Goodwin v. Wertheimer
| Decision Date | 05 May 1885 |
| Parties | GOODWIN and others v. WERTHEIMER, impleaded, etc. |
| Court | New York Court of Appeals Court of Appeals |
OPINION TEXT STARTS HERE
Wm. F. MacRae, for appellants, Henry J. Goodwin and others.
M. H. Regensburger, for respondent, Leopold Wertheimer, impleaded, etc.
This action is based upon the right of a vendor of goods to rescind the contract of sale, and to recover the goods, where the sale and delivery were obtained by the fraud of the vendee. The fraud in such case does not intercept the passing of the title to the goods to the purchaser, but the title acquired is defeasible, subject to the right of the vendor, on the discovery of the fraud, to reassert his original right and reclaim the property, unless it has come to the hands of a bona fide purchaser. Barnard v. Campbell, 58 N. Y. 76;S. C. 55 N. Y. 461.
The defendant Wertheimer is the assignee of Goldsmith & Co., the fraudulent vendees, under a general assignment made by them to the defendant for the benefit of creditors, and had possession of the goods in question, as part of the assigned property, at the time of the commencement of this action. But he was not a purchaser for value, and he acquired no better title as against the plaintiff than his assignors had at the time of the assignment. Barnard v. Campbell, supra.
The trial court dismissed the complaint on the ground that there was no proof that the goods were demanded of Wertheimer before bringing the action. It is not claimed that Wertheimer was cognizant of the fraud committed by Goldsmith & Co. The legal title at the time of the assignment was in Goldsmith & Co., no proceeding having been taken by the plaintiff to rescind the sale until after the assignment had been made. The defendant Wertheimer, therefore, lawfully acquired the title and possession of the goods, but subject to the same right of reclamation in the plaintiffs, upon their rescinding the contract, as they before had against the assignors. The original possession of Wertheimer being lawful and not tortious, it was necessary to change the character of his possession by a demand and refusal, before the plaintiffs could maintain an action against him for conversion, or to recover the goods. Add. Torts, 312; Holbrook v. Wight, 24 Wend. 169;Mount v. Derick, 5 Hill, 455;Pierce v. Van Dyke, 6 Hill, 613. There was no proof that the plaintiffs demanded the goods of Wertheimer, personally, at any time. It was shown, however, that the plaintiffs' attorney, a few days after the making of the assignment, and just prior to the commencement of the action, went to the store where the goods were and found three persons, one of whom was Goldsmith, one of the firm of Goldsmith & Co. He asked if the assignee of the Goldsmiths was there, and was informed that he was not, and that Goldsmith was in charge. The witness then stated to Goldsmith that he was attorney for the plaintiffs, and in substance demanded the delivery of the goods, on the ground that they had been obtained by fraud. In reply Goldsmith said that he had no power or authority to give up the goods, as the firm had made a general assignment for the benefit of...
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