author: BRANTLY, C. J.

text:
    GALLICK, Appellant, v. BORDEAUX et al., Respondents.
    [No. 1,065]
    [Submitted March 9, 1899.
    Decided April 26, 1899.]

      Replevin — Pleading— General Denial — Evidence — Fraud — • Witnesses — Gross Examination — Sales-—Change of Posses,sion.

    1. In an action of claim and delivery, where the complaint contains only general allega- ■ tions of title and right of possession, without setting forth the origin of the title or the facts tending to destroy or rebut plaintiff’s claim, though including proof of a fraud, is admissible under a general denial.
    2. In an action against a constable and the sureties on his bond, to recover property seized by him under an execution, and damages, a plea of justification under the writ authorizes evidence that the alleged sale of the property seized, prior to the seizure, was constructively fraudulent because of a want of immediate delivery followed by a continued change of possession, or that the sale was actually fraudulent and designed to hinder the creditors of the seller, or that the sale was designed to operate merely as security for money advanced by the buyer.
    8. The declarations of the seller, after the sale but while still in possession, where the sale is attacked by a creditor on the ground of fraud, are admissible against the buyer to show the character of the seller’s possession and his interest in the premises.
    4. A witness for plaintiff (E. Gallick), who was in plaintiff’s employ, testified that, on the day certain saloon property was sold and delivered to plaintiff, he suggested to plaintiff to put up “his” sign on the saloon to show his ownership, which was done. Afterwards an execution was levied on the property as belonging to the seller. There was evidence that, after the levy, the sign was changed from “B.” Gallick to “E.” Gallick. Meld, that it was proper, on cross-examination, to ask the witness if he did not change the sign, both to contradict him and to show his interest.
    5. Plaintiff, a purchaser of a saloon, who testified in chief that he put up his sign on the saloon immediately after the sale, may be cross-examined as to whether he did not do so to defraud creditors of the seller.
    6. In any event, the allowing of such question, where answered in the negative, was not prejudicial error.
    7. The mere fact that the seller of a saloon was in possession 13 days after the sale, and at the time of a levy on the property as belonging to him is not conclusive -evidence of a fraudulent sale', where there was evidence of a cash consideration, a bill of sale, the putting up of a sign with the buyer’s name on it, and the hiring of the seller as bartender; and the further fact that the seller was out of possession for not more than 4 hours, which was on the day of the sale and pending an arrangement, does not conclusively show fraud.

      Appeal from District Court, Silver Bow County; William O. Speer, Judge.

    Action by Emanuel Gallick against Thomas J. Bordeaux and others. From a judgment for defendants, and an order denying -a new trial, plaintiff appeals.
    Reversed.

      Statement of the case by the Justice delivering the opinion.
    Action in claim and delivery to recover the possession of a stock of cigars, tobacco and liquors, and a lot of saloon furniture, with damages to plaintiff’s business by the wrongful seizure of and detention of the property.
    The complaint alleges, generally, ownership and right of possession in plaintiff, a wrongful seizure by defendant Thomas J. Bordeaux on May 15, 1895, a detention of the property since that date, and then continues: “That at the time of the seizure the plaintiff was engaged in running a saloon business in the city of Butte, Silver Bow county; that the property was his stock in trade; that by the wrongful detention by the defendant Thomas J. Bordeaux plaintiff’s business has been damaged to the amount of $1,000; that at the time of the seizure the defendant Thomas J. Bordeaux was a duly qualified and acting constable in Silver Bow county; that he seized the property as the property of one Bordoni, under a writ of execution out of the justice’s court of 17. F. Turner, a justice of the peace of Silver Bow county, in a cause wherein F. H. Cooney was plaintiff and F. A. Bordoni was defendant; that Bordoni had neither right, title nor interest in the property; that the defendant Thomas J. Bordeaux, at the time of entering upon his duties as constable as aforesaid, made and filed his official bond, conditioned as provided by law for the faithful performance of his duties; that the other defendants are his sureties upon his official bond; and that his seizure of the property, as alleged, was a breach of his official duty. ’ ’ The value of the property is alleged at $860.02. Judgment is demanded for the return of the property, or its value, and for $1,000 damages.
    The answer denies, generally, the ownership and right of possession in plaintiff and damage to his business, admits that the property was worth $176; alleges that the property belonged to Bordoni; and then justifies the seizure under a writ of execution in the case- of Cooney against Bordoni upon a judgment in favor of plaintiff therein.

      It was claimed by plaintiff at the trial that on May 2, 1895, he had purchased of Bordoni the goods and saloon furniture theretofore owned by the latter at a place in Butte known as the ‘ ‘Sonoma Wine Cellar, ’ ’ paying in full for them by advancing §180 to pay off a claim against Bordoni in favor of one Brennen, who had caused the property to be attached, and that after taking possession he had continued the business at the same place, making additions to the stock from time to time, as necessity required. It was also claimed that Bordoni was left in charge to run the business as plaintiff’s agent.
    The trial was had to a jury, which returned a verdict for defendants. From the judgment rendered thereon, and an order overruling his motion for a new trial, plaintiff appeals.

      John W. Cotter, for Appellant.
    Cross-examination.must be confined to matters brought out on direct examination, and must be responsive thereto. (Code of Civil Procedure, Section 3376; Thornburgh v. Hand, 7 Cal. 561; Harpers. Lamping, 33 Cal. 647.) A wide latitude is given to a cross-examination in cases of fraud. (Randall v. Greenhood et al., 3 Mont. 509.) But the cross-examination cannot be used to elicit facts which will constitute part of the defendant’s case. (Fredericks v. Clarh et al., 3 Mont. 258; Gridley v. Boggs, 62 Cal. 191.) The defendants’ answer does not, in any manner, set up or attack the sale from Bordoni to appellant, but simply denies that appellant is the owner of the same. There are no allegations of fraud in the sale to be found in the answer, and, therefore, appellant submits that the court was in error in a great many of its rulings in admitting evidence over appellant’s objections that the same was incompetent, irrelevant and immaterial under the pleadings. If fraud is a necessary part of plaintiff’s or defendants’ case, the facts constituting the fraud should be set out in the pleadings, so that the opposite party may know what he has to meet. (Cobbey on Replevin, Sec. 824; Smith v. Auerbach, 2 Mont. 348, 349; Bidden. Irvine, 9 Mont. 251; 8 Am. & Eng. Ency. of Law, 653, note 3.)

      One of the grounds of appellant’s motion for a new trial is, that the evidence is insufficient to sustain the verdict in the case, and we submit that under the authorities above cited and the authorities hereinafter cited, that if appellant’s position is correct with reference to the objections, that there is no competent evidence of any character in the case to support the verdict. All of the evidence in the ease that in any manner tends to support the verdict is based upon fraud, or a fraudulent sale of the property in question, or upon statements made by Bordoni in the absence of appellant. There being no fraud pleaded, we submit that the evidence was incompetent upon that proposition, and we submit, further, that the statements of Bordoni, as shown by the record, were entirely incompetent for any purpose. The respondents contended upon the trial that Bordoni, being the bartender for the appellant in the saloon in question, that any statement that he might make was competent to' be shown against the plaintiff. It is only where the acts of the agent are admissible that his contemporaneous declarations, explanatory of these acts, are admissible. (1 Greenleaf on Evidence, Secs. 113, 234; 2 Wharton on Evidence, Secs. 1173-1175; Story on Agency, Secs, 134-138; Hutchings v. Castle, 48 Cal. 152; Beasley v. San Jose Co., 92 Cal. 388, 28 Pac. 485; Birch v. Hale, 99 Cal. 299, 33 Pac. 1088.) The record shows that Bordoni sold the place, as claimed by plaintiff, to the plaintiff long prior to the time of making the alleged admissions and declarations. The declarations of a vendor made' after a sale and delivery of personal property are not admissible in evidence to show a fraud in the sale. (Hutchings v. Castle, 48 Cal. 152, 153; Garlick v. Bowers, 66 Cal. 122; Briswalter v. Palomares, 66 Cal. 261; Demartin v. Demartin, 85 Cal. 75; White v. White, 86 Cal. 223; Sukefórth v. Inrd, 87 Cal. 399; Winslow v. Gohransen, 88 Cal. 453, 26 Pac. 504; _Z?’Arago v. Produce Co., 65 Texas 106, 31 S. W. 713; 1 Jones Ev., Sec. 246; 1 Rice Ev., p. 471; Beasley v. San Jose Co., 92 Cal. 388, 28 Pac. 486.) A judge shall not charge the jury with respect to matters of fact. (Wastl v. Montana Union By.

      Co., 17 Mont. 213.) There being evidence in the case tending to show an actual delivery of the property and a change of possession, it was a question for the jury to determine whether there was an actual and continued change within the meaning of the law. (O’ Gara v. Lowry, 5 Mont. 127; Rochelean v. Boyle, 11 Mont. 151.) The employment of the vendor as a clerk would not show such want of continued change of possession in the vendee to render the sale void as a matter of law. (O’ Gara v. Lowry, 5 Mont. 127; Rochelean v. Boyle, 11 Mont. 151, 167; Stevens v. Irvine, 15 Cal. 503; Godchausa et al. v. Mulford, 26 Cal. 316, 323; Porter v. Bucher, 98 Cal. 151, 33 Pac. 335.) Appellant further contends that the instructions above referred to are contradictory of Instruction Number 15, given at the request of plaintiff, and for this reason, in addition to the reasons hereinbefore urged, the said instructions are erroneous and misleading. Where instructions on a material point are contradictory and inconsistent, the judgment must be reversed. (Flick v. G. II. d¡ R. M. Co., 8 Mont. 298, 305; Territory v. Owings, 3 Mont. 137, 139; Hayne, New Trial and App. Sec. 123, p. 350 and cases cited.) Where conflicting instructions may have misled the jury, it is ground for a new trial. (Kelly v. Cable Co., 7 Mont. 70, 77; Wenner v. McNulty, 7 Mont. 37.)

      C. P. Drennen, for Respondents.
   BRANTLY, C. J.

1. Plaintiff insists that the court erred in permitting the defendants to introduce proof tending to show that the plaintiff’s title to the property .in controversy was founded in fraud, in the absence of a special allegation in their answer setting up the facts. The defendant Thomas J. Bordeaux was allowed, over the objection of plaintiff, to detail a conversation, had with Bordom at the time of the levy, in which Bordoni told him, substantially, that he was in debt to the plaintiff about $100, besides debts he owed to other persons; that, if his creditors would let him alone, he would pay them; that he had put the business in Mr. Gallick’s name for protection; that the business was in fact his, but that the levy of the execution “settled it.” Other witnesses-also testified to similar statements by Bordoni. One of these, Del Grosso, who worked as bartender in the saloon after the sale to Gallick, testified to a conversation between Bordoni and Gallick, just after the time of the sale on May 2d, in which Gallick said to Bordoni: “If any one asks you to whom this-business belongs, just tell them it belongs to me. Nobody will bother you from this on. You go along, and attend to your business.” Then, turning to witness, he said: “You go along, and attend to your business. You are working for Bordoni.” This witness testified, further, that he worked for Bordoni, and was paid by him. The evidence of declarations by Bordoni was further objected to on the ground that declarations made by him after the sale to Gallick were not competent for any purpose, as against Gallick. This proof was all allowed, on the theory that it was admissible under the denials in the answer without special allegations of fraud. We think the evidence admissible, in so far as it tended to show that the arrangement between the plaintiff and Bordoni was-fraudulent. It is the general rule that, where a party to an action relied upon fraud, he must plead it. In replevin, however, it seems to be the rule, supported by the great weight, of authority, that where the complaint contains only general allegations of title and right of possession, without setting forth the origin of the title or the facts upon which it is based, the defendant may deny these allegations generally, and upon the trial give proof of any fact tending to destroy or rebut plaintiff’s claim. Mr. Phillips, in his work on Code Pleading., states the rule thus: “A general denial puts in issue all the essential averments of the complaint, puts the burden of proving them upon the plaintiff, ■ and admits evidence by the defendant (1) to controvert plaintiff’s evidence, (2) to disprove his allegations, and (3) to prove other and inconsistent facts. Under such denial, the defendant may prove his right to possession, or that he, as an officer, levied on the property at the suit of a creditor of him from whom the plaintiff obtained it in fraud of creditors, or he may show title in a stranger.” (Section 492.) The reason of the rule is that it is unfair to compel the defendant to anticipate what the proof of plaintiff’s title will be, and allege specific objections to it, before he will be heard to attack it with his proofs. The plaintiff, under his general allegations, is allowed to show any title he can, no matter what may be its source or the facts upon which it is based. Under his denial, the defendant must, of necessity, be allowed to present proof of anything tending to defeat the title which the plaintiff attempts to establish. If the complaint does not disclose the plaintiff’s title, the defendant may have no knowledge of it until it is revealed by the proof at the ’trial. Especially is this true of an officer who has taken the property under his writ from the possession of the defendant debtor named therein, and is afterwards met by a claim thereto from a stranger, about whose title he knows nothing. There is some conflict in the authorities, but we are of the opinion that this view is correct on reason and principle. The following authorities support it: Cobbey on Replevin, Sec. 752; Burchinell v. Butters (Colo. App.) 43 Pac. 459; Jones v. McQueen (Utah) 45 Pac. 202; Munns v. Loveland (Utah) 49 Pac. 743; Abbott’s Tr. Brief on the Pleadings, Secs. 942, 958; Bailey v. Swain, 45 Ohio St. 657, 16 N. E. 370; Eureka Steel Works v. Bresnahan, 66 Mich. 489, 33 N. W. 834; Blue Valley Bank v. Bane, 20 Neb. 294, 30 N W. 64; Merrill v. Wedgwood, 25 Neb. 283, 41 N. W. 149; Graham v. Warner’s Ex’rs, 3 Dana, 146; Mullen v. Noonan (Minn.) 47 N. W. 164; Johnson v. Oswald, 38 Minn. 550, 38 N. W. 630; Delaney v. Canning, 52 Wis. 266, 8 N W. 897; Mather v. Hutchinson, 25 Wis. 27; Hotchkiss v. Ashley, 44 Vt. 195; Bliss v. Badger, 36 Vt. 338; Lane v. Sparks, 75 Ind. 278; Stephens v. Hallstead, 58 Cal. 193; Eaton v. Metz (Cal.) 40 Pac. 947; Pulliam v. Burlingame, 81 Mo. 111; Gray v. Parker, 38 Mo. 160; Schulenberg v. Harriman, 21 Wall. 44; Bailey v. Bayne, 20 Kan. 657; Bliss on Code Pl. Sec. 328 and notes; Griffin v. Railroad Co., 101 N. Y. 349, 4 N. E. 740.

In addition to the issue made upon the allegations of the complaint, the defendants herein allege justification under the writ of execution in the case of Cooney against Bordoni, and claim the right to hold the property under this writ. The defendants, therefore, through the writ of execution in the hands of the officer, stand in the position of creditors, as to whom a. conveyance by a debtor, either actually or coñstructively fraudulent, is absolutely void. They were, therefore, properly permitted to introduce any proof under their answer tending to show that the sale from Bordoni to plaintiff was constructively fraudulent, because there was no immediate delivery of the property followed by a continued change of possession, or that the sale was actually fraudulent and designed to hinder’ and delay the creditors of Bordoni, or that the arrangement between Bordoni and Gallick was designed to operate as a security to the firm of Gallick Bros, for the money advanced to Bordoni to pay the Brennen judgment. It is not necessary to decide the question whether, in cases of this bind, where the officer seizes property under his writ in the possession of the defendant named in the writ, it is necessary to plead specially the facts in justification. Many of the authorities cited support the rule as laid down by Mr. Phillips, supra. In this, case, however, he has essayed to do so, and no question is made as to the sufficiency of his allegations in this regard. Inasmuch as he occupies the position of one who claims the-property, not as owner, but by virtue of a special interest therein, as an officer under his writ and for the purpose indicated therein, there are reasons why he should be required to do so; for it is only by this special property'that he can be-permitted to contest the right of the plaintiff. So far as the defendant officer here is concerned, except for his writ and the rights acquired by his seizure thereunder, the arrangement between the plaintiff and Bardoni, no matter how fraudulent, in fact or in law, was valid and binding as to all persons whomsoever.

The conclusions here reached are in conflict with the case of Bickle v. Irvine, 9 Mont. 251, 23 Pac. 244, which was followed by the case of Davis v. Morgan, 19 Mont. 141, 47 Pac 793, and perhaps others. These cases are founded upon the •cases of Smith v. Auerbach, 2 Mont. 349, and Botcher v. Berry, 6 Mont. 448, 13 Pac. 45. Smith v. Auerbach was a ■case in which the plaintiff sought to recover the possession of •certain personal property as the assignee in bankruptcy of Louis & Coleman. The defendant held the property under a chattel mortgage. The plaintiff, after setting forth the character of his title, undertook to allege facts sufficient to show that defendant’s mortgage was void under the bankrupt law. The complaint was held bad, because it alleged a mere conclusion, instead of the facts showing the fraudulent character of the mortgage. In Botcher v. Berry the plaintiff was assignee in insolvency of McLean & Co. Certain goods embraced in the assignment had been seized under attachment by the defendant, as sheriff, at the suit of one of the creditors of McLean & Co. The plaintiff sought to recover as assignee, alleging the facts upon which his title was based. The defendant attacked the assignment for fraud. The trial court, on motion of plaintiff, struck out as immaterial the part of the answer alleging fraud. This Court held that the facts constituting the fraudulent character of the assignment were properly pleaded, and that it was error to strike out that part of the answer. The case of Bickle v. Irvine was also one in claim and delivery. The complaint contained general allegations of •ownership and right of possession in plaintiff. The answer was a general denial, and justification under a writ of attachment.- ■ It was held by this Court, under the authority of Smith v. Auerbach and Botcher v. Berry, that the defendant eould not, under .this answer, introduce proof showing that the bill of sale upon which the plaintiff relied as showing his title ¡by- purchase was constructively fraudulent, because the sale was in violation of the statute against fraudulent conveyances. In Davis v. Morgan this Court held, upon the authority of these cases, that the defense of fraud in this class of cases was a special affirmative defense, and that therefore, on cross-examination, the plaintiff, and his witnesses could not be interrogated touching the matters involved in this affirmative defense. As to the two cases first mentioned,, they are clearly correct upon principle. In the former, the plaintiff sought to overturn a fraudulent title under which he alleged defendant claimed. In the latter, the defendant sought to overturn the title of plaintiff, based upon the assignment, by alleging facts and circumstances to avoid it on the ground of fraud. These cases are, therefore, no authority for the cases of Bickle v. Irvine and Davis v. Morgan, but support the general rule. Moreover, in a later case (Pincus v. Reynolds, 19, Mont. 564, 49 Fac. 145), this Court did not adhere to the rule of these last two cases, but held that in this class of cases the plaintiff must recover upon the strength of his own title, and that the whole matter of fraud could be investigated upon the cross-examination of plaintiff and his witnesses. We have therefore decided not to follow the authority of these earlier cases, but to adopt the rule announced herein as more in consonance with reason and principle.

Nor do we think that there is any merit in the objections to declarations of Bordoni on the ground that they were made after he parted with his title to ¿he property in controversy. The other proof showed beyond controversy that, within three or four hours after the transaction of May 2d, by which E. Gallick claims to have purchased the property, Bardoni was again in possession, running the business as before. He had hired a bartender at his own expense to assist him in running the business. The witness Heilbronner testified that .he had sold to Bordoni a bill of goods, to be added to the stock, not as the agent of Gallick, but upon his own account. It is true Gallick and his witnesses testified that Bordoni was only the agent of Gallick to run the business for him, but the evidence nowhere showed that any arrangement had been made by which Bordoni was to account to him in any way for the proceeds of the business. The evidence up to that point, with the exception of the single fact that Gallick’s sign was put up in the place, tended to show that the proprietorship was the same as before the sale. It is the general rule that the declarations of the vendor of the property in disparagement of the title, after he has” parted with his interest therein and his possession, are not admissible against his vendee. But this principle is not applicable to fraudulent sales of property, where the property remains in the possession of the vendor, and the sale is attacked by a creditor on the ground of fraud. The declarations of the vendor under such circumstances, while he is still in possession, and his acts of ownership in regard to the property, are admissible for the purpose of explaining the character of ,his possession, and as shedding light upon the question of his interest therein. (Jones on Evidence, Sec. 354; Murphy v. Mulgrew, 102 Cal. 547, 36 Pac. 857; Redfield v. Buck, 35 Conn. 328, s. c. 95 Am. Dec. 241; Smith v. Boyer, 26 Am. St. Rep. 373 (Neb.) 45 N. W. 265; Wharton on Evidence, Secs. 1166, 1167; Blake v. Graves, 18 Iowa, 312; Bump, on Fraud. Conv. (4th Ed.) Sec. 600; Waite on Fraud. Conv. (3d Ed.) Sec. 279; Roberts v. Medbery, 132 Mass. 100.)

The declarations of Bordoni, while still in the possession of the property which the plaintiff claimed to have purchased from him, were clearly admissible, as shedding light upon the character of the transaction between him and the plaintiff, and the character of Bordoni’s possession; and it is upon this theory that they are admissible, and not upon the theory, as counsel for respondents claim, that Gallick was bound by the declarations of his agent employed by him to run the business for him. If Bordoni were in fact the agent of Gallick, employed to run the saloon business for him, doubtless, within the scope of this business, the plaintiff would have been bound by his declarations. The declarations admitted were clearly not within the scope of that business, but had to do with the title to the property then in possession of Bordoni, the recent former owner.

2. Meyer Genzberger, a witness for plaintiff, testified on direct examination that he was in the employ of the plaintiff, and was present on May 2, 1895, when the property was sold and delivered to the plaintiff by Bardoni. He suggested to the plaintiff, he says, that he (plaintiff) should put up a sign in the saloon showing that he was the owner, and that this was done. On cross-examination he was asked if, after the execution was levied, he did not go into the place to change the sign from £1B. ” Gallick to £tE. ” Gallick. There is some testimony in the record tending to show that this was done by some one. The question was objected to as not proper on cross-examination, because the direct examination had been only as to matters connected with the sale by Bordoni to plaintiff on May 2d. The witness was required to answer, and in reply to the question said that he had not done so. It is earnestly contended that this was error. We do not agree with counsel. If, in fact, the witness had changed the letter upon the sign from ££B.” to ££E.,” the showing of this would have tended to contradict his statement on direct examination that E. Gallick had put up his own sign at the suggestion of the witness. Again, if the sign really had on it the initial £B., ’5 instead of ‘E., ” and the witness could be shown to have changed it to ££E.,” the proof of this fact would have tended to show the interest of the witness in behalf of his employer. Further, the witness testified on direct examination that he was in the saloon after the levy, and saw E. Gallick’s sign there. We think the question proper, as having immediate connection with the direct examination. (Code of Civil Procedure, Sec. 3376.)

Plaintiff was called as a'witness in his own behalf. He testified on direct examination that, at the time he purchased the Sonoma Wine Cellar stock and furniture from Bordoni, he had put up his sign, reading £ £E. Gallick, Proprietor, ’ ’ on a partition inside the saloon, facing the front. He was asked on cross-examination, over the objection of his counsel, if he had not put up that sign to defraud creditors. He answered in the negative. Plaintiff complains of this as prejudicial error. Admitting that it was error to permit the inquiry, it was error without prejudice, because no evidence prejudicial to plaintiff’s claim was elicited by it. But we do not think it was error to allow the question. It was proper to thus interrogate the plaintiff touching the character of the relation between him and his alleged vendor.

3. There is no fault to be found in the rulings of the court upon questions of evidence during the progress of the trial, but prejudicial error was committed in directing the jury in the following paragraphs of the charge:

“(12) The court instructs the jury that Bordoni could not be allowed to remain in the apparent sole and exclusive possession of the goods described in the plaintiff’s complaint after the sale thereof, and, if the jury find that he was in such sole and exclusive possession at the time the defendant herein levied upon said goods and took possession thereof, that such possession of Bordoni is inconsistent with an open and notorious delivery and actual change of possession, and that such possession by Bordoni is conclusive evidence of fraud.
“(131 . The jury are instructed that, if they find from the testimony that F. A. Bordoni was in the sole possession of the property levied upon at the time of the levy of the execution issued in the case of Cooney against Bordoni, and they find that Bordoni, the admitted former owner of the personal property so levied upon, had been out of the possession for a period not exceeding four hours, then they must find for the •defendant. ’ ’

The alleged sale by Bordoni to plaintiff was made on May '2d. The evidence of plaintiff tended to show that the place was then in charge of an officer, who had attached the stock and furniture at the suit of one Brennen. The claim of Brennen, amounting to $180, was paid by Gallick Bros. It was then assigned to E. Gallick, and a bill of sale made to him by Bordoni. Thereupon the plaintiff took the keys, locked up the place, and went with Bordoni to the store of Gallick Bros. Within a few minutes afterwards an arrangement was made with Bordoni to reopen the place and run the business for the plaintiff. Thereupon the place was reopened, Gallick’s sign put up, and Bordoni went to work as bartender at $2.50 per day. The whole arrangement was effected in three or four hours. The levy of the execution was on the 15th. Under the former of these instructions, the defendants were entitled to a verdict, on the single fact of Bordoni’s possession at the date of the levy. Under the latter, the jury should have found for defendants, upon this fact and the additional one that Bordoni had not been out of possession more than four hours. Both instructions withdrew from the jury the consideration of all the other facts and circumstances, appearing in the proof and briefly summarized above, which plaintiff was entitled to have considered by them. The question as to the character of the sale was one of fact, to be determined by the jury from all the evidence in the case, and not from these isolated facts, to which their attention was specially called. The apparent exclusive possession by Bordoni on the 15th, thirteen days after the sale, was not inconsistent with the conclusion, possible from a consideration of all the evidence, that the sale was in compliance with the law and made in good faith; nor was it within the province of the court to say that the return of the property to the vendor after four hours furnished ground for a conclusive presumption of fraud.

Complaint is made of other instructions, but an examination of the charge fails to reveal any prejudicial errors other than those already noted. With these two exceptions, the charge, though brief, fairly states the law applicable to the issues involved, and is as favorable to the plaintiff as he could ask.

4. The point is made that the evidence is not sufficient to .sustain the verdict. As the judgment must be reversed on •account of the errors noted in the instructions, we refrain from expressing an opinion on this branch of the case; nor are we to be understood as expressing any opinion as to the liability of defendants A. JEL Barrett and John R. Bordeaux, in this form of action, as sureties upon the official bond of Thomas J. Bordeaux. No question was made on this point, either on the argument or in the briefs of counsel.

Let the judgment be reversed, and the cause remanded, with directions to the court below to grant a new trial.

.Hunt and Pigott, JJ., concur.


source: Caselaw Access Project

author: HUNT, J.

license: Public Domain

text:
    COSIER et al., Appellants, v. McMILLAN, COUNTY TREASURER, Respondent.
    [No. 1,073.]
    [Submitted April 5, 1899.
    Decided April 26, 1899.]

      Taxation — Indian Reservation — Indian Post Trader — Exemption — Board of Equalization — Irregularity of Assessment— Waiver.

    1. Indian reservations are not without the jurisdiction of the State for the purposes of taxing personal property, in which the Indians are not interested, held upon such reservations.
    2. The fact that an Indian post trader is licensed by the government to trade with Indians does not exempt his stock in trade from state and county taxation, such trader being a mere licensee, and not an agent, of the government,
    3. Irregularity of a hoard of equalization in placing a value on a taxpayer’s property, instead of requiring the assessor to do so, was waived by the taxpayer, who, with notice thereof, and in response to the notice, appeared before the board to request it to strike the assessment because the property was not subject to taxation, no objection being made to the irregularity, nor to the valuation adopted.

      Appeal from District Court, Valley County; Dudley Du Bose, Judge.

    Suit by H. M. Cosier and Annie Shaw, co-partners, doing business under the firm name and style of H. M. Cosier & Co., against A. J. McMillan, as county treasurer of Valley county. There was a decree for defendant, and plaintiff’s appeal.
    Affirmed.
    Statement of the case by the Justice delivering the opinion.
    Action to restrain the defendant county treasurer of Valley county from collecting taxes on property situated on the Fort Peck Indian reservation, Montana, and used as the stock in trade of the duly-licensed Indian post trader at that place. H. M. Cosier was the duly-licensed military post trader at Fort Peck, and "W. B. Shaw was the duly-licensed Indian post trader at the Fort Peck Indian reservation at Poplar Biver, Montana. The stock of goods used by each of these parties, respectively, as such trader, was owned by these plaintiffs. In 1893 the assessor of Valley county listed for taxation certain property belonging to the plaintiffs, but did not include either of the stocks of goods used by said traders. No change was made in that assessment list by the assessor, and he never listed the goods for taxation until the board of equalization for Valley county met. At the meeting of that board, held on July 17, 1893, the following resolution was adopted: ‘'On motion the assessment of H. M. Cosier & Co., of Poplar River, was raised on merchandise in store on military reservation from nothing to five thousand dollars, and, on motion, the same action was taken as to their store on the Indian reservation at Poplar River.” Thereupon the property was, by the order of the board of equalization, placed on the assessment roll for taxation. On August 7, 1893, W. B. Shaw, as agent for the plaintiffs, appeared before the board of equalization, and filed an application, supported by affidavit, to strike from the assessment roll the stocks of merchandise so listed for taxation. This application was refused. Plaintiffs offered to pay the taxes on the horses and cattle which were listed for taxation as their property, but the county treasurer refused to receive or accept it, or give a receipt therefor, unless they would pay all taxes assessed against them, including the taxes on these stocks of goods. Thereupon this action was commenced. The trial court held that a stock of goods used by an Indian trader was and is subject to taxation, and gave judgment accordingly. Plaintiffs appeal.

      Cullen & Toole and Walsh & Newman, for Appellants.
    The appointment of a post trader on an Indian reservation is a part of the policy of the nation in dealing with the Indians and other persons upon the reservation, and the presence of such person with his stock of goods, wares and merchandise is for the interest of the tribe of Indians upon that reservation, and enables the government to carry out its treaty with the Indians, and is expressly authorized by law. (Rev. Stat. U. S., Secs. 2128, 2129, 2131; Adams v. Freeman, 60 Pac. 135.) If taxation is allowed, it may be exercised to such an extent as to become so burdensome and oppressive as to contravene the policy of the government and bring about a conflict in the authorities between the State and Federal Government. In this respect the case is analogous to taxing national banks, whose charters are granted by acts of Congress and the taxation of which is prohibited upon similar grounds. If the State can tax the goods, wares and merchandise of such post traders, it can also require a license to do business, and a case might arise out of conflicting authority which would prohibit the exercise and practice of the policy of the government in establishing these post traders upon Indian reservations, and would disable the government and prevent it from carrying out its treaties with the Indians. The right to regulate commerce with the Indians is reposed in Congress, and Congress, by reserving exclusive jurisdiction over these lands in the act of admission, and providing for the appointment of Indian traders, continues to regulate commerce with these Indians as it has always done, and the Constitution of the United States and the laws made in pursuance thereof, being' supreme over the several states, the power of regulation cannot be interfered with, limited or restrained by any exercise of state authority. When, therefore, it is held that the power to tax is at the discretion of the authority which wields a power which may be carried to the extent of annihilation of that which it taxes, and therefore may defeat and nullify any authority which may elsewhere exist for the purpose of protection and preservation, it follows as a corollary that the several states cannot tax the commerce which is regulated under the acts of Congress. (Cooley on Taxation, p. 62; McCullough v. Maryland, 4 Wheat. 316-425; see, also, Weston et al. v. City of Charlestown, 2 Pet. 449; Osborn et al. v. Bank of the United States, 9 Wheat. 738; Cooley on Taxation (2d Ed.) 83; Desty on Taxation, Vol. I, p. 75.)
    There is a broad distinction between cases where the property is that of an Indian post trader upon an Indian reservation, who is upon that reservation under a license from the general government and as its agent is carrying out the provisions of its treaty with the Indians, and where property is upon a reservation for other purposes. In all cases where this question has been presented to the courts, it has been invariably held that such property is not subject to taxation. (Foster v. Commissioners of Blue Earth Co., 7 Minn. 84; Fremont Co. v. Moore, 19 Pac. 438.) The opinion of the Attorney General of the United States on this question is entitled to great weight .by this Court. We respectfully invite the attention of the Court to the opinion of Attorney General Wirt, 1 Opinions Attorney General, p. 645. See, also, Opinions of Attorney General, 19 Opinions, 161. Also, Opinion of Attorney General rendered April 29, 1893. We have been unable to procure the citation to that opinion. We also invite the attention of the Court to the opinion of the Commissioner of Indians as set forth in the following letters:

    The fact that the property in question was owned not by the Indian trader, but by the plaintiffs in this action, does not change the rule. The exemption from taxation is not a personal privilege. It is the property that is exempt. The Indian post trader being duly licensed to trade on the reservation, could make any arrangement he wished with reference to procuring his stock of goods to enable him to carry on the business of Indian post trader. (Dunn v. Carter, 1 Pac. 66.) We respectfully submit that the property of an Indian post trader is not subject to taxation.

      G. B. Nolan, Attorney General, for Respondent.
   HUNT, J.

1. Although the people of the state of Montana agreed, as a condition to the admission of the state into the Union, to disclaim any right or title to all lands lying within the limits of the state owned or held by any Indian tribes, and that until title thereto shall be extinguished by the United States the same shall be and remain subject to the disposition of the United States, and under the absolute jurisdiction and control of Congress, still Indian reservations are not without the jurisdiction of the State for the purposes of taxing personal property, in which the Indians are not interested, held upon such reservations. In Truscott v. Hurlbut Land & Cattle Co., 19 C. C. A. 374, 73 Fed. 60, the United States Circuit Court of Appeals said, in reference to taxing cattle upon an Indian reservation: “We are unable to see any good reason why the authority of the state and its subordinate subdivisions, the counties, may not also include the taxation of all such personal property found within their geographical limits, although upon the reservation in question, provided, as in this case, the Indians are in no way interested in it. ’ ’

Appellants, however, would have the courts except their property from the operation of the taxing power of the state because it constitutes the stock in trade of an Indian post trader, and is used in trading with the Indians under a license obtained from the government of the United States; or, in other words, appellants contend that the presence of an Indian trader with a stock of goods on an Indian reservation is an agency of the general government to carry out its treaty with the Indians, and is expressly authorized by law. ■ W e cannot concur in this argument. There was a time when the government furnished the merchandise traded to the Indians, and when the person who dealt out the property so furnished acted as an agent of the United States, which made the commerce so conducted with the Indians an agency of the government. But long ago (in 1834) that policy was changed, and now any loyal citizen is authorized to trade with an Indian tribe upon giving a bond conditioned to faithfully observe all laws and regulations made for the government of trade and intercourse with the Indian tribes. (Bev. St. U. S. Sec. 2128 •et seq.) So that at present an Indian post trader is á licensee with authority to trade with the Indians, required, of course, to observe the laws and regulations appertaining to such intercourse,. — a privileged trader on his own account, responsible to no one except for the observance of the aforesaid laws and regulations and for violation of the same. His real connection with the government seems to be that he is privileged, upon conditions and under regulations, to go onto the reservation to seek as customers the wards of the United States living upon the Indian reservation, permission to trade with whom upon their reservation can only be obtained from the guardian government, which reserves the right to revoke the license or terminate the privileges at its pleasure. (Id. Sec. 2131.) We are unable to see how such a relationship between a citizen and the general government makes the citizen enjoying the privilege an agent of the United States, or how his goods, in which neither the government nor the Indians have an/ interest, are .a federal agency or means employed by the government for the execution of its powers, the taxation of which by the state is forbidden by implications of the Constitution of the United States; provided there is no unjust discrimination between the property of the citizen situate upon the reservation and other like kinds taxed by the state. (Thompson v. Railroad Co., 9 Wall. 579; Railroad Co. v. Peniston, 18 Wall. 5; Central Pac. R. Co. v. California, 162 U. S. 91, 16 Sup. Ct. 766; Moore v. Beason (Wyo.) 51 Pac. 875; Thomas v. Gay, 169 U. S. 264, 18 Sup. Ct. 340; Wagoner v. Evans, 170 U. S. 588, 18 Sup. Ct. 730.)

2. It is also said that the tax cannot be collected in this instance because the levy was not made m the manner provided by law. It appears that the assessor, prior to the meeting of the county board of equalization, made no assessment upon the stock of goods of H. M. Cosier & Co. for 1893, though he did make assessments to the value of $2,900 upon other property owned by the firm. Afterwards, at a meeting of the board of equalization of Yalley county, held on July 17, 1893, the entry was made as quoted in the statement preceding this opinion. The assessor testified on the trial that he made the changes in the assessment so as to include the merchandise involved by order of the board of equalization, and that the total assessment as equalized against Cosier & Co. for 1893 was $12,900. The record also shows that on August 7, 1893, at a meeting of the said board of equalization, plaintiff's, by W. B. Shaw, as agent, appeared before the board and requested that said assessment be stricken off the lists upon the-ground that the property was not subject to taxation, which application was denied by the board.

The action of the board of commissioners, sitting as a board of equalization, in placing a value upon the property in the manner it did, and in causing the entry quoted to be spread upon its minutes of July 17th, was irregular in fact and in form. The function of a county board of equalization is to-require the assessor to assess taxable property which has escaped taxation, and to direct that official to make the proper entry upon the assessment book. The board itself should not make the assessment, its power being to equalize after an assessment has been made as directed by the assessor. (Session-Laws of 1891, p. 99, Secs. 68, 69; Political Code of 1895,. Secs. 3788, 3789.) But, unless this irregularity rendered the tax void, or substantially prejudiced plaintiff’s rights, the case should not be reversed. The assessment book was put in evidence on the trial. It-showed an entry by the assessor of the-plaintiff’s stock of merchandise, with the valuation placed thereon by tlie board. Plaintiffs had been duly notified (under section 69) of the action of the board of equalization in putting a valuation of $5,000 on their stock of merchandise-owned by them as Indian traders, and in response to this notice appeared before said board, not objecting in any way to. the irregularities of procedure in listing their property, not claiming they did not own the property so assessed, not objecting to the valuation adopted by the board and entered on the assessment book by the assessor, but only to request the board to strike from the lists the assessment of their merchandise used in Indian trading, on the sole ground that such, property was not subject to taxation at all under the laws of the state. We cannot escape the conclusion that by the conduct of the plaintiffs they intended to disregard any irregularities of the board of equalization or of the assessor in the assessment of their stock in trade, and to stand upon the single broad ground that the stock in trade of an Indian post trader lawfully trading on an Indian reservation is an agency of the United States, exempt from taxation by the state and any local subdivision thereof. There was no showing of prejudice to the plaintiff’s rights by error in the assessment by the board and assessor. It seems but just, therefore, that they should not be allowed to restrain the collection of the taxes for the mere irregularity referred to. (Cooley on Taxation, 2d Ed., p. 775.)

We find no error in the case. Judgment affirmed.

Affirmed.

Brantly, C. J., and Piggtt, J., concur.


author: PER CURIAM.

text:
    McDONALD et al., Respondents, v. GOODKIND, Appellant.
    [No. 1,082.]
    [Submitted April 13, 1899.
    Decided April 26, 1899.]

      Sales — Fraud—Rescission — Waiver — Stoppage in Tra/nsitu-

    i. seller, three days after shipping goods on the positive statement of the buyer as to his solvency, received a report that, in some quarters it was the opinion that the buyer owed more than he stated; that his real estate was worth much less than he stated; that he was generally believed to be heavily in debt to the banks; that no estimate of Ills worth is offered; that he is a man of good general reputation, and has a clear business record; that he meets all drafts on presentation, and apparently has the confidence of Ms bankers; — but, still relying on the buyer’s statement, the seller permitted the goods to be delivered. Held, that, under such information as that imparted by this report, the failure to stop the goods in transit, or to retake them from the buyer, was not a waiver of the right to rescind and retake them from the buyer’s assignee.

      Appeal jrom District Court, Lewis and Clarice County/ II. N. Blahe, Judge, and II. C. Smith, Judge.

    Action by R. L. McDonald and others against E. I. Good-kind. From a judgment for plaintiffs, and from an order denying a new trial, defendant appeals.
    Affirmed.

      II. G. ■Mclntire, for Appellant.
    This is an action to rescind a contract of sale upon the ground of fraud on the part of the vendee, and to enable plaintiffs to recover, it must be shown that they parted with the goods in question under a bona fide reliance upon the false statements made by Israel to the Bradstreet Agency. (Dingle v. Trash (Colo.) 42 Pac. 186; 2 Pomeroy’s Eq. Juris. (2d Ed.) Sec. 890.) “But false representations or fraud will not avoid a sale unless it appears that a seller was thereby induced to do that which he would probably not have done except for such fraud or deception. ” {Klopenstevn v. Midcahy, 4 Nev. 296; Slaughter's Administrators v. Gerson, 13 Wall. 379; Long v. Warren, 68 N. Y. 426; Oberla/nder v. Spiess, 45 N. Y. 175; Griswold v. Hazels, 71 N.' W. Rep. 972.) And plaintiffs must be justified in relying upon the representations made. ‘ ‘The foregoing requisite that the representation must be relied upon plainly includes the supposition that the party is justified, under all the circumstances, in thus relying upon it. * * * If after a representation of fact, however positive, the party to whom it was made institutes an inquiry for himself, has recourse to the proper means of obtaining information, and actually learns the real facts, he cannot claim to have relied upon the misrepresentation and to have been misled by it.”' (2 Pomeroy’s Eq. Juris. (2d Ed.) Secs. 891-892-893; ParrY. Peterson, 64 N. W. 863; Slaughter's Adminis

      trators v. Gerson, supra', Tootle v. Petrie, 65 N. W. 43; Starr v. Bennett, 5 Hill, 302.) “It has been repeatedly held that it is not every willful misrepresentation, even of a fact, which will avoid a contract upon the ground of fraud if it be of such a nature that the other party had no right to place reliance on it and it was his own folly to give credence to it; for courts of equity, like courts of law, do not aid parties who will not use their own sense and discretion upon matters of this sort. ’ ’ (Dugan v. Cureton, 1 Ark. 31; Moore v. Turbeville, 5 Am. Dec. 642; Crocker v. Ma/nley, 45 N. E. 577; Moore v. Recek, 44 N. E. 868.) Conceding that plaintiffs may have been justified in extending the credit and shipping the goods upon the representations contained in the first report received by them from the Bradstreet agency, still they certainly were not justified in permitting the goods to pass from their control and into the hands of the consignee after receiving the second report. It seems clear that the situation of the parties to the action is precisely as it would be had plaintiffs received the second report before the goods were shipped. Such goods were as much under their control as if they had not been shipped to the consignee, for they could at any time prior to their delivery have rescinded the sale and regained possession of them. (Kearney Milling & El. Co. v. U. P. By. Co., 66 N. W. 1059.) And the failure of plaintiffs to so stop the goods in transit constituted in effect a ratification and affirmance of the contract of sale after knowledge of the true condition of affairs. Having ratified the contract of sale with knowledge that the representations upon which it was founded were false, plaintiffs cannot now maintain this action to rescind and set it aside. (Bigelow on Estoppel (3d Ed.) 562; First Nat. Bank v. Skinner, 43 Pac. 679.) “Though a contract be in fact wholly invalid when executed, still * * * if it be acted upon afterwards by the parties to it as valid, they will, if sui juris, be estopped thereafter to allege its invalidity. ’ ’ (Bigelow on Estoppel (3d Ed.) 574; Wachsmuthv. Sims, 32 S. W. 821; Foster v. Rowley, 67 N. W. 1077, and cases cited; Hallaban r.. Webber, 40 N. Y. S. 103; Kearney Milling de El.

      Co. y. U. P. Ry. Co., supra; Berna/rd Leas Mfg. Co. v. Waller, 36 S. W. 531; Bank v. McKinney, 66 N. W. 280.)
    “The person who has been mislead is required, as soon as he learns the truth, with all reasonable diligence to disaffirm the contract or abandon the transaction, and give the other party an opportunity of rescinding it, and of restoring both of them to their original position. If after discovering the untruth of the representations, he conducts himself with reference to the transaction as though it were still subsisting and binding, he thereby waives all benefit of and relief from the .misrepresentations.” (2 Pomeroy’s Eq. Juris. (2d Ed.) Secs. 817-897; Sdhiffer v. Dietz, 83 N. Y. 300; Lindsley v. Fer.guson, 49 N. Y. 623; 5 Lawson’s Rights and Remedies, Secs. 2361-2362; Wood v. Staudenmayer, 43 Pac. 760; Association v. Rainbolt, 67 N. W. 495; Weaver v. Shriver, 30 Atl. Rep. 189; Pollock v. Smith, 69 N. W. 312.)

      Walsh c& KTewman, for Respondents.
    The right to rescind a contract is clearly defined by the 'Code. Among the grounds for recision are fraud and mistake. (Civil Code, Secs. 2112-2271.) Fraud consists of: {1) The suggestion as a fact, that which is not true by one who does not believe it to be true. (2) The positive assertion in a manner not warranted by the information of the person making it of that which is not true, though he believes it to be true. * * * (3) Any other act fitted to deceive. (Civil Code, Sec. 2117.) Mistake is defined as: Belief in the present existence of a thing material to the contract whieh -does not exist. (Civil Code, Sec. 2122.) It is well settled that any false statements or representations made by a purchaser to the vendor, by means of which the latter is induced to part with property, which, were it not for such statements, he would not have done, will avoid the sale, and he can rescind the sale and recover his goods. (Farwell Co. v. Boyce, 17 Mont. 83; Kopenstein v. Mulcahey, 4 Nev. 30; Whittaker v. Bank, 59 N. W. 395 (Mich.); Silberman v. Munroe, 62 N. W. 555 (Mich.); Reed v. Cowduroy, 44 N. W. 351 (la.); Schram

      r. Stouse, 28 S. W. 262 (Tex.); Bowden y. Fish, 27 S. W. (Tex.); Bank.Y. Bamberger, 13 S. W. 959 (Tex.); Newell v. Randall, 19 N. W. 972 (Minn.); Work v. Jacobs, 53 N. W. 993 (Neb.); Syms v. Bonner, 48 N. W. 472 (Neb.); Tootle v. Bank, 52 N. W. 396 (Neb.); Krauss v. Thompson, 14 N. W. 266 (Minn.); Oswego S. F. v. Tindrum, 10 N. W. 900 (la.); DoaneY. Bocknoood, 4 N. E. 500 (111.); Hiller v. Ellis, 18 So. 95-98; American Sugar Refining Co. v. Fancher, 145 N. X. 552, 40 N. E. 206; Amer. <& Hightower, 70 Cal. 440, 11 Pae. 697; Singer y. Schilling, 74 Wis. 369; Judd y. Weber, 55 Conn. 267; Stephenson y. Weathersby, 45 S. W. 987; Gough y. St. John, 16 Wend. 645; Reed v. Pinney, 35 111. App. 612. Bugg y. Westheimer-Schwartz Shoe Co., 64 Ark. 12.) The evidence shows that plaintiffs relied solely upon the statements made by Israel when they shipped and delivered the goods. But it is not necessary that they relied solely upon the statements, if they were a material inducement and influenced plaintiffs in delivering the goods and extending the credit to Israel. (Handy v. Waldron, 35 St. 884; Sioux City National Bank v. Norfolk National Bank, 56 Fed. 139; Wright v. JTmted States Mortgage Co., 42 S. W. 789; McKenzie v. Wyman, 22 So. 508.) It is sufficient to entitle plaintiffs to recover if the statements are made to a commercial agency and they are subscribers or patrons of that agency. (Hinchman y. Weeks, 48 N. W. 790; Blacknall v. Rowland, 13 S. E. 191; Ensign v. Hoffman, 4 At. 189; Farwell Co. v. Boyce, 17 Mont. 83; Silberman v. Monroe, 62 N. W. 555; SchramY. Strouse, 28 S. W. 262; Bank y. Bamberger, 13 S. W. 959; Bowden v. Fisk, 27 S. W. 180; Converse v. Sickles, 44 N. X. S. 1080; Howell v. Berger, 44 N. X. S. 259; P. Cox Shoe Co. y. Nelan, 75 N. W. 316.) It is contended that when plaintiffs received the second report from Bradstreet’s, on July 2nd, they should have stopped the goods in transit, and because they did not so do, that they are estopped from prosecuting an action to rescind the sale and recover the goods. • The principle of estoppel cannot be invoked, because the defendant is not a bona fide purchaser for value, and cannot assert any- defense or claim any rights that Israel could not if the suit was prosecuted against him instead of the defendant. {Merchants Bamlk v. Oreenhood, 16 Mont. 395; Burrill on Assignments, 6th Ed. p. 482 and note 5; Warner v. Jamison, 50 la. 70; Singer v. Schilling, 74 Wis. 369; Bridgford v. Barbour,' 80 Kentucky 529; Tyler v. Aberg, 3 Atl. 904, 65 Md. 18.) When a person has the right of election between two remedies, he may prosecute his action according to his election, and the defendant cannot complain because he did not pursue another and different remedy. The right to rescind a sale and recover property on the grounds of fraud is well established. The right to stop goods in transit is likewise clearly established and is defined, by the Civil Code. The distinction between rescinding a sale on the grounds of fraud, and stopping goods in transit on the grounds of insolvency is clearly defined, and the line of demarcation is as clearly drawn as the line between an action in replevin and an action for the purchase price of the goods. Section 3970 of the Civil Code provides that when the purchase price has not been paid, the seller may, upon the insolvency of the buyer becoming known to him, and after parting with the property, stop it while on its transit and resume possession thereof. Section 3971 declares that a person is insolvent within the meaning of the last section when he ceases to pay his debts in the manner usual with persons of his business or when he declares his inability or unwillingness to do so. Section 3974 provides that stoppage in transit does not of itself rescind a sale, but is a means of enforcing the lien of the seller. The information obtained by plaintiffs through the second report of Bradstreet’s was not sufficient to warrant them in exercising the right of stoppage in transit. While Mr. Israel, as is shown by subsequent events, was then actually insolvent, that report did not show that he was insolvent within the meaning-of Section 3971 of the Civil Code, which alone would justify stopping the goods in transit, but on the contrary, it stated that he paid all drafts on presentation, thus showing solvency within the meaning of that section. ‘ ‘Insolvency of the buyer must be based upon well founded information, and if from misinformation, the seller stops the goods when the buyer is not actually insolvent, the buyer is entitled to the goods and to the indemnification for the expenses incurred in consequence of the stoppage. ’ ’ (Walsh v. Blakely, 6 Mont. 200; More v. Lot, 13 Nev. 383.) Can it be said as a matter of law, based upon the facts shown in the record in this case, that the plaintiffs were bound at their peril to stop the goods in transit or be forever barred from availing themselves of another well defined and well established remedy, that is to rescind the sale and. recover the goods on the grounds of a false and fraudulent representation made by Israel ? Goods cannot be stopped in transit on the grounds that they were procured by false and fraudulent representations. “It is wholly inconsistent with the principles upon which the right is based to permit its exercise in a case of fraud or misrepresentation in the sale. That would be a ground for rescinding the sale, not for restoring the vendor to his lien. (See note in 29 American Decisions, on page 386.) Long prior to the adoption of our Code, the doctrine was well established that goods could be stopped in transit only upon the grounds of the insolvency of the purchaser, and the right could not be exercised in case of fraud or misrepresentations. (Benjamin on Sales (Corbin’s Ed.) Secs. 1229, 1243; Scmse v. Judson, 29 Am. Dec. 377, and notes.)
   PER CURIAM.

Plaintiffs, merchants at St. Joseph, Mo., having received from one Israel, a merchant at Helena, Mont., an order for certain goods, to be shipped June 28, and to be paid for December 31, 1895, applied to the Bradstreet Company, a commercial agency, for information as to the financial standing and responsibility of the prospective purchaser, in order to determine whether the goods should be sold to him on credit, in response to which the Bradstreet Company, on June 10, furnished to plaintiffs a report based upon and containing a statement made by Israel to that company in February, 1895, in which he claimed assets of the value of $165,-000, and asserted that his debts amounted to but $36,300. Believing the statement of Israel to be true, and relying upon it, plaintiffs decided that it would be safe to sell the goods upon the terms proposed; and accordingly, on June 29th, they delivered them to a common carrier for transportation to Israel. They would not have sold the goods on credit, nor parted with the actual possession thereof, if they had not believed in, and relied upon, the truth of Israel’s statement. The statement was in fact untrue, since at the time it was made Israel owed at least $78,000, and his assets did not exceed in value $90,000. Its representations were both false and fraudulent, and were made for the purpose of obtaining credit. Israel entered into the contract of purchase without any intention of paying for the goods. He received them on July 12, and on August 19, 1895, he executed an assignment for the benefit of his creditors to defendant, into whose possession, as assignee, the goods passed. Between the time the statement was made, in February, and the day of the assignment, Israel sustained no unusual loss, nor did he incur any extraordinary expense; yet the inventory, verified and filed by him within a few days after the assignment, shows assets of $85,173.08 and liabilities of $102,441.14. Plaintiffs notified defendant that they rescinded the sale to Israel, and demanded possession of the goods, and, upon the refusal of defendant to surrender it, instituted this action on September 3, 1895, to recover the goods. The court found (in addition to the finding hereinafter mentioned) substantially and in effect, the facts to be the foregoing, and rendered judgment for the plaintiffs, from which and the order denying a new trial, defendant appeals.

There is no controversy in this court over the facts just stated. The defendant offered no evidence, and moved for a nonsuit, in the court below. For the purposes of the appeal, he concedes that the plaintiffs were induced to make the sale and to deliver the goods to the carrier by means of the false and fraudulent representations contained in Israel’s statement, and that they were justified in so doing. He concedes, also, that Israel purchased the goods without the intention of paying for them. The court further found that plaintiffs, as soon as they discovered the falsity of Israel’s representations, notified defendant that the sale was abrogated. This finding is assailed as as being contrary to the following evidence: On June 28, 1895, the Bradstreet Company at Helena again forwarded to its office at St. Joseph a copy of the February statement of Israel, and the company’s report thereon of June 10th; adding as comment, inter alia\ “In some quarters it is the opinion that he is owing moré than he stated, it being said that he is owing his brother-in-law, L. Auerbach, about $8,000; same not appearing in his statement. Mr. Israel’s real estate, at present market value, is not worth to exceed $85,000. He is generally believed to be heavily in debt to the banks, and no estimate of his worth is offered. Is a man ■of good general reputation, and has a clear business record. He meets all drafts on presentation, and apparently has the confidence of his bankers. ’ ’ This additional report, which materially reduced Israel’s credit rating, was communicated to plaintiffs on July 2d, — three days after the goods had been •delivered to the railway company for Israel. The manager of the credit and financial department of plaintiffs testified that, if the second report had been received before the shipment of the goods, it would not have changed his opinion of the statement made by Israel concerning his financial condition, and that, as he relied upon the truthfulness of the statement made by Israel, the comments of the Bradstreet Company on his condition were not such as to change his belief in the responsibility of Israel, and the truth of his statement. It is contended that this evidence with respect to the second report shows conclusively that plaintiffs knew of the falsity of the representations made by Israel prior to the actual receipt of the goods by him, and that, therefore, they were guilty of negligence in not regaining possession while the goods were in transit; that, by not exercising the right to stop the goods in transit after the knowledge of the fraud so acquired, they elected to ratify the contract of sale, and are therefore es-topped from maintaining this action to rescind it; and that such evidence conclusively proves that plaintiffs did not permit the goods to reach the actual possession of Israel in the belief that the false and fraudulent representations made by Israel to them were true. It cannot be said, as a matter of law, that plaintiffs ratified or affirmed the contract of sale by their omission to retake the goods prior to the time when the same-reached the hands of Israel. Nor, as a matter of law, is negligence in not retaking the goods to be presumed from such omission. Neither are the elements of an estoppel present. Nothing in the report of the Bradstreet Company communicated to plaintiffs on July 2d may be said to have the necessary effect of destroying or lessening the belief which it is admitted plaintiffs had in the truth of the statement emanating from Israel himself. It is quite plain that the plaintiffs, under the circumstances, were not bound, in law, to disregard and cease to believe the statement of their debtor. Such portions of the report of July 2d as reflected upon the financial condition of Israel were based entirely upon rumor. A merchant of ordinary business prudence would, we think, be likely at least to question and doubt the propriety and safety of stopping goods in transit for mere insolvency of the debtor (which would affirm the sale), or of retaking them from the constructive or actual possession of the purchaser for fraud (which, if proved, would avoid the sale), and might well decline to incur the risk incident to either act, if the only information concerning the insolvency, in the one case, or the fraudulent representations, in the other, were such as that imparted by the last report. Neither omission to stop the goods before they reached Helena, nor the failure to retake them prior to their transfer to the assignee (who is not a good-faith purchaser for value), may, under the facts disclosed by the record, be deemed an affirmance of the sale. We cannot say that the inference from the evidence leads irresistibly, or even points, to the conclusion that plaintiffs were guilty of negligence, or that their delay and nonaction had the effect of a waiver. The duty of believing the rumor set out in the report was not imposed upon plaintiffs, and they were warranted in taking the positive statement of Israel to be true. The court below necessarily so found, and we perceive no reason why its decision should be disturbed.

There being no error in the record, the judgment and order refusing a new trial are affirmed.

Affirmed.


text:
    HINES, Respondent, v. CARL, et al., Appellants.
    [No. 1,229.]
    [Submitted April 28, 1899.
    Decided May 1, 1899.]

      Appeal — "Bond—Faihvre to File.

    In the absence of a waiver or of a deposit of money, failure to file appeal bond within five days after service of notice of appeal — as required by Code of Civil Procedure, Section 1724 — renders the appeal wholly ineffectual.
    Obitek. — The statutory provisions regulating the mode of perfecting appeals must he strictly followed.

      Appeal from, District Court, Meagher County; F. K. Arm,-. strong, Judge.

    Action by John Hines, Sr., against Dennis Carl and others: There was a judgment for plaintiff, and defendants appeal.
    Appeal dismissed.

      F. II. Goodman and J. F. Kanouse, for Appellants.

      Boht. B. Smith, for Respondent.
   PER CURIAM.

Appeal by defendant Carl from an order of the District Court of Broadwater county, entered December 7, 1897, denying his motion for a new trial. Notice of appeal was served on January 17, 1898, but not until the 31st day of the same month was any undertaking on appeal filed. Plaintiff moves the Court to dismiss the appeal upon the ground that the undertaking was not filed within the time prescribed by statute. The motion must be granted. By Section 1724 of the Code of Civil' Procedure an appeal to the Supreme Court is declared ineffectual for any purpose unless within five days after service of the notice of appeal an undertaking be filed or waived, or a deposit of money be made, as provided in Section 1725 of the same Code. There was neither waiver nor deposit in this case, and the undertaking was not filed until after the lapse of five days from the time when the notice of appeal was served. The statutory provisions regulating the mode of perfecting appeals must be strictly followed. (Creek v. Bozeman Waterworks Co., ante, p. 327, 56 Pac. 362.) In the absence of a waiver or of a deposit of money, to perfect an appeal the undertaking must be filed within the five days limited by the statute. Omission in this regard renders the attempted appeal wholly ineffectual (Pardee v. Murray et al., 4 Mont. 35, 1 Pac. 737; Greek v. Bozeman Waterworks Co., supra,) and this Court has therefore no jurisdiction.

The appeal is dismissed for want of jurisdiction.

Dismissed.


text:
    YERRICK, Respondent, v. HIGGINS et al., Appellants.
    [No. 1,077.]
    [Submitted April 7, 1899.
    Decided May 8, 1899.]

      Homestead — Declaration—Including Excessi/oe Amount— Validity of Glai/m.

    1. Civil Code, Sections 1670,1693, allow one to select as a homestead a quantity of land not exceeding one-fourth of an acre, being within a town plot, city or village, and the dwelling house thereon and appurtenances. Section 1701 requires claimant’s declaration to describe the premises, but there are no provisions by which, after the homestead is selected, there can be a readjustment of the area in case of an excess, and the surplus taken by a creditor. Held, that, where a declaration inadvertently included one-sixth more land than allowed, the whole claim was invalid.
    2. A declaration of homestead is valid and effective, though the estimated cash value is far in excess of the limit fixed in the statute, provided it contains the other statements required; but, as to área, the premises described must fall within the statutory limit, otherwise the declaration is ineffective to exempt the property claimed.
    3. The requirements of tile statute by which a homestead exemption right becomes fixed are mandatory and must be complied with.
    4. The opinion in the case of Mitchell v. McCormick, ante, p. 249, modified.

      Appeal from District Court, Missoula Cownty; Frank II. Woody, Judge.

    Action by C. A. Yerrick against George C. Higgins and H. W. McLaughlin, sheriff of Missoula county. From a judgment for plaintiff, defendants appeal.
    Keversed.
    Statement of the case by the Justice delivering the opinion.
    Action for an injunction to restrain the sale of lots 5 and 6, block 24, in Knowles’ addition to the city of Missoula, Missoula county, Montana, and to quiet plaintiff’ s title thereto.
    On April 22, 1896, one James H. Fussy, the head of a family, was the owner of this property in fee. He had it inclosed, and for some time before this date had been residing upon it with his family. The dwelling occupied by him and his family and the appurtenant outbuildings are upon lot 6, except that the barn extends somewhat onto lot 5. The remainder of lot 5 is a yard, planted with fruit and ornamental trees, and is appurtenant to the dwelling. On April 22, 1896, the said Fussy made, acknowledged and filed for record in the office of the county recorder of Missoula county a declaration of homestead, claiming the said premises as his homestead under the laws of Montana, containing all the statements required by law to be contained therein. The value of them does not exceed $2,500. The said Fussy and his wife, on July 25, 1896, by regular conveyance, and for the consideration of $1,800, conveyed the said premises to the plaintiff herein, and she is now the owner thereof in fee. The area of these lots together is 13,000 square feet, or 2,100 square feet in excess of one-fourth of an acre. This excess in area can be taken off the east side of lot 5, without disturbing the dwelling or any of the appurtenant outbuildings, by cutting off a strip lengthwise of the lot 16.2 feet in width. At the time the declaration was filed, Fussy knew the dimensions of the lots, but overlooked, through inadvertence, that the two were in excess in area of one-fourth of an acre. On May 22d George C. Higgins, one of the defendants herein, recovered a judgment against the said Fussy in the District Court of the Fourth judicial district in and for Missoula county for the sum of $764.69. On the same day this judgment was duly docketed upon the judgment docket in the office of the clerk of the court. On the •-day of January, 1897, defendant Higgins caused an execution to be issued upon his said judgment, and by the defendant McLaughlin, as sheriff of Missoula county, to be levied upon the above-mentioned property. Thereupon the sheriff was proceeding to advertise and sell the same to satisfy the judgment. No execution under this j udgment had theretofore been levied upon the property. The sale was stopped by a preliminary order of injunction herein. After a trial, at which the facts here stated were agreed upon, the court below found as a conclusion of law thereon that the defendant Higgins never acquired a lien upon the said lots, or any part thereof, under his judgment against James H. Fussy, and that when he and his wife conveyed them to the plaintiff herein on July 25, 1896, the plaintiff took them free and clear of any lien or incumbrance by reason of said judgment. A decree was thereupon entered in favor of plaintiff quieting her title, and directing that the temporary order of injunction be made perpetual, with costs. From this judgment and decree defendants appeal.
    Marshall, Ogden & Banff, Henry G. Stiff and Francis G. Higgins, for Appellants.

      F. G. Webster and Sanders & Sanders, for Respondent.
   BRANTLY, C. J.

The defendants ask for a reversal of the judgment on the ground that the admitted facts do not support it. The declaration made by Fussy on April 22, 1896, they contend, was not effective to withdraw the property from the reach of any of his judgment creditors while it remained in his hands, and therefore the plaintiff in this case, the grantee of Fussy and his wife, took it subject to the judgment lien of defendant Higgins. The Code of Civil Procedure provides: ‘1 * * From the time the judgment is docketed it becomes a lien upon all real property of the judgment debtor not exempt from execution in the county, owned by him at the time, or which he may afterward acquire, until the lien ceases. The lien continues for six years, unless the judgment be previously satisfied.” (Section 1197.)

“The homestead of a judgment debtor exempt from execution is provided for in the Civil Code in Section 1670 to Section 1701, inclusive.” (Section 1223.)

These are all the provisions contained in this Code upon this subject, except those regulating the assignment of the probate homestead, none of which have any application here. Under these provisions the lien of the Higgins judgment attached, unless the declaration of Fussy so far filled the requirements of the Civil Code touching the selection and setting apart of the homestead as to bring the property within the exemption.

it is conceded by the defendants that, if the declaration in question was a compliance with the legal requirements, Fussy and his wife could convey the homestead thus selected free from any incumbrance by virtue of the judgment lien. We shall therefore assume, for the purposes of this discussion, that, after the homestead has once been selected, and the declaration has been recorded in conformity with the statutes, no judgment lien thereafter attaches for any , purpose. The validity of the Fussy declaration is therefore the only question for determination.

“The homestead consists (1) of the dwelling house in which claimant resides, and (2) the land on which the same is situated, (3) selected as in this title provided.” (CivilCode, Sec. 1670.)

“Homesteads may be selected and claimed: (1) Consisting of any quantity of land not exceeding one hundred and sixty acres used for agricultural purposes, and the dwelling house thereon and its appurtenances, and not included in any town plot, city or village; or (2) a quantity of land not exceeding in amount one-fourth of an acre, being within a town plot, city or village, and the dwelling house thereon and its appurtenances. Such homestead, in either case, shall not exceed in value the sum of two thousand five hundred dollars.” (Civil Code, Sec. 1693.)

• The former of these provisions defines the homestead in general terms; the latter limits this general definition, and specifies particularly the subject-matter to which the selection and claim may apply. Standing alone, the general definition would leave no limit to the amount or value of the property selected and claimed, provided the claimant resided in his dwelling upon it. Under this latter provision, then, if the property out of which the homestead is to be selected is outside of a town plot, city or village, the homestead may not exceed 160 acres in area, nor $2,500 in value. If it is included in a town plot, city or village, the homestead may not exceed one-fourth of an acre, with the same limitation as to value. This language is clear and explicit. The declaration must,, therefore, be in conformity with both these limitations, unless by some other provision, or by just implication from all the provisions on the subject, there be some way by which a failure to conform can be excused. The declaration must contain a statement showing (1) that the person making it is the head of a family; (2) that he is residing on the premises, and claiming them as his homestead; (3) a description of the premises; and (4) an estimate of their actual cash value. (Civil Code, Sec. 1701.)

From the necessity of the case, if the property selected exceeds the statutory limit of value, the declaration will not be rendered invalid for that reason. In Mitchell v. McCormick, 22 Mont. 249, 56 Pac. 216, we said: “It does not follow that, if the property selected for a homestead is of greater value than $2,500, the law will not protect the claimant to the extent of his rights as the head of a family. If this were true, then the head of a family owning a ‘dwelling house, in which he resides, and the land on which the same is situated, ’ of greater value than the statutory amount, could not select a homestead from it at all. ” And we think this view correct if it be understood that the selected property does not, in area, exceed the statutory limit. The other provisions of the Code clearly recognize this necessary condition. Sections 1678 to 1692, inclusive, make special provisions applicable to cases of this kind, so that a creditor dissatisfied with the estimated value placed upon the homestead by the declarant may have the value judicially ascertained and declared, and the surplus applied to his debt. But these provisions apply only to those cases where the value is in question, and no.t the area. In none of them is the limitation of area mentioned. They all refer to value, and have to do with the method of ascertaining it and the disposition of the surplus, if any is found to exist. Clearly, they also apply to homesteads only, which, as to area, are within the statutory limit. The sections of our Code providing for the selection of a homestead by the head of a family were all adopted into the Code of 1895 from the California Code, except Section 1693, supra, which fixes the limitations. This section was brought forward from the First Division of the Compiled Statutes of 1887, and is substantially the same as Section 322 of that Code. The limitations are the same in both Codes. The latter required no declaration. Occupancy was sufficient. There were also provisions (Sections 321, 325, First Division, Compiled Statutes) by which, when levy was made under execution, the homestead could be claimed out of the property by metes and bounds by the owner, or by which, when the plaintiff creditor was dissatisfied, the sheriff could have it set apart by survey, so that it would be within both limitations, so long as both could be adjusted by subdivision. There was no provision, however, by which, after subdivision had been made as far as possible and the value of the property still exceeded the limit, the whole could be sold, and the claimant have the value of the homestead paid to him in money. It was therefore impossible, under the provisions of the Compiled Statutes, for the head of a family to have a homestead allotted to him in compliance with the value limitation unless it could by subdivision be carved out of the property upon which he resided. To remedy this defect in our statute, doubtless, the provisions of the California Code were adopted, thus enabling the claimant to have his homestead reserved to him regardless of the value of the corpus of the property within which it happened to be embraced. The Supreme Court of that state has held this to be the purpose of these provisions, and we accept and adopt this view. (Ham v. Semita Rosa Bank, 62 Cal. 125; Tiernan v. Creditors, Id. 286.)

Under these decisions the declaration is valid and effective,' though the estimated cash value is far in excess of the limit fixed in the statute, provided it contains the other statements required. This is but just; for value is a matter of opinion, and fluctuates from time to time. The claimant cannot be held to strict accuracy in this regard, while at the same time his creditor is not debarred from contesting in the courts the estimate he puts upon the property he seeks to exempt.

The policy of the area limit, however, is based upon a different principle. 'The Code contains no provision by which, after the homestead has once been selected, there can be a read] ustment of the area, and the surplus taken by the creditor. If the selection is, in compliance with the law, within the value limit, and remains there, the claimant is beyond the pursuit of his creditors; and, so far as they are concerned, he may forever after retain the specific property selected, except (1) when the judgment has been obtained before the declaration is filed, and (2) when the judgment is expressly made a lien upon the homestead. (Civil Code, Sec. 1671.) “From and after the time the declaration is filed for record, the premises therein described constitute a homestead. * * * And in no case shall the homestead be held liable for the debts of the owner, except as provided in this title. (Civil Code, Sec. 1703.)

The question, then, as to what is a compliance with the law in respect of the area to be claimed, must necessarily be answered in the statement that the premises described in the declaration must fall within the statutory limit, otherwise the declaration is ineffective to exempt the property claimed. We are confirmed in this conclusion when we remember that area is a matter of accurate measurement, and easily ascertainable. It is not a matter about which men may differ. The claimant has it within his power to state it as a fact, and the policy of the statute is that he shall do so. If he can describe, in his declaration, premises containing a greater area than the statute allows, and still be held to have complied with the law, then he can, by his own disregard of the actual facts, and because there is an absence of specific provisions of law by which his creditor can contest his claim, .secure a greater exemption than the law provides for him. The statute requires the claimant to describe the premises he claims, not the premises within which his homestead is included, or out of which it may be carved. And this requirement is neither harsh nor unjust. It simply demands of the claimant that he be honest, and state the truth. The statute points out the way by which he can secure his exemption. He has but to follow it, and he is secure. If, from his own carelessness, or from fraudulent motives, he fails to observe the law, he must suffer the penalty.

These conclusions are supported by the additional consideration that in this State the homestead is a purely statutory right. The Constitution (Sec. 4, Art. XIX) enjoins upon the Legislature the duty to “enact liberal homestead and exemption laws,” yet the mode for obtaining the exemption, and the amount and character of it, are left for this body to provide. It has done this. The provisions made are liberal, just as are the provisions for liens for labor and materials furnished and expended by certain classes of persons. The rights provided under these statutes can be claimed or not, as the party entitled wishes; but if, in endeavoring to fix his right, he fails to comply with the law, no matter for what reason, he also fails to secure his right. The court cannot relieve him, in the absence of special provisions of statute enabling it to do so. His only safety is to comply with the law. The Fussy declaration, upon which the plaintiff relies in this case, undertakes to exempt about one-rsixth more land than the statutory amount. It is admitted by defendants that this was done inadvertently. Yet there is no provision by which relief can be had. The court cannot provide a way. That would be to legislate. The court below held, in default of such provision, that the property as claimed should all be exempt. This judgment cannot be sustained, for to sustain it would be to grant to the plaintiff a greater exemption by one-sixth than the law allows.

We are not to be understood as saying that a claim of homestead would be void for a small and unsubstantial excess in the area. It is the policy of the law to disregard very small errors in everything. But this principle cannot be invoked in aid of plaintiff in this case. It is the general rule that all statutes providing for such rights as the one under consideration in this case must be liberally construed. But it is. also the rule that the mandatory requirements of the statute by which the right becomes fixed must be complied with. (Thompson on Homest. & Exemp. Secs. 731, 732; Lindley v. Davis, 7 Mont. 206, 14 Pac. 717; Ferguson v. Speith, 13 Mont. 187, 31 Pac. 1020; Ashley v. Olmstead, 54 Cal. 616; Ames v. Eldred, 55 Cal. 136; Fromans v. Mahlman, 92 Cal. 1, 27 Pac. 1094, and 28 Pac. 579; Waples on Homest. and Exemp. pp. 864, 865; Quackenbush v. Reed, 102 Cal. 493, 37 Pac. 755.) In his declaration Fussy failed to comply with the mandatory requirement of the statute that he should describe the premises claimed as his homestead in that he claimed premises that could not, in any event, be exempt under the statute.

When the opinion in the case of Mitchell v. McCormick, supra, was written, we were of the opinion, as some expressions therein show, that a disregard of the statutory limitation as to area would not invalidate the claim of homestead. A more careful consideration of the provisions of our statute has led to a modification of our views upon this particular point. The decision in that case was correct, however, and we adhere to the conclusion therein reached upon the question involved.

The judgment herein is therefore reversed, with directions to the court below to enter judgment in favor of defendants.

Reversed.

Hunt and Pigott, JJ., concur.