Lathrop v. Selleck , 74 N.Y.S. 1101 ( 1902 )

McLennan, J.:

The only questions of fact submitted to the jury were whether or not the sale of the furniture by Norton & Co. to the railway company was a conditional sale, the condition being that the title to the property should not pass until paid for, or was such that the railway company became the absolute owner of the property, and was such at the time it assumed to sell and deliver the same to the plaintiff in this action, and whether or not the plaintiff was a bona fide purchaser of the same. • . .

The defendant was permitted, over plaintiff’s objections and exceptions, to introduce a large amount of evidence tending to show that the railway company, from which the plaintiff purchased the goods in question, was insolvent when it purchased the same from Norton & Co., and also when it sold them to the plaintiff. We are of the opinion that the admission of such evidence constituted reversible error. The evidence was not material and had no bearing upon any issue submitted to the jury. If the sale by Norton & Co. to the railway company was a legal conditional sale, and of such a character that the title did not to pass until the goods were paid for, the solvency or insolvency of the railway company was of no consequence, because its interest and right to the possession of the goods having terminated- on account of its failure to pay according to the terms of the sale, Norton &-Co¡ were entitled to retake- them, and upon so doing became the absolute owners of the same. • Under siich a sale Norton & Go. would have had the right to retake the goods even if the railway company had been entirely solvent. Their rights in the premises could in no manner be affected because of the fact that the railway company was solvent or insolvent, and. so proof of that fact was immaterial and incompetent for- the purpose of establishing the character of the sale. ......- - -

Many of the'facts'proven which tended to establish the-insolvency of the railway company¿ and which were objected to, weré -in no manner shown to have been known to the plaintiff when he purchased the goods from the railway company, and, therefore, were not competent for the purpose of showing that he was not a Jbona fide purchaser of the goods in question.

If We assume that the alleged conditional sale. was valid as between Norton & Go. and the railway company, it could have no binding force or effect as against the plaintiff under the proof in this■ case, ■ if • he was a bona fide purchaser, .and any . fact which existed as to the financial condition of the railway company was not Competent to impeach his bonafides, unless such fact was known or ought to have been known by him. It is urged by the learned coum sel for the respondent that it was proper to show the insolvency, o.f the railway company, for the'purpose of bringing the transfer by it to the plaintiff within the statute prohibiting transfers by insolvent corporations, or by those whose insolvency is imminent. (Laws bf 1890, chap. 564,, § 48, as amd. by Laws of 1892, chap. 688.) A éufficient answer to that suggestion is that no such issue was. sub: mitted to the jury. It is true defendant’s counsel asked the court to charge, and it did charge,-the statute, but the court nowhere pointed out its applicability, if any, to the facts of the case at bar, and the jury was not in any manner instructed what effect should be given to the provision of the statute in determining the rights of the respective parties.

Without going over the evidence in detail bearing upon the question of the railway .company’s insolvency, which was objected to; we think it clear that at least.such of the facts proven as were- not shown to have come to the knowledge of the plaintiff at the time he purchased the goods in question were incompetent, and had no bearing upon any issue which was submitted to the jury for its determination. It cannot be , said that the evidence was not prejudicial to the plaintiff. It is apparent that the financial condition of the railway company, as disclosed by the evidence, would materially influence the determination of the jury. The jury would naturally give weight to the fact that an insolvent corporation had obtained Horton & Co.’s goods, and that while insolvent it had sold them to the plaintiff for much less than the purchase price, perchance for less than their value, and such considerations would be quite likely to influence the determination of the questions submitted to the jury by the court, especially so when the questions submitted were presented in such a manner as to leave the important issues somewhat obscured.

Humerous other objections were made by the plaintiff to the rulings of the court in receiving and excluding evidence, to which exceptions were duly taken, but in view of the fact that a new trial must be had because of the error committed in receiving evidence of the railway company’s insolvency, we deem it unnecessary to discuss the other exceptions presented by the record.

It follows that the judgment and order appealed from should be reversed and a new trial granted, with costs to the appellant to abide event.

Judgment and order reversed upon questions of law only and a new trial ordered, with costs to the appellant to abide event. ■

Adams, P. J., Spring, Williams and Hiscook, JJ., concurred. .

Judgment and order reversed upon questions of law only, and new trial ordered, with costs to the appellant to abide event.