Case ID: neb_108/html/0801-01.html
Source: Caselaw Access Project
Author: {"author": "Morrissey, C. J.'", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

A. J. Parr, appellee, v. Carl Helfrich, appellant.
    Filed June 22, 1922.
    No. 22093.
    Sales: Fraud: Bona Fide Purchaser. A fraudulent purchase of personal property accompanied with delivery is not void, but voidable only, at the election of the vendor, and until it is avoided the vendee has power to make a valid sale of the goods to a iona fide purchaser having no notice of the fraud.
    
      Appeal from the district court for Morrill county: Anson A. Welch, Judge.
    
      Reversed.
    
    
      G. G. Perry and R. 0. Ganaday, for appellant.
    
      William A. Bryans, Jr., and McDonald & Irwin, contra.
    
    Heard before Morrissey, C. J., Rose, Aldrich and Hay, JJ.
   Morrissey, C. J.'

This is an action of replevin. Plaintiff, a resident of Denver, Colorado, was the owner of an automobile, which he advertised for sale. The automobile was in the garage at plaintiff’s residence and his wife exhibited the car for sale to all persons who called to inspect it. There was no explicit designation of plaintiff’s wife as agent with authority to sell the car, but their conduct and relations were such that her authority to so act is apparent. Among others who called to inspect the car were two men unknown to plaintiff’s wife. These men represented that they were desirous of buying the car, inspected it, and ascertained the sum for which it could be purchased. They later returned and delivered to plaintiff’s wife a purported certified check on the First National Bank of Denver for the price theretofore agreed upon, and the car was delivered to them. These men drove the car to Bridgeport, Nebraska, and sold and delivered it to defendant. Plaintiff presented the purported certified check to the bank on which it was drawn and whose certification it was supposed to bear. The check was pronounced a forgery and payment refused. At the conclusion of the testimony the court instructed a verdict in favor of plaintiff, and defendant appeals.

From the conduct of the trial and the language of the motion made for a directed verdict it may be inferred that plaintiff questions the good faith of defendant in making the purchase and is not disposed to concede him the status of an innocent, good-faith purchaser for value. We shall not review the evidence on the question of defendant’s good faith. If the bona fides of the transaction is not conclusively shown it was a question to be determined by the jury. Schmelzel v. Leecy, 101 Neb. 672.

It is well settled that when property is obtained from its owner by fraud, and the facts show a sale by the owner to the fraudulent vendee, an innocent purchaser of the property from the fraudulent vendee will take good title. The inquiry is: Did the owner intend to transfer the ownership as well as the possession of the property? If he did, there was a contract of sale. The essential thing in the passing of title to personal property is that the vendor and the vendee intend that the title shall pass, and not what induced them to have that intention. But one who has been induced by fraud to part with title to his property has his remedy either in an action because of the fraud and deceit, or he may rescind the contract and 'recover back the property while title still remains in the fraudulent vendee, but he cannot recover it' when title has passed to a bonafide purchaser for value. Homan v. Laboo, 2 Neb. 291; Hoham v. Aukerman-Tuesburg Motors, Inc., 133 N. E. (Ind. App.) 507.

As said by Shaw, C. J., in Rowley v. Bigelow, 12 Pick. (Mass.) 307: “Being tainted by fraud, as between the immediate parties, the sale was voidable, and the vendors might avoid it and reclaim their.property. But it depended upon them to avoid it or not, at their election. They might treat the sale- as a nullity and reclaim their goods, or affirm it and claim the price. And cases may be imagined, where the vendor, notwithstanding such fraud, practiced on him, might, in consequence of obtaining security, by attachment or otherwise, prefer to affirm the sale. The consequence therefore is that such sale is voidable, but not absolutely void. The consent of the vendor is given to the transfer, but that consent being induced by false and fraudulent representations, it is contrary to justice and right that the vendor should suffer by it, or that the fraudulent purchaser should avail himself of it;.and upon this ground, and for the benefit of the vendor alone, the law allows him to avoid it. The difference between the case of property thus obtained, and property obtained by felony, is obvious. In the latter case, no right either of property or posesssion is acquired and the felon can convey none. We take the rule to be well settled that where there is a contract of sale, and an actual delivery pursuant to it, a title to the property passes, but voidable and defeasible as between the vendor and vendee, if obtained by false and fraudulent representations. The vendor therefore can reclaim his property as against the vendee, or any other person claiming under him and standing upon his title, but not against a bona fide purchaser without notice of the fraud. The ground of exception in favor of the latter is that he purchased of one having' a possession under a contract of sale, and with a title to the property, though defeasible and voidable on the ground of fraud; but as the second purchaser takes without fraud and without notice of the fraud of the first purchaser, he takes a title freed from the taint of fraud.”

Tavo pertinent inquiries were presented on the trial of this cause: Did plaintiff, through his agent, transfer title to the automobile to his fraudulent vendees? Did defendant become a bona fide purchaser, without notice of the fraud? On the record presented each of these questions should have been answered affirmatively by the court, or submitted to the jury for its determination.

The judgment is reversed and the cause remanded.

Reversed.