The Court,
Comegys, C. J.,
charged the jury, that it had been ruled in the case of Waters
et al. v.
Comly, 3 Harr., 117, in the Court of Errors and Appeals in this State, that a bond given by a man in failing circumstances to a creditor, covering all his property, for the benefit of preferred creditors, would be void under our act against fraudulent insolvency, but at the same time it was held that such a debtor may give his bond to a creditor to secure the payment of a
bona fide
debt. So far as the proof goes, however, this was the case of a sale of a stock of goods in a store at Sandiown in this county on the 21st day of February, 1878, by Jacob Hickman to the plaintiff, Robert H. Groff, in payment of a note for four hundred dollars and interest on it, which he owed, and two judgments in this court, one in favor of George W. Porter for the sum of three hundred and twelve dollars and sixty cents, and the other in favor of William Sapp for the sum of one hundred and four dollars and twenty cents which the plaintiff had paid to them for him, and a small sum in addition thereto, as the price agreed on between them for the goods, Hickman not being able, as he has testified, to pay the plaintiff his note in money, which had then been due three years, offered to sell him the stock of goods, and on his inquiring what other claims there were against them, and being informed by him of the two judgments just mentioned, concluded, after some reflection, to accept his offer and to purchase them at the price then agreed upon between them, which was to be determined by their cost price, less five per cent, to be deducted, the plaintiff reserving the right to apply so much of the purchase-money as was required to pay the judgments, costs and interest in favor of Porter and Sapp, and which he soon after paid in full to them. It also appears, by the testimony of the witness, W. S. Muchler, Esq., a member of the bar of Maryland, who acted as counsel of the plaintiff in the close of the transaction, that on the 21st of
February, 1878, an account of the stock of goods was taken by the parties in the storehouse at Sandtown, that the plaintiff receipted to Hickman for Porter’s and Sapp’s judgments and his own note, and then delivered the key of the storehouse to the plaintiff, who locked it up and put the key in his pocket. Soon after that, judgments were recovered before a justice of the peace by other creditors against Hickman for accounts due them prior to this transaction between him and the plaintiff, on which the executions were issued which came to the hands of the defendant, Cooper, the constable, and on which he seized and took the goods out of the possession of the plaintiff, as the goods of Hickman still, and detained them in his custody and possession until they were replevied by the plaintiff in this action now on trial before you, the plaintiff claiming to be the
bona fide
purchaser of them from Hickman and the lawful and rightful owner of them, and seeking damages in it for the taking and detention of them by the defendant until they were replevied, and the defendant claiming them by virtue of his executions and levies on them as the goods of Hickman, because his alleged sale of them to the plaintiff was made when he was in failing circumstances and insolvent, and for the purpose of preferring the plaintiff and Porter and Sapp to his other creditors, all of which the plaintiff well knew, or had good reason to believe or suspect at the time of the transaction, and was consequently fraudulent and void in law under our act against fraudulent insolvency. And the counsel for the defendant contends that it was but a pretended sale, wholly fictitious and fraudulent in its character, because the goods were again the next day and afterwards in the possession of Hickman in the same place as. before, and so continued in his possession, or if not in his exclusive possession, at least in the mixed or joint possession of him and the plaintiff, which also rendered the sale fraudulent and void in law against all other creditors of Hickman under our statute of frauds. He further contends that the plaintiff must have known, from his intercourse with Hickman, or had good reason to believe or suspect that he was indebted to the parties whom he represents in this case, and if so, that the sale was null and void because it
was made by an insolvent debtor in preference of certain credi- ■ tors over others, and to the plaintiff, as one of his creditors, who well knew the purpose of it, contrary to the statute against fraudulent insolvency.
In the case of Waters
et al. v.
Comly, the Court of Errors and Appeals in this State, in effect, declared the law to be, that any transaction of a debtor in failing circumstances (as, in this case, Hickman was) which seeks to prefer certain creditors to others by securing their debts out of his property and leaving the rest unpaid, is in fraud of our statute against fraudulent assignments, and void. That decision binds this court, and is the law of the State; and it therefore follows, that if the object and intention of Hickman in selling out to Groff, the plaintiff, was to prefer him and Porter and Sapp to his other creditors, of which number were the plaintiffs in the executions of Constable Cooper against Hickman, and Groff, the plaintiff then knew that they also were his creditors, and that the object of Hickman in selling out to him was to prefer him and Porter and Sapp to them as his creditors, then the transaction was fraudulent and void under the statute, and the seizure of the goods -by Cooper, the constable, under the executions at the suit of those creditors was lawful and proper; and if the jury were satisfied from the evidence that such was the case, the plaintiff would not be entitled to recover in the action, and their verdict should be for the defendant with damages to the value of the goods, as they had been replevied out of his hands and restored to the plaintiff. Because, to make such a transaction fraudulent and void in law, and such a seizure valid and binding in law, it was necessary that the jury should be satisfied from the evidence, not only that it was the object of Hickman in selling out to the plaintiff to prefer him with his other two creditors, Porter and Sapp, to his other creditors, the plaintiffs in the executions afterwards sued out and levied on the goods by Cooper, the constable, but also, that the plaintiff ■knew, when he bought the goods from him, that they were creditors, too, of Hickman, and that his purpose in selling out to him was to prefer him and Porter and Sapp to them as creditors, .or, .in other words, to pay, in the failing condition in which he
then was, those three preferred creditors the whole amounts due them, and at the same time to leave his other creditors wholly unpaid. For, without such proof with reference to the plaintiff) he could not be charged with any fraud in the transaction. In all such cases, the purchaser must have knowledge of the intention of the seller, in so disposing of his property, to prefer some one or more of his creditors to others, or the sale to him will be lawful and valid.
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The Court,
Comegys, C. J.,
charged the jury, that it had been ruled in the case of Waters
et al. v.
Comly, 3 Harr., 117, in the Court of Errors and Appeals in this State, that a bond given by a man in failing circumstances to a creditor, covering all his property, for the benefit of preferred creditors, would be void under our act against fraudulent insolvency, but at the same time it was held that such a debtor may give his bond to a creditor to secure the payment of a
bona fide
debt. So far as the proof goes, however, this was the case of a sale of a stock of goods in a store at Sandiown in this county on the 21st day of February, 1878, by Jacob Hickman to the plaintiff, Robert H. Groff, in payment of a note for four hundred dollars and interest on it, which he owed, and two judgments in this court, one in favor of George W. Porter for the sum of three hundred and twelve dollars and sixty cents, and the other in favor of William Sapp for the sum of one hundred and four dollars and twenty cents which the plaintiff had paid to them for him, and a small sum in addition thereto, as the price agreed on between them for the goods, Hickman not being able, as he has testified, to pay the plaintiff his note in money, which had then been due three years, offered to sell him the stock of goods, and on his inquiring what other claims there were against them, and being informed by him of the two judgments just mentioned, concluded, after some reflection, to accept his offer and to purchase them at the price then agreed upon between them, which was to be determined by their cost price, less five per cent, to be deducted, the plaintiff reserving the right to apply so much of the purchase-money as was required to pay the judgments, costs and interest in favor of Porter and Sapp, and which he soon after paid in full to them. It also appears, by the testimony of the witness, W. S. Muchler, Esq., a member of the bar of Maryland, who acted as counsel of the plaintiff in the close of the transaction, that on the 21st of
February, 1878, an account of the stock of goods was taken by the parties in the storehouse at Sandtown, that the plaintiff receipted to Hickman for Porter’s and Sapp’s judgments and his own note, and then delivered the key of the storehouse to the plaintiff, who locked it up and put the key in his pocket. Soon after that, judgments were recovered before a justice of the peace by other creditors against Hickman for accounts due them prior to this transaction between him and the plaintiff, on which the executions were issued which came to the hands of the defendant, Cooper, the constable, and on which he seized and took the goods out of the possession of the plaintiff, as the goods of Hickman still, and detained them in his custody and possession until they were replevied by the plaintiff in this action now on trial before you, the plaintiff claiming to be the
bona fide
purchaser of them from Hickman and the lawful and rightful owner of them, and seeking damages in it for the taking and detention of them by the defendant until they were replevied, and the defendant claiming them by virtue of his executions and levies on them as the goods of Hickman, because his alleged sale of them to the plaintiff was made when he was in failing circumstances and insolvent, and for the purpose of preferring the plaintiff and Porter and Sapp to his other creditors, all of which the plaintiff well knew, or had good reason to believe or suspect at the time of the transaction, and was consequently fraudulent and void in law under our act against fraudulent insolvency. And the counsel for the defendant contends that it was but a pretended sale, wholly fictitious and fraudulent in its character, because the goods were again the next day and afterwards in the possession of Hickman in the same place as. before, and so continued in his possession, or if not in his exclusive possession, at least in the mixed or joint possession of him and the plaintiff, which also rendered the sale fraudulent and void in law against all other creditors of Hickman under our statute of frauds. He further contends that the plaintiff must have known, from his intercourse with Hickman, or had good reason to believe or suspect that he was indebted to the parties whom he represents in this case, and if so, that the sale was null and void because it
was made by an insolvent debtor in preference of certain credi- ■ tors over others, and to the plaintiff, as one of his creditors, who well knew the purpose of it, contrary to the statute against fraudulent insolvency.
In the case of Waters
et al. v.
Comly, the Court of Errors and Appeals in this State, in effect, declared the law to be, that any transaction of a debtor in failing circumstances (as, in this case, Hickman was) which seeks to prefer certain creditors to others by securing their debts out of his property and leaving the rest unpaid, is in fraud of our statute against fraudulent assignments, and void. That decision binds this court, and is the law of the State; and it therefore follows, that if the object and intention of Hickman in selling out to Groff, the plaintiff, was to prefer him and Porter and Sapp to his other creditors, of which number were the plaintiffs in the executions of Constable Cooper against Hickman, and Groff, the plaintiff then knew that they also were his creditors, and that the object of Hickman in selling out to him was to prefer him and Porter and Sapp to them as his creditors, then the transaction was fraudulent and void under the statute, and the seizure of the goods -by Cooper, the constable, under the executions at the suit of those creditors was lawful and proper; and if the jury were satisfied from the evidence that such was the case, the plaintiff would not be entitled to recover in the action, and their verdict should be for the defendant with damages to the value of the goods, as they had been replevied out of his hands and restored to the plaintiff. Because, to make such a transaction fraudulent and void in law, and such a seizure valid and binding in law, it was necessary that the jury should be satisfied from the evidence, not only that it was the object of Hickman in selling out to the plaintiff to prefer him with his other two creditors, Porter and Sapp, to his other creditors, the plaintiffs in the executions afterwards sued out and levied on the goods by Cooper, the constable, but also, that the plaintiff ■knew, when he bought the goods from him, that they were creditors, too, of Hickman, and that his purpose in selling out to him was to prefer him and Porter and Sapp to them as creditors, .or, .in other words, to pay, in the failing condition in which he
then was, those three preferred creditors the whole amounts due them, and at the same time to leave his other creditors wholly unpaid. For, without such proof with reference to the plaintiff) he could not be charged with any fraud in the transaction. In all such cases, the purchaser must have knowledge of the intention of the seller, in so disposing of his property, to prefer some one or more of his creditors to others, or the sale to him will be lawful and valid. This is the law in regard to preferring creditors under such circumstances; but there is no direct evidence in the case, that the plaintiff had knowledge of any such design on the part of Hickman when he bought the goods of him, nor has it been shown by any proof in the cause that any facts or circumstances were then known to the plaintiff that should have led him to believe, or to suspect, that Hickman had any other creditors than those he named to him, Porter and Sapp and himself, or that he had any intention of preferring them to other creditors, or contemplated any such fraud in the sale of his goods. We therefore instruct you that there has been no evidence adduced to sustain this ground of defence, and it should therefore be discarded by you from the consideration of the case entirely.
But the counsel for the defendant has further contended that according to the evidence in the case there was not such a
bona fide
sale and delivery of the goods by Hickman to the plaintiff as transferred the lawful property in them to him under another statute of the State, called the statute of frauds, which in substance provides that no sale of any goods and chattels within this State shall be good in law (except as against the vendor), or shall change or alter the property in such goods or chattels, unless a valuable consideration for the same shall be paid, or in good faith secured to be paid, and unless the goods and chattels sold shall be actually delivered into the possession of the vendee, as soon as conveniently may be after the making of such sale. And if such goods and chattels so sold, shall afterward come into and continue in the possession of the vendor, the same shall be liable to the demands of all his creditors.
Where the property is present at the time of the sale it should
be delivered immediately into the possession of the purchaser, and this is done by placing it in his hands or by giving him the dominion and control over it, as by giving him the key of the building, room or place where it is stored. There are other modes of delivery, but it is not necessary in this case to refer to them, as the counsel for the plaintiff contends that the delivery of the goods sold was complete to the plaintiff by the handing to him by Hickman after they had taken the account of the stock of goods, of the key of the storehouse, and the locking up of the goods therein by the plaintiff and putting the key in his pocket. If you believe from the testimony of the witness that this was in fact done, then it was a good delivery in law of the goods to him as the purchaser of them. But the defendant’s counsel contends that it was not an actual and honest delivery of them, but a pretended and fraudulent delivery of them, merely got up between them to give the transaction the appearance of an honest and
bona fide
sale: but even if it had been all that it pretended to be, it would have been without any effect as a delivery under the statute against any creditor of Hickman, for the goods afterwards, and the very next day, came into and continued in the possession of Hickman, and he continued to have a mixed possession of them, at least with the plaintiff for a long while after they had been seized in execution by the defendant as Hickman’s goods and had been replevied by the plaintiff. If such was the case, or it is true that the goods were never in fact delivered to the plaintiff as his goods, or afterwards came into and continued in the possession of Hickman as his property, then the transaction was fraudulent and void in the contemplation of the statute, and the property or ownership in these goods never passed out of Hickman at all, as against any of his creditors to whom he was then indebted.
How this depends entirely on the evidence and is the main question of fact in the case which you are to try. Was there an actual legal delivery of the goods in question by Hickman to the plaintiff on the occasion we have.before mentioned? And if there were, did its effect remain unimpaired by the conduct of the parties afterward ? I have stated to you that it has been
sworn to in the case both by Hickman and the witness, Mr. Mutchler, that the goods were invoiced and the custody and control of them was given by the delivery of the key of the store to the plaintiff, and the locking of the door with it by him. It was also testified by both of them that the evidences of the debt of the plaintiff and of the judgments of Porter and Sapp were surrendered by him to Hickman with the proper receipts upon them, and that the small balance remaining was paid to him in money. The defendant contends, however, that he has made sufficient proof to satisfy your minds that these goods the next day passed into and afterwards continued in the possession of Hickman and thereby became liable under the statute and the fraud involved in the transaction, to the demands of all his creditors, and to levy and seizure on the executions in his hands, and that consequently your verdict should be for him. If you should be of opinion, from all the evidence in the case, that the goods did so come into and continue in the possession of Hickman. after they had been delivered by him to the plaintiff, and became his own property again with the right on his part to use and dispose of them as his own goods, then the delivery of them on the preceding day by him to the plaintiff, however formal or particular it may have been, became wholly inoperative and void under the statute as against the creditors of Hickman, and their verdict should consequently be for the defendant.
jjBut what is meant with respect to the sales of personal property by the terms used in the statute of frauds to which we must give an interpretation consistent with reason,
“
come into and continue in the possession of the vendor ” after they have been sold and delivered to the vendee, is this, that such property shall in some way, no matter how, get back or be restored to the possession and ownership of the vendor, without any responsibility or liability for it to his vendee who apparently became the actual
bona fide
purchaser and owner of it, and which is the same as saying that it returns to the possession of the vendor so as to give him the dominion and control absolutely over it without any accountability for it on his part to the vendee, and con
tinues therein, that is to say, it remains his so long as he chooses to retain the possession and ownership of it. The word “ continue ” is used in the statute to distinguish such a possession from a transient or temporary possession merely for a special purpose entirely consistent with the purchaser’s general property in it. And the evidence relied upon by the defendant to show that the goods after their delivery to the plaintiff came into and continued in the possession of Hickman, is that of the witnesses who saw him on the occasion mentioned by them after the sale and delivery to the plaintiff, in the store behind the counter selling the goods to customers which is met by testimony on the other side that Hickman was at first so employed for the plaintiff in the store for a few days, until the clerk he had engaged should arrive and take charge of it, and that after he arrived and took charge of the store, it was by his request that Hickman assisted him in waiting on customers when in the store and the occasion required it, but that he had no property or interest in the goods, and sold them as the goods only of the plaintiff. Such was substantially the evidence not only of Hickman, but of Mutehler and Wooders, the clerk of the plaintiff If such was the case, then, certainly, the goods could not be said to have come into the possession of Hickman as his goods after the sale or continued in his possession as his goods after it, contrary to the meaning and intention of the statute*. And if the jury were satisfied from the evidence in the case that such was the possession merely which Hickman had of the goods after the delivery of them to the plaintiff, it would not constitute any ground of fraud to vitiate the sale under the statute, and their verdict should be for the plaintiff
The plaintiff had a verdict.