Andrew v. Dieterich

By the Court, Savage, Ch. J. This subject has been several times before this court, and the cases all sustain the proposition that a fraudulent purchaser acquires no title as against the seller; but as possession is prima facie evidence of property, where the vendor has delivered possession of his goods, with intent not only that the possession but the property shall pass, a bona fide purchaser, from a fraudulent vendee, shall hold the goods in preference to the original owner. The reason is, that the original owner, by putting his goods in the hands of the fraudulent vendee, has reposed confidence in him, and has thereby enabled him to commit a fraud, and therefore the equity of the original owner is not equal to that of the person who has Iona fide parted with his money or property in the purchase of such goods. The original vendor by his imprudence enabled the fraudulent vendee to defraud some one, and should himself be the sufferer rather than a third person who must otherwise be defrauded. Mowry v. Walsh, 8 Cowen, 238. Root v. French, 13 Wendell, 570. In the first of those cases, it was stated that if goods were taken feloniously, no title was acquired by the felon, and he could convey none to a bona fide purchaser. Such is the law in England, unless the stolen property be sold in market overt; and as we have no market overt, all our sales have the same effect as sales in England, other than those in market overt; and such sales do not divest the title of the owner from whom property has been stolen. Even after a sale in market overt, if the owner prosecute the felon to conviction, he is entitled to his property again or its value, even from the purchaser in market overt, or his vendor for valuable consideration without notice. Horwood v. Smith, 2 Durnf. & East, 750, 755, 6. This restitution is made in pursuance of a statute. 21 Hen. 8, ch. 11. Our revised statutes allow the restoration of property alleged’to have been stolen, upon satisfactory proof to the magistrate who shall take the examination [35] of the person accused of stealing such property, without any conviction. 2 R. S. 746, § 31. I cannot therefore admit the correctness of the last proposition laid down by the learned judge who presided at the trial, “ that the plaintiff could not recover on the ground that the property had been feloniously obtained.” In the case of Mowry v. Walsh, the question principally discussed by the counsel and the court was, whether the person who fraudulently purchased the goods of the plaintiff Mowry, and sold them to the defendant Walsh, had been guilty of larceny in obtaining possession of them. If he had been guilty of larceny, it was conceded by the counsel, and assumed by the court, that the defendant’s bona fide purchase for valuable consideration paid, would not protect him. In such a case, the maxim caveat emptor applies. We then understood the law to be, and so declared it, that a fraudulent purchaser of goods was not guilty of larceny if the owner delivered possession, thereby intending to part with the property in the goods. In this respect, I apprehend, the charge of the judge in the court below was not as explicit as it should have been. He put it to the jury to say whether there had been a complete delivery of the property to Simmons. The question should have been, whether the plaintiff delivered possession, thereby intending to transfer his interest in the carpet. If there was any thing to be done by the parties preparatory to ascertaining the price, where the sale was to be for cash, then a delivery for such purpose did not divest the title of the plaintiff. Ward v. Shaw, 7 Wendell, 404. There oxen were delivered to a butcher to be slaughtered, and paid for in cash at a certain price per hundred ; it was held that the property did not pass until the weight was ascertained. Here the number of yards was to be ascertained, and this was to be done in both cases by the vendee—in both it was an act in which the vendor was interested, and was to precede any act of the vendor in demanding or waiving payment. It was there said, and authorities referred to in support of the position, that when any thing remains to be done before the article is to be delivered, the property does not pass. Here, according to the evidence, the roll of carpeting was delivered to Simmons ; not because it was all sold to him* but [36] for a special purpose, to wit, that the necessary quantity might be cut off to make the carpet in question. That quantity was to be ascertained before the bill could be made out, and the bill must be made and presented before payment could be demanded, and payment, by the contract, was to be made upon delivery. The judge therefore should have instructed the jury that the facts proved did not constitute a delivery in law. It has already been observed, that in Mowry v. Walsh, the law was understood to be, that where the owner of goods parted with them to a fraudulent vendee, intending thereby to divest himself absolutely of his interest or property in such goods, the fraudulent purchaser was not guilty of felony. This was under the common law definition of the term “ felony.” The revised statutes have defined the term as follows: “ The term ‘felony,’ when used in this act or in any other statute, shall be construed to mean an offence, for which the offender, on conviction, shall be liable by law to be punished by death, or by imprisonment in a state prison.” 2 R. S. 702. § 30. Every person who obtains the personal property of another by any false pretence, is liable to be punished “ by imprisonment in a state prison,” 2 R. S. 767, § 53; he is therefore guilty of felony; property thus obtained is now obtained feloniously. It seems to follow that the owner of any property thus obtained is not divested of his ownership therein by means of such fraud, but may reclaim the same even after a transfer to a bona fide purchaser. This must follow, or there must now be an exception to the general rule that the owner is not divested of his property by a felonious taking and subsequent sale to a bona fide purchaser. I think the courts are bound to say, that when the legislature altered the law as to what constitutes a felonious taking, they intended that such alteration should have its full effect, and the principle should be extended and carried out in all its ramifications. This construction is calculated to give additional security to the owners of personal property, and is not liable to the objection of unreasonably restraining its alienation. Formerly, if afelon secretly possessed himself of property not his own, and subsequently sold it to an innocent purchaser, the owner might [37] follow his property and recover it; but if the same person, instead of secretly stealing the property, had obtained possession by means of false pretences, whereby the owner was induced to part with his property, he was without remedy as against a subsequent bona fide purchaser for value. The reason was, that in one case he never consented to part with his property, and in the other he did ; but in the latter case that consent was obtained by fraud. In both cases the property of the owner was gone without an equivalent, and in both cases the subsequent purchaser had paid value without notice of fraud or felony. I apprehend there never was any very good reason for the distinction. In very few cases does the bona fide purchaser know any thing of the circumstances under which the fraudulent possessor obtained possession. In the present case the circumstances would have been the same as to the pawn or pledge of the carpet, whether Simmons had obtained it either by an actual or constructive felony. The defendant made no inquiries, and received no information on that point, before making the advance. On the whole case, therefore, my conclusions are, 1. That there was no delivery of the property by the plaintiff which could divest his title to the carpet in question, and 2. That if there had been such delivery obtained by false pretences, which would subject Simmons to imprisonment in a state prison, then the property was feloniously obtained; and in such case the owner is entitled to recover his property from a bona fide purchaser for valuable consideration. The plaintiff was therefore entitled to recover, and the judgment of the court below must be reversed. Venire de novo to be issued by the superior court; costs to abide event.