B. Lowenstein & Bros. v. Goodbar & Co. , 69 Miss. 808 ( 1892 )

Cooper, J.,

delivered the opinion of the cdurt.

The verdict in this case is not supported by the evidence, and the instructions asked and, secured by the defendants should not have been given.

There is nothing to suggest that Lowenstein & Bros, had auy notice that any of the claims against Hudson, the payment of which they assumed, were simulated or exaggerated, if in fact they were.

Neither H. J. nor B. L. McLaurin was their agent to negotiate a purchase from Hudson. The terms of the sale had been agreed on in Memphis between H. J. McLaurin, acting for Hudson and B. L. McLaurin, and Percy and Waddill, acting for Waddill, Catchings & Co., and B. F. Catchings and Lowenstein & Bros., acting for themselves. B. L. McLaurin had no-other agency for appellants than to receive possession of the stock of goods, in consummation of a sale, the terms and consideration of which had already been fixed by the parties. He was but to put in form the bill of sale of the goods, and this he did for all parties, and to take possession of the goods until the arrival of appellants’ representative. He was never agent of appellants in such sense that his knowledge of the character of his own professed demand against Hudson, as simulated in whole or in part, should be imputed to Lowenstein & Bros., and operate to defeat the sale which was being made or arranged by all the other parties. The transaction is capable of but one construction. Hudson was insolvent,, and had determined to secure Waddill, Catchings & Co. and W. B. Catchings in their demands. He also owed Lowenstein & Bros., and was willing to carry out any arrangement which H. J. McLauriu should make for him, the effect of which would be to secure the payment of the debts due to Waddill, Catchings & Co. and W. B. Catchings. H. J. Mc-Laurin went to Memphis to negotiate for Hudson, having an eye in the negotiation,'however, toward the securing his own debt, which, for private reasons, he transferred to B. L. Mc-Laurin before leaving Bolling Fork. B. L. McLaurin remained at Bolling Fork, to execute there, under the direction of H. J. McLauriu (Hudson’s representative), any plan that might be agreed on in Memphis for the payment of the creditors Hudson desired to prefer. It was agreed in Memphis that Lowenstein & Bros, should buy the entire stock of goods •of Hudson, and, in consideration thereof, should assume the payment of the debts of "Waddill, Catchings & Co., W. B. •Catchings- and R. L. McLaurin, and, in addition thereto, ■should discharge their own demand against him. The agreement was telegraphed to R. L. McLaurin, who prepared a bill of sale of the goods, which Hudson signed, and also received possession of the stock for Lowenstein & Bros.

R. L. McLaurin negotiated no purchase for Lowenstein & Bros, fróm Hudson; the sale was agreed on in Memphis, and, so far as the record suggests, R. L. ‘McLaurin’s agency for Lowenstein consisted only in receiving the possession of the goods. Under these circumstances, it was error to submit to the jury the question whether R. L. McLaurin was the agent of Lowenstein & Bros, in purchasing the stock so as to affect the good faith of their purchase by reason of his knowledge of the character of his claim against Hudson.

It was also error for the court to submit to the jury the question whether or not the minds of Hudson and Lowenstein & Bros, met upon the contract of sale. The inquiry, in view of the undisputed testimony, was wholly immaterial. Hudson’s desire was to secure his own discharge from certain agreed debts. He may have understood, and probably did understand, that Lowenstein & Bros, became absolutely and unconditionally bound to immediately pay them to the parties to whom he was indebted. It was no concern of his, however, what arrangements these creditors and Lowenstein & Bros, had made, as between themselves, for the time or condition of the payments. Hudson was not at all injured by the fact that Waddill, Catchings & Co. were to be first paid, and they, not until Lowenstein & Bros, should sell the goods bought of Hudson, nor that McLaurin should not be, in fact, paid at all, unless the goods should bring a sufficient sum to pay all the debts for which they were bought.

Hudson was instantly and absolutely discharged from all these demands by the sale of the goods. As to him, there was no essential difference between tbe contract be understood he was making and the one Lowenstein & Bros, understood they were making. In truth, there was no mistake, either as to the subject-matter of the contract or as to the consideration. Lowenstein & Bros, got exactly what they'intended to get and what Hudson intended for them to have— the goods. Hudson got precisely what he intended to get— a discharge from certain debts. Hudson probably did not know the terms of the collateral agreement between Lowenstein & Bros, and these creditors, but this was immaterial.

Mr. Benjamin thus formulates the rule in cases of mistake: “ Wherfe there has been a common mistake as to some essential fact forming an inducement to the sale — that is, when the circumstances justify the inference that no contract would have been made if the whole truth had been known to the parties — the sale is voidable.” Benj. on Sales, § 415.

It is difficult to perceive upon what grounds the creditors of Hudson may treat the sale as void, when, at most, it would have been voidable by him (if the mistake had been in reference to an essential fact), and which he has not sought to avoid.

Judgment reversed and cause remanded.