In the

United States Court of Appeals

For the Seventh Circuit

Nos. 99-2362 & 99-3053

Eastern Trading Company, et al.,

Plaintiffs-Appellants, Cross-Appellees,

v.

Refco, Inc., and Refco Capital Corporation,

Defendants-Appellees, Cross-Appellants.

Appeals from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 97 C 6815--Suzanne B. Conlon, Judge.

Argued February 24, 2000--Decided October 10, 2000

 Before Cudahy, Posner, and Evans, Circuit Judges.

 Posner, Circuit Judge. Eastern Trading Company,

a partnership located in Dubai that trades gold

and silver bullion in large quantities, brought

this suit against two commonly owned

corporations--Refco, Inc., a Chicago commodities

broker, and Refco Capital Corporation-- charging

fraud and related misconduct in violation of the

Commodity Exchange Act, 7 U.S.C. sec.sec. 1a et

seq., and the common law of Illinois. The

defendants counterclaimed for breach of contract.

The jury brought in a verdict for the defendants

on the main claim and a judgment for Refco, Inc.

of $14 million on the counterclaim, the judge

having dismissed Refco Capital Corporation as a

counterclaimant before the trial. Eastern

appeals. Refco (as we’ll refer to Refco, Inc.,

the broker, except when discussing its affiliate)

cross-appeals, seeking an award of attorneys’

fees, as provided for in its commodity trading

contract with Eastern, the basis for the

successful counterclaim. The issues that we need

to resolve are primarily ones of general law

rather than of anything peculiar to the Commodity

Exchange Act or Illinois law. In view of the jury

verdict, Refco gets the benefit of the doubt on

disputable facts.

 The partners in Eastern are Haji Ashraf and his

four eldest sons. They are equal partners in the

sense of sharing the profits of the partnership
equally. Although the firm does a substantial

business, its offices consist of a single large

room partitioned into separate cubicles for the

partners by means of sliding glass doors. The

partnership agreement authorizes each partner to

sign contracts on behalf of the firm. The father

is the chairman of the firm but during the period

relevant to this case his eldest son, Zahid

Ashraf, was the managing partner. Refco is

represented in Dubai by a commodities broker

called Ramada Financial Consultants that is owned

and operated by a distant cousin of the Ashrafs

named Zaheer Khawaja. Although Ramada is a

"foreign correspondent" of Refco (the meaning of

the term in this context is unclear), the

contract between the two firms disclaims any

intention of making Ramada an agent of Refco.

 In January 1992 Eastern and Refco entered into

a customer agreement by which Refco was to broker

trades on U.S. commodities exchanges for Eastern.

Eastern’s trading account with Refco established

pursuant to the agreement was nondiscretionary,

meaning that Eastern was to make all the

decisions on what trades to make and Refco was

merely to execute them. The agreement authorized

Zahid and two of his brothers (the three being

identified as "general partners" in Eastern with

Zahid also being designated "Managing Director")

to act for Eastern and provided that "Refco may

assume conclusively that all actions taken by and

instructions from any one of the . . . named

general partners have been properly taken or

given pursuant to authority invested in them by

all the partners in the Partnership."

 At first the trades that Refco executed for

Eastern involved options and futures contracts

designed to hedge Eastern against unexpected

changes in gold and silver prices between the

time that it bought gold and silver and the time

that it sold them. But after three years Zahid

Ashraf began placing orders with Refco through

Khawaja on behalf of Eastern for options and

futures contracts in much greater quantities than

required to hedge Eastern’s bullion trading; in

fact he was speculating, which is the opposite of

hedging. And not for the first time. In 1994 he

had opened a personal trading account (not an

Eastern account) with another U.S. commodities

broker, Republic Securities New York, through

Khawaja. In March of the following year, at about

the time that he started speculative trading

through Khawaja and Refco, Zahid lost millions of

dollars in his Republic account, which Republic

liquidated. Zahid had funded that account from

Eastern funds, and when his father got wind of

this he forced Zahid to repay the money to

Eastern and to promise never again to use

Eastern’s funds for commodities trading without
the permission of the other partners.

 The promise was not kept. In fact the trades

that Zahid began making on Eastern’s behalf after

the Republic fiasco were ten times as large as

any of the previous trades that Eastern had made.

They were very risky; in three days in March,

Eastern lost $22 million in trades at Zahid’s

direction executed by Refco. Refco was of course

aware of the sudden and substantial increase in

the scale and riskiness of Eastern’s commodities

trading and it also learned from Khawaja of

Zahid’s disastrous experience with Republic. But

as the increase in scale translated into much

larger commissions for Refco, and Eastern was a

substantial and reputable firm and Zahid its

managing partner, Refco was content.

 Refco mailed Eastern daily statements of the

trading results of the previous day, and Ramada

faxed similar statements ("recaps") to Eastern.

Zahid’s partners did not read any of these

documents, however; they left everything to do

with commodities trading to Zahid. At his

request, Ramada began sending Eastern two sets of

recaps, one reflecting routine hedging

transactions and the other the new, speculative

trading by Zahid. Zahid did not show these recaps

to his partners--in fact he destroyed them. When

one of Zahid’s brothers visited Refco’s chief

operating officer, the latter didn’t tell him

about the dramatic change in the amount of

trading in Eastern’s account.

 Zahid informed Refco of a change in the mailing

address of Eastern’s account and also opened a

separate account with Refco at the new address in

Eastern’s name and switched his speculative

trading to that account. He did not consult his

partners about either the change of the mailing

address or the opening of the new account. He

later opened still another account with Refco and

switched his speculative trading to that account,

again without consulting his partners. And he was

no longer trading gold and silver futures and

options. He was speculating in foreign

currencies, at one point obtaining an exposure in

British pound futures and options that exceeded

$3 billion. Refco did not inform Zahid’s partners

of any of these developments.

 Beginning in May 1996, the account (Zahid’s

third Eastern account) began experiencing large

trading losses which caused it to become

undermargined; nevertheless Refco continued

executing trades in it at Zahid’s direction.

Refco also allowed him to withdraw money from the

other accounts, even though the third was now

undermargined. When finally liquidated in July of

1996, that account had a debit balance of $28
million, which Refco, Inc., as a clearing broker,

had to make good to the people on the other side

of Eastern’s commodities trades. To eliminate the

debit, Refco Capital, without advising Eastern,

Zahid, or Khawaja, lent Eastern that amount,

which was deposited in Eastern’s account with

Refco, Inc. Although the loan was from Refco

Capital, Eastern was asked to give, and gave, a

promissory note for the amount of the loan to

Refco, Inc., which assigned the note to Refco

Capital. Eastern repaid half the borrowed amount

to Refco, Inc., not to Refco Capital, the

assignee, but refused to repay the rest, and

Refco’s counterclaim is for the remaining debit

balance. As a result of the losses, Zahid was

stripped of his partnership interest in Eastern.

 So far as its own claim, that of fraud, is

concerned, Eastern argues only that the judge

should not have instructed the jury on Refco’s

defenses of ratification, estoppel, and

mitigation (the parties focus on the first of

these, and we can ignore the others, which the

parties treat as synonyms for ratification),

because there was no evidence of ratification and

so the jury was confused. Eastern is right of

course that a jury should not be instructed on a

defense for which there is so little evidentiary

support that no rational jury could accept the

defense. E.g., United States v. Perez, 86 F.3d

735, 736 (7th Cir. 1996); Aerotronics, Inc. v.

Pneumo Abex Corp., 62 F.3d 1053, 1065-66 (8th

Cir. 1995); Farrell v. Klein Tools, Inc., 866

F.2d 1294, 1297 (10th Cir. 1989). Such a defense

should be excluded from the case altogether by a

grant of partial summary judgment or by a partial

directed verdict. Letting the jury consider it is

just an invitation to jury lawlessness. But it

doesn’t follow from this that the jury’s verdict

must be set aside. The invitation isn’t always

taken. It cannot just be assumed that the jury

must have been confused and therefore that the

verdict is tainted, unreliable. It’s not as if,

here, the judge had failed to give an instruction

to which Eastern was entitled, or had given an

erroneous instruction. This is just a case of

surplusage, where the only danger is confusion,

and reversal requires a showing that the jury

probably was confused. Griffin v. United States,

502 U.S. 46 (1991); Buhrmaster v. Overnite

Transportation Co., 61 F.3d 461, 463-64 (6th Cir.

1995); Free v. Peters, 12 F.3d 700, 703 (7th Cir.

1993); Dwoskin v. Rollins, Inc., 634 F.2d 285,

292-95 (5th Cir. 1981); cf. Gile v. United

Airlines, Inc., 213 F.3d 365, 374-75 (7th Cir.

2000); McCarthy v. Pennsylvania R.R., 156 F.2d

877, 882 (7th Cir. 1946); Lattimore v. Polaroid

Corp., 99 F.3d 456, 468 (1st Cir. 1996).

Buhrmaster suggests that such an error is

harmless as a matter of law, 61 F.3d at 463-64,
implying that there is to be no inquiry into the

likelihood that the jury was confused; that may

go too far.

 It is different when, as in Sunkist Growers,

Inc. v. Winckler & Smith Citrus Products Co., 370

U.S. 19, 29-30 (1962), the jury is instructed on

an erroneous theory of liability and there is no

basis for determining whether it relied on that

theory. Since the jury is to take the law as the

judge instructs it, however erroneous the

instruction is, an erroneous theory of liability

supported by the facts is quite likely to commend

itself to the jury. The presumption is reversed

when, as in this case, the jury is instructed on

a theory (here of defense, but that is

immaterial) for which there is no evidence and

which probably, therefore, it rejected.

 Eastern argues that the jury was confused. The

verdict states that Eastern first had notice of

Zahid’s fraud in July 1995, which is incorrect--

that was the date of the discovery of his fraud

against Republic Securities. But if this shows

confusion, still it is hard to see how it could

be due to the erroneous instruction, which is

about ratification rather than about notice.

Anyway, since by July 1995 all of Zahid’s trading

was in Eastern’s account in Refco, the jury may

simply have determined that by then Eastern must

(or should) have known about Zahid’s unauthorized

speculations. 

 We add that if Eastern had asked the district

judge to submit to the jury an interrogatory on

ratification, and the jury had checked the box

for that defense, indicating that it agreed that

Eastern had ratified the fraud committed by

Refco, Eastern would then have had a solid basis

for seeking a new trial (or further deliberations

by the jury) if indeed there was no evidence of

ratification. See Fed. R. Civ. P. 49; Abou-Khadra

v. Mahshie, 4 F.3d 1071, 1082-83 (2d Cir. 1993);

Chaney v. Falling Creek Metal Products, Inc., 906

F.2d 1304, 1308 (8th Cir. 1990); Foster v. MooreMcCormack Lines, Inc., 131 F.2d 907, 908 (2d Cir.

1942). Eastern did not do this, and so has only

itself to blame for its inability to demonstrate

that the jury was confused by the instruction.

 In any event there was enough evidence to

justify submitting a defense of ratification to

the jury after all, although actually the case

involves, as we’ll see, a mixture of consent and

ratification.

 It is helpful to step back a bit and consider in

commonsensical rather than technical legal terms

the situation disclosed by the trial record.

Zahid Ashraf had speculative fever, and although
he was speculating for the Eastern partnership

rather than on his own account (as he had been

doing through Republic Securities) he knew that

his partners would disapprove and so he took

steps with the aid of Ramada to conceal his

speculative trades from them. This was a breach

of his fiduciary duties to his partners,

Restatement of Agency (Second) sec.sec. 381, 383,

385 (1957), and hence a fraud. In re Gerard, 548

N.E.2d 1051, 1059 (Ill. 1989); Doner v. Phoenix

Joint Stock Land Bank, 45 N.E.2d 20, 24 (Ill.

1942); Conway v. Conners, 427 N.E.2d 1015, 1020

(Ill. App. 1981). True, he hoped that his

partners, members of his family, would benefit

along with himself (he would be entitled to one

fifth of the partnership’s profits from his

trading). But what he did was still fraud, just

as it is fraud to embezzle money from your

employer for the purpose of gambling at the

racetrack even though you expect to win and you

intend when you do win to return to your employer

more than you had "borrowed" from him. In other

words, deliberately imposing risk can be a breach

of fiduciary duty or a fraud. United States v.

Catalfo, 64 F.3d 1070, 1077 (7th Cir. 1995);

United States v. Schneider, 930 F.2d 555, 558

(7th Cir. 1991); United States v. Dial, 757 F.2d

163, 170 (7th Cir. 1985). More fundamentally,

motive does not equal intent; fraud, larceny,

embezzlement, and the other financial crimes and

their tort equivalents are actionable even when

the motive for the wrongful conduct is benign.

E.g., United States v. Kenrick, 221 F.3d 19, 28

(1st Cir. 2000); Reddy v. CFTC, 191 F.3d 109, 119

(2d Cir. 1999); United States v. Simpson, 950

F.2d 1519, 1524-25 (10th Cir. 1991); Buechin v.

Ogden Chrysler-Plymouth, Inc., 511 N.E.2d 1330,

1336 (Ill. App. 1987).

 It appears that Zahid was aided and abetted in

his fraud by Ramada, although this is unclear and

Ramada is not a party. Eastern claims that Zahid

was also aided and abetted by Refco. We have said

that there is no tort of aiding and abetting,

Renovitch v. Kaufman, 905 F.2d 1040, 1049 (7th

Cir. 1990); Cenco, Inc. v. Seidman & Seidman, 686

F.2d 449, 452 (7th Cir. 1982), but of course

without meaning that one who aids and abets a

tort has no liability. The distinction is between

a separate tort of aiding and abetting, and

aiding and abetting as a basis for imposing tort

liability. Although a number of cases do speak of

a "tort of aiding and abetting," e.g., Hurley v.

Atlantic City Police Dept., 174 F.3d 95, 127 (3d

Cir. 1999); Rice v. Paladin Enterprises, Inc.,

128 F.3d 233, 251 (4th Cir. 1997); GCM, Inc. v.

Kentucky Central Life Ins. Co., 947 P.2d 143, 146

(N.M. 1997); Halberstam v. Welch, 705 F.2d 472,

479 (D.C. Cir. 1983), most of them also contain

language suggesting that aiding and abetting is a
basis for imposing liability for the tort aided

and abetted rather than being a separate tort.

E.g., id. at 481; Hurley v. Atlantic City Police

Dept., supra, 174 F.3d at 126; GCM, Inc. v.

Kentucky Central Life Ins. Co., supra, 947 P.2d

at 148. That is the approach taken by the

Commodity Exchange Act and the cases interpreting

it, 7 U.S.C. sec. 25(a)(1); Damato v. Hermanson,

153 F.3d 464, 470, 473 (7th Cir. 1998); Nicholas

v. Saul Stone & Co., 2000 WL 1093319, at *4-8 (3d

Cir. Aug. 7, 2000); Tatum v. Legg Mason Wood

Walker, Inc., 83 F.3d 121, 123 n. 3 (5th Cir.

1996) (per curiam), and it is also the dominant

approach in Illinois, see, e.g., Congregation of

the Passion v. Touche Ross & Co., 636 N.E.2d 503,

508 (Ill. 1994); Freese v. Buoy, 576 N.E.2d 1176,

1182 (Ill. App. 1991); Sklan v. Smolla, 420

N.E.2d 575, 578 (Ill. App. 1981), although a

couple of cases have language (weakly) consistent

with the separate-tort idea. Carter Coal Co. v.

Human Rights Comm’n, 633 N.E.2d 202, 205 (Ill.

App. 1994); Wolf v. Liberis, 505 N.E.2d 1202,

1208 (Ill. App. 1987).

 The dominant approach is also the better

approach. There is nothing to be gained by

multiplying the number of torts, and specifically

by allowing a tort of aiding and abetting a fraud

to emerge by mitosis from the tort of fraud,

since it is apparent that one who aids and abets

a fraud, in the sense of assisting the fraud and

wanting it to succeed, is himself guilty of

fraud, McClellan v. Cantrell, 217 F.3d 890, 894-

95 (7th Cir. 2000); Cenco, Inc. v. Seidman &

Seidman, supra, 686 F.2d at 452-53, in just the

same way that the criminal law treats an aider

and abettor as a principal. E.g., 18 U.S.C. sec.

2; United States v. Loscalzo, 18 F.3d 374, 383

(7th Cir. 1994); United States v. Hodge, 211 F.3d

74, 77 (3d Cir. 2000). Law should be kept as

simple as possible. One who aids and abets a

fraud is guilty of the tort of fraud (sometimes

called deceit); nothing is added by saying that

he is guilty of the tort of aiding and abetting

as well or instead.

 Eastern argues that Refco knew that Zahid was

acting without authority in making these huge

speculative trades and that it turned a blind eye

because huge trades generate huge commissions. If

this is the correct description of the situation

(a big if, however), Refco was guilty of

participating in Zahid’s fraud. The point is not

that Refco failed to blow the whistle on Zahid;

there is no general duty in tort law, a variant

of a "good Samaritan" duty, to report someone

else’s fraud or other misconduct to the victim of

it, IIT v. Cornfeld, 619 F.2d 909, 927 (2d Cir.

1980); cf. Chiarella v. United States, 445 U.S.

222, 234-35 (1980); Lightning Lube, Inc. v. Witco
Corp., 4 F.3d 1153, 1185 (3d Cir. 1993); National

Union Fire Ins. Co. v. Woodhead, 917 F.2d 752,

757 (2d Cir. 1990), any more than there is a

general duty to warn or otherwise assist a victim

or potential victim of an injury tortious or

otherwise. Gust K. Newberg Construction Co. v.

E.H. Crump & Co., 818 F.2d 1363, 1367 (7th Cir.

1987); see generally Richard A. Epstein, Torts

sec. 11.2 (1999); W. Page Keeton et al., Prosser

and Keeton on the Law of Torts sec. 56, pp. 375-

76 (5th ed. 1984). But that’s a rule about the

duty, or rather lack of duty, of a bystander. If

Refco was the paid executant of the fraud, it

could not describe itself as a bystander. Indeed,

as the agent of the partnership, Refco, if it

knew of Zahid’s unfaithful dealing with his

partners, had a duty to inform those partners.

See Rookard v. Mexicoach, 680 F.2d 1257, 1262

(9th Cir. 1982); Charlotte Aircraft Corp. v.

Purdue Airlines, Inc., 498 F.2d 152, 156 (8th

Cir. 1974); Restatement of Agency (Second) sec.

381 and comment a (1957). It could not hide

behind the customer agreement, which authorized

it to execute trades ordered by any of the

general partners, including Zahid. That was not

authorization to connive with one of the partners

to defraud the partnership.

 We may assume, therefore, that Eastern made out

a prima facie case of fraud (if not, its claim

should have been dismissed before trial). It was

not a strong case, so it is unlikely that, in

finding that Refco did not in fact commit fraud,

the jury was confused by the instruction on

ratification. But in any event, as we have said

and must now explain, there was enough evidence

of ratification to justify the giving of such an

instruction, though not for two of the three

reasons given by Refco. The first is that Zahid’s

knowledge is imputed to the partnership and so

his partners necessarily approved of his

speculative trading; that is, the partnership was

doing the trading, and it couldn’t defraud

itself. This reasoning obviously is wrong, Ash v.

Georgia-Pacific Corp., 957 F.2d 432, 436 (7th

Cir. 1992); Marine Midland Bank v. John E. Russo

Produce Co., Inc., 405 N.E.2d 205, 212-13 (N.Y.

1980); Restatement of Agency, supra, sec. 282(1),

as it would provide a legal immunity for anyone

who assisted one partner to defraud another.

 The second bad ground for ratification is the

carelessness of Zahid’s partners in failing to

monitor his activities, especially after the

Republic episode. Their carelessness would be a

defense had Zahid been defrauding a third party,

such as customers of Eastern, on behalf of

Eastern, as in our Cenco case, 686 F.2d at 454-

56; see also Restatement of Agency, supra,

sec.sec. 282(2)(a), (c) and comment h; cf. In re
Bonnanzio, 91 F.3d 296, 303 (2d Cir. 1996); New

England Tank Industries of New Hampshire, Inc. v.

United States, 861 F.2d 685, 693 n. 16 (Fed. Cir.

1988); but cf. Prudential-Bache Securities, Inc.

v. Citibank, N.A., 536 N.E.2d 1118, 1125-26 (N.Y.

1989). They would then be the beneficiaries of a

successful fraud suit against Refco and would

thus be seeking to profit from a fraud that they

could have prevented had they exercised due care.

But Zahid was defrauding his partners, and

contributory negligence is not a defense to

fraud. E.g., Dexter Corp. v. Whittaker Corp., 926

F.2d 617, 620 (7th Cir. 1991); Astor Chauffeured

Limousine Co. v. Runnfeldt Investment Corp., 910

F.2d 1540, 1546 (7th Cir. 1990); Douglas County

Bank & Trust Co. v. United Financial Inc., 207

F.3d 473, 479 (8th Cir. 2000).

 The good ground for a defense of ratification

(or, better, consent) here is that the

partnership, though warned of Zahid’s speculative

propensities and unilateralism by the Republic

episode, decided to leave the management of the

commodities trading side of Eastern’s business to

him. They gave him carte blanche, not only in the

terms of the customer agreement with Refco but

also in their refusal to review his transactions

or otherwise monitor or supervise, let alone

participate in, his trading activities. They

trusted him, and authorized him, to speculate

responsibly. Although in the end his speculative

trading was a flop, during much of the 18-month

period of his trading through Refco he made money

for the partnership. The partners were happy when

things were going well, and they cannot, by a

retroactive cancellation of his authority, shift

the cost when things went badly to Refco, which

in following Zahid’s directions thought it was

doing what the partnership wanted it to do. The

partners were not defrauded if they authorized

the conduct that they now denounce as fraud,

either knowing exactly what Zahid was doing or

choosing to turn a blind eye to it, e.g.,

Chauffeured Limousine Co. v. Runnfeldt Investment

Corp., supra, 910 F.2d at 1547, or if they led

Refco to believe that Zahid’s risky trades were

authorized. If the partners did not originally

authorize his speculations, they either ratified

them by failing to repudiate them upon discovery

of them, e.g., Progress Printing v. Jane Byrne

Political Committee, 601 N.E.2d 1055, 1067-68

(Ill. App. 1992); Chalet Ford, Inc. v. Red Top

Parking, Inc., 379 N.E.2d 88, 91 (Ill. App.

1978); Restatement of Agency, supra, sec. 82 and

comment b, or misled Refco into thinking they had

ratified them. If Refco was misled, it was not a

defrauder, since fraud is an intentional tort.

 We turn now to Eastern’s challenge to the

counterclaim. The counterclaim resulted in an
award of $14 million to Refco, Inc. for breach of

contract. The loan to Eastern giving rise to the

debt that precipitated the counterclaim was made

not by Refco, Inc., however, but by Refco

Capital, which was dismissed before trial on the

ground that there was no consideration for the

promissory note that Eastern had given Refco,

Inc. and the latter had assigned to Refco

Capital, furnishing the only basis for Refco

Capital’s claim. Because the customer agreement

already obligated Eastern to repay any debit in

its account with Refco, Inc., the promissory note

that Eastern gave Refco, Inc. and the latter in

turn gave Refco Capital was not supported by

consideration. That is to say, there was no fresh

consideration for it; it was just a repetition of

an already existing obligation. It is true that

the doctrine of "moral consideration" makes

enforceable, without any fresh consideration, the

promise of a debtor to pay a debt that is no

longer enforceable (maybe because the statute of

limitations has run), E. Allan Farnsworth,

Contracts sec. 2.8, pp. 56-57 (3d ed. 1999), but

Refco never mentioned the doctrine; so it was

waived and Refco Capital was out as a

counterclaimant. But that left the customer

agreement, which Refco, Inc. did not assign to

Refco Capital. That agreement, as we said,

required Eastern to make good on its debit. But,

says Eastern, there was no debit; it was erased

by the loan from Refco Capital. The loan made

Refco, Inc. whole and Refco Capital the only

creditor. And Refco Capital is no longer a party.

 Questions of "veil piercing" ordinarily arise

when a creditor is trying to go after a

shareholder or affiliate of his debtor, and when

that is so the veil can be pierced and the

shareholder or affiliate reached only in

circumstances not relevant to this case. Here we

have a case in which the creditor’s affiliate

(Refco Capital is the creditor, and Refco, Inc.,

the only remaining counterclaimant, is the

affiliate) is trying to pierce the veil that

would ordinarily separate it from the creditor,

in order to defeat a defense to the creditor’s

suit--the lack of consideration for the

promissory note, which, in the absence of any

invocation of the doctrine of moral

consideration, bars Refco Capital from suing to

collect the note. There is nothing to prevent

using the concept of piercing the corporate veil

in this way to accomplish elementary justice,

however. It isn’t done very often, but there is

ample authority for doing it when appropriate.

United States v. Scherping, 187 F.3d 796, 801-04

(8th Cir. 1999); McCall Stock Farms v. United

States, 14 F.3d 1562, 1568 (Fed. Cir. 1993); Towe

Antique Ford Foundation v. IRS, 999 F.2d 1387,

1390-94 (9th Cir. 1993); Roepke v. Western

National Mutual Ins. Co., 302 N.W.2d 350, 352-53
(Minn. 1981); Olen v. Phelps, 546 N.W.2d 176,

180-81 (Wis. App. 1996); Crum v. Krol, 425 N.E.2d

1081, 1087-89 (Ill. App. 1981); Earp v. Schmitz,

79 N.E.2d 637, 639-40 (Ill. App. 1948). The

purpose of limited liability is to encourage

investment, Frank H. Easterbrook & Daniel R.

Fischel, The Economic Structure of Corporate Law,

ch. 2 (1991), and is not engaged by the effort of

an affiliate to collect a debt nominally owed

another affiliate. Eastern inflicted a loss of

$14 million on Refco which, the jury could and

did find, the contract between Eastern and Refco

made it the obligation of Eastern to bear. The

customer agreement gave Refco, Inc. a prima facie

claim that Eastern owed it $14 million. Eastern’s

defense is that the money was paid--by Refco

Capital. To that, Refco, Inc. rebuts that Refco

Capital is as a practical matter the same entity

as Refco, Inc., and so the payment was illusory

and the defense fails. We agree.

 Now it is true that for reasons having to do

with reporting requirements imposed by the

commodities exchanges, Refco did not want to

reveal the debit in Eastern’s account, and that

is why it funded it with a loan from its

affiliate, with which it has a complete identity

of interest by virtue of the fact that both Refco

corporations are wholly owned by a third

corporation. Eastern points us to nothing

indicating that what Refco did was illegal,

however, and the jury was not required to find,

and did not find, that it was a fraud against

Eastern (which argues that the infusion of cash

into the account delayed the discovery by Zahid’s

partners of his huge losses), for the jury

rejected Eastern’s claim of fraud. Why Eastern

should escape its contractual obligation because

of intercorporate transactions that have no

economic significance or relation to Eastern’s

rights escapes us.

 All this rigamarole would have been avoided if

instead of arranging a loan to Eastern to cover

the deficit in Eastern’s account, Refco, Inc.,

the creditor on the account, had gone after

Eastern directly, without bringing Refco Capital

into the picture. Although the rigamarole may

have been for the disreputable purpose of fooling

the Board of Trade or the Commodity Futures

Trading Commission, we do not think an

appropriate sanction is a forfeiture of Refco,

Inc.’s valid claim and a windfall to its

defaulting customer.

 The last issue concerns the attorneys’ fees that

the district court refused to award Refco,

precipitating the cross-appeal. The court refused

on the ground of waiver, the issue of attorneys’

fees not having been specified in the pretrial
order as an issue for trial. The refusal was

error, because the issue of attorneys’ fees was

not a triable issue. The customer agreement

obligated Eastern to reimburse Refco for the cost

(including reasonable attorneys’ fees) of

collecting any unpaid debit in the account. There

was no issue of entitlement to attorneys’ fees to

submit to the jury. Compare McGuire v. Russell

Miller, Inc., 1 F.3d 1306, 1313-14 (2d Cir.

1993). Either Refco prevailed on its claim for

the unpaid debit of $14 million and was therefore

entitled to reasonable attorneys’ fees, or

Eastern prevailed and Refco therefore was

entitled to no attorneys’ fees. The issue of

attorneys’ fees (including amount) was therefore

an issue to be resolved after the trial on the

basis of the judgment entered at the trial,

Rissman v. Rissman, No. 00-2141 (7th Cir. Oct. 2,

2000); Jannotta v. Subway Sandwich Shops, Inc.,

2000 WL 1222052, at *3 (7th Cir. Aug. 29, 2000);

Capital Asset Research Corp. v. Finnegan, 216

F.3d 1268 (11th Cir. 2000) (per curiam); Ideal

Electronic Security Co. v. International Fidelity

Ins. Co., 129 F.3d 143, 150 (D.C. Cir. 1997),

just as in cases in which statutory rather than

contractual entitlements to attorneys’ fees are

involved. E.g., Hensley v. Eckerhart, 461 U.S.

424, 433 and n. 7 (1983); Hamilton v. Daley, 777

F.2d 1207, 1212 (7th Cir. 1985); MidAmerica

Federal Savings & Loan Ass’n v. Shearson/American

Express, Inc., 962 F.2d 1470, 1475 (10th Cir.

1992).

 The judgment against Eastern on the main claim

and in favor of Refco, Inc. on the counterclaim

is affirmed, but the denial of attorneys’ fees is

reversed with directions to the district court to

award Refco its attorneys’ fees in accordance

with the terms of the customer agreement.

Affirmed in Part, Reversed in Part,

and Remanded with Directions.