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65 Wis. 523

Lee v. Simmons

Wisconsin Supreme Court

Decided March 16, 1886

Wisconsin Supreme Court · decided 1886-03-16

The following statement of the case was prepared by Mr. Justice Cassoday: This is an action of replevin.

Key passage — most relied on by later courts

““Where, as here, a person orders goods, knowing himself to be insolvent, without disclosing his insolvency, and with the preconceived purpose of not paying for them at -all, or, at most, only a very small per cent., and with the further preconceived purpose of having them swell his assets, for the benefit of those whom he intends to make his preferred creditors, the purchase is fraudulent.””

quoted by 1 later decision, including In re Friedman

Relies on Donaldson Assignee v. Farwell et al. · Nichols v. . Michael · Nichols v. . Pinner

Good law ✅— No negative treatment on recordhow we know

Decided 1886-03-16

How this case has been cited

Cited by 16 later decisions — most recently April 1972

1 federal appellate · 1 district · 14 state decisions

901886189019001910192019301940195019601970decided

Later decisions citing this case, by decade. The current decade is in progress, and our corpus holds fewer opinions from the most recent years, so the latest bars are undercounted — not a real decline.

View the full empirical analysis of this case →

Cassoday, J.

¶1The facts are undisputed. They appear by the stipulation of the parties, and the testimony of the defendant, his assignor, and his clerk. They more than justify the findings as above stated. From these facts we think the court was justified in holding that the purchase was fraudulently made. Where, as here, a person orders goods knowing himself to be insolvent, without disclosing his insolvency, and with the preconceived purpose of not paying for them at all, or, at most, only a very small per cent., and with the further preconceived purpose of having them swell his assets for the benefit of those whom he intends to make his preferred creditors, the purchase is fraudulent, and the vendor, upon discovering the fraud, may rescind the contract, and retake the goods, as against the vendee. Nichols v. Pinner, 18 N. Y. 295; S. C. (Nichols v. Michael), 23 N. Y. 266; Hennequin v. Naylor, 24 N. Y. 139; Devoe v. Brandt, 53 N. Y. 462; Pike v. Wieting, 49 Barb. 314; Wright v. Brown, 67 N. Y. 1; Dow v. Sanborn, 3 Allen, 181; Thompson v. Rose, 16 Conn. 71; Morrill v. Blackman, 42 Conn. 324; Shipman v. Seymour, 40 Mich. 274; Donaldson v. Farwell, 93 U. S. 631; Stewart v. Emerson, 52 N. H. *527301. The case of Garbutt v. Bank of P. du C. 22 Wis. 384, is clearly distinguishable. The defendant, as assignee for the benefit of creditors, took the goods subject to the equities between the original parties, and hence is in no better position to defend against this action than Whittelsey would have been had the suit been brought against him before the assignment. Nichols v. Michael, supra; Devoe v. Brandt, supra; Dow v. Sanborn, supra.

See note to this case in 37 N. “W. Rep. 176.— Rep.

¶2The mere fact that the defendant voluntarily advanced to the railway company the freight on the goods did not make him a bona fide holder, nor entitle him to retain the goods until he should be reimbursed; nor did the fact that the vendee received and appropriated to his use the goods sent by express, before the plaintiffs discovered the fraud, prevent them from reclaiming the goods not so appropriated when they did discover the fraud.

¶3By the Court.— The judgment of the circuit court is affirmed.

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