McKensie v. Rothschild

COLEMAN, J. The appellants, as creditors of H. Blumberg, sued out attachments against Mm, which' were levied .upon certain goods and merchandise found in his possession. The appellee made affidavit; gave bond and interposed a claim to the goods. An issue' was made up and the trial resulted in verdict for the claimant. The plaintiffs in attachment appealed, and have assigned certain rulings of the court, upon the admission of evidence and instructions given to the jury; as error. The claimant was the vendor of the goods levied upon under the attachments, and his right to recover depends upon the question as to whether the facts and circumstances attending the sale and purchase were such as to authorize a rescissiomof the contract of sale and resumption of the goods sold. The application of the rule which prevails in this state in such- cases, by the decisions of this court, apparently have not always been entirely consistent with the rule itself, and to prevent any misunderstanding the rule has been recently restated, in conformity with the construction given to it by the decisions. It is as follows: “A sale and purchase of goods is fraudulent and open to disaffirmance by the' seller, when the purchaser was at the time thereof insolvent, or in failing circumstances, and had the design not to pay for them, or had no reasonable expectation of being able to pay for them, and either represented that he was solvent, or intended to pay,- or had reasonable expectation of being able to pay, or failed to disclose his financial condition, or the fact that he did not intend to pay, or expect to be able to pay for the goods.” — Maxwell v. Shoe Co., 114 Ala. 304. Mere insolvency of the purchaser, or being in failing circumstances, alone is not sufficient. There must exist in connection with these [423] facts, a design on the part of the purchaser not to pay for the goods, or that he-had no reasonable expectation to pay for therii, and these two conditions together are not sufficient to reinvest the vendor with title. The purchaser must either have represented that he was solvent, or intended to pay, or had reasonable expectation of being able to pay, or failed to disclose his financial condition, or having the'intention not to pay, failed to disclose the fact that he did not intend to pay or expect to be able to pay for’ the goods. — LeGrand & Hall v. Eufala National Bank, 81 Ala. 123. Evidence which is relevant and material must in some degree' tend to support or negative the existence of some one or more of these conditions. The first, second and eighth assignments of error are not insisted upon by appellant, and for this reason Ave will not consider either of them. The court, against the objection of the plaintiffs, permitted the AAÚtness, Farmer, to testify to the contents of a statement made and signed by the defendant in attachment, purporting to sIiqav his financial condition, on a trial of the right of property between plaintiffs and Biedler Bros. The loss of the statement was proven and also that it Avas signed by Blumberg. The general rule is that other transactions wdth different parties aré not competent, but there are exceptions. to the rule, Avhen the motive or intent wdth which an act was done are proper subjects of inquiry. The record, hoAvever, fails to shoAV wrhen the statement Avas made. For aught that appears, the statement may have been made years before the purchase of the goods, the subject of the present controversy. For aught that appears, the statement may 'haAre been true Avhen made. There is nothing whatever to connect it with the present controversy. The court erred in admitting the statement without further proof. The court also admitted the introduction of two letters, Avritten by one Wilks to the defendant debtor, against the objection of the plaintiffs. In this the court erred. The issue before the court was between plaintiffs and claimant. The acts and representations of Blumberg, the purchaser of the goods, are competent, and- his admissions wrere admissible, if a part of the res gestae, but there is nothing in the present record to authorize the admission of the declarations or statements of a [424] third party, or a letter written by such party to the debtor, and especially when the letters bear internal evidence that they were written long after the purchase of the goods. We know of no principle of law which rendered these letters competent against the plaintiffs on the present trial. ' • • There was no error in the charge given by the court, at the request of the claimant. It complies with the rule declared in the Maxwell case, supra. The charge requested by the plaintiff, when referred to the evidence was properly refused. It ignored that phase of the evidence which tended to show that the defendant could have had no reasonable expectation of being able to pay. Although a purchaser may intend to pay, yet if he has no reasonable expectation of being able to pay, and fails to disclose his condition, he commits a fraud which vitiates the purchase. Reversed and remanded.