New Amsterdam Cas. Co. v. O'Brien, 47534

• Decision Date: 11 January 1960
• Docket Number: No. 1,No. 47534,47534,1
• Citation: 330 S.W.2d 859
• Parties: NEW AMSTERDAM CASUALTY COMPANY, a Corporation, Plaintiff, v. Jerome Dudley O'BRIEN, Appellant, and C. Gordon Heiss, Heiss Hotel Company and Mayfair Hotel Company, Respondents
• Court: Missouri Supreme Court

Page 859

330 S.W.2d 859

NEW AMSTERDAM CASUALTY COMPANY, a Corporation, Plaintiff, v. Jerome Dudley O'BRIEN, Appellant and C. Gordon Heiss, Heiss Hotel Company and Mayfair Hotel Company, Respondents.

No. 47534.

Supreme Court of Missouri, Division No. 1.

Jan. 11, 1960.

Bernard Susman, William L. Mason, Jr., St. Louis, for appellant.

Grand, Peper, Martin & Roudebush, Harold C. Gaebe, Jr., St. Louis, for respondents.

HOLLINGSWORTH, Judge.

This is an appeal by Jerome Dudley O'brien, defendant and third-party plaintiff, hereinafter referred to as appellant, from a judgment rendered in favor of C. Gordon Heiss, Heiss Hotel Company and May fair Hotel Company, third-party defendants, hereinafter referred to as respondents, in which action appellant sought to recover $2,500 actual and $25,000 punitive damages for allegedly false and fraudulent representations made by respondents in procuring from appellant a transfer of 'whatever interest, if any,' appellant had in 149 shares of common stock and 299 shares of preferred stock of Heiss Hotel Company. Respondents denied the fraud alleged and affirmatively pleaded (1) a duly executed release in full of the claim asserted by appellant and (2) the five year statute of limitations, Section 516.120 RSMo 1949, V.A.M.S. Pursuant to stipulation, approved by the trial court, the defenses of release and bar of the action by limitation were separately tried upon certain of the pleadings, with the understanding that the judgment rendered thereon would be final and appealable as to those issues.

The background of this litigation, as revealed in pleadings filed in connection therewith and considered by the court in disposing of the issues here presented, will be of aid in disposing of the contentions made by appellant at the trial and on this appeal. In 1950, respondents were interested in procuring the aforesaid certificates of stock, which were registered in the name of John F. Bulfin. Bulfin had died in 1933, leaving his estate to his widow, who had died in 1944, leaving appellant as one of her heirs. The stocks were not listed as assets in either estate and appellant was unaware of any interest therein. Respondents, for a consideration of $509.78 paid to appellant, procured from him 'whatever interest, if any, he had' in said stock. In connection with the sale and transfer of that interest, appellant executed an application for and New Amsterdam Casualty Company delivered to respondents a 'fiduciary or lost instrument bond,' insuring respondents against loss by reason of their payment of $509.78 for said stock if appellant did not own it. Either the application or the bond or both contained 'an indemnity agreement in favor of said New Amsterdam Casualty Company.'

On or about May 24, 1951, the stock certificates, duly endorsed by John Bulfin, were found among the assets of the estate of one Lawton, deceased, and they were purchased from that estate by respondents. Thereafter, on demand of respondents, New Amsterdam Casualty Company (hereinafter referred to as 'Amsterdam') paid respondents the sum of $509.78, and Amsterdam, on or about June 21, 1954, instituted suit against appellant under his indemnity agreement. Appellant impleaded respondents as third-party defendants and on May 2, 1956, filed 'Answer of Defendant Jerome Dudley O'Brien to Plaintiff's Fourth Amended Petition and Defendant's Counterclaim and Third Party Petition.'

In that portion of the pleading designated 'Defendant's Counterclaim and Third Party Petition,' appellant alleged that respondents, for the purpose of inducing him to sell his interest in said stock, represented to him that, as an integral part of the transaction, respondents would obtain a policy of insurance and indemnity to protect appellant against any loss or repayment of the amount paid him by reason of the stock being found. The pleading further alleged the intentional falsity of those representations, appellant's reliance thereon, and the fraudulent procurement of insurance by respondents in behalf of respondents instead of in behalf of appellant. The counterclaim further alleged 'that plaintiff (Amsterdam) and third party defendants (respondents) acted jointly and in consort with each other.' The prayer sought judgment against plaintiff (Amsterdam) and third-party defendants (respondents) for $2,500 actual and $25,000 punitive damages 'for the aforesaid false and fraudulent representations.' That pleading will hereinafter be referred to as 'appellant's counterclaim.'

In that state of the pleadings, appellant, on April 23, 1957, executed, acknowledged before a notary public and delivered to Amsterdam the following document 'Release

'In Full Of All Claims

'In consideration of the payment of One and no/100 Dollar and other good and valuable consideration, to me in hand paid by The New Amsterdam Casualty Company, a corporation, I do hereby release and forever discharge said New Amsterdam Casualty Company, its agents, servants, employees, attorneys, successors and assigns, from any and all actions, causes of actions, claims and demands for, upon or by reason of any damage, loss or injury, which heretofore have been or which hereafter may be sustained by me in consequence of my application to said company for the issuance of a lost instrument bond, and the issuance of said bond, and the matters involved in civil action styled New Amsterdam Casualty Company v. Jerome Dudley O'Brien, et al., in the Circuit Court of the County of St. Louis, Missouri, cause No. 204611, and all issues relating thereto;

* * *

* * *

This Is A

Release

In Full

'Jerome Dudley O'Brien [Seal]

'Jerome Dudley O'Brien * * *'

Following the execution of the above release, appellant on June 17, 1957, filed his 'First Amended Third Party Petition.' Thereafter, on June 6, 1958, he filed his last pleading designated as 'Third Amended Petition of Defendant and Third-Party Plaintiff Jerome Dudley O'Brien.' The allegations of these two pleadings are practically identical. In both of them, Amsterdam is deleted as a party. In both of them, however, appellant re-alleges the fraud originally pleaded against both Amsterdam and respondents but makes no mention of their acting 'jointly and in consort with each other.' Both of these pleadings, in addition to the fraud priorly alleged against both Amsterdam and respondents as joint tort-feasors in appellant's counterclaim, further allege for the first time as follows:

'On or about June 21, 1954, plaintiff New Amsterdam Casualty Company sued third party plaintiff Jerome O'Brien to indemnity it for its payment, (together with its attorney fees and expenses) to defendant Mayfair Hotel Company. Said suit was successfully defended by plaintiff Jerome O'Brien in this court and in such defense plaintiff Jerome O'Brien incurred a liability for attorney fees in the amount of $1,000.00. That in addition thereto, plaintiff Jerome O'Brien has lost time from his business, and has suffered embarrassment, and his business and business credit have been injured in the amount of $1500.00.'

The prayer in both of these pleadings was, as it was in the original counterclaim against Amsterdam and respondents, for actual damages in the sum of $2,500 and punitive damages in the sum of $25,000 and for costs.

Appellant's contentions with reference to the release are:

(1) There is no evidence that respondents were joint tort-feasors with Amsterdam in the cause of action asserted by him against respondents 'because the averment that New Amsterdam and 'defendants acted jointly and in consort with each other,' found in an abandoned pleading of [appellant] has no probative force nor value and there is no other evidence on the point; * * *.' (Emphasis ours.)

(2) The release did not operate to release respondents 'because release of one tort-feasor does not release others unless the party giving the release has received satisfaction; the written release in evidence does not recite that [appellant] received satisfaction and there is no evidence that he did.'

(3) 'The release cannot be construed to be a direct release of all parties adverse to [appellant], regardless of whether such parties were or were not joint tort-feasors, on the theory that the release states that [APPELLANT] RELEASES THE PARTY NAMED IN AND specifically released from 'any and all actions, claims and demands,' etc., because: a release is a contract, and subject to the same general principles of law; a contract must be supported by a consideration; there was no consideration for a release of these [respondents] by the release in question, and [respondents] were not parties to the contract of release; it does not in any way recite or evidence that it was made for their benefit; and there is no evidence that it was.'

Of these, in order:

(1) The pleading which appellant now designates as 'an abandoned pleading' was very much alive at the time the release in question was executed on April 23, 1957, and it was not 'abandoned' until appellant filed his 'First Amended Third Party Petition' on June 17, 1957, at which time he dropped Amsterdam as a party. Prior to that time his counterclaim sought not only actual damages in the sum of $2,500 but also punitive damages in the sum of $25,000 against both Amsterdam and respondents, predicated upon an express allegation that Amsterdam and respondents 'acted jointly and in consort with each other' in 'tricking' him into procuring the insurance in favor of respondents instead of in favor of himself.

We think it clear beyond question that the theory upon which appellant sought, and the only theory upon which he could possibly have sought, to recover punitive damages against Amsterdam was that Amsterdam had acted jointly with respondents in the alleged fraud allegedly perpetrated upon appellant. Moreover, it is also clear that Amsterdam construed the counterclaim to allege it to be a joint tort-feasor with respondents; otherwise, there would have...