Thompson v. Paret & Co.

Mr. Justice Trunkey delivered the opinion of the court, Prom the testimony of Paret the jury could have found an agreement to consign goods to Laing for sale, the invoice prices to be paid weekly or oftener if sales warranted, and all above said prices to be retained by the consignee for his own use, with right in the consignors to reclaim their unsold goods at any time. Such an agreement is a bailment, as was the contract in McCullough v. Porter, 4 W. & S. 177, and the agent or factor had no interest in the goods subject to levy and sale. If Laing’s testimony was true the goods were sold absolutely, and the vendors had no right to their return. The court quite fully and fairly instructed the jury in case of their finding a bailment, or “ an out and out sale ;” and of those instructions there is no complaint. It is alleged by the plaintiff in error that the apparent contract [280] of bailment was a mere device to cover up a sale so as to enable .the defendants to have a secret lien on them 'for the purchase-money, and that the court erred in the portion of the charge which relates to this view of the case. Although the assignment does not set out all the court said on this point, yet it truly gives the gist of the instruction — the omitted part being the reference to testimony. It may be noted that the court spoke of the alleged device as made to defraud Laing’s creditors, and, after reading and commenting on Paret’s letter, said, “ There is no evidence of actual fraud in this case, and that John Paret and William H. Laing entered into an arrangement for the purpose of hindering, delaying and defrauding the creditors of William H. Laing.” This may have been intended in a sense literally true, but if so, it did not meet the case; for Laing was not in debt, the arrangement was not to cheat creditors he then had; it was to prevent any future creditor taking the goods, because of the title and lien of the vendors. “ If the vendor and vendee agree that the possession shall pass to the vendee, but the property remain in the vendor until the purchase-money is paid, such agreement, as respects creditors and the sheriff, is fraudulent. By transferring the- possession to the vendee under such a contract, a false credit is given to the vendee, and therefore in respect of third persons, as he is the apparent so he is to be considered the real owner:” Per Rogers, J., Rose v. Story, 1 Barr 190. Whatever the form of the agreement, if its purpose was to cover up a sale and preserve a lien in the vendors for the price of the goods, it was void as respects creditors, whether the credit was given before or after the delivery of the goods. A consignment for such object is no better than any other device. Laing assigned a mortgage and conveyed a lot as collateral security for goods to be delivered. Iiis attorney, Bartine, wrote to Paret that Laing had requested him to draw a paper giving Paret a claim on all goods furnished in excess of $3000, and asking his wishes concerning the paper. On the same day, August 14th 1879, Paret replied, “While I do not anticipate Mr. Laing’s becoming in any way involved, yet in view of the proposed business arrangements, it is necessary for us to provide for all possible contingencies ; and, for Mr. L.’s protection as well as our own, I think it desirable to so arrange the matter that his stock could not possibly be subject to any attachment or judgment. I do not know that this could legally be accomplished by a bill of Sale, unless a new one be given for every purchase. But I have suggested to Mr. Laing that the object may more easily be attained by our ‘ consigning’ the goods to him and so marking our invoices and books. By this means we would retain the title, and in case of any difficulty the goods would be ours and not subject to any other indebtedness of Mr. L. It would, of course, be understood that the goods are not to be returned to us except at our desire.” The [281] goods were consigned, the invoices and books so marked, Laing charged with their net cash value at thirty days and with average interest after thirty days. Paret & Co.’s letter of October 15th 1879 shows a refusal to take back goods. Laing did business in his own name and also had goods bought of others. The oral statements of Paret and Laing conflict. If the contract were proved by the letters alone the court would declare their meaning, but they are to .be considered with the other testimony, and the whole is for the jury. .The jury were correctly instructed, in case they found a real consignment — also if they found an absolute sale. But we think the testimony was ample to warrant a finding that there was a sale of the goods, which was covered by a sham consignment, and that in respect to such fact, if found by the jury, they should have been instructed that the arrangement was void as against a creditor of Laing. Judgment reversed, and a venire facias de novo awarded.