Appeal, No. 321 | Pa. | Jul 19, 1893
Opinion by
This is an action of trespass against the sheriff of Clearfield county for selling on execution certain goods as the property of Louis Shaffer, which plaintiffs claim belonged to them.
Plaintiffs are merchants in Philadelphia. Shaffer was a retail dealer in Dubois, Clearfield county. In 1886 he and one Friedman had been in partnership in the mercantile business at Dubois. This partnership was dissolved about January 1, 1887, by the withdrawal of Fi'iedman, and thereafter Shaffer carried on the business in his own name down to the 11th of November, 1889, when, on judgments confessed by him aggregating1 more than $7,000,’ his personal property, including the stock of goods on hand, was seized and sold by the sheriff. The largest judgment was to H. B. Claflin & Co. of New York for $3,683.23; there were four others to L. Friedman, his former partner, amounting altogether to $1,578.78; then four to Mary Shaffex’, amounting to $2,000. The sheriff’s sale realized about $6,500. Shaffer &• Friedman had purchased goods on credit from plaintiffs while in business, and when they dissolved they owed a balance of $241.71, which had been staxxding for some
The sheriff, disregarding the notice, proceeded with the sale and brought the proceeds into court for distribution. Tiie plaintiffs then brought this action against him for damages. On the trial in the court below, plaintiffs offered evidence of alleged false representations made by Shaffer on the 10th of September, 1889, when the last bill was purchased.
Mr. Schwartz, one of the plaintiffs, testified as follows: “ Q. What was the statement that you said he made there in 1889 in the presence of your credit man ? A. The first questions were addressed to the matter of Friedman’s withdrawal from the firm. He said Friedman had no means and had no money in the firm; that he had taken nothing out, and that he owed him nothing. He also said that the difficulties he had in meeting his liabilities promptly were due to Friedman’s buying goods too liberally. He said he had no over-matured liability of any kind, and his financial condition was good; he was able to meet all his bills as they matured. That is substantially what he said.”
He then testified that Shaffer gave four notes, all dated October 1, 1889, for this last bill; one at thirty days for $100 ;
Mr. A. R. Barret, the credit man of plaintiffs, testifies to the representations made by Shaffer at the time spoken of by Mr. Schwartz as follows: “ Q. State what was said. A. Mr. Schwartz first asked him in relation to his copartnership and dissolution, and why it was dissolved. Shaffer answered that his partnership with Friedman had been dissolved because Friedman had been accustomed to buy too freely, and he accounted for his past or his previous slowness in paying his. accounts upon that ground. He was then asked if Friedman had taken anything out of the concern, and he said, “ no.” He was then asked in regard to his liabilities, and he said he had no unmatured or past due liabilities, — and that he would be perfectly able to pay his bills in the future.
The plaintiffs followed this by offering judgments entered on warrants of attorney bearing date prior to September 10, 1889, amounting to about $4,000 in favor of L. Friedman and Mary Shaffer.
It was argued from this evidence, here were three false statements : (1) That he was not indebted to Friedman, the retiring partner. (2) That he had no overdue debts. (8) That he was able to pay all his debts as they matured. Assuming, as we must, where a compulsory nonsuit is entered, that the statements of plaintiff’s witnesses are correct, Shaffer certainly did not tell the truth; the record shows he was indebted to Friedman; he owed debts then past due; in less than sixty days thereafter he was not able to pay his debts, and was in fact insolvent at the date of the purchase. If the issue had been between plaintiffs and Shaffer, it would have been a question for the jury to determine whether, in view of all the evidence, plaintiffs had been misled by “falsehood, artifice, or contrivance; ” had parted with their goods on the faith of false representations. If, by false and fraudulent representations, Shaffer, under the form of a sale, got into his control and apparent absolute ownership their property, they had a right to
If not a trespasser at the beginning, did he by the sale, after notice, become one? Leaving out of view the inquiry as to whether the evidence showed such “ contrivance and fraud ” as would warrant a rescission of the contract of sale on part of plaintiffs as between them and Shaffer, the question is whether as to this property, in the custody of the sheriff under a lawful seizure by virtue of execution on judgments regularly entered, the alleged rescission was effectual to revest title in the plaintiffs.
It has never been held in this state, that, as against an attachment or execution on a debt contracted subsequent to the alleged voidable sale, the vendor could rescind and reclaim the goods. On the contrary, in Smith v. Smith, Murphy & Co., 21 Pa. 867, the rule that he cannot do so is approvingly recognized, although the decision was rested on other grounds. Creditors whose debts are contracted subsequent to the possession by the vendee of goods under a voidable title, are treated as in the same situation with bona fide purchasers.
Plaintiffs concede here that, if Shaffer had sold these goods to his customers, they could not have followed and reclaimed them, because by their own act they had put in Shaffer a title known only to themslves to be voidable; purchasers had the right to assume, when they bought, that he was the absolute owner. So with creditors whose debts were contracted subsequent to his possession under this title. By plaintiff’s act he was fur
Further, the acceptance of the $100 by plaintiffs on November 4, 1889, in part payment of the bill, was in affirmance of the contract. This, it is said, was before they discovered Shaffer’s statements were false. Let this be so; even if their neglect to make inquiry for fifty days did not affect their right to rescind, because they had not yet discovered the fraud, still when they did discover it, a reclamation of the goods imposed upon them the duty of refunding the money over and above the value of the few already sold by Shaffer. Thereafter, their retention of Shaffer’s money was a persistent affirmance of the contract. A party seeking a rescission cannot have both the property and the price ; cannot both affirm and disaffirm.
The case does not belong to that class of fraudulent contracts where property in the goods never passed to the wrongdoer; as in case of false personation, or a fraudulent refusal to perform conditions precedent to transfer. Both the property in and the possession of the chattels vested in Shaffer, and such was the intention of both parties to the contract; the price was to be paid by installments; up to the time of the alleged rescission the purchaser had paid just as he agreed to pay. But then, before the other payments were due, at the time of the seizure of his goods, it was demonstrated he was not solvent as he had said he was, and he did owe creditors he had said he did not owe. Assume, on these facts, plaintiffs had a right to rescind and reclaim their goods, the nature of the transaction conferred on them no right to appropriate $100 of Shaffer’s money, nor did it impose on him a forfeiture of that amount, or of that amount
But, it is argued, this rule can only have application where the suit is between the vendor and vendee ; that plaintiffs ought not to have paid the money to the sheriff, for they had not received it from him; nor to Shaffer, for he had no longer control of the goods. This is to say in effect, plaintiffs could rescind for what they gave, but could not for what they got; could take back their goods, but could not give back Shaffer’s money. We fail to see how a levy on the goods deprived Shaffer of the right to receive his money; this suit against the sheriff is not for a rescission ; it is for trespass ; to maintain it, plaintiffs must show that, as between them and Shaffer, they had rescinded before bringing it. They must prove they had sufficient grounds to rescind, and that, before reclaiming the goods, they did all that equity demanded; its first demand is, that one claiming to rescind a contract must restore or offer to restore the other party to his condition before it was made. True, it does not demand that which is impossible or unreasonable; but it was not impossible to tender Shaffer his money, for he was there in person. They did tender and he received the notes not yet due. The fact that the goods were in the custody of the law to be applied to payment of his debts did not make a tender to him unreasonable; the sheriff had nothing to do with the money; had no levy or claim upon it; it was Shaffer’s, and he had a right to receive it. The title to the goods was still in him until the money was tendered to or received by him, and until the rescission was completed by repaying or offering to repay the money, the sheriff could not, without peril, relinquish the goods sought to be reclaimed. Therefore, in proceeding-according to the command of his writ, he made sale not of plaintiff’s property but of Shaffer’s.
True, the debtor in the writ could not, by any act of his after the levy, loosen the grasp of the law, but the plaintiffs, by doing what was required of them, could have made void his title, and thus have constructed a foundation for this suit against the sheriff. The decision of this court in Kitchen v. MeCloskey, 150 Pa. 376" court="Pa." date_filed="1892-07-13" href="https://app.midpage.ai/document/kitchen-v-mccloskey-6240945?utm_source=webapp" opinion_id="6240945">150 Pa. 376, is properly cited and relied on by appellants as establishing the right of the vendor to a rescission after levy and
The judgment of the court below is affirmed, and appeal is dismissed at cost of appellants.