Trebelhorn v. Bartlett, 32903

CourtSupreme Court of Nebraska
Citation47 N.W.2d 374,154 Neb. 113
Docket NumberNo. 32903,32903
PartiesTREBELHORN v. BARTLETT et al.
Decision Date30 March 1951

Syllabus by the Court.

1. The extent to which examination of jurors may be pursued upon voir dire rests in the sound discretion of the trial court, and its ruling thereon will not be disturbed unless there has been an abuse of discretion to the prejudice of the complaining party.

2. A conspiracy, like other facts, may be proved by direct or circumstantial evidence, and one means of proof is by showing overt acts or representations of the individuals charged with conspiracy. From the fact that different persons at different times by their acts or representations pursued the same object, the jury may, in connection with other facts, infer the existence of a conspiracy to effect that object.

3. In an action for damages based upon a conspiracy to defraud by wrongful acts or false representations, the damages and not the unlawful confederation is the gist of the action, so that if damages are shown to have resulted to plaintiff from such acts or representations of defendants or any of them, then a judgment against such defendants may be sustained without establishing a conspiracy among them all.

4. In such cases the proof of a conspiracy is of no consequence except as bearing upon rules of evidence or to bring within the ambit of liability someone who may have conspired but did not actively participate in the conduct itself.

5. In other words, failure to prove an allegation of conspiracy does not affect the plaintiff's right to recover, there being sufficient independent grounds for recovery, although it limits those against whom recovery may be had to persons actively participating in the conduct complained of, and whose acts, as regards time, substance and result, in fact united to produce the injury.

6. Fraud may consist in words, acts, or the suppression of material facts with the intent to mislead or deceive.

7. Where fraud or misrepresentation is material with reference to a transaction subsequently entered into by a person deceived thereby, it is assumed in the absence of facts showing the contrary that it was induced by the fraud or misrepresentation.

8. To maintain an action for damages for false representation, plaintiff must allege and prove what representation was made; that it was false and so known to be by the defendant charged with making it, or was made without knowledge as positive statement of known fact; that plaintiff believed the representation to be true; that he relied and acted upon it, and was thereby injured.

9. A person is justified in relying upon a representation made to him where the representation is a positive statement of fact and where an investigation would be required to discover the truth.

10. The general rule that fraud is not presumed but must be proved by the party alleging it does not mean that it cannot be otherwise proved than by direct and positive evidence. Fraud in a transaction may be proved by inferences which may reasonably be drawn from intrinsic evidence respecting the transaction itself, such as inadequacy of consideration, or extrinsic circumstances surrounding the transaction.

11. Actionable fraud may not be predicated upon mere expressions of opinion as to value honestly made under circumstances that do not give another the right to rely thereon, but representations of positive facts pertaining to the quality of the thing sold or purchased and relied upon by the purchaser or seller, which are calculated to mislead and deceive, if proved false, constitute actionable fraud.

12. The measure of damages recoverable by one who has been induced to sell corporate stock by fraud of the purchaser is the difference between the consideration received by the seller and the actual value of such stock at the time of the transaction, if the latter exceeds the former.

13. The actual value of corporate stock which has no market value, that is, where it is all common stock, closely held and not listed or actively traded in on any stock exchange, is ordinarily determinable from the then net worth of the corporation divided by the number of bona fide shares issued and outstanding.

14. For the purpose of deciding such net worth, evidence of the many related factors and elements, such as assets, liabilities, and all other matters pertinent to the value of the particular corporation involved, may be admitted and considered.

15. A motion for directed verdict or for judgment notwithstanding the verdict must, for the purpose of decision thereon, be treated as an admission of the truth of all material and relevant evidence submitted on behalf of the party against whom the motion is directed, who is entitled to have every controverted fact resolved in his favor, and have the benefit of every inference that can reasonably be deduced from the evidence.

Lloyd E. Chapman, Charles W. Phillips, Lincoln, for appellant.

Ginsburg & Ginsburg, Lincoln, for appellee.

Heard before SIMMONS, C. J., and CARTER, YEAGER, CHAPPELL, WENKE, and BOSLAUGH, JJ.

CHAPPELL, Justice.

Plaintiff brought this action to recover damages from defendants, who allegedly conspired together for the purpose of fraudulently inducing him, and by false and fraudulent representations of each did so induce him to sell his stock in defendant Ace Plumbing & Heating Company, a corporation, for less than its actual value.

Upon issues joined and trial to a jury, it returned a verdict for plaintiff in the amount of $4,000, and judgment was entered thereon. The trial court overruled defendants' motion for judgment notwithstanding the verdict or in the alternative for a new trial, and they appealed, assigning: (1) That the verdict and judgment were not supported by the evidence but contrary thereto; (2) that the court erred in exclusion of certain evidence; (3) erred in the giving and refusal of instructions; and (4) erred in refusing to declare a mistrial because prejudicial questions were asked by counsel for plaintiff upon voir dire. We conclude that the assignments should not be sustained.

Defendants cited no authority to sustain the fourth or last assignment. In that connection, it is generally the rule that: 'Upon the voir dire examination of a proposed juror, each party has the right, within reasonable limits, to put pertinent questions for the purpose of ascertaining whether there exists sufficient grounds for a challenge for cause, and also to aid the party in the exercise of his statutory right of peremptory challenge.

'The extent to which such examination may be carried rests in the sound discretion of the trial court, and its ruling thereon will not be disturbed unless there has been an abuse of discretion to the prejudice of the complaining party.' Strong v. State, 106 Nob. 339, 183 N.W. 559. In the light of such rules, we have examined the record, and conclude that the assignment has no merit.

We turn then to the first assignment, decision of which depends upon rules of law applicable to competent evidence appearing in the record.

A conspiracy, like other facts, may be proved by direct or circumstantial evidence, and one means of proof is by showing overt acts or representations of the individuals charged with conspiracy. From the fact that different persons at different times by their acts or representations pursued the same object, the jury may, in connection with other facts, infer the existence of a conspiracy to effect that object. Patton v. Rapp, 133 Neb. 308, 275 N.W. 315.

In an action for damages based upon a conspiracy to defraud, such as that at bar, the damages and not the unlawful confederation is the gist of the action, so that if damages are shown to have resulted to plaintiff from wrongful acts or misrepresentations of defendants or any of them, then a judgment against such defendants may be sustained without establishing a conspiracy among them all. Dunbier v. Mengedoht, 119 Neb. 706, 230 N.W. 669; Harvey v. Harvey, 75 Neb. 557, 106 N.W. 660; Commercial Union Assurance Co. v. Shoemaker, 63 Neb. 173, 88 N.W. 156; Booker v. Puyear, 27 Neb. 346, 43 N.W. 133.

As stated in Annotation, 152 A.L.R. 1147: 'It has been frequently pointed out that, speaking broadly, there is no such thing as a civil action for conspiracy, the action being for damages caused by acts committed pursuant to a formed conspiracy, rather than the conspiracy itself, so that, unless something is actually done by one or more of the conspirators which results in damage, no civil action will lie against anyone. See, for example, 11 Am.Jur. 577, Conspiracy, § 45. Thus, in most cases the gist of such an action is the wrongful conduct resulting in the plaintiff's damage, and proof of a conspiracy is of no consequence except as bearing upon the rules of evidence, * * * or to bring within the ambit bit of liability someone who may have conspired but who did not actively participate in the conduct itself. In such cases failure to prove an allegation of conspiracy does not affect the plaintiffs' right to recover, there being sufficient independent grounds for recovery, although it limits those against whom recovery may be had to persons actively participating in the conduct complained of, and whose acts, as regards time, substance, and result, in fact united to produce the injury.'

The case at bar is such a case wherein the cause of action was one independent of conspiracy and not one dependent thereon as distinguished in Annotation, 152 A.L.R. 1154. Reid v. Brechet, 117 Neb. 411, 220 N.W. 590, 221 N.W. 17, relied upon by defendants, is clearly distinguishable upon the pleadings and the facts.

Fraud may consist in words, acts, or the suppression of material facts with the intent to mislead or deceive. Faulkner v. Klamp, 16 Neb. 174, 20 N.W. 220; 37 C.J.S., Fraud, § 9, p. 225, § 15, p. 242; 23 Am.Jur., Fraud and Deceit, § 24, p. 776, § 76, p. 850; Restatement, Contracts, § 470, p. 890, § 471, p....

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