Summary
In Hall v. Peckham, 8 R.I. 370, goods had been obtained from the plaintiff by fraud by one who turned them over to his assignee, and the latter sold them.
Summary of this case from Gorham v. SaylesOpinion
OCTOBER TERM, 1866.
Monies received by an assignee under a voluntary assignment, for goods purchased by the assignor under fraudulent representations and with intent not to pay therefor, may be recovered of the assignee by the original vendor, in an action for money had and received to his use. Nor is it necessary, before commencing suit, to make demand of such goods or of such monies, nor to restore or to offer to restore any promissory notes given for such goods, it being sufficient to produce them at the trial, to be impounded, as ruled in Duval Inglehart v. Mowry, 6 R.I. 479. In an action of assumpsit for the proceeds of goods obtained by fraud, brought by the vendor against the assignee of the fraudulent vendee, it not appearing that the defendant had been at all prejudiced by the plaintiff's delaying suit for nearly a year after the obtaining of the goods, it cannot be adjudged error on the part of the judge trying the cause, that he refused to charge, as matter of law, that the plaintiff was estopped, by such delay, from prosecuting his suit
MOTION for a new trial of an action of assumpsit, tried in this Court before Justice Durfee, with a jury, at the March term, 1866.
The action was brought to recover from the defendant certain monies, admitted to have been in his hands, in his character of assignee of one Philip A. Doyle, at the commencement of the suit; and among the facts in proof, or agreed, were these, viz.: That said Philip A. Doyle, on the 30th of December, 1863, voluntarily assigned all his property to one James Doyle, for the benefit of his creditors; that afterwards (March 7th, 1864), on the petition of the plaintiff and others of said Doyle's creditors, said James Doyle was, by this Court removed from his office of assignee of said Philip A., and this defendant appointed in his stead; and that said James, on his removal, paid over to this defendant the monies in his hands, received by him for property sold by him a few weeks after the assignment, including certain merchandise originally purchased by said Philip A. of the plaintiff, between the 26th day of November and the 24th day of December, 1863; and that no demand, either for said goods or the proceeds of them, had ever been made by the plaintiff upon the defendant or his predecessor, prior to the service of the writ in this case, which bore date the 15th of October, 1864. The plaintiff alleged — and submitted evidence to show — that the said Philip A. Doyle obtained possession of the said goods by means of fraudulent representations, and with an intent not to pay for them, and upon the proofs and admissions, claimed a verdict for the amount received as aforesaid by James Doyle for the goods thus obtained, and by him paid over to the defendant, $1,432.27 in amount. The notes of said Doyle, held by the plaintiff, were impounded in Court at the trial.
The jury returned a verdict for the plaintiff, whereupon the defendant filed exceptions to certain of the Judge's instructions, and, for alleged error therein, asked a new trial. The exceptions are substantially embodied in the three specifications submitted by the defendant's counsel in his argument.
Payne, for the defendant: —
A new trial is asked by the defendant in this cause —
I. Because the Court ruled that the plaintiff could maintain this action without proving that the defendant had expressly promised to pay to him the proceeds of the goods in question The goods in question were assigned by Philip A. Doyle to James Doyle, and, by James Doyle, sold with the knowledge and assent of the plaintiff, and the proceeds were, by James Doyle, paid over to the defendant. When the plaintiff permitted the sale of the goods by James Doyle, he elected to treat the sale to Philip A. Doyle as valid, and cannot now be permitted to say that it was not, and therefore there can be no implied promise on the part of the petitioner to pay the proceeds to the plaintiff, and no express promise is pretended.
II. Because the Court ruled that the plaintiff could maintain this action without proof of a previous demand of the proceeds in question, by the plaintiff, of the defendant. The goods in question came lawfully to the possession of Philip A. Doyle and of James Doyle, and the plaintiff could not have maintained replevin for the goods, or trover for their value, against either, without previous notice and demand. A fortiori, he cannot maintain assumpsit against the plaintiff without notice and demand. Duval Inglehart v. Mowry, 6 R.I. 484.
III. Because the Court charged the jury, that it was the plaintiff's duty to elect, within a reasonable time after the discovery of the fraud, whether he would or would not confirm the sale, and that any unreasonable delay in that particular was evidence of an election not to confirm the sale, and left it for the jury to say whether he had elected to confirm the sale. Whereas, the Court should have instructed the jury that, under the admitted facts in this case, it was a conclusive presumption of law that the plaintiff had elected to confirm the sale.
IV. Because, in finding that the plaintiff did not elect to confirm the sale, the verdict was against the evidence and the weight thereof.
Eames, for the plaintiff: —
I. The money in the defendant's hands, arising from the sale, by the assignee of P.A. Doyle, of the plaintiff's goods, obtained by P.A. Doyle by fraudulent representations, belonged to the plaintiff; and, without any express promise by the defendant, the law implies a promise, on his part, to pay it over to the plaintiff. Fahnestock Co. v. Baily Varnon, 3 Met. (Ky.) 48; McQueen et al. v. State Bank, 2 Ind. 413; Lockwood v. Kilsea, 41 N.H. 185, 188; Wilson v. Sergeant, 12 Ala. 778; Hawley v. Lage, 15 Conn. 52; Ex parte Wendell, assignee of Brown, 2 Story U.S.C.C. 360; Palmer v. Thayer, 28 Conn. 237; Ratcliffe v. Longston, 18 Md. 383, 390, 391.
II. No demand for the money in the defendant's hands, other than the demand made by the service of the writ, was necessary. A demand in this case, upon the defendant, at any time when the funds are within his control, is sufficient. Fahnestock Co. v. Baily Varnon, 3 Met. (Ky.) 48; Thurston v. Blanchard, 22 Pick. 18; Hawley v. Lage, 15 Conn. 52; Hunter v. Hudson River Iron, c., Co. 20 Barb. 499.
III. The impounding in court, at the opening of the plaintiff's case upon the trial, of the notes of P.A. Doyle, payable to the order of the plaintiff and received by him for his goods fraudulently obtained by P.A. Doyle, was the only tender of the notes required to be made to enable the plaintiff to maintain his action. There is no pretence that either Doyle or his creditors have suffered any injury by the plaintiff's retention of the notes until they were impounded in Court. Duval Inglehart v. Mowry, 6 R.I. 479, 483, et seq.; Gatling v. Newell et al. 9 Ind. 572-577; Fraschievis v. Henriques et al. 36 Barb. 276; Thurston v. Blanchard, 22 Pick. 18.
IV. The instructions of the Court, upon the question of the plaintiff being estopped by his acts to claim the proceeds of the goods, was, in all respects, correct. Gatling v. Newell et al. 9 Ind. 572, 578; Downer v. Smith, 32 Vt. 1; Taymon v. Mitchell, 1 Md. Ch. 496; Duval Inglehart v. Mowry, 6 R.I. 484.
V. The evidence fully sustains the verdict. 1. It is clearly established by the weight of evidence that the goods were obtained of the plaintiff by the false and fraudulent representations of P.A. Doyle, and also that he purchased the goods with the intent not to pay for them. 2. The plaintiff disaffirmed the contract within a reasonable time after discovering the fraud. The fraud was not discovered until after the assignment. The goods were sold by the assignee within two weeks of the assignment, and the action was brought before the assignee had parted with the money arising from the sale.
1. The defendant, being in the place of the voluntary assignee of Philip A. Doyle, could have no better right to the property assigned than Doyle himself. Doyle, according to the finding of the jury, was a fraudulent purchaser, and therefore held the property subject to the right of the plaintiff to disaffirm the sale and reclaim it. Subject to this right it passed to the assignee, and when the assignee sold it, the proceeds were in his hands subject to the same right, and so likewise passed into the hands of the defendant. The plaintiff having chosen to disaffirm the sale, those proceeds were thenceforth monies in the defendant's hands belonging to the plaintiff, and we see no reason why the plaintiff should not, according to the general rule in such a case, be entitled to recover them, in an action of assumpsit, on an implied promise on the part of the defendant to pay them over to him.
2. The defendant contends that the plaintiff could not maintain trover or replevin without a previous demand, and that therefore he cannot, without such demand, maintain assumpsit. But we do not think such demand would be necessary even in trover or replevin. The law on this point is laid down in Thurston v. Blanchard, 22 Pick. 18. The plaintiff in that case sued in trover for goods sold on fraudulent representations, and it was objected that the suit could not be maintained without previous demand. But the Court held the contrary, and Shaw, C.J., delivering the opinion, said: "Such demand and a refusal to deliver are evidence of a conversion when the possession of the defendant is not tortious, but where 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, or 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 a case the plaintiff may maintain replevin or trover for his goods." In this case the conversion is proved, not only by the fraudulent purchase of the goods, but also by their subsequent sale by the assignee of the purchaser. Neither do we think it was necessary that the notes given by Doyle should have been tendered to the defendant before commencing the action. It was sufficient, as decided in Duval Inglehart v. Mowry, 6 R.I. Rep. 479, that they were produced to be impounded at the trial.
3. Inasmuch as the money for which this suit was brought was still in the defendant's hands at the commencement thereof, and there is no evidence that he had been, in any way, prejudiced by the plaintiffs delay in bringing it, we do not think it was error in the Judge who tried the case, to refuse to rule, as a matter of law, that the plaintiff was estopped from prosecuting his claim for the money in question.
4. We do not think the verdict is so palpably erroneous as to entitle us to set it aside.
Motion dismissed.