Ludlow v. Hurd & Sewall

Spencer, Ch.- J. delivered the opinion of the Court. The question arising in this case is, whether the sale of the plate and household furniture was bona fide, and upon adequate consideration ? If these questions are answered in the affirm- ' ative, the plaintiff’s title will be valid. That there was a full consideration seems to me unquestionable. J. A. Willink chose to prefer Mr. Ehrick, as he lawfully might do, -as to a part of his debt; and the plaintiff, whose ability to pay the notes which she gave to Ehrick for $24,229 33, has not been drawn in question, became absolutely responsible to that amount. A.s a consideration for her liability, she received a conveyance of Willinlds plate and furniture, valued at 5,500 dollars, and a transfer of the dishonoured bills, against a bankrupt house, amounting to 41,066 dollars and 66 cents, including the damages. If she shall be able to realise what Wil\link had stated the dividend would be, 40 per cent., she will then lose by the negotiation. I perceive nothing to impeach the bona fides of the transaction. It is not pretended that it was secret or clandestine, or that there was any trust between the parties ; but it is contended that Willink remained in possession, and that the retaining of possession by him, the sale being absolute, rendered it fraudulent. It is unnecessary to discuss the point, whether the retaining possession of chat-ties by the vendor, after an absolute sale of them, be, ipse fació, fraudulent, or only a badge of fraud, fqr the consideration of a jury, because here the vendor did not retain the possession. One of the ingredients of fraud, in Twyne’s case, (3 Co. 81.) was, that the donor continued in possession, [222] And used the goods as his own, and by reason thereof, he trac|ed and trafficked with others, and defrauded and deceived them. In Leonard v. Baker, (1 Maule & Selw. 254.) Mr. Justice Bayley very pertinently remarked, that the possession of the goods did not give any false credit in the neighbourhood, and that the assignment was perfectly notorious. The retaining possession by the vendor, is indicative, that the transaction is fictitious: first, us it is inconsistent that one shall buy goods, and not receive the possession; and, secondly, because, leaving the goods in the possession of the vendor, enables him to keep up a false credit, by inducing others to trust him, in consequence of his apparent property. It is, therefore, wise and politic to require a transfer of the possession, when goods are' purchased from one in debt or in failing circumstances. I understand possession, in such a case, to be the visible control of, and dominion over, the goods sold. Here, the furniture and plate were in the plaintiff’s house, and she had the entire control and management of thé household. Willink was neither visibly, nor in judgment of law, in possession of the goods. He did not, in point of fact, intermeddle with them j and in point of law, the plaintiff’s ownership of the goods drew after it the possession. Besides, the plaintiff was actually in possession of the household furniture, by using it, and she was, also, in possession of the plate, by being in possession of the house in which it was deposited. There is, then, a full and valuable consideration for the sale and transfer of the furniture and plate ; and the transaction is, bona fide, devested of every circumstance which in Tzvyne’s case, and'in those which have followed, would render it fraudulent, either at common law, or under the statute. I have considered the sale of the furniture and plate as absolute, and have applied to the case, in that view, which is most favourable to the defendants, the legal tests of such a sale. It may be that a court of equity would consider the sale as operating only as a mortgage, but it is needless to consider that point. It has been urged, that the subsequent judgment in favour of the plaintiff, against J. A. Willink, was a waiver or relinquishment of the sale. I consider the judgment in [223] the nature of a collateral security; and that, therefore, it was no waiver of any lien which had been acquired; but if it was, the defendants’ case is not any better, for the plaintiff’s execution acquired priority over the defendants’. In any view of the case, the plaintiff is entitled to judgment. Judgment for the plaintiff.