Case ID: walker_4/html/0301-01.html
Source: Caselaw Access Project
Author: {"author": "Paxson, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

HAPGOOD vs. McINTOSH.
    If the Court can say that it sees no fraud in the case, it is error to submit the question to the jury.
    An intention on the part of a debtor to defraud his creditors by selling his goods does not affect a b ona fide purchaser for value
    Error to Common Pleas of Lackawanna County, No. 103 January Term, 1885.
    On the 24th of December, 1883, Charles Hapgood of Easton, went to Scranton at the urgent request of Stoddard & Co., to consider a proposition by the latter for the sale to him of their stock and good will as shoe dealers. The bargain was closed, the purchase being made at a full price for cash. A check for the consideration money was filled up at once by Hapgood, who had brought one with him for the purpose, drawn to his order by Plapgood, Hay & Co., of Easton. On the same day, he and W. H. Stoddard proceeded to Easton, leaving one Smith in charge of the store, the Stoddards immediately withdrawing. On the 26th Chas. Hapgood drew the money, and, as was alleged, paid to Stoddard all that he was entitled to.
    The purchase was really made on behalf of L. B. Hapgood, brother of Charles, and he went to Scranton on the 26th to-take charge of the store. The next day executions were levied upon the goods by the defendants, judgment creditors of Stoddard & Co., and the present case is a feigned issue to test the ownership of the goods.
    At the trial the Court was asked to charge that there was no evidence of fraud in the case, and the verdict should be for the plaintiff. To this the court answered, that “we can discern no fraud in the case,” but left it to the jury to determine whether any had been made out. This, together with other instructions, amounting to nearly the same thing, was assigned for error.
    The jury rendered a verdict in favor of the execution creditors and against Hapgood.
    
      W. G. Ward, G. S. Horn and A. H. Winton, Esqs., for plaintiff in error,
    cited Howard Express Co., vs. Wile, 64 Pa., 205; Battles vs. Laudenslager, 84 Pa., 452; Brown’s Appeal, 86 Pa., 524. Fraud must never be presumed, but must be proved; Kaine vs. Weigley, 22 Pa., 184; Sartwell vs. Wilcox, 20 Pa., 123; Bear’s Estate, 60 Pa., 435; Reehling vs. Byers, 94 Pa., 316; Scott vs. Heilager, 14 Pa., 239.
    
      E. N. Willard, E. Warren and F. W. Gunster, Esqs., contra,
    
    cited Castle vs. Ballard, 23 Howard, 187; Caldwell vs. Boyd, 57 Pa., 321; Stauffer vs. Young, 39 Pa., 455; Young vs. Edwards, 72 Pa., 257; Brinks vs. Heise, 84 Pa., 252; Rogers vs. vs. Hall, 4 Watts, 360; Zerbe vs. Miller, 16 Pa., 488; Geiger vs. Welsh, 1 R., 349; Lloyd vs. Williams, 21 Pa., 327; Ferris vs. Irons, 83 Pa., 182; Deakers vs. Temple, 41 Pa., 234; Pearson vs. Carter, 94 Pa., 146; Loucheim vs. Henszey, 77 Pa., 305; Dean vs. Connelly, 6 Pa., 239; Smull vs. Jones, 1 W. & 128; Brown vs. Schock, 77 Pa., 479; Ehrisman vs. Roberts, 68 Pa., 308; Stewart vs. Wilson, 42 Pa., 450; Graham vs. Smith, 25 Pa., 325; Forsyth vs. Matthews, 14 Pa., 100; McPherson vs, Kinnear, 12 W. N. C., 40; Ashmead vs. Hean, 13 Pa., 584; Trefts vs. King, 18 Pa., 160; Brown vs. Keller, 43 Pa., 104; Miller vs. Garman, 68 Pa., 134; Steelwagon vs. Jeffries; 44 Pa., 407; Garman vs Cooper, 72 Pa. 32; Clow vs. Woods, 5 S. & R., 274; McKibbin vs. Martin, 64 Pa., 356; Barr vs. Reitz, 53 Pa., 256; Bentz vs. Rockey, 69 Pa., 71; McMaran vs. English, 74 Pa., 296; Ball vs. Loomis, 29 N. Y., 415; Bastian vs. Dougherty, 3 Phila., 30.
   The Supreme Court reversed the judgment of the Common Pleas, on March 23d, 1885, in the following opinion, per

Paxson, J.

If the learned judge below was correct in saying to the jury, as he did in answer to the plaintiffs points, “that we can discover no fraud in this case,” it was his plain duty to have granted a new trial, for the reason that the jury found fraud where none existed.

The point in question was in these words : “That there is no evidence of any fraud in the case, and the verdict should therefore be for the plaintiff.”-

It was the duty of the Court, in answer to this point, to say distinctly, whether there was evidence of fraud, and, if there was not, to affirm the point without qualfication. The object •of it was to obtain a binding instruction, and to withdraw the case from the jury. Instead of doing so, the learned judge charged, that he saw no evidence of fraud, and then submitted that question to the jury.

The testimony shows that the sale of the stock of goods was honestly made, so far as the purchaser was concerned. If Stoddard & Co. had any design to defraud their creditors, the knowledge of their design was not brought home to the plaintiff. The mere fact that he know the firm was “shaky,” as the witness expressed it, is of little importance. At most, it means that the firm were not in good credit. This would not affect the plaintiff with knowledge that the firm intended to ■cheat their creditors; if it would, an embarrassed firm could not sell anything to anyone, though done in the most perfect good faith. Such is not the law.

Nor does the manner in which the check was paid furnish a scintilla of evidence that the stock of merchandise was not paid for as agreed upon. The evidence is clear that the proceeds ■of the check was handed over to Stoddard & Co., less the sum they owed the plaintiff, and which it was agreed should be deducted. This was proved by credible witnesses, who were neither contradicted nor impeached.

All the requisites of a valid sale appeared in the case. The stock was sold at a fair price, and the purchase money paid in. cash, and the requisite change of possession took place. And, as before observed, there was nothing in the case to indicate-that the plaintiff had in his mind any intent to hinder and delay the creditors of Stoddard & Co., or even knew they had any creditors other than himself. Under such circumstances-it was grave error to allow the jury to find fraud without evidence, or upon such weak and inconclusive facts as furnish no proper basis for a verdict. The court should have affirmed the plaintiff's point without qualification,

The judgment is reversed and a. venire facias de novo awarded,