England v. Forbes

12 Del. 301

• Court: Superior Court of Delaware
• Decided: November 15, 1885
• Status: Published

Opinion

Comegys, C. J.,

charging the jury:

Wherever there is a sale of personal property, where nothing remains to be done by the seller before it is delivered, the property passes to the buyer without delivery; and if injured or destroyed after the sale, the loss falls upon the purchaser, and the seller is entitled to payment of the price.

The right, of property and the right of possession are distinct. The former may be in one person, and the latter in another. A seller may have a qualified right to retain the goods sold until payment is made, and yet the property in the goods may be in the purchaser.

Where there is an immediate sale, and nothing remains to be done by the seller as between him and the buyer, the property in the thing sold vests in the buyer, and all the consequences resulting from the vesting follow.

When there is a sale of goods generally, no property in them passes until delivery, because until then the very goods sold are not ascertained; but when, by the contract itself, the seller sets apart, or appropriates to the vendee, a specific chattel, and the latter thereby agrees to take that specific chattel, and to pay the stipulated price, the parties are then in the same situation as they would be after delivery of goods in pursuance of a general contract. The appropriation of the chattel is the same as delivery by the seller, and the assent of the buyer to take the specific chattel and pay the price is equivalent to his accepting possession.

Where there is a sale of personal property to be paid for in cash, the property in the things sold passes to the buyer, but the seller has the right to re-possession until the money is paid: this is because of his lien for the purchase’ money. But if he deliver the possession to the buyer without such payment, his lien is gone and the title of the buyer is complete. His remedy is an action on the contract of sale.

So where goods are sold to be paid for on credit, whether generally, or upon notes, bills, bonds, or the like, to be given, and they are deliver’d to the buyer upon such general credit, or before the security is given, where it is stipulated for, the property and title to them against the seller is complete: his remedy is on the agreement, or by reason of it.

Where goods are sold to a person upon a false representation as to his solvency or ability to pay, and it does not appear from the evidence, either directly, or by reasonable inference, that the sale was made in whole or in part, under the influence of such representation, the seller cannot rescind the contract of sale on the ground of false representation, and retake the goods if they have been delivered to the buyer. But if the sale were made by reason of such representation, it may be avoided, and the goods, if they have been delivered, retaken from the custody of the buyer.

He may likewise refuse to deliver the goods bought, where they have not been delivered, upon the same ground. The reason is, because the fraudulent representation, in virtue of which the contract of sale was made, vitiated such contract and made it voidable, at the option of the seller.

But if in the case of such vitiated contract of sale, the goods sold have been delivered to the buyer, who sells them to another who buys them bona fide, without any notice or knowledge on his part of the fraudulent feature of the sale, such innocent purchaser ■ acquires a valid title to them, which cannot be defeated by the original seller. Likewise, where, after possession has been obtained by a party who purchases under a fraudulent representation as to his solvency, they be levied upon by an execution issued at the suit of a bona fide judgment creditor, having no notice or knowledge of any such representation, his execution lien cannot be disturbed by, but will hold good against, the defrauded seller.

It is the law of this State, as decided in the case of Mears & Son v. Waples, that mere insolvency of the buyer, well known to himself and concealed from the seller, does not in itself furnish sufficient grounds for recinding a contract of sale. Uor will the fraudulent purchasing and obtaining of goods with an intention of never paying for them, of itself render the contract of sale absolutely void, even as between the seller and buyer; yet it will render it voidable at the election of the seller, but if the goods are sold by such fraudulent buyer to an innocent purchaser for value, the latter will take and hold them by a valid title. 3 Houst., 621 ; 4 Houst., 62.

In order to entitle the plaintiff to recover at all, you must be satisfied from the proof in the cause, of two things—-1st, that he made the sale to Forbes & Banks upon or by reason of a false representation made at the time of their financial condition • in determining this, you must take the evidence given you by the defendant, Banks, as well as that of the plaintiff, and the evidence also of the actual condition of Forbes & Banks; and 2d, that the execution of Edwin R. Banks was issued upon a judgment entered on a bond made fraudulently, and not bona fide.

In any event, if the plaintiff with his replevin took any property other than the spokes shipped by him, the defendants are entitled to a verdict for their value, although you may decide to give the plaintiff a verdict for the value of the spokes remaining at the time the sheriff served the replevin.

Verdict for plaintiff.