Huthmacher ex rel. Levy v. Lowman's Sons

Mr. Justice Scofield

delivered the opinion of the Court.

Daring the summer of 1894, A. Levy, of Murphysboro, Illinois, bought goods of many wholesale houses in different cities, so that, by the 10th day of the following November, he had accumulated a large and valuable stock for a city the size of Murphysboro. In the latter part of July he was in Cincinnati, Ohio, and made purchases of Heldman & Co., and of Lowman’s Sons, appellees. He visited the Iieldmans first, and one of the Heldmans went with him to the house of Lowman’s Sons, and introduced him to one of the proprietors. The large amount of his proposed purchases aroused suspicion, or at least provoked inquiry, and he was interrogated concerning his means, and what he had bought, or was intending to buy, from other houses. The jury were justified in believing from the evidence that his answers to these questions were designedly false.

The goods bought of Lowman’s Sons were billed by them to Levy during the latter part of August, and were to be paid for within four months after October 15th.

On November 10th, Levy, claiming that he was indebted to his three sons, Harris, Michael and Simon, the usees in this action, sold his entire stock to them at a discount of twenty-five per cent, whereby he was divested of all earthly possessions which might be subjected to the levy of an execution. The consideration named in the" bill of sale was $9,000. Levy swears that he owed Harris $2,050, Michael $2,400, and Simon $1,000, and that the three agreed to pay four of the claims against him" which amounted in the aggregate to $2,550.. By this arrangement at least twelve wholesale houses, of which Levy had bought goods during the summer and fall of 1894, were to be defeated in the collection of their claims, and the business was to be conducted thereafter in the name of Levy Bros., the venerable head of the family retiring from business with no visible means of support.

Harris had worked for his father in the store prior to November 10th, and was undoubtedly cognizant of the amount of his father’s indebtedness, and of his father’s intention to defraud his creditors. The evidence justifies the inference that the other two sons were also cognizant of these facts; but if it were not so, the knowledge of Harris would be imputable to his brothers, who were .his partners in the purchase and management of the store. Wolf v. Mills, 56 Ill. 360; Loomis v. Barker 69 Id. 360; Tenney v. Foote, 95 Id. 99; Wiley v. Thompson, 23 Ill. App. 199; 1 Lindley on Partnership, 150.

It is a strong circumstance against the good faith of the purchase by the three sons that neither of them testified upon this or any kindred question. The father was put upon the stand by the appellees and endeavored to uphold the transaction as being altogether innocent and legitimate. But his two dozen “ I don’t remembers,” and many other equivalent expressions, behind which he took refuge when pressed by questions propounded by counsel for appellees, lead fairly to the inference that there was something in the transaction which he deemed it advisable to conceal.

After the transfer of the goods by the father to the sons, Lowman’s Sons elected to rescind their sale to A. Levy, and brought an action of replevin for the goods. The plaintiffs dismissed their suit before trial, but retained the goods which had been delivered to them under the replevin writ. The present suit was brought on the replevin bond to recover damages for an alleged breach thereof, and appellees defended as to all but nominal damages, on the ground that the goods had been procured by A. Levy through false and fraudulent representations, and also with the intention of never paying for them, by reason whereof the vendors had the right to rescind the sale and to recover the goods, not only from A. Levy, but also from his sons, who were fraudulently helping their father, through the form of a purchase, to hinder, delay and defraud his creditors.

The verdict of the jury assessing the damages of Harris, Michael and Simon at one cent, is a finding that this defense has been established, and as such is abundantly justified by the evidence in this record.

The evidence sufficiently shows that A. Levy knowingly made false representations in material matters to Lowman’s Sons for the purpose of obtaining credit, and that Lowman’s Sons sold to him on the faith of these representations. In such case there can be no doubt as to the right of the vendors to rescind the contract and reclaim the goods from the vendee.

The evidence also shows that when A. Levy bought the goods he did so with the intention of never paying for them, and this, of itself, would amount to fraud, authorizing a rescission of the contract. Bowen v. Schuler, 41 Ill. 192; Farwell v. Hanchett, 120 Id. 573; The People v. Healey, 128 Id. 9.

The evidence also shows that the sale by A. Levy to his sons was fraudulent, through and through, and that the sons were parties to the fraud.

The question now arises whether or not there is such error of law in the record as to require the reversal of a judgment which is clearly right under the evidence.

It is said that the court erred in permitting the depositions of the Heldmans to be read to the jury. In these depositions the defendants detail the fraudulent representations made to them by A. Levy at the time of his purchase of goods from them. This was proper evidence under the authorities. Hertz v. Kaufman, 46 Ill. App. 591; Castle v. Bullard, 23 How. 172. Another act of fraud is admissible to prove the fraud charged where the evidence shows that the two acts were committed in pursuance of a common purpose to defraud. Johnson v. Beeney, 5 Bradw. 601; Hanchett v. Riverdale Distillery Co., 15 Id. 57; Henderson v. Miller, 36 Ill. App. 232. That there was such a common purpose in this case is justly deducible from the circumstances proved on the trial. The proof of fraud is not limited to direct evidence. The perpetrator of a fraud skulks in the dark and uses indirect agencies to accomplish his end, and the law lays hold of him with circumstances and inferenees therefrom, and drags him from his covert, and compels him to make restitution, notwithstanding his vigorous protest that eye-witnesses must be produced before he can be compelled to render an account.

A few general observations in this connection will relieve us from the necessity of specially considering many of the questions which have been presented in the argument of the case.

It was incumbent on appellees to prove two distinct propositions : First, that the father bought through fraudulent representations, relied upon by the vendors, or with the intention of never paying for the goods; and' second, that the purchase by the sons, was for the purpose of enabling their father to defraud his creditors. To say that certain evidence is not proper on the question of fraud in the purchase by the sons is not a concession that the court erred in admitting it, for this very evidence may have been proper proof of fraud in the purchase from appellees such as would justify a rescission of the contract of sale. After it has been determined that the sale by appellees to the father can be rescinded, it yet remains to be shown that the goods can be taken from the custody of the sons on the ground of a fraudulent purchase by them from their father. If evidence is proper for one purpose, it must be admitted for that purpose, regardless of its inapplicability to other parts of the case.

The contention that the court erred in admitting the testimony of A. Levy when he was called as a witness by counsel for appellees can not be considered, for the reason that no exceptions to any ruling of the court in admitting this testimony have been preserved in the bill of exceptions. After the witness had given part of his testimony, appellants objected to all that had gone before and to all that might follow. Under the practice of appellate courts in such cases, this general objection can not be considered.

The rulings of the court in giving, modifying and refusing instructions have been subjected to the usual ordeal of criticism. The instructions, when considered together, presented the law with reasonable accuracy, and a judgment so well fortified by the evidence as is the one in this record, should not be reversed for technical errors.

The judgment is affirmed.