Kops Bros. v. Smith

Grant, J. (after stating the facts). If there was an Infirmity of title to the pianos in the hands of McGinn, defendant could not be considered a bona fide purchaser, as he gave no new consideration for the purchase. The ¡sole consideration for the transfer was a past-due indebtedness. Vincent v. Hansen, 113 Mich. 173 (71 N. W. 488); Schloss v. Feltus, 103 Mich. 525 (61 N. W. 797, 36 L. R. A. 161). The only question, therefore, is, Was there evidence of fraud on the part of McGinn and Morey in the sale and transfer of this property? The goods were consigned by plaintiff to Morey for sale. Until sold by Morey, the title remained in plaintiff. When a piano was sold by Morey, as between plaintiff and him the transaction was for cash, and Morey was under obligation to remit cash therefor. In the absence of authority conferred, or a valid usage, an agent cannot sell property on credit; the sale must be for cash. Mechem, Agency, § 353; Burks v. Hubbard, 69 Ala. 379. Whether, under the contract, Morey was authorized to sell upon credit, we need not determine. It made no difference to plaintiff whether Morey sold for cash or credit, if Morey paid cash on making a sale. McGinn was in the same business as Morey, and received pianos from defendant for sale. They were consigned to him for sale on what defendant termed “consignment contracts,” but the precise terms and conditions are not stated. It is a common method of carrying on business in property of this character. The sales by Morey to Mc-Ginn were not made in the usual course of trade by Morey. Morey received the pianos for sale to customers who desired to purchase for their own home use. Instead he sold them on long terms to an insolvent trader in the same business, without any security, or any attempt to protect plaintiff. McGinn was in debt to his employer to the amount of $1,180, and could not pay. The name of plaintiff as maker was upon these pianos. Whether the circumstances were sufficient to put McGinn upon inquiry as to Morey’s authority to sell to him was a question for [32] the jury to consider in determining the question of fraud. Morey knew that plaintiff was under no obligation to take McGinn’s notes, and that it was entitled to receive cash. Within two days after the alleged transfer by Morey to McGinn, McGinn turned the property over to defendant in part payment of his indebtedness. Without entering into details, the conduct of Morey and McGinn, when-plaintiff’s agent attempted to ascertain where this property, was, and to get it back, showed an intent to deceive the plaintiff. We think there was sufficient evidence of fraud, to justify the submission of the question to the jury. If the transaction was fraudulent, then the plaintiff was entitled to recover. If fraudulent, defendant’s claim against McGinn is the same that it was before the transfer to him. Neither law nor justice permits a creditor to be paid with goods which his debtor has obtained by such fraud as will vitiate the title between the original vendor and vendee. The judgment is reversed, and new trial ordered. The other Justices concurred.