Darby & Co. v. Kroell

McCLELLAN, J. Darby & Co. sold goods to Reynolds & Co., on a credit of sixty days. Soon afterwards R. & Co. absconded, and attachments were levied at the suit of other creditors on certain goods, including those sold by D. & Co., left by them in the store which they had occupied. D. c% Co. asserted the right to rescind the sale to R. &Oo. on the ground of fraud, and demanded the goods from the sheriff, who refused to give them up, and sold them under the attachments. The present action is prosecuted by Darby & Oo. against the sureties on the official bond of the sheriff, to recover the value of the said goods, as for a conversion by their principal under color of office. The point of contest in the court below seems to have been, whether such fraud was committed by Reynolds & Co. in the purchase from Darby & Co., as entitled the latter to rescind the sale, and invest themselves with the title to the property; and the record presents for our review only rulings of the trial court upon that point. • The repeated adjudications of this court have established the doctrine, that to authorize a rescission of a sale of chattels, on the ground of fraud, it must at least be made to appear, (1) that the purchaser was, at the time of the transaction, [609] insolvent, or in failing circumstances; (2) that he had no intention of paying, or reasonable expectation of being able to pay for the goods, at the time of the purchase; (3) that he intentionally concealed these facts, or made a fraudulent representation in regard to them. — Loeb & Bro. v. Flash Bros., 65 Ala. 526; Hornthall v. Schonfeld, 79 Ala. 107; LeGrand & Hall v. Eufaula Nat. Bank, 81 Ala. 123; Robinson v. Levi, 81 Ala. 134; Wollner v. Lehman, Durr & Co., 85 Ala. 274. These authorities do not, in terms, make the right of rescission depend upon the further consideration, that the sale was induced by the fraudulent representation, or resulted from a want of knowledge on the part of the vendor of some material fact which the purchaser fraudulently concealed from him; but this absence of reference to the familiar doctrine, that fraud for which a contract may be rescinded must have conduced to its execution, is due to the fact-, that the exigencies of those cases did not require a consideration of that question, there being no evidence in any of them which tended to show that the seller did not rely on the statements of the purchaser, and not to the idea that the general rule was not applicable to this class of cases. There is, and can be indeed, no reason why it should not fully obtain in a case like this, and defeat rescission and recovery, when the jury find that, though false representations have been made, and fraudulent concealments have been resorted to, the seller did not rely or act on such representation, and was not influenced by a state of facts which the purchaser’s concealments induced him to believe existed. “However false and dishonest the artifices and contrivances may be,” says Mr. Benjamin, “by which one man may attempt to induce another to contract, they do not constitute a fraud, if that other knows the truth, and sees through the artifices and contrivances. . . . And even if the one party is unaware of the truth, yet if the artifice adopted by the other has not induced him to enter into the contract, that is to say, if the fraud is not fraus dans locum contractxii, he will not be entitled to relief.” — 1 Benjamin on Sales, § 637; Gregory v. Schoenell, 55 Ind. 101; Sledge v. Scott, 56 Ala. 202. The evidence on the trial tended to show insolvency-, preconceived design not .to pay, and fraudulent representations bearing on these facts, on the part of the purchasers; but it further tended to show that Darby & Co. did not rely upon, and were not influenced by these representations. The charges given at defendants’ request were based on these tendencies of the testimony, and they correctly set forth the doctrine we have been considering, that “a fraud by which no one is deceived or induced to act, is harmless in the law.” If, as is [610] insisted by counsel, these charges tended to mislead the jury, requests for explanatory instructions should have been preferred. This tendency affords no ground for a reversal. — Smith v. State, 86 Ala. 28; Blackburn v. State, 86 Ala. 595; Delacy v. Tillman, 83 Ala. 155. There is no evidence in this record that “Reynolds & Co.” assumed that name and style for the purpose of personating the firm of H. 0. & W. B. Reynolds, a reputable concern doing business in the same town. It does not appear but that one or more of the men who held themselves out as Reynolds & Co. bore the name of Reynolds. The fact that Darby & Co. assumed that “Reynolds & Co.” was one and the same with H. O. c% W. B. Reynolds, and upon that assumption sold to Reynolds & Co., does not avoid the sale. The title passed to Reynolds & Co. as completely for all purposes as if the mistake had not been made by the sellers, and they had no more right to take the possession of the goods sold, when abandoned by the purchasers, than did any other creditor. — Edmunds v. Transportation Co., 135 Mass. 283. These considerations serve to demonstrate that charges 4 and 6 requested by the plaintiffs were properly refused. Charge 5, requested by plaintiffs, based their right to rescind the sale and revest title in themselves upon the one hypothesis that Reynolds & Co. did not intend to pay for the goods when the purchase was made, thus pretermitting all inquiry as to their solvency, whether they had made any false representations to the plaintiffs, and whether these statements, if made, had been relied on and induced the sale. To have given this charge, would have been clearly erroneous, under our numerous decisions cited above. Judgment affirmed.