Court Opinion

ID: 8744187
Source: CourtListenerOpinion
Date Created: 2022-11-26 11:00:27.494363+00
Date Added: 2024-06-11T17:00:34.274489
License: Public Domain

SANBORN, Circuit Judge
(dissenting). I agree with the proposition of the majority that an action for damages for deceit could have been maintained by the plaintiff against the bank on its certificate of January 6, 1896, and the facts surrounding its presentation to the plaintiff. But that position leads inevitably to the conclusion that an action for the money which that certificate declares that the bank held on deposit for the plaintiff on December 31, 1895, could also be maintained. An estoppel is a prohibition from denying the existence of the facts and the legal consequences of the existence of the facts which one has falsely represented to exist to the damage of another. In this case it forbade the bank to deny that on December 31, 1895, it had $27,269.33 of the money of the plaintiff in its possession, and it as conclusively prohibited it from denying the legal effect of that fact, namely, its implied promise and its legal liability to pay the plaintiff that amount. This action is not based on the theory that this money was ever actually deposited in this bank. It rests on the fact that the bank falsely represented to the plaintiff, to its damage, that it owed it tMs amount of money on December 31, 1895, and upon the legal conclusion that it was thereby forbidden to deny the truth of its statement. Hence it is that the plaintiff was not required to prove that any money was actually on deposit with the bank to the credit of the Modern Woodmen of America, in order to raise the implied promise and the legal liability of the bank to pay this debt. When the Modern Woodmen of America had proved that it relied upon the truth of the statement in that certificate, and that it was thereby induced to change its position, to its damage, that certificate became as incontestable proof, against the bank that the facts therein stated were true, and that the necessary legal conse-*761quenees of these facts, the implied promise and the legal liability to pay, had arisen, as a judgment or a decree to that effect would have been. When a false representation raises an estoppel, the injured party has a choice of remedies. He may aver the falsity of the statement, and recover damages for the deceit, or he may insist upon the truth of the representation, and enforce the rights he would have had if it had been true. One purchases bank stock for another, but takes the certificate in ids own name. The bank may maintain an action .against, him for damages for the deceit, but it may also refuse to avail itself of this remedy, may insist that the false appearance he has caused represented the truth, and may collect assessments from him who made the representation just as if it had been true. Horton v. Mercer, 71 Fed. 153, 18 C. C. A. 18, 36 U. S. & App. 234. One who luis a first lien upon property represents to anolher about to take a second lien thereon that I he latter’s mortgage will constitute a first lien The holder of the second lien may recover damages for this deceit, but that is not his only remedy. He may insist that his mortgage is a first lien, may foreclose it upon that theory, and the holder of the first lien will not be permitted to deny either the fact or its legal consequences. Guthrie v. Quinn, 43 Ala. 561; Kuhn v. Morrison, 78 Fed. 16, 23 C. C. A. 619, 41 U. S. App. 700. A bank states that a, check is good when it is not, and one accepts it in payment of some obligation of the debtor worth much less than the face of the check. He may sue the bank for the deceit, and recover the damages he actually sustained. But: he is not confined to that remedy. He has a right to recover of the bank the exact amount he would have received if its statement had been true. He can recover the face of the check. Merchants’ Nat. Bank v. State Nat. Bank, 10 Wall. 604, 645, 19 L. Ed. 1008; Riverside Bank v. First Nat. Bank of Shenandoah, 74 Fed. 276, 20 C. C. A. 181, 88 U. S. App. 674; Farmers’ & Mechanics’ Bank of Kent Co. v. Butchers’ & Drovers’ Bank, 16 N. Y. 125, 69 Am. Dec. 678.
Xow here, while the plaintiff had the right to sue the bank, and to recover damages for the deceit, that was not its only remedy. It had an equal right to maintain an action, and to recover a judgment against the bank for the money which it would have been entitled to receive if the statement, in the certificate had been true, — the $27,-269.83, and interest from date of demand or presentation. Indeed, under the facts of this case, this certificate had exactly the same meaning and the same legal effect that Zink’s check payable to the plaintiff and certified by the bank would have had. It was a certificate of the bank that it held $27,269.33 on deposit for its benefit on December 31, 1895. When this certificate was presented hv Zink to the plaintiff, it and its officers knew that, if that money was there to its credit on December 31, 1895, it still remained there, for they had not withdrawn it, and no other party had authority to do so. Hence the presentation of the certificate to the plaintiff was a plain statement of the bank that it was indebted to the Modern Woodmen of America at the time the certificate was presented in the amount stated upon its face. Moreover, this certificate does not differ in any respect that is material to the liability of the bank to pay the *762debt it evidences from the usual certificate of deposit, upon wliich all will concede that an action may be maintained. Such a certificate reads:
“St. Louis, April 9, 1901.
“John Smith has deposited with this hank one thousand dollars in current funds, payable to his order on the return of this certificate properly indorsed.”
Of course, such a certificate is a negotiable'instrument, while the certificate before us is not. But, if the words “payable to his order on the return of this certificate properly indorsed” are stricken from the instrument, the legal liability of the bank to pay its face to the payee — a liability which may be enforced by an action on the instrument — will still remain. Now, the only difference between such a certificate and that in evidence in this case is that the former certifies that the monqy was deposited at some indefinite time in the-past, without stating when it was there, while the latter certifies that it was deposited ¿t some time in the past, and that it was still on deposit with the bank seven days before the certificate was dated. This variance cannot make any material difference in the legal effect of the two certificates, and that issued by the defendant is, in my opinion, an evidence of indebtedness upon which an action is maintainable to the same extent and in the same way that it is upon a certified check, upon a certificate of deposit, or a duebill. A little reflection will show that the cashier of a bank, when he certifies a check or issues a certificate of deposit, is always stating a past transaction, — that money has been deposited, that the bank has become indebted. H<* usually writes his certificates of deposit in that form, and his certificate in this case stated only what he was accustomed to state whenever he issued a certificate of deposit. If the plaintiff had been a party to, or had been aware of, the mischievous acts, which led to the issue of this certificate, those acts would have constituted a defense to it. But it was not. It stands in the same relation to the bank that the purchaser of a certified check or of a certificate of deposit is placed. The latter purchases the certificate in good faith, in reliance upon the truth of the statement it contains.. The plaintiff took this certificate in good faith, in reliance upon the truth of the statement it contained that the bank was indebted to it in the amount of its face, and for this reason it forbore to collect its debt of Zink and the G-rand Island bank, the parties that really owed it. It received the certificate in good faith in payment of Zink’s, debt, and permitted him, his sureties, and the Grand Island bank to escape payment on account of its reliance upon the indebtedness of the Omaha bank. These facts estopped the latter bank from proving the falsity of its certificate.
■Ford and the bank cannot escape from this estoppel because they did not intend to induce the plaintiff to act upon the certificate. An actual intent to deceive, or to induce another to act on a false representation, is not essential to the creation of an estoppel. It is sufficient that the natural and probable effect of the misrepresentation was to deceive others, and to induce them to change their position in reliance upon it. Such a misstatement begets a conclusive presumption that he who makes it intends thereby to deceive, and to induce *763others to act upon it, under the familiar rule that every one is presumed to intend the natural consequences of his acts. The true rule is i hilt, if a man so conducts himself, whether intentionally or not, that a reasonable person would infer that a certain state of things existed, and the latter acts upon that inference, the former will aft-erwards be estopped from denying it. Bigelow, Estop. (5th Ed.) 684; Cornish v. Abingdon, 4 Hurl. & N. 549; Barnes v. .Railroad Go., 54 Fed. 87, 89, 4 C. C. A. 199, 201; Baxson v. Brown, 10 O. 0. A. 185, (51 Fed. 874, 882; Cairn cross v. Lorimer, 8 Maeq. JL L. Cas. 828; Dickerson v. Colgrove, 100 U. S. 578, 582, 25 L. Ed. 618; Kirk v. Hamilton, 402 U. S. 68, 75, 26 L. Ed. 79; Evans v. Snyder, 64 Mo. 516; Pence v. Arbuckle, 22 Minn. 417; Crook v. Corporation of Seaford, L. R. 10 Eq. 678; Faxton v. Faxon, 28 Mich. 159; Cooper v. Schlesinger, 111 C. S. 148, 155, 4 Sup. Ct. 360, 28 L. Ed. 382; Kiefer v. Rogers, 19 Minn. 32, 36 (Gil. 14); Slim v. Croucher, 1 De Gex, F. & J. 518; Litchfield v. Hutchinson, 117 Mass. 195, 198; and cases cited in Barnes v. Railway Co., 4 C. C. A., at page 202, 54 Fed., at page 90.
How, the Omaha bank, when it issued this certificate, did so conduct itself that any one who saw it would naturally and inevitably conclude that that bank was indebted to the plaintiff, and would confidently act on that belief. These facts were sufficient evidence of intention to sustain the estoppel. But this was not all. This certificate was not issued to inform those? who knew the state of these accounts. It was not issued to educate the cashier of the Grand Island bank or Zink. It was issued for the sole purpose and with the sole intent of misleading and deceiving those who did not know the condition of these accounts, and with the intent to induce them to act or to refrain from acting in reliance upon this certificate. Ford intended — and in this transaction Ford was the bank, because he was the officer to whom the duty of examining and certifying the state of its accounts was intrusted, and what Ford intended the hank intended — Ford intended that this certificate should deceive the members of Hie Modern Woodmen of America and 1 he customers of the Grand Island hank, and that it should induce them to act, or, rather, to refrain from acting, to refrain from collecting from the Grand Island bank this $27,2459.88, and other amounts which that bank owed until it was too late. The two hanks and Zink entered int.o a conspiracy to misrepresent to the members of the plaintiff and the customers of the Grand Island bank the state of the accounts of these two banks wfith the plaintiff. In pursuance of that conspiracy, for that: purpose, and with the intent to deceive these parties, and to induce them to refrain from enforcing their rights, and with no other intent, the Omaha bank issued this certificate. Does it lie in its mouth now to say that: its falsehood was more deceitful and more effectual to accomplish its purpose than it intended it should he; that it not: only deceived and defrauded the lay members of the plaintiff, but also its officers, whom it supposed, from the false statement of one of its co-conspirators, to be participes criminis in its nefarious scheme? I think not. One who fires his gun into a crowd, and kills a man, is not guiltless because he did not intend to harm that man, but meant to kill another. One who falsely certifies a check, which *764C. takes in reliance upon the certificate, cannot escape the estoppel because he did not intend to deceive C., but thought to cheat D.; and the Omaha bank ought not to escape this- estoppel because, its purpose and intent were to deceive the lay members of the plaintiff’s organization, while its false certificate not only accomplished that purpose, but went further, deceived the officers of the corporation, and induced the plaintiff to do the very thing which the bank intended that its certificate should induce others to do, — induced it to refrain from collecting the obligations of the Grand Island bank until it was too late. In my opinion, the facts in this case present every element of an equitable estoppel, the certificate itself is an evidence of a debt upon which an action can be maintained, and the judgment below ought to be reversed.