Mooney v. Davis

• Decision Date: 14 June 1889
• Citation: 42 N.W. 802,75 Mich. 188
• Court: Michigan Supreme Court
• Parties: MOONEY ET AL. v. DAVIS ET AL.

42 N.W. 802

75 Mich. 188

MOONEY ET AL. v. DAVIS ET AL.

Supreme Court of Michigan

June 14, 1889

Error to circuit court, Wayne county; REILLY, Judge.

Action of replevin by William M. Mooney and others against Thomas Dudley and Egbert J. Davis, his assignee for benefit of creditors, to recover a quantity of leather sold by plaintiffs to defendant Dudley, December 12, 1887. Verdict and judgment for plaintiffs, and defendants bring error. The testimony of plaintiffs' witness Edward S. Foster, and the remark of the court in connection therewith, referred to in the last paragraph of the opinion, were as follows: " Witness. I am engaged in the leather and findings business, and one of the firm of Mumford, Foster & Co., and have been engaged in the business for twenty-five years. I know Mr. Dudley, and have known him for sixteen years. I know that Thomas Dudley succeeded the firm of Dudley, Davis & Co. in the spring of 1886. Question. Were you in the store after March, 1886,-Dudley's store, 199 Jefferson avenue? Answer. I could not say when I was in the store; probably two or three times during the year, but not often. Q. Do you know whether or not from March 1886, until January, 1887,-whether or not he was continuously in business? A. I supposed him to be. Q. Did you know? A. I supposed that he was continuously in trade. Court. There is no evidence now that he was not."

MORSE J., dissenting.

SHERWOOD C.J.

Until March 10, 1886, the defendants did business in Detroit, as Dudley, Davis & Co. They were engaged in the wholesale leather and findings business. On that day Dudley succeeded this company, and took its business as such successor, and under the name of the Standard Leather Company carried it on until January 7, 1888, when he made a general assignment to his former partner, E. J. Davis. The plaintiffs were engaged in the tanning and harness leather business at Columbus Ind., in August, 1887. Mooney & Co. received an order from Dudley in July previous for some leather, and on making inquiry at Dun & Co.'s agency for the financial standing of Dudley, and upon the plaintiffs receiving a favorable report, upon which they relied, they filled said order on the 5th of August. It is claimed, and the undisputed testimony shows, that the report made by Dun & Co. was based upon the verbal statement of Dudley to Dun & Co.'s agent, from which the rating was made, and which was made in March, 1886, and was to the effect that the defendant's assets then amounted to $39,882, and a mortgage indebtedness upon the real estate of $3,500. The second sale and shipment of leather was September 9, 1887. In this month the plaintiffs obtained a statement from the agency, and received the same report as in July as to Dudley's financial condition, and it is claimed that it was upon this last report the second shipment was made. Both of these bills were paid for, and none of the goods purchased upon these sales are now claimed for. In December, 1887, Dudley wished to buy more leather, and at this time plaintiffs consulted Bradstreet's agency as to his financial standing, and obtained a special report, and on this, together with what they had learned through Dun & Co.'s agency, plaintiffs, on the 12th of the month, sold to Dudley, as they claim, the third bill of goods, amounting to $411.86; and these goods are those for which the present suit is brought in replevin. Dudley's schedules to his assignment showed his assets at the date of that instrument to be $6,377.99, and his liabilities, $9,959.46. This suit was commenced immediately after the assignment became known to the plaintiffs, to recover the goods sold in December, 1887. And the plaintiffs claim the fraudulent representations made by Dudley as to the credit of himself are sufficient to vitiate the sale of this bill of goods, and to entitle them to a return of their property. Mooney testified that in making the sale to Dudley his firm made inquiries of Dun's and Bradstreet's agencies, and that in making the last sale they relied upon the reports obtained from them. And the agencies averred that their source of information upon the subject was obtained from Dudley in the statements he gave to their agents. The plaintiffs were subscribers to the commercial agency of R. G. Dun & Co., and the statements made by Dudley to Dun's agent as to the amount of defendant's property are not denied by any one. In the testimony of Bradstreet's agent he says he had a personal interview with Dudley as late as June 17, 1887, in which the latter referred to the statements to both agencies in March, 1886, and said that there was no material change in the defendant's financial condition from the report then made, and the defendant's rating at that time was from $25,000 to $30,000, and his showing was that he had a surplus of over $36,000. The books of defendant were offered in evidence, from which testimony it would appear that Dudley was insolvent at the time the goods in question were purchased. The defendants offered no testimony upon the trial, and the plaintiffs obtained judgment for the property, with one dollar damages. The defendants bring the case into this court, and ask for a reversal of the judgment, assigning 21 alleged errors as grounds therefor.

The principal question in the case is, were the goods in question obtained by the false representations and fraud claimed by plaintiffs? No question is made upon the pleadings; and, if the defendant Dudley committed the fraud in question in making the purchase, the title to the goods never passed, and the suit is well brought. There was testimony given by the plaintiffs tending to show the misrepresentation and fraud alleged, and the jury have found for the plaintiffs, and it only remains to be seen whether the testimony by which the fraud of the defendant was made to appear was competent, and properly admitted. It is claimed by defendants that the court erred in admitting copies of the statements of the financial condition and ratings of Dudley made by the agents of Dun &amp Co. and Bradstreet. We find nothing objectionable in this. It must be recollected that these statements were made by these agents as given verbally by Dudley. They were only statements given by these men of what Dudley told them, and written down at the time. The copies offered are of the same kind of evidence as those made at first, but of a different grade. Either was admissible. Neither was ever signed by the defendant, and, but for the testimony subsequently given tending to show his approval of the same, neither would have been admissible. We further think the testimony tending to show defendant Dudley's approval of these statements was so recent before the sale in question that he must be held bound thereby, or at least, if there had been any material change in his financial standing after the statements were given, he should have notified the agencies to whom...