Stewart v. Scannell

Burnett, J., after stating the facts, delivered the opinion of the Court—Terry, J., concurring. The only question presented by the record, is, whether the sale was void, as against the creditors of Lowe, Ebbetts & Co., under the provisions of the fifteenth section of our Statute of Frauds, which requires the sale to be “ accompanied by an immediate delivery, and be followed by an actual and continued possession of the property sold.” Com. L., 201.

The language of the statute is exceedingly strong, and the intention manifest. The change of possession from the vendor to the vendee, must not only be actual, but also continued. The object of the statute being the prevention of fraudulent sales of goods, no means more simple and efficient could have been adopted to have accomplished the end intended, than that requiring this actual and continued change of possession. It takes away from the parties the means of carrying out their fraudulent intent, and removes the temptation. As the fraudulent vendor cannot remain in possession, under any pretence whatever, he is compelled to trust entirely to the fidelity of the fraudulent vendee. But if, by arranging proper bills of sale, warehouse-receipts, or other papers, the vendor was permitted to retain possession in any capacity whatever, the rigid provisions of the statute would be practically useless. In such case, as a fraud cannot be presumed, but must be proved, the creditor would not, in most instances have any means of protection left. The transaction would look fair upon its face, while the actual power of proof would be taken away.

The present case falls within the principle settled by this Court in the case of Fitzgerald v. Gorham, 4 Cal. Rep., 289. In that case, as in this, there was no actually fraudulent intent. But the Court held that “ it was the very case upon which the statute intended to operate.”

The statute makes certain facts conclusive evidence of fraud, and whatever may or may not be the actual intention of the parties, if the actual facts exist which are contemplated by the law, the sale is void. In the case referred to, the vendor was only employed in the capacity of a clerk, at a monthly salary. The goods were as much under the actual control of the vendees in that as in this case. The two cases are the same in principle. In one case, the vendor afterwards had possession of the property, as clerk, and in the other, as warehouseman. In both, the vendors were but agents or servants of the vendees, but in both they had the actual possession that renders the sale void as against creditors, while good as between themselves. In the [84]