Flower v. Farwell

18 Ill. App. 254, 1885 Ill. App. LEXIS 146
CourtAppellate Court of Illinois
DecidedJanuary 27, 1886
StatusPublished
Cited by2 cases

This text of 18 Ill. App. 254 (Flower v. Farwell) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Flower v. Farwell, 18 Ill. App. 254, 1885 Ill. App. LEXIS 146 (Ill. Ct. App. 1886).

Opinion

McAllister, J.

In the leading cases of Pasley v. Freeman, 3 Term R. 51, and Haycraft v. Creasy, 2 East, 92, the doctrine was clearly enunciated that in order to recover damages on the ground of fraud, mere legal fraud was not sufficient; that moral fraud or dishonest intention was indispensable. But it seems that after those decisions some of the English courts drifted away from their principles and they were lost sight of or obscured by various theories respecting what constituted frauds in the sense that it would invalidate sales of goods or afford the basis of an action for damages, so that mere fraud in law, without moral fraud, had come to be regarded as sufficient for either purpose. But both the Exchequer Chamber and Queen’s Bench have at length gone back and anchored upon the principles of the above cases, and it is now settled that mere legal fraud will not afford ground for invalidating contracts for the sale of goods, or for maintaining an action for damages; that there must be moral fraud or dishonest intention. Collins v. Evans, 5 Adol. & El. (N. S.) 820; Bailey v. Waiford, 9 Id. 197; Ormund v. Huth, 14 Mees. & Welsb. 651; 2 Smith’s Leading Cases, 105-6.

Mr. Benjamin, in speaking of the remedies of vendors of goods, says: “ JSText, it is now settled that there can be no fraud without dishonest intention—no such fraud as was formerly termed a legal fraud” Benj. on Sales, 2d Am. Ed. § 429.

So far as the doctrine has received full consideration and may be deemed settled in this State, it is entirely in harmony with that view. The case of Henshaw v. Bryant, 4 Scam. 106, was the first of that class. It is there stated to be this: “When a person who knows himself to be insolvent, by means of fraudulent pretenses or representations, obtains possession of goods under a pretense of purchase, with the intention not to pay for them but with the design to cheat the vendor out of them, a court of chancery will set aside the sale and order a return of the goods if they have not passed into the hands of a tona fide purchaser, or the vendor may bring replevin or trover for them.” That statement of the law was expressly re-affirmed in Patton v. Campbell, 70 Ill. 75.

We may readily concede that this statement of the law by our Supreme Court embraces one element as a necessary requisite, which is held by a preponderance of the authorities outside this State not to be necessary, viz., that in addition to the intention not to pay for the goods and design to cheat the vendor, there should be fraudulent representations by the buyer. But the necessity of such false representations, or some trick or artifice capable of proof, is held by several courts to be imperative. Smith v. Smith, 21 Penn. 367; Backentoss v. Speicher, 31 Id. 324; Bell v. Ellis, 33 Cal. 620; per Sheldon, J., in Nichols v. Piner, 18 N. Y. 295.

As opposed to that view, see Shipman v. Seymour, 40 Mich. 283; Stewart v. Emerson, 52 N. H. 301; Donaldson v. Farwell, 93 U. S. 631. These cases go upon the theory that a preconceived design never to pay, which involves a positive design to cheat and defraud, or known insolvency, with the intention not to pay for the goods, and the fraudulent concealment of that intention from the seller, are sufficient; and we agree with that conclusion. But eliminating that element from the statement of the law, in Henshaw v. Bryant, and Patton v. Campbell, supra, then the rule is, that when a person obtains goods, under the pretense of a purchase, with the intention not to pay for them, but with the design to cheat the vendor out of them, this would be such a fraud as would invalidate the sale, and lay the foundation for an action at law.

That is precisely what the plaintiffs below have averred in the first count of their declaration. The second count is upon fraudulent representations; but there was no evidence tending to support it, sufficient to be submitted to the jury. Although there was some slight evidence tending to support the first count, yet it was so slight and unsatisfactory, that any inaccuracy in plaintiffs’ instructions, calculated to mislead the jury, will be regarded as fatal. One of their instructions was, that “ If a merchant buys goods on credit without intending to pay for them, this is a fraud upon the seller and will entitle him to avoid the contract of sale and sue for the value of the goods, in an action based on such 'fraud ; that if the jury believe from the evidence that defendant obtained such goods upon credit without intending to pay for them, then their verdict should be for plaintiffs.”

It will be perceived that this instruction makes no reference to the question whether the purchase was made with the intention to cheat the plaintiffs out of their goods, which is expressly averred in their declaration, or to the insolvency of the defendant, and knowing it, the purchase with intention not to pay, and the fraudulent concealment of that intention from the plaintiffs. There is nothing of the kind; but the mere absence of any intention is, by it, declared to be a fraud as matter of law. If this instruction should receive the sanction of the courts, then it would be available in supplying the want of evidence tending to prove a fraudulent intent, at the time of a purchase, and enable the sellers of goods upon credit, where the buyers have failed, to turn nearly every action for the collection of such debts into an action on the case for fraud, and thereby defeat the beneficent purposes of that provision of the constitution which abolishes imprisonment fur debt.

In Catlin v. Warren, 16 Bradwell, 418, we held just such an instruction bad. At the time that case was heard, that of Hanchett v. Mansfield, Id. 407, was also submitted. The counsel for appellees in this present case were counsel in both those cases. " In the latter they were on the other side of the question involved here, and cited the case of Burrill v. Stevens, 73 Maine, 395, to sustain the proposition that there must be a positive design on the part of the buyer, at the time of the sale, not to pay for the goods. We adopted that view, citing Burrill v. Stevens, and decided the case in their favor. But they also cited the same case in Catlin v. Warren, where they were endeavoring to support an instruction given at their instance, the same as that in this present case. We followed Burrill v. Stevens, and other cases, and decided Catlin v. Warren, against them. The counsel now quarrel with that decision, and speaking of the case from 73 Maine, they say : “ It is sufficient to say that it has been expressly and repeatedly repudiated by courts of the highest authority.”

If the learned counsel had succeeded in making that statement good by citations, and shown that they had found out about tha.t repudiation since they urged it upon our attention in the cases referred to, we frankly say that while we would have been surprised at the discovery, it would have materially added to the high respect we already entertained for them. But they failed to find and cite any case which expressly or indirectly refers to that of Burrill v. Stevens, or any which are in any material degree in conflict with it. They take the position that a positive intention never to pay is not necessary ; and to sustain the instruction they must take that position ; and that a dishonest intention, in fact, is not essential.

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Bluebook (online)
18 Ill. App. 254, 1885 Ill. App. LEXIS 146, Counsel Stack Legal Research, https://law.counselstack.com/opinion/flower-v-farwell-illappct-1886.