Trask v. Bowers

Richardson, G. J. The facts of this case are shortly these. On the 29th October, 1819, the plaintiff leased to Tilton a farm and certain cattle, under a contract that Tilton should deliver to the plaintiff one half of the produce of the farm, and of the increase of the cattle, and at the end of the term return cattle of equal value. Til-ton continued to occupy the farm, sold the cattle and bought others with the assent of the plaintiff, and continued selling and exchanging the stock upon the farm, representing the same to be his own, and dealing with it as such until the 2d October, 1823, when, being indebted to the plaintiff, he sold to him his interest in the stock upon the farm to pay the debt, and it was agreed that the lease should expire on the 29th of October, 1823. This sale and agreement was made in secret. Tilton was then employed as the servant of the plaintiff, and carried on the farm, and with the assent of the plaintiff exchanged one yoke of oxen for another, and offered to sell others, and no change of his right in the cattle was known in the neighborhood, and Tilton kept all secret lest his creditors might be alarmed- But at the time the attachment was made by the defendant the plaintiff gave him notice that the cattle were his sole property. The question is, whether the sale by Tilton of his interest in the cattle to the plaintiff, on the 2d October, 1823, must, under the circumstances, be considered as fraudulent with respect to his creditors ? If it must in law be so considered, the verdict is against both law and evidence, and there must be a new trial, but otherwise, the plaintiff is entitled to judgment on the verdict. [313] It must bow be considered.as settled law in this state that a sale of goods by a person in debt in order to be considered as bona fide, with respect to creditors, must be made without any trust whatever either express or implied. The grounds and reasons of this rule of law are so fully stated in the ease of Coburn v. Pickering, 3 N. H. Rep. 415, that it is unnecesary to repeat them again in this case. Was there then a secret trust attending this sale ? It was decided in the case just mentioned that if a vender of chattels retain possession after an absolute sale, this is always prima facie, and if unexplained, conclusive evidence of a secret trust. In the case before us the goods were left in the possession of the vender and the question is, whether the explanation given is in law sufficient to rebut the presumption of a trust, which is raised by the possession ? The explanation is, that the plaintiff owned the farm, that the lease was terminated by agreement, and that Tilton was employed by the plaintiff as a servant to manage the property. Is this a sufficient explanation ? If all this had been done openly and without any secresy, and Tilton’s real situation in relation to the property had been made known to the neighborhood, we are not prepared to say that this explanation would not have been a good answer to the imputation of fraud in the transaction. When the lease was ended, and the business settled, there seems to be no good reason why the plaintiff might not have employed Tilton as his servant as well as any other person, provided he so employed him as not to give him a false credit, and thus mislead and deceive his creditors. But all was done in secresy. No person except the parties to it was present at the settlement. Tilton was not only left in possession of the property, but in possession selling and offering to sell “ ivith the special direction of the plaintiff,” precisely as he had done before the sale. [314] No one in the neighborhood was aware of any change in the property, and Tilton, although his property was gone in this way, retained his credit. No doubt can be entertained that this permission of the plaintiff to Tilton to remain thus in possession, and thus retain his credit, was a trust attending the sale which must in law be .considered as a fraud, and render the sale void with respect to creditors. The case does not state that the plaintiff agreed to keep the sale secret. But it was in fact kept secret ; and it was so kept by Tilton, his agent, and servant with a view to deceive his creditors. The plaintiff made the bargain with Tilton in secret, and did not afterwards make it public. It was in fact kept secret. It must then be presumed to have been kept so with his assent. Such a sale cannot be deemed bona fide with respect to creditors. When goods are sold by a debtor, there must be a bona fide substantial change of possession. It has been held not to be enough, that the vendee puts a person into possession jointly with the vender. 1 Camp. 332, Wordall v. Smith; 3 N. H. Rep. 415. In this case the possession of Tilton may, without doubt, be for some purposes considered as the possession of the plaintiff. But with respect to the creditors of Til-ton, from whom his real situation was kept a secret, and who were deceived and misled by his having the management of the property, Tilton must be considered as having the possession ; and as having it in such a manner and under such circumstances as render it conclusive evidence of a secret trust, which renders the sale of the goods to the plaintiff void. The verdict in this case, is therefore contrary to law, and there must he A new trial granted,