Fraudulent Sales — Retaining possession by vendor.
S, being indebted to C and D, sold to them certain cattle and hay for $90, who endorsed the amount upon a note held by them against S. The sale was made in the presence of a witness. The cattle and hay were left in the possession of S to feed the hay to the cattle, also to his own cow at his own expense; and it was agreed that the manure made by the cattle should become the property of S. The creditors of S attached the cattle and hay as the property of S, and C and D replevied them. Upon the trial, these facts appealing, it was ruled that the sale was void as to creditors, and that the facts furnished no sufficient explanation of the retaining the possession of the property by S; and a verdict was ordered for the defendant. Held, that the ruling was correct. When the possession of chattels is retained by the vendor after an absolute sale, it is no sufficient explanation to show that the sale was made in the presence of a witness, where it was not attended with such publicity as would naturally give notoriety to the transaction, and when there was no change in the possession or use of the chattels to indicate that any change in the ownership had taken place.
FROM SULLIVAN CIRCUIT COURT.
[fn*]SMITH, J. [fn*] CUSHING, C. J., having presided at the trial, did not sit.
The plaintiff's vendor retained possession of the steers and hay, although the sale was absolute. This was prima facie evidence of a secret trust. If they have failed to explain why this was done, then it is conclusive evidence of such trust. Trask v. Bowers, 4 N.H. 309. When the fact of a secret trust is admitted or established, the fraud is an inference of law, which a court is bound to pronounce. A sale of goods by a person in debt, in order to be considered bona fide in respect to creditors, must be made without any trust whatever, either express or implied. Coburn v. Pickering, 3 N.H. 428.
The facts offered by the plaintiffs, to explain why the possession of these chattels was left with their vendor, are not disputed. There was then, no question of fact to be found by the jury. But the question is, whether in law the explanation is sufficient to repel the presumption of fraud arising from the possession and use of the chattels by Smith. I think it is clear this must be answered in the negative. Although the trade was made in the presence of a witness, it was not attended with such publicity as would naturally give notoriety to the sale. The leaving the cattle with the vendor to be kept upon the hay, with the stipulation that the manure made by them should become his property, and with the further stipulation that his own cow should be fed upon the hay, although at his expense, would have no tendency to indicate that any sale had taken place. There was nothing whatever that was calculated to apprise the public of any change in the ownership of the property, but, rather, everything indicated that there had been no transfer of title.
This case comes clearly within the doctrine of Coburn v. Pickering, supra, and the law as laid down in that case has been upheld in numerous cases since in our reports, including Lang v. Stockwell, 55 N.H. 561. No law is more firmly established in this state, and we have only to follow it. The exceptions must be overruled.
LADD, J., and STANLEY, J., C. C., concurred.
Judgment on the verdict.