79 Ill. App. 308 | Ill. App. Ct. | 1898
after making the foregoing statement, delivered the opinion of the court.
The question is, was, or not, the claimed purchase by appellants valid, as against the attaching creditor, Thompson. The verdict of the jury, and the judgment appealed from, say it was not.
Ever since the case of Thornton v. Davenport, 1 Scam. 296, the rule has been, in Illinois, that all absolute sales of chattel property, where possession is permitted to remain with the vendor, are fraudulent per se, and void as to creditors and purchasers, unless the retention of possession by the vendor is consistent with the provisions of the deed of transfer or bill or sale. In all such cases the vendor’s possession is not merely evidence of fraud, but, by legal inference, is fraud in itself, and can not be rebutted, although the parties may have acted in the best of faith. See also Lawson, v. Funk, 108 Ill. 502; Thompson v. Yeck, 21 ILL. 73; Allen v. Carr, 85 Ill. 388.
The rule is founded in public policy, and is designed to prevent secret and collusive transfers of property, and the procurement of credit upon an apparent ownership, different from that which really exists, and there has been no deviation from it in Illinois, notwithstanding its variations in other States.
“ The policy of the law in this State will not permit the owner of personal property to sell it and still continue in the possession of it. Possession being one of the strongest evidences of title to personal property, if the real ownership is suffered to be in one, and the apparent ownership in another, the latter gains credit as owner, and is enabled to practice deceit upon mankind. It is the well-established doctrine of this court that an absolute sale of personal property, where the possession is permitted to remain with the vendor, is fraudulent per se, and void as to creditors and purchasers.” Ticknor v. McClelland, 84 Ill. 471.
But if there has been an actual, open, substantial and exclusive change of possession that follows the title, the vendee will be protected from the creditors of the vendor, except for fraud in fact; and whether the fraudulent intent, or fraud in fact, exists in such a case, is a question of fact, to be established by extrinsic proofs. Lawson v. Funk, supra; Thompson v. Yeck, supra.
It is not urged that the sale to appellants was not in good faith, and if it were so urged, the contention would be unavailing, for the decided weight of evidence—we might almost say the uncontradictéd evidence—would uphold the bona fides of the transaction.
The most that could he urged against it would be that by the transaction certain creditors received a preference over others. An individual or corporation, in debt, may make a valid preference in favor of one set of creditors.
The question of fact that remains is, whether or not there took place that substantial and exclusive change of possession that the law requires should follow an absolute sale of chattels, in order that the vendee may be protected from creditors of the vendor. As between the parties, vendor and vendee, the transaction was in good faith and was complete. Nothing, in such respects, remained to be done.
Was there such an open manifestation of this executed intention by the parties as to preclude creditors of the vendor company? It is said there was not, because there was no change of signs upon the outside of the salesroom; no change in or withdrawal of the business cards formerly used by the vendor that lay around the inside of the store and were given out to customers; and because Lightner, the vendor’s former manager, was re-hired as head salesman for the vendees, and remained in charge of the salesroom in the same apparent capacity after as before the sale; and because of Lightner’s contradictory statements to the officer who served the writ; and of the remarks of Lightner and another salesman, to professed customers, in regard to orders from the vendor company to sell goods peremptorily and at a reduced figure.
In the opinion of this court, in McCord v. Gilbert, 64 Ill. App. 233, it was said: “ McCord and Goggin were not required to place their own names upon the saloon signs. We are aware of no law that requires a business man” to put his name upon his place of business as a prerequisite to its full ownership by him; and Ave see no reason to think that Bass & McDonald were required to do so under the facts in this case.
Mr. Presiding Justice Wall, in Ware v. Hirsch, 19 Ill. App. 274, said: “ It may be that a casual observer would not be aware of any change in the situation, but it is not easy to see what else there was to do except to put up a sign, or advertise in some way. These acts could not have been performed immediately, and we do not understand that they were essential.”
The representations made by the cards that were continued in use were just as true after as before the. sale of .the business to appellants, except in respect of Lightner, the manager. The cards, printed in type of varying size, read as follows:
“ The Superb Smalley Bicycles, Manufactured by Plymouth Cycle Manufacturing Co., Plymouth, Ind.
J. S. Lightner, Manager Chicago Branch, Cor. State and Monroe Streets, Palmer House.”
The goods there for sale were, after as before, those, and only those, manufactured by the Plymouth Company. Lightner, it is true, was no longer manager, but was head salesman, and it is only with reference to 'the capacity in which he was acting that the cards were not exactly as truthful after the sale as before it.
It is difficult to see how it could well be held that the use of the cards by the vendees, in the continuance of the business, was in any material sense inconsistent with an otherwise fair intention. As to the re-employment of Lightner, it is well settled that the re-employment of the former employes of the vendor, by the vendee, in a continuation of the transferred business, at the same stand, is not alone enough to stamp the transaction as fraudulent in law, and let in the creditors of the vendor.
The fact that Lightner, in the first instance, answered affirmatively the inquiry of the officer, if he were the manager of the Plymouth Company, and of his and the other salesmen’s statements that the companj^’s orders were to sell the goods at reduced figures, etc., ought not to be given much weight, as against a bona fide transaction. Statements of such character should be understood with reference to the surrounding circumstances. In this case, they were made to supposed customers, and evidently were put forth as inducements to further conversation and possible sales. There is no doubt that all the retained employes in the store had been told of the sale to appellants, and had accepted employment under appellants.
We do not think that, as a matter of law, either one or the combined whole of these slight indicia of a continued ownership and possession by the Plymouth Company, should control the actual sale and substantial change of possession that, as between the parties, took place.
The transaction that was upheld in Straus v. Minzesheimer, 78 Ill. 492, is, in our opinion, not as strong in respect of a visible change of possession as the one we are considering.
What is, or not, a sufficient compliance with the rule concerning a change of possession of personal property in the case of its absolute sale, in order to make it effectual against creditors of the vendor, must, in the very nature of things, depend upon the circumstances of each transaction, and the subject-matter. The evidences of a substantial and exclusive change of possession in the case of a sale of valuable jewels, would necessarily be quite different from those of a horse, or of a kiln of brick.
The general rule, stated in Thompson v. Yeck, supra, and reiterated in Ticknor v. McClelland, supra, is that “ in all cases the change of possession must be substantial and exclusive.”
In Gillette v. Stoddart, 30 Ill. App. 231, it is said (following a Vermont case) that the change of possession must be “ obvious,” “ observable,” “ visible,” “ such that the appearances would indicate to an observer that there had been a change.”
In Martin v. Duncan, 156 Ill. 274, the Supreme Court said, in applying the law to the facts of that case: “ Up to May 16th defendant in error had been in possession as agent of his brother, and if, on May 28th, he was in possession for himself, the change in the character of the possession should have been indicated by such outward, open, actual and visible signs as could be seen and known to the public, or persons dealing with the goods.”
At first reading it might seem that the intention existed in these two cases to widen and extend, and add elements to, the earlier rule requiring the change to be “ substantial and exclusive.”
But we doubt that such was intended.
“ Outward,” “ open,” “ actual,” “ visible,” “ substantial ” and “exclusive” mean, in the connection that they are employed in the cases referred to, substantially the same thing. They mean “ not concealed,” “not hidden, exposed to view,” “ free from concealment, dissimulation, reserve or disguise;” “in full existence; denoting that which not merely can be, but is, opposed to potential, apparent, constructive and imaginary;” “ veritable, genuine, certain, absolute; ” “ real, at present time, as a matter of fact;” “not merely nominal, opposed to form,” “actually existing, true;” “ not including, admitting or pertaining to any others; undivided, sole;” “ opposed to inclusive.” Anderson’s Law Dictionary and The Century Dictionary, under appropriate headings.
We regard the rule, whichever way expressed, as having been fully satisfied by the change of possession that took place.
It follows that the judgment must be reversed and the cause remanded, upon the ground that the verdict was contrary to the decided weight of the evidence, and that upon the case as made it was error to refuse to instruct the jury to find for the appellants. Reversed and remanded.
