Harkness v. Smith

• Decision Date: 18 December 1891
• Citation: 3 Idaho 221,28 P. 423
• Parties: HARKNESS v. SMITH, SHERIFF
• Court: Idaho Supreme Court

28 P. 423

3 Idaho 221

HARKNESS v. SMITH, SHERIFF

Supreme Court of Idaho

December 18, 1891

STATUTE OF FRAUDS-SALE OF PERSONAL PROPERTY WITHOUT CHANGE OF POSSESSION-SALE VOID AS TO CREDITORS.-The statutes of Idaho make all sales of personal property in the possession of the vendor, except things in action, unaccompanied by immediate delivery and followed by an actual and continued change of possession, void as to subsequent purchasers, creditors, etc. G., being largely indebted, sold a stock of merchandise to H., one of his principal creditors, and who held a chattel mortgage upon the stock of merchandise owned by G. as security. The sale was made at the residence of H twenty-five miles from the place where the merchandise was. No invoice was taken, no inspection or examination of the stock, no change in the clerical force, nor in the conduct or management of the business. G. continued to conduct the business as before, except that he added the abbreviation "Mgr." when signing letters, check, etc. Held there was no such immediate delivery and actual and continued change of possession as the statute requires, and the sale was void as to creditors.

ATTACHING CREDITOR KNOWING OF PRETENDED SALE DOES NOT AFFECT HIS RIGHTS.-The fact that the attaching creditor knew of the pretended sale of G. to H., and continued to deal with G. as "Mgr.," is of no moment, and cannot be urged to prevent the operation of the statute.

(Syllabus by the court.)

APPEAL from District Court, Bingham County.

Reversed and remanded, with instructions.

Smith & Smith, for Appellant.

Delivery must be made of the property. The vendee must take the actual possession, and that possession must be open and unequivocal, carrying with it the usual marks and indications of ownership by the vendee. (Norton v. Doolittle, 32 Conn. 405; Stevens v. Irwin, 15 Cal. 503, 76 Am. Dec. 500; Godchaux v. Mulford, 26 Cal. 316, 85 Am. Dec. 178; Wright v. McCormick, 67 Mo. 426; Lawrence v. Burnham, 4 Nev. 361, 97 Am. Dec. 540; Bassinger v. Spangler, 9 Colo. 175, 10 P. 809; Grum v. Barney, 55 Cal. 254; Dean v. Walkenhorst, 64 Cal. 78, 28 P. 60; Bell v. McClellan, 67 Cal. 283, 7 P. 699; Hesthal v. Myles, 53 Cal. 623; Woods v. Bugbey, 29 Cal. 466; Hull v. Sigsworth, 48 Conn. 258, 40 Am. Rep. 167; Perrin v. Reed, 35 Vt. 2.)

Hawley & Reeves, for Respondent.

As plaintiff assumed control, and ordered goods from the party beneficially interested, who had full knowledge of the transaction, such possession was amply sufficient under the rule. (Cook v. Mann, 6 Colo. 21; Gray v. Sullivan, 10 Nev. 416; Billingsley v. White, 59 Pa. St. 464; Godchaux v. Mulford, 26 Cal. 316, 85 Am. Dec. 178.)

HUSTON, J. Sullivan, C. J., and Morgan, J., concur.

OPINION

HUSTON, J.

Plaintiff brought action of claim and delivery for the recovery of possession of a stock of merchandise alleged to have been wrongfully taken and unlawfully detained by defendant. Defendant was sheriff of Bingham county, and under and by virtue of a certain writ of attachment, issued out of the district court for Bingham county, in the suit of F. J. Keisel & Co. v. P. Gallagher, levied upon and seized a certain stock of merchandise in the town of Pocatello, in said county, as the property of said P. Gallagher. The answer of defendant is a general and specific denial of all the allegations of the complaint, except the taking. The evidence establishes the following facts: On the twenty-first day of November, 1890, one P. Gallagher was, and for some months prior thereto had been, engaged in a general merchandise business in the town of Pocatello, Bingham county, Idaho. It appears by his own testimony that at the time he entered into the business he had about $ 3,000 invested therein; that shortly after, for the purpose of erecting a store building, he borrowed $ 2,000. He also testifies that his monthly profits from the time he started in business in March, 1890, to the time of his alleged sale to plaintiff on November 21, 1890, were about $ 300 per month. The plaintiff is a ranch and stock man and capitalist, residing at McCammon, about twenty-five miles from Pocatello. On November 21, 1890, Gallagher goes to McCammon, to the residence of plaintiff, and there makes a sale of his said stock of merchandise to plaintiff, who at that time held a mortgage of $ 4,000 on said stock of merchandise. The price alleged to have been paid by plaintiff was $ 7,240. This included the store building. After deducting the amount of his chattel mortgage plaintiff says he paid the balance of $ 3,240 to Gallagher in his checks, which were paid. On the morning following the sale plaintiff and Gallagher went to Pocatello. The clerical force in the store at that time consisted of a man by the name of Smith, and the son and daughter of Gallagher. Harkness (plaintiff) said to Smith when he first went into the store, on the day after the alleged sale by Gallagher to him, "Will you work for me for the same salary Gallagher has been paying you?" and Smith said he would. No invoice was taken, no change was made in the personnel of the establishment, no sign was changed. Gallagher continued in charge of the business as theretofore. The clerical force was the same, two of the employees being members of Gallagher's family. Gallagher continued to buy and order goods as before the alleged sale, except that the letter-heads were in the name of "H. O. Harkness," and Gallagher signed all letters, checks, etc., "P. Gallagher, Mgr.," and this continued to be the condition of affairs up to the time of the levy of the attachment by defendant on February 25, 1891. The case was tried by the court with a jury, and verdict rendered for the plaintiff for return of property and $ 125 damages. Upon said verdict judgment was entered. Motion for new trial was made and overruled. From the judgment and order denying motion for new trial defendant appeals.

The first assignment of error by the appellant is that the evidence is insufficient to justify the verdict. This point, we think, is well taken. The statutes of Idaho (Rev. Stats., sec. 3021) are as follows: "Every transfer of personal property other than a thing in action, and every lien thereon other than a mortgage, when allowed by law, is conclusively presumed, if made by a person having at the time the possession or control of the property, and not accompanied by an immediate delivery and followed by an actual and continued change of possession of the things transferred to be fraudulent and therefore void against those who are his creditors while he remains in possession, and the successors in interest of such creditors, and against any persons on whom his estate devolves in trust for the benefit of others than himself, and against purchasers or encumbrancers in good faith subsequent to the transfer." It is not enough that there is an actual delivery and an actual change of possession as between vendor and vendee, so long as the property, without legal excuse, is so placed back into the same condition and the same apparent relation to the vendor that there is no such manifest and continued change of possession as would indicate to the world that there has been a change of title. (Norton v. Doolittle, 32 Conn 405; Lawrence v. Burnham, 4 Nev. 361, 97 Am. Dec. 540; Wright v. McCormick, 67 Mo. 426; Dean v. Walkenhorst, 64 Cal. 78, 28 P. 60; ...