Courtney v. Knabe Co. Mfg. Co. , 97 Md. 499 ( 1903 )

This suit was brought by the appellants, trustees of H. Clay Tunis, to recover the price of certain mahogany lumber alleged to have been sold by Tunis to the appellees. The narr. contains two money counts and a special count. The defendants plead the general issue. The judgment being for the appellees the appellants have appealed.

Five exceptions were taken at the trial. The first four to the admission of evidence; the fifth to the ruling of the Court on the prayers.

The first and third exceptions raise the same questions, and will be considered together. To maintain the issues on their part the plaintiffs offered the following letters, viz:

Baltimore, July 2d 1900.

Messrs. William Knabe Co., City.

Dear Sirs: — I beg to confirm sale to you of the following mahogany mentioned upon my list, a copy of which I enclose, namely all the 5-8, all the 4-4 No. 1 and 2 and 4-4 select, common 10 to 16 feet long, all of the 5-4 and 6-4 and 8-4, except the common and culls, and end lengths from 4-4 No. 1 and 2 and select common 8 to 9 and 3 to 7 feet long, as you may be able to use to advantage being the amount furnished up to 100M ft. Price on the 5-8 to be six cents per foot, and on the balance eleven cents per foot, delivered in your yard, delivery to be made this month. Terms: Four equal payments to be made on November 10th, 1900, January 10th, 1901, February 10th, 1901, and March 10th, 1901.

Yours truly,

H. Clay Tunis.

Baltimore, July 6th, 1900.

Mr. H. Clay Tunis, City.

Dear Sir: — Referring to your favor of the 2nd inst., confirming order given to your Mr. Welch, for mahogany, beg to say, that the same is correct, as to quantities, terms, etc., as specified.

Kindly advise us two or three days before you have the lumber brought to the city, as we will have to make some preparations for receiving it into our yards.

Yours truly,

William Knabe Co. J.N.H.

A witness then testified that he had made the sale referred to in the letter of Knabe Co. on behalf of Tunis; and on cross-examination said the Knabes "were to judge whether the lumber suited their purposes by the approval and inspection of it, upon its arrival in Baltimore;" whereupon the counsel for the defendants asked him if the agreement (contained in the letter), was "the original contract?" and was it (the lumber) to be subject to their (Knabes) approval and inspection. In the third exception, the witness was further questioned as to the making and substance of the verbal contract through the agency of the witness. These questions, and the answers, were objected to upon the grounds that the letters contained the contract, and that parol evidence could not be admitted to add to or vary it: but the Court overruled the objection and held the letters did not contain the original contract, and the defendant had "a right to go into, what the original contract" was.

The question presented by these exceptions therefore is, whether the letters contained, or were intended by the parties to contain, the contract; or whether they were intended merely to refer to a contract that had already been made and to confirm it. It is too plain for argument that if it was intended to reduce the contract to a writing which should be the expression of what the parties had done, or intended to do, all previous stipulations, negotiations and terms are supposed to be embodied in the writing, and parol evidence is not admissible to add to or vary it. Artz v. Grove, 21 Md. 456. And it is equally plain that if an offer is communicated by letter and an acceptance is made, the offer becomes a contract between the parties.Stockman v. Stockman, 32 Md. 207; Hand v. Evans MarbleCo., 88 Md. 231; Wills v. Carpenter, 75 Md. 84.

Is this case within any of the principles set forth in the cases cited above? It seems to us clear that the letter of Tunis was not intended to and did not import more than a confirmation of a transaction that had been theretofore made by Welch, the agent of Tunis. Tunis' letter specially so states: "I beg to confirm sale to you," etc.; and what follows this assumes that a sale had already been made of the lumber mentioned, to be delivered and paid for as stated. Knabe Company's reply shows that they so regarded it. They say "your favor of the 2nd inst.confirming order given to your Mr. Welch, etc." The letter of Tunis does not admit of a construction that would amount to an offer to sell. It refers exclusively to a prior transaction, and only "confirms" a sale that had already been made by Welch, who, as it appears from the evidence, was his "hardwood salesman." Nor does Tunis in his letter undertake to state the contract of sale except as to "quantities, terms, etc." As to all other conditions, if any, no reference at all is made. As we have already said, it also seems to be clear that the Knabes so construed the letter, for in their reply they do not accept an offer, but only acknowledge the receipt of the Tunis letter, which they say "confirms order given to your Mr. Welch;" and then they add "that the terms of the order as contained in the letter is correct as to quantities, terms, etc., as specified." If no order had been given to Welch as agent of Tunis, then there would be no evidence of a contract of sale in the case; and if there was such an order, that was the thing the parties by their letters confirmed. What was the "order" thus confirmed? Evidence was admissible to show what it was. So far as stated in Tunis' letter, and admitted to be correct in Knabe's letter, no evidence was required because to that extent both parties had admitted its terms; but these admissions went no farther than stated, and if there were other features, not stated in the letters, that had been agreed to by both parties, it was competent for either party to show what features of the order had been omitted from the letters. It was the whole order as given to Welch, and not a part of it, that Tunis "confirmed." It was therefore the order in its entirety that constituted the contract of sale between the parties. We find no error in these rulings.

The plaintiffs further to maintain the issues on their part then offered in evidence the docket entries in the case ofUptegrove Co. v. Tunis, being an action to replevin brought by the former against the latter to recover from the latter the lumber which is the subject of this suit. After the introduction of these, and also the original papers, as well as the testimony taken therein, and also the instructions granted and refused by the Court, the appellees offered evidence tending to prove that Tunis had fraudulently purchased the lumber from Uptegrove Bros. and therefore had fraudulently obtained possession of it. The appellant objected to the reception of this evidence. The Court, however, overruled these objections as well as a motion to strike out and exclude such evidence as had already gone to the jury subject to the appellants' objections; and these rulings constitute the second exception. The ground of the appellants' objection to this evidence was and is that the title to the lumber had been finally adjudicated in the replevin suit, and therefore in the present case the title was no longer an open question. It is well established that a former judgment upon the same subject-matter operates as an estoppel between the same parties, provided that it appears by the record or other proof that the matter in issue was decided in the former suit;Whitehurst v. Rogers, 38 Md. 512, and the term "parties," include those who are directly interested in the subject-matter of the suit, knew of its pendency and had the right to control and direct or defend it. McKinzie v. B. O.R.R. Co.,28 Md. 175.

It is shown by the evidence, and not contradicted, that Knabe Co. had full knowledge of the former suit. Mr. Ernest Knabe testified that he "had an understanding and agreement with Uptegrove, at the time he laid the replevin, to get possession of the lumber, that he (Knabe) would aid him provided Uptegrove would aid him." Whatsoever, therefore, was decided in the replevin suit as to title is now res adjudicata in the present case.

Now, what was decided in the former suit, as appears by the record or other proof? Two pleas were there interposed, first,non cepit, and second, property in William Knabe Co; the replication was property in the plaintiff (Uptegrove), and not in Knabe Co; the verdict and judgment were for the defendant, but the Court in the judgment did not order a return of the property. Unexplained, the judgment and verdict could have been rendered, either upon a finding that the property was not in the possession of the defendant (Herzberg v. Sachse, 60 Md. 433); or that the plaintiff had not title or right of possession as against the defendant (Seldner v. Smith, 40 Md. 612); or, that the title and right of possession was in Knabe Co. It is impossible to determine, however, from the form of the verdict, upon which of these grounds the decision of the Court (who sat as Judge and jury), was placed. Nor do the instructions granted by the Court throw any light upon this difficulty. There were only two prayers granted. One, upon the Court's own motion, wherein the pivotal fact, upon which the defendant's right to a verdict depended, was whether or not the goods were in the "possession of the defendant at the time of the institution of the proceedings." If there had been no other instruction than this, it might seem that the question as to the right of possession of, or title to, the property was not decided at all, but only that the defendant did not take, or was not in the possession of, the property. The other prayer granted was that there was no other evidence offered legally sufficient to entitle the plaintiff to recover. This covered all the possible grounds upon which the plaintiff could recover under the issues in the case. The proof adduced in the case, as appears by the record, covered all the possible defenses under the evidence that was offered, viz: as to the title of Tunis as well as that of Uptegrove; and whether the lumber at the time of the bringing of the suit had been, or then was, in the possession of the Knabes. It therefore appears that several distinct matters were in issue under the pleadings and proof upon anyone of which the verdict and judgment could have been rendered, and no extrinsic evidence was adduced in this case from which it can be determined upon which of them the judgment was rendered. If the judgment had been for the plaintiff, the same difficulties would not have been presented, for if such had been the case, the effect of the judgment would have been at most to decide that the right to the possession was in the plaintiff, and upon this hypothesis this case would then be within the rulings in McKinzie v. B. O.R.Co., 28 Md. 174; and in that case where the pleas being noncepit and property in another, it was held that the pleas imposed upon McKenzie the onus to prove title in himself, and as he had done so successfully the judgment in his favor operated as an estoppel between the same parties. The Court in its opinion, in this case, noted a distinction between the facts before them and those presented in Warfield Mactier v. Walter, 11 G. J. 83, where the pleas being the same the verdict and judgment were against the plaintiff. The Court referring to that case said, "Had the verdict and judgment been for the plaintiffs, the judgment would have been conclusive and operated as an estoppel, because the title of the plaintiffs was the matter in issue. But being adverse to the plaintiffs, the verdict only went to the extent of declaring that the title was not in them; and could not be regarded as declaring title in anyone else." In the case at bar, however, where there was evidence of the actual possession of the property by the Knabe Company at the time of the suit, the verdict and judgment might have been made upon the finding of the non-possession of the defendant at the time of bringing of the suit. The judgment therefore could not operate as an estoppel in this suit, whereby the parties are prevented from showing that there was no title in the defendant, Tunis. In Whitehurst v.Rogers, 38 Md. 518, this Court announced the same doctrine. It was there said: "It is not necessary to the conclusiveness of the former judgment that issue should have been taken on the precise point which is controverted in the second trial; it is sufficient if that point was essential to the former verdict." We have seen that in the former case the determination of the title was not essential to the finding of the judgment and verdict that were rendered, and not being conclusive, evidence tending to prove that Tunis had obtained the possession of the lumber by fraud was properly admitted.

The fourth exception is to the admissibility in evidence of certain reports by the Dun and Bradstreet Mercantile Agencies. Evidence had gone to the jury showing that the lumber in dispute had belonged to William E. Uptegrove Bro., a corporation, that this company had agreed to sell it to Tunis, and thereafter before the purchase-money had been paid, Tunis sold a large part of it to William Knabe Co.; that after Tunis began its delivery, the Knabes refused to accept, on the ground that it did not come up to the requirements of their contract (with Tunis), but agreed to permit the balance to be stored in their yard for their mutual convenience; and that Tunis, having made default in his payment to Uptegrove, the latter upon inquiry found that Tunis had imposed upon him by false representations; and therefore elected to rescind the sale and resume the possession of that part of the lumber which had not been sent to the yard of the Knabes. For the purpose of showing some of the false representations by which Uptegrove Co., had been induced to sell to Tunis, the defendant offered in evidence certain statements of Tunis, made to Uptegrove by himself or through his agent, Welch, and that Uptegrove, himself, prior to the sale, had examined the reports of these mercantile agencies, and that the representations contained in these reports as to the financial condition of Tunis, together with the false statements made by Tunis by himself or through his agents, constitute the inducement which led Uptegrove to extend credit to Tunis, who at that time was hopelessly insolvent, with no expectations of paying his creditors. The offer and report of the mercantile agency was made and admitted by the Court, "subject to the proof of its authenticity;" and subsequently, by the granting of the fourth prayer of the defendant, the jury were directed, "to exclude from their consideration all of the reports furnished by R.G. Dun Co. to Uptegrove outside of the matters testified to by said Robert W. Brown, as stated to him, by said Tunis or obtained from the books of said Tunis by his direction."

The witness Brown, who made the statements contained in the reports, testified that in May, 1900, he called on Tunis for a statement of his financial condition, and was told by him, "that it was as good as it was when he made the previous statement (that is the statement of July, 1899), and that the figures in that would practically be good." The witness reported this and the statement was given out by the agency. In the Spring of 1900, he had made a statement of his affairs as of 1899, July 1st, from the books shown to the witness by Tunis in response to a request to be informed as to his condition. It therefore appears that the reports as to Tunis' affairs came directly from him. The admissibility of these reports were especially excepted to, for the following reasons: Because,

1st. They had not been sufficiently authenticated.

2nd. There was no evidence that they were not correct at the time of the purchase of the lumber by Tunis (about June, 1900.)

3rd. No evidence that Uptegrove Co. relied on the truth of said reports.

4th. No evidence that such reports were made by Tunis with design of imposing and cheating Uptegrove, or the public generally, in respect to the sale of said lumber.

After what has already been said, the first of these reasons requires no further attention. The fourth reason raises the question as to the motives of Tunis in issuing the statements that may reasonably be imputed to him in the absence of any express proof on the subject.

In Blum's case, 94 Md. 388, where the defendants were indicted for obtaining goods on false pretenses, representations, etc., exception was taken to the admission of the testimony of an expert accountant to testify as to the details of a statement of the financial condition of the traverser, made by one of the firm of Blum Bros. Harris to a reporter of R.G. Dun Co. and by him reduced to writing and examined by the accountant in connection with the books. The Court ruled this evidence out because it had not been so clearly established that the statements to the agency were made with the fraudulent purpose to use such agency as an instrument in accomplishing a fraud upon his vendor or some other dealer as to justify the Court "in saying that a fraud was perpetrated through the medium of the agency of a character,sufficient to justify criminal prosecution therefor." To support this view the case of Deckerhoff v. Brown, (unreported), 64 Md. xiii, is cited wherein the rule laid down inVictor v. Renlein, 33 Hun. 549, is approved, that "when the only representations made are those furnished to sellers by these agencies, it must be clearly shown that the accused buyer made the statements to the agency with the fraudulent intent to use such agency as an instrumeut in accomplishing a fraud upon his vendor or some other dealer." In the case at bar, there were other representations, alleged to be false, made by Tunis, which it is contended contributed to induce Uptegrove to sell the lumber and extend a credit to Tunis. So that the question here is not whether standing alone false representations to such agencies are sufficient to establish a fraud of a criminal character, but whether such reports can be offered for the purpose of showing, in connection with other representations, fraud and deceit in the purchase of merchandise on the part of the buyer, of such a character that the seller may avoid the transaction.

Now for the sake of argument, assuming that the reports were false, and were known to be so by Tunis, they must have been made to the agency that they might be communicated to others and be believed by them. They were made to a concern whose business, it is well known, is to disseminate among business men the character and standing of all other men of business, with whom they may have transactions, that require credit and capital. A statement to them to be disseminated broadcast, if known to be false at the time it was made, could only be made, for the purpose of securing a larger credit than would have been possible if only the strict truth had been given. This view, which is apparently reasonable, has been adopted by most of the Courts of the country. In the case of Eaton, Cole Burnham Co. v. Avery, 83 N.Y. 33 (38 Am. Rep. 389), a leading case, the Court said: "It is not essential that a representation should be addressed directly to the party who seeks the remedy for having been deceived and defrauded by means thereof." "A person furnishing information to such an agency can have no other motive in so doing than to enable the agency to communicate such information to persons who may be interested in obtaining it for their guidance in giving credit to the parties, and if a merchant furnishes to such an agency a willfully false statement of his circumstances, or pecuniary ability, with intent to obtain a standing and credit to which he knows he is not justly entitled, and thus to defraud whoever may resort to the agency and in reliance upon the false information there booked, extend a credit to him, there is no reason why this liability to any party defrauded by this means, should not be the same as if he had made the false representation directly to the party injured." Of similar import are the following cases: Soper Lumber Co. v.Halstead Harmount Co., 73 Conn. 547; Genesee Co. SavingsBank v. Barge Co., 52 Mich. 164; In re Epstein, 109 Fed. Rep. 874; Cox Shoe Co. v. Adams, 105 Iowa 402; Nicholls v.McShane, 64 Pac. Rep. 375 (Colo.)

The appellant offered seven prayers, all of which were rejected and the appellee six, all of which were granted.

The first and second prayers of the appellants instructed the jury that the letter of Tunis and the reply of the Knabe Co. constituted the contract for the sale of the lumber; and was therefore bad for reasons already stated. The second prayer is open to the additional objection that it ignores all the evidence respecting the manner in which the Knabes became possessed of the lumber, and Uptegrove's relation to it. The third, seventh and fifth prayers were defective in that the jury is told that the suit in replevin established conclusively that the title to the lumber was not in Uptegrove. The fourth prayer was properly rejected. There was evidence in the cause tending to show that Knabe had refused to accept the lumber, because it was not of satisfactory quality, and had merely permitted the lumber to be put in his yard for the mutual convenience of the parties; and in view of this it became and was a matter of law, upon all the testimony in the case, whether there had been an acceptance by the Knabes. To instruct the jury therefore to find an acceptance, without informing them what facts amounted to an acceptance, was calculated to mislead them and therefore was faulty. The prayer practically denies that Knabe Co. had the power to reject all or any part of the lumber, if, when part of it had been delivered, it was found it did not measure up to the standard fixed by the contract. The jury should have been told explicity what the legal effect would be, if they found that Knabe had rejected, or attempted to reject, the lumber after part of it had been received. The sixth prayer is open to the same objection and in addition that it instructed the jury there was no evidence that the purchase of the lumber was fraudulent on the part of Tunis.

The modification added by the Court to the 8th prayer was proper.

We find no error in the granting of the defendant's prayers. Without going over these prayers in detail, we may say that they put the case fairly before the jury. By the first, the jury were told that the plaintiff could not recover on the special count, which set up a contract by letter, if they found the contract was "not in writing," thus leaving open the question of their right of recovery upon the common counts.

The 2d 4th and 5th (marked 6th in the record) as granted, were in accordance with the views already here expressed.

The third prayer is in accordance with instructions approved inPeters v. Hilles, 48 Md. 507, and other cases in this Court.

Finding no error the judgment will be affirmed.

Judgment affirmed.

(Decided June 30th, 1903.)