Higgins v. Lodge

68 Md. 229 | Md. | 1888

Bryan, J.,

delivered the opinion of the Court.

Lodge and others replevied certain goods from Higgins. The evidence tended to show that one Hirsch Levy had made a fraudulent purchase of these goods from the plaintiffs ; and that he had sent them for public sale to the defendant, who was an auctioneer. The defendant had made advances of money on them.

On the supposition that the purchase of the goods from the plaintiffs had been accomplished by the fraud of Levy, it is not questioned that it was void at the election of the sellers, and that they could have reclaimed their property from him. But if he sold them to a bona fide purchaser without notice of the fraud, a good title would be passed which could not be impeached by the original vendor. Ordinarily a purchaser cannot acquire a title from a vendor who has none. But the authorities show without dissent that there is an exception under the circumstances which we have just supposed, in Powel vs. Bradlee, 9 G. & J., 278, it is said : “ In such a case, good faith, and a valuable consideration would be^ssential constituents of a good title.” If these features do not appear in the transaction, we take it that the title fails. An interest in the goods acquired by making advances on them when placed in the hands of an auctioneer for sale, would be protected under the same circumstances which would make a purchase valid.

The Court instructed the jury that if Levy’s purchase was fraudulent, the defendant’s title would be defeated, unless they found he had in good faith advanced money to Levy upon the security of the goods; or incurred expenses in relation to them. On the prayer of the defendant the Court ruled that the plaintiff could not recover, if the jury found that the advances were made by the defendant, without notice' or knowledge of the circumstances under which Levy purchased the goods. On the prayer of the plaintiffs it was ruled that they were not precluded from recovering by these advances, if the jury found that at the time the goods were delivered to the defendant, he had knowledge of circumstances calculated to-put a man of ordinary prudence on inquiry as to whether Levy was perpetrating a fraud in selling the goods by auction, and that he failed to make inquiry into the character of the transaction. Taking these instructions together it seems ’to us that they laid the case properly before the jury. Higgins could not deduce title to the goods through a fraudulent vendee,’ unless he showed that his advances were made in good faith. If he knew that Levy was selling these goods for the purpose of carrying into effect a fraud, his advances could not be considered as made in good faith; and if the circumstances were such as reasonably to call for inquiry, and if inquiry would have given him this knowledge, he is responsible in the same way as if he had obtained it. It has been held that if in any purchase “there be circumstances which in the exercise of common reason and prudence, ought to put a man upon particular inquiry he will be presumed to have made that inquiry, and will be charged with notice of every fact which that inquiry would give him.” Baynard vs. Norris, 5 Gill, 483. To the same effect are Green vs. Early, 39 Md., 229; Abrams vs. Sheehan, 40 Md., 446. The evidence showed that Levy rented a basement room about the fifteenth of June, 1885, and commenced business as a jobber; that between that time and September the seventh he purchased a large quantity of goods; six thousand dollars worth being purchased from these plaintiffs; that in the latter part of June, 1885, he commenced sending goods to the defendant to be sold by auction, the defendant making advances on them; that he continued to send goods for this purpose, and to receive advances from the defendant until September the fifth ; that the amount of these auction sales was more than sixty-four hundred dollars; that on September the fifth, Levy had in his store only four or five hundred dollars worth of goods; that the week before he had fifteen thousand dollars worth; that he had opened a bank account on the eleventh of July, and on the seventh of September he drew out the balance to his credit with the exception of a small sum; that after that day he was regarded as utterly insolvent, that he purchased the goods in question from the plaintiffs on the twenty-first of August on credit, the time fixed for payment being October the tenth; that the small balance to his credit in the bank was attached by creditors, and that after September his business was conducted in his wife’s name. The evidence certainly warranted the jury in finding that when Levj^purchased these good he did not intend to pay for them, and that he was engaged in a deliberate scheme of fraud, which he was effecting by purchasing large quantities of goods on credit, selling them by auction, and putting the proceeds beyond the reach of his creditors. Notwithstanding fraud on the part of Levy in making the purchase in question in this case, the title of Higgins would be good if the matters within his knowledge did not reasonably suggest to him the propriety of inquiring into the transactions in which Levy was engaged, and if this inquiry would not have discovered his fraudulent courses. It was the province of the jury to determine this question on the evidence in the cause.

(Decided 5th January, 1888.)

Judgment affirmed.