Keene Lumber Co. v. Leventhal, Civ. No. 6348.

• Citation: 71 F. Supp. 598
• Decision Date: 02 May 1947
• Docket Number: Civ. No. 6348.
• Parties: KEENE LUMBER CO. v. LEVENTHAL et al.
• Court: U.S. District Court — District of Massachusetts

71 F. Supp. 598

KEENE LUMBER CO. v. LEVENTHAL et al.

Civ. No. 6348.

District Court, D. Massachusetts.

May 2, 1947.

Harry B. Zonis, of Boston, Mass., for plaintiff.

Abraham L. Levine, of Boston, Mass., for defendants Harold A. Leventhal and Prime Business Co.

Frank L. Kozol and Friedman, Atherton, King & Turner, all of Boston, Mass., for defendants Bertram E. Finley and Finley Wood Products, Inc.

Benjamin Goldman, of Boston, Mass., for defendant Hyman Krinsky.

Samuel Markell and Goulston & Storrs, all of Boston, Mass., for defendants Mitchell Koritz and Federal Studios, Inc.

WYZANSKI, District Judge.

In the Motion Session on Monday, April 28, 1947, the defendants by several motions attacked the complaint on the ground that it failed to state a cause of action and that if it did state a cause of action, it violated the admonitions of Rule 8 of the Rules of Civil Procedure, 28 U.S.C.A. following section 723c, in that the complaint was not simple, concise and direct, but on the contrary was tautologous and replete with scandalous and impertinent matter. Moreover, the motions requested that if the complaint did state a cause of action, the matter should be transferred from the jury to the non-jury list.

In open court, plaintiff's counsel specifically limited the nature of its complaint. Counsel disclaimed any intention of seeking relief under the Uniform Fraudulent Conveyance Act, Mass. Gen.Laws, Chap. 109A. Counsel did not make it clear exactly what reasons he had for that disclaimer. The argument at the bar suggested that among his reasons might be his belief (not necessarily shared by the Court) that if his client would otherwise have had a cause of action on the basis that the defendants had hindered, delayed and defrauded creditors, that cause of action had been assigned by operation of law to the trustee in bankruptcy of Davenport-Brown, Inc. Another reason that may have moved plaintiff's counsel to his disclaimer was the defense of at least one of the defendants that plaintiff would be estopped by judgment or would be barred by the principle of res judicata if its theory of recovery were grounded on a claim of fraudulent conveyance. Without, however, pursuing the matter further, it is sufficient in this memorandum to repeat that plaintiff's counsel explicitly and frequently stated that he did not rely upon the theory of fraudulent conveyance as embodied in Mass.Gen.Laws, Chap. 109A.

In short, plaintiff's counsel limited his complaint to a combination of a claim of deceit and conspiracy to commit deceit. It was his view that his pleading in effect asserted that defendant Mitchell Koritz had knowingly and falsely, but orally, stated to representatives of the plaintiff that he, Koritz, had invested certain sums in and was prepared to invest further sums in Davenport-Brown, Inc; that those knowingly false statements were made by Koritz with the intent and the effect of inducing Keene Lumber Co. to advance credit to Davenport-Brown, Inc.; and that the defendants other than Koritz had formed a general scheme to use for their purposes the deceitful misrepresentations of Koritz and that as a result of the deceit and the concerted plan plaintiff suffered damage for which he seeks recovery of $7,809.76, with interest.

Defendants' contention is that even if defendant Koritz had made the representations of which plaintiff complains (a point which defendants of course challenge), nonetheless, it is apparent on the face of the complaint that these alleged misrepresentations were oral, and being oral, these misrepresentations, cannot be the subject of a cause of action in the light of the express terms of the Mass. Statute of Frauds, Mass.Gen.Laws, Chap. 259, sec. 4, which provides: "No action shall be brought to charge a person upon or by reason of a representation or assurance made concerning the character, conduct, credit, ability, trade or dealings of any other person, unless such representation or assurance is made in writing and signed by the party to be charged thereby, or by some person thereunto by him lawfully authorized."

Plaintiff's reply to the Statute of Frauds point is that the Statute is directed merely to cases where the defendant made a representation exclusively as to another's (and not as to his own) conduct or acts. Plaintiff points to the language of the Statute which says that "No action shall be brought to charge a person upon or by reason of a representation * * * made concerning the character * * * credit * * * or dealings of any other person, unless such representation * * * is made in writing * * *." It is the plaintiff's position that in the case at bar he brings his action upon the basis of a representation made by defendant Koritz, concerning Koritz's own dealings. Although the representation covers both Koritz's dealings and the dealings of another person, to wit, Davenport-Brown, Inc., the plaintiff says that the reference to the other person, Davenport-Brown, Inc., is merely incidental and the gravamen of the complaint is the representation of defendant Koritz as to what he, himself, had done and would do.

I am persuaded that defendants' position is correct.

Section 4 of Mass.Gen.Laws, Chap. 259 is a local enactment following both in language and in purpose what is commonly called Lord Tenterden's Act, 9 Geo. IV, c. 14 (1829). See Walker v. Russell, 186 Mass. 69, 70, 71 N.E. 86, 1 Ann.Cas. 688; Williston, Contracts (Rev.Ed.) § 1520A. "The object of the enactment was to extend to a defendant, in case of an attempt to charge him with the debt of another person by parol evidence of a false representation as to the solvency of that third person" the protection of written evidence. Walker v. Russell, supra, 186 Mass. at page 71, 71 N.E. at page 87.

It would have been possible to read the enactment strictly and to hold that the statute did not apply to a representation which included both a false statement as to another's solvency and a false statement of the speaker's own conduct or position. However, the English Court of King's Bench ruled otherwise in 1838 — which though it was four years after Massachusetts first enacted its local Lord Tenterden Act, see Mass.St.1834, c. 182, § 5, was prior to the time when Massachusetts re-enacted the local Lord Tenterden Act as part of the Revised Statutes and subsequent codification of Massachusetts laws of general...