Von Bruck v. Peyser — 27 N.Y. Super. Ct. 514

Majority

p. 514

Moritz Von Bruck et al. plaintiffs and respondents, vs. Frederick M. Peyser, et al. defendants and appellants.

Headnote

1. Where one defendant sold out his stock in trade to another, principally upon credit, and the vendee bad no other capital than the stock so purchased and the good will of the business, a letter written in the German language by such vendor to the plaintiffs, a foreign firm, (from whom he had been in the habit of buying merchandise on credit,) immediately after such sale, stating that he had made over his “ business, with debits and credits, to ” the vendee, who would “ continue the same, with updiminished weans,” under the title of his own name, as successor to the vendor; and, after thanking the plaintiffs “ for the confidence reposed” in him hitherto, requesting them “to extend the same to his successor,” is such a false representation of the credit and responsibility of the vendee as to make the vendor liable for goods subsequently sold to the former by the plaintiffs on credit.

2. The whole contents of such letter, taken together, show an intention to Convey some idea of the responsibility of the person named in it. The word “ means,” in it, is not to be confined to stock in trade, but includes all resources necessary to continue the business to the same extent as before. The term qualifying it (ungeschwaehte) as undiminished, did not relate to the future, but to an existing state of things, and was intended as a comparison of the resources with which the vendee was able to conduct such business, with those with which the vendor had conducted it. It implied that the business to be conducted by the vendee, as to the means with which it was to be so conducted and its extent, were precisely the same as those of the vendor, embracing not only an ownership of the same amount of stock, but also enough money to keep up the assortment, by new purchases from time to time. Such letter was substantially a representation that the vendee’s pecuniary responsibility, for the purposes of the continued business, was as good as that of the vendor.

3. Such interpretation of such letter was properly allowed to be corroborated by the admission in evidence of a subsequent verbal statement of the vendor to the plaintiffs that he meant to say by it that the concern remained the same, except a change of name,

4. The testimony of the plaintiffs as to their understanding of the letter, although not admissible to vary its meaning and legal effect, was admissible| to show that they trusted the vendee on the faith of it, .

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6. Subsequent letters, written by the vendor tó the plaintiffs, and his subsequent intercourse with them, were properly admitted in evidence, in order to show ' his intent in sending such first letter.

6. A person who has made himself liable for the contract of another by fraudu- ' lent representations of the credit of the latter, is not entitled to the benefit of the same rule of strict construction of those representations, as an honest guarantor, so as to confine his liability to the first act of deception. Nor does . the statute of frauds, as to paying the debt of another, extend to such a case.

7. Where the falsehood of such representations, and the knowledge of it by the maker are established, he is presumed to have intended to produce thereby a permanent effect upon the mind and belief of the party to whom they were made, with the design of. affecting all future dealings between the latter and the person recommended.

8. Any other rule would permit the instrument of fraud, after paying for his first purchase, to prey at will on the victim of it, and relieve the party committing it from all responsibility thereafter.

9. No favor is to be shown to a falsehood, in the construction of its terms, although it may be possible to make a representation in such a form, or so limit it by accompanying circumstances, as to confine it to a single dealing.

10. Even if representations could be so limited, the one in question, whereby the vendor of .the stock requested the plaintiffs to extend to the party recommended the same confidence they had reposed in him, with a verbal explanation thereof, as being intended to convey the idea that the concern was the same in all respects as before the sale, except as to the person and the name, where there was no extrinsic evidence offered to show it was intended to be confined to one dealing, were properly submitted to the juiy, as evidence that it was intended to cover all future dealings. The false impression of the purchaser’s responsibility, under which the last sale was made, is just as much attributable to the vendor’s fraudulent conduct, as that under which the first was made.

11. In an action to recover the value of goods sold to a third person upon the false representations of the defendant as to such third person’s solvency, the damages must be estimated by the value of the goods when sold. If the price was payable in francs, at a period when gold was the only legal tender, the value of the franc in gold at that time is to be the measure of damages.

(Before Bobertsob, Oh. J., and Barbour and Garvmí, JJ.)

Heard January 7, 1867;

decided January —; 1867.

This was an action brought to recover in damages the price of certain merchandise sold by the plaintiffs to one Emil Kanter between February and October, in the year 1860, upon the faith of certain representations, made by the defendant to them, which they alleged were false and known to him to be so. The first was made in a letter in the German language signed by the defendant and directed to the plaintiffs, dated Febru

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ary 1, 1858, of which the following is a translation admitted on the trial to be correct:

“I hereby respectfully advise you that I have this day made over my business, with debits and credits, to my brother-in-law, and assistant for many years, Mr. Emil Ranter, who will continue the same with undiminished means, under the firm of ‘Emil Ranter, successor to Fred. M. Peyser/ In giving you my best thanks for the confidence reposed in me hitherto,

I beg that you will extend the same, also, to my successor.”

In June following, the defendant being at the residence of the plaintiffs in Prussia, was asked by one of them (Seyffardt) as he testified, in the presence of another, (E. Yon Brack,) “ to interpret the meaning of the expression of his letter undiminished (literally unweakened) means.” He answered “that he himself being a man of property and- purposing to' live in Europe thenceforth, had given up Ms business to his brother-in-law (Ranter ;) that in fact the concern would remain altogether the same with an alteration of the firm.” During that (1858) and the following year, Ranter bought merchandise from the plaintiffs several times, generally selected by the defendant from- their stock, or ordered by him to be manufactured by them, which was paid for. In June, 1860, the defendant wrote to the plaintiffs asking in his own name for samples of goods of the kind in which both himself and Ranter had previously dealt. In July following he sent the plaintiffs a written order for such goods on behalf of Ranter ; stating therein that they would “ receive payments from Ranter” by certain drafts “punctually,” adding that he had “received the same conditions from all his European friends.”

For gome years prior to February, 1858, the defendant had dealt with the plaintiffs, possessed considerable capital above all liabilities, and always paid promptly.

The complaint in its final amended form, which is entitled supplemental, notwithstanding it does not contain any other. - allegations than those in the form first adopted, except as to the value of a franc and the plaintiffs’ damages, sets forth the sales of goods between February and October, 1860, by the

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plaintiffs to Kanter on the faith of the letter of the defendant, of February, 1858, and other false and fraudulent representations of the latter. It stated the value of such goods (fes. 11,982-^) and of the franc (50 cts.) and claimed certain damages (#5991.07.) It also alleged that Kanter, at the time of such purchase, as the defendant knew, was destitute of property and means, purchased such business on credit, and was then indebted to the defendant #7000 for the purchase of such business, and #2000 for borrowed money. That Kanter owed the defendant #27,711 on the 18th of May, 1861, and being then insolvent executed to him therefor a chattel mortgage. The answer, which was the same to both complaints, alleged, among other things, that the defendant besides selling his stock to Kanter gave him a large amount of stock and fixtures of the value of #18,000, and that the plaintiffs knew the property, means and credit of Kanter. It admitted that the latter purchased some goods of the plaintiffs in the year 1860, on a credit of six months, but put in issue most of the other material averments in the complaint.

On the trial of the issues of fact in this case, in May, 1865, the defendant’s counsel excepted to the overruling of objections taken by him to an answer of one of the plaintiffs (M. Yon Brack) to an interrogatory put to him on a commission to examine him as a witness, wherein he stated the understanding of his firm of the words translated “ undiminished or unweakened means;” also to another answer given by the same witness to another Interrogatory under the same commission, declaring that his firm “had made sure of Ranter’s solvency” by the letters of February, 1858, and June and July, 1860 ; also to the introduction of such letters in evidence ; also to the answer of-another plaintiff (Seyffardt) to an interrogatory under the same commission, that the defendant, “before ordering the goods that were never paid for, asked for patterns in Ms own name and not in that of Kanter.”

■ The counsel for the defendant excepted also to the following portions^of the charge of the judge to the jury. That it was “ quite immaterial whether the German word in the letter

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signified undiminished or unweakened means, such words meaning substantially the same thing.” That the first question for them “ to determine was whether the plaintiffs put a similar construction upon the letter (of February, 1858,) to that which was put upon it by the general term of this court which was, that it was “ capable of being interpreted as meaning that the pecuniary means and facilities possessed by Kanter were equal to those possessed by the defendant, and that such means and facilities would be employed by Kanter in conducting his business as the defendant’s successor.” And if the jury did so, “ it was for them to say whether they (the plaintiffs) understood from it that Kanter’s pecuniary means and facilities were equal to those of the defendant.” That if they believed the testimony of the plaintiff Seyffardt, as to the alleged conversation between him and the defendant in June, 1858, before mentioned, they had “ the construction put upon the words undiminished means by the defendant himself.” That no general rule could be adopted as to the distance of time to which it could be presumed or claimed that the influences of representations continue their effect. That such extent of time “ must depend upon the facts and circumstances of each case,” and that “it is for the jury, not the court, to determine whether the parties continue to be operated upon by the representations previously made.” That - the defendant’s letters of June and July, 1858, “ might be considered in connection with the continuing influence of that of February, 1858.” All of which exceptions were overruled.

The defendant’s counsel also excepted to the separate refusals of the court to charge as requested by him :

1st. That the terms “ unweakened means ” mean that the capital of the concern was not less than it was before, and not that Kanter’s means were the same as the means of Peyser.

2d. That the letters written subsequently to that of February 1, 1858, are not representations, and cannot be made the basis of any liability.

3d. That the representations made must be understood in the sense in which the defendant intended the plaintiffs should

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understand them, and if the plaintiffs misconstrued those representations, the defendant cannot be liable for that.

A witness (Ackerman) testified that the value of a franc in 1861, in gold, was 19^- cents, and in United States legal currency notes was 23 cents. No act was passed by the congress of the United States, making any notes issued under its authority, a legal tender in payment of debts, until July, 1862, (12 Stat. at Large, U. 8. 532, § 1. 2 Bright. Dig. 1165, § 1.) The value, according to the testimony of such witness, of the goods sold to Kanter with interest from April, 1861, amounted to $2998.03, calculated at 19J cents for the franc, or to $3551.12, calculated at 23 cents for the same. The court instructed the jury, that if they found for. the plaintiffs they should find for the latter sum, to which the defendant's counsel excepted.

The jury found a verdict for the plaintiffs for such last named sum. A motion was made for a new trial, at special term and denied. From such denial and the judgment upon the verdict, the defendant appealed to the general term, and the two appeals were heard at the same time.

W. H. Peclcham, for the appellant.

I. The court erred in admitting the evidence of the witness and plaintiff Yon Bruck, as to what the plaintiffs understood by the expression “ unweakened means,” used in the letter of the defendant. The expression was part of a written letter. Neither plaintiffs nor defendant have a right to say what that writing meant. The interpretation is for the court. If the letter itself does not mean what the witness assumes to say he understood it to mean, then his misunderstanding is his own fault and loss. He cannot make us liable, upon what he understood our letter to mean.

II. The court erred in admitting the evidence of the same witness. The first part of his answer is of the same character as that objected to in the first point, but more gross. He testifies he has been made sure of Ranter’s solvency, by the defendant’s letter. He might as well have testified that he

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had been made sure by that letter, that if Ranter did not pay his debts, Peyser would. The letters of July 26, and August 29, 1860, have not the slightest relevancy to any issue in this case. The letters are those of a man assuming to act as agent for Ranter, and the order is given for Ranter. Hot a single word is said in them as to Ranter’s solvency or condition ; but the witness says he is made sure of Ranter’s solvency by Peyser’s continuing to buy goods for him. It was suggested, when this, case was before the bar of this court, that these letters might be admissible, as tending to show that the plaintiffs at the time of the last sales still relied on the representations of the defendant. But the difficulty is, that the plaintiffs offered them for no such purpose. They were admitted in connection with the last interrogatory, and the witness states that he had been made sure of Ranter’s solvency, by the defendant continuing to buy goods for him, and by these two letters. The witness (one of the plaintiffs) treats these letters and accompanying acts as representations—as matters upon which in themselves the plaintiffs affirmatively relied. He does not say in the least that he was by them reminded of the letter of February, 1858. How, if they are inadmissible as the foundation of a distinct claim, or as constituting in themselves any cause of action, why should they be presented to a jury' by the court, for a purpose for which the plaintiffs did not .offer them, and to show a consequence which the plaintiffs did not claim.

III. The court erred in allowing that part of the answer of the witness Seyffardt objected to by the defendant. The whole testimony of all these witnesses, is one continued effort to create the impression that Peyser was a kind of guarantor of any credits they might make to Ranter, or that in reality he, Peyser, was still dealing with them. This evidence was for that purpose, or it was for ’nothing. It was relevant to that purpose, but it was not to the issues in this case. When that issue is offered, the defendant will be ready to meet it. Upon this issue the court clearly erred in admitting it.

IY. The court erred in not granting the defendant’s motion

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for a new trial. The verdict is against evidence. Peyser says he detailed the whole facts. There is nothing in. the case to contradict him. Seyffardt is the only living person whom he saw, and Seyffardt does not pretend to remember the conversation. Peyser is further conclusively corroborated as follows: The plaintiffs themselves regarded Kanter as a man without means,- except as given him by Peyser. Moritz Yon Brack says, “ we continued our transactions with'Kanter, after having had unsatisfactory accounts of him, because we had by Peyser’s letter, and by his verbal representations, the impression that he had left to his brother-in-law the sufficient capital to continue honorably his concern.” Now, does not that language clearly import that the speaker supposed that Kanter derived whatever capital he had from Peyser ; that except what Peyser left him Kanter had none ? That although their information as to Kanter himself and his own means was unsatisfactory, they continued to deal because of the impression that Peyser had left him sufficient capital to continue honorably the concern. Or if not, what does it mean ? Again, the same witness, “We considered that by the expression ‘unweakened means’Peyser’s object was to make his connections sure of Kanter’s solvency and respectability, and to make them understand that Peyser, who was known to be a man of property, left his money in the concern of Kanter, who was not known in Europe at all.” But how left his money in the concern of Kanter; not as a partner, certainly ? They did not. understand that, or they would have sued him as such, and he would, of course, have been estopped by any statements. Moreover, the letter expressly says he has made over his business with debits and credits. So that he, Peyser, was out of the concern. If, then, they understood that Peyser was not a partner, and yet that he left his money in the concern, they must have understood that Peyser loaned his money to the concern. Mr. Emil Yon Brack testifies in the very same words. Mr. Seyffardt varies the story slightly. He says that in Orefeldt, Peyser repeated the statement of his letter of February, 1858, and in addition said “ that he himself being a man of property,

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and purposing to live in Europe henceforth, had given up his business to his brother-in-law, Kanter; that in fact the concern would remain altogether the same, with an alteration of the firm.” This last language is somewhat vague, and it is worthy of remark that when on cross-examination we ask this witness to state exactly what was said and what representations were made, we can get nothing from him but an exact repetition of these words, and which he does not pretend were the words of Peyser. Again, this same witness says he was warned by Ackerman against trusting Kanter, as he, Ackerman, “ did not understand for what reason Peyser made this arrangement with his brother-in-law,” and repeats the same, except to say for what lawful reason, on cross-examination. How, does not this language clearly show that Kanter was not represented by Peyser as a man of property or of capital, and on the contrary that it was clearly understood by the plaintiffs that the “ concern ” was to be run on the capital of Peyser, or such capital as Peyser had left in the concern, and that for such capital Kanter owed Peyser. Again, the witness speaks of the “ arrangement,” and that Ackerman did not understand for what honest reason the arrangement had been made. How to what arrangement do they refer. It cannot be to the mere sale mentioned in the letter of February, 1858, for certainly, if a mere sale to a man of means and capital, there is no difficulty in giving an honest reason for it. It must then be to some other arrangement than such a sale that Ackerman and the plaintiff Seyffardt referred. Whatever arrangement there was had evidently been told by Peyser to Seyffardt, and by Seyffardt to Ackerman. There was an arrangement then communicated to Seyffardt other than the mere general sale stated in the circular letter. How what was that arrangement ? The defendant and witness Peyser states what it was, and that he told the plaintiffs what it was ; and the plaintiffs, as witnesses, all refer to some arrangement, the reason for which they do not understand, and the terms of which they do not, and, when asked on cross-examination, tuill not state. It is thus sufficiently evident that the terms of

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that arrangement were stated. And as Peyser states what those terms were, and as, from the testimony of the plaintiff's themselves, we know that, after their conversations with Peyser, they did not look upon Kanter as a man of capital, and that their trust in him was not on account of his capital, but because Peyser trusted him and loaned to him. Seyffardt says that “ Peyser' always tried to create with them the impression that he himself was responsible for his brother-in-law.” But if he gave them the statement or impression that Kanter was himself a man of capital, why should he have tried to create this last impression ? It is sufficiently apparent that one or the other must be untrue. Now, taking this whole testimony together, what existing fact was represented as existing which turned out not to exist ? Was it that Kanter had unweakened means ? It is beyond contradiction apparent that the plaintiffs never regarded Kanter as a man of capital, or that he was equally responsible with Peyser, and there is nothing to contradict Peyser’s statement of what did occur. And if unweakened means meant that capital should not be withdrawn from the business, it was not. And if there is any other representation comprehended in the term “unweakened means,” it has not been suggested. Was it, then, that Peyser suppressed the fact that Kanter still owed him, or that Peyser had sold the goods on credit ? Peyser says he told them of it, and the plaintiffs say that they supposed Peyser “ had left to his brother-in-law the sufficient capital to continue honorably the concern,” and if he had left it, it could be only as a loan. We assert, without fear of contradiction, that there is not proved a single representation of the existence of any fact which is shown not to have existed. If there be, we would like the court or counsel to refer us to the fact. We are aware of the extent to which this court has gone in its refusal to interfere with the verdicts of juries, but we submit that the courts have gone too far in this direction. In their effort to escape labor and responsibility, they are in great danger of omitting their duty. The law, in plain terms, gives a party an appeal to this court on questions of fact. It does not

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limit the right to such cases as show prejudice, passion or perversity on the part of a jury. It makes this court a court of review for errors of fact. Whenever this court is satisfied that the jury erred, it fails to perform its duty if it does not set aside the verdict. But taking the case of Lewis v. Blake, ( 10 Bosw. 200 ,) as the rule, the verdict should be set aside.

Y. The court erred in refusing the defendant’s motion for a nonsuit. On this point we will present only matters not presented to, or passed upon by this court at the former hearing of this case. There was no evidence that the defendant at the time of writing the letter of February, 1858, or of the conversation at Crefeldt, shortly thereafter, had in his mind, or intended to induce the credit for the loss of which this action is brought. In order to sustain this action, a mere naked false statement is insufficient. It must be a falsehood, “ and told with the intention that it should be acted on by the party injured, and that act must produce damage to him.” (2 Smith’s L. Cases, 168.) In other words, the very act sought to be produced by the defendant, must be the act causing injury. Now in the case at bar, it is most apparent that the defendant, when he wrote the letter of February 1,1858, did not write it with the intention that it should be acted on by the plaintiffs in the summer and fall of 1860. The defendant, in 1858, did not intend to influence sales in 1860, nor did the plaintiffs understand him as so intending. The case of Rogers v. Warner, ( 8 John. 119 ,) is analogous. That was a letter of credit in these words : “ If D. wishes to take goods of you on credit, we are willing to lend our name as security for any amount he may wish; May 3,1804. D. took several amounts of goods for which he paid,-and in December, 1805, took another parcel of goods, for which be did not pay. It was held that the letter did not extend beyond the first parcel of goods. So take Whitney v. Groot, ( 24 Wend. 81 .) “ We consider Mr. J. E. V. good for all he may want of you, and we will indemnify the same,” was held to make the writers liable only on the first sale. It is no answer to this point to suggest, as is done in the opinion of the court at general term, and in the charge on the

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trial, that owing to the subsequent letters of the defendant, the plaintiffs at the time of the late sales, might have remembered this first letter, and have relied on it. All the plaintiffs were examined and not a single one says he or they did. Seyffardt indeed is the only one who says they ever relied on it. The sales on which this action is brought, were made more than two years after the writing of the letter, and long after all the sales that followed the reception .of that letter had been made and paid for. To say that notwithstanding this lapse of time, and these circumstances, the plaintiffs might have relied on the representations of 1858, as to his then condition, is not enough. It must further appear that these representations of February 1, 1858, were “ made with the intention of influencing the sales of I860.” Now where is the evidence of any such intention on the part of the defendant ? How can such an intention be implied from such a ridiculous non-sequitur as that Kantér should have credit in the fall of 1860, because he was represented good in February, 1858. It is the more necessary to regard this element in actions of this kind, because no actual intent to defraud is necessary to sustain it. The court so charged, and such undoubtedly is the law. All that is necessary is a false statement made with a view to induce credit, and known to he false. The action in Massachusetts is regarded as so analogous to contract, that the statutes of frauds have been extended to it, and representations must now be in writing in order to .avail. (McKinney v. Whiting, 8 Allen, 207 .) Such a statement may often be made with the best of motives, in order to aid a struggling friend, .and with the intention to respond if the friend is unable. It is made and understood on both sides as a kind of guaranty. Why should the liability be extended further than on a guaranty ? If to this letter of February, 1858, Mr. Peyser had added the words, “ Sell him goods, and if he does not pay for them, I will,” he would confessedly have been liable only for sales then proximately made. Is it not singular justice that he should extend his liability by failing to guaranty.

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VI. The court erred in charging the jury that there was no difference between the terms undiminished, and unweakened means. The term unweakened, has a much more natural reference to the amount of capital employed in the business, than to the general means of the party—“ undiminished” less so.

VII. The court erred in holding and charging the jury that it was for them to say what construction was put on the term “ unweakened means,” by the plaintiffs. It is the province of the court, and not the jury, to construe written documents, and the question is what the document means, and not what the plaintiffs understood it to mean. Moreover, if the court should leave questions of construction to the jury, the rule of construction is not, as charged by the court, what the plaintiffs understood the statement to mean. The true rule in such cases is that the statements must be interpreted in that sense in which the maker had good reason to believe the other party understood it. (Hoffman v. Ætna Ins. Co., 32 N. Y. Rep. 405 .) The learned court below charged the jury that the question for them was how did the plaintiffs interpret and understand the contract.

VIII. The court erred in charging the jury that they must find a verdict for the larger of the two calculations of the witness Ackerman, i. e. 'the one based on the franc at 23 cts. instead of 19J. The verdict is based on the value of a franc, in April, 1861, and. interest from that time. The witness says it was worth 19J cents in gold, 23 cents in paper. How the paper then referred to was not legal tender notes, because the legal tender law was not' passed till the 11th of July, 1862. (12 U. S. Stat. at large, 532, § 1. 2 Brightly’s Dig. 1165, § 1.) Inasmuch as at that time Ranter was bound to pay in gold, and could not pay in the paper currency, it is clear that the amount then due must be fixed by the value of the franc in the only recognized currency. (See Commonwealth v. Haupt, 10 Allen, 38 .).

IX. The judgment should be set- aside and a new trial granted, with costs to abide the event, pr the verdict must be

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set aside and a new trial granted, unless the plaintiffs agree to reduce their verdict to $2998.03, in which case the defendant must have the costs of this appeal—for non constat that if the verdict had been for that amount he ever would have appealed.

Thos. Darlington, for the repondents.

I. As to the admission and exclusion of evidence there is no error in the ruling, as it lets in the understanding of the plaintiffs in regard to the defendant’s representation. The evidence is neither incompetent, irrelevant, or inmmaterial; but, assuming it to be so, the admission can do no harm to the defendant. The same remark applies to the next exception. The court in charging the jury explains fully the bearing of the two letters. The next exception is of the same character, and refers to the same subject.

II. This being an action to recover damages for fraudulent concealment as well as for fraudulent representations, and the fraudulent concealment being apparent from the admissions of the defendant himself, the verdict might be sustained, even if every exception was well founded. This admission is made in the most solemn manner in open court, on the defendant’s examination as a witness in his own behalf.

III. The only real question attempted to be raised on this appeal is contained in the exception at fol. 381, p. 78. It is the question whether a French franc ought to be calculated at 23 cents, or at 19J cents ; in the former case, the amount of the verdict would be entirely correct, in the latter case, it would have to be reduced to $2998.03. The undisputed evidence in the case, shows that a French franc was of the value of 23 cents, at the commencement of the action, in the year 1862, and also on the day of trial ; that in 1861, the value of a franc in paper currency, was also 23 cents, and at the same time in gold 19-|- cents. Taking into consideration the fact that the original contract between the plaintiffs and Kanter, was one of exchange, by which the plaintiffs delivered to him goods, for which he agreed to furnish francs, it is evident that

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the measure of damages is the value of francs, either at the commencement of the action, or on the day of trial, which, in either case, is twenty-three cents.

IV. There is no law in existence by which the value of a franc is fixed, for commercial purposes. The statute does not provide for any par value of any foreign coin. The constitution of the'United States provides that congress shall have power “ to coin money, regulate the value thereof, and of foreign coin.” In accordance with this power, congress passed an act in 1792, which professed to fix the value of foreign coins, although it was decided that this act was passed for revenue purposes only. ’ (Phillips v. Ins. Co. of Pa. Hall’s Journ. of Juris. 250, 267.) But to remove all doubts, the act of May 22, 1846, fixed the value of foreign coins expressly in respect to computation of the custom house, and not for commercial purposes, and repeals all acts inconsistent therewith ; at that time foreign coins were still a legal tender within the United States. The act of February 21, 1857, (11 Slat. 163,) repealed all former acts which made foreign coins a legal tender in payment of debts ; and these two acts made or left foreign coins marketable articles, the value of which must be ascertained as matter of fact from the evidence. Section 3 of the act of 1857, reads thus :

“ That all former acts authorizing the currency of foreign gold or silver coins, and declaring the same a legal tender in payment for debts, are hereby repealed ; but it shall be the duty of the director of the mint to cause assays to be made from time to time of such foreign coins as may be known to our commerce, to determine their average weight, fineness and value, and to embrace in his annual report a statement of the results thereof.”

V. The legal tender act has no application to this case. It provides that the notes thereby created shall be lawful money and a legal tender in payment of all debts, public and private, within the United States. ( 12 Stat. 345 .) Conceding the debt which underlies this case to be a “ debt within the United States ; ” the question would still remain to be solved,

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what the amount of that debt was. 'If Kanter had agreed to pay a certain and definite sum of dollars, he would have had a right of discharging that debt by paying the amount in legal tender notes. But the contract was one of exchange by which the defendants agreed to give the plaintiffs francs for silks, and as neither is money according to our law, the legal tender act does not profess to provide the price for either, and hence it is entirely inapplicable.

VI. The debt on which this action is based being made payable in Europe, and afterwards sued for in this country, the creditor is entitled to receive the full sum necessary to replace the money in the country where it ought to have been paid, with interest for the delay ; for then, and then only, is he fully indemnified for the violation of the contract; and in such case, when money is payable in a foreign country and in a foreign currency, by the terms of the contract, its value is fixed according to the rate of exchange at the time of the trial. (Lee v. Wilcox, 5 Serg. & Rawle, 48 . Smith v. Shaw, 2 Wash. Cr. 167. Grant v. Mealy, 3 Sum. 528.) In this last case, Judge Story, in delivering the opinion of the Supreme Court of the United States, reviews and disapproves the cases of Martin v. Franklin, ( 4 John. 125 ,) and Scofield v. Day, (20 id. 102,) and exposes the defect in the reasoning which induced these decisions. These two-New York cases were decided at a time when foreign coins were still a legal tender, and when an actual difference existed between the exchange value and the par value of these coins. (See also decisions of the N. Y. Common Pleas in Bergman v. Kanter, and Buckemeyer v. Gardly. Also, Story on Conflict of Laws, §§ 308 to 310.)

VII. Aside from statute laws, it would be highly unjust, injurious, and inequitable to permit the contracting of debts in a foreign country at our specie standard, and the payment of the amount thus ascertained in our depreciated paper currency. Foreign transactions necessarily are made and expressed in foreign currency. ■ To apply to their enforcement by suit, the specie measure of equivalency in Federal currency,

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and then permit their discharge in the same sum of paper, would he introducing a monstrous inequality, to the prejudice of foreign creditors ; indeed our courts would thus he practically closed against the enforcement of foreign debts and of consequence commercial credit, without which foreign commerce cannot be carried on, will fail.

By the Court,

There were substantially but two points at issue between the parties in this case : First. The truth of the defendant’s representations contained in his letter of February, 1858, either construed according to the natural and ordinary meaning of its language, or as interpreted by the defendant in June following, in his interview with two of the plaintiffs, (E. Von Bruck and Seyffardt;) and, Secondly. Their effect, in inducing the plaintiffs to sell to Kanter the goods in question in 1860, nearly two years after-wards.

Whatever the precise philological meaning of the terms used in the letter of February, 1868, was, they were plainly intended to procure credit for Kanter, by conveying some idea of his responsibility. = The defendant could not have intended by the word “ means ”. to embrace only “ stock in trade,” which he had already stated he had transferred to Kanter, because that would be diminished by expected sales. He must have intended all the resources necessary to continue the same business which he had carried on, and, of course, capital. But the epithet used by the defendant to qualify means, (whatever English word be employed as a translation,) does not relate to the future, but implies some existing state of things, and is also a comparison of the existing means of Kanter, with a standard which could only have been his own resources. The same business, in all respects, was to be continued by his successor, and the pecuniary means with which it was to be conducted were to remain unchanged; in other words, were to be as strong and reliable as those previously employed by the defendant; that is, he was not only to own the stock free from debt, but to have money enough to keep up the assortment of

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goods. No one, except by a random conjecture, could have arrived at the idea that the defendant only meant to say, either that he had given a long credit for his debt, or that he should not press Kanter to pay the debt due to him, so long as he owed others. He did not deprive himself of the power to do so. The language used was not confined to any action of his, and he did not even state that any thing was due. Considering its connection with the announcement of the transfer of his business to Kanter, and the request to continue the same commercial confidence in the latter which they had given to him, there can be but one interpretation of the meaning of that part of the letter, to wit, that Kanter’s responsibility was as good as his. This accords precisely with the explanation given by him in the interview of June following, that he meant to say the concern remained the same, except a change of name. That was entirely admissible as evidence, under the pleadings. The exceptions to the charge as to the meaning of the words were properly overruled.

There was, however, another somewhat novel point urged on the argument before us, affecting the extent of the defendant’s liability, of which it may be better now to dispose. The learned counsel for the defendant apparently sought to place every one who should obtain credit for a third person, by false representations of his solvency, upon the same footing with an honest guarantor of the liability of such third person, by claiming the same rule of strict construction, so as to make him liable for only the first act of deception. There may possibly be some reason for extending the operation of the statute of frauds to such representations, as has been done in Massachusetts, (McKinney v. Whiting, 8 Allen, 207 ;) but when once actually made, in writing, I am not aware that such a principle has ever been tolerated as that now presented. A person who makes such a representation'is not liable, until both its falsehood and knowledge of its falsity are shown. It is then to be presumed to have been intended to have its effect upon the victim’s mind and belief permanently, until dislodged by some other occurrence. To limit the influence of such a

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general statement, and confine the liability of its maker to a single, dealing, would allow the instrument of fraud to prey at will upon the sufferer, after paying for the first purchase, and enable the originator of it to escape liability and secure certain advantages for the future, at the risk of only a small sum. It is not impossible.that a representation may be made in such form, or limited by accompanying circumstances, as not to reach beyond a single dealing, but there is no favor to be shown to a falsehood, in the construction of its terms. In this case the defendant not only did not limit the use to be made of his statement, but even requested the plaintiffs broadly to give Kanter the same confidence they had shown him. Kor did any extrinsic evidence tend to show that its reliability was to terminaté after one dealing. It was, however, not thought worth while on the trial, even to claim the application of any such rule of law by instructions to the jury to that effect.

But the defendant removed any doubt there might or ought to have been on the minds of the plaintiffs, relative to the meaning of the letter of February, by his oral explanation in June following, that he intended to say the concern was the same, as regarded dealings with others, except in name. If Kanter had never bought any goods until 1860, or the February letter merely announced the defendant’s retiring from and transfer of his business to Kanter, who was to carry it on with the same stock, in trade which he had bought from him, and the defendant had never again intermeddled with any of the transactions between the parties, there might be some room for arguing that the plaintiffs did not trust, in 1860, to any statement of Kanter’s resources in 1858. But, considering the previous relations of the parties to this action and the defendant’s constant supervision of Kanter’s dealings with the plaintiffs, after the information given to them by him that the resources of Kanter were no less than his, after his purchase of the defendant’s stock, and that the concern remained the same in every thing but name, no time was afforded for the source of their confidence in Kanter to fade from their -memory. His intermediate purchases and payments may .have strength

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ened their faith, but would not be likely to diminish the impression under which the first dealing was had between the parties, or to obscure its origin. Commercial good faith requires that the defendant, if he was guilty of unfairness, in producing the first impression on the minds of the plaintiffs and it had never been entirely effaced, should be as responsible for the last as the first transaction. The defendant was interested in sustaining Kanter’s credit, at least until the first of the notes given by the latter on the. purchase became due, which was in 1861, when if unpaid, all would become due. It cannot be doubted that he was at least partly influenced in giving assistance to Kanter to enable him to meet that liability. Finally when Kanter’s credit broke down, he absorbed all his assets, although having in the meantime constantly facilitated him in making purchases. He certainly has no. right to urge, as against the plaintiffs, who on the strength of his representations were dealing with Kanter, unconscious of the load he had to carry from the outset, that the last dealings in which he selected the goods bought, should be to them a total loss. So long as the notes of Kanter to the defendant remained unpaid, the constant agency of the latter in the business of the former, the continuous dealings with the plaintiffs by both, linked the first and last representation by the defendant of Kanter’s responsibility so indissolubly together, that it became wholly immaterial, whether the jury should have found that the defendant merely availed himself in his letter of July, 1860, of the lingering recollections of that of February, 1858, or the impressions it had left, to procure new credit for Kanter, or he originally designed by the latter to continue to produce the same effect until the notes to him were paid, or even whether he had any specific purpose at all. The admission in evidence of the letters of the defendant in 1860, and all the circumstances of his intercourse with the plaintiffs, were proper evidence to make the defendant responsible for having procured the last sales to Kanter by fraud.

Without regard, however, to the proper legal interpretation of the language of the letter of February, 1858, and however

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much or little it may have been affected by the defendant’s explanation of it, four months afterwards, in establishing the reliance of the plaintiffs on the representation so made, which was essential, it became material to prove in what sense they understood it, so as to have justified confidence in Kanter’s resources, as being more than merely having the same stock of goods which the defendant had owned, and continuing his business. If the defendant apprehended any danger of the jury taking such evidence as proof of the actual legal meaning of the words used, he could have protected himself by requesting the court to instruct the jury that it was not. The questions therefore put to the plaintiffs, as to their understanding of the representations, were entirely legal and the objections to them were properly overruled. The answer of the plaintiff to the last general interrogatory put to him on the execution of the commission, that they were “ made sure of Kanter’s solvency ” by the defendant’s letter of February, 1858, and “ by his continuing to buy goods for him,” as shown by the two letters of June and July, 1860, expressed substantially the idea that they relied on Kanter’s responsibility, from the defendant’s letters, coupled with his conduct, which connected the whole series of dealings. It was therefore admissible on the same principle as the contents of the letters 'themselves. It was not essential, in order to make such testimony admissible, that the witness should have testified that he was “reminded” of the contents of the first letter by such subsequent acts, because the complaint charges that the sale-was made partially on the faith of the representations made in 1860. The reference made by another plaintiff (Seyffardt) on his examination, to the fact that the defendant before he ordered (in July, I860,) the goods, which never were paid for, asked (in the letter of June, I860,) for patterns in his own name and notin Kanter’s, tends to the same point, of showing the appearance always presented by the defendant of the most intimate knowledge and control of Kanter’s affairs. Whatever the defendant’s intention may have been, his- whole conduct was such as was .most likely to create a strong impression that he knew that Kanter -was per

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fectly able to pay for all he bought, and the plaintiffs were therefore entitled to prove that conduct, leaving him to explain it if he could. I cannot find, therefore, any reason for disturbing the judgment for any errors in the charge or in admitting or excluding evidence.

But it is claimed that a new trial should have been granted upon the motion for that purpose, because it is said the verdict was against evidence. This renders necessary some examination of the latter. It is confidently claimed for the defendant that every fact represented by him, (assuming, I presume, the interpretation by the plaintiff of his representations,) existed as represented and appeared in evidence on the trial. That Kanter was a man of unimpaired means, because the plaintiffs never looked upon him as a man of capital, and in fact no capital was ever withdrawn from the business. The representation as claimed by the plaintiffs was, that Kanter would continue the defendant’s business with unimpaired means, implying the same resources as those with which the defendant had carried it on. Although a mere promise to continue it with like means, would not be a statement of a fact, the assertion that the means remained the same, was, particularly as the defendant explained it, as being that the concern remained the same in all respects except the change of nanie. All doubt as to the inability of Kanter, in February, 1858, to carry on the business with the same resources as the defendant had, being laid aside, it is urged that the plaintiffs never regarded Kanter as a man of capital, knew that he had bought the defendant’s business on credit, and relied simply on the defendant’s leaving his capital with him. That theory is based .entirely upon the supposed testimony of the defendant, that he detailed to the plaintiffs the whole facts of the transfer to Kanter, and that they admitted in their testimony, that they knew that some arrangement had taken place between them. That, however, originates in an entire misrepresentation or misconstruction of the defendant’s testimony. In answer to a question put to him as to what was said either by himself or the two plaintiffs, (E. Von Bruch and Seyffardt,)

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present at the interview of June, 1858, he stated that his reply, when they both asked him upon what terms he had sold his business, was ufor thirty thousand dollars,” evidently assuming the inquiry to relate only to price, and he further stated in his cross-examination this to be all that he told him., and that he did not believe he had omitted any thing. The subsequent details given by him in the same answer, of his arrangement with Kanter, were evidently not pretended to have been then communicated. And he merely assented to the subsequent information given by him by his counsel, whether true or not, that he had stated that he “ told Seyffardt the fact in regard to the sale.” He nowhere undertakes to say that he disclosed the fact that Kanter had not paid for the property bought of him, which, from the letter of February, 1858, they had a right to infer he had done. The additional incidents of such interview, stated by the plaintiffs and not denied by him, fully establish the limited nature of his disclosures. The continuation by the plaintiffs of their dealings with Kanter, notwithstanding they had had “ unsatisfactory accounts” of him, when they were yet under the impression, from the defendant's previous statements, that he had left his successor sufficient capital to carry on the business, is not at all inconsistent with the belief that Kanter had paid for the stock in trade, and that the money furnished him by the defendant was to make new purchases. The warning of a third person (Ackerman) of his inability to understand what “lawful” reason there was for such an arrangement, does not imply knowledge by them, or even him, of any thing further than the fact of a transfer. The defendant, therefore, nowhere undertakes to testify that. he disclosed to the plaintiffs the whole arrangement with Kanter, or that the fact that he had the same goods to sell which the defendant previously had, without regard to the fact whether he had paid for them or not, satisfied them. Some stress is laid upon the circumstance that the defendant had not, to reimburse himself, withdrawn from Kanter any of his capital, consisting of his stock in trade and borrowed money, so that his means were, in fact, still

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unwealcened, but, as I have already stated, the true construction of the phrase implies a comparison with the defendant’s previous means, and not a mere promise.

In fine, it is somewhat difficult to imagine what purpose the defendant had in sending the letter of February, 1858, except to procure credit for Kanter by means of its contents. If the object had been to save unnecessary trouble in soliciting purchases, to a firm with whom the defendant had previously dealt, the mere announcement of his retiring from business would have been amply sufficient. The defendant was a buyer from his European correspondents, not a seller to them. A solicitation of a continuance of their confidence for his successor, could only have been, to enable the latter to buy. There was no end to be answered in describing the means of his successor as being unimpaired, except to increase confidence in his responsibility. But when the whole contents are taken together, first announcing the transfer of the defendant’s business, debits and credits to Kanter, next the relationship of the latter to the defendant, and then that Kanter would not carry on a new business, but continue “ the same,” (that is, the defendant’s) with wndiminished means, under a firm which designated him as the defendant’s successor, and finally asking for the same confidence in him as the defendant had enjoyed, it is hardly possible to conceive how the defendant could have used expressions better calculated to produce the belief that, so far as Kanter should need any credit from the plaintiffs in continuing such business, he was, in all respects, as worthy of it as the defendant. If the defendant intended the effect only for the first purchases, he should have disclosed Kanter’s true pecuniary condition, and left the facts of his having paid for them to have their effect, independent of such letter. I see no reason, therefore, for disturbing the verdict on the evidence, if the amount be proper.

But I think the verdict was for too much. Of course, the damages to the plaintiffs must be estimated by the value of the goods in question when sold ; that was estimated in francs. The value of the franc at that time, in the only currency which

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was then a legal tender, was nineteen and a half cents, and the two values on gold and paper had not been sanctioned by law. The verdict should, therefore, be reduced to the- amount due at that rate, (#2998.03.) The judgment should be affirmed upon making a rebate of the excess by the plaintiffs ; otherwise there must be a new trial, and the judgment must be reversed.

Cases cited

Whitney v. Groot 24 Wend. 81 N.Y. Sup. Ct. p. 524