Lloyd v. Brewster

Headnote

Where goods are obtained from the vendor by means of a fraudulent misrepresentation of the vendee as to his situation and circumstances, the vendor may elect to consider the sale void, and may follow the goods, or the proceeds thereof, into the hands of a third person who has received them without paying any new consideration therefor; or he may affirm the sale, and proceed in the ordinary way against his vendee to recover the price of the goods.

If a vendor, who has been defrauded in the sale of his goods, proceeds to judgment against the vendee, upon the contract of sale, after he is apprised ■of the fraud, his election is determined ; and he cannot afterwards follow the goods, or the proceeds thereof, into the hands of a third person, on the ground of the fraud.

Where the vendor recovers a judgment for the price of the goods, before he has notice of the fraud, he cannot file a creditor’s bill against the vendee for the purpose of collecting the amount of the judgment out of the equitable assets and choses in action of the defendant, and in the same bill claim to follow the goods, or the proceeds thereof, into the hands of a third person, on the ground that the original sale was fraudulent and Void. Neither is a bill with a double aspect proper for such a case.

A bill with a double aspect may be filed where the complainant is in doubt whether he is legally entitled to one kind of relief or another, upon the facts of the case as stated in the bill; in which case Ins prayer should be framed in the alternative, so that if the court decides against him as to one kind of relief prayed for, be may still obtain the proper relief under the other branch of his alternative prayer.

So also, where the complainant is entitled to relief of some kind against the defendants, upon the facts stated in his hill, if the nature or kind of relief to

which he is entitled depends upon the existence of a fact of which he is ignorant, he may allege his ignorance of such fact, and may frame his prayer for relief in the alternative, so as'to obtain the appropriate relief according as the fact shall appear at the hearing of the cause.

Where a bill has been filed for a particular purpose, and has been sworn to for the purpose of obtaining an injunction, which injunction has been dissolved upon the coming in of an answer denying the whole equity of the bill, the court will not allow an amendment the effect of which will be to change the whole character of the litigation.

This was an appeal from a decision of the vice chancellor of the first circuit, refusing leave to the complainant to amend a sworn bill. The bill stated the recovery of a judgment in favor of the compláinant, against the defendant Brewster, for about $700, on a bond and warrant given for goods sold to him by the complainant, upon which judgment an execution had been issued, and returned unsatisfied. The bill contained the usual allegations required to be stated in creditors’ bills, by the -189th rule. The complainant also charged that the goods for which the bond and warrant were given, were obtained from him upon false and fraudulent representations, made by Brewster, and by Ramsdell and Brown the other defendants, that Brewster had a capital of $2000, and was safe to trust; and that about the time of the making these false and fraudulent representations, Brewster gave to Ramsdell and Brawn a bond and warrant of attorney to enter up judgment, for a large amount, to secure some pretended claim of Ramsdell and Brown, or for credits or advances to be given or afforded to Brewster by them. The complainant further charged that it was fraudulently agreed, between Brewster and Ramsdell and Brown, that they should aid and assist Brewster in setting up business and in obtaining credit, and particularly in obtaining goods on credit, and that Brewster should in any event secure them from loss; and that if he was unsuccessful in business, he should secure any claims they might have against him, in preference to all other creditors. And that the bond and warrant of attorney to Ramsdell and Brown were given, and the false and fraudulent representations upon which the goods of the complainant were obtained were made, in pursuance of and in accordance with such agreement to give them a preference. The complainant fur-

'¿her alleged, in his bill, that subsequent to the delivery of his goods to Brewster, the latter made an assignment of his goods, household furniture and effects to Ramsdell and Brown, for the purpose of defrauding the complainant and other creditors; 4he principal part of which goods and effects, so assigned, were the same goods obtained from the complainant upon such fraudulent and false representations, or the proceeds of such goods. The complainant therefore prayed that the bond and warrant, giveii to Ramsdell and Brown, and the judgment entered thereon, and the assignment from Brewster to them, might be adjudged fraudulent and void j that the assigned property and effects might be delivered up; that an account thereof might be taken ; and that the debt of the complainant, and the debts of such other creditors as might come in under the decree, might be paid out of such property and effects, according to their respective priorities. The bill also contained a prayer for an injunction, for a receiver to take charge of the assigned property, and for general relief. Upon the coming in of the answer of Ramsdell and Brown, denying all fraud on their part in obtaining the goods and all knowledge of any fraudulent misrepresentations on the part of Brewster, and denying all fraud in the assignment, which assignment, as they alleged, was made to one of them to secure the payment of a bona fide debt due to both, the injunction was dissolved. And upon an appeal to the chancellor, the decision of the vice chancellor dissolving the injunction was affirmed. On the hearing of that appeal, as it appeared from the answer of Brewster that he had obtained the goods upon the false and fraudulent representation that he had a cash capital of $2000, when in fact he had no such capital, the complainant’s counsel insisted that he had a right to follow the goods, or the proceeds thereof, into the hands of Brewster’s assignee, although they might have been fairly and honestly assigned to secure a bona fide debt; and that the injunction, for that reason, ought not to have been dissolved. But the court held that the bill was not properly framed for that kind of relief; that the complainant, by taking a judgment for the amount of the goods sold, and by filing a creditor’s bill here to collect the amount of such judgment, had

affirmed the sale of the goods, and could not, therefore, treat the sale as a nullity. And that if the judgment had been taken, and the execution issued thereon, before the complainant was apprised of the fraud, he should have stated the fact in his bill. The complainant thereupon applied to the vice chancellor for leave to amend the bill, by charging that fact; and by changing and into or, at the conclusion of the prayer for special relief, so as to make the prayer in the alternative, for the specific relief asked for, provided that could be obtained, and if not, for such other relief as might be proper upon the case made by the bill. The vice chancellor denied the application ; whereupon the complainant brought the present appeal.