The Western Custom M37 shotgun can only use standard shotgun ammo rather than the enhanced shotgun ammo that can be made with the reloading tool. The M37 is a lever action shotgun based on the Winchester Model 1887, which was designed only to use the shorter 2 3/4" shells rather than the 3" magnum shells.
While trying to get the cable car to run, you have the option to head back to where Dario was hiding out. En route you see a young lady fleeing from zombies and eventually getting killed. Hey wait...Didn't Dario say he lost his daugh... Oh...
Different girl. Not that this makes it any better, since you do find his daughter's corpse in the clock tower.
Similarly, if you revisit the street outside the boutique and the bar where you meet Brad, you'll find the fire escape where you could find some herbs drawn up and two dead bodies lying in the street. Did they die trying to make that escape? Did someone leave them for dead?