Stewart v. Pollack-Forsch Co.

Decision Date24 April 1928
Docket Number(No. 6182)
CourtWest Virginia Supreme Court
PartiesMrs. Sue Payne Stewart v. Pollack-Forsch Company
1. Fraud Action for Fraud and Deceit Lies Against Person Making False or Fraudulent Representations as to Material Matter Inducing Another to Enter Contract and Sustains Damages.

An action on the case for fraud and deceit lies against a person for making false and fraudulent representations as to a material matter, whereby another is induced to enter into a contract and by so doing sustains damages, (p. 459.)

(Contracts, 13 C. J. § 304.)

2. Appeal and Error Error Not Specified on Motion for New Trial, and Not Made Subject of Special Bill of Exceptions, is Waived.

Error not specified on a motion for a new trial and not made the subject of a special bill of exceptions, will be treated as waived, (p. 459.)

(Appeal and Error, 3 C. J. § 863; 4 C. J. § 1786.)

3. Damages Generally, Law Puts on One Committing Tort Risk of All Proximate Consequences.

As a rule, the law puts upon a person who commits a tort the risk of all proximate consequences of his wrong, (p. 461.) (Damages, 17 C. J. § 81.)

4. Same: To Recover for Loss of Profits From Tort, They Must be Such as Would be Expected to Follow Naturally and Certain in Nature and Cause From Which They Proceed.

In order to recover for loss of profits as a result of such tort., they must be such as would be expected to follow naturally the wrongful act and are certain both in their nature and the cause from which they proceed, (p. 461.)

(Damages, 17 C. J. § 116.)

5. Appeal and Error Damages Law Leaves Amount of Damage From Tort to Jury's Sound Discretion; Verdict for Damages for Tort Will Not be Disturbed, Unless so Large as to Indicate Improper Influence.

In such case, the law leaves the amount to the sound dis- cretion of the jury, and the appellate court will not disturb their verdict, unless the amount awarded is so large as to indicate that the jury acted under the impulse of some improper influence, (p. 462.)

(Appeal and Error, 4 C. J. § 2847.)

(Note: Parenthetical references by Editors, C. J. Cyc. Not part of syllabi.)

Error to Circuit Court, Mercer County.

Action by Mrs, Sue Payne Stewart against the PollackPorsch Company. Judgment for plaintiff, 'and defendant brings error.

Arthur F. Kingdom, for plaintiff in error. Russell S. Ritz and George Richardson, Jr., for defendant in error.

Woods, Judge:

This is an action of fraud and deceit for damages suffered as a result of the fraudulent inducement held out to the plaintiff by the defendant company through its agent and officer, moving her to execute and deliver a deed of trust incumbering all of her real estate for its benefit and resulting in the inability of plaintiff to obtain credit with which to carry on her well-established business. Damage was laid in the sum of $15,000.00. The jury returned a verdict for the plaintiff for $4,500.00, and, from a judgment entered thereon, the defendant brings error to this Court.

The plaintiff, Mrs, Sue Payne Stewart, is a retailer of ladies' ready-to-wear merchandise in the City of Blrieheld, and has for a number of years enjoyed a large and extensive business, and has accumulated some property. While at the time of the alleged fraud she was in need of ready money, she was in a position with her property to raise additional funds and carry on her business. The defendant, The PollackForsch Company, a wholesale concern, located at Cleveland, Ohio, was a creditor of the plaintiff for merchandise to the

Affirmed. extent of about $1,300.00. Peiser, the secretary of the defendant company, was sent to Bluefield to observe conditions and make investigations regarding plaintiff's business. While in Bluefield he learned of plaintiff's shortage of ready money, as well as her ownership of three pieces of property. After returning to Cleveland, Peiser, writing for the company under date of June 22, 1926, opened negotiations with respect to furnishing assistance, stating in conclusion, "We would like to have you buy all your better goods from us." Needing money to finance the business for the fall season, the plaintiff wrote defendant company on June 24, 1926, regarding their proposal, and, after a few exchanges of correspondence, went to Cleveland to make the necessary arrangements regarding the defendant's offer to finance her. A plan was agreed upon whereby the plaintiff should give the defendant a deed of trust upon her real estate in the City of Bluefield for the sum of $5,000.00, which should cover the claim of defendant and the difference should be paid to the plaintiff in money and used to re-establish her credit. An attorney was instructed to draw up the deed of trust and agreement. While at Cleveland plaintiff was entertained by Peiser and Forsch, another officer of defendant company, and was introduced by them to a firm, to whom she delivered orders for special merchandise. She selected and requested the defendant to ship a number of coats to her from its stock. The deed of trust and agreement were forwarded by Peiser on August 23rd, with the request that plaintiff execute and return the same. Observing that the agreement did not conform to her understanding of their verbal agreement, plaintiff wrote defendant on August 27th, that it did not give her the ready cash, '' Which, '' she stated, "I need so badly and am compelled to have if I continue business." By a reply, bearing date of August 31st, she was promptly assured that, if she would execute the papers sent her and immediately return them, defendant company would immediately discount her paper to the extent as listed in the deed of trust and agreement, and that she would "thereby be enabled to have enough cash in order to facilitate operation and show a statement accordingly." The papers were executed September 17th, and returned. An invoice of plaintiff's stock of goods, all outstanding claims of other mercantile houses, as well as a list of all encumbrances against her real estate, were furnished defendant. Yet after securing possession of the property under the said deed of trust, the defendant, as the correspondence, telegrams, etc., clearly shows, virtually refused to extend the promised credit by continually insisting that something or other "is not quite satisfactory." And the defendant did this, knowing at the time that the plaintiff was suffering grievous losses through her inability to get merchandise for the fall season, which they knew to be rapidly advancing. Plaintiff tried in every way to satisfy the harrassing and exacting requirements of the defendant company, and even went to the expense of sending her attorney to Cleveland. After his visit, plaintiff forwarded bills of other concerns to the defendant for payment, in order that she might obtain additional credit, but the same were never paid, thereby causing her orders to be held up. Plaintiff's two trips to New York City to buy merchandise were thwarted by defendant's refusal to extend the promised credit. A local loan of $1,500.00 was refused, it may be fairly inferred, because the defendant had plaintiff's property tied up. After standing such treatment as long as she could, on November 23rd, plaintiff demanded the performance of defendant's obligations, or the release of the deed of trust. After considerable correspondence, the deed of trust was finally released.

As to the matter of damage, there is evidence in the record to the effect that plaintiff had regular customers who through a period of years had been accustomed to purchasing their merchandise from her; that there was a falling off in her business during the nine months immediately following defendant's alleged fraudulent action, over like months of the preceding year, and that the same was directly attributable to such action. Notwithstanding this falling off the plaintiff had the same overhead expense, and her loss actually attributable to the defendant's fraud, and directly demonstrated by actual and accurate figures, according to her testimony, amounted to $6,956.49. To this she adds certain other expenses, including fees and expenses incurred by reason of sending an attorney to Cleveland, in an amount of $787.50.

It is contended by the defendant that this action, being for damages occasioned by alleged fraud and deceit inducing the execution of the contract and deed of trust, could not be predicated upon these instruments. It is true that such action to recover such damages is not based upon the contract but upon tort. It has been held by this Court that an action such as we have here under consideration lies at law against a person for making false and fraudulent representations as to a material matter, whereby another is induced to enter into a contract, and by so doing sustains damage. Crockett v. Burleson, 60 W. Va. 252. So where a party intentionally or by design misrepresents a material fact, or produces a false impression in order to mislead...

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