Court Opinion

ID: 5267331
Source: CourtListenerOpinion
Date Created: 2022-01-06 19:03:02.809387+00
Date Added: 2024-06-11T08:28:10.169158
License: Public Domain

Hinman, J. (concurring):
I agree that technically the plaintiff could not have believed that it had a valid and enforcible contract. It was presumed to know the law and thus to know that if' the letter of acceptance was still in the possession of the defendant, the agent of Cluett, Peabody & Co., Inc., unmailed and undelivered, there was no legal acceptance of the offer. It was the duty of the plaintiff, under such circumstances, if it wished to enforce that contract or to protect itself from damages due to its breach, to insist upon the legal acceptance. It had a duty to protect itself in any way open to it. There was a way. It had a right to temporarily adjust its course upon the basis of the oral statement of Dean and to assume as the necessary effect of Dean’s representations that it was the intention of Cluett, Peabody & Co., Inc., to contract and the duty of Dean to do what he inadvertently failed to do that day, i. e.} to deliver or mail the letter of acceptance and thus perfect a contract. It was the plaintiff’s duty, however, to so rely only for such reasonable period as would be necessary to accomplish such intentions upon the return of Dean to his office. The plaintiff had no right to permit a year to elapse without protecting its rights and then to sue for damages upon the basis of loss of profits from failure to carry out for another year an unenforcible contract.
The plaintiff had a cause of action apparently but it has mistaken its remedy. It has adopted a wrong theory of damage. The damage which naturally flowed from the fraud was not loss of *320profits for failure of this contract but loss of profits, if any, which flowed from the refusal of other contracts, relying upon the fraud of the defendant, if such refusals and loss could be said to have proximately resulted from the fraud and not from the plaintiff’s own failure to protect itself after the discovery of the fraud or after it ought to have discovered it.
Mr. Justice Kellogg concludes that the plaintiff “ could justly have believed that Cluett, Peabody & Co., Inc., had determined to accept its offer and, at the moment of the representation, intended, to contract with the plaintiff. No representation which induced the plaintiff so to believe was other than a representation of expectations. It was in no sense a representation as to a material existing fact.” By “ expectations ” I presume Mr. Justice Kellogg means something intended to take place in the future and, therefore, that something was not an existing fact. I think that he has missed a point in his analysis. The important thing was that it was a misrepresentation of a present intention, a thought embraced in the statement of Mr. Justice Kellogg’s conclusion but which he does not apply. What else could the defendant have conveyed in his representations than that his company intended to contract with the plaintiff? That it had expressed its intention to do so in writing was vouched for by the agent. He says, in effect, that nothing further was needed than to correct his inadvertence; that there had been a meeting of the minds of the parties; that legal perfection of the contract was due only to his neglect of duty. That he was charged with the duty to carry out instructions to mail or deliver and that he would do so in obedience to his instructions was inherent in the representations made.
If the representation of Dean as to the existence of the letter and his inadvertent failure to bring it with him for delivery can be interpreted as expressive of an intention to contract, which I think is the necessary implication and to which Mr. Justice Kellogg seems to agree, it was a false and fraudulent representation, made with intent to deceive' the plaintiff, who relied upon it and was a fraudulent misrepresentation of a material existing fact of which the court will lay hold for the purpose of doing justice. (Adams v. Gillig, 199 N. Y. 314; Ritzwoller v. Lurie, 225 id. 464.)
Within the principles laid down in those cases, the intention to contract was an affirmation of something which was to occur when the party making the affirmation knew perfectly well that no such thing was to occur. A fact, according to Webster, is “ a thing done; * * * an actual happening in time or space; any event, mental or physical.” A misrepresentation of one’s intention at the time *321is a misrepresentation of an existing fact. As Lord Bowen once said: “ The state of a man’s mind is as much a fact as the state of his digestion.”
The- plaintiff alleges that, relying upon the statements made by the defendant, it refused other contracts which had been offered to it. The plaintiff had a right to rely upon this representation for a reasonable period thereafter as a guide to its action during such period, which should be measured by such a time at least as would have permitted the plaintiff to have received such letter in due course of the mails upon the return of the defendant to his office. Whatever action the plaintiff may have taken based upon such misrepresentation during such period resulting in its damage entitled it to recover the same upon the basis of fraud. The complaint indicates the possibility of such special damage flowing directly from this fraud by alleging generally that the plaintiff refused other contracts by reason of the false and fraudulent representations of the defendant. The date or dates of such refusals is not stated in the complaint and no particulars are alleged from which it can be determined what, if any, damage was suffered by reason of such refusals. If the plaintiff did refuse such contracts during the period reasonably required for the receipt of the letter of acceptance from Cluett, Peabody & Co., Inc., and if there were sufficient allegations of special damage directly flowing from this fraud, there might be a recovery. The complaint, however, is too meagre in its statement of facts in regard to any such theory of liability and the theory of damage expressed in the complaint is for loss of profits due to the failure of Cluett, Peabody & Co., Inc., to complete the alleged contract. Damages such as are the natural but not the necessary result of fraud are special and must be alleged. (Vanderslice v. Newton, 4 N. Y. 130.)
Since the complaint does not state a cause of action based upon loss of profits under a supposed contract with Cluett, Peabody & Co., Inc., due to the fraud of the defendant or a cause of action based upon loss of profits with any other concern by reason of the fraud, I agree with Mr. Justice Kellogg that the complaint should have been dismissed for failure to state facts sufficient to constitute a cause of action.