the idea of $50.000, but on our way told me in words plainly that he considered himself worth $10,000 to $20,000 clear anyhow." A. believed this statement to be true when he subsequently sold goods to S., and declared that in the absence of such representations and S.'s statement that he would discount the bills in January next, upon which he relied, he would not have sold S. the cigars now in controversy, which were sold some time between October and January. Later, March 25, 1895, S. made an assignment, and on March 27th, F., having just learned of S.'s insolvency, attempted to rescind the sale for fraud. Upon this point said Mr. Chief Justice Cassoday in rendering the opinion of the court: "After completing the business of the day at Racine, and while riding home on the cars, an accidental remark of Alces induced Stapleton to say that he 'considered himself worth from ten to twenty thousand dollars clear. It is not stated as an existing fact, but merely that he 'considered' himself worth that amount.in other words, that that was his estimate or opinion of his then present worth; and the fact that he

1 Talcott v. Henderson (1877), 31 Ohio St. 162, 27 Am. R. 501, seems to go further and to declare "that an insolvent purchaser, without reasonable expectations of ability to pay, should be presumed to intend not to pay;" but it is doubtful if the learned judge who wrote the opinion intended to do more than to lay down a rule of evidence. The case is ap

said from $10,000 to $20,000 shows that he was not claiming to have any definite knowledge nor welldefined opinion on the subject; and besides. he was talking to a man who, from the nature of things, would naturally be supposed to know more or less about his financial condition. There is nothing to indicate that the statement was dishonestly made, nor made with intent to deceive or defraud any one. . . . We must hold that the representations of Stapleton, assuming them to have been made as testified to by Alces, and that they were false, were not of such a character as authorized the plaintiff to rely upon them, and avoid the sale in consequence of them." Hallacher v. Henlein (1896), Tenn. Ch. App. 39 S. W. R. 869. On January 1, 1894, defendant's inventory showed assets $9,973.87, and liabilities $14,172.24; excess of liabilities $4,196.48. Of his debts, $3,403 were owing to an uncle and an aunt, and he had as much time as he pleased in which to pay this debt. Another debt of $7,200 was due in weekly instalments of $400 each, but the creditor had agreed that if he could not pay these instalments as proved in Wilmot v. Lyon, 49 Ohio St. 296. Some other cases also seem to support this rule. See Morrow Shoe Mfg. Co. v. New England Shoe Co., 57 Fed. R. 685, 6 C. C. A. 508, 24 L. R. A. 417; Davis v. Stewart, 8 Fed. R. 803. The great weight of authority certainly is the other way, as will be seen in the following note.

they fell due the notes might be renewed. His business was apparently prosperous, and during the months of January, February, March and April his purchases amounted to $16,000 and his sales to nearly $13,000. The monthly purchases increased from less than $1,500 in January to more than $7,000 in April. The monthly sales increased from January to March and fell off in April. There was nothing suspicious in his sales. His goods were not forced

1 "This is not a question of reasonable expectation, but of fraudulent purpose. It is not a question whether the grounds of their belief that they could and should pay were sound and rational, but whether they did so believe in point of fact." Curtis, J., in Biggs v. Barry, 2 Curt. 259. "The sanguine, hopeful mind, rashly confident or inconsiderate, disbelieves in failure, and for that very reason sometimes plucks success out of desperate circumstances. The law lets the insolvent keep his own counsels, and struggle with his embarrassments, so long as he has an honest hope of overcoming them." Durfee, C. J., in Dalton v. Thurston, 15 R. I. 418, 7 Atl. R. 112, 2 Am. St. R. 905. To like effect: Watson v. Silsby, 166 Mass. 57, 43 N. E. R. 1117; Reticker v. Katzenstein, 26 Ill. App. 33; Houghtaling v. Hills, 59 Iowa, 287, 13 N. W. R. 305; Kelsey v. Harrison, 29 Kan. 143; Rodman v. Thalheimer, 75 Pa. St. 232; Reid v. Cowduroy, 79 Iowa, 169, 44 N. W. R. 351, 18 Am. St. R. 359; Thompson v. Peck, 115 Ind. 512, 18 N. E. R. 16, 1 L. R. A. 201; Manheimer v. Harrington, 20 Mo. App.

upon the market. He made no representation to the plaintiffs concerning his solvency when he made the purchases under consideration, and plaintiffs asked nothing concerning it. During the four months of January-April, he withdrew from his business for his own use about $3,500. He made a general assignment on May 8th, and at no time from January 1st to May 8th had he a reasonable expectation of being able to pay all his debts. Plaintiffs upon learn

297; Zucker v. Karpeles, 88 Mich. 413, 50 N. W. R. 373; Bell v. Ellis, 33 Cal. 620; Nichols v. Pinner, 18 N. Y. 295; Nichols v. Michael, 23 N. Y. 264, 80 Am. Dec. 259; Wright v. Brown, 67 N. Y. 1; Wheeler & Wilson Mfg. Co. v. Keeler, 65 Hun (N. Y.), 508; Hotchkin v. Third Nat. Bank, 127 N. Y. 329, 27 N. E. R. 1050; Garbutt v. Bank, 22 Wis. 384; Redington v. Roberts, 25 Vt. 686; Ex parte Whittaker, L. R. 10 Ch. App. 446; Mears v. Waples, 3 Houst. (Del.) 581; Birchinell v. Hirsh, 5 Colo. App. 500, 39 Pac. R. 352; Franklin Sugar Ref. Co. v. Collier, 89 Iowa, 69, 56 N. W. R. 279; Dorman v. Weakley, — Tenn. --, 39 S. W. R. 890; Consolidated Milling Co. v. Fogo, 104 Wis. 92, 80 N. W. R. 103; Hart v. Moulton, 104 Wis. 349, 80 N. W. R. 599.

Commercial National Bank v. Pirie (1897), 49 U. S. App. 596, 15 Bkg. L. Jour. 45, 82 Fed. R. 799, 27 C. C. A. 171. In 1891 and at other times below mentioned, W. was president of the Cherryvale National Bank, and was also doing a mercantile business in Cherryvale, Kansas. On February 17 or 18, 1892, W. applied to the firm of C., P., S. & Co., at their place of business in Chicago, Ill., to purchase a bill of goods, and on being asked by a member of the firm to make a property statement as a basis for obtaining credit, he produced and exhibited the following document which had been executed by M., cashier, at the request of W.: "R. T. WEBB, President.

"A. H. HARDING, Vice-Prest. "T. C. MOLLOY, Cashier.

"C. F. GODBEY, Asst. Cashier. "CHERRYVALE NATIONAL BANK. "Capital, $50,000.00.

"CHERRYVALE, KANSAS, "Feby. 15, 1892. "Carson, Pirie, Scott & Co., Chicago, Ill.-Gentlemen: We will guaranty the payment of any bill of goods which Mr. R. T. Webb may buy of you while in Chicago, during the present week. If this guaranty

"Yours, very truly, "THE CHERRYVALE NATIONAL BANK, "Per T. C. MOLLOY, Cashier." Upon the strength of this W. was allowed to purchase of C., P., S. & Co. goods to the extent of $6,395.25. W. made no other representation concerning his solvency, nor was he asked to do so. Bills for the goods were to mature on May 15th and June 15th. At the time of the purchase W. was unable to meet his obligations as they matured and the Ch. Bank was insolvent, though it was continuing to do business. On June 10th the doors of the Ch. Bank were closed by direction of the comptroller of the treasury. On the same day W. executed two chattel mortgages covering his entire stock in trade in favor of the appellants herein, the Com. Bank and one Guernsey. A part of the consideration for these mortgages was a loan of $700 that day made by G. The remainder was prior indebtedness. G., acting for himself and for the Com. Bank, of which he was cashier, immediately took possession of the property and advertised it for sale, and it was accordingly sold. P., prior to the sale, notified the Com. Bank that the sale to W. had been induced by certain fraudulent representations made by him concerning his solvency, and that they rescinded the said sale, and they demanded the return of the goods. They brought suit, after the mortgage sale, for conversion, and the trial court peremptorily instructed the jury to return a ver

dict for the plaintiffs, from the judgment upon which the defendants now appeal. The appellate court holds that the guaranty of the Ch. Bank, being ultra vires, was void, and that the firm of P. were bound to know this and could not claim to be defrauded by it. Whether or not W. bought with the preconceived intention not to pay for the goods was a question of fact for the jury, since the evidence that he did was not so clear and convincing but that two reasonable men could possibly differ úpon it.

Consolidated Milling Co. v. Fogo (1899), 104 Wis. 92, 80 N. W. R. 103. F. on March 28, 1898, knew himself to be insolvent, yet he ordered of C. a carload of flour which was duly shipped to and received by him, and, on April 5th and 6th thereafter, was stored in his store. F. made no representations as to his solvency, and C. asked no questions concerning it. At the time of the purchase F. intended to pay for the flour. On the afternoon of April 6th, after all the flour had been taken into possession by F. and removed to his store, H., a creditor firm, through their agent J., pressed F. for payment, which was refused. J. thereupon threatened to bring suit. Later in the day B., another creditor, through its cashier,

1 Dalton v. Thurston, 15 R. I. 418, 7 Atl. R. 112, 2 Am. St. R. 905; Edson v. Hudson, 83 Mich. 450, 47 N. W. R. 347; Rodman v. Thalheimer, 75 Pa. St. 232; Bughman v. Central Bank, 159 Pa. St. 94; Cincinnati Cooperage

came to F. and requested that it be further secured. F. after some hesitation gave B. a chattel mortgage upon his stock, which mortgage was immediately recorded. In the evening of the same day, April 6th, H. commenced suit against F. and attached his property. On April 9th C. brought replevin for the flour in question on the ground that the sale was procured through fraud, and that it might and did rescind the same. On March 23d, in another city, and without the knowledge of F., P. had, in response to an inquiry by A., agent of C., declared that F.'s financial standing was all right. P. was not aware that F. intended to order any flour of C., but had reason to believe that what he said would probably influence C. in any action it might take in regard to F. B., of which P. was at that time cashier, was a heavy creditor of F. C. was induced to fill F.'s order of March 28th in reliance upon P.'s statement to C.'s agent A., and without such statement it would not have filled F.'s order. Said the court, speaking by Cassoday, C. J.: "An honest, though abortive, purpose to continue business, and pay for the goods, is consistent with the vendee's knowledge of his own insolvency. We must hold that the sale of the flour

Co. v. Gaul, 170 Pa. St. 545, 32 Atl. R. 1093; Reager v. Kendall (Ky.), 39 S. W. R. 257.

2 Lupin v. Marie, 6 Wend. (N. Y.) 77, 21 Am. Dec. 256.

to Fogo was complete and without any fraud before the giving of either of the mortgages. . . . Pease was not Fogo's representative and had no authority to speak for him. It was a mere casual conversation. . . . The defendant bank had no business with Anderson at the time. Pease was not transacting any business for the bank at the time of making the declarations attributed to him. . . . It is obvious that he could not bind the bank by such declarations."

West v. Graff (1899), 23 Ind. App. 410, 55 N. E. R. 506. G. & S. were insolvent on and subsequent to January 15, 1898. On that date they ordered of Graff the goods described in the complaint. They knew they were insolvent and made no representations whatever, nor were any questions asked them. Upon receipt of the goods they were placed in G. & S.'s store and put in course of sale at retail. Later, on January 31st, G. & S. mortgaged their entire stock to W. in trust to sell and pay certain creditors in full, and the remainder, including Graff, pro rata out of the balance. W. immediately took possession and by February 28th had completed the sale. On February 10th, G., having heard of the assignment, demanded of W. that the goods described in the complaint should be returned and delivered up, on the ground that they had been procured through fraud. Upon being refused, the appellees brought replevin, March 2d, and recovered in the lower court.

The court of appeals reversed the decision and remanded the cause, saying upon the question of fraud: "It does not appear that they [G. & S.] made any representation whatever to the appellees, or that any inquiry was addressed to them or others by the appellees before they sold and delivered the goods upon the mere order for such goods. . . The mere fact of the making of the mortgage soon afterwards, together with the fact of insolvency, could not be taken to indicate that such disposition of the goods to favored creditors was purposed at the time of sale and delivery of the goods, or that the buyers purchased them with the design not to pay for them."

In the following cases the facts are held to amount to such fraud on the part of the buyer as warrants the seller in rescinding the sale and reclaiming the goods:

Carstairs v. Kelley Co. (1895), Ky. App. —, 29 S. W. R. 622. T. sold twenty barrels of whisky to K., who were wholesale dealers. K." was insolvent at the time of purchase, and, instead of handling the whisky in its usual way as a distributor to the retail trade, it immediately placed the warehouse receipts therefor in the hands of brokers to be sold for cash. When detected it refused to make restitution to the vendors on terms manifestly just." Held, that these "are circumstances which abundantly support the conclusion reached by the lower courts that the sale was