Haworth v. Truby

OpikioN, Mk. Justice Mitchell: The learned judge below restricted the liability of defendant to the case of his knowledge and participation in the fraud of Chambers. But this is much too narrow a line for the circumstances. The coffee was ordered in defendant’s name, was sent to him by plaintiffs with a bill or statement in the regular course of business, and he had immediate knowledge of all the facts by his interview with Chambers. Instead of repudiating the transaction and promptly notifying plaintiffs, he accepted Chambers’s explanation and permitted him to carry out his plan. This was a clear loan of his credit to Chambers, and of itself would have made defendant liable. But, to put the matter beyond all question, the defendant received a second and a third bill, and in response to the latter sent his check for about half the amount, and promised “ the balance in a few days.” A plainer case of ratification can hardly be imagined. There is another ground, entirely distinct, but equally conclusive of defendant’s liability. The act of Chambers was a fraud; and, assuming the entire innocence of defendant, nevertheless he allowed a state of facts to be represented to plaintiffs which was not true, and thereby he put into Chambers’s hand [230] the means of successfully carrying out tbe fraud. It is no doubt bis misfortune tbat he had confidence in Chambers, but nothing is better settled than that, as between these two innocent parties, the one whose conduct gave the means of perpe* trating the fraud must bear the loss. The evidence of the unusual character of an order for a- ton of coffee at that place, and the evidence of another similar transaction on the part of Chambers at a little subsequent date, were alike irrelevant and immaterial. The custom of other dealers, or even of this defendant previously, had no bearing on a perfectly plain order for a definite quantity, given in defendant’s name and plainly ratified by him. A merchant who receives an unusually large order may, as a business precaution, consider the advisability of filling it; but, to say that its unusual size is notice, or anything to put him upon inquiry of fraud, would be giving other people’s custom a potency to interfere with every man’s business which has never yet been accorded to it. Judgment reversed, and venire de novo awarded.