Chisolm v. S. B. Chittenden & Co.

Montgomery, Judge. The defendant in fi. fa., Muse, mortgaged a stock of goods in Atlanta, worth $7,000 to plaintiffs in fi. fa., in September, 1868. Shortley after, he went to New York, and by false representations as to his financial standing, (as the jury must have found to justify their verdict under the charge of the Court, though Muse swore he made no such statements,) induced the claimants to sell him some $900 worth of goods, for which he paid one-third cash. By this purchase from the claimants, and other purchases, the goods in the store which contained the mortgaged goods, were increased in value to about $18,000 The plaintiffs then foreclosed their mortgage on the stock of goods, and the sheriff levied on the whole stock found in the store. Claimants put in a claim, identified the goods sold by them and replevied. Other claimants did the same as to other portions of the goods after claimants in this case had replevied theirs. The weight of the evidence is, that no damage was done to the goods by the claimants in this case overhauling them, in selecting the goods sold by them to defendant out of the lot; but much damage was done by the other claimants in their efforts to select their goods. When the claimants in the present case elected to rescind the contract of sale, they with others, represented by the same counsel, tendered through their counsel, to the defendant in fi. fa., the amount of cash paid by him at the time of the purchase, which he refused. Plaintiffs in fi. fa. and defendant compromised with most or all of the other claimants, paying certain amounts to them and permitting them to take some of the goods. No new consideration passed from plaintiffs in fi. fa. to defendant, at the time of the addition to his stock of goods. [219] Plaintiffs claim that the whole stock of goods levied on is subject to their mortgage. Plaintiffs also objected to the claimants giving in evidence the representations of defendant made to the latter in New York, for the purpose of obtaining credit. 1. We do not think the 1944th section of the Code warrants the interpretation sought to be given to it by plaintiffs in fi. fa. If so, it would open the door to unlimited fraud. A very small amount of goods might be mortgaged, and then an unlimited addition made to the stock, all of which would be covered by the mortgage, to the exclusion of the very creditors from whom the goods were bought. 2. The general rule is, that when personal property is levied on it is, prima facie, a satisfaction pro tanto of the execution. That plaintiff and defendant in fi. fa. compromised with certain creditors by permitting them to take some of the goods levied on cannot be permitted injuriously to affect the rights of contesting creditors, not parties to the compromise: 20 Georgia Reports, 210; 19 Georgia Reports, 589; 30 Georgia Reports, 433; Code, sections 3607-8-9. Plaintiffs in fi fa. insist that they are at least entitled to have the property subjected to their claim to the extent of the cash paid by the defendant to the claimant at the time of the purchase. Had a bill been filed, or if, under our law, the claimants had been put upon notice by proper averments in the pleadings at law, this might possibly have been done. As the case stands, to set up such a claim now, especially where the amount in cash had been tendered back, on election by claimants to rescind, would operate as a surprise upon them. They might show, if duly notified, that such a claim would be made, that a proper disposition had been subsequently made of the fund received by them at the sale. 5. The alleged false representations of defendant as to his pecuniary standing were properly admitted. His title depended on the fact whether or not he made the false statements. [220] 6. If lie did make them, he got no title: Code, sections 3117, 2591, 2592. 7. If he got n® title, he could convey none, where no consideration passed from the purchaser. It is said the consideration moved from the mortgagee at the time of the making of the mortgage; true, so as to cover all goods to which he might subsequently acquire title, added to his stock within the amount of the original value of the stock mortgaged, but certainly not to cover goods belonging to third parties, which might by some means become mixed with the mortgaged goods. 8. The sayings of the defendant at the time of the purchase were part of the res gestee by which he acquired title, if he had any, and do not come within the principle laid down in Dollner, Potter & Company vs. Williams, 29 Georgia Reports, 743. Judgment affirmed upon the grounds stated in the head-notes.