Buckley v. Duff & Sons

Mr. Justice Clark

delivered the opinion of the court,

No question of actual fraud arises upon this record; the court gave binding instructions to the jury to find for the defendant, upon the ground that the transaction of 1875, between Greaves & Marland and Buckley, was fraudulent in law; the case must therefore be considered apart from any allegation of intentional fraud.

The general rule of law is undoubted’that where the sale of personal goods, reasonably susceptible of delivery, is not accompanied by a transfer of the actual possession, although valid and binding as between the parties (Boyle v. Rankin, 22 Pa. St., 168), it is a fraud per se as to creditors and bona fide subsequent purchasers, without regard to the intent of the parties, (Clow v. Woods, 5 S. & R., 275; Babb v. Clemson, 10 Id., 419) ; and the question where the facts are established, is for the court and not for the jury: Dornech v. Reschenbach, 10 S. & R., 84; Young v. McClure, 2 W. & S., 150. The rule •is subject to some modifications, however, iu particular cases. It often happens, too, that the subject of sale is not reasonably capable of an actual delivery, and then a constructive delivery has been held to be sufficient. “In such ease,” said Mr. Justice Sharswood in McKibben v. Martin, 14 P. F. S., 352, “it is only necessary that the vendee should assume the control of the subject, so as reasonably to indicate to all concerned the fact of the change of ownership.” “The question in such case is, did the vendee do all that he might reasonably be expected to do in the case of a real and honest sale?” “Regard must be had not only to the character of the property, but to the nature of the transaction, the position of the parties, and the intended use of the property;'no such change of possession as will defeat the fair and honest object of the parties is required:” Crawford v. Davis, 3 Out., 576; McClure v. Forney, 11 Outerbridge, 414.

In the case at bar, the consideration of the sale was fully paid by the cancellation of the note; the machines were surrendered to Buckley, who thereupon formally leased them to Greaves & Marland at their full rental value; Buckley had them insured in his own name ; the machines remained in the mill, the place in which they were to be used, and for seven years the rent was regularly paid. It may be, perhaps, that this was of no avail to defeat the claims of existing creditors, or of bona fide purchasers. That question we are not called upon to decide ; it has not been shown that Greaves & Marland were at the time indebted to any one, in any sum whatever, excepting to Buckley, to whom they sold the machinery, and it is not pretended, that there was any bona fide subsequent purchaser. Nor does it appear that Greaves & Marland had entered into, or were about to enter into, any hazardous business, or that they contracted any indebtedness thereafter, or that they anticipated any indebtedness, from any cause whatsoever. There is, in fact, nothing in the case from which any .fraudulent notice might be inferred. The purpose of the Acts of 13th and 27th Elizabeth, as has been well said, was “ to place parties under a disability to commit fraud in requiring for the characteristics of an honest act, such circumstances as none but an honest intention can assume.”

There is nothing, we think, in the circumstances of this case which is consistent with a dishonest motive on the part of Marland & Greaves ; the debt upon which the execution was issued was.not the debt of Greaves & Marland, but the debt of Greaves alone, and was not created for some years after the sale. The rule in Pennsylvania is, that a transfer void as to existing creditors is not necessarily void as to subsequent creditors ; it is bad only as to those it was intended to defraud: Byrod’s Appeal, 1 Casey, 241; Monroe v. Smith, 29 P. F. S., 459. If the transaction is not fraudulent as to existing creditors, and in this case, as we have said, there were none, subsequent creditors can avoid the sale only under special circumstances, as for instance, by showing that it was made with a view to incurring liability, or to provide against the contingencies of a hazardous business, which gave rise to their debts; and cases of this character are ordinarily under proper instructions for the determination of a jury. Such is the doctrine of Snyder v. Christ, 3 Wright, 499; Monroe v. Smith, 29 P. F. S., 459; Harlan v. McLaughlin, 9 Norris, 293. Although the. cases cited relate to transfer of real estate, the rule is alike applicable on questions affecting the sales of personal property.

For the reasons stated, we are of opinion that the judgment must be reversed.

Judgment reversed. .