129 Ky. 105 | Ky. Ct. App. | 1908
Opinion of the Court by
Affirming.-
Tim Gray & Dudley Hardware Company, a 'Tennessee corporation, brought this suit of claim and delivery in the McCracken circuit court on the 24th day of September, 1906, for a lot of merchandise, consisting of whips and lashes, valued at $348.45, claiming to be the owner of said property. The parties defendant to the original petition were E. Rehkopf Saddlery Company, R. J. Barber, assignee of E. Rehkopf Saddlery Company, American-German National .Bank, and the Cohankns Manufacturing Company. On September 25,1906, an amended petition was filed, making W. S. O’Brien, O. B. Starks, and the Starks-Ullman Saddlery Company parties defendant, and claiming that said merchandise was detained by these defend
It appears from the record that on August 23, 1906, the Gray & Dudley Hardware Company which had a branch establishment at Eddyville, Ky., received by mail an order for a lot of whips and lashes from the E. Rehkopf Saddlery Company. On Monday, September 3, 1906, the Gray & Dudley Hardware Company (appellee) shipped to the E. Rehkopf Saddlery Company whips and lashes to the value of $348.45. On September 20,1906, the E. Rehkopf Saddlery Company made a deed of assignment to R. J. Barker for the benefit of its creditors. At the time of the assignment the assets of the E. Rehkopf Saddlery Company
The president of the American-German National Bank testified that on September 4, 1906, E. Rehkopf, president of the E. Rehkopf Saddlery Company, brought to the hank for discount a note of O. C. Harper, executed to the E. Rehkopf Saddlery Company and indorsed by E. Rehkopf, and offered $6,200 of warehouse receipts as collateral security for same. Not being satisfied with the security, he demanded more, and Rehkopf promised to deliver to him additional collateral in a few days. With that understanding, the note was accepted by the bank, and the proceeds placed to the credit of the E. Rehkopf Saddlery Company. This was a new loan, and not a renewal of any old loan. Pursuant to his agreement, Rehkopf on September 11, 1906, offered additional security in the shape of warehouse receipt No. 21, issued to the E. Rehkopf Saddlery Company hy W. S. O ’Brien, a public warehouseman of Paducah, Ky., covering a lot of whips and lashes valued at $348.45. He accepted this additional collateral, not knowing from whom or when the whips had been bought. He believed at the time of the transaction from the reports of commercial agencies and other sources that the E. Rehkopf Saddlery Company was entirely solvent. 1$he E. Rehkopf Saddlery Company had for a long time been a cus
O. B. Starks testified that he was the president of the Starks-Ullman Saddlery Company, and that on September 17, 1906, he, as president of said company, bought the merchandise in controversy, together with other merchandise, from the American-German National Bank, which held the warehouse receipts for the same, and delivered to him an invoice for the goods that were stored in the public warehouse of W. S. O’Brien at the Cohankus factory. At the time he did not know from whom the E. Rehkopf Saddlery Company had bought the property.
W. S. O’Brien testified that he was the' keeper of warehouses in Paducah, Ky. He leased warehouses, issued warehouse receipts, and kept records of goods received and receipts issued. He had leased the Cohankus house where the goods were stored. He received them on September 11, 1906, and issued a.
Appellant contends for a reversal on the following grounds: (1) The verdict was against the evidence. (2) There was a fatal variance between appellee’s pleading and proof. (3) The court erred in rendering judgment against the appellant American-German National Bank, because there was no proof of detention or possession by it at the time of the institution of the action, but, on the contrary, the defendant Starks-Ullman Saddlery Company admitted the detention and possession by it at said time.
First. The law is now well settled that where goods have been obtained by a party without any intention or reasonable expectation of paying for same, and with a design of cheating the vendor out of his goods, or to obtain them without consideration, the vendor may, upon discovering the fraud, elect to treat the contract of sale as a nullity and bring his action for the recovery of the specified property, or an action for its value. 24 Am. & Eng. Ency. of Law, 1135; Dietz’s Assignee v. Sutcliffe, 80 Ky. 650, 4 Ky. L. R. 837; Brown v. Popham, 15 Ky. L. R. 543; Crozier’s Assignee v. Cromie, 14 Ky. L. R. 858. In actions of this kind it is difficult to prove the fraud of the purchaser except by his subsequent conduct. At the time the E. Rehkopf Saddlery Company purchased the goods in question, its assets did not amount to over $25,000, and its liabilities were over $150,000. These liabilities consisted of small accounts due various parties in all parts of the United States. When the goods were received by the E. Rehkopf Saddlery Company, they were not opened or taken out of the original packages. They viere delivered to a warehouse and the warehouse receipt was then delivered to appellant. The
The court instructed the jury as follows:
“No. 1. If you .shall believe from the evidence in this case that at the time the defendant E. Rehkopf Saddlery Company ordered and obtained from the plaintiff the goods in controversy in this action that said defendant’s officers ór agents ordering or obtaining said goods knew that said E. Rehkopf Saddlery Company was insolvent, and had no reasonable expectation of being able to pay plaintiff for said goods, and made the order for said goods without any intention of paying for same, or without any reasonable expectation of paying therefor, and with the design of cheating the plaintiff out of said goods, or to obtain them without consideration, and that said officers or agents concealed said designs from the plaintiff, then in law the plaintiff is the owner of the goods sued for, and entitled to recover possession thereof, and, if you shall so believe, then you will find for the plaintiff the goods sued for, and in your verdict fix the value thereof at not exceeding three hundred and forty-eight dollars and forty-five cents ($348.45), the value alleged in the petition, unless you shall believe as stated in instruction No. 3 herein, and this instruction is given you subject to said instruction No. 3.
“No. 2. But, unless you shall believe from the evidence in this case that the goods in controversy were obtained from plaintiff by defendant E. Rehkopf Saddlery Company under the facts and circumstances*117 stated to yon in instruction No. 1 herein, then the law is for the defendant, and you will so find.
“No. 3, Although you may believe from th.e evidence that the goods in controversy were obtained from plaintiff by defendant E. Rehkopf Saddlery Company under the facts and circumstances stated to you in instruction No. 1 herein, yet if you shall further believe from the evidence in this case that after the delivery of said goods by plaintiff to defendant E. Rehkopf Saddlery Company that said saddlery company placed same in a public warehpuse in the city of Paducah, Ky., and caused the warehouse receipt exhibited to you in evidence to be issued covering said goods, and shall further believe that said warehouse receipt was delivered and pledged by said E. Rehkopf Saddlery Company to the defendant American-German National Bank for money loaned to said saddlery company, or for a note or notes discounted at the instance or request of said E. Rehkopf Saddlery Company, or its officers or agents, by reason of the delivery to it, and upon the faith of said warehouse receipt, and without any knowledge or notice that said E. Rehkopf Saddlery Company had obtained said goods from the plaintiff under the facts and circumstances stated to you in instruction No. 1 herein, if you shall believe that said goods had been so obtained, then the law is for the defendant, and you will so find. But, unless you shall so believe from the evidence, then the law is for the plaintiff as defined to you by instruction No. 1 herein.”
Instruction No. 1 properly presents the law as .to whether or not the goods were obtained by fraud.. Instruction No. 3 presents appellant’s defense in language as favorable to it as it could reasonably contend for. In this instruction the jury were told to find for.
Second. It is contended by counsel for appellant that as appellee’s petition did not charge that it had been deprived of possession of, or title to, the goods by fraud, but simply sought to recover the property as its own, it could not do so under the proof in this case, appellee showing by its own witnesses that it sold and delivered the goods in the regular course of trade,to the E. Rehkopf Saddlery Company, and had as vendor placed said vendee in possession of, and invested it with, title to said goods. In this view of the law, however, counsel are mistaken. Appellee had the right to treat the goods as its own, and sue for their recovery or their value in case of their conversion. This rule is well settled by a long line of
Third. Counsel for appellant further contend that as the American-German National Bank did not have possession of the goods in question at the time of the institution of the suit, and as the Starks-Ullman Saddlery Company answered admitting that it had possession of the goods, judgment could not properly go against appellant. In the early case of Pool v. Adkisson et ah, 1 Dana 110, which was an action of detinue for the recovery óf two slaves who, the proof showed, were at that time in the State of Missouri, the court, speaking through Chief Justice Robertson, said: “But is detinue maintainable? We think it is. Since the ease of Burnley v. Lambert, 2 Wash. 308, it has been considered that proof of possession by the defendant at the date of the writ is not necessary in an action of detinue. In Southcote’s Case, 4 Co. Rep. 83, detinue was maintained against a bailee (to keep safely) after he had been robbed of the thing bailed. In many cases it would be difficult to ascertain the motive which induced a defendant to part with the property prior" to the institution of the suit for it. And surely the right to maintain detinue can not depend on grounds, so precarious and delusive as the fact that the defendant was in the possession at the date of the writ, or at the time of its sendee, or the fact that, in parting with the possession prior thereto, he had acted wantonly or in bad faith. Such a metaphysical inquiry as-the latter seems not to be required by principle or authority, and would, were it required, tend to the-subversion of the action of detinue.” Furthermore,.
But counsel for appellant contend that appellee’s petition was defective, and that he could only recover the value of the property in case he -asked for that specific relief. Appellee’s petition., however, complied with all the provisions of the statute with reference to an action for claim and delivery. It set forth the separate value of each article, and not only prayed for a recovery of the property, but for all proper relief. Assuming, as was found by the jury, that appellant was not a bona fide purchaser for value without notice, it necessarily, then, converted tbe proceeds of appellee’s property to its own use. It alone received the proceeds, of tbe property, when it was not entitled to
The fact that judgment was not given against the Starks-Ullman Company is not assigned as ground for a new trial, and it can not therefore he considered. However, it may he said that judgment should not have gone against the latter company merely because it admitted possession of the property, if the evidence showed that that company bought and paid for the goods without notice of the fraud by which they had been obtained.
Perceiving no substantial error in the record, the judgment is affirmed.