Case ID: nys_20/html/0388-01.html
Source: Caselaw Access Project
Author: {"author": "Dwight, P. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Wheeler & Wilson Manuf’g Co. v. Keeler, Sheriff, et al.
    
    
      (Supreme Court, General Term, Fifth Department
    
    October 21, 1892.)
    1. Conditional Sale—Waiver of Condition.
    Where goods are sold under an agreement that the purchaser shall give a note for the price when the bill is rendered, without waiting until the goods are delivered, and the bill is rendered, but the note is not given, and no demand is made therefor, a subsequent unconditional delivery of the goods is a waiver of the condition that the note should be given, and title to the property passes to the purchaser.
    2. Fraud—Evidence—Proof of Other Frauds.
    In an action to rescind a contract of sale on the ground that it was induced by the fraud of the purchaser, who was insolvent at the time, evidence that the purchaser, about the time of the sale, made false representations as to its financial condition to a third person, is not admissible where no evidence of fraud in the sale has been offered.
    Exceptions from circuit court, Cayuga county.
    Action by the Wheeler & Wilson Manufacturing Company against William E. Keeler, sheriff, and Thomas Jones. Plaintiff moves for a new trial on a case and exceptions ordered to be heard in the first instance at general term after nonsuit granted at the circuit. Motion denied.
    Argued before Dwight, P. J., and Macomber and Lewis, JJ,
    
    
      J. W. O'Brien, for plaintiff. C. I. Avery, for defendant Keeler. E. C. Aikin, for defendant Jones.
   Dwight, P. J.

The action was replevin fora lot of sewing machines,, and the sole question was of the plaintiff's title to the property, at the time of the commencement of the action. The property had been sold to the Rheubottom & Teal Manufacturing Company of Weedsport, several months before, under an agreement that the vendee "should give “a good eleven-months note” for the price when the bill was rendered, and without waiting for the machines to be set up. The note was not given, although a bill was rendered, and the machines were afterwards shipped and set up. These facts present the first ground of the plaintiff’s claim to retake the property, viz., that the sale was conditional, and that, the condition not being performed, title to the property did not pass. The contention is unavailing, because the condition of sale was waived by an unconditional delivery of the property. Smith v. Lynes, 5 N. Y. 41. No demand was made for the note when the bill was rendered nor when the property was delivered, and the delivery was without condition. The plaintiff seeks to account for its failure to insist upon the condition of the sale on the theory of a misunderstanding between two of its own agents. But the fact of an unqualified delivery of the property remains, and the effect is the same, whatever the cause, so long as it was not one for which the vendee was responsible.

The second alleged ground of avoidance of the sale is that it was procured by fraud, viz., that the vendee was in failing circumstances at the time, and that he bought the property with the intention not to pay for it; and this was the question chiefly litigated on the trial. We think the learned court at the circuit was correct in holding that there was not evidence to warrant the submission of that question to the jury. It is well settled that the mere fact of insolvency, though well known to the vendee, and not disclosed to the vendor, does not afford ground for imputing fraud to the former. There must have been the intent, when the property was purchased, not to pay for it. Coffin v. Hollister, (Sup.) 7 N. Y. Supp. 734; Hotchkin v. Bank, 127 N. Y. 329, 27 N. E. Rep. 1050, and the cases cited. The vendee of the property in this case was probably insolvent at the time of the purchase; at least, if that had been the controlling question, it should have been submitted to the jury. But we think there was clearly not evidence which would have warranted the finding that the officers of the company regarded its condition as hopeless, or did not expect that it would continue in business, and meet its current liabilities as they should fall due. The evidence indicates that the business was loosely conducted, and the books imperfectly kept, but we think it fails to show that the officers were aware of the actual insolvency of the company at the time of the purchase of the sewing machines; still less that they contemplated a failure before the machines should be paid for.

It only remains to consider two exceptions taken by the plaintiff to rulings of the court on questions of evidence. The plaintiff offered in evidence a written statement, signed and verified by the president of the debtor company in July, 1890,—about a month before the purchase of the machines of the plaintiff,—addressed and delivered to a banking firm in Weedsport, which on its face purported to have been made for the purpose of obtaining at some time additional credit for the company. There was also the offer to show that the statement contained representations bearing upon the credit of the company, which were hot true at the time it was made. The evidence was excluded. Its admissibility is contended for under the rule which admits the evidence of other frauds of the same party, at about the same time, of a character similar to that under investigation. We think the ruling was entirely correct in this case, for the reason that in the case of the statement offered in evidence no fraud is shown to have been committed or attempted. Assuming that the statement might have been shown to have been in some respects untrue, there is no evidence nor offer to show that any increase or renewal of credit was given or applied for on the strength of it. This leaves the case quite outside the lines of the rule as stated by any of the authorities. Cary v. Hotailing, 1 Hill, 311; Hall v. Naylor, 18 N. Y. 588; Miller v. Barber, 66 N. Y. 558. The rule which admits evidence of one fraud to prove another is at best so exceptional in its character that, although well established, it will not be extended beyond the limits already assigned to it. The case of Hall v. Naylor, supra, which is cited by counsel for the plaintiff, turns upon the point here made, and the evidence was rejected because it did net appear that in the case to which the evidence related a fraud was actually accomplished.

The other exception relates to an offer of the plaintiff to give evidence of the total assets of the debtor company at the time of the failure in December, 1890. The ruling seems to us to have been correct, on the ground that the time was too remote from the date of the contract assailed, without the accompanying offer to trace back the transactions of the company so as to show the amount of its assets at the date of the sale. We think, too, that the ruling may be sustained on the ground that the matter of the offer was already in proof by evidence as definite, so far as appears, as any which could have been produced under the offer. We find no error committed in the admis-' sion or rejection of evidence, and we are clearly of the opinion that, upon the evidence as received, a case was not made which would have justified a finding that the machines in question were purchased with the intent to cheat the plaintiff out of the price. The motion for a new trial should be denied.

Motion for a new trial denied, and judgment ordered for the defendants on the nonsuit. All concur.