Iasigi v. Brown/Opinion of the Court
2. The letter referred to that of Curtis of 26th June, who said: 'I replied, that I believed you thought favorably of the concern,' (p. 7,) showing nothing as to having exhibited the previous letter to any one.
VII. The conversations in October and January following, cannot be used in the interpretation of the letter of 7th April.
1. The conversation of January, spoken of by Mr. Grant, (p. 13,) was in relation to his own sales, which he says were made on the faith of the letters (meaning both); whereas he states: 'I never saw the letter till after the failure, but got its contents from Mr. Iasigi.' P. 13.
Mr. Iasigi's statement of the contents cannot be the basis of any inferences within the statute. Nor does any thing appear to have been said in this conversation as to any right in Mr. Curtis to exhibit the first letter.
2. The conversation of October 15 is wholly inadmissible, under the statute of frauds of Massachusetts. It consists of very loose oral evidence, not distinguishing what was said by the two Messrs. Brown; it was given, in order to render a letter, which was in its terms confidential, in effect public, with the widest and most indefinite responsibility. This would defeat the statute in the most palpable manner.
3. Again: It seeks to involve the defendant in a responsibility for the first letter, because he or his partner declared that it was a 'guarded' letter. This is not only giving oral evidence to vary the writing, but adds to it the remoteness of an insufficient inference from the oral evidence.
4. Again: Its being a guarded letter, had reference to its effect on Mr. Curtis himself, and by no necessity implied guarded as to others, who, by its being confidential, were not expected to see it.
5. Again: It is attempted to argue, from the silence by Messrs. Brown, in reference to the exhibition of the letter by Mr. Curtis, that he had originally intended it. But this is giving in evidence mere silence, in order to extend the effect of a statutory document.
6. But lastly: The purpose and object of this conversation was to press a supposed moral right in these gentlemen, Iasigi, Grant, and Kendall, to share in an attachment made by Messrs. Brown, and not at all to discuss their liability at law on the letters in question.
VIII. The offers of proof, tending to show the facts stated in the letter of April 7 false and suppressive, were wholly insufficient and inadmissible.
1. Supposing such evidence given, it would have been no warrant to impute an intent, that the letter should be shown, much less would it tend to enlarge or contradict its language.
2. The evidence seeks to contradict the effect of a writing by oral evidence, that it would have effected frauds if its terms were disregarded.
3. The evidence offered seeks to reverse the policy of the statute. This policy was to shield all men from charges of fraud, without a writing to be falsified. The offers attempt first to try the man for fraud, and thence to imply a sufficient representation.
Last. It was the duty of the judge to have directed the jury to bring in a verdict for the defendants. Parks v. Ross, 11 How. 372.
Mr. Justice McLEAN delivered the opinion of the court.
This case is brought before us by a writ of error to the circuit court of the United States for the district of Massachusetts.
The plaintiffs are merchants in Boston, and deal largely in wool, and, prior to the 4th of April, 1851, sold, occasionally, to two corporations in the State of Connecticut, called the Thompsonville Company and the Tariffville Company, and received therefor their notes, indorsed by Orrin Thompson. And, with the view of making further sales to them, having become doubtful of their pecuniary means and ability to make payment in future, the plaintiffs applied to Thomas B. Curtis, of Boston, the agent of defendant, to ascertain his opinion as to any possibility of loss, by selling largely on credit to said corporations or to Thompson; the plaintiffs knowing that the defendant was friendly to the companies, and intimately acquainted with their pecuniary condition.
A letter was written to defendant, by his agent, Curtis; and an answer was received, as alleged in the declaration of the plaintiffs, which induced them to give large credits to the two companies and Orrin Thompson, when, at the time, they were insolvent, which fact was known to the defendant.
The points in the case are stated in the bill of exceptions, and arise on the construction of the above letter and one of a subsequent date, and on facts proved and offered to be proved, which conduced to show, as plaintiffs insist, the fraudulent intent with which the letters were written.
The first letter, from Curtis to Brown, bears date the 5th of April, 1851, and reads as follows: 'Dear Sir-I have your note of yesterday, but have scarcely had a moment to peruse it this morning. My object, at the moment, is to ask your opinion as to any possibility of loss, by selling largely to the Thompsonville Company or Orrin Thompson. Whatever that opinion may be, it will be discreetly used by myself.'
The reply to this letter is marked 'confidential,' and dated 'New York, 7th April, 1851. T. B. Curtis, Esquire. Dear Sir: With respect to Thompson and Co. and Orrin Thompson, I have to say, that our house done business with them for some twenty years or more; they have always met their engagements promptly, and we feel are men of strict integrity. They have unquestionably laid out too much money in the Tariffville Manufacturing Company and the Thompsonville Carpet Manufacturing Company, and my house has been for years in the habit of loaning them either paper or money to a considerable extent on security. On the failure of Austen and Spicer, they were unfortunately on their paper (received for sales of carpets) for $183,000; this threw, suddenly, so heavy a burden on Thompson and Co., that Messrs. Hicks and Co. and ourselves looked into their affairs, and feeling that they had an abundance to pay every one and have a handsome sum left, if they continued their business, we jointly advanced the money to pay their indorsements as they came round, for which advances we have security. In order, however, to relieve them from the necessity of borrowing, and needing more cash capital to carry on the business comfortably, both the companies alluded to owing Messrs. Thompson and Co. each about $375,000, making, together, $750,000, executed a mortgage to John H. Hicks, W. S. Wetmore, and James Brown, for $750,000, to secure the payment of those bonds, which are payable in six, eight, and ten years. A gentleman goes out to Europe this month to negotiate these bonds, which he feels confident of doing on favorable terms. The negotiation of these bonds, and the securities held, would pay off all the advances made by ourselves, Messrs. Hicks and Co., and of W. S. Wetmore, who also made them some advances. From Thompson's statement of the business of the factory, they are doing a good, nay, a very profitable business, and I feel that in making sales to them now, no more than the ordinary business risk would be run.
'If the bonds are negotiated, which is confidently expected, they would be enabled to conduct their business with more facility and comfort than they have ever yet done, and as I will recommend brother William to take from sixty to one hundred thousand dollars for himself and for me, whatever they are negotiated at, the confidence shown will probably help the negotiation. Messrs. Hicks will also take some of them. Since the failure, Thompson and Co. have laid their hands on Austen and Spicer's property, to the extent of fifty thousand dollars, reducing the risk to one hundred and twenty-three thousand; and out of this they will get a dividend. As Mr. Orrin Thompson considers himself fully worth four hundred thousand dollars, any loss that can now occur by Austen and Spicer does not hurt him much. All they want is the negotiation of the bonds, to make them move on with perfect comfort. (Signed) JAMES BROWN.'
The next letter from Curtis to Brown is dated 'Boston, 26th June, 1851. A friend of ours desires me to inform him how far it would be satisfactory to me (you) to have him sell to the Thompsonville Company. I replied that I believed you thought favorably of the concern. Now I wish to know what your present feelings are in respect to that concern; there being several among my friends here who have heretofore sold them wool, and wish to continue to do so.'
The answer to this letter was: 'Dear Sir-We are in receipt of yours 26th instant; contents noted. We continue to have a favorable opinion of the concern you allude to. (Signed) BROWN, BROTHERS, AND CO.'
Mr. Curtis being called as a witness, said he was agent for Brown, Brothers, and Co., who carried on, in the city of New York, an extensive banking business. He wrote his first letter at the request of Iasigi, and never showed the reply except to him and his friend, Mr. Skinner, until after the failure of the Thompsons. When he wrote to Brown, he did not let him know that the information requested was for any other person than himself. On the day his first letter was written, Iasigi said to him that he held a large amount of notes of certain factories in Connecticut, indorsed by Orrin Thompson, of New York; that by the recent failure of Austen and Spicer they had lost money, and he was solicitous about the paper he held. Witness supposed it amounted to about the sum of $40,000. He said Brown was the friend of Thompson, and witness was requested to ascertain his standing by writing to Brown.
As the answer was marked confidential, the witness, when Iasigi first read the letter, declined handing it to him to show to his partner, but on his calling, it was shown to him also. Witness expressed a favorable opinion as to Iasigi's getting his money. Mr. Brown never authorized the witness to show his letter to any one. After the failure of Thompson, Iasigi stated he had collected his debt, but that he again trusted them. The witness remarked, that on that letter you should not have trusted them. He asked to see the letter, and on reading it he said, if you had not stated this to be the same letter, I should not have believed it.
The witness stated, some of our clients prior to this had been in the habit of selling wool to Thompson and Co. There were five or six firms, importers of wool, who had credits with me. It was highly important to me and my principals that I should know the standing of this great concern, because large amounts of credits were being invested in wool, by houses which might or might not be jeoparded by selling to that concern; I mean invested by correspondents of Brown, Brothers, and Co., who had credits for them.
Mr. Grant, a witness, stated that he, Iasigi, and several others who had sold wool to the two companies and Thompson, had an interview with the defendant at his office in the city of New York, where a conversation respecting the letters was had, principally between Iasigi and Brown, who replied that the letter of the 7th of April was a guarded one, and as to the second letter, it was only a statement that 'we continue to have a favorable opinion of the concern.' He proceeded to say that the connection of Brown, Brothers, and Co. with Mr. Thompson had been of long date; that they had a great number of transactions together, and that at the time the April letter was written, they intended to carry Mr. Thompson through; but that Thompson had deceived them. He repeated several times that this was a guarded letter, and as it was written in entire good faith, and as they had lost much more than we had subsequently to the writing of the letter, they did not see how there could be any responsibility resting on them.
As the company was about separating, Mr. Stewart Brown observed: 'If you had called on us, gentlemen, and conversed with us, instead of writing, you would not have sold this wool. That the letter was a guarded one, was several times repeated. That they had great confidence in Thompson; that at the time the letter was written they had lost their confidence, but still meant to carry him through in good faith; but being unable to do so, and having lost their confidence, the letter was guarded.' On being asked by witness, if, at the time the first letter was written, he had all the property of Orrin Thompson conveyed to him, he replied: 'No, sir, not all his property, but his real estate.' There was no objection at this time by any one, that the letter was confidential. The Browns refused to acknowledge any responsibility.
After this evidence had been given, the plaintiffs offered evidence, not objected to or excluded, except as hereinafter stated, tending to prove that certain statements in the letter of April 7, 1851, material to show the property and credit of the two companies, and of Orrin Thompson, and the safety and expediency of selling them goods on credit, and material to influence and determine the judgment of one who should read the letter, in regard to the safety and expediency of so selling goods on credit, were false at the time the letter was written, and were then known to the defendant to be false. And that the defendant, prior to the 7th of April, alone and jointly with one Hicks, had taken conveyances, in mortgage or absolutely, of all Orrin Thompson's property, real and personal, with some small exceptions, to the amount of one hundred and eighty-eight thousand dollars, as security for the debt and liabilities of the house of Thompson and Co. to defendant's house and said Hicks, amounting to over five hundred and nine thousand dollars. And also offered evidence to prove that defendant had an interest of a pecuniary kind to sustain the credit of said Thompsonville Company, said Tariffville Manufacturing Company, and Orrin Thompson, and to induce extensive sales of goods on credit to them.
And other evidence was offered conducing to show that the letter was written with a fraudulent intent, and that it was intended for other persons than Curtis. And the plaintiffs proved that they made the sales stated in the declaration, relying on and trusting to the statements in said letter.
But the evidence, as above offered, was rejected as immaterial and as insufficient, when taken in connection with the other evidence above set forth, to authorize the jury to find a verdict for the plaintiffs.
And the court thereupon ruled and held, that the plaintiffs had not maintained their action, and directed a verdict for the defendant. And a verdict was accordingly so rendered. To which rulings and direction the counsel for the plaintiffs excepted.
The 3d section of the act of Massachusetts, to prevent frauds and perjuries in contracts and actions founded thereon, published in the Revised Statutes of 1836, provides that 'No action shall be brought to charge any person, upon or by reason of any representation or assurance, made concerning the character, conduct, credit, trade, or dealings of any other person, unless such representation or assurance be made in writing, and signed by the party to be charged thereby, or by some person thereunto by him lawfully authorized.'
As the letter was written in New York, a doubt has been suggested whether this statute can apply to the case. The letter was intended to operate in Massachusetts, and consequently the law of that State applies to it. But it is not perceived that the statute can have any other effect than to require the representation, on which the defendant is charged, to be in writing.
No one controverts the power and duty of the court to construe all written agreements or papers which are given in evidence. This is not the question involved in this case. No individual can be held responsible for a statement of facts, however injurious they may be to an individual or company. But when there is a misstatement of facts in regard to the pecuniary ability of an individual or company, and, especially, if this be done through interested motives or a fraudulent intent, by reason of which a credit is given and the debt is lost, the facts which conduce to establish the liability must, as in this case, be outside of the writing. And if these facts may not be established by parol evidence, there can be no remedy in such cases, however gross the fraud or ruinous the consequences may be.
It is contended that the letter of the 7th of April, being marked confidential, could have been intended only for Curtis, the agent, and that he was not authorized to show it to the plaintiffs. In his testimony Mr. Curtis says, Brown never authorized him to show the letter. There may have been no express authority to show the letter, but the intention of the writer, in this respect, can be best ascertained by reference to the facts and circumstances under which it was written.
In his letter of April the 5th, Mr. Curtis requested to know 'the opinion of the defendant as to any possibility of loss by selling largely to the Thompsonville Company or Orrin Thompson; and he remarks, whatever that opinion may be, it will be discreetly used by myself.'
Mr. Curtis states, when under examination as a witness, that he was then, and had been for several years, acting as the agent of the Browns, and that was his principal business. He said that he was not, at any time, a seller of wool to the factories of Orrin Thompson. This employment of the agent must have been known to his principal, and it appears in the proof that when the plaintiffs and others had an interview with the defendant, in New York, he spoke of the letter being guarded, but made no objection that it had been written to his agent in confidence, and ought not to have been shown to the plaintiffs.
In view of these and other facts, it might have been submitted to the jury whether the defendant, in marking his letter 'confidential,' intended it for the eye of his agent only. The terms of the letter, independently of the above facts, would scarcely authorize such an inference. The 'opinion will be discreetly used by myself.' This was notice to Brown that the opinion was to be used, and how could it be used by the agent, who made no sales of wool to Thompson on his own account, without imparting the opinion to others; but 'the opinion will be discreetly used by myself.' It shall not be made known by any other person than myself, and you may rely on my discretion. In view of the facts, the jury should consider whether the word 'confidential' might be construed to mean, in confidence that you will use my opinion discreetly by yourself, as you propose, or whether it restricted the letter to the agent only.
This seems to have been the construction given to the letter by the agent. He suffered Iasigi to read it, but refused to give it into his hands to show to Skinner. Had the writer intended that no one should read the letter but Curtis, he would probably have said so. Such a restriction was not necessarily imposed by the terms of the letter, in view of the facts proved. Its detailed statement of facts in regard to the embarrassments of the two concerns and of Orrin Thompson, and how they had been relieved by himself and others, and enabled to do a good, nay 'a profitable business,' &c., would be a matter, in connection with other facts, for the jury to consider, and to determine whether the letter could have been written for the eye of the agent only, who at no time sold wool to Orrin Thompson.
In another letter written to the defendant by Curtis, he says: 'A friend of ours desires me to inform him how far it would be satisfactory to me, (you,) to have him sell to the Thompsonville Company. I replied that I believed you thought favorably of the concern. Now, I wish to know what your present feelings are in respect to that concern, there being several among my friends who have heretofore sold them wool, and wish to continue to do so.' To this, Brown, Brothers, and Co. reply: 'We continue to have a favorable opinion of the concern you allude to.'
This letter sheds some light on the first letter of Brown. It was on the same subject, and was a reiteration of what had been stated more particularly and at large in the first letter. In fact, the words 'we continue to have a favorable opinion of the concern you allude to,' refers to an opinion before expressed.
As the court instructed the jury to find for the defendant, on the ground that the plaintiffs had not sustained their action, if the plaintiffs gave, or offered to give, any evidence which was fit to be considered by the jury, the judgment must be reversed. Any evidence conducing to prove that the statements of the defendant, in the letter of the 7th April, in regard to the condition of the Thompsonville Company and Orrin Thompson, and their ability to meet their engagements, and in regard to the value of Thompson's property, were false, was competent evidence as tending to prove the facts. And especially was the testimony of Grant admissible, who heard the defendant say, if the plaintiffs had called on them personally, they would not have sold their wool to the company; also the statement that before the letter was written, Brown admitted that he had lost confidence in Thompson, and therefore the letter of the 7th of April was guarded. These, and all other facts which conduce to show that the defendant acted in bad faith in writing that letter, are proper to be considered by the jury.
By whatever motives the defendant may have been actuated, he is not to be held responsible, unless his letters did mislead, and were intended to mislead the plaintiffs. And it will be for the jury to say, on a thorough examination of the letters, and the facts and circumstances connected with them, whether they were calculated to inspire, and did inspire, a false confidence in the pecuniary responsibility of the Thompsonville Company and Orrin Thompson. If an impression, not only of their solvency but of their success in business, so that by selling largely to them no more than the ordinary risks of business were incurred, was made and authorized, by the letters, while, at the same time, their true condition was known to the defendant, which did not authorize such a representation, and which was intended to deceive and mislead the plaintiffs, the defendant may be justly held responsible. But of this the jury are to judge, they being the triers of the facts outside of the letters, and which should be submitted to them for their consideration and decision.
We have necessarily referred to the leading facts stated in the bill of exceptions, in order to show that the circuit court erred in withdrawing them from the jury; but we express no opinion on the merits of the case.
The judgment of the circuit court is reversed, and the cause is remanded for a venire de novo.
Mr. Justice NELSON, Mr. Justice CURTIS, and Mr. Justice CAMPBELL dissented.
Mr. Justice CURTIS.
I do not agree with the majority of my brethren in this case. But, as I may be required to preside at the trial which has now been ordered, I am not willing to enter into a discussion of the evidence heretofore given, and which will doubtless be repeated on another trial. Without doing so, it is not practicable to exhibit the legal principles which, in my opinion, should govern this case. I, therefore, merely say I do not concur in the judgment.
This cause came on to be heard on the transcript of the record from the circuit court of the United States for the district ofMassachusetts, and was argued by counsel. On consideration whereof it is now here ordered and adjudged by this court, that the judgment of the said circuit court in this cause be and the same is hereby reversed with costs, and that this cause be and the same is hereby remanded to the said circuit court, with directions to award a venire facias de novo.
Mr. Justice CAMPBELL, Mr. Justice NELSON, and Mr. Justice CURTIS dissented.