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Dissenting Opinion

United States Supreme Court

58 U.S. 183

Iasigi  v.  Brown

Mr. Justice CAMPBELL, dissenting.

The importance of this cause renders it proper that the reasons for a dissent from the judgment should be placed on the record. The charge of the plaintiffs is, that in anticipation of large sales of merchandise to two manufacturing corporations of Connecticut, on a credit, and distrustful of their condition to govern and direct their conduct, they sought of the defendant, through his agent, an opinion and information of them and their indorser, Orrin Thompson, as to the risk they would encounter. That the defendant was intimate with their affairs, and knew they were untrustworthy; but well knowing the motives of the plaintiffs inquiry, they wrote to their agent a letter, for exhibition, containing false and fraudulent statements and representations, calculated and designed to increase the credit of the corporations and Thompson, and to induce the plaintiffs and others, who, like them, should see the letter, to sell their property to them. These averments, describing the circumstances under which the information was obtained, and the knowledge of the defendant of the aims of the plaintiffs, are, in my opinion, material, and should be substantially proved.

In Pasley v. Freeman, 3 T. R. 51, Justice Ashurst, replying to the argument that, should the principle of that suit be supported, actions might be brought against any one for telling a lie by the crediting of which another sustains damage, said 'No; for, in order to make it actionable, it must be accompanied with the circumstances averred in the count, namely, that the defendant, intending to deceive and defraud the plaintiff, did deceitfully encourage and persuade them to do the act and for the purpose made the false affirmation, in consequence of which they did the act.' And Lord Kenyon said two grounds of the action concur: 'The plaintiffs applied to the defendant, telling him that they were going to deal with Falch, and desiring to be informed of his credit, when the defendant fraudulently, and knowing it to be otherwise, and with a design to deceive the plaintiffs, made the false affirmation which is stated on the record, by which they sustained a considerable damage.'

The case of Pilmore v. Hood, 5 Bing. N. C. 97, was that of a defendant about to sell a public house to one who had agreed to purchase. He fraudulently misrepresented to him its receipts. The bargain having failed, the sale was made to another, who had heard these representations and acted upon them with the knowledge of the defendant. Lord Chief Justice Tyndal said that notice to the defendant was 'an important ingredient in the case,' and adapting the terms of Langridge v. Levy, 2 M. and W. 532, he says: 'We do not decide whether the action would have been maintainable if the plaintiff had not known of and acted upon the false representation. Nor whether the defendant would have been responsible to a person not within the defendants' contemplation at the time of the sale, to whom the gun might have been sold or handed over. We decide that he is responsible in this case for the consequences of his fraud, whilst the instrument was in the possession of a person to whom his representation was either directly or indirectly communicated, and for whose use he knew it was purchased.'

In Gerhard v. Bates, 2 Ell. and Black. 476, the misrepresentation was contained in the prospectus of a bubble company, of which the defendant was a director. Lord Campbell said, 'that had the plaintiff only averred that afterwards, having seen the prospectus, the plaintiff was induced to purchase the shares, objection might have been made that a connection did not sufficiently appear between the act of the defendant, and the act of the plaintiff, from which the loss arose; but the second count goes on expressly to charge the defendant, that by means of the said false, fraudulent, and deceitful pretences and representations, he wrongfully and fraudulently induced the plaintiff to become the purchaser and bearer, and plaintiff did then and by reason thereof actually become the purchaser and holder of the shares, and alleges the loss sustained to have been the direct consequence of the defendant's act. Thus the wrong and the loss are clearly concatenated as cause and effect.'

The allegations, therefore, being essential to the action, the question is, was there any evidence to go to the jury for their support?

I leave out of consideration, for the present, the statute law of Massachusetts. The charge of the declaration is that the letter was written for exhibition to the plaintiffs and among dealers like the plaintiffs, and to deceive those who should see it. The proof of the plaintiffs is that until after the failure of the corporations, only two persons were permitted to see it, or heard of its contents from Mr. Curtis. One of these was Skinner. The proof in regard to the exhibition to him is: 'Iasigi asked me (Curtis) to let him take the letter to his friend Skinner, with whom he always advised. I (Curtis) again said the letter was confidential, and that I could not suffer it to go from my office. He then said, will you let Skinner see it here, repeating that he always advised with Skinner on matters of importance, and that he wanted him to see it. Upon this solicitation I consented, and Skinner came with Iasigi, and read the letter.'

There is no evidence that Skinner ever had a transaction with the corporations of Connecticut, or conducted a business which could bring them into any contact or connection. And surely this evidence can afford no support to the averment of a purpose to defraud or injure him or others through him.

The charge in the declaration, by this evidence, loses its generality, and is reduced to the imputation of a mischievous and fraudulent design upon the plaintiffs alone. The only use, 'the discreet use,' of the opinion contained in the defendant's letter, consisted in communicating its contents to Iasigi himself, and to his confidential friend, at his solicitation, and that he might advise intelligently with him. It then becomes necessary to inquire of the circumstances under which that communication was made to him. It was not told to the defendant that the plaintiffs had asked for information of Mr. Curtis, nor that his letter was written at his request, nor was he advised until several months afterwards that any use had been made of the letter. I do not think it necessary to consider how much the power of the agent was limited by the mark 'confidential,' on the face of the letter, but I will suppose that it was nothing more than a repetition of the caution that it should be 'discreetly used' by Mr. Curtis, and that the defendant is liable for the use he made.

The evidence on the record comes from the plaintiffs; and in reference to the circumstances of the exhibition, from a single witness. The agent of the defendant was the near neighbor and friend of the plaintiffs, but had never had any intercourse of business with them, either for himself or for his principal.

Such being their relations, Iasigi, on the 5th April, came to him as a friend and neighbor, and stated, that 'he had a large amount of notes of certain factories in Connecticut, indorsed by Orrin Thompson; that there had been a failure recently, in New York, (Austen and Spicer,) by which he thought the factories, or Orrin Thompson, or all of them, would lose money; and that he felt anxious as to the fate of the paper he held. He did not state the amount he held exactly, but Curtis was led to believe it was about $40,000. He proceeded to say that Mr. James Brown was a friend of Orrin Thompson, and that he, Iasigi, had himself heavy dealings with him, and that he wished him (Curtis) to write to Mr. James Brown, and ask him about the standing of Thompson and his property. Curtis accordingly wrote, but did not state that he wrote at Iasigi's request.' Upon this statement the particular form of the inquiry is open to, and will be the subject of remark hereafter. The question to Mr. Brown is: 'What is your opinion as to any possibility of loss to the Thompsonville Company or Orrin Thompson? The witness proceeds: 'I was led to ask the information and to communicate the result to him in consequence of the friendly relations that had long existed between us, and further, because I thought it would tend to relieve Mr. Iasigi's mind, and not with a view to future sales.' He says further: 'at these interviews about my letter, and Brown's reply, there was nothing said about any anticipated or prospective operations by Iasigi. Mr. Iasigi said the credits were due to him.' The witness 'never knew that he had sold his notes,' but was asked if he would guarantee them.

This statement of the circumstances of the exhibition of the letter to Iasigi contains the whole case. No other letter of the defendant was seen by him, no other communication was made to him, nor was this letter after this produced to any other person before the failure of the corporations. Now the proof of the plaintiffs is, that they held but a single note, of less than $800, running on time, at this date; the others had been sold in the winter previously, in the New York market, without indorsement or guarantee. They had a book debt then due, upon which a large payment was made within ten days after, all of which has been collected, and about which no solicitude was expressed. It likewise appears that Iasigi did contemplate further operations, for in January Thompson had taken samples of wool to arrive, and which did arrive, and was sold about six weeks from this interview.

Before closing this statement of the evidence, it is proper to note the impression that the defendant's letter made upon those who read it, as an accrediting document.

Curtis reading it with the object of deciding whether the corporations and Thompson would meet their negotiable notes for two or three months, was willing to guarantee the debt for the usual commission; but when told that credits on sales were given afterwards, he 'expressed his surprise that Iasigi should have sold after reading that letter.' Skinner, who probably knew the secret purpose of Iasigi, and interpreted the letter accordingly, was not 'favorably impressed.' Iasigi, in reply to the expression of surprise by Curtis, quoted above, asked to see the letter again, and after reading it said: 'If you did not say that this was the same letter I read in your office, I should say that I had never seen this letter before;' and the Browns, when interrogated upon it after the failure of these parties, said, that the letter was a guarded one and did not warrant credits on sales to them. Having collected the facts important to the issue, the question arises, do they constitute a case to go to the jury upon this declaration? The evidence is that the plaintiffs anticipating consignments of wool, and sales to these Connecticut corporations, and desiring the defendant's information and opinion of them, through Iasigi, approached his neighbor and friend, Mr. Curtis, the confidential agent of the defendant, to engage him to procure this opinion and information from his principal in New York. He approaches Curtis with a statement of anxieties for debts, existing in the form of negotiable notes running on time.

These statements were certainly not accurate, and are, apparently, insincere; and it will be noticed that the motive alleged in the declaration, as prompting the plaintiffs, was not revealed, and if it existed, was disguised under the apprehensions that were then expressed. The evidence shows the plaintiffs did not have notes of the amount spoken of, and that the book debt was then due. There is a discordance between this evidence and the inquiry proposed in the letter of Curtis. That inquiry discloses no apprehensions of loss upon existing debts, but refers to perils to arise on future transactions. If Iasigi suggested the form of the inquiry with a view to obtain information to guide his conduct, as the declaration avers, and concealed his aim, and by affecting an alarm he did not feel, covered that aim from Curtis, it has the appearance of circumvention. Curtis says he wrote his letter in consequence of his friendship for the plaintiffs, to calm their fears, and without an intimation of prospective operations. Curtis gave a pledge that he would use the letter of the defendant discreetly. Before the letter was placed in the hands of the plaintiffs, they were informed it was 'confidential,' and Iasigi read that upon the letter itself. Iasigi again confirms the impression of Curtis, that apprehensions of loss upon his notes were still moving him, by addressing queries as to the probabilities of his getting his money, and importunes Curtis to exhibit the letter to his friend, that he might profit from his counsel. The declaration avers that this letter, exhibited under such circumstances, was written for exhibition to inquiring dealers, to encourage and persuade them to give credit to these corporations, and was shown to the plaintiffs with that design. That when it was written and exhibited, the anticipated transactions from which loss has followed, were known to the defendant, and the object of the exhibition was to induce the plaintiffs to make them.

I find no support for these averments, but a direct and palpable contradiction of them. This conclusion upon the evidence renders a discussion of the statute of Massachusetts, (Rev. Stat. ch. 74, § 3,) requiring that representations of the character, ability, and conduct of another person should be in writing to support an action, unnecessary. But the discussions upon a similar statute fortify the conclusions contained in this opinion. 'The true construction of the statute,' says Lord Abinger, 'is, that the representation or assurance should concern or relate to the ability of the other person effectually to perform and satisfy the engagement, of a pecuniary nature, into which he has proposed to enter, and upon the faith of which he is to obtain money, credit, or goods.' 1 M. and W. 101, 123. 'He who has money to lend or goods to sell on credit, and doubts the ability of the borrower, or buyer,' says Baron Gurney, 'may exact his own terms; he may insist on having a representation or assurance in writing, of the ability, from a third person; and if that be refused, he may keep his money and goods. If he thinks fit to trust without that, he has no right to resort to the responsibility of the person of whom he inquires.' S.C.. 107. Baron Alderson says: 'If we refer to the cases which had occurred before the legislative provision, I think it will be found that the decision in the class of cases commencing with Pasley v. Freeman, had raised a well-founded complaint in the profession of having virtually repealed the statute of frauds, by which a guarantee was required to be in writing, and that the object Lord Tenterden had in view, was to place both on the same footing, and to provide that a written document should be equally required in both. The two cases are, I think, identical in principle. He adds, 'that fraud, in substance, amounts to an implied guarantee of the plaintiff's solvency.'

Had Curtis given a guarantee to the plaintiffs of their debt, either for or without a commission, and accompanied the act with statements of the pecuniary condition of the debtors, and expressions of confidence in his solvency wholly unwarranted, it is clear that it would have imposed no responsibility for sales not then spoken of or alluded to, which were not made for several weeks afterwards, which were not contemplated by one of the parties, and if by the other, were concealed in all the intercourse that then took place. The statute was designed to reduce the liabilities, for the representations it describes, to some definite and appreciable limit; that the representations should be evinced in a written document, and that those who were to derive a benefit from it, as a security, should be ascertained from its contents; and that the liability on the document should not be extended beyond the engagements to which it had reference.

The questions embraced in this case, are exhibited in a short conversation detailed in the evidence of the plaintiffs. Curtis says: 'After the failure of the corporations, in September, I had an interview with Mr. Iasigi. I met him in the street; he accosted me in a state of excitement; he said: 'Mr. Curtis, Thompson has failed, and the Thompsonville Company has failed.' I said: 'I am sorry, but you have got your money.' He said: 'Yes, I have got the money that was owing to me, but I have trusted them again.' I expressed surprise that he should have trusted them again.'

It was not with a declared purpose of trusting them again that Iasigi sought information of Curtis; nor was the confidential letter of Mr. Brown to his agent read, with the avowal that future operations were to be affected by the impression it made; nor was the questionable act of its exhibition superinduced by any suggestions of the existence of pending negotiations.

The objects disclosed by Iasigi were wholly incompatible with, and exclusive of, the notion of any legal responsibility for the accuracy or sufficiency of the letter, or even for a wilful misrepresentation.

He did not ask for information, proposing action, even in regard to the notes of which he spoke, nor did any alteration of his debt take place in consequence. He simply inquired of Curtis, that anxieties might be relieved and his apprehensions quieted.

The liabilities incurred in cases like that described in the declaration, are for a fraud productive of damage; of damage directly consequential and in the contemplation of the parties, as a result of the act done, and not for consequences remote, contingent, and arising from acts unconnected with the objects disclosed or comprehended by them.

This work is in the public domain in the United States because it is a work of the United States federal government (see 17 U.S.C. 105).