Lupin v. Marie & Varet

| New York Court of Chancery | Apr 6, 1830

The Chancellor.

The principle of stoppage in transitu is wholly inapplicable to this case. Goods cannot be stopped or reclaimed unless the right is exercised, or there is a bona fide attempt made to exercise it before the property actually comes into the possession of the vendee. In this case the goods had come into the possession of the vendee, and had been shipped by him to the West Indies, and were on their way thither before his failure.

The vendor of real estate has, in many cases, an implied lien on the property sold, for the purchase money, where no express lien or other security is agreed upon by the parties. But there is no such lien on personal property, even as between vendor and vendee. If the goods are absolutely and unconditionally delivered, without any fraud on the part of the Vendee, the .vendor can only look to his personal security ‘for payment; (Chapman v. Lathrop, 6 Cowen's Rep. 110 ; 1 Greenl. Rep. 376.) If the delivery of the goods is obtained by. the fraud of the vendee the title .does not pass, and the vendor' may reclaim the goods if they have not passed'into the hands of a bona" fide purchaser." In such a case the assignee to. whom the goods have been assigned ■ to secure' antecedent debts or responsibilities," canrlot hold'thetp'as against the seller. So also if the delilvery was not intended by the parties to be absolute, but conditional, the vendor, .does not. part with his property until the condition is complied with. (4 Mass., 405" court="Mass." date_filed="1808-05-15" href="https://app.midpage.ai/document/hussey-v-thornton-6403237?utm_source=webapp" opinion_id="6403237">4 Mass. Rep., 405. 6 John. Ch. Rep. 437. 4 Mason’s Rep. 289. 1 Paige, 312.) But even in that-case- a bona fide purchaser who 'has no notice of the fraud will be protected. For where one pf two innocent, persons must suffer by the acts-of a third, he who has enabled such third person to occasion the injury' must sustain the- loss.

It is not necessary in this case' to decide whether it would be sufficient, to avoid'a sale as fraudulent - if a merchant' in good .credit purchase goods- upon his o„wn responsibility, who knows himself to be insolvent at . the timé," but conceals that fact from, the vendor. ' If he made- the purchase.. under such circumstances,'intending never to'pay for them, or for the purpose of placing.them in the hands of an assignee for the -benefit of other creditors, there , can be no. doubt it would be such a fraud as would avoid the sale. But in this case it is évident that no fraud was intended. The goods were. ■ purchased on' the 24th of August and shipped on the 26th. At that time Marie had- no reason to suppose he was insol-. vent, although he was so "in fact, Frotó his answer,- which has. not been replied "to and therefore must be taken as true, it appears he then supposed himself solvent, and actually, paid $18,000 of' his debts after the sale. ‘Between that time and the day he stopped payment,' several vessels arrived from abroad, bringing him intelligence of the" failure of the house of Goldschmidt & Co. with, which he had great commercial dealings, and of "other.'heavy losses-sustained in-his Commercial speculations elsewhere. These- accumulated disasters compelled him to suspend his payments on the fourth .of September. i . , ■ : ."

I also think the delivery was not conditional and that it was not intended to be so by either party. The purchase was Made at the solicitation of the complainant’s agent and upon the personal responsibility of Marie alone. No security was required, nor was it supposed necessary. The agent knew the goods were to be immediately shipped for the Havana, and they were sent on board the brig for that purpose. Although notes were to be given for the purchase money, the liability of Maria would not have been changed by the giving of such notes. The agent no doubt took it for granted they would be given whenever called for. There was therefore no good reason why the delivery should, be conditional, and I cannot believe either party so intended it. In Smith v. Dennie, (6 Pickering’s Rep. 262,) where goods were sold to be paid for in an endorsed note on delivery, and the goods were the next day delivered by a clerk in the absence of the vendor and without any thing being said as to the condition, and the vendor neglected, for eight days, to call for the note, after which the goods were attached by another creditor, the condition was considered as waived.

It may undoubtedly be considered a very hard case that the goods of the complainants, sold so short a time before the failure, and which at the time of the failure remained in the original packages and under the control of the vendee, should, to the entire exclusion of the complainants, go into the hands of Varet to secure antecedent debts and responsibilities. But such is the settled law of the land; and it is not in the power of this court to change it. The bill in this case must be dismissed; but as the complainants had grounds to suspect fraud or collusion until the coming in of the answer, which fully explained the reason of the failure, I shall not charge them with costs.