Illinois Leather Co. v. Flynn

Michigan Supreme Court

Illinois Leather Co. v. Flynn

65 N.W. 519, 108 Mich. 91, 1895 Mich. LEXIS 1235

CourtMichigan Supreme Court

DecidedDecember 30, 1895

StatusPublished

Cited by6 cases

This text of 65 N.W. 519 (Illinois Leather Co. v. Flynn) is published on Counsel Stack Legal Research, covering Michigan Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Illinois Leather Co. v. Flynn, 65 N.W. 519, 108 Mich. 91, 1895 Mich. LEXIS 1235 (Mich. 1895).

Pincite

Opinion

Montgomery, J.

Defendant was appointed receiver of the property covered by a chattel mortgage given by W. A. Bourke & Co. to the City Savings Bank of Detroit. Plaintiff, by permission of the court, brought replevin against the receiver for 1,001 bales of hair ordered of plaintiff February 10, 1892, and shipped to Bourke & Co. April 15, 1892. On the trial, plaintiff contended that the goods were bought by Bourke & Co. under circumstances raising a presumption that they received the goods having formed the intention of not paying for them, or, at least, under circumstances that show that a man of ordinary prudence would have known that he could not continue the business until the maturity of plaintiff’s claim; and the chief contention, as made in this court, is that, under such circumstances, a purchase is to be deemed fraudulent in law.

We think the law is otherwise. It is not the law that, though a dealer is insolvent, he is guilty of fraud if he continues to purchase goods, if he buys in good faith, and in the expectation of continuing in the business. He is not bound to abandon hope. It is true, there is a class of cases in which it has been held that, where the natural effect of the acts of the party is to work a fraud against another, the absence of an intent to defraud is not a de[93]*93fense; but it is not a fraud peí’ se for a purchaser of goods to fail to make payment, nor is it a fraud per se for a dealer to purchase goods, though insolvent, in the absence of any misrepresentation, and with the intention of paying for them; nor does the fact of a subsequent failure make the purchase fraudulent by relation. What constitutes fraud in such a case is the purpose of the buyer not to pay for the goods. This is not determined by what purpose some other, less hopeful of success in his ventures, might, under like circumstances, have entertained; but, to constitute the purchase fraudulent on this ground, there must have been an actual intent on the part of the purchaser to obtain the goods without paying for them. Tied. Sales, § 170, and cases cited; Morris v. Talcott, 96 N. Y. 100; Doyle v. Mizner, 40 Mich. 160; Edson v. Hudson, 83 Mich. 450.

The circuit judge in the present case withdrew the question of fact from the jury. An examination of the testimony satisfies us that there was no error in this. While there was testimony which might be construed as showing the insolvency of Bourke & Co., as we have pointed out, this fact alone, if established, would not have justified a verdict for the plaintiff. There was no proof of any misrepresentation, nor, as we think, was there any testimony tending to show a preconceived purpose of obtaining these goods, and avoiding payment therefor.

The judgment will be affirmed.

Long, Grant, and Hooker, JJ., concurred. Me-. Grath, C. J., did not sit.

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Montgomery, J.

Defendant was appointed receiver of the property covered by a chattel mortgage given by W. A. Bourke & Co. to the City Savings Bank of Detroit. Plaintiff, by permission of the court, brought replevin against the receiver for 1,001 bales of hair ordered of plaintiff February 10, 1892, and shipped to Bourke & Co. April 15, 1892. On the trial, plaintiff contended that the goods were bought by Bourke & Co. under circumstances raising a presumption that they received the goods having formed the intention of not paying for them, or, at least, under circumstances that show that a man of ordinary prudence would have known that he could not continue the business until the maturity of plaintiff’s claim; and the chief contention, as made in this court, is that, under such circumstances, a purchase is to be deemed fraudulent in law.

We think the law is otherwise. It is not the law that, though a dealer is insolvent, he is guilty of fraud if he continues to purchase goods, if he buys in good faith, and in the expectation of continuing in the business. He is not bound to abandon hope. It is true, there is a class of cases in which it has been held that, where the natural effect of the acts of the party is to work a fraud against another, the absence of an intent to defraud is not a de[93]*93fense; but it is not a fraud peí’ se for a purchaser of goods to fail to make payment, nor is it a fraud per se for a dealer to purchase goods, though insolvent, in the absence of any misrepresentation, and with the intention of paying for them; nor does the fact of a subsequent failure make the purchase fraudulent by relation. What constitutes fraud in such a case is the purpose of the buyer not to pay for the goods. This is not determined by what purpose some other, less hopeful of success in his ventures, might, under like circumstances, have entertained; but, to constitute the purchase fraudulent on this ground, there must have been an actual intent on the part of the purchaser to obtain the goods without paying for them. Tied. Sales, § 170, and cases cited; Morris v. Talcott, 96 N. Y. 100; Doyle v. Mizner, 40 Mich. 160; Edson v. Hudson, 83 Mich. 450.

The circuit judge in the present case withdrew the question of fact from the jury. An examination of the testimony satisfies us that there was no error in this. While there was testimony which might be construed as showing the insolvency of Bourke & Co., as we have pointed out, this fact alone, if established, would not have justified a verdict for the plaintiff. There was no proof of any misrepresentation, nor, as we think, was there any testimony tending to show a preconceived purpose of obtaining these goods, and avoiding payment therefor.

The judgment will be affirmed.

Long, Grant, and Hooker, JJ., concurred. Me-. Grath, C. J., did not sit.

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Bluebook (online)

65 N.W. 519, 108 Mich. 91, 1895 Mich. LEXIS 1235, Counsel Stack Legal Research, https://law.counselstack.com/opinion/illinois-leather-co-v-flynn-mich-1895.

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