John T. Barbee & Co. v. American Brewing Ass'n

MOURiSUND, J.

This is an appeal from a judgment rendered in two cases which were consolidated. One of these, as made by the petition on which trial was had, was a suit by the American Brewing Association against P. Arismendi, Jr., for a balance of $364.09 and certain interest and attorney’s fees, alleged to be due on a promissory note to said brewing association by said Arismendi and his partner, Rosalio Gutierrez, for liquors sold them while they were in the saloon business. The other was a suit by the Brownsville Bank & Trust Company against said Arismendi, Jr., for $364.09, interest and attorney’s fees, alleged to be due upon a promissory note executed by said Arismendi and his partner, Gutierrez. In each case tho appellant, John T. Barbee & Co., and H. H. Weller were sued for the sum claimed against Arismendi; it being alleged that appellant or H. H. Weller purchased from Arismendi & Gutierrez goods, wares, and merchandise, of the aggregate value of $800, without complying with the provisions of the Bulk Sales Law, which goods, wares, and merchandise they then had in stock in their retail liquor business.

Appellant company, in addition to a general denial, specially pleaded that the goods v.-ere not bought by it, and not sold to it by Arismendi or Gutierrez, but were tbe property of appellant company, and tbe title to same bad never passed to said parties, in tbis, that said goods bad been contracted to said Arismendi & Gutierrez by tbis appellant and delivered to them upon tbe promise to pay \ cash tberefor and upon tbe promise and representation that said Arismendi & Gutierrez were solvent and able to pay cash tberefor, whereas in truth and in fact, at tbe time said goods were delivered, they were not solvent and able to pay cash tberefor, but were insolvent and unable to pay for said goods, and that, as soon as appellant discovered tbat said representations were untrue, it demanded tbe return of said goods, and said goods were then and there returned to it in whole packages and just as they were originally delivered to said Arismendi & Gutierrez. This answer was adopted by Weller.

Tbe trial resulted in a judgment in favor of tbe brewing association and tbe bank against Arismendi for tbe amount sued for, and in favor of each against appellant company for $249.95, and tbat they take nothing as against Weller.

Tbe judgment against appellant is based on the finding by tbe trial court tbat certain goods of tbe value of $499.90 sold by appellant to Arismendi & Gutierrez were reclaimed by appellant and surrendered by said parties, tbe court finding in tbis connection that tbe sale of tbe goods was induced by false and fraudulent representations by said parties to appellant’s agent to tbe effect tbat they were solvent, when in fact they were notoriously insolvent, and tbat about 30 days after said goods were in tbe place of business of said parties appellant discovered tbat such representations were false, and as soon as possible reclaimed such goods, or a part thereof, which were surrendered by said Arismendi & Gutierrez. The goods thus reclaimed were sold by appellant to H. H, Weller for $499.90, and at tbe date of trial all of tbe same bad passed from tbe possession of Weller.

Tbe findings of fact are lengthy and show fully the gross fraud which induced tbe appellant to part with its goods, but we have stated tbe substance thereof sufficiently for tbe purposes of tbis appeal.

Appellant’s assignments raise tbe issue tbat tbe findings of fact do not show a sale in violation of tbe Bulk Sales Law.

[1] It is well settled by our decisions tbat appellant, upon discovering tbe falsity of the representations, was entitled to recover by suit tbe goods delivered by it to Aris-mendi & Gutierrez, and could have done so, even if the same bad been transferred to an assignee for tbe benefit of creditors, or delivered to creditors in payment of their claims. Simpkins on Contracts and Sales (3d Ed.) pp. 900-902. It is held tbat under such circumstances tbe title does not pass. Articles 3971, 3972, and 3973, Bev. St. 1911, relating to sales in bulk, were enacted for tbe prevention of fraud, and not for tbe purpose of preventing sellers from repossessing themselves of goods obtained from them by fraud. Such statutes would not have prevented appellant from procuring a judgment for its goods under tbe facts proven, and it necessarily follows tbat they would not render appellant liable by reason of tbe fact tbat tbe return of tbe goods was procured without the aid of a court, pursuant to a rescission of the contract. Tbe transaction did not constitute a sale or transfer within the meaning of said statutes.

[2,3] Tbe appellees, by cross-assignment, complain of tbe overruling of their general demurrer to appellant’s answer. Tbis is not a suit by appellant to rescind the sale of tbe goods, but is one in which appellees undertook to prove a sale in violation of the Bulk Sales Law. We believe appellant was authorized, under its general denial, to prove tbat there was no liability on their part under tbe Bulk Sales Law. In addition the special answer, as against a general demurrer, sufficiently alleged that there could have been no sale in violation of the Bulk Sales Law, as tbe title bad never passed.

Having held tbat appellant is not liable, it follows that tbe cross-assignment complaining of the refusal to award a judgment against Weller must be. overruled, and it is unnecessary to decide what appellees’ rights would have been as to him bad appellant bought in violation of tbe Bulk Sales Law.

The judgment will be reversed in so far as it awards a recovery against appellant, in favor of each appellee, and judgment rendered tbat each of them take nothing as against appellant. In all other respects the judgment will remain undisturbed.

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