Case Name: JOHNSON VS. OBERHOLTZER
Court: Supreme Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1882-05-01
Citations: 1 Walk. 103
Docket Number: No. 69
Parties: JOHNSON VS. OBERHOLTZER.
Judges: 
Reporter: Reports of cases decided by the supreme court of pennsylvania which have been omitted from the regular reports
Volume: 1
Pages: 103–111

Head Matter:
JOHNSON VS. OBERHOLTZER.
If a purchaser prevents bidding, it avoids the sale and leaves the property open to seizure by another creditor.
Where the execution creditor promised to protect another,creditor if he would not bid, such creditor is not estopped from setting up the fraud.
Error to Common Pleas of Schuylkill County, No. 69, July Term, 1881.
The facts of the case appear in the charge of the Court delivered May 18, 1881, by
Walker, J.:
These are three feigned issues directed by the Court under the Act of Assembly to determine the title and ownership to certain personal property levied upon by the sheriff of Schuylkill County, in the three executions, as the goods and chatties of S. Holmes and Frederick W. Geer, trading as S. Holmes & Co.
From the evidence,' it appears that these defendants obtained three judgments against S. Holmes & Company, to wit: H. M. Oberholtzer, to No. 74, May Term, 1879, for $900; Schramm, Bro. & Co., to No. 196, March Term, 1381, $59.86; Wilson, Hood & Co., to No. 197, March Term, 1881, for $43.05. Fi.fa.’s were issued on all these judgments, and on the 17th of February and 26th of February, 1881, the sheriff made a levy in each case as the property of 8. Holmes & Co.
William H. .Johnson, the plaintiff in these issues, claimed to hold the property levied on, and so notified the sheriff, and these issues are to determine whether they belong to S. Holmes & Co., or to Wm. H. Johnson.
The plaintiff’s claim is founded upon an amicable judgment which has been given in evidence to No. 261, November Term, 1879, for $1,800 upon a judgment bond, dated 8th of March, 1879, upon which an execution, was issued, a levy made, and the goods sold to plaintiff' for $1,322, on the 4th of November, 1879, as the property of 8. Holmes & Co.
This stock of fancy goods embraced in the sheriff’s levy is a portion of the articles sold the plaintiff, a part had been sold and turned into money before the seizure by the sheriff.
The goods were not removed from the premises of Holmes & Co. by the purchaser, but were allowed to remain in their possession under an agreement in writing, acknowledging the ownership in the plaintiff, and with a power of attorney to S. Holmes & Co., authorizing them to act as agents of the plaintiff', dated the 4th November, 1879. The plaintiff claims that he paid full value for the judgment, that everything done in the premises was bona fide, and that S. Holmes & Co. had a perfect legal right to prefer them to any other creditors, that the purchase of the articles in dispute was at sheriff’s sale, that he -received a bill of sale for the goods, and loaned them for the consideration named in the agreement, to the original defendant.
On the part of the defendants, who are all judgment creditors, it is contended that this judgment was given to the plaintiff to mislead the creditors of Holmes & Co., that it was not entered at the time it was given, but was kept back until the firm had obtained other goods, when it was entered, execution issued upon it and the very bills of goods that were bought on the 23d and 30th of September, 1879, were sold to Johnson on the 4th of November.
They therefore contend that the conduct of S. Holmes & Co-acquiesced in by the plaintiff, was in fraud of their rights, and intended to hinder, delay, and defraud them; and that the action of the plaintiff in seeking to deter other bidders was fraudulent, ánd that, therefore, the verdict should be for the defendant.
The testimony of Mr. Holmes is, that the order for the articles upon which judgment is founded, was given at the time the judgment was executed, to wit: on 8fch of March, 1879, that it was not entered until October, following; that during the summer of 1879 his firm became embarrassed ; that an execution was about being issued against them by Mr. 'Schalck, who represented the Grover & Baker Sewing Machine Co- that he then wrote to Mr. Johnson, who entered up his judgment, issued execution on it, levied on his stock of goods, and bought them in. He states that the judgment was for full-value.
Mr. Lineaweaver, who represents Mrs. Oberholtzer, says that on the 4th of November, 1879, the day of the sale, Johnson and Holmes came to his office, and, in a conversation upon this subject, Johnson told him that Mrs. Oberholtzer should be secured. He then asked him for security,'and Johnson’s reply was that “one thing at a time should be attended to.” Mr. Lineaweaver further testified that he saw Mr. Farquhar on the subject; that he again saw Johnson, who told him that the best thing he could do would be not to interfere, for if they got their backs up Mr. Lineaweaver’s client would get nothing; that after this he took no steps to protect his clients, but relied upon Johnson’s promise. He says that he had intended to have the articles sold piecemeal, so as to bring as much as possible, but went to the sale and only bid once; that after the sale he saw Johnson again and asked him to arrange the matter so as to give his client something -substantial ; that Johnson then said that he had nothing to do with it, and referred him to Mr. Holmes to fix it; that .he then saw Mr. Holnaes, who told him he must see Johnson, as he was acting only as his agent.
Mr. Lineaweaver says the stock of goods was worth between $5,000. and $6,000.
Mr. Miller says the stock was worth $5,000 and would bring $2,500 at a forced sale.
The law on the question raised in these cases is well settled.
In voluntary sales of personal property, there must be an actual and continued change of possession in order to constitute them valid. The separation of the property must be at the time of the sale, or at a reasonable time thereafter. — McMarlin vs. English, 24 P. F. S., 296; Garman vs. Cooper, 22 P. F. S., 32; Barr vs. Reitz, 3 P. F. S., 256.
But in judicial sales the law is otherwise.
One who buys personal property at sheriff’s sale, may safely leave it with the defendant in the execution under such a contract of bailment, as entitles the bailor to reclaim the property.
And to avoid a purchase at a judicial sale, it must be proved that the purchaser obtained the property at an under value and by means ot false representations. — Dick vs. Cooper, 12 H., 217; Schott vs. Chancellor, 8 H., 199; Lothrop vs. Wightman, 5 Wr., 297.
When a judgment is given by the debtor to secure an honest debt, there can be no presumption of fraud flowing from that act. A debtor has an undoubted right to prefer any of his creditors by a transfer of his property or a confession of judgment (except as against the bankrupt law), although he may thereby hinder, or forever prevent his other creditors from collecting their just demands. — Walter vs. Gernant, 1 H., 517; Wilson vs. Berg, 7 Norris, 167.
A plaintiff' cannot recover either in a court of law or equity whose cause of action is sustained by fraud or fraudulent representations. Fraud vitiates everything, but it is a question of fact and must be proved or inferred from facts clearly proved. It can never be presumed. And no one can be visited with the fraudulent acts of others, unless he is himself a party to their acts, or has knowledge of them. An absent vendee is not to be affected by the declarations of his vendor when not a party to a fraud.— Scott vs. Heilager, 2 H., 238; Confer vs. McNeal, 24 P. F. S., 112.
The least concert or collusion between parties to an illegal transaction makes the act of one that of all. — Confer vs. McNeal, 24 P. F. S., 112.
That part of the testimony of Mr. Holmes which refers to a. conversation when he purchased goods that “his financial standing or condition was all right,” not being sufficiently connected with the plaintiff” in our opinion as set forth in defendant’s offer, should not be considered but must be rejected by the jury in making- up your verdict, but anyching else said by Mr. Holmes upon the subject of securing the claim of Mrs. Oberholtzer, after Mr. Johnson referred Mr. Lineaweaver to him, would be evidence in the cause.
You must, therefore, apply these principles of law to the facts in evidence in rendering your verdict.
If all the acts and intentions' of the plaintiff were fair, honest, and bona fide, intending to secure himself, then your verdict should be for the said plaintiff.
If you believe from the evidence that it was the intention of the plaintiff and Holmes to hinder, defraud, and delay creditors (beyond the mere fact of preferring one creditor to another), then it would constitute such a fraud that would prevent a recovery here and your verdict should be for the defendants.
May 18,1881, verdict for defendant.
Johnson took a writ of error in the Oberholtzer case and assigned twelve errors in the answers to points, the first six being plaintiff’s points and the last six defendant’s points, and are as follows:
1. The only fraud which is alleged to vitiate the sale is a fraud practiced on Mrs. Oberholtzer; she is the only person w;ho can take advantage- of it. The other defendants can not set it up.
Answer. — We say to you if there has been any fraud on the part of the plaintiff he can not recover in this case under the evidence.
2. If any fraud was committed by the plaintiff at the sale, the party defrauded is estopped from setting it up by the lapse of time and by the ratification which “the receipt of part of the proceeds of that sale evidences.
Answer. — We decline to affirm this point.
3. That if the alleged agreement between Johnson and Oberholtzer on the day of the sale, was a fraud on subsequent execution creditors, then Oberholtzer being a party to the fraud can not set it up to defeat Johnson’s title to the goods on a feigned issue.
Answer. — No one guilty of a fraud can take advantage of it.
4. That the alleged promise made by Johnson was invalid under the statute of frauds, and, therefore, ought not and could not amount to an inducement to Oberholtzer to abandon any rights which his judgment and execution gave him in respect of said sale.
Ansioer. — The promise of one man to pay the debt of another over $20 is invalid under the statute. Whether this promise induced Mrs. Oberholtzer to abandon the proceedings is for the jury under the evidence.
5. That the evidence of any promise made by Johnson is uncertain, and in view of what took place between Lineaweaver and Farquhar, could not have been any valid ground for the abandonment of any rights by Oberholtzer.
Answer. — This involves a question of fact for the jury.
6. That admitting the promise made by J ohnson to Lineaweaver to have been as alleged by Mr. Lineaweaver, it does not establish a fraud or vitiate a sale.
Answer. — This is a fact which the jury must determine under all the evidence in the case.
- 7. That if the jury believe that the purchaser Wm. II. Johnson, appealed to Mr. Lineaweaver not to bid at the sheriff’s sale that if he, Mr. Lineaweaver, would not so bid at said sale, that , he, Johnson, would protect his, Lineaweaver’s claim, and that if, after the sale, he, the said Johnson, did not protect the said interest, and that the promise of Johnson was relied on, and that he, the said Lineaweaver, thereby allowed his claim to be sacrificed, which he could have protected at the sale, then the said Johnson was guilty of a fraud which would prevent him of acquiring a title „to the goods as against Oberholtzer or the other creditors.
Answer. — The question of fraud is for the jury. If the plaintiff made any false representations to deter bidders from attending the sale, and thereby bought the property at an under value, then such sale would be invalid.
8. The policy of the law being to multiply bidders and increase competition, and any attempt on the part ot the purchaser to dissuade bidding avoids the sale and leaves the property open to seizure, at the suit of another creditor, therefore if the jury find from the evidence in these cases that anything was said or done by Johnson, or any .one for him, at the time of the sale or before to dissuade bidders and prevent bidding, their verdict must be for the defendants.
Answer. — This is affirmed.
9. If the jury believe from the evidence in the cases, that anything was said or done by Johnson, or any one by Johnson’s authority, by which the goods sold brought less than they otherwise would, it was a fraud upon creditors, and their verdict must be for the defendants.
Answer —This is affirmed, if what was said or done was with the intention to depreciate the value of these articles to buy others lower.
10. If the jury believe that anything was said or done, at or before the sheriff’s sale by Johnson, or by others acting under his authority, which prevented competition at the sale among bidders, or hindered bidders, their verdict should be for the defendants.
Answer. — This is affirmed.
11. If the jury believe from the evidence that the execution of Wm. H. Johnson was issued for any other purpose than to make the money, their verdict must be for the defendant.
Answer. — This is affirmed, if the execution was issued to hinder, delay, or defraud creditors.
12. If the jury believe from the evidence that the execution of William H. Johnson was issued for the purpose of defeating the creditors represented by Mr. Schalck or any other creditor, or in any way to delay, hinder, and defraud, then it would be a fraud as to creditors, and the verdict must be for the defendants.
Answer. — This is affirmed.
F. G. Farquhar, Esq., for plaintiff
in error argued that the facts alleged do not amount to fraud on the part of Johnson. Dick vs. Cooper, 12 Harris 217; Harman vs. Reese, 1 Browne 11; Uhler vs. Maulfair, 11 Harris 484; Worman vs. Wolfersberger, 7 Harris 61; Navis vs. Charles, 8 Barr 82; Lowry vs. Coulter, 9 Barr 349; Forsyth vs. Matthews, 2 Harris 100; Hugus vs. Rob inson, 12 Harris 9; Dunlap vs. Bournonville, 2 Casey 72; Shontz vs. Brown, 3 Casey 123; McMarlin vs. English, 24 P. F. S. 296; Wilson vs. Berg, 7 Norris 167; Hopkins vs. Beebe, 2 Casey 85; York Co. Bank vs. Carter, 2 Wright 446; Lloyd vs. Williams, 9 Harris 327; Keen vs. Kleckner, 6 Wright 529. It is not illegal to prefer one creditor even though others be hindered thereby. Bentz vs. Rockey, 19 P. F. S. 71. The court gave undue weight to the fact that Johnson was a preferred creditor. Brown’s Appeal, 5 Norris 529. Fraud is not to be presumed. Bear’s Estate, 10 P. F. S. 430; Shoemaker vs. Kunkle, 5 Watts 107; Lutton vs. Hesson, 6 Harris 109; Commonwealth vs. Erie & Pitts. R. R. Co., 24 P. F. S. 94. A charge of iraud cannot be predicated on a vigilant pursuance of a person’s rights by legal means, even though others be injured thereby. Damon vs Bache, 5 P. F. S. 67; Tracy vs. Quinn, 1 Pitts. L. J. 154; Lloyd vs. Williams, 9 Harris 330. As to the eleventh error: “It matters little to the other creditors what the appellant’s intention was in issuing his writ, if he did nothing to prejudice his rights after it was issued.” Brown’s Appeal, 2 Casey 492. As to the third and fourth errors, the instructions of the Court were not explicit. Hays vs. Paul, 1 P. F. S. 134; Killion vs. Power, 1 P. F. S. 429; Mills vs. Buchanan, 2 Harris 59.
Mrs. Oberholtzer cannot complain unless she lost by reason of the declaration of Johnson. Abbey vs. Dewey, 1 Casey 413.
If the agreement with Johnson was fraudulent as to creditors, then Mrs. Oberholtzer, being a party to a fraud, can not complain of it. Shuman vs. Shuman, 3 Casey 90; Miller’s Appeal, 6 Casey 478; Evans vs. Dravo, 12 Harris 62, Murphy vs. Hubert, 4 Harris 58; Hershey vs. Weiting, 14 Wright 244.
Mrs. Oberholtzer has been guilty of delay in standing by for eighteen months. Leaming vs. Wise, 23 P. F. S. 173; Adams vs. Savage, 28 N. Y. 103, Masson vs. Bovet, 1 Denio 73; Negley vs. Lindsay, 17 P. F. S. 228.
J. Lineaweaver, Esq., contra,
the question of fraud was for the jury. Forsyth vs. Matthews, 2 Harris 104; Lutton vs. Hesson, 6 Harris 109; McMichael vs. McDermott, 5 Harris 353; Ehrisman vs. Roberts, 18 Smith 308; McKibben vs. Martin, 14 Smith 152; Murphy vs. Hubert, 4 Harris 57. The ruling of the Court below is sustained by Walter vs. Gernant, 1 Harris 517; Schott vs. Chancellor, 8 Harris 199; Abbey vs. Dewey, 1 Casey 413; Klopp vs. Witmoyer, 7 Wright 219. “Whether the execution creditor really mean to obtain his money is the question, in deciding, whether it is fraudulent as to other creditors.” Smith’s Appeal, 2 Barr 331; Weir vs. Hale, 3 W. & S. 285. Mrs. Oberholtzer is not estopped from complaining. McMichael vs. McDermott, 5 Harris 353.

Opinion:
The Supreme Court affirmed the ruling of the Court below on May 1st, 1882, in the following opinion,
Per Curiam.
There was no error in the answers of the Court to the points. There was evidence of an agreement not to bid at the sale, and the question of fraud was fairly submitted to the jury.
Judgment affirmed.