Phelps v. Halsell

• Decision Date: 07 June 1901
• Citation: 1901 OK 25,65 P. 340,11 Okla. 1
• Parties: PHELPS, DODGE & PALMER COMPANY, a corporation, v. O. D. HALSELL AND W. A. FRAZIER, Partners, doing business as HALSELL-FRAZIER GROCER COMPANY.
• Court: Oklahoma Supreme Court

1901 OK 25

65 P. 340

11 Okla. 1

PHELPS, DODGE & PALMER COMPANY, a corporation, v. O. D. HALSELL AND W. A. FRAZIER, Partners,doing business as HALSELL-FRAZIER GROCER COMPANY.

Supreme Court of Oklahoma

Decided: June 7, 1901

Error from the District Court of Logan County; before Jno. H. Burford, Trial Judge.

Syllabus

¶0 1. THE FORM AND NOT THE COMMON LAW CAUSES OF ACTION IS ABOLISHED BY THE STATUTE. Every cause of action that existed under the common law forms which has not been expressly abolished still exists under the name of a "civil action." The statute did not abolish common law causes of action, but only abolished their forms, and grouped them under one head. A plaintiff, under the statute, must allege and prove every fact that he was required to allege and prove at common law.

2. ACTION IN TROVER-- When demand is necessary, and when to be made. Where a party is lawfully in the possession of personal property, before an action can be maintained against him for conversion, a demand for the return thereof must be made, and such demand must be made while such party is in possession of such property, unless it appears that the party has disposed of the same before a demand could reasonably have been made, or that the party disposed of the same to evade demand.

3. CONTRACT OF SALE RESCINDED ON THE GROUNDS OF FRAUD-- Party Rescinding must not be Guilty of Laches. Where a party seeks to rescind the sale of personal property on the grounds of fraud, he must exercise reasonable care to discover such fraud and much rescind such a sale within a reasonable time after such discovery, in order to affect the rights of innocent purchasers, or intervening creditors, who have not had notice of such fraud. Where goods are purchased fraudulently, and the party who purchases them is allowed to retain the open and notorious possession thereof for a long period of time, and prior to any attempt to rescind the sale has disposed of the same in payment of a pre-existing debt, without notice of said fraud on the part of the party taking such goods in payment of such pre- existing debt, the law will presume that the original seller has waived the fraud, and such seller cannot rescind such sale so as to prejudice the rights of such intervening creditor.

Dale & Bierer, for plaintiffs in error.

Cotteral & Hornor and Geo. S. Green, for defendants in error.

STATEMENT OF FACT.

Plaintiff in error brought this action in the court below to recover of defendants the value of a certain lot of boots and shoes. According to the petition, in the year 1898, and prior thereto, one M. A. Clark was engaged in the grocery business in Guthrie, O. T., the business being managed by her husband, M. W. Clark. The plaintiff in error is a corporation, existing and created under the laws of the state of Illinois; that it is engaged in the wholesaling of boots and shoes. That between the dates of September 1 and April 18, 1898, the said Clark, as such retail dealer, bought of the plaintiff, at wholesale, boots and shoes for the purpose of and with the intention of disposing of the same. That on the 23rd day of September, 1897, the said M. A. Clark, by her agent, M. W. Clark, for the purpose of obtaining credit from the plaintiffs, in the purchasing, at wholesale, of a certain lot of boots and shoes, made and delivered to the plaintiff a certain statement, purporting to set forth a true and complete statement of the liabilities and assets of the said M. A. Clark, which statement was to the effect that she, the said M. A. Clark, was worth, over and above all her liabilities, the net sum of from seven to ten thousand dollars. That afterwards, and to-wit, on or about the 16th day of February, 1898, said M. A. Clark, by her agent, M. W. Clark, made a statement to the Wilber Mercantile Agency, of Chicago, Illinois, of which said agency the plaintiff was a member and subscriber, which statement purported to show the assets and liabilities of said M. A. Clark, wherein she claimed and asserted that the net worth of her assets, over and above all her liabilities, was in the sum of about eight thousand dollars. That between the dates of September 1, 1897, and March 4, 1898, said M. A. Clark, by her agent, M. W. Clark, made various other statements to the Dunn Mercantile Agency and to Bradstreet's Mercantile Agency, of which said agencies the plaintiff was a member, in which statement the said Clark claimed that she was worth over and above all her debts and liabilities, the sum of from seven to ten thousand dollars. That said statements were duly authorized to be made by the said M. A. Clark, and were made for the purpose of obtaining credit; that on account of the said statements and relying upon the same, the plaintiff, on the 31st day of January, 1898, sold to the said Clark a certain bill of boots and shoes, of the value of eight hundred thirty-six and thirty-one one hundredths dollars, and on March 4, of the same year, shipped and consigned to M. A. Clark another lot of boots and shoes of the value of fifty-five and twenty-one one- hundredths dollars; which statements so made by said Clark were untrue, and the fact was that at the time of so making said statements said Clark was insolvent, or worth but little if anything over and above her liabilities and debts, and that said fact was known to her at the time she made such statements.

It is further charged in said petition that upon April 17, 1898, the said M. A. Clark, without the knowledge or consent of this plaintiff, made, executed and delivered to the defendant, The Halsell-Frazier Grocery company, a chattel mortgage upon the boots and shoes above described and that said mortgage was so given to secure an antecedent debt, owing to the said defendant, the Halsell-Frazier Grocery company, and that said antecedent debt existed prior to the delivery and making thereof, and long prior to the delivery by the plaintiff of said boots and shoes to the said Clark. It is further alleged that the plaintiff, immediately upon learning of the fact that said M. A. Clark had deceived plaintiff in said statement, and thereby secured the purchase of boots and shoes heretofore described, rescinded said sale, and, to-wit, on April 28, 1898, notified said M. A. Clark, through her agent, M. W. Clark, and also notified the defendant herein, the Halsell-Frazier Grocery company, that the. plaintiff rescinded said sale, for the reason that the same was induced by the fraudulent representations of M. A. Clark, and demanded from each of said parties all of the boots and shoes taken by the said Halsell-Frazier Grocery company, under their chattel mortgage, and upon their failure to return said goods, said plaintiff demanded the value thereof, which demand was refused. Plaintiff further states that said defendant, the Halsell-Frazier Grocery company, has, without right and against the wishes and consent of the plaintiff, sold and converted to its own use, the property above described, belonging to this plaintiff, and that the property so converted was at the time of said conversion, of the value of eight hundred ninety-six, and fifty one-hundredths dollars, wherefor plaintiff prays judgment.

To the petition the defendant enters a general demurrer, which demurrer is overruled by the court, to which action the defendant excepts. The defendant then files answer to said petition, alleging that on the 18th day of April, 1898, said M. A. Clark made, executed and delivered to defendants and one John Gordon jointly, a certain chattel mortgage, upon the goods and property therein described, and that at or about the same time the said M. A. Clark, made, executed and delivered certain other chattel mortgages, on the same property, to certain other creditors of the said M. A. Clark, that the mortgage given to the said defendants, was given to secure the payment of a note, dated April 17, 1898, due one day after date, for the sum of two thousand, two hundred thirty-two and twenty-one hundredths dollars; that the said mortgage was given and received in good faith to secure the amount heretofore named. That said mortgage was given on the stock of merchandise of the said M. A. Clark, including the boots and shoes which were then in stock. And the defendants further answering say that prior to the time when plaintiff made any claim upon said property, or any part thereof, that defendants had rightfully disposed of and sold said mortgaged property in good faith and for value, under the terms of said mortgage.

To which answer the plaintiff files a general demurrer, which demurrer is overruled by this court, and exception by the plaintiff. The plaintiff then files its reply to defendant's answer. Said reply admits that defendants, prior to the time when plaintiff made any claim upon said property, or any part thereof, had sold and disposed of said mortgaged property, but denies that the same was in good faith, but alleges that said sale was with full knowledge on the part of the defendant of the claim of the plaintiff. And in said reply plaintiff claims the right to recover the proceeds of said sale of the defendant. And afterwards the defendants move the court for judgment on the pleadings in this action, which motion was sustained and judgment on the pleadings entered in favor of defendant and against the plaintiff for costs, to which judgment of the court the plaintiff excepts, and brings the case here for review.

IRWIN, J.:

¶1 In plaintiff's petition it is alleged that "the defendant, the Halsell-Frazier Grocery company, has, without right, and against the wishes and consent of the plaintiff, sold and converted to its own use, the property above described, belonging to this plaintiff, and that the property so converted, was, at the time of such conversion, of the value of eight hundred ninety-six and fifty one hundredths dollars." This shows that the plaintiff intended in this action to bring an action of conversion. On this proposition arises the...