Shull v. Crawford

SHAW, J.

This action was brought to cancel and annul a certain conveyance of real estate made by plaintiff and his wife to defendant, which instrument, while in form a deed absolute, was in fact conceded to have been given as a mortgage to secure an alleged indebtedness due from plaintiff to defendant. The appeal is from a judgment in favor of the plaintiff and an order of court denying defendant’s motion for a new trial.

It appears that a corporation known as the Domestic Utilities Manufacturing Company was engaged in the manufacture and sale of what was known on the market as the “Vacuum Clothes Washer.” The company had adopted a lengthy, complex, and confused form of agency contract in appointing agents and making sales of its washers to those who could be induced to purchase the same in lots of 1,667, and whereby the purchaser was allotted the exclusive right to operate in territory selected and agreed upon. The form and substance of this contract was, if not intended as a means for the perpetration of fraud, well calculated to deceive the unwary and appeal to the gullible, for the reason that, while the purchaser was required to pay five thousand dollars for which he received 1,667 washing-machines, it gave him the right, provided he could find persons equally unsophisticated, to sell like contracts for five thousand dollars, for each of which he was to retain as his commission $3,333, the balance of $1,667 going to the company for the 1,667 washing-machines which it furnished to the purchaser of the contract, who likewise was given the right, upon like inducement, to search for “prospects” and, if found, develop them if pos

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sible. The evidence, however, shows that to render one a successful agent in selling the vacuum washing-machines, and particularly in selling the contracts, from which latter the profits were to be derived, required that the agent or purchaser be “posted, informed, and educated”; so the contract provided that an agent making a sale of “family rights,” or to persons to whom he might sell “said articles at wholesale,” or those “appointed as subagents,” should “post, inform, and educate” them. Whether or not defendant was the holder of one of these valuable contracts is immaterial; at all events, it appears that he was authorized to sell the same, and selected Riverside as a fertile field for operation, and where it seems his labor was rewarded by the discovery of plaintiff, who was recognized as a “likely prospect.” Defendant, it seems, was what is known as a “live wire” in the business, and without much effort convinced plaintiff that he, too, upon being “posted, informed, and educated,” could with like success find unsophisticated individuals whom he could induce to buy the privilege of making like sales in this endless chain scheme.