Brief for Respondent — Fairmont Glass Works v. Cub Fork Coal Co.

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CHARLES ELMSte Ct0P:

C IRA

IN THE ———

Supreme Court of the United

States :

OCTOBER TERM, 1932.

No. 314

FAIRMONT GLASS WORKS,

Petitioner,

Vv.

CUB FORK COAL COMPANY and

PARAGON COLLIERY COMPANY,

Respondents.

BRIEF FOR RESPONDENTS

CONNOR HALL. Esq.,

Counsel for Petitioner.

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IN THE

Supreme Court of the United

States

OCTOBER TERM, A. D. 1932.

FAIRMONT GLASS WORKS,

Petitioner.

Vv.

No. 314

CUB FORK COAL COMPANY and

PARAGON COLLIERY COMPANY, {

Respondents.

BRIEF FOR RESPONDENTS

STATEMENT

In the trial in the District Court the jury found a

verdict for the plaintiff upon breach of contract for the

sale and delivery of coal and assessed the damages at

one dollar. The evidence as to the amount of the un-

delivered coal and the market price at the times fixed in

the contract for delivery was uncontradicted. The

Circuit Court of Appeals, in its opinion, said: ““Appel-

lee breached its contract without justification on De-

cember 4, 1920. The market price of coal is shown for

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is also disclosed, so that the actual amount of damage

is quite definitely ascertainable. There is a slight dis

ro in the statements of witnesses who testified

as to the market value of the coal. One witness, for

example, placed the value of such coal in April at $2.60

to $2.70, whereas another witness placed it at $2.75

and another placed it at $2.90. This was the widest

difference of opinion appearing in the entire record.

There is also a difference in the testimony respecting

the amount shipped and the amount received. This

diffrence was due apparently to the fact that the rail-

roads confiscated a small amount of the coal on several

occasions.

,

“Against appellants’ damages, appellee sought to

recover its alleged damages for appellants’ failure to de-

liver the tonnage specified for the months of July, Aug-

ust and October. The market value for coal for these

months is likewise not in serious dispute. The con-

tract called for the delivery of a total of 7,000 tons dur-

ing the first five months. 6,638.95 were shipped.

“It is evident that on any hypothesis appellants were

entitled to recover over $18,000. The jury fixed the

damages at $1. The verdict should have been set aside

and a new trial ordered on appellants’ motion.

“United Press Assn. v. Nat. Newspapers Assn.,

254 Fed. 284,

_ Pugh v. Bluff City Excursion Co., 177 Fed. 399;

Stetson v. Stindt, 279 Fed. 209;

James v. Evans, 149 Fed. 136;

Glenwood Irrigation Co. v. Vallery, 248 Fed. 483;

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Smith v. United States, 281 Fed. 696."

The District Judge charged the jury (page 121)

that the measure of damages was the difference between

the contract price and the market price at the time of

breach. Counsel for the respondents (pages 122, 123)

called his attention to the error in the charge and re-

quested that he instruct the jury that the measure of

damages was the difference between the contract price

and the market price, not at the time of breach as he

charged, but at the times fixed in the contract for de-

livery. The colloquy between the court and counsel

will be found as indicated on pages 121, 122 and 123.

The breach as shown by the evidence and found by

the Circiut Court of Appeals occurred on December

4, 1920. The coal which remained undelivered under

the contract was to be delivered in equal monthly in-

stallments in the month of December, 1920, and in

the first six months of the year 1921. The difference be-

tween the market price and the contract price (page 42)

in December was ($.75) seventy-five cents—in Jan-

uary ($2.35) two dollars thirty-five cents—in Febru-

ary ($3.00) three dollars and in each of the months of

April, May and June ($3.75) three dollars seventy-five

cents.

PROPOSITIONS OF RESPONDENTS

I. The judgment of the Circuit Court of Appeals

reversing the judgment of the District Court is right

without regard to any question as to whether the order

denying a new trial is appealable; for,

(A) the judgment appealed from may be sup-

4

not assigned the Circuit Court of Appeals.

Langnes v. Green, 282 U. S. 531, 538; Story

Parchment Co. v. Paterson Co., 282 U. S. 555,

560; and

(B) the charge of the District Court was plain-

ly erroneous in instructing that the measure of

damages was the difference between the contract

price and the market price at time of breach in-

stead of (as is the correct rule) the time of deliv-

ery. U.S. v. Burton Coal Co. 273 U.S. 337, 340.

This error was a natural and material inducement

to the mistake of the jury in finding damages of

only one dollar.

Il. But the order refusing a new trial was appeal-

able. There was not involved any re-examination of

facts, but merely a review of a matter of law. The

finding of one dollar damages was arbitrary, not sup-

ported by evidence, but contrary to all the uncontra-

dicted evidence of disinterested witnesses; and the set-

ting aside of such verdict is not a matter of discretion

but of law. Mills v. Scott, 9 Otto 25, 30; Railroad Co.

y. Frailoff, 100 U. S. 24, 31, 32; Wabash Railway Co.

y. McDaniels, 107 U. S. 454, 456, 463; Insurance Com-

pany v. Folsom, 18 Wall, 237, 252; St. Louis & Iron

Mountain Railway Company v. Craft, 237 U. S. 648,

661; Pleasants v. Fant, 22 Wall 116, 120, 121; Met-

ropolitan Railroad Co. v. Moore, |21 U. S. 558, 567,

568; Louisville, etc. Railroad Co. v. Woodson, 134 U.

S. 614, 623; Walker v. Southern Pacific R. R., 165 U.

S. 593; 596; Atcheson, etc., R. R. Co. v. U. S. 284

U. S. 248, 262; James V. Evans, 149 Fed., | 36, 141;

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Pugh v. Bluff City Excursion Co., 177 Fed. 399; Stet-

son v. Stindt, 279 Fed. 209; Glenwood Irrigation Co.

v. Vallery, 248 Fed. 483; Smith v. U. S. 281 Fed. 696.

Ill. The judgment of the District Court being sub-

ject to reversal, the Circuit Court of Appeals in limit-

ing the new trial to damages followed the practice sanc-

tioned by this court. Gasoline Products Co. v. Champ-

lin Refining Co., 283 U. S. 494.

ARGUMENT

Counsel for petitioner base their case upon the

ground that the order of the District Court denying a

new trial is not appealable, and that therefore the Cir-

cuit Court of Appeals in finding this to be error ex-

ceeded its power. We will discuss this question later.

The judgment of the Circuit Court of Appeals is to be

supported without any necessary consideration of this

question. The jury, as we have seen, found for the re-

spondents, (plaintiffs in the District Court), but as-

sessed damages for only one dollar. Such mistake was

doubtless induced by the erroneous charge of the court.

In Langnes v. Green, 282 U.S. 531, 538, this court

said, “Respondent here defends that decree upon the

ground upon which it was based, and, in addition, con-

tinues to urge the rejected ground, not to overthrow

the decree, but to sustain it. His right to do so is be-

yond successful challenge, quite apart from the fact

that this is a proceeding in admiralty.” Likewise in

Story Parchment Co. v. Paterson Co., 282 U. S. 555,

560, it was said, “Respondents seek to sustain this

judgment upon that ground and also upon the addition-

al ground, which the lower court found against them,

SORTER Ma Ne Per ces te

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_that there was no evidence: of a conspiracy or combin-

was no cross-petition for certiorari, petitioner insists

that the additional ground is not open here for consid-

eration. But respondents do not invoke that ground

in order to overthrow the judgment below, but to sus-

tain it; and this they may do.”

The District Court, as we have seen (pages 121,

122, 123) charged that the measure of damages for

the breach by the defendant for the contract to take

coal was the difference between the contract price and

the market price at the time of breach. The correct

rule as laid down by this Court is, of course, the differ-

ence between the contract price and the market price

not, as charged by the Court, at the time of the breach,

but at the time fixed in the contract for delivery. In

U. S. v. Burton Coal Co., 273 U. S. 337, 340, the Court

said, “The coal had a market value and it was less than

the contract price. The applicable measure of damages

is fixed by the rule of law that, where a buyer in vio-

lation of an executory contract of sale refuses to accept

the commodity sold, the seller may recover the differ-

ence between the contract price and the market value

at the times when and the places where deliveries should

have been made.” This was not only a very plain, but

also a prejudicial error. The breach occurred on De-

cember 4, 1920. The times fixed for delivery were the

month of December, 1920, and the first six months in

the year 1921, in equal monthly installments. Now, the

difference between the contract price and the market

price in December, the time of the breach, was ($.75)

seventy-five cents. The difference in the subsequent

months in which celivery was to be made was as fol-

i i a) as . ie aie eee ho ec

7

lows: January ($2.35) two dollars thirty-five cents;

February ($3.00) three dollars; March ($3.50) three

dollars fifty cents, and for each of the months of April,

May and June, ($3.75) three dollars seventy-five cents

(page 42). For this reason alone the judgment of the

District Court was liable to reversal, and can in no event

be affirmed; but on the contrary the judgment of the

Circuit Court of Appeals for this reason, if for no other,

is to be supported.

But the order of the District Court denying a new

trial was not the exercise of such discretion as to be be-

yond review by the Circuit Court of Appeals. There

was not involved any re-examination of facts. The

verdict of the jury finding only one dollar damages was

not only unsupported by evidence, but was contrary

to the whole of the evidence introduced upon this point,

uncontradicted evidence of disinterested witnesses. The

only witnesses testifying as to the market price of the

coal were I. F. Vass (page 42), M. L. Burtless (page

51), Walter L. Tetman (page 50) and Milton M. Tyree

(page 52). The Circuit Court of Appeals in its opinion

took the highest market price stated by any of these

witnesses, found the difference between that and the

market price and from this deducted upon the counter-

claim of the defendant its damages calculated upon the

lowest market price, thus giving to the petitioner the

benefit of all differences and of all doubts. The result

showed damages to the respondents in excess of $18,-

000.00 without counting interest. It is thus seen that

the finding of damages of only one dollar was plainly

arbitrary. Only one of these witnesses, Mr. Vass, had

any interest in the case.

~The question whether an order denying @ new

‘trial is reviewable may properly be divided into two

parts: first, that of constitutional power and secondly

as a mere rule of practice.

Now, as far as constitutional power is concerned,

there is little difficulty. The constitution merely forbids

a re-examination of facts found by a jury otherwise

than according to the course of the common law. So

far as constitutional power is concerned, that merely

means that the right of trial by jury shall be preserved.

But this does not mean that a jury must decide a case

unless there be evidence to support it. It has, of course,

long been settled that the Court is not obliged to submit

every case to a jury even though there be a scintilla of

evidence. If there be no substantial evidence to sup-

port the plaintiff's action or the defendant's defense,

the duty of the Court is to instruct the jury to return a

verdict in accordance with the court’s opinion. This

demonstrates that the seventh amendment does not give

any right to an abritrary, unbridled decision by a jury.

In fact, under our system of government, there is no

place for an arbitrary finding even by administrative

bodies in which the largest discretion is reposed. Thus,

in Atcheson, etc. v. U. S., 284, U. 5. 248, 262, this

court said, “We think that this action was not within

the permitted range of the commission's discretion, but

was a denial of right.”

So far as the ordinary rule against reviewing an

order denying a new trial is a rule of practice, there

is at bottom equally little difficulty. Rules of practice

in the Federal Courts are not straight-jackets—they are

not masters, but servants and guides. Generally it is

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entirely proper that an order granting or denying.a new

trial should not be reviewable, for ordinarily a party has

other opportunities of preserving his rights. If improp-

er evidence should be admitted, or proper evidence be

rejected, if the charge of the Court be erroneous, if there

be not sufficient evidence to support an action or a

defense, a party may in the course of the trial take his

exceptions. This applies to everything occurring up to

the time the case is submitted to the jury. But for an

arbitrary finding or palpable mistake of the jury in

reaching its verdict, a motion for a new trial is all that

is left, and if, as here, the mistake is plain and the find-

ing unsupported, the setting aside of such verdict is not

a matter of discretion. A party has the right to have

his case decided not by caprice, but according to the

law of the land, and if he is deprived of such right and

has no opportunity to make his objection except by a

motion for a new trial, and that be denied, he should

then have the judgment of an Appellate Court.

In James v. Evans, 149 Fed. 136, 141, it is said

that the ruling of the trial court upon the motion for

a new trial if based upon an erroneous view of the law,

amounts to an abuse of discretion and is reviewable.

In Pugh v. Bluff City Excursion Co. 177 F ed. 399,

the Circuit Court of Appeals for the Sixth Circuit re-

viewed and reversed the refusal of the lower court to

grant a new trial where the jury found for the plain-

tiff and fixed the damages of one dollar for the death

of a son twenty-nine years of age and in good health.

In Stetson v. Stindt, 279 Fed. 209, it is held by the

Circuit Court of Appeals for the Third Circuit that a

finding for the plaintiff, but for only part of the dam-

ages shown by uncontroverted evidence, is contrary to

the law, and if the trial court refuses to set aside such a

In Glenwood Irrigation Co. v. Valery, 248 Fed.

483, it is held by the Circuit Court of Appeals for the

Eighth Circuit that a finding for the plaintiff, but for

only part of the damages clearly recove is an er-

ror of law, and the action of the trial court thereon is

reviewable.

In Smith v. United States, 281 Fed. 696, the Cir-

cuit Court of Appeals for the Fourth Circuit reviewed

and reversed the action of the trial court in refusing

to grant a new trial.

In Pugh v. Bluff City Excursion Co. cited above,

the Circuit Court of Appeals for the Sixth Circuit said:

“It is the general rule that the granting of a new

trial is a matter of discretion, and will not be reviewed.

But it is not so where the verdict is inconsistent on its

face and shows the abuse of power on the part of the

jury. If the granting of the motion is a positive duty, it

is not discretionary. If it is necessary to correct a mis-

trial, it becomes a positive duty to set aside the erron-

eous proceeding and grant a new trial. And such, we

think, was the case here. The jury found the plaintiff

was entitled to recover. And if she was, it was absurd

to say that she was entitled to only nominal damages.

The conclusion seems unavoidable that the verdict was

simply a compromise to prevent a disagreement. Its

effect was to cut off the plaintiff from her privilege of

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having another trial if the jury were unable to agree

upon the question of her right to recover. And upon

the new trial to which she was entitled, she might be

able to satisfy the jury that she was entitled to recover

upon the merits of the action and have substantial dam-

ages.

In Stetson v. Stindt, cited above, the Circuit Court

of Appeals for the Third Circuit said:

“The third is based on the broad proposition of law

that a verdict which is contrary to the law of the case

or which is not sustained by evidence in the case must

be set aside. On this general law some courts have

squarely met the question and have held that an in-

struction on the measure of damages is an instruction

on the law, that a verdict by the jury in disregard of such

instructions calls for a new trial, and that, under the

circumstances, refusal by the trial court to grant a new

trial constitutes reversible error.

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“We are persuaded by the ratio decidendi of the

last line of authorities that a verdict like the one under

consideration, which is perverse and directly violative

of the charge of the court and is wholly without evi-

dence to support it, cannot stand. It is not sufficient

to say that the defendant cannot complain because he

was not injured. He was injured by being deprived of

the right of a litigant to have the jury determine his

liability under the law as laid down by the court. That

liability might be for more than the jury found; y€t it

might be for nothing. What his liability is, the jury re-

fused to say; but said something else, which, under the

law and on the facts, was simply untrue. Therefore,

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we are of opinion that the verdict was invalid and that

the court erred in entering judgment upon it. Whether

this error is reversible depends on the next question.

“The defendants in error make the point that a

question of error entering judgment on the verdict,

even if invalid, is not before this court because that

question was decided with finality by the trial court on

the motion for a new trial, resting on the principle, too

well established to require authority, that the granting

or refusing of a new trial is a matter of discretion by the

trial court, with the exercise of which an appellate court

will not interfere.

“This rule, invariable in its operation, is by its

terms applicable where the dicretion of the trial court

is invoked with reference to a matter open to its exer-

cise. It was conceded in this case that the verdict was

opposed to the court's instruction on the law. Also,

there was no question whether the verdict was right or

wrong. Admittedly, it was wrong. It did not require

exercise of discretion to arrive at this conclusion. Ev-

eryone agreed to it. Therefore, the duty of the court

not to enter judgment upon a verdict unlawful because

rendered in opposition to its instruction was one of law.

United States v. Routt County Coal Co., 248 Fed. 483,

485, C. C. A. 495. In the performance of that duty

the learned trial judge was not called upon to determ-

ine a question with respect to which no strict rule of

law is applicable, but he was called upon to enforce a

fixed rule. His duty was quite imperative. Nor did

the learned trial judge, in entering judgment on the

verdict in this case, do so within a discretion which he

brought into exercise. What he did was to interpret

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13

the law and thereupon perform the duty of apply-

ing the law as he had interpreted it. As we have been

law, it follows necessarily that error was involved in its

application.”

It thus appearing that the judgment of the District

Court being subject to reversal for both of the reasons

assigned above, the Circuit Court of Appeals acted prop-

erly in limiting the new trial to damages alone. Gaso-

line Products Co. v. Champlin Co. 283 U. S 494. It 3

was especially proper here. The jury had found the ;

issues in favor of plaintiff, but assessed damages at only

one dollar. This mistake, as we have seen, was in-

duced by the erroneous charge of the court upon the

measure of damages.

In fact, the defendant had no substantial defense

to the action of the plaintiffs. That it had committed a

breach of the contract was determined upon prior ap-

peal, 33 Fed. (2nd) 420. The only defense that it

could claim should have been submitted to the jury,

upon the trial now under consideration was that the

W. E. Deegans Coal Company represented that it was

the owner of the mines, whereas in fact they were

owned by the respondents. The W. E. Deegans Coal

Company was the sales organization of the respondents.

W.E. Deegans owned a majority of the stock of all three

companies (page 58), and he, together with his part-

ner, J. B. Hoffmeier, Mrs. W. E. Deegans, Jack Faulk-

ner and O. C. Huffman, owned substantially all the stock

of all three companies. (Pages 40, 41, 46, 54 and 58.)

The undisputed written correspondence sho-ws that

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the defendant had prior to the date of the alleged sis-

i fully determined to enter into the con-

tract and that the alleged misrepresentations, as a mat-

ter of law, did not induce the defendant to do anything

which it would not otherwise have done.

The defendant had had e contract with the plain-

tiffs for the furnishing of coal for the year previous.

This contract was to expire in July, 1920. On July

7, 1920, (page 78) the defendant Glass Works

through John Rau, its president, wrote the W. E.

Deegans Coal Company at Huntington, calling at-

tention to the fact that he had a few days prev-

iously written: “In reference to a contract for our next

year's coal supply on the same kind of coal that we

have been getting this year.” He asks the Deegans Com-

pany to name a price and continues: “We are very

anxious to know as soon as possible just what you in-

tend to do for us on next year's coal supply. We will

have to know as soon as possible and the best price.”

On July 10 (page 78) the W. E. Deegans Coal Com-

pany answered this letter saying that Mr. Deegans who

had charge of the operating companies, was out of the

city, but would return and that Mr. Rau would be ad-

vised. On the 12th (page 79), The Glass Works

through its president, again wrote urging that he be

given some word as soon as possible, among other

things saying: “We would like to know as soon as pos-

sible what you intend to do about furnishing us with

coal for next season. We are needing coal badly and

must have this information promptly. If we are not

going to get coal from your company, we must get coal

elsewhere, and we hope you will give us an answer as

soon as possible.” On July 14 (page 80) the W. E.

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Deegans Coal Company sent a telegram to the defend-

ants as follows: “Will contract your requirements egg

coal at six fifty net ton mines subject condition in let-

ter today.” In a letter of the same date (page 80) the

conditions referred to are stated, that Mr. Deegans has

been negotiating for the sale of the property and that

if he did sell it, then any contract must be subject to

such sale. On July 15, the next day the defendant wrote

as follows:

“We have your telegram reading as follows: ‘Will

contract your requirements egg coal at $6.50 net ton

mines, subject conditions in letter today.’

“We note you say you are forwarding contract

and price will be $6.50 net at the mines, subject to

conditions in letter of same date.

“We would like to have you ship us our full

amount of coal right along, also the balance of cars

which are still due us on the old contract. Please let

this coal come along as soon as possible, also your con-

tract.

Yours truly,

FAIRMONT GLASS WORKS

Per John Rau, President.”

On the next day, July 16 (page 81) before he

had received any reply, he writes again:

“We would like for you to ship our coal at the

same amount per month as we have been ordering ac-

cording to our old contract, and as advised in telegram

today. I will be there Monday, the 19th, and would

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fie to meet your Mr. Deegans and close up the deal.

to be cancelled in case the couapany is sold. Certainly

we will have to take our chances on this, but we would

like to have at least sixty days leeway in case the com-

pany was sold, as we are paying a good price for coal

and the party who buys your company should surely

be willing to carry us along at least sixty days to give

us a chance to get coal elsewhere.”

From the above it will be seen that on the 15th of

July after he had received the price and the new con-

dition which was to be added to the contract (a form

of which he already had and with which he was famil-

iar) Mr. Rau writes:

“Please let this coal come along as soon as possible,

also your contract,” and on the next day, July 16, he

says he will be there Monday 19th and “would like to

meet your Mr. Deegans and close up the deal.” He did

go to Huntington on the 19th and closed up the con-

tract as he anticipated. The above correspondence

shows that Rau was very anxious to obtain a contract

with the plaintiffs and that he had fully made up his

mind to enter into it before he ever left Indianapolis,

that is on the 15th and 16th of July. According to his

own testimony and the only testimony as to the mis-

representation that the Deegans Company owned the

mines was made on the 19th after he came to Hunt-

ington. If it were ever made, it had no part in inducing

him to enter into the contract, for he had previously de-

termined to contract with the W. E. Deegans Coal Com-

pany and was in fact very anxious and the disturbance

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17

in Mr. Rau’s mind was whether the Deegans Coal Com-

pany would give him a contract. So far from the Coal

Company inducing Mr. Rau or attempting to induce

him to do anything, he was all the time anxiously and

persistently pursuing them beseeching a contract. He

made the advances all the way. This evidence is fur-

nished by his own written letters and conclusively

shows that the alleged representations were not any

inducement, even if they were made. Therefore, there

was no substantial issue upon misrepresenation to be

submitted to the jury.

In Southern Development Co. v. Silva, 125 U. S.

249, 250, the court said: “The burden of proof is on

the complainant; and unless he brings evidence sufh-

cient to overcome the natural presumption of fair deal-

ing and honesty, a court of equity will not be justified

in setting aside a contract on the ground of fraudulent

representations. In order to establish a charge of this

character the complainant must show by clear and de-

cisive proof... . Fifthly, that it was acted on by com-

plainant to his damage.” This is of course the general

rule. Schugan v. Scott, 162 F. 209 (CCA8); Brandon

v. McCausland, 171 F. 402, (CCA8). And where a

party fails to prove that he would have acted otherwise

had he known the facts he can not have any relief upon

the ground of fraud. In Ming v. Woolfolk, 116 U. S.

599, 602, 603, the court said: “So far, therefore, as

the case made by the declaration is to be considered as

an action to recover damages for a deceit practiced by

the defendant, it amounts to this, that the defendant,

by his false representations, induced the plaintiffs to do

something which they would have done anyhow, and

by which they sustained no loss, but on the contrary

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were grea I ‘advantaged. “The requisites | to sustain an

action for deceit," says Baron Parke, in Watson v. Poul-

son, WS Jurist, 1111, are ‘The telling of an untruth,

wing it to be an untruth with intent to induce a

man to alter his condition and his altering his condition

in consequence, whereby he sustains damage’.”’

It is true that Mr. Rau says that when he took the

contract for the year previous, he stated to the repre-

sentative that he would not contract with a broker or

owners; and that the man said: ‘““We own the mines.”

owners; and hat the man said: ““We own the mines.”

This representation that ““we own the mines” cannot

be made the basis of any charge of fraud. The Cub

Fork Coal Company and the Paragon Coal Company

owned the mines and at that time there was in exist-

ence the two written contracts constituting the W. E.

Deegans Coal Company the exclusive sales agent of the

owners (page 109-110). The language of these con-

tracts is: ““The seller hereby constitutes and appoints

the W. E. Deegans Coal Company its sole agent to sell

and agrees to ship to or on orders of the agent the entire

output of its mines....” The W. E. Deegans Coal

Company was thus authorized to enter into contract

binding on the two principals, and its representative was

equally the representative of the two mine owners. The

Fairmont Glass Works even as a technical matter there-

by obtained a contract with the mine owners, and could

have sued them thereon. Darrow v. Horne Produce

Co. 57 F. 463; Moore v. Sun P. and P. Co. 101 F. 591,

183, U. S. 642; Curtis v. Miller 73 W. Va. 481, | Minor

Inst. 236; Johnson v. Hoover, 72 Ind. 397. Fraud is

dishonesty, and certainly no charge of dishonesty can

be based upon this statement. Furthermore, we find

19

that whenever Mr. Vass who conducted the correspond-

ence for the W. E. Deegans Coal Company had occa-

sion to refer to the separate ownership, he did so frank-

ly and without any thought that there was anything to

conceal. Thus, in his letter of July 10, he states that

Mr. Deegans “who has charge of the operating com-

panies” is out of town and in the letter of November

1, he states that he has taken up the question of in-

crease with the “mine” and they have agreed to waive

it.

No charge of fraud can be based upon this state-

ment that “We own the mines,” and the claim of the

defendant must come back to the alleged statement of

July 19 that the W. E. Deegans Coal Company owned

the mines. The defendant does not claim that this

statement was ever made at any other time or place.

The representative in taking the first contract did not

state that the W. E. Deegans Company owned the

mines, even according to the testimony of Mr. Rau,

but simply that “We own the mines,’’ which was tech-

nically and substantially true.

The defendant with knowledge that the W. E.

Deegans Coal Company was not the owner of the mines

(having such knowledge both before and after the sign-

ing of the contract) elected to proceed and waived the

misrepresentation, if any. A second answer to the al-

leged misrepresentation of the ownership of the mines is

found in the fact that the defendant with full knowledge

elected to proceed.

In the letter of November 1, 1920, it was said: “We

have taken the matter of increase in cost up with the

mine and they have agreed to waive the privilege ac-

a ete S 2 te

a

20

corded them in clause ‘D’ and make no advance on this

as a result of the wage increase effective September |.”

This letter was written by the W. E. Deegans Coal

Company to the defendant which thereafter called for

further shipments. Upon this, the present trial, the

ntiffs introduced new and important evidence in ad-

dition to the letter of November |, upon which the court

then passed, which new evidence together with the old,

in our opinion leaves this question no longer open. In

the letter of July 10, 1920, (page 78) from the W. E.

Coal Company to the defendant written in

reply to the defendant's letter of July 7, it is said: “Mr.

Deegans who has charge of the operating companies, is

out of the city at the present, but will return tomorrow

and we will advise you Monday....” Mr. Rau was

then dealing with the W. E. Deegans Coal Company,

which to his knowledge, sold coal. Here he is advised

that the operating companies are different. ““Operating

companies” in this connection, could have meant noth-

ing except something in contra-distinction to the selling

company; that is, a mining company. This is the nat-

ural meaning of the word and the circumstances at the

time but emphasized it. This information in no way

shocked the president of the defendant; nor, can it be

claimed that he overlooked it, for he says in the letter

of July 12 (page 79): “We note that your Mr. Deeg-

ans who has charge of the making of contracts is out

of the city...." Here Mr. Rau is given information

which he reads that there are operating companies dif-

ferent from the company with which he has been deal-

ing and from which he is buying coal; that is, the

W. E. Deegans Coal Company. It can hardly be argued

he can understand anything other than a mining com-

saetatiaiinactamin is —

21

pany, and in his letter of July 12, he shows that he

understands that Mr. Deegans who has charge of the

operating companies, must also be consulted about the

contracts for he says: “Your Mr. Deegans who has

charge of the making of contracts... . ”

In Simon v. Goodyear Metalic Rubber Shoe Co.

105 F. 573, 581, Judge Lurton, speaking for the Cir-

cuit Court of Appeals for the Sixth Circuit, said: “But

full knowledge of a fraud does not mean that the party

defrauded shall have knowledge of all of the evidence

tending to prove the fraud. If he have knowledge of

the material facts which go to make up the case of

deceit as practiced upon him, it is sufficient to make

him elect whether he will go on with the contract, or

stop short and sue for the loss he has already suffered.”

The foregoing confirms the propriety of the judg-

ment of the Circuit Court of Appeals in limiting the

new trial to damages. The written correspondence fur-

nished by the defendant itself shows that its only de-

fense, that of misrepresentation, was untenable: First,

because the alleged misrepresentation was not any in-

ducement to entering into the contract, and secondly,

that with full knowledge defendant elected to proceed

and to call for continued performance of the contract;

and thereby waived the fraud—if any.

There was, therefore, nothing substantial in the

way of defense to be submitted to the jury except a

counter-claim, and this the Circuit Court of Appeals

has left open. Be that as it may, however, the jury by

its finding for the plaintiff negatived the alleged de-

fenses. It is therefore respectfully submitted that the

22

——

O. J. DEEGAN.

CONNOR HALL.

INDEX

TABLE OF CASES

STATEMENT

Finding of C. C. A

Charge of District Court pols ae

Market Price of Coal at Several Periods of Delivery___-_.** 8

PROPOSITIONS OF RESPONDENTS 3-4

ARGUMENT 5-22

Judgment of C. C. A. to be Affirmed Independently of

Question Whether Denyal New Trial is Appealable__ 6-7

Judgment of C. C. A. did not imvolve any re-examina-

tion of facts, but was merely a setting aside of an

arbitrary finding of the jury contrary to all the evi-

dence in the case 7-13

No Constitutional Right to caprice of a jury unsuppcrt-

ed by any and contradicted by all the evidence. sss‘ 7-8

Limited new trial proper___ 21-22

Defendant had no substantial defense___ 13-22

Atcheson, etc., Railroad Co. v. U. S. 284, U. S. 248, 262. ss gg

Curtis v. Miller, 73 W. Va., 481 1 Minor Institute 236 18

Darrow v. Horne Produce Co., 57 Fed. | aR ie 18

Glenwood Irrigation Co. v. Vallery, 248 Fed. 483. s—is«d100

Gasoline Products Co. v. Champlin Co., 283 U.S.494.. ss 4

Insurance Co. v. Folsom, 18 Wall ov Rd Se eae 4

James v. Evans, 149 Fed. | ERTS eee 9

Johnson v. Hoover, 72 Indiana 397___ SE eae Se le LARSON ATED 18

Langnes v. Green, 282 U. S. ce | ER SENS SIDE AE 5

Louisville, ete., R. R. Co., v. Woodson, 134 U. S. 614, 623 4

Mills v. Seott, 9 Otto, 25, 30.0000 ss 4

Metropolitan R. R. Co. v. Moore, 121 U. S. 558, 567. 4

Moore v. Sun P. & P. Co., 101 F. 591, 188 U. S. 642... 18

Pugh v. Bluff City Excursion Ce. 177 Fe. 300 10

Pleasants v. Fant, 22 Wall 2 ae DS > 4

Railroad Co. v. Frailoff, 100 U. S. S| ES * ae a 4

ORG Ea En Ss 4

Stetson v. Stindt, 279 Fed. 209... == 11

Smith v. U. S., 281 Fed. 696. Cis 10

Simon v. Goodyear Metallic Rubber Shoe Co., 105 F.

573, 581 -