Spicer v. Waters

Mullin, J. The first and most important question presented by this appeal is, whether the plaintiffs were bona fide purchasers of the logs from which the lumber in question was made. If the learned judge was wrong in holding the plaintiffs to be such purchasers, there must be a new trial, as the whole of the defence was excluded, because the defendant did not throw over the bonafides of the-plaintiffs sufficient suspicion to make it either necessary or proper to submit the question to the jury. A bona fide purchaser is" one who buys property of another without notice that some third person has a right to, or interest in, such property, and pays a full and fair price for the same, at the time of such purchase, or before he has notice of the claim or interest of such" other in the property. The chancellor, in De Mott v. Starkey, (3 Barb, Ch. 403,,) thus states the principle: “ To entitle a party to the character of a bona fide purchaser without notice of a prior right or equity, he must not only have obtained the legal title to the property or the negotiable security, but he must have paid the purchase money, or some part thereof, at least, or have- parted with something of — 232 — value upon the faith of such purchase, before he had notice of such prior right or equity.” In Jackson v. Cadwell, (1 Cowen, 622,) it was held that to constitute a bona fide purchaser, it is not enough to show a conveyance good in form, but payment of the consideration must be made out. It must be actually paid, not merely secured to be paid, for otherwise the purchaser would not be hurt. Chancellor Kent, in Jewett v. Palmer, (7 John. Ch. 65,) says: “To support the plea of bona fide purchase without notice, the defendant must aver and prove not only that he had no notice of the plaintiff’s rights before his purchase; but that he had actually paid the purchase money before such notice. Though he secured the purchase money, yet if it was not in fact paid, before notice, it will not be sufficient to maintain his plea. (See, also, Root v. French, 13 Wend. 570.) It is not pretended that the plaintiffs had'paid, or secured to be paid, any part of the consideration of the logs. If payment of the price is essential to make their title valid, they must of course fail. But if the title of Leonard Carter was valid as against the creditors of Richard, those creditors cannot seize and appropriate the property because the plaintiffs have purchased on credit. If, on the other hand, Leonard’s title was void by reason of fraud as against the creditors of Richard, that fraud would defeat the plaintiffs’ title, unless they were purchasers bona fide without notice. Without stopping to consider whether the evidence given on the part of the plaintiffs proved or had a tendency to prove Laud in the sale to Leonard, or fraud in the dealings in reference to the property subsequent to such sale, the offer of the defendant to prove fraud between Richard and Leonard presents the question whether such fraud constitutes a defence to the action. That offer is in terms to show the title of Leonard void — 233 — as to creditors, by reason, of fraud, and particularly because there was no change of possession after the purchase by Leonard. If Leonard was the party suing, this fraud would be a complete defence to the action. It follows that if Leonard’s title is defective, that defect attaches to the title of every person not a bona fide purchaser without notice. The purchasers are not such purchasers, and hence their title must fail with that'of their vendor. These views are predicated on the assumption that it is competent for a creditor to assail collaterally a judgment against his debtor, for fraud. If he was not at liberty to do so, of course proof of fraud would be wholly irrelevant, against the creditor recovering the fraudulent judgment. It is not necessary, at this day, to cite cases in support of the proposition that a judgment may be assailed collaterally," for fraud, by persons not parties to it, or privies who are injured by the fraud. The cases will be found collated in 2 Cowen & Hill’s Notes, 854, el seq. If the only fraud imputed is that which is presumed from the omission to change possession after the purchase by Leonard at the sale on his execution, we might hold the presumption rebutted by the character of the property purchased. It was held in Farrington v. Sinclair, (15 John. 428,) that the omission for a few days to remove the wood, it being a ponderous article, was not per se sufficient evidence of fraud. But under the Revised Statutes the question is for the jury, and not for the court; and it may not be taken from the jury and decided as a question of law, by the court. The statute (2 R. S. 137, § 4) is peremptory that the question of fraudulent intent, in all cases arising under that chapter, (chap. 7,) shall be deemed a question of fact, and not of law. (Edgell v. Hart, 9 N. Y. 218.) I am of the opinion that the learned judge erred in — 234 — holding the plaintiffs to be bona fide purchasers, and. for that reason excluding the defence of fraud. I am also of opinion that the charge that the plaintiffs were entitled to recover the value of the property at Troy, less expenses of transportation, was erroneous. The general rule is, that in an action for the conver-' sion of personal property, the measure of damages is the market value of the property at the time and place of conversion, with interest thereon to the trial. (Cortelyou v. Lansing, 2 Caines’ Cas. 200. Kennedy v. Strong, 14 John. 128. Smith v. Griffith, 3 Hill, 333. Andrews v. Durant, 18 N. Y. 496. Sedg. on Dam. 473 et seq., and cases cited by the court in Suydam v. Jenkins, 3 Sandf. 626.) There are several modifications or exceptions to this general rule: 1st. When the property has no fixed value, but is fluctuating, the measure of damages is the highest price in the market between the time of conversion and the trial. (Sedg. on Dam. 479. But see Suydam v. Jenkins, 3 Sandf. 614.) This is the measure of damages in the case of the conversion of stocks. (Romaine v. Van Allen, 26 N. Y. 309.) 2d. When the plaintiff’s interest in the property is by way of lien, the extent of the lien is the measure of the damages. (Parish v. Wheeler, 22 N. Y. 494. Sedg. on Dam. 482.) When the wrongdoer is without claim to the property the special property-man may recover the value. (Alt v. Weidenberg, 6 Bosw. 176.) 3d. When the property taken has been made more valuable by the labor of the defendant, the owner is entitled to its enhanced value. (Baker v. Wheeler, 8 Wend. 505. 6 John. 168. 7 Cowen, 98. Rice v. Hollenbeck, 19 Barb. 664. 3 N. Y. 379. 5 John. 348. 10 id. 237. But see Hyde v. Cookson, 21 Barb. 92.) 4th. When special damages are laid in the complaint, it has been held they may be recovered. (Davis v. — 235 — Oswell, 7 Car. & P. 804. Contra, Brizsee v. Maybee, 21 Wend. 144.) 5th. When the property has no market value, such as paintings, manuscripts &c., the damages are in the. discretion of the jury. (Sedg. on Dam. 474.) The "case before us is not within any of the modifications or exceptions to which I have referred. I have not been able to find any case in which the measure of damages adopted in this case has been recognized, unless Suydam v. Jenkins (3 Sandf. 614) is one. Duer, J., in discussing the measure of damages for the conversion of personal property, there lays down the general rule as I have stated ; but insists that there are cases in which the owner may be entitled to a higher compensation—as when the property is taken on its way to a more profitable market, where it would certainly have arrived. In such case he thinks the market value at such place, less the cost of transportation, is the true rule of compensation. But he cites no casé in support of it, and it cannot be reconciled with the case of Brizsee v. Maybee, (21 Wend. 144.) In that case the action was replevin, for logs. The defendant had a verdict, and on the execution of a writ of inquiry he gave evidence of special damages. He proved that he was accustomed to send his lumber to Albany and Troy for sale, and the value of the lumber which might have been made from the logs after deducting the expenses of manufacturing and transportation. The court set aside the inquest, holding the defendant not entitled to the special damages proved. In reference to the evidence of value at Troy &c., Cowen, J., says: “ Much of the evidence given before the under-sheriff was admissible to show the market value at the time when,, and the place where, they were taken by the writ. The ultimate value at Albany or Troy, when in the ordinary course of business the boards would reach there, deducting the expenses of manufacture and the price of — 236 — transportation, were proper topics of inquiry with a view to the ascertainment of value at the canal; but that being once fixed in the minds of the jury, the measure of damages in the case was the legal interest on such value to the day of the inquisition, or at farthest to the next term.” [Onondaga General Term, January 2, 1866. Morgan, Bacon and Mullin, Justices.j Ho proof of the value of the lumber at the canal was given, and hence the only way to get at the value was to prove the price at the nearest market, and deducting from that the expenses of manufacturing and of transportation gave the value or price at the place of conversion. But such evidence is never admissible when it appears that the property has a market value at the time and place of conversion. The very object of the evidence of price at Troy was to arrive at the value at the place of conversion. There being no market there, there was no other mode of arriving at it. In this case, a market value was proved at the time and place of sale, by the defendant, and that price, with interest,- is the only and true measure of. damages. For these errors occurring on the trial, I am in fav'or of reversing the judgment, and granting a new trial, with costs to abide the event. Morgan, P. J., concurred. Bacon, J., dissented. Hew trial granted.