Burrill v. Stevens

Peters, J.

The defendant gave a negotiable note in consideration of a promise of the payees of the note to deliver to him at a future time certain mowing machines and plows. The note is sued by an indorsee, and one of the grounds of the defense was, that the payees obtained the note with an intention never to deliver the implements, and that the indorsee, who sues the note, was conusant of the fraud.

The instructions to the jury upon that point present the question, whether getting property by a purchase upon credit, with an intention of the purchaser never to pay for the same, constitutes such a fraud as will entitle the seller to avoid the sale, although there are no fraudulent misrepresentations or false pretences.

*399 The question lias never been fairly before this court before this time, so as to require a deliberate decision. The plaintiff contends that the question was settled in the negative in the case of Long v. Woodman, 58 Maine, 49. But that case falls short of meeting the question presented in the present case. The gist of the charge against the purchaser in that case seems to have been that he fraudulently refused to do after the contract what he agreed to do at the time of the contract, the alleged fraud being an intention formed after the contract rather than contemporaneously with it; and that. was an action of deceit based upon a broken promise to convey real estate. Of late years, nisi prius rulings in our own courts have frequently been in accordance with the law as delivered to the jury by the presiding judge in the case at bar, and we think the doctrine may safely be accepted and approved, both upon authority and principle.

It is the admitted doctrine of the English cases, and is sustained by most of the courts in the United States. In Benj. on Sales, (2d Amer. ed.) § 440, note e, very numerous cases are cited to the proposition. Stewart v. Emerson, 52 N. H. 301, discusses the question at length, and reviews many authorities.

The plaintiff relies upon the objection that it is not an indictable fraud,- an argument which seems to have inclined the Pennsylvania court against admitting the principle into the jurisprudence of that state. Smith v. Smith, 21 Pa. St. 367; Backentoss v. Speicher, 31 Pa. St. 324. It has been held by some courts to be an indictable cheat, the false pretence being in the vendee’s pretendingly making a purchase, while his only purpose is to cheat the vendor out of his goods. It is more often considered, however, as not a matter for indictment. Bish. Crim. Law, § 419. But the objection, taken by the plaintiff, has, generally, been considered as insufficient to override the rule.

But the doctrine governing the case before us should not be misunderstood. To constitute the fraud, there must be a preconceived design never to pay for the goods. A mere intent not to pay for the goods when the debt becomes due, is not enough; that falls short of the idea. A design not to pay according to *400 the contract is not equivalent to an intention never to pay for the goods, and does not amount to an intention to defraud the seller outright, although it may be evidence of such a contemplated fraud.

Nor is it enough to constitute the fraud, that the buyer is insolvent, and knows himself to be so, at the time of the purchase, and conceals the fact from the seller, and has not reasonable expectations that he can ever pay the debt. Some courts have gone so far as to denominate that a fraud which will avoid the sale. 'And it may have been so held in bankruptcy courts, in some instances, as between a vendor and the assignee of the vendee. But it would not, generally, be enough to prove the fraud. The inquiry is not whether the vendee had reasonable grounds to believe he could pay the debt at some time and in some way, but whether he intended in point of fact not to pay it.

Nor is it enough, that after the purchase the vendee conceives a design and forms a purpose not to pay for the goods and successfully avoids paying for them. The only intent that renders the sale fraudulent is a positive and predetermined intention, entertained and acted upon at the time of going through the forms of an apparent sale, never to pay for the goods. Cross v. Peters, 1 Greenl. 378; Biggs v. Barry, 2 Curtis, (C. C. R.) 259; Parker v. Byrnes, 1 Low. 539 ; Rowley v. Bigelow, 12 Pick. 306 . The general principle is found to have been especially applicable in cases where written instruments and negotiable papers have been fraudulently obtained from the makers of them. Smith v. Braine, 16 A. and Ell. N. S. 244; Hall v. Featherstone, 3 Hurls. and Nor. 284.

The defendant received a small portion of the goods which were to be sent to him for the note, and the jury were instructed to render a verdict for the price of those articles, less the damages sustained by the defendant for a non-delivery of the balance of the articles at the contract price. That was correct. The defendant was to be no worse off under his contract because he was defrauded than he would have been if not defrauded. Nor does it make a difference that each article was separately priced in the contract. The contract is an entirety, and the damages *401 are because the articles were not all furnished at the enumerated prices. The plaintiff urges upon our attention that there is no evidence to support any reduction from the price for damages. There is such in the testimony of the defendant.

Motion and exceptions overruled.

Appleton, C. oJ., Walton, Barrows, Danporth and Virgin, JJ., concurred.