Court Opinion

ID: 6407369
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:50:00.564441+00
Date Added: 2024-06-11T15:51:15.410517
License: Public Domain

Shaw C. J
delivered the opinion of the Court. We are now to take it as proved in point of fact, to the satisfaction of the jury, that the goods, for which this action of trover is brought, were obtained from the plaintiffs by a sale, but that this sale was influenced and effected by the false and fraudulent representations of the defendant. Such being the case, we think the plaintiffs were entitled to maintain their action, without a previous demand. Such demand, and a refusal to deliver, are evidence of conversion when the possession of the defendant is not tortious ; but when the goods have been tortiously obtained, the fact is sufficient evidence of conversion. Such a sale, obtained under false and fraudulent representations, may be avoided by the vendor, and he may insist that no title passed to the vendee, or' any person taking under him, other than a bona fide purchaser for value and without notice, and in such case the seller may maintain replevin or trover for his goods. Buffinton v. Gerrish, 15 Mass. R. 156.
The only important question is, whether the plaintiffs had done enough to rescind the contract and reclaim their goods in this action, without first tendering back the note of the defendant, which they had received on the sale. We are to take it as proved, that this was a negotiable note; that it had not been negotiated, either at the time the action was brought, or at the trial, or at any time ; on the contrary, that it had always remained with the plaintiffs unindorsed, and was produced at the trial and offered to be surrendered, and placed on the files of the court for the defendant’s use.
The rule undoubtedly is, that if the vendor under such circumstances would rescind the contract, and take back his property, if he has received a valuable consideration, he must restore it, whether it be money or goods, or the negotiable security of a third person. Kimball v. Cunningham, 4 Mass. R. 502.
The precise question then is this, whether the vendee’s own note-not negotiated, comes within the rule. Had it not been negotiable, we think it quite clear, that there would be no necessity of returning it. Rescinding the contract for the sale, *21rescinds the contract of payment by the vendee. A note not negotiable, would have been nothing more than an express promise to pay for the goods, and would have been avoided with the sale. The Court are of opinion, that a note, though payable to order, whilst it remains in the hands of the promisee, the vendor of the goods, is to be put on the same footing, and that the delivering it up was not a condition precedent to bringing the action. If not produced at the trial, to be surrendered, it might be presumed that it had been negotiated, and that would have been a bar to the action, upon the rule stated.
It is somewhat analogous to a class of cases, which, though they do not arise here on account of our rule, treating a negotiable note given for goods sold as payment, yet are common in England and New York, where a different rule prevails. When a note is given on a sale of goods, but is not paid at maturity, the action is brought for goods sold, and the note is produced at the trial, to be surrendered, and to show that it is not outstanding. If not thus produced, the presumption would be, that it had been negotiated and was outstanding ; and if it was so, the vendor could not recover as for goods sold. The negotiable security, actually negotiated and outstanding, would be deemed payment. But if not outstanding, such negotiable security would be deemed as only a collateral promise for the payment of the goods, and need not be tendered before bringing the action for goods sold and delivered.
Judgment on the verdict for the plaintiffs.