PLUNKETT et al. v. LEVENGSTON, 258 F. 889

EVANS, Circuit Judge (after stating the facts as above). We are convinced that the evidence is sufficient to support the verdict rendered in favor of the plaintiff. It will serve no useful purpose to restate in detail all of the evidence upon which we base this conclusion. Defendants’ claim that the representations set forth in the declaration were not actionable — that‘at least some of them were mere expressions of opinion, while others were promises or statements of prophecy as to future transactions — must also be rejected.

While some of these statements, standing alone, were subject to this criticism, there were many actionable representations made. They were made at various times and at different places and by different defendants. It is impossible to set them forth fully. They should be read together.

So construed, we are convinced that actionable misrepresentations appear. 1 nslructions. — Complaint is made because the court, among other things, charged the jury as follows: “You may also take into consideration the fact that it was agreed by the parties here that at least fourteen cases of these books were shipped from the Chicago warerooms of Tomlinson & Co. to New Orleans at or abouv the time when the transaction took place, and you also had a right to take into consideration the fact that Tomlinson has not seen fit to take the stand in this case. All of those facts may be considered by you.

The same is true with the defendants Plunkett and Humes. Those charges were made, and they probably knew as well as anybody in the world actually what took place, and they bad a perfect right to take the stand in their own behalf, and give you their version of the transaction, and I say you may take into consideration the fact in reaching your verdict that they (lid not so testify, although as yon know that at different times during the trial appeared here. * * * ” In giving this charge no error was committed. This was a civil action.

The jury was justified in drawing inferences against defendants because of their failure to testify. Kirby v. Tallmadge, 160 U. S. 379, 16 Sup. Ct. 349, 40 L. Ed. 463; Union Bank v. Stone, 50 Me. 595, 79 Am. Dec. 631; Brown v. Schock, 77 Pa. 471; Bastrop State Bank v. Levy, 106 La. 586, 31 South. 164. More than this, one of the issues of fact arose over defendants’ claim that a librarian of standing had collected these books.

On the other hand, it was claimed by plaintiff that a large portion of the library was shipped from Chicago to New Orleans shortly before' the prospective purchaser arrived; that these books were sent by Tomlinson & Co. to New Orleans; that they were no part of the library collected by Mr. Beer. The real facts were peculiarly within the knowledge of defendants, particularly Tomlinson, and under such circumstances the failure of a party to testify raises an inference against him. Mantonya v. Reilly, 184 Ill. 183, 56 N. E. 425.

We conclude, however, that, in the absence of any special circumstances such as here disclosed, the instruction was proper. Wigmore on Evid. § 289. The agreement heretofore quoted was pleaded as a bar by all defendants. To this plea, plaintiff filed a replication of non est factum. Upon the trial the execution and delivery of the agreement was clearly established, and to avoid its effect plaintiff introduced evidence tending to show that its execution was secured by fraud, also that it was a conditional release, and further that there was a total failure of consideration for its execution.

Against objection the court received this evidence on the assumption that the pleadings were “as broad as the' proof.” Eormal amended pleadings were later filed. The judge fcharged the jury in reference to the agreement as follows: “Now as to the so-called covenant not to sue, you have heard evidence given by Levengston, you have heard Mr. De Lay, you have heard Mr. Butler, and there have been certain letters read to you which refer to it.

Now, if you find from the evidence in this case that Levengston sent that paper or release to Tomlinson and Humes on the basis of a promise on the part of Humes that he would furnish certain evidence of the fraud committed on Levengston, and that he would send an affidavit which would enable Leveng-ston to institute his suit in New York City, and if you find further from the evidence that Humes did not fulfill his part of the agreement; if he made his promise and failed to keep it — then the covenant, so-called covenant, not to sue is no bar to the action in this case. “But you have all the facts before you.

You have all the facts that anybody has. You heard all the evidence. It must be fresh in your mind because it was the last evidence given, and you are to make up your minds from that evidence whether Humes did what he promised to do when he got the covenant not to sue from Levengston. If he did fulfill his promise, if Levengston got what he expected to get and what he was promised, then there is a complete bar as to Tomlinson and Humes.

If, on the other hand, this document was procured by false promises, if it was procured by promises that were not fulfilled, then it is no bar to an action on the part of Levengston.” Defendants challenged the correctness of this charge and preserved their rights by exceptions. This charge was clearly erroneous. There was no total failure of consideration for executing the agreement. In fact, the jury could have well found that a part of the consideration passed to the plaintiff before the agreement was executed.

Nor can we accept as correct the statement that— “If he did fulfill his promise, if Levengson got what he expected to get and what he was promised, then there is a complete bar as to Tomlinson and Humes. If, on the other hand, this document was procured by false pretenses, if it was procured by promises that were not fulfilled, then it is no bar to an action on the part of Levengston.” If the agreement was obtained through fraud, and we think the evidence presents a jury question on this issue, it was not a bar to plaintiff’s recovery.

But sucia issue of fraud was not fully nor correctly presented to the jury by these instructions. Whether defendant could, against plaintiff’s objection, have pleaded a covenant not to sue, running to two of the three or more joint tort-feasors in an action against all wrongdoers, we need not determine. See Duck v. Mayeu, 2 L. R. Q. B. D. 1892, 511; Mason v. Jouett, 2 Dana (Ky.) 107; C. & A. Ry. v. Averill, 224 Ill. 516, 79 N. E. 654; McDonald v. Goddard Grocery Co., 184 Mo. App. 432, 171 S. W. 650, 58 L. R. A. 293 (note); 34 Cyc. 1090; 23 Ruling Case Law, 405, note 13.

While we are convinced that this agreement ' is a covenant not to , sue (City of Chicago v. Babcock, 143 Ill. 358, 32 N. E. 271), and not a release, the record before us is not such as would justify us in disposing of the case upon a question of pleading.

The plaintiff sought a determination of the issues raised by the covenant by him executed and invited the court to dispose of all of the issues presented by the pleadings and is not now in this court in a position to avail himself of a rule of pleading which at best is somewhat out of harmony with a practice which .demands disposition in one action of all issues capable of being fairly triable in one suit. Neither in the District Cóurt nor in this court .did plaintiff'raise any objection to the disposition of all the issues arising out of the execution and delivery of this covenant.

Another assignment of error respecting instructions, we think, is well taken.

At the completion of the charge counsel for defendant called the court’s attention to an alleged failure to enlighten the jury respecting “future promises.” To this, the court replied: “Well, I am of the opinion, as I stated on the motion for a directed verdict, that, if the jury finds in this case that there was a deliberate planned fraud, then it is immaterial what means were used to induce Leyengston to give up his money; whether it was a promise in the future, whether it was an expression of opinion, whether it was saying the boxes were open, look at the books.

It doesn’t make the slightest difference what the conspirators did to bring about the desired result, if they intended to commit a fraud, and if they unlawfully intended to induce the plaintiff to part with the money.” To this charge defendant excepted. This instruction was clearly erroneous. Liability for damages in a fraud action is not created solely by the presence of a fraudulent intent.

There must, of course, have been false representations made with intent to deceive, and such representations must have been material, made to induce action, relied upon, and acted upon to the injury of the party claiming damages. While it is true the judge had previously defined the elements necessary to make out a case of fraud accurately, this later incorrect statement of the law could not but mislead the jury to defendants’ prejudice. The judgment is reversed.