Richardson-Roberts-Byrne Dry Goods Co. v. Goodkind

PER CURIAM. 1. At the conclusion of the evidence defendant prayed the court for an instruction directing the jury to return a verdict for the defendant, and the denial of this request is the first error assigned. It is insisted that the peremptory direction should have been given, for the reason that plaintiff was negligent in permitting the goods to pass from its control. It appears that on May 23, 1895, plaintiff applied to Bradstreet’s, at St. Joseph, for a report on the financial condition of Israel, and that on May 27th Bradstreet’s furnished plaintiff with such report, containing the statement made by Israel on February 16, 1895, and referred to in the complaint. It further appears that on June 28, 1895, Bradstreet’s agency at Plelena sent out another report concerning Israel financial standing, in which his capital rating given in the report of February 16th was taken away, and his credit rating reduced to a grade next above the lowest reported by the agency, a copy of which report was sent to the office of the Bradstreet Company in St. Joseph. This report was not based upon any statement of Israel, nor did he know it was made. Without making inquiry other than that of May 23d, plaintiff forwarded the goods to -Israel on August 1 and 5, 1895. The report of June 28th was never communicated to plaintiff. Defendant argues that by the exercise of reasonable diligence plaintiff might have learned from the Bradstreet Company the true condition of affairs, and withheld the goods [467] from shipment, and that therefore its failure to make such inquiry was, as a matter of law, such negligence as will prevent a recovery in this action. We are satisfied that the court was right in refusing to instruct the jury as requested. Conceding, without deciding, that the evidence just mentioned tends to establish negligence, it is perfectly apparent that the question whether or not the plaintiff exercised prudence was for the jury to determine. (Handy v. Waldron, 19 R. I. 618, 35 Atl. 884.) 2. The next contention is that the special findings of the jury are in conflict with the general verdict, and that the court should have rendered judgment in defendant’s favor upon the special findings. As appears by the statement preceding this opinion, the jury returned a general verdict for plaintiff, and in addition thereto found specially that Israel was solvent on February 16th, and that he intended to pay for the goods at the time he ordered them in May, and, further, that he knowingly and intentionally made the false and fraudulent statement set out in the complaint concerning his financial condition for the purpose of obtaining credit, and that plaintiff relied upon such statement when it shipped the goods. The position which the defendant takes is that, for the plaintiff to recover in this action, it is necessary to prove, not only that Israel knowingly made the false representations for the purpose of obtaining credit and that the plaintiff relied upon them, but also that Israel either intended at the time not to pay for the goods or was then insolvent. Such is not the law. Although the purchaser at the time of the sale was solvent and intended to pay for the goods, yet if, by willfully false representations in respect to his financial condition, the purchaser induces the seller to part with property which, but for such representations, the seller would not have done, the sale may be avoided as to all but Iona fide purchasers for value. (Klopenstein v. Mulcahy, 4 Nev. 296; Whitaker Iron Co. v. Preston Nat. Bank of Detroit, 101 Mich. 146, 59 N. W. 395; Schweizer v. Tracy, 76 Ill. 345; Reed v. Pinney, 35 Ill App. 610; Collins v. Cooley (N. J. Ch.) 14 Atl. 574. See, also, Bank v. [468] Bamberger, 77 Tex. 48, 13 S. W. 959; Mooney v. Davis, 75 Mich. 188, 42 N. W. 802; Hoffman v. Noble, 6 Metc. (Mass.) 68, 39 Am. Dec. 711; Lowdon v. Fisk (Tex. Civ. App.) 27 S. W. 180; Cox Shoe Co. v. Adams, 105 Iowa, 402, 75 N. W. 316; Schram v. Strouse (Tex. Civ. App.) 28 S. W. 264; Newell v. Randall, 32 Minn. 171, 19 N W. 972; Farwell Co. v. Boyce, 17 Mont. 83, 42 Pac. 98; Hinchman v. Weeks, 85 Mich. 535, 48 N. W. 790; Emerson v. Detroit Steel & Spring Co., 100 Mich. 127, 58 N W. 659; Silberman v. Munroe, 104 Mich. 352, 62 N. W. 555; Reid v. Cowduroy, 79 Iowa, 169, 44 N. W. 351; Wilson v. Carpenter's Adm'r, 91 Va. 183, 21 S. E. 243; Judd v. Weber, 55 Conn. 267, 11 Atl. 40; Stephenson v. Weathersby (Ark.) 45 S. W. 987; Gough v. St. John, 16 Wend. 646; Bugg v. Wertheimer Shoe Co., 64 Ark. 12, 40 S. W. 134.) 3. Defendant complains of the refusal of the court to give certain instructions prayed by him concerning the reliance by plaintiff upon the statement made by Israel to the agency. Instruction 2, prayed by defendant and refused, advised the jury that, “if the plaintiff had any other information subsequently to the report received by the plaintiff in May, 1895, which in any way changed or affected the said standing of Israel, then there was not such a reliance upon the said report as would enable the plaintiff to recover in this action. ” There was no evidence tending to show that plaintiff received any information respecting Israel, before shipping the goods, other than the statement of May 27th; on the other hand, the proof was that the May statement was the only report on Israel ever communicated to plaintiff until after his assignment. Moreover, such information, if received, would not necessarily have the effect attributed to it by the instruction. In other words, nonreliance upon the February statement of Israel, communicated to plaintiff in May, would not be the presumption of law arising from the receipt by plaintiff of such subsequent information. By the third prayer defendant asked the court to charge that if, by the exercise of additional inquiry at the office of the [469] Bradstreet Agency, prior to the shipments, plaintiff could have learned of the changed report and rating on Israel of June 28th, the verdict must be for defendant. The court rightly refused so to instruct. If, from the omission to seek further information from Bradstreet’s, the inference of negligence may be drawn in this case (which we are inclined to doubt), the jury, not the court, must draw it. Such omission, it is manifest, does not give rise to the legal presumption that plaintiff failed to exercise reasonable care; nor will the law, by reason of the omission, impute to plaintiff notice of Israel’s changed financial condition. The charge of the court upon the questions mentioned was certainly as favorable to defendant as he could reasonably ask. Instruction No. 4, as prayed by defendant, is probably a correct statement of the law with respect to the effect of certain printed matter upon the invoices sent by plaintiff to Israel at the time the goods were shipped, to the effect that the goods were merely consigned “subject to replevin” at any time prior to November 1st. (Brittain Dry Goods Co. v. Birkenfeld, 20 Mont. 347, 51 Pac. 263.) Whether or not the court erred in not giving this instruction is immaterial, since proof of the allegation in the complaint that the goods were only consigned was not necessary to plaintiff’s recovery. The error, if any, was not prejudicial, for the special findings are justified by the evidence, and are sufficient to entitle plaintiff to recover, even if the jury had declared that the goods were not consigned. Were there a general verdict only, it might be difficult, if not impossible, to determine the particular ground upon which the j ury decided that plaintiff ought to prevail in the case at bar, — whether the defeasible title in Israel was divested by the plaintiff’s election to rescind the voidable sale for fraudulent representations inducing it, or whether the general property in the goods never passed to Israel because they were merely consigned. The special findings, however, aid the general verdict, and reveal the unimportance of determining the issue with respect to the alleged consignment. The order denying the motion for a new trial and the judgment are affirmed. Affirmed.