Mahler v. Schloss

It clearly, and ivithout dispute, appeared on the trial that on and prior to June 1st, 1874, the plaintiff occupied a store at No. 849 Broadway, for the sale of articles of fur; that on or about that day he granted to one Cornelius C; Carlton, for the firm of F. Carlton & Sons, the right to use a part of the store with a front window for the sale of umbrellas, at a rent of ten per cent, upon their gross sales. On the 1st of July following, Carlton & Sons executed to the plaintiff, upon the expressed consideration of $300, a bill of *295sale of all their stock of umbrellas, consisting of seven dozen,at $4 28i each.

An instrument in writing was produced on the part of the defendants, which the jury might find from the testimony to have been executed at the same time by the plaintiff, or with his authority, and as part of the same transaction, granting said F. Carlton & Sons an option to repurchase the same invoice of umbrellas within two months for $300, together with a profit to him of $25 ; the proceeds of whatever he should sell by the 1st of September, amounting to over $325, he was to hand over to Carlton & Sons, less ten per cent, commission on sales. While proceeding to sell umbrellas, the plaintiff added to the stock and purchased goods of that character to an amount (as he testified) of upwards of $1,000, and after he had sold about half the stock so purchased from Carlton & Sons, the defendants, on an execution in favor of the Messrs. 'Schloss, seized and took away all the remaining stock of umbrellas, including such as had been purchased by the plaintiff after the transaction with Carlton.

The evidence presented by C. C. Carlton, in opposition to plaintiff’s positive testimon}*' denying that either he, or any one in his behalf, remained in possession of the business after July 1st, is of the most meagre and unreliable character, and could scarcely warrant any finding of such possession.

The testimony fails to show that the price paid by the plaintiff for the seven dozen umbrellas, was so inadequate as to even suggest that any unconscionable advantage was being taken by him of the Carltons’ necessities.

The plaintiff denied any knowledge of the Carltons’ insolvency, and even of their being embarrassed, and there is no shadow of testimony tending to show that he acted with intention to defraud the Carltons’ creditors.

The defendants, therefore, could not, by force of their execution, assert any rights but such as could have been enforced by the Carltons.

The transaction, as evidenced by the bill of sale and counter-agreement, was of an absolute sale, with a right to *296repurchase within two months upon the terms stated. It-bore no feature of a mortgage, since uo debt or obligation-existed on the part of the Carltons for the $300 paid to them for the umbrellas. (Southworth v. Bennett, 58 N. Y. 659.). It was not a conditional sale, but was on its face, at most, a sale with a right to repurchase. The legal effect of the agreement could not, as between the parties, or those claiming under them, be varied by parol, except it was shown to-have been a mere device for usury. Being neither a mortgage nor a conditional sale, the property in the seven dozen umbrellas was absolute in the plaintiff, and for his agreement to resell, he was only liable as upon the executory agreement giving the Carltons the right of repurchase. Considering the absence of any testimony showing that the value-of the umbrellas sold plaintiff exceeded the $300 paid for them, it is difficult to understand how the question of usury could be made available to the defense in any aspect of the transaction.

Assuming, however, as claimed by the defendants, that notwithstanding this sale to plaintiff, the Carltons, through their clerks and agents, continued in possession, and that it was presumptively fraudulent as against the creditors of the vendors, the plaintiffs had a right to have the bona fides of the transaction submitted to the jury.

The judge erred in instructing the jury (aside from the question of possession) that “if it was a conditional sale, then it was void as against creditors.” ' In no aspect of the law can such a proposition be maintained. A conditional sale is, in all cases, operative as against the creditors of the vendor, and because on condition no fraud on creditors can be imputed to, or necessarily inferred from, the transaction.

. He also erred in charging that “ if it was a mortgage it was also void, for the reason that Mr. Schloss had the right to take possession of the goods under the execution, they being in the possession of Mr. Carlton, and being to all intents and purposes his goods.” In this connection plaintiff asked the judge to charge the jury “ that if. the jury should find that Carlton was in possession, this would only cast. *297upon the plaintiff the duty of showing that the transaction was free from fraud with reference to the creditors, as far as he was concerned.” If the instrument was a mortgage the prescribed time for redemption, had long since expired, and the title was absolute in the mortgagee. If the transaction was effectual as a sale as between the Carltons and the plaintiff (and that certainly was an issue to he determined by the jury), the question of the nature of the debtors’ possession presented by the plaintiff was one that ought to have been distinctly stated and explained by the judge to the jury. His refusal to charge as requested was a distinct intimation to them that it was not a matter for their consideration. The exception was well taken.

The judgment should be reversed, and a new trial had, with costs to abide the event.

Larremore and J. F. Dalv, JJ., concurred.

Ordered accordingly.