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UNITED STATES v. GILL

November 20, 1957

UNITED STATES of America
v.
Joseph A. GILL



The opinion of the court was delivered by: MARSH

Plaintiff brought this action to recover an alleged balance due on a promissory note executed by defendant and delivered to plaintiff's predecessor in title, the Reconstruction Finance Corporation. *fn1"

The defendant admits in his answer to the complaint that the note was executed and delivered by him to the Reconstruction Finance Corporation; and further admits the truth of plaintiff's allegation that defendant has only paid $ 2,596.20 of the $ 5,255 face value of the note. However, defendant denies any indebtedness to plaintiff, but to the contrary alleges in a counterclaim incorporated in his answer, that the plaintiff is indebted to the defendant in the sum of $ 1,371.20.

 In support of his counterclaim and his denial of indebtedness, the defendant alleges that the note in question was given in part payment for a surplus Cessna Aircraft, which defendant had purchased from the Reconstruction Finance Corporation; that defendant was induced by the fraudulent representations of agents of that organization to purchase the aircraft at a price far in excess of its fair market value, and that defendant has already paid more than the fair value of the aircraft and is therefore not indebted to plaintiff, but rather is entitled to recover from the plaintiff.

 The plaintiff has now filed a motion for summary judgment and a motion to dismiss the counterclaim, which motions are herein considered.

 Motion for Summary Judgment

 The plaintiff contends that it is entitled to summary judgment because defendant's pleading 'is a simple allegation of fraud without alleging in detail the specific elements thereof, and without particularity sufficient to set forth a valid defense as elements thereof.' *fn2"

 The defendant has alleged in his answer that prior to October 18, 1945, when defendant purchased the said aircraft, he had conducted negotiations with the duly authorized agents of the Reconstruction Finance Corporation; that it was represented to defendant by said agents that there were only a very few of the subject-type aircraft available; that the price was about to be increased; and that if defendant wished to purchase the aircraft at the then prevailing price of $ 8,500, he should act promptly. Defendant then avers that he had no means of verifying the accuracy of the representations, and that in complete reliance on them he made the October 18, 1945 purchase at $ 8,500, and executed the note in question in part payment thereof. The defendant further avers that the said agents knew or should have known when they made the aforesaid representations that a substantial number of identical aircraft were available, and that the purchase price was about to be lowered. Finally, defendant avers that in January, 1946, the purchase price was in fact lowered to prices ranging from $ 500 to $ 2,500.

 Although we think the defendant's pleading is sufficient under Rule 9(b), Fed.R.Civ.P., 28 U.S.C. as discussed hereafter, even if it is defective, a genuine issue of fact appears in respect to whether the defendant's purchase was induced by the fraud of agents of the Reconstruction Finance Corporation. Wittlin v. Giacalone, 1946, 81 U.S.App.D.C. 20, 154 F.2d 20.

 Where a genuine issue of a material fact appears from the pleadings, summary judgment cannot be granted. Fairbanks, Morse & Co. v. Consolidated Fisheries Co., 3 Cir., 1951, 190 F.2d 817; Toebelman v. Missouri-Kansas Pipe Line Co., 3 Cir., 1942, 130 F.2d 1016.

 Rule 9(b), as it has been construed by the courts, does not require that fraud be pleaded with absolute and detailed particularity. All that is required is that the circumstances constituting the alleged fraud be pleaded with sufficient definiteness so as to advise the adversary of the claim which he must meet.

 While the circumstances pleaded by the defendant here are not as detailed as might be desirable, nevertheless, we feel that the plaintiff has been adequately notified of the defense it must meet. *fn3" Wittlin v. Giacalone, supra; Levenson v. B. & M. Furniture Co., Inc., 2 Cir., 1941, 120 F.2d 1009; Automotive Service of Reading, Inc. v. Reading Trust Co., D.C.E.D.Pa.1950, 93 F.Supp. 907, 909; Hirshhorn v. Mine Safety Appliances Co., D.C.W.D.Pa.1944, 54 F.Supp. 588.

 Nor can we agree that the defendant's pleading does not set forth the essential elements of fraud as defined by the substantive law of Pennsylvania. See In re McClellan's Estate, 1950, 365 Pa. 401, 75 A.2d 595; cf. Seaboard Surety Co. v. Permacrete Construction Corp., 3 Cir., 1955, 221 F.2d 366, 375; Neuman v. Corn Exchange National Bank & Trust Co., 1949, 356 Pa. 442, 51 A.2d 759, 763, 52 A.2d 177; Restatement of Contracts, ยง 471.

 Specifically, the plaintiff asserts that the allegations of fraud pleaded by the defendant constitute a mere statement of opinion and of a future occurrence, and that the defendant fails to aver an intention to deceive on the part of the ...


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