154 



FRAUDULENT CONTEACTS. 



Eesale by the 

 buyer to an 

 innocent 

 vendee. 



Contract with 

 intent to cheat 

 the seller. 



Preconceived 

 design of not 

 paying for 

 goods. 



Question for 

 the jury. 



Resale at a 

 reduced price. 



valid transaction (s), or has a right to treat the contract as 

 a nullity, and recover the value of the goods in an action of 

 trover [t). 



If he does not treat the sale as void before the buyer has 

 resold the goods to an innocent vendee (s), or pledged them 

 for a bond fide advance (m), the property will pass to the 

 vendee. 



But the property will not pass to an innocent vendee, 

 unless the relation of vendor and vendee existed between 

 the original owner of the goods, and the person who has 

 fraudulently obtained them; for, if there be not a sale 

 between these parties there is no contract, which the owner 

 can either affirm or disaffirm («). Thus where A., who had 

 formerly been B.'s agent, and had been known to the 

 plaintiff as such, after his agency ceased, obtained goods 

 from the plaintiff in the name of B., which he handed over 

 to the defendant, an auctioneer, by whom they were sold : 

 it was held, that the plaintiff might maintain trover against 

 the defendant, for there was never any sale to A., or any 

 contract between him and the plaintiff («/). 



All contracts of purchase made with the fraudulent intent 

 to cheat the seller, and dispose of the goods at a swindling 

 price, to raise money, are held void {%). 



It would appear that where the buyer purchases goods 

 with the preconceived design of not paying for them, such 

 sale does not pass the property therein (a) . Thus where 

 some sheep had been bought under such circumstances. 

 Chief Justice Abbott held that if the buyer contracted for, 

 and obtained possession of the sheep in question, with a 

 preconceived design of not paying for them, that would be 

 such a fraud as would vitiate the sale and prevent the pro- 

 perty from passing to him (b). 



Whether the buyer has obtained possession of the goods 

 with such a preconceived design, is a question for the 

 jury (&). 



The resale of the goods at reduced prices immediately 



(s) White V. Garden, 20 L. J., 

 C. P. 166. 



[t) Ferguson v. Carrington, 9 B. & 

 C. 59 ; -S. C. 3 C. & P. 457 ; Load v. 

 Green, 15 M. & W. 216, 221. 



(u) Kingsford v. Merry, 11 Ex. 

 577. 



[x) Kingsford y. Merry, 26 L. J., 

 Ex. 83. 



((/) Miggons v. Barton, 26 L. J., 



Ex. 342. 



(z) Gibson V. Carruthers, 8 M. & 

 W. 346. 



(a) See Irving v. Motley, 7 Bing. 

 551 ; Load v. Green, 15 M. k W. 

 221 ; Ferguson v. Carrington, 9 B. & 

 C. 59. 



(4) Farl of Bris'ol v. TTilsmore, 1 

 B. & C. 521. 



