Case Name: Fait & Slagle Company, a corporation existing under the laws of the State of Maryland, vs. Joseph D. Truxton and Planner J. Williams
Court: Delaware Superior Court
Jurisdiction: Delaware
Decision Date: 1897-10-12
Citations: 1 Penne. 24
Docket Number: 
Parties: Fait & Slagle Company, a corporation existing under the laws of the State of Maryland, vs. Joseph D. Truxton and Planner J. Williams.
Judges: 
Reporter: Delaware Reports
Volume: 17
Pages: 24–46

Head Matter:
Fait & Slagle Company, a corporation existing under the laws of the State of Maryland, vs. Joseph D. Truxton and Planner J. Williams.
Replevin—Practice—-Non Stdt Refused—Evidence—Decision as to judgment creditors in England vs. Forbes, 7 Houston, 306, Disregarded by a majority of the Court; Grubb, f., dissenting.
1. The fact that a juror is a nephew of one of the counsel engaged in a civil suit, is not a sufficient ground to disqualify him from serving as a juror in said suit.
2. In an action of replevin for goods sold by the plantiff to a vendee under whom the defendant derived his title, the testimony of persons who have sold goods to the same vendee about the same time, showing that he was then insolvent, and that he knew it, and that he had no reasonable expectation of paying for the goods purchased by him, is competent evidence to prove that his purchase from the plaintiff was fraudulent.
3. A purchaser for a valuable consideration, without knowledge or notice of fraud, takes a valid title from the fraudulent buyer which cannot be defeated by the original vendor.
4. Where goods in the hands of a .fraudulent vendee are levied upon under executions issued on the judgments of other creditors whose debts were contracted prior to the alleged fraudulent sale, such levies will not hold good against the defrauded seller, who has elected to avoid the sale or prevent him from recovering the goods or the value thereof in an action of replevin.
5. . The right of the vendors to rescind or avoid the contract of sale exists so long as the goods remain in the hands of the fraudulent purchaser, or some one having them with a knowledge of the fraud by which they were originally obtained. Until rescinded the title to the property is in the buyer, who may dispose of it to bonah.de purchasers for value, and thus vest in them indefeasible and irrevocable title to the property.
6. The suing out of the writ of replevin is in itself a rescisión of the contract.
(October 12, 1897.)
Fore, C. J., and Grubb and Pbnnewill, J. J., sitting.
A. F. Polk and Lewis C. Vandegrift for plaintiff.
C. W. Cullen, C. M. Cullen and C. F. Richards for defend- ’ ants.
Superior Court, Sussex County,
October Term, 1897.
Action oe replevin, to recover from defendants $2016.00, being the alleged value of 96,000 tin cans, with interest, which cans plaintiff claimed were its property and which were unlawfully seized and sold by said defendants as the property of Morrow & Coulboum, a canning firm doing business at Seaford in this State.
(See charge of Court for further facts.)
At the trial, while empaneling the jury, a juror called to the box proved to be a nephew of one of the counsel for the defendants. Mr. Vandegrift raised the point that the fact of relationship to one of, the counsel in the case was sufficient ground for disqualification of a person to serve as a juror, and that the plaintiff should not be required to exercise a.challenge.

Opinion:
Tore, C. J:—
It is not a sufficient ground for disqualification. You may challenge him; but we do not think' that he has such an interest in the case as would exclude him from serving as a juror.
The witness, Edgar F. Kirwan, after having testified as to certain admissions made to him by one of the vendees as to the fraudulent nature of the purchase of the goods replevined in the above case,was asked the following questions by Mr. Vandegrift:
" Did you sell goods to Messrs. Morrow & Coulboum at or about the same time that Fait & Slagle sold to them?" After answering the above question, in the affirmative, the following question was asked—viz:
" With respect to the sale you made to them, did they make similar representations to you as to their solvency that they had made when purchasing the goods of Fait & Slagle?"' This question was objected to by counsel for defendants as irrelevant. Plaintiff's counsel contended it was pertinent to the issue in a case where fraud is alleged, and cited Carey vs. Hotailing, 1 Hill (N. Y. Reports), 311; also Rowley vs. Bigelow, 12 Pickering, 306.
Tore, C. J:—
We think, under the authority of Carey vs. Hotailing, 1 Hill (N. Y. Reports, 311), that this question is admissible. In the case of Rowley vs. Bigelow, 12 Pickering, 307, Chief Justice Shaw lays it down very distinctly. The syllabus in the latter case is as follows:
' ' In trover for goods sold by the plaintiff to a vendee under whom the defendant derived his title, it was held, that the. testimony of persons who had sold goods to the same vendee, about the same time, showing that he was then insolvent, and that he knew it, and that he had no reasonable expectation of paying for the goods purchased by him, is competent' evidence to prove that his purchase from the plaintiff was fraudulent."
The Chief Justice elaborates the syllabus and gives his reasons. It was held that the testimony was admissible.
At the conclusion of plaintiff's testimony, the defendants moved for a non suit upon two grounds, viz:
i. Because the'evidence did not show that the contract between the plaintiff and Morrow & Coulbourn (the vendees) was ever rescinded.
2. Because no'proof was introduced to show that the execution creditors of Morrow & Coulbourn were cognizant of the fraud practiced by said firm upon the the plaintiff, and consequently, said execution creditors occupied the same position as purchasers for value without notice.
Donaldson, Assignee vs. Farwell, et al., 93 U. S. 631; Benjamin on Sales, 433; Hoffman, et al. vs. Noble, et al., 6 Metcalf, 68; Mears & Son vs. Waples, 3 Houst. 581; 4 Houst. 79; England vs. Forbes, 7 Houst. 301.
Mr. Vandegrift-. The motion is made to non suit the plaintiff, and two grounds are urged in support thereof:
1. Because the evidence does not show that the contract between the plaintiff and Morrow & Coulbourn was ever rescinded.
2. Because no proof was introduced to show that the execution creditors of Morrow & Coulbourn were cognizant of the fraud practiced by said firm upon the plaintiff and consequently said execution creditors occupied the same position as purchasers for value without notice.
The first point was scarcely contended for, the motion being rested almost if not entirely upon the second point. In answer to the first point it is submitted that the question of rescisión of the contract does not arise because there was no contract to rescind, Firaud vitiates all things and if the jury shall believe the proof of fraud offered by the plaintiff, then there was never any meeting of minds so necessary as the foundation of a contract and without which it is impossible for a contract to exist.
It is- inaccurate to say such a contract is voidable. It is more correct to say that if such a contract has been attempted and failed by reason of vendee's fraud, the vendor must seasonably disavow it or he will be barred from so doing upon the ground of his own laches. The reason for this is because, as some of the cases put it, if the proposed contract is not seasonably disavowed the rights of innocent third parties may arise, which the court will of course protect.
If by reason of this fraud there was no contract by which title to the goods could pass, then there could be no rescission of what did not exist. Some of the cases cited to the above effect were :
Coghill vs. Boring, 15 Cala., 213; Sargent vs. Sturm, 23 Cala., 359; Buffington vs. Gerrish, 15 Mass., 158; Farley vs. Lincoln, 51 N. H., 579; Ayers vs. Hewitt, 19 Me., 281; Bristol vs. Willsmore, 1 B. & C., 514.
If there was fraud in this case, then there was no contract, and whether there was such fraud, and consequently whether or not there was any contract is a question for the jury.
Cases supra, especially Bristol vs. Willsmore, 1 B. & C., 514.
The fact that to speak of a contract such as this as "voidable" (or to speak of " rescinding " it) is inaccurate and unwarranted, is emphasized by a consideration of those cases where notes were taken. In each of those cases it was held that giving up the notes was all the plaintiff was called upon to do, in order to maintain replevin.
Ayers vs. Hewitt, 19 Me., 281; Nichols vs. Michaels, 23 N. Y., 265; Coghill vs. Boring, 15 Cala., 213; Thurston vs. Blanchard, 22 Pickering.
The reason a mere re-delivery of the notes was regarded as sufficient, was to prevent another action upon them against the fraudulent vendee. If "rescission" in its strict and proper sense were required, a mere re-delivery of the notes would not be sufficient, but the fraudulent vendee would have to be put back in exactly the same position as before the attempted sale. Courts are not solicitous about persons quilty of fraud.
In the Massachusetts cases the courts sometimes speak of a "voidable " sale and a " rescission " of the contract, yet in the case of the minor who had parted with some of the goods procured by the fraudulent representations of his age, the court held replevin would lie for those goods still in possession of the minor. •
Badger vs. Phinney, 15 Mass., 359.
This shows we ought never to speak of a contract as "voidable" or as capable of being "rescinded," which by the fraud in its inception never existed.
Take up now the second point made in support of the defendants' motion, viz : That these execution creditors stand in the same position as would bona fide purchasers for value without notice of fraud.
The defendants' counsel in urging this point in support of their motion seem to have entirely lost sight of the fact that this suit is against the sheriff and his bailiff and that these execution creditors are not parties to the suit. How can anything be urged here for their protection when they are not parties ?
This suit being against the sheriff, the proof with respect to him is sufficient to go to the court. It is to the effect that the defendants in the execution were tortiously in possession of the plaintiff's goods. Whether they were or not is a question for the jury.
If the sheriff chose, after notice, to make himself a party to the tortious taking by Morrow & Coulbourn of the plaintiff's goods, he must bear the consequences, and that he did do this has been fully proved; certainly sufficiently to be submitted to the jury.
Whether the execution creditors knew of the fraud of Morrow & Coulbourn is not an issue in this case as it was in England vs. Forbes, 7 Houst., 301.
The only issue here is whether the sheriff was apprised of the fact of plaintiff's ownership of the goods and gave them to him, or sided with the tortious holding of Morrow & Coulbourn. If the latter, then the plaintiff should recover.
Ash vs. Putnam, 1 Hill 302; Acker vs. Campbell, 23 Wendell, 372; Hall vs. Gilmore, 40 Me. 580; Nichols vs. Michael, 23 N. Y. 265.
It is further submitted that an execution creditor, whose debt according to the .proof in this case is prior to the obtaining of the plaintiff's goods by Morrow & Coulboum, would have no right to the same as against the plaintiff.
The reason of this is.because they have suffered no detriment in any way. On the contrary, they in this case profited.
Execution creditors,such as the proof offered shows these to be, would have no right to these goods as against the plaintiff. This is the overwhelming weight of authority.
Cases supra, especially Coghill vs. Boring, 15 Cala. 213; Ash vs. Putnam, 1 Hill, 308; Farley vs. Lincoln, 51 N. H. 579; Bristol vs. Willsmore, 1 B. & C. 514.
The execution creditors have parted with nothing of value. The proof shows they were creditors of long standing and prior to the dealings by which Morrow & Coulbourn obtained the goods in question.
Another fact controlling here is that an officer, whether sheriff, assignee or bailiff of the liberties, can seize and apply to an execution or other process only the property of the defendant in such execution or other process. Such officer has no right to seize the property of a third person for the debts of the defendant in the execution.
Farley vs. Lincoln, 51 N. H. 679; Bristol vs. Willsmore, 1 B. & C. 514.
As to the authorities submitted by the defendants' counsel, they were cases of bona fide purchasers for value, except possibly one. With such authorities we at this time have no contention.
The exception referred to is Forbes vs. England, 7 Houston, 306.
The case is distinguishable, because suit was there brought against not only the sheriff but also the fraudulent vendee and the execution creditor.
The facts do not show there was such proof as we have introduced here to the effect that the representations were fraudu lent, were the inducement to the sale and that there was the intention not pay for the goods.
The assertion of the Chief Justice in that case that an execution creditor was in the same position as a bana fide purchaser for value, was not necessary to the decision.
As was said by one of the case cited, all the authorities are to the effect that such an execution creditor cannot succeed against the vendor who has parted with his goods through the fraud of the vendee, and if England vs. Forbes is to the contrary, it should not be allowed to stand.
, It is, however, not necessary to overrule it under the facts of this case. The proof here presents a different case in the manner before stated.
It is submitted the motion for a non suit should be overruled.
Uore, C. J:—
A majority of the Court think that this non suit ought not to be granted.
While perhaps we are not able now to clearly distinguish between the case at bar and the ease of England vs. Forbes, 7 Houston, 306, we should like to say that the case of England vs. Forbes seems to stand by itself. Counsel on neither side, apparently, have been able to produce any authority for that decision.
The doctrine of this Court—which seems to be absolutely in line with the cases heretofore decided—is so clearly and tersely laid down by Judge Gilpin in the case of Mears & Son vs. Waples, (4 Houston, 581), designating as it were the class of people who may be termed innocent parties and in that respect having a right to be discriminated either for or against, according to their position, that it seems to us it could not be more clearly expressed. In that case it is confined to this class of persons, viz: ' A purchaser for a valuable consideration without knowledge or notice of fraud takes a valid title from the fraudulent buyer which cannot be defeated by the original vendor. And a consignee of goods who in good faith makes advances upon them, stands precisely in the same position as a purchaser for value." That is, somebody who has an interest in the goods for which he has parted with value.
In the case of England vs. Forbes, before referred to, this announcement is made by the Court: "Where after possession has been obtained by a party who purchases under a fraudulent representation as to his solvency, they be levied upon by an execution issued at the suit of a bona fide judgment creditor, having no notice or knowledge of any such representation, his execution lien cannot be disturbed by, but will hold good against the defrauded seller;",and immediately after that the learned Judge in that case distinctly endorses the doctrine previously laid down in Mears & Son vs. Wapels. Now if the principle laid'down in the latter case is correct, then this decision in England vs. Forbes is incorrect, and we are compelled now to elect between two decisions of this Court. It is not simply that the case of England vs. Forbes goes beyond the other, holding that a judgment creditor who has made a levy stands in the same position as a purchaser for value, but it is in antagonism to the principle laid down and clearly defined in the Mears case. Immediately following what I first read, the learned Judge in the case of England vs. Forbes says: "It is the law of this State, as decided in the case of Mears & Son vs. Waples, that mere insolvency of the buyer, well known to himself and concealed from the seller, does not in itself furnish sufficient grounds for rescinding a contract of sale; nor will the fraudulent purchase and obtaining of goods with an intention of never paying for them, of itself render the contract absolutely void, even as between the seller and buyer; yet it will render it voidable at the election of the seller, but if the goods are sold by such fraudulent buyer to an innocent purchaser for value the latter will take and hold them under a valid title."
So that the decision in the case of England vs. Forbes, not only goes beyond the decision in the Mears case, but is in conflict with the principle laid down in the latter case.
We hold—and we think it the just course—that whenever the Court finds it has made an error, it is its duty to correct such error. It is a duty it owes to the public; it is a duty it owes to the litigants themselves, that they may not be driven to another Court to ascertain that which this Court believes to be wrong. Again, it is a principle that the Court will at all times recognize, that wherever the right is clear, that that right shall be distinctly announced, and if it has made an error, to correct it in a frank, " manly and prompt manner.
That being the opinion of' a majority of this Court, we do not think a non suit ought to be granted in this case.
PFNnfwiul, J:—
The Chief Justice has very correctly stated the position of a majority of the Court, and I do not propose to go over that at all. I only wish to say that if I could feel satisfied that it has been the settled policy and practice of this Court to adhere to its former decision upon the same subject, even though it was believed that such decision was erroneous, I might feel constrained to be governed by the decision in England vs. Forbes, in regard to an execution creditor having the same protection as an innocent purchaser against the claim of the defrauded vendor. But I am not satisfied that such has been the settled policy and practice of this Court, and therefore I must view this as a matter of law and not as a question of policy and practice.
That being the case, I cannot endorse a principle which my judgment does not approve, at least until it has been so declared by the Court of last resort, when I must recognize it to be the law of the State. Not approving of that part of the opinion of Chief Justice Comegys which relates to an execution creditor, I cannot endorse it, and not being satisfied that it has been the policy and practice of the Court to adhere to its former decision under such circumstances, I feel constrained to take the position against granting the motion for a non suit in this case.