Court Opinion

ID: 8772587
Source: CourtListenerOpinion
Date Created: 2022-11-26 12:49:55.556538+00
Date Added: 2024-06-11T17:02:19.347179
License: Public Domain

ALDRICH, District Judge
(concurring in the result, but disagreeing with the ground of decision). I am far from agreeing with the idea that there can be no recovery by a party who has an overdue claim, and intends to demand immediate payment of a solvent debtor, and who is directly influenced from making his demand and enforcing payment by the willfully false representations of another creditor, who intends that the false representations shall be acted upon, and who, by means thereof, reaps the benefit of his fraud by collecting his own claim in full, thereby rendering the debtor insolvent and thus causing the party whom he has misled to suffer substantial pecuniary loss; and I do not think the right of recovery depends at all in such a case upon whether the injured creditor had proceeded so far as to take out a writ.
The learned judge submitted the case to the jury with distinct and emphatic instructions that the plaintiff’ could not recover unless the representations and the story which the defendant told were willfully false, “that it is a lie, that the defendant lied.” There were also explicit instructions that the plaintiff must have intended to demand immediate payment when the debtor was solvent, and that he must have refrained from doing so by reason of the false representations of the defendant, and but for such representations that the plaintiff would have obtained payment in full.
Aside from the foregoing explicit instructions, the theory on which the case was submitted and the general principles governing were stated as follows:
“For the plaintiff to recover, he'must satisfy you first that the representations wh'ich he alleges, the story which he says defendant told, is false, not merely that it is untrue in the sense that it is not accurate, that it does not correspond to the facts, but that it is willfully false, that it is a lie, that the defendant lied. That is the first thing the plaintiff must establish.
“The second point is that the lie is concerned with matter of fact. It must not be merely a breach of a promise or something pf that sort. It must be a *17false statement regarding a fact. And what a fact is in the eye of the law I shall discuss with yon later.
“In the third place, the statement must be made by the defendant with the intention that the plaintiff shad act upon it; that is, a mere passing remark, not made with any intention that the plaintiff shall act upon it, is not such a false representation that the plaintiff can recover.
“And the fourth requisite to the plaintiff's case, the fourth thing that, the plaintiff must prove, is that he did act upon it, that lie did act upon this lie, to his own pecuniary hurt.
“Those are the four limiters concerning which the plaintiff must satisfy you here. First, that the statement was a lie. It must be false. If it should happen to be true, the plaintiff cannot recover. It must be not only untrue in the sense that it does not correspond with the facts, but that it is willfully untrue, willfully false, false to the defendant's knowledge. That is the first. The second is that it must be a representation of fact. The third is that it must he a representation made with the intention that the plaintiff shall act upon it. And The fourth is that the plaintiff must have acted upon it to his own pecuniary hurt.”
In short, as disclosed by the record and as established by the verdict of the jury upon the issues of fact submitted, the defendant, representing another creditor of the Coal Company, through false representations, stood the plaintiff off from collecting its claim, and by means thereof collected in full the claim of the Trust Company, which he represented, and of which he was president. Holding that there can be no recovery in such a situation where damages are susceptible of legal proof would be setting a premium on one’s wrongdoing for one’s own benefit.
I do not conceive that Bradley v. Fuller, 118 Mass. 239, at all applies to a situation like this, because in Bradley v. Fuller it was not the party who made the false representations that reaped the benefit of the fraud. That was simply a case where the treasurer of a debtor corporation (not a representative of another creditor like Graham) by false representations induced a creditor not to sue, and thereafter another creditor, one not tainted with fraud at all, stepped in and attached the property of the corporation, and that case therefore presents an entirely different question. If in Bradley v. Fuller the attaching creditor who collected his claim had secured the pecuniary advantage and benefit through fraud which lulled the first creditor into nonaction, and if legal remedy had been sought against him, it would be like the case at bar. Again, this case is not like Bradley v. Fuller and Adler v. Fenton, but in some respects more like Lincoln v. Claflin, because the action here is not against the debtor or the representative oí a debtor, and because the question here is not whether the plaintiff, as a ground of action, had acquired a lien upon or an interest in the property of the_ debtor, but, quite independent of such considerations, whether the plaintiff, who was a creditor, has a right of action against the representative of another creditor, grounded upon fraud and deceit, successfully practiced under circumstances of trust and reliance.
But aside from the fundamental question of the right of recovery by an injured party upon the ground of fraud against another who has for himself, or for the interests which he represents, intentionally reaped a harvest by means thereof under circumstances where the question of damages would be susceptible of solution with legal certainty, I think the record presents a serious question whether the *18plaintiff in this case is entitled to recover. This question results because, under peculiar and exceptional circumstances, his alleged damages are so far in the field of contingency as to present a situation of legal uncertainty in that respect. There were many inherent contingencies. If Peale, Peacock & Kerr had pressed payment, they might have secured their entire indebtedness, and they might not. If not, they might have secured a writ and made an attachment, and they might not. And in case of an attachment the Coal Company might have been thrown into bankruptcy, thus involving the contingencies and uncertainties of such a proceeding-, and a result based upon unforeseen and unexpected depreciations. Or if they had been voluntarily paid without attachment, under possible bankruptcy proceedings and a possible showing of belief of insolvency, the money might have been recovered back by, a trustee in bankruptcy upon the ground that the payment amounted to a voidable preference.
The question of legal uncertainty in respect to damages was raised by the requests and assignment of errors (20 to 25, inclusive), and the court was, in effect, asked to direct a verdict for the defendant on the ground that the plaintiff had proved no legal damages. It is true the court, in effect, told the jury that the damages must be made certain, that the jury must find that the Coal Company was solvent, and that the plaintiff would, in fact, have collected its entire claim; but, after all, the question still remains fairly enough, under the requests, whether the proofs were of such a character of legal certainty as to entitle the plaintiff to have that question submitted to the jury. Apparently the whole case in respect to damages was in the field of conjecture, and apparently all theories about damages are necessarily speculative and uncertain, thus presenting, I fear, one of those unfortunate situations where it is impossible for an injured party to show in a legal sense the extent of his injury, or even to show with legal certainty that he was injured at all. Lamb v. Stone, 11 Pick. (Mass.) 527, 534; Adler v. Fenton, 24 How. 407, 412, 16 L. Ed. 696.
6I cannot agree to the ground of decision disclosed in the majority opinion, but, as my impression is that the plaintiff is not in a position to make his damages legally certain, I agree with the result reached.