Steinger v. Smith

• Decision Date: 12 July 1948
• Docket Number: 40414
• Citation: 213 S.W.2d 396,358 Mo. 39
• Parties: Joseph Steinger, Appellant, v. George R. Smith, Arthur L. Locatell, Herbert L. Glaser, William A. Gauvin, Donald Dubail and Tower Grove Bank & Trust Company, a Corporation, Respondents
• Court: Missouri Supreme Court

213 S.W.2d 396

358 Mo. 39

Joseph Steinger, Appellant, v. George R. Smith, Arthur L. Locatell, Herbert L. Glaser, William A. Gauvin, Donald Dubail and Tower Grove Bank & Trust Company, a Corporation, Respondents

No. 40414

Supreme Court of Missouri

July 12, 1948

Rehearing Denied September 13, 1948.

Appeal from Circuit Court of St. Louis County; Hon. Fred E Mueller, Judge.

Affirmed.

Bernard Steinger and James T. Blair, Jr., for appellant.

(1) The court erred in giving and granting to the jury the instruction offered by the defendants directing a verdict in favor of defendants. 37 C.J.S., p. 215, sec. 3; Maupin v Provident Life & Acc. Ins. Co., 72 S.W.2d 593; Jeck v. O'Meara, 122 S.W.2d 897, 343 Mo. 559; Shannon v. Crabtree, 71 S.W.2d 709; Smithpeter v. Mid-State Motor Co., 74 S.W.2d 47; Stoltzfus v. Howey, 54 S.W.2d 501; Buzby v. Cary, 30 S.W.2d 171; State ex rel. Cary v. Trimble, 43 S.W.2d 1050; Osborne v. Simmons, 23 S.W.2d 1102; Reed v. Cooke, 55 S.W.2d 271, 331 Mo. 507; Grand Lodge v. Mass. Bonding & Ins. Co., 25 S.W.2d 783, 324 Mo. 938; Bryan v. Louisville & N.R. Co., 238 S.W. 484, 292 Mo. 535, 23 A.L.R. 537; Collet v. Local Finance Co., 153 S.W.2d 123; Burbison v. Weis, 152 S.W.2d 201; National Theatre Supply Co. v. Rigney, 130 S.W.2d 258; Budd v. Budd, 122 S.W.2d 402, 233 Mo.App. 377; Taverno v. American Auto Ins. Co., 112 S.W.2d 941, 232 Mo.App. 820; Wendell v. Ozark Orchard Co., 200 S.W. 747; State ex rel. St. Louis & S.F. Ry. Co. v. Daues, 290 S.W. 425, 316 Mo. 474; Doll v. Purple Shoppe, 90 S.W.2d 181, 230 Mo.App. 256; Jeck v. O' Meara, 107 S.W.2d 782, 341 Mo. 419; Philadelphia Storage Battery Co. v. Kelly-Law-Thompson Co., 64 F.2d 834; Long v. Freeman, 69 S.W.2d 973, 228 Mo.App. 1002; Monsanto Chemical Works v. American Zinc, Lead & Smelting Co., 25 S.W. 1006; Fleischer v. Berger, Cohn & Co., 96 S.W.2d 643; Sewell v. Ladd, 158 S.W.2d 752; Thompson v. Kansas City, C.C. & St. J. Ry. Co., 27 S.W.2d 58, 224 Mo.App. 415; Gilmore v. Ozark Mut. Assn., 21 S.W.2d 633; Allgood v. Tarkio Electric & Water Co., 68 S.W.2d 51, 222 Mo.App. 964; Security Sav. Bank v. Kellems, 98 S.W.2d 967, 321 Mo. 1; Easton-Taylor Trust Co. v. Laker, 205 S.W. 87; Shell Oil Co. v. State Tire and Oil Co., 126 F.2d 971; 37 C.J.S., pp. 400, 402. (2) The court erred in rejecting competent, and relevant, and material evidence offered by plaintiff and objected to by defendants that plaintiff believed and relied upon said statements. 23 Am. Juris., p. 809; 37 C.J.S., p. 421; Scott v. Haynes, 12 Mo.App. 597; Brown v. Adams Transfer & Storage Co., 31 S.W.2d 117; 37 C.J.S., p. 237, sec. 12. (3) The verdict of the jury and the judgment entered thereon is against the law applicable; against all the law and all the evidence and the great weight of the evidence. Devero v. Sparks, 176 S.W. 1056, 189 Mo.App. 500; Green v. Edmonds, 245 S.W. 378; Donnell v. Stein, 53 S.W.2d 903, 301 Mo. 418; Smith v. St. Louis Pub. Serv. Co., 84 S.W.2d 161; Rules of the Supreme Court of Missouri, Rule 4.15, p. 37.

James V. Dunbar and A. E. L. Gardner for Arthur L. Locatell, Herbert L. Glaser, William A. Gauvin and Tower Grove Bank & Trust Company, Kerth & Schreiber, by A. H. Kerth for George R. Smith, Jr.; Kerth & Schreiber of counsel, and Charles R. Judge for Donald Dubail, respondents.

(1) Representations relating to something to be done in the future cannot be made the basis of charge of fraud. Therefore, the statement made by the respondents Locatell and Smith that appellant "would be paying deficiencies all the rest of his life on account of this deal," cannot be made the basis of an action by appellant for fraudulent representations, as that statement related to a future event. Grand Lodge v. Massachusetts Bonding & Ins. Co., 324 Mo. 938, 25 S.W.2d 783; Reed v. Cooke, 331 Mo. 507, 55 S.W.2d 275; Rardon v. Davis, 52 S.W.2d 193; Long v. Freeman, 228 Mo.App. 1002, 69 S.W.2d 973; Collet v. Local Finance Co., 236 Mo.App. 181, 153 S.W.2d 123. (2) In action for fraud, plaintiff must prove fraud beyond a reasonable doubt. Rardon v. Davis, 52 S.W.2d 193; Bragg v. Kirksville Packing Co., 205 Mo.App. 600, 226 S.W. 1012; Jourdan v. Sheets, 248 S.W. 641. (3) Representation of matters of law or expression of opinion as to legal liability cannot be made the basis for charge of fraud. Gilmore v. Ozark Mutual Assn., 21 S.W.2d 633; Bondurant v. Raven Coal Co., 25 S.W.2d 566; Easton-Taylor Trust Co. v. Loker, 205 S.W. 87; Allgood v. Tarkio Electric Co., 6 S.W.2d 51. (4) It is only where the representation between the parties is confidential or of a fiduciary capacity that reliance may be justified on expressions of opinion. Rardon v. Davis, 52 S.W.2d 193; 26 C.J. 1158, 1160, sec. 72; Armstrong v. Rachow, 205 Mich. 168.

Van Osdol, C. Bradley and Dalton, CC., concur.

OPINION

VAN OSDOL

Action to recover $ 726,175 actual and $ 100,000 punitive damages. Plaintiff has appealed from the judgment rendered on a directed verdict for defendants.

Plaintiff's action is based on an alleged conspiracy to defraud whereby, it is alleged, plaintiff was induced to assign his one-half interest (of alleged value $ 726,175) in the capital stock of two corporations to defendant George R. Smith, Jr., for the unconscionable sum of $ 5000.

There was evidence introduced tending to show that June 25, 1943, plaintiff and defendant George R. Smith, Jr., had executed a note payable on demand ("and if no demand be made, then on the 26th day of June, 1944") for $ 68,000 payable to the defendant Tower Grove Bank & Trust Company, hereinafter referred to as "Trust Company." The note was for money borrowed from Trust Company to pay for the capital stock, to settle certain obligations, and to improve the physical properties of two corporations, Mount Hope Cemetery & Mausoleum Company and Community Mausoleum Company, which capital stock the plaintiff and defendant Smith, as copartners, had contracted May 11, 1942, to purchase from "Family Investment" for a consideration of $ 45,000.

Prior to the execution of the contract of purchase, plaintiff and defendant Smith had become acquainted while both were employed in the sales department of a manufacturing company. In the purchase of the corporate stock, plaintiff had contributed $ 5000; and defendant Smith had contributed his efforts in the consummation of the contract of purchase. The negotiations for the $ 68,000 loan were instituted by plaintiff who had theretofore transacted business with Trust Company and had known defendant William A. Gauvin, Trust Company's trust officer. The defendants Locatell and Glaser are respectively president and loan officer of Trust Company. Defendant Dubail became attorney for the copartnership upon defendant Locatell's suggestion.

When the $ 68,000 note was executed the "controlling" stock of the two corporations was pledged as collateral, and the corporations executed a note for $ 144,000 secured by deed of trust on the cemetery and mausoleum properties. Two other notes were executed by the corporations, and endorsed by plaintiff and defendant Smith, one for $ 10,000 and one for $ 80,000. The latter three notes were also pledged as security for the $ 68,000 indebtedness.

The partners, plaintiff and defendant Smith, until about November 5, 1943, engaged in the management of the cemetery and mausoleum properties, and in the sale of cemetery lots and crypts in the mausoleums. April 1, 1943, there were approximately 700 unsold crypts in the mausoleums. The selling price per crypt varied from $ 500 to $ 3125. There were "approximately 7500 to 7800" unsold lots of "six graves." The sales price was $ 50 per grave. The partners shared the duties of transacting the business of their adventure according to their own arrangement whereby plaintiff remained upon the cemetery properties and there arranged sales of crypts and lots, and defendant Smith traveled over the city of St. Louis in encouraging and consummating sales. Plaintiff testified that after the first twelve months' operation "we had a $ 14,000 profit, after paying all expenses" and paying $ 5000 to "Family Investment" on the purchase price of the properties. All seemed well until about October 7, 1943, when friction developed between the partners. According to plaintiff's testimony, defendant Smith became "very absentminded" and expressed the wish to sell his interest and "to get out" of the business. Plaintiff went down to the bank and told defendant Gauvin, "I don't know what is wrong with George Smith." The officers of defendant Trust Company requested plaintiff and defendant Smith to attend a conference at the offices of the Trust Company concerning the affairs of the copartnership.

The conference was called by defendant Gauvin for 3:00 o'clock the afternoon of November 5th. Plaintiff defendant Smith, and defendants Locatell, Gauvin, Glaser and Dubail were present. Plaintiff testified defendant Smith charged plaintiff with having made "phoney deals" and with having shown the "phoney deals" on statements to the bank; and there were other accusations and counter-accusations, whereupon, according to plaintiff,

"Mr. Locatell said 'I don't like the way this thing is going. I am going to give you two days to bring that $ 68,000 in here. You have that $ 68,000 in here Monday morning by 9:30. If it is not in here you are going to be paying deficiencies for the rest of your life on this deal!'

"Q. Was anything said about what was going to happen to your interest in that stock?

"A. He said 'We know what to do. We are old time bankers. We have your collateral. We will take it and sell it for any price we can get. We've got it. What have you got?' I said 'Mr. Locatell, wouldn't you wait until Wednesday?' Monday morning at 9:30, why here it was 5 o'clock Friday night when the meeting was...