Holmes v. Harrington

Dissenting opinion by

Lewis, P. J.

I respectfully dissent from the legal conclusions of my learned associates, as well as from their reading of the testimony in this record, and from their arithmetic. As to the second issue described in the majority opinion, it is clear to my mind that there was ample testimony to take it to the jury; that the instructions relating to it were apt and correct, and that the finding of the jury ought not to be disturbed.

My learned associates find fault with the arithmetical deductions, or inferences, of the witness Barbee and of the mercantile agency report, from the facts and figures furnished by the debtors. They seem to suppose' that those deductions were improperly treated as facts for which the debtors were held responsible in the verdict, and they find further that the deductions are; in themselves, erroneous and incongruous. As to the first objection, it is completely answered by an instruction which was given. The jury were told by the court that they were “not bound by the opinion of witnesses as to any fact in issue in this trial, but are to determine such fact for themselves.” Every deduction or inference in the testimony is squarely presented as derived by the utterer from facts appearing, and not as a fact or averment coming from the debtors. The jurors were competent, as juries always are, to accept the same deductions, or to r lopt others of their own, if found less questionable. As to the supposed errors and incongruities,‘they all disappear before such a fair and reasonable understanding of the testimony, as the majority opinion *673escapes. Tims, it is discovered that the witness Barbee, reporter for the mercantile agency, made a series of gross miscalculations, all resulting from his mistakenly adding the value of the Memphis opera house to the business capital of the Leubries, instead of subtracting it therefrom ; “which,” as the opinion explains, “would make a difference in their worth of about $45,000.” The error is in the majority opinion.

The whole issue in connection with Barbee’s testimony at this point is, not what was the actual financial condition of the Leubries ; but what, in their interview with the reporter, did they represent it to be ? The truth of their representations in this and similar interviews, is the whole matter of controversy in the case.

It is perfectly clear that, if the opera house property was purchased and paid for out of the mercantile capital, or even its proceeds, its value, or its purchase price, would be properly chargeable against the capital, and in diminution thereof, in order to ascertain the actual holdings of the firm ; since they could not thus expend the value, and still claim to hold it. But if the property had been acquired from a different source and by other means, so that it was a holding in addition to the mercantile capital invested, the same value would appear as an increment of the firm’s wealth, and there would be no shadow of propriety in charging it against the capital. If, therefore, the debtors told the reporter that the real property was additional to their mercantile capital and independent of it, when, in fact, it was drawn from that capital and, therefore, chargeable against it, they falsely represented themselves to the reporter as richer, by about $45,000, than they really were, and as by so much the more entitled to credit in the mercantile world. Testimony to this effect was directly pertinent to the issue, and was proper to be submitted to the jury.

It appears in the testimony that Lou Leubrie, one of the members of the firm, and Maas, the business manager, were the persons who gave information to Barbee about the condition of the firm. Barbee testifies that *674they not only referred him to their books, but they “read off” to him the figures he obtained. “I could not say that I read them out; but they were both there, and gave them out to me.” “Q. Then you took the figures and set them down as they called them off. Does that express the idea? A. Yes, sir.” He thereupon shows that all the statements made about the ■opera house were to the effect that it was a separate holding in addition to the cash capital put into the business by the brothers. After giving the amount contributed by each, he continues: “Besides that, they had real estate, an opera house in Memphis, Tennessee.” 'They told him that this was unincumbered, and that it was worth $22,942. A question may naturally arise here: What.possible reason existed for going into these ■details about the opera house, if its value was only a ■constituent element of the capital invested? What reason could exist, but an intention to have it understood that the firm held an unincumbered property additional to the cash capital already particularly itemized .and described? But, aside from speculative inquiries, the testimony that such was the intention is sufficiently direct and convincing.. Barbee was the only witness who described what was said to him on this point. Louis Leubrie and Maas both testified for the defence, but neither had anything to say on that particular matter. Barbee, throughout a long and harrassing cross-examination, maintained that the impression distinctly conveyed to him by his informers, in every phase of their interview, was, that the opera house was separate property, and additional to the capital invested of $59,555.67. He showed that his own estimates, made at the time, were solely’ on that basis, and that the same estimates, with the method of making them, were followed up in the mercantile agency report. Was his understanding of the story told him a mistaken one? That was a question for the jury, and this court has no right to weigh the testimony against the verdict. But there is no evidence of mistake: “ Q. Then they also *675had capital in real estate? A. Yes, sir. Q. Which yon credited to their account ? A. I gave them credit lor owning it. Q. Why did you add that to their $59,-000 of capital ? A. I added it in to see what they were worth. * * * The real estate was entirely separate. * * * This real estate was in addition to their capital. ■* * . * They told me it was clear and entirely separate. ■* * * They told me it was separate, and they showed me that amount as being part of their credit; a part of what they had invested in their business. * * * I understood them to say it was extra. Q. * * * Then it might be your error in getting the figures, instead of theirs ? A. No, sir. They told me they had that amount invested in the company, and it was credited on their individual account as being the amount they had invested in the business.” The witness made several other emphatic declarations to like effect. As generally happens in skilful cross-examinations, the witness was •occasionally entrapped into an affirmative or negative ■answer that appeared to be inconsistent with the drift of his story. But, when further pressed, he invariably adhered to his first account; thus showing that he had misapprehended some of the questions. The majority opinion, however, finds that this witness admitted on cross-examination, “that the value of the opera house should have been deducted from the aggregate investment of the two partners.” This admission, if made, would only show the falseness of the Leubries’ representation to the contrary. But the nearest approach to such an admission that I can find in the record, is contained in the following extract from Barbee’s cross-examination : “ Q. If the capital account was credited with $59,000, and charged with real estate $22,000, then it should be deducted from the capital account ? A. I did not figure it that way. Q. Then this mistake arose in your mind in getting them charged with more capital than they were entitled to? A. Well, that might be so.” I confess my inability to find in all this, anything more than an admission of what might be the result, if *676a certain hypothesis of facts were true, which the witness earnestly protests was not true. He has been all along insisting that he never did “charge” the real estate against the capital account;' but that he always understood and treated it, from the information given him, as a credit, wholly independent of the cash capital account. It is a common device of expert counsel in cross-examination, to assume that the witness has committed a mistake, whether in fact he has or not.

Mr. Maas, a brother-in-law of the Leubries, and their business manager, testified that the opera house value was “to be charged” against the credits for capital, and that this was necessary in order to make the books balance. This means, of course, that the property was not additional to the cash capital, but was so-much taken out of it. Compare this with the information given, and reiterated in various verbal forms, toBarbee, for transmission to the mercantile world. It shows a clear difference of forty-five thousand dollars-between the representation and the fact. Why was not this a case for submission to the jury ? ■ Might not both witnesses be believed ? That the jury did believe both is apparent from their verdict; and yet that verdict is to be here set aside, because on this very issue there was no evidence in support of the plaintiff’s case!

All the supposed errors, contradictions, and incongruities, charged in the majority opinion against Barbee and the agency report, are a direct result of this curious misapplication of the testimony. Barbee is represented as giving the actual state of the Leubries’ finances, when he is only repeating their misleading accounts of it. From the standpoint on which he was placed by the information given him, his estimates and deductions are correct and consistent, in every particular. But the majority opinion transfers him bodily to a different one, and from this false position enlarges upon contradictions and incongruities of its own evolution. The instance here dwelt upon is not the only one in the learned majority opinion of a misapplication of the *677figures given in the testimony, as I understand them. I will not occupy space with further illustrations, but will endeavor, briefly, to summarize the conclusions which the figures indicate to me, and which they evidently indicated to the jury. '

Barbee’s testimony on the trial corresponds generally with the agency report, which was also given in evidence. The testimony,; in this two-fold form covers three financial periods: (1) The end of .the Leubries’ fiscal year, in March, 1883. (2) The date of the first report, October 18, 1883. ■ (3) The visit of Grorse, a second agency reporter, in September, 1884. The figures will not be here stated in the order adopted by the reports; since those papers are wholly innocent of precision in logical arrangement. For the first period, it is made to appear that the brothers are credited with an aggregated cash capital of $59,555.67, and “besides that,” an opera house worth $22,942; making a total of $82,497.67, which is given in these exact figures as the total worth of the firm.

The stock on hand is stated at $92,000. The indebtedness of the firm is given, not as a fact directly imparted to the reporter, but as his deduction from the ascertained figures, with the process whereby that is reached. The amount of cash put into the business is subtracted ?from the value of the stock on hand, and the remainder shows the indebtedness. This is a logical, inevitable, and utterly harmless “deduction.” It is •quite as much so as would be that of the witness, who, testifying that he saw two horses, and afterwards saw two more, should venture upon the deduction that there were four in all. It is certain that, if a man goes into business with $50,000 in money, and lays in a stock of $100,000, he must have become a debtor for the extra $50,000; in other words, for the excess over his capacity to buy for cash. Some additional facts were here furnished: as that sales for the preceding year had amounted to $326,130.00, and net profits to $5,005.90. For the second period, it is reported that the Leubries *678are “at present,” October 18,1888, carrying a stock of some $150,000. Here a deduction is made of the firm’s indebtedness, at “about $90,000.” The majority opinion finds this result contradictory and inexplicable. A right reading of the figures make it perfectly simple and satisfactory. Thus, if, as before, we subtract the cash invested, or $59,555.67 from the stock on hand, or $150,-000, there will remain $90,444.33, or about $90,000 for indebtedness, as stated.

For the third period, no exact 'figures are given, but material information was imparted to a second reporter by the business manager of the firm. “Their indebtedness had decreased; that they had no bank liabilities, and that they owed nothing for borrowed money at that time. The business had been profitable. That a year before, they owed the bank about-$25,000, and that now they didn’t owe the bank anything. Their indebtedness, which was quite large a year or so ago, was materially reduced.” This was in September, 1884.

The testimony altogether, presents an array of well-defined facts, figures, and information, derived from the-debtors themselves, and having, a direct bearing upon their financial condition, and their title to mercantile-credit. The same facts, figures, and information were-communicated to the plaintiffs, as each of them testified, through the reports of the mercantile agency; and because of their reliance on the truthfulness of that information in its general details, they gave the credit which underlies this suit. Doubtless, some additional testimony crept in, that was irrelevant to the issues. But I am unable to perceive that any of this impaired, or modified in any way, the force pi that which was relevant. The only question remaining is, whether there was sufficient testimony to take to the jury the issues upon the-falseness of the information given by the debtors \

Within three months after the last statements obtained from the Leubries, which exhibited their condition as very much better than what appeared from the-figures previously given, the real condition of the firm *679was developed by the assignment and its sequences. It then appeared that the debts of the concern, as proved before the assignee and sued upon by attachments, am ounted to $242,600, 'of which $65,000 was for money borrowed. The whole amount of assets realized from the assignee’s and the sheriff ’ s sales, was $108,500. There were estimates of the cost of the stock on hand, up to $250,000. Bnt these estimates came from the Leubries and other interested persons, without an actual invoice. The substantial outcome left the condition of the Leubries about $133,000 worse than nothing.

In this expose of the true financial status, as compared with the figures and the facts given but a short time before to the agency reporters, was there nothing from which a jury might lawfully infer that those figures and facts could not, in the ordinary course of human affairs, have been truly given ? I will not here undertake to demonstrate what such a comparison would prove, one way or the other. But I do insist that in such a comparison, there is an ample field of inquiry for submission to a jury, in addition to that furnished by the testimony about the opera house. The case went thus to the jury, with unexceptional instructions upon the issues involved ; and I think, with all possible deference to my learned associates, that it is against precedent, and palpably against the demands of justice, to set the verdict at naught.

I am of opinion that the judgment of the circuit court ought to be affirmed.