Case ID: ohio-st_22/html/0388-01.html
Source: Caselaw Access Project
Author: {"author": "McIlvaine, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

O. Dean v. Alonzo C. Yates et al.
    1. In an action to recover damages for the fraud of defendant in obtaining" certain goods from the plaintiffs under a contract induced by the falst and fraudulent representations of the defendant, a writ of attachment was issued and levied upon a portion of the goods alleged to have been so obtained, together with other goods of the defendant. Held, that such levy, and a sale thereunder, do not necessarily constitute a waiver of the fraud and an affirmance of the contract by the plaintiff.
    2. Where a contract for the sale of goods is induced by the fraud of the purchaser, but no delivery is made under the contract, and the purchaser afterward wrongfully obtains possession of the goods without the assent or knowledge of the seller, the title remains in the seller, not only as against the fraudulent purchaser, but also as against his vendee, although the latter purchased for a valuable consideration and without notice of the defect in his vendor’s title.
    3. In an action where the allegation of petition is that the defendant, by means of fraud, obtained the goods of the plaintiff and converted them to his own use, and where the only proof in support of the allegation shows the defendant to be a bona fide purchaser from one in possession of the goods, but without title, the plaintiff can not recover. Such case is one of failure of proof, under section 133 of the code, and not one of immaterial variance, under sections 131 and 132. See 10 Ohio St. 621, and 21 Ohio St. 668.
    Error to the Court of Common Pleas of Portage county, reserved in the District Court.
    The original action was brought, by defendants in error, against plaintiff in error and one H. Kent, to recover damages alleged to have accrued to plaintiffs by reason of the fraud and deceit of the defendants in obtaining certain goods. The allegations of the petition are, that “ on the 19th day of December, 1867, the said defendants fraudulently combined and confederated together to cheat aud defraud tlie plaintiffs, and thereby, then and there, did, in pursuance of said combination and confederation between them, fraudulently obtain from the plaiutiffs the goods and chattels enumerated in the exhibit hereto annexed, marked “ A,” and which is made a part of this petition. That at the time said goods and chattels were so fraudulently obtained, plaintiffs were merchants at Cleveland, Ohio, and on or about said 19tli day of December, 1867, said defendant Kent, with full knowledge on the part of said Dean, and acting at bis suggestion and instigation, came to plaintiffs’ store in Cleveland, and then and there, in order to obtain said goods and chattels, fraudulently and falsely represented to plaintiffs that he, said Kent, the defendant, was a son of Charles H. Kent, of Kent, Portage county, Ohio, and was a partner with said Charles H. Kent, as merchants at said Kent, in the firm name of Charles H. Kent & Son, said Charles H. Kent then being known to plaintiffs to be responsible — all of which representations were wholly false, and were known by the said defendants, at the time they were so made, to be false. That it was not true that said defendant Kent was a son of Charles H. Kent, of Kent, Portage county, Ohio. Nor was it true that said defendant was then, or ever has been, a partner of said Charles H. Kent. By means of which false and fraudulent representations the said defendants obtained from plaintiffs the goods and merchandise specified in said exhibit “ A,” which were of the value of $529.40, and have, by reason of theii said frauds subjected the said plaintiffs to damages, expenses, costs, and charges, in the sum of $150, in addition thereto.
    “ That said goods and merchandise were, after being so fraudulently obtained by plaintiffs, shipped to Kent, Portage coiiuty, Ohio ; were there received by the said Dean, and by him, as well as by the said Kent, immediately thereafter exposed to sale at public auction, and some portions thereof, as well as other goods obtained in the same manner, sold at such public auction as rapidly as possible, but before all were sold, both defendants left Kent, and neither one has returned.
    “ The plaintiffs aver that the obtaining of said goods, in the manner and upon the representations aforesaid, was a scheme to defraud plaintiffs and others, concocted and carried out by the defendants jointly, and for the pecuniary benefit of both, and that both participated in the proceeds of the fraud, whereby and by reason of the premises, the plaintiffs aver that they have sustained damages, and that the defendants have damaged them in the sum of $669.40, and that, by reason of the premises aforesaid, an action hath accrued to them therefor, against the said defendants. Wherefore they pray for a judgment against said defendants for the said sum of $669.40, and interest thereon from December 19,18G7.”
    The defendant, Dean, filed his separate answer, specifically denying the allegations of the petition.
    On the trial, the plaintiffs offered testimony tending to prove the state of facts referred to in the charge as the claim of the plaintiffs.
    The court thereupon, among other things, instructed the jury as follows:
    “ Upon the trial the question has been made whether or not the plaintiff can recover in this action of the defendant, Dean, without establishing notice or knowledge on his part of the manner in which the goods were obtained of the plaintiffs, or that he was, in some way, jointly concerned with Kent in obtaining the goods, the plaintiff maintaining the affirmative and the defendant the negative of this question.
    “ So far as this is a question of pleading in the case, the court is of opinion, and you are hereby instructed, that, to the extent which will hereafter be stated to you, the joint connection of Kent and Dean, in the matter, is immaterial, as well also as Dean’s knowledge of any fraud of Kent, for the reason that, however it might properly stand ass an original questiou, yet that the defendant has not, upon the trial of the case, been misled by the state of the pleadings, as to the claim made by the plaintiff in this respect.
    “ The court is, therefore, of opinion that if -the goods of the plaintiff'were received by the defendant Dean from the defendant Kent, Dean claiming thereby to derive title to them, and were then, by him, ottered for sale as his own, selling a portion and boxing up the residue among other goods of a similar character as his own, then his liability for them, in case he did not otherwise collude with Kent in the matter, and had no notice of fraud on the part of Kent in obtaining them, must turn upon the question whether or not a title to the goods was, by the transaction in question, conferred upon said Dean as against the plaintiff.
    “ The court is of opinion, and so instructs you, that if, by the transaction in question, a title, to the goods was conferred upon Dean as against the plaintiffs, that then they can not recover against Dean in this action without showing that he had some connection with Kent in fraudulently obtaining the goods as a partner in the transaction, or as procuring or inciting him to do it, or showing that he had notice of fraud committed by Kent in obtaining the goods, before he had completed any purchase of them from Kent.
    “ On the other hand, the court is of opinion, and so instructs you, that if, by the transaction in question, no title to the goods in question was conferred upon Dean as against the plaintiffs, and if he received and dealt with the goods in the manner above stated, that he is liable to the plaintiffs on that account, whether he did or did not know of the means by which Kent had obtained the goods from the possession of the plaintiffs, and whether he had or had not any connection with Kent in so obtaining them. And this makes it proper for you to inquire in what manner the goods had been obtained from the possession of the plaintiffs, if they were so obtained.
    “ It is claimed by the plaintiffs, oh trial, to be established by the proof that, at the time of the transactions, they were merchants in the city of Cleveland, engaged in the sale of clothing there. That the defendant, Kent, came into their store there and represented that his name was Kent; that he was the son of Charles II. Kent, of Kent, in this county, and a partner with him in the mercantile business under the name of Charles II. Kent & Son, and solicited the sale by them to such firm of the goods in question on a credit to the firm; that learning by inquiry that Charles II. Kent, of Kent, was a man of reliable credit, they consented to make such sale upon said credit. That thereupon the goods were selected by Kent, and were, by the plaintiffs, put in boxes suitable for shipping, directed to Charles H. Kent & Son, at Kent, Ohio, and by them placed in the hands of the express company for shipment according to the directions on the boxes. That this was done relying upon the credit which,, by inquiry, they believed to belong to Charles H. Kent and to the supposed firm of Charles H. Kent & Son, and composed of Charles H. Kent and his son: That, in fact, the person thus dealing with them was not the son of Charles H. Kent, nor a partner of said Charles II. Kent, nor authorized to pledge the credit of said Charles H.Kent, nor of his son, and was an impostor. That the goods were carried by the express company to their station or office at Kent, and there claimed and first taken into the actual custody of the defendant Kent, and by him, shortly afterward, by sale or other-' wise, transferred to the defendant Dean, and that these facts constitute the only title of Dean to the goods in question.
    “ I am of opinion and so instruct you, that if you find from the proof that such are the facts of the case, no title to the goods was thus conferred upon the defendant Dean as against the plaintiffs, and that if he then converted them to his own use by claiming to derive a title to them, offering them, or a portion of them, for sale, as his own, selling a portion and boxing up the others with other goods as his own, the plaintiffs are entitled to recover of him in this action the value of any goods which he has so converted to his own use. And that this is independent of any knowledge or notice on his part of any such transactions on the part of Kent, and of any previous connection with him.”
    To this charge the defendant, Dean, excepted, and a verdict being returned in favor of the plaintiffs, the defendant moved for a new trial, which was refused and bill of exceptions filed.
    
      Bockwell Buggies, for plaintiff in error:
    l. By the pleadings in the case, the only issue raised, is, as to whether Dean did, or did not combine or conspire with H. Kent in fraudulently obtaining said goods, or had any knowledge of the fraud perpetrated by said Kent, at the time he, Dean, purchased the same.
    The jury was misled in consequence of the charge of the court on a point outside of the pleadings. By reference to the charge of the court to the jury, it will be seen that the entire charge goes to the point as to whether, under an entirely different state of circumstances from those alleged in the petition and denied in the answer, a title to the goods in question was conferred upon Dean, this plaintiff in error.
    2. Apply the rule sanctioned in Selser v. Brock, 3 Ohio St. 302, to this case, and the result must be in favor of Dean.
    3. By the proceedings in attachment, Yates et al. either attached and sold their own property, or by said proceedings they conferred upon Dean title to the property in question. They are estopped from denying Dean’s title.
    4. Had the question above referred to been raised by the pleadings, the law as given by the court to the jury, on said question was erroneous.
    A person who obtains goods from a fraudulent purchaser, without notice of fraud, in the usual course of trade, that is, gives value for them, makes advances upon them, incurs responsibilities upon the credit of them, or receives them in pledge for money or property to and upon the strength of them, may hold the goods against the vendor of the fraudulent purchaser; such party is a bona fide purchaser. Root v. French, 13 Wend. 570, etc.; Mowery et al. v. Welsh, 8 Cow. 238, and cases there cited; Jackson v. Henry, 10 Johns. 185; 14 Wend. 33, n.; 8 Wend. 423; 24 Pick. 245; Swan’s Treatise, 586; 15 Mass. 156; 8 Cow. 31.
    
      Hart $ Reed, for defendants in error:
    1. Was the verdict against the evidence? Clearly not.
    2. Was the charge of the court wrong?
    An innocent purchaser, in order to be protected, must at least claim title from or through the party to whom the original owner sold or intended to sell the goods. If I, upon the representations of B., sell goods to A., upon A.’s credit ancl box them up and put them in an express office directed to A., and B. in some way gets possession of them, and sells them to C., an innocent purchaser, I can still claim the goods, for in such case C. does not pretend to purchase or derive title from the person to whom I sold, but from an outsider.
    This seems to have been the opinion of the court in its charge to the jury, and the correctness of the doctrine is sustained not only by sound reasoning but by authority. Decan v. Shipper et al., 35 Penn. St. (2 Casey) 239; Downs v. Perrin, 2 Smith (N. Y. Court of Appeals), 325; 1 Smith’s Leading Cases, 751; Brewer v. Peabody, 3 Kernan, 121; Fawcett v. Ogden, 32 Ill. 411; Wooster v. Sherwood, 11 Smith (N. Y.), 278; Saltus and Saltus v. Everett, 20 Wend. 267; Williams & Chapin v. Merle, 11 Wend. 268; Casey v. Hoadling, 1 Hill, 311; 2 Hilliard on Torts, 146-149.
    8. Yates et al. are not estopped from denying title in Dean. Eraud and non-residence are grounds of attachment. But more than this, Dean had taken Yates & Co.’s goods and mingled them with his own. The attachment was not issued to be levied on these particular goods in question, but was levied upon whatever goods the sheriff could find belonging to Dean. Among the goods so found were §60 or §70 worth of goods that had come from Yates & Co.’s store. Replevin was practically impossible. The fact that a few of these goods were found with the others taken by the sheriff) can not change the rights of the parties on the trial of the case. The proceedings of the sheriff are independent of the proceedings in court, and the sale was not made until long after the trial and judgment in the case.
   McIlvaine, J.

The principal questions in this case arise upon the charge as given to the jury by the court below.

1. Did the court err in its instructions a3 to the liability of the defendant, Dean, to the plaintiffs below in case the jury found, under the circumstances named, that he was a bona fide purchaser from his co-defendant for a valuable consideration and without notice of his vendor’s fraud.

The charge substantially stated the law to be, that a bona fide purchaser of goods from one in possession, for a valuable consideration and without notice of any defect in his vendor’s title, can not be protected against the title of the true owner in a case whore the vendor had fraudulently obtained his possession, and without the knowledge or consent of the owner, although previous to such possession he had, by false and fraudulent representations, induced the owner to enter into a contract for the sale of the goods. In this charge, we perceive no error. It is based upon a fundamental principle of the law, that no person can be deprived of his property without his consent, express or implied, or by due process of law. If the plaintiffs, however,. had delivered the goods under the sale to the fraudulent purchaser, and thus clothed him. with the insignia of title, a different rule would have prevailed, to wit, where one of two innocent persons must suffer by the fraud of a third, he who first trusted such third person, and placed in his hands the means which enabled him to commit the wrong, must bear the loss.

The court very properly and carefully distinguished between a case where the possession is delivered by the owner, to a fraudulent purchaser, and a case like the one put in the charge where the owner did not deliver, or authorize any other person to deliver, the goods to the fraudulent vendee.

In the case stated in the charge, it is true, the owner, under the directions of the fraudulent purchaser, shipped the goods by express to the firm of Charles Kent & Son, at Kent, Ohio, where Charles IT. Kent was known to reside. But it was supposed and believed by the plaintiffs at the time that Charles II. Kent & Son were the real purchasers. No authority, however, was thus given to the express company to deliver the goods to any other person than Charles H. Kent & Son, of Kent, Ohio. When, therefore, the vendor of the plaintiff' in error obtained the possession of the goods from the express company by other false and fraudulent representations and personations, he obtained it without the consent of the owners. Possession thus obtained is tortious, if not absolutely felonious, and does not affect the title of the true owner. And a subsequent vendee for value, and without notice, acquires no better title, as against the owner, than his vendor possessed.

2. On the pleadings as they stood at the time of trial, were the plaintiffs entitled to recover upon the law and facts above stated?

As we understand it, the sole ground for recovery laid in the petition was the fraud and deceit of the defendants in obtaining goods from the plaintiffs. The case, as put to the jury in the charge of the court, authorized a verdict against the defendant, Dean, without proof of any fraud or notice of fraud as against him, hut solely on the ground that he was a purchaser from one who had no title, although the purchase was made for full value and in good faith.

By sections 131 and 132 of the code of civil procedure, it is provided that no variance between the allegation in a pleading and the proof is to he deemed material, unless it have actually misled the adverse party to his prejudice, etc. But section 133 provides that when the allegation of the claim or defense, to which the proof is directed, is unproved, not in some particular or particulars only, but in its general scope and meaning, it is not to be deemed a case of variance within the meaning of sections 131 and 132, but a failure of proof. The allegation of this petition, in its general scope and meaning, is that the defendant Dean was guilty of actual fraud and conspiracy against the plaintiffs, whereby they were injured in their property, while the proof directed to that allegation (as the case was put to the jury) shows not only that Dean was innocent and ignorant of all fraud and conspiracy, but it also shows that he was a victim himself of the same villainy that deprived the plaintiffs of their property. We therefore unite in the opinion that such case is not one of immaterial variance, under sections 131 and 132 of the code, but a failure of proof under section 133, and for this reason the judgment must be reversed and the cause remanded. See Hill v. Supervisors, etc., 10 Ohio St. 621, and Thatcher v. Heisey, 21 Ohio St. 668.

3. It is further claimed by plaintiff in error that the verdict was against the law and the evidence, because of the fact that a writ of attachment had been issued in the case and levied upon a portion of the goods claimed to have been obtained from the plaintiffs by means of the fraud alleged in the petition, and that the same had been sold; which seizure and sale, it is claimed, was in law and in fact an affirmance by the plaintiffs of the contract for sale of the goods, and a waiver of the fraud alleged to have been practiced upon them.

An intelligent and intentional ratification, by the injured party, of a contract voidable on account of fraud, will, as a general rule, preclude the party from afterward insisting upon the fraud as a cause of action. And had the affirmance of the contract, and consequent waiver of the fraud, been made an issue in this case, such seizure and sale, no doubt, would have been circumstances admissible for the consideration of the jury. But as matter of law, they would not necessarily have controlled the verdict; or, in other words, such seizure and sale, made in an action based solely upon the ground of the fraud, do not, as matter of law, amount to such ratification. Óf course, however, the disposition made of the goods so seized should be considered in the assessment of damages.

Judgment reversed and cause remanded.