Kichline v. Lobach

Opinion,

Me. Justice Clark:

This is an action of trespass., brought by William S. Lobach against John Kichline, a constable, for seizing and selling, on an execution against one John Mertz, a certain carriage, or piano-box wagon, claimed to be the property of the plaintiff. The carriage, it is admitted, originally belonged to Mertz, but the plaintiff’s contention is, that Mertz sold it to William H. Fenner, -who afterwards and some time prior to the levy sold it to William S. Lobach. The carriage from the first, and until the constable’s seizure, was in the custody of Jacob Hoffman, who had it in his warehouse in Bethlehem on storage, as a bailee. Fenner bought the carriage on August 30, 1886, giving his note to Mertz for ©100, the price agreed upon ; and on the next morning, Hoffman would appear to have been notified of the sale, and that the carriage belonged to Fenner. On the evening of the same day, August 31st, Fenner sold the carriage to Lobach for ©100, the same price he had agreed to pay for it, and on receipt of the money, or within a day or two afterwards, lifted his note from Mertz. After Fenner sold to Lobach, Fenner says he notified Hoffman of the fact, and told him if Lobaoh came, to give him the carriage, as it now belonged to him.

Kichline, the constable, made his levy on September 10,1886, upon an execution in his hands in favor of George D. Meyers against John Mertz ; he removed the carriage from Hoffman's warerooms to the Washington Hotel, where on October 8th following he sold it at public sale to Theo. F. La wall, for ©75.

The whole question turned upon the bona lides of the sale from Mertz to Fenner, and upon the bona lides of William S. Lobach. Did he purchase the carriage in good faith, and upon a valuable consideration ? Hoffman’s engagement to hold the possession for the purchaser, it is conceded, would fill the requirements of the law, in respect of delivery, and no question of legal fraud is raised upon the record. The only question is as to the existence of actual fraud. Was the sale by Mertz to Fenner fair or fraudulent ? If fraudulent, was Lobach party to it, or cognizant of it, at the time of his purchase ? If the sale by Mertz to Fenner was not made with intent to hinder, delay, or defraud creditors, but was a bona fide and a fail-sale, for a valuable consideration, then certainly Lobach is entitled to recover in this case, for his title was derived from Fenner ; and, although Mertz was indebted, Fenner would not be affected by a fraudulent intent on the part of Mertz, of which he had no notice : Reehling v. Byers, 94 Pa. 316; Scott v. Heilager, 14 Pa. 238. So, also, if tlie sale by Mertz to Fenner was in fact fraudulent, the intention being to hinder, delay, and defraud the creditors of Mertz, yet if Lobach was innocent, and ignorant of the fraud, he would, be entitled to recover; for, as a purchaser without notice, his title wotdd be protected, unless there were circumstances which should have put him as a reasonably prudent man upon inquiry, in which case, he would be charged with the knowledge of such facts as inquiry would have disclosed.

Applying these principles to the case now under consideration, it is plain that the first subject of inquiry was as to the nature of the transaction between Mertz and Fenner, and we cannot see why the offer embraced in the second assignment of error should not have been admitted.

The pivotal and most important question involved in the case was the good or bad faith of Lobach; and whilst Lobach cannot be held for the fraudulent character of the transaction between Mertz and Fenner, if he knew nothing of it, or was not put upon inquiry concerning it, yet it was proposed to show, not only that Mertz was pursued by his creditors, especially by Meyers; that he had been arrested for fraud, etc., but that Fenner or Mertz went to Lobach and induced him to advance the money on this carriage, and to pay Fenner the amount of his note; that the note was paid and surrendered to Fenner; that Lobach was cognizant of these facts, and generally that there was a conspiracy between the three persons named to defraud Meyers. The offer was in some respects inaccurate and somewhat general in terms, but as it was not objected to on that ground, and the court seems to have understood its import, we think it should have been, received. “ The plaintiff’s right to recover in this action,” says the learned judge, “ depends entirely xrpon whether the sale from Fenner to Lobach, the plaintiff, was made in good faith, no matter whether the sale from Mertz to Fenner was in good faith or bad faith.” The first part of this statement of the law, if properly understood, is undoubtedly correct; for if the sale from Mertz to Fenner was fraudulent, and Lobach knew it, then the sale from Fenner to Lobach could not have been made in good faith; this made Lobach party to the fraud.

But the expression that it was “ no matter whether the sale from Mertz to Fenner was in good faith or bad faith ” is accurate only upon the assumption that Lobachwas ignorant of the fraud if any existed. That the court so understood the law is manifest from the fact that the good faith character of the sale to Fenner was expressly submitted to the jury. The error of the court consists in not admitting the evidence properly bearing on that question. The witness on the stand was a party to both of the sales, and it was certainly competent to examine him, with some degree of particularity, as to the exact character of the several transactions. The evidence offered was with reference to the sale from Mertz to Fenner, and to Lohach’s connection with or knowledge of that sale, or of any circumstances connected therewith; and as this was certainly pertinent to the issue, we think it should have been received. In cases of fraud, considerable latitude has always been allowed. We liave purposely avoided any reference to the facts, bearing upon the alleged fraud, by way of illustrating the pertinency of the evidence proposed, fearing that what we would say might tend to influence the jury in their consideration of the case, when it comes on for re-trial.

The judgment is reversed, and a venire facias de novo awarded.