Oswego Starch Factory v. Lendrum

• Decision Date: 20 December 1881
• Citation: 10 N.W. 900,57 Iowa 573
• Parties: OSWEGO STARCH FACTORY v. LENDRUM
• Court: Iowa Supreme Court

10 N.W. 900

57 Iowa 573

OSWEGO STARCH FACTORY v. LENDRUM

Supreme Court of Iowa, Des Moines

December 20, 1881

Appeal from Polk Circuit Court.

ACTION of replevin. There was a decision for defendant upon a demurrer to the petition. Plaintiff appeals.

REVERSED.

A. B. & J. C. Cummins, for appellant.

Nourse & Kauffman, for appellee.

OPINION

BECK J.

I.

The petition alleges that plaintiff shipped to Thompson & Reeves pursuant to their orders, certain goods. The other material averments we present in the language of the pleader, as follows:

"That at the time said goods were so ordered, shipped and received said Thompson & Reeves, as a firm, and as individuals, were, and had for a long time been, insolvent to their own knowledge; that they ordered and received the same, well knowing such insolvency and their inability to pay therefor; that they ordered and received the same with the intent not to pay therefor, and to cheat and defraud the plaintiff of the purchase price thereof.

"Plaintiff further states that said Thompson & Reeves concealed from it their insolvency and their inability to pay for said goods, and their intention not to pay for the same, and their intention to cheat and defraud the plaintiff of the purchase price thereof; and the plaintiff further states that, relying on the solvency and good faith of said Thompson & Reeves, and not knowing of their fraudulent intention, or of their insolvency, it sold said goods and shipped the same as hereinbefore stated.

"Plaintiff further states that after the writs of attachment, hereinafter mentioned, were levied upon the goods in controversy, but before the bringing of this suit, it elected to rescind said contract of sale, and without notice thereof, brings this suit.

"That it so elected to rescind the same as soon as it was informed of such fraudulent conduct and intention on the part of said Thompson & Reeves.

"Plaintiff further states that by reason of such fraudulent conduct and intent and said election to rescind, the plaintiff is the absolute and unqualified owner of said goods and merchandise.

"That the defendant wrongfully detains possession of said property from the plaintiffs at Des Moines, Polk county, Iowa and that the same is of the value of one hundred and nineteen dollars; that said property was taken neither on the order or judgment of a court against the plaintiff, nor under an execution or attachment against it, or against said property.

"That the defendant, the sheriff of Polk county, took and detains the same on certain writs of attachment against the property of Thompson & Reeves; that said sheriff, having no knowledge of such fraud, levied on said goods and chattels under said writs of attachment as the property of said Thompson & Reeves; that he holds the same under a claim of absolute ownership in said Thompson & Reeves, and under a claim that the rights of the plaintiff, in said suits wherein the attachments were issued, who had no knowledge of said fraud, are paramount and superior to those of the plaintiff in said goods and chattels."

The demurrer to the petition is in the following language:

"1st. Said petition fails to show that any demand has ever been made upon defendant, or Thompson & Reeves, for said goods.

"2d. Said petition shows that plaintiff gave no notice of its election to rescind said contract of sale, either to defendant or Thompson & Reeves, or any other party, before the bringing of this suit.

"3d. The petition shows that plaintiff elected to rescind said contract of sale after defendant levied on said goods, and also shows that defendant and the attaching creditors had no knowledge of said alleged fraud, and said contract of sale cannot be rescinded after defendant's levy thereon, to the prejudice of attaching creditors.

"4th. Said petition fails to show or charge Thompson & Reeves with any false representations or fraudulent concealment of the facts or motives or intent charged in the petition, and fails to show that plaintiff had any right to rescind."

II. The questions arising in the case will be discussed in the order we find them presented in defendant's demurrer, which, we think, accords with their logical sequence. The first question is this: Must a demand be alleged and proved in order to support the action? The petition alleges that the absolute and unqualified title of the goods is in plaintiff and thereon is based the right of possession of the property, for the recovery of which the action is brought. The alleged cause of detention of goods by defendant, as required by Code, section 3225, par. 5, is also shown. The defendant, it thus appears, seized the goods upon an attachment, claiming that they were the property of Thompson & Reeves. It therefore appears that no question of possession, disconnected from the ownership of the property, is in the case. The parties respectively claim the right to the possession of the property under conflicting and adverse titles. While the remedy sought is the possession of the goods, the gist of the action, so far as the rights of the parties are concerned, is the title to the property. Defendant's right to the possession is absolute and unqualified, if plaintiff is not the owner of the goods, and no act of the plaintiff's can defeat that right. We discover that the contention of the parties is not about the right of possession, disconnected from the title, but is about the title of the property. The question before us has been more than once ruled by this court. We have held that a demand is required only when it is necessary to terminate defendant's right of possession or confer such right on plaintiff, and that when both parties claim title and right of possession incident thereto no demand need be made Smith v. McLean, 24 Iowa 322; Jones v. Clark, 37 Iowa 586; Redding v. Page, 52 Iowa 406, 3 N.W. 427; Thurston v. Blanchard, 39 Mass. 18, 22 Pick. 18; Ayers v Hewett, 19 Me. 281.

This rule is not questioned by defendant's counsel, but they urge that as the petition shows that plaintiff had not rescinded the sale when the suit was brought, defendant did not wrongfully seize the goods, and defendant could not know, without a demand, that plaintiff would not concede and recognize defendant's claim to the property. There might be something in this position, if the petition did not, as required by statute, set out defendant's claim to the property as based upon the title. The petition thus states both sides of the case and takes the place of an answer. (Of course all its averments may be denied in an answer.) The demurrer admits the averments of the petition, one of which is that defendant "holds" (present tense) the property under a claim based upon the absolute ownership of the goods in Thompson & Reeves. The defendant's counsel cannot deny in argument what they have admitted in their demurrer.

III. Does the law require plaintiff to allege and prove notice of rescission of the sale of the goods given before the action was commenced? It will be observed that the petition alleges the rescission of the contract of sale was on account of the fraud of the vendee in inducing plaintiff to enter into it, and that under the sale a delivery of the goods was made to the vendee.

Counsel for defendants cite no case which holds a notice to be necessary. We know of no principle of law which requires it. We know that such a rule would practically defeat the remedy the law secures to vendors, by recovering the property when the sale is induced by the fraud of the vendees. The thought is ludicrous that the rule should be applied to "lightning rod men," to the vendors of patent rights and patented articles, to those who travel over the State appointing agents for the sale of agricultural implements, "hog cholera cure," etc., etc, and to other like adventurers. They are usually far beyond the reach of notices, or become invisible immediately after perpetrating their frauds. It would be quite as wise to require a thief to be notified that a warrant will be issued for his arrest, as to require notice to swindlers before instituting proceedings to recover the property which they have acquired by their frauds. The language of the Illinois Supreme Court in Johnson v. Howe, 7 Ill. 342, 2 Gilm. 342, quoted in Smith v. McLean, supra, holding that a demand for the property is not required, is just as applicable to the case of notice. It is as follows:

"It could scarcely be insisted that if one to whom a horse had been loaned, instead of returning him according to contract, should attempt to run him from the country, and the first intelligence received by the owner should be, that he was actually absconding with his property, such owner would be bound, before he could properly procure a writ of replevin upon which to retake the same, to follow and overtake the wrong-doer, and formally demand his property."

If the vendee is not entitled to notice of the rescission of the contract, those claiming under him are not. They hold the property under the title of the vendee, and in cases where they are not innocent purchasers for value, they are entitled to no higher rights than the vendee. We shall soon discover that defendant and the plaintiffs in the attachment are not protected as innocent purchasers for value.

IV. Did plaintiff have authority to rescind the sale after the levy of the attachment? It is not denied that as against the vendees he possessed such right before the attachment; but defendants' counsel insist that after the attachment no such power existed. The proposition of law which they maintain, may be stated in these words: The vendor after the attachment of the goods by the creditors could not rescind the sale for fraud perpetrated by the vendee, of which...