Opinion
April, 1899.
James H. Fay (George Walter Green, of counsel), for appellant.
Joseph A. Arnold, for respondent.
We think that the evidence shows a sale and delivery of the goods in question to Cashriel Co., and, by that firm, a delivery of said goods to the defendant. We also think that the evidence shows that the sale of the plaintiff to Cashriel Co. was induced by fraudulent representations made by said firm to the plaintiff and that such sale was duly rescinded.
The only consideration advanced by the defendant upon the sale to it of said goods, was an antecedent indebtedness, amounting to about $1,600, and $50 paid at the time of the sale.
In view of the fact that Cashriel Co. obtained the goods by fraud from the plaintiff the duty rested upon the defendant to establish that it was a bona fide purchaser. 79 N.Y. 254.
The transfer to it by said fraudulent purchaser as security for, or in payment of, an antecedent debt, does not make it a bona fide purchaser so as to enable it to hold the goods against the original vendor ( 79 N.Y. 254), nor does the payment of the $50 mentioned make it a bona fide purchaser, because the testimony of the defendant's main witness, a Mr. Sloat, shows that said $50 was not advanced for the purpose of purchasing said goods or to pay value for the same; but was paid for the purpose (as he testified), of making the sale absolutely valid against any person who might claim the goods mentioned in the bill of sale to the defendant.
It was, as he further testified, suggested by the lawyers engaged in the transaction, that such further consideration should be made so that there might be no question as to the validity of the bill of sale. Also that the lawyers stated that there might be a question as to the validity of said bill of sale if there was only the pre-existing debt to maintain it as a consideration, and that unless the new consideration ($50) was given, the transfer might be questioned.
This testimony shows that the defendant regarded the sale to it as a questionable transaction. The new consideration was not advanced for the purpose of paying, as before stated, a consideration for the goods, or for the purpose of becoming an honest purchaser thereof, but was clearly intended as a legal guard against the claim of any person, situated like the plaintiff, who was induced to sell goods to Cashriel Co. by fraudulent representations. Under the circumstances we think that it cannot be claimed by the defendant that it was an innocent and honest purchaser in good faith, and the payment of said $50, in our judgment, does not make it so. This precaution used by it shows that it was not a bona fide purchaser.
The judgment must be affirmed, with costs.
McCARTHY and HASCALL, JJ., concur.
Judgment affirmed, with costs.