Grace Harbor Lumber Co. v. Friedman

The principal question raised by counsel is whether the judgment should be reversed because the verdict was against the great weight of the evidence. The case was tried by plaintiff upon mingled theories of fraud, conspiracy, implied contract, express promise to pay, and unjust enrichment. With plaintiff's consent, the cause was submitted to the jury upon the sole issue of express promise. Plaintiff's case rests primarily on Rachar's testimony of his conversation with Zimmerman. The impossibility of relating the words of a conversation *Page 209 held five years before renders such testimony questionable unless it finds support in intervening events. Rachar's statement that Zimmerman said the bank would pay for the materials is supported by no subsequent conduct but, on the contrary, is impeached and overbalanced by the unexplained and undisputed facts — that about three months after the claimed conversation Rachar made a sworn statement of lien, alleging that his firm had furnished the materials in pursuance of a contract with Friedman, not naming the bank as contractor or debtor, and that the Friedmans and Lanskys were the owners of the property, although he said he had the conversation with Zimmerman because the bank had a sheriff's deed and he was not satisfied to continue furnishing materials for Friedman; that in his telephone conversation with Walz, he did not mention Zimmerman's promise to pay, nor seek confirmation of it; that neither he nor his employer made claim to the bank or any officer that Zimmerman had made the promise; and evidently Rachar forgot to tell his employer of the arrangement because Mr. Ernst, with Mr. Leitch, vice-president and secretary of plaintiff, and another, had two conversations with Mr. Walz in 1931, in which they sought an option to buy the property in order to protect their accounts, finally were refused an option and none of them made a suggestion that the bank was liable for or had promised to pay their bills. Such conduct by a credit man of five years' experience, and by his employer, is persuasive that, if Rachar and Zimmerman had the conversation claimed, Rachar did not understand that Zimmerman had agreed to pay the bills. Further, Rachar's testimony, if accepted, amounts only to an admission by Zimmerman that he had made arrangements with plaintiff to pay its account. *Page 210 It was not direct evidence of the fact that such arrangement had been made. The admission may not have been true. The subsequent events are persuasive that, if made, it was not true. Plaintiff charged the materials to Friedman, not to the bank. It sent no bills to the bank. On September 8, 1930, it made sworn claim of lien, stating it had furnished the materials under contract with the Friedmans, naming the Friedmans and Lanskys as owners of the property and denying knowledge of any other owner or claimed owners. It participated in the conference in April and August, 1931, between the material men and Walz, in which the former were seeking an option in order to protect their accounts and, although the option was refused, made no claim of promise by Zimmerman or the bank to pay. It commenced this suit against the Friedmans in January, 1932, making affidavit in attachment that they owed the account. In its declaration it charged the common counts and also that the Friedmans had fraudulently contracted the obligation by falsely representing that they had arranged the refinancing of the property and would pay for the material. It made no claim whatever against the bank until January 9, 1933, three months after Zimmerman's death, had made it impossible for him to deny alleged conversations or arrangements. It then made the bank a party to the suit, claimed no promise to pay, but charged it with conspiracy with Friedman to defeat the liens and claims by means of the bank permitting Friedman to remain in possession, giving him option to repurchase and representing that the financing had been completed and the Friedmans would pay. Not until December 21, 1933, did plaintiff claim a promise by the bank. It was then claimed only by general allegations in the declaration, including the common counts, running against all the defendants. *Page 211 Business men who contract with a responsible person do not wholly ignore his obligation to pay them and pursue an irresponsible party for years and until their true debtor or his contracting agent is dead. The conduct of the bank lends no support to plaintiff's claim. One can hardly imagine that the bank promised payment of the material men during the redemption period and afterward gave the Friedmans option to repurchase on payment of the mortgage debt with subsequent charges, without legal right, contract or provision for reimbursement for the material bills. In the negotiations between the bank and the material men for an option to the latter, the bank expressed its sole concern to be repayment of the mortgage and charges in connection therewith, without thought or suggestion by anyone of any other charge. To permit the verdict to stand is to ignore the obvious force of these cumulative facts and to put an unjustified premium on verbal testimony which may be the result of misunderstanding of, or inability to repeat, words used in a conversation, or worse. The situation is that, while there was sufficient testimony to require submission to the jury of the issue of an express promise to pay plaintiff, the overwhelming testimony was to the contrary, and the verdict was against the great weight of the evidence. In such case, the court does not render a contrary judgment but sets aside the judgment entered and orders a new trial. Aside from the question of Zimmerman's authority to contract for the bank, the other errors alleged will not be likely to arise on new trial and need not be discussed. Under the testimony, and especially the rule that a corporation may not receive and retain *Page 212 the benefits of a completed transaction and deny the authority of its officer who produced it, there was sufficient evidence of Zimmerman's authority to represent the bank to make it a jury question. Reversed, with costs and new trial. WIEST, SHARPE, and TOY, JJ., concurred with FEAD, J. POTTER, J., did not sit.