur. 791. (5) The trial court required the cause to be tried in spite of the absence of Alfred H. Greubel, the principal defendant, who was thus deprived of his day in court. (6) There was a total failure of proof against defendant Fannie Greubel, in that she was shown to have no more knowledge than plaintiff of the truth or falsity of the alleged representations of defendant Alfred H. Greubel. This court may reverse the judgment outright as to her. Brunk v. Hamilton Brown Shoe Co., 334 Mo. 517, 66 S.W.2d 903; Adair v. K.C. Terminal R. Co., 282 Mo. 133, 220 S.W. 920; State ex rel. Dunklin County v. Blakenrose, 275 Mo. 695, 205 S.W. 626.

Harry S. Gleick for respondent; Gleick & Strauss of counsel.

(1) In an action for fraud, the essential allegations to be pleaded are, that certain representations of fact were made, that they were false and known by the party making them to be false, that they were made with intent to deceive, that the complainant relied upon them and was injured as a result. Menke v. Rovin, 352 Mo. 826, 180 S.W.2d 24; Judd v. Walker, 215 Mo. 312, 114 S.W. 979; Nash v. Normandy State Bank, 201 S.W.2d 299; Gittings v. Jeffords, 292 Mo. 678, 239 S.W. 84; Gockel v. Gockel, 66 S.W.2d 867; Gray v. Carder, 347 Mo. 1046, 151 S.W.2d 1112; Remmers v. Remmers, 217 Mo. 541, 117 S.W. 1117; Tamm v. Ford Motor Co., 80 F.2d 723. (2) Where one party to a transaction makes certain statements and representations respecting existing facts which are untrue, and the other party is not in as favorable position to know the facts, then the second party has the right to rely upon the statements and representations so made. Monsanto Chem. Wks. v. American Zinc, Lead & S. Co., 253 S.W. 1006; Klika v. Wenzlick R.E. Co., 150 S.W.2d 18; Jeck v. O'Meara, 341 Mo. 419, 107 S.W.2d 782, 343 Mo. 559, 122 S.W.2d 897; Brown v. Stanley, 20 S.W.2d 915; Fleischer v. Berger, Cohn & Co., 96 S.W.2d 643; Flack v. Wall, 197 Mo.App. 10, 193 S.W. 56; certiorari quashed State ex rel. v. Reynolds, 272 Mo. 588, 199 S.W. 978; Becker v. Thomas, 336 Mo. 27, 76 S.W.2d 357; Diehl v. Charles, 8 S.W.2d 1082; Wendell v. Ozark Orchard Co., 200 S.W. 747; Stoenmets v. Head, 248 Mo. 243, 154 S.W. 108; Selle v. Wrigley, 233 Mo.App. 43, 116 S.W.2d 217; 26 C.J., p. 1144. (3) Due diligence does not require that plaintiff should suspect the defendant of lying. Judd v. Walker, 215 Mo. 312, 114 S.W. 979; Frederichsen v. Farmers State Bank, 19 S.W.2d 303; Selle v. Wrigley, 233 Mo.App. 43, 116 S.W.2d 217; Goar v. Belinder, 213 Mo.App. 330, 249 S.W. 977; Schubert v. St. Louis Pub. Serv. Co., 206 S.W.2d 708. (4) The fact of reliance upon false representations need not be established by direct evidence, but may be inferred from facts and circumstances. Jones v. West Side Buick Auto Co., 231 Mo.App. 187, 93 S.W.2d 1083. (5) The filing of a claim in the bankruptcy court is no bar to recovery. Marquis v. Pettyjohn, 212 S.W.2d 100; Weldell v. Ozark Orchard Co., 200 S.W. 747; Goar v. Belinder, 213 Mo.App. 330, 249 S.W. 977. (6) Where there is no request for a finding on a controverted issue, and no finding was made, a judgment will not be set aside unless clearly erroneous. Civil Code of Missouri, sec. 114; Laws 1943, pp. 353-397; Bokata v. Illinois Bankers Life Ins. Co., 195 S.W.2d 888; Bank of Brimson v. Graham, 335 Mo. 1196, 76 S.W.2d 376; Conley v. Crown Coach Co., 348 Mo. 1243, 159 S.W.2d 281; Goar v. Belinder, 213 Mo.App. 330, 249 S.W. 977; 3 C.J. 868-869. (7) Where a cause is tried by the court without a jury, all fact issues upon which no specific findings are made shall be deemed found in accordance with the result reached. The judgment shall not be set aside unless clearly erroneous. Civil Code of Missouri, secs. 114, 140; Laws 1943, pp. 353-397; Geisinger v. Milner Hotels, 202 S.W.2d 142; Mound City Finance Co. v. Frank, 199 S.W.2d 902; Humphries v. Shipp, 238 Mo.App. 985, 194 S.W.2d 693; In re Jamison's Estate, 202 S.W.2d 879; Sidney Weber, Inc., v. Interstate Motor Freight System, 205 S.W.2d 291; Loeb v. Viviano, 202 S.W.2d 528. (8) Appellants' miscellaneous claims of prejudicial error have no merit.

OPINION

Clark, J.

Defendants appeal from a judgment for plaintiff in the sum of $ 25,500.00. Plaintiff's petition, in substance, alleged: that defendants, husband and wife, were officers and directors of the Greubel Machine and Tool Company, a corporation, manufacturing lawnmowers; that plaintiff was an employee of the company, but had no information of its affairs except as furnished to him by defendants; that defendant, Alfred Greubel, owner of nearly all the stock of the company, with intent to deceive and defraud plaintiff and to induce him to invest in stock and lend money to the company, falsely represented to plaintiff (1) that the building occupied by the company was owned by it and was free and clear of liens; (2) that the plant and machinery belonged to the company and was paid for; (3) that the company needed money for working capital only; (4) that the company had $ 10,000.00 due it from the United States; (5) that the company was in good financial condition. The petition further alleged that defendant Fannie Greubel joined with her husband in misrepresenting the financial condition of the company; that plaintiff, relying upon the representations so made, was induced to invest $ 18,000.00 in the capital stock and lend the company more than $ 8,000.00 in January, February and March, 1946; that on March 29, 1946, the company filed a voluntary petition in bankruptcy and plaintiff's investments became a total loss.

Defendants filed a general denial, later amended by alleging that Greubel prior to January 7, 1946, advised plaintiff of the true condition of the company; that after January 7, 1946, plaintiff attended various meetings and knew or should have known the company's true condition before paying for the balance of his stock and making loans to the company.

By stipulation the case was tried by the court without a jury. At the close of the case the plaintiff and the defendants made suggestions as to findings of facts. The court approved the suggestions offered by plaintiff, rejected those offered by defendants, and rendered judgment for plaintiff.

The evidence leaves no doubt that plaintiff invested the sums alleged in his petition, in loans and the purchase of stock and that the corporation was hopelessly insolvent before and at the time of such investments. Plaintiff testified and offered other proof that each of the defendants made the representatians alleged and that they were false. Defendant Alfred Greubel was not present at the trial and his deposition was not taken. The other defendant, Mrs. Greubel, testified that she did not make the false representations attributed to her.

The first two contentions of defendants on this appeal are closely related and will be discussed together. They are that the case should be reversed because the plaintiff failed to plead the exercise of ordinary prudence in relying on the representations, and because he failed to prove that he had a right to rely upon them.

The petition alleged the facts as to the relations existing between the parties and their connection with the corporation; the representations made to plaintiff by defendants; that such representations were false; that plaintiff relied upon them and was thereby induced to part with his money. Plaintiff pleaded reliance, that was an allegation as to a fact; he did not, in so many words, plead a right to rely, that would have been a conclusion. The petition did not set out what, if any diligence plaintiff exercised in making an investigation as to the truth of the representations; but it did show a prima facie right to rely on defendants' statements for it indicated that they were in a better position to know the truth than he was. Defendants filed no demurrer on motion to dismiss. Their first assault on the sufficiency of the petition came in their ...