STOESER V. SPRINGER.

Replevin—Fraudulent Purchase-Disaffirming Sale.

M., by false representations, induced T. to sell to him a horse, buggy, and harness, and to take for them two promissory notes. T. having discovered the fraud, went and demanded back his goods, at the same time throwing the notes on the table. On the assurance of M., however, that on the following Tuesday he would bring the property or satisfaction, T. again took the notes and went away. M. did not appear as he had promised, and T. sued out a writ of replevin against M., but, before it had been executed, M. sold the property to plaintiff, an innocent purchaser, who, having been deprived of it under the replevin, brought trover against the sheriff:

Held, that the plaintiff was entitled to recover; that the contract had not been disaffirmed when the writ of replevin issued, and that the mere issue of it was no notice to M. of disaffirmance, and could not affect the plaintiff.

Held, also, following Great Western Railway Co. v. McEwan, 28 U. C. R. 528, 30 U. C. R. 559, that the defendant, as sheriff, having taken the property out of the plaintiff's possession, could not justify under the writ of replevin.

THIS was an appeal from a judgment of his Honour the Junior Judge of the county of Waterloo, directing judgment to be entered for the plaintiff for $15 and costs; and from a subsequent judgment of the same learned Judge, refusing an order to set aside the judgment directed to be entered for the plaintiff, and to enter a nonsuit or verdict for the defendant.

The action was in trover for one single buggy and one set of single harness.

The defendant pleaded (1) not guilty; (2) goods not plaintiff's; (3) that the goods were obtained by plaintiff from one Markle, who got same from one Tyson under fraudulent circumstances, and with the preconceived design of not paying for them, and that before sale by Markle to the plaintiff, Tyson disaffirmed the sale; (4) that the goods were the goods of Tyson, whose agent defendant was; (5) justification by defendant as sheriff under a writ of replevin in the suit of Tyson v. Markle.

At the trial the plaintiff was examined on his own behalf and, swore that he was agent for the Globe Manufacturing Company; and was suing for a horse, buggy, and 63-VOL. VII A.R.

harness; that on the 19th of October he had purchased from one J. B. Markle, at St. Agatha; that he had met him there and gave him $50 and his buggy and harness in exchange; paid the cash the same evening. This was in the afternoon. He had the buggy from Wednesday the 19th to Saturday following. On Saturday the plaintiff and his father came to Berlin with the buggy and harness and his horse, and put the horse, buggy, and harness in the stables at Keefer's hotel. They went out and met Klippert. He told plaintiff to give up that buggy, which he refused to do as it was his property. Klippert and another person took them.

The plaintiff further swore :

"I told the sheriff, as I had to give the harness up, to take it, but that I would look after him. The first I heard of trouble was by my brother's wife, who said that people would say he stole them. This was after the trade. Markle told me after this that it was all right, he bought and paid for them, gave notes. I had no idea there was anything wrong. I have not got my buggy and harness back."

John Tyson was called on behalf of the defendant, and swore that he knew Markle fifteen or twenty years ago.

"I saw him on 5th October last at Guelph. I had an animal to sell. Markle introduced himself, and said he was open to buy one. He asked me to see it. He came to my house in company with me. He saw the mare, sorrel. He said he would rather buy a whole rig. I agreed to sell him. He asked me what I would take for the rig. We effected a sale. I asked him $160 for horse, buggy, and harness. No sum was put on each article. $160 for whole rig. Buggy, $100; horse, $45 or $50; balance, harness, $10 or $15. He said he had no money; had a note, as good as cash, against a responsible farmer-person had been a farmer, now speculating in landed property; that if he owed $500 he would pay. He produced the note for $120, made by Peter Wenger in favour J. B. Markle or bearer, dated 4th January, 1881, at 7 months; interest at 6 per cent. He gave me his own note for $40. Then, as to his own responsibility, he said he was able to pay it when it became due, and had money coming to him in a few days. I at that time knew nothing about his or Wenger's circumstances. I relied on the promise he made as to his ability and Wenger's responsibility, and the notes. He said everything was right. On the following day, in consequence of something I heard, I went to Elmira on the 6th to get my property back, or such satisfaction as he could give. I saw Markle. I demanded the property from him in presence of my son. I told him he told me untrue, and I found things the reverse

of what he told me.

He hesitated about giving up the property. He said: It would not look well to see you drive the rig away; that he had a reputation to keep up; but to rest contented, and that he would be down to Guelph at the hotel on Tuesday following, and that he would bring the property to Guelph or satisfaction. He never appeared. I had the notes in Elmira with me. I told him he had deceived me. I had known he had been in the Penitentiary. I tendered the notes to him in Elmira. I put them on the table. I afterwards picked them up and put them in my pocket."

His Honour delivered a written judgment, in which he stated:

"This is an action of trover brought by plaintiff under the following circumstances :-On the 5th October last, John Tyson sold at Guelph, where he lived, to one J. B. Markle, one horse, one buggy, and one set of single harness, for $160, getting in payment therefor a promissory note made by one Peter Wenger, in favour of Markle, or bearer, for $120, due in the following January, dated 4th June, 1881, with interest at 6 per cent.; also his own note for $40, at one month, payable to Tyson, or bearer. It is alleged by Tyson that the sale was obtained by fraud, and that so soon as he discovered the fraud, on the day following the sale, he disaffirmed the sale; that Markle, after such disaffirmance sold the property to plaintiff; that before the sale he caused replevin to issue, and defendant as sheriff, to whom the writ was directed, replevied the property out of plaintiff's hands to Tyson. The plaintiff maintains that Markle had the right to sell to him, and that he was a bonâ fide purchaser. "The questions to be determined in this action are:-(1) When Markle purchased the property in question from Tyson, did he make any representations knowing them to be false at the time? If so, (2) After Tyson became aware that the representations were false, did he disaffirm the sale? If so, (3) Was the sale before or after the disaffirmance, and if before, was he an innocent purchaser for value? (4) In what capacity was the defendant acting? I have arrived at the following conclusions: (1) That Markle obtained the property from Tyson by representations, knowing them to be untrue, and Tyson acted in reliance on them. (2) That Tyson did not, before the sale from Markle to plaintiff, avoid the contract of sale between Markle and himself. (3) That if the demand of itself of the property by Tyson from Markle was an avoidance, Tyson relinquished the right he acquired to retake the property, and the position of the parties as to the ownership remained as it was before the demand. (4) I find the property to be of the value of $115, and I award $10 to the plaintiff as damages for the detention. And I direct judgment to be entered for the plaintiff for $125 and costs; and that execution be stayed until the 5th of April next."

The defendant thereupon appealed on the following amongst other grounds:

(1) That the defendant being a public officer, was as such entitled to notice of action under the Revised Statutes of Ontario, ch. 73: McDougall v. Peterson, 40 U. C. R. 95. (2) That the defendant could properly justify under the writ of replevin. The case of Great Western R. W. Co. v. McEwan, 28 U. C. R. 528, was not binding upon this Court, and should not be followed. The practical effect of such a rule would be to render the execution of writs of replevin impossible in most cases. The form of the writ (R. S. O. p. 738,) requires the property to be replevied, without saying from whose possession the same is to be replevied. (3) That the defendant being a public officer, and not a mere wrong-doer, could set up the jus tertii. (4) That the evidence established that Markle obtained the goods in question from Tyson, with the preconceived design of not paying for them, and therefore Tyson had the right, on discovering the fraud, to disaffirm and avoid the sale Davis v. McWhirter, 40 U. C. R. 598. (5) That the learned Judge having found as a fact, that Markle obtained the property from Tyson by representations which he knew to be untrue, and that Tyson had acted in reliance on them, it followed from this, that Tyson had the right, on discovering the fraud, to disaffim and avoid the sale: Stevenson v. Lewham, 13 C. B. 285; Kingsford v. Merry, 11 Ex. 579; White v. Gordon, 10 C. B. 919; Morrison v. Universal and Marine Ins. Co., L. R. 8 Ex. 197; Clough v. London and North Western R. W. Co., L. R. 7 Ex. 26; Load v. Green, 15 M. & W. 216; Croft v. Lumley, 6 H. L. Cas. 705; Young v. Billiter, 6 E. & B.; The Queen v. Middleton, L. R. 2 C. C. R. 44; Jones v. Carter, 15 M. & W. 718; Higgins v. Barton, 26 L. J. Ex. 342. (6) And the sale having been disaffirmed, there could be no reaffirmance of it. The subsequent dealings of Tyson and Markle must be viewed by themselves, apart from the previous transaction, which was at an end. What took place was not sufficient to revest the property in the goods in Markle, but amounted simply to an agreement that Markle should have the possession of Tyson's horse,

&c., for a few days, when he was to return it unless they could agree on a price, and security: Ross v. Eby, 28 C. P. 316; Isaac v. Andrews, 28 C. P. 40; Benjamin on Sales, 3rd Am. ed. 285.

The appeal came on for argument on the 7th September, 1882.

McCarthy, Q.C., for the appellant.

J. K. Kerr, Q.C., for the respondent.

September 16, 1882. WILSON, C. J.-I think Tyson extended the time for Markle to return the property or to give satisfaction: that is to pay for it, or to give security for it, during which time it was Markle's property, and during which time he could sell it as a means of giving satisfaction.

That he did not give Tyson the satisfaction he promised to give, will not matter so far as third persons are concerned.

He sold the property to an innocent purchaser without notice, and was thus enabled to give to Tyson the satisfaction he had promised to give to him; but because he cheated Tyson is no reason why he should be allowed to cheat also the innocent purchaser, or why Tyson should take from the purchaser the property he enabled and authorized Markle to sell to him.

It was argued, that although that may be so, yet Tyson before the sale by Markle had issued his writ of replevin, which was an election by him to determine the sale to Tyson and an election, although the writ was not executed until after the sale by Markle, and which election Tyson could not waive or abandon.

That does not seem to be so. The mere issue of the writ was no notice to Markle of Tyson's election to determine the sale, and Tyson himself until he executed it could have abandoned the writ.

In Woodfall's Landlord and Tenant, 11th ed., p. 507, it is said: "By issuing and serving a writ of ejectment,