IMPORTANT JUDGMENT.

New Zealand Times, Volume XXXIV, Issue 5641, 29 April 1879, Page 3

IMPORTANT JUDGMENT.

I'ALLANT (TRUSTEE OP) V. LODBERE. The Resident Magistrate, Mr. Mansfdrd, yesterday delivered the following judgment in the above case, heard a few days ago—Mr. Stafford gave notice of appeal:— In this case the plaintiff sues the defendant for £IOO, the value of certain boots and shoes, the property of the plaintiff, as such trustee, removed by the defendant from a certain shop in Manners-street, the property of the plaintiff, as such trustee, and purchased by the defendant from one Joseph Teesdale, who had no right, title, or interest to or in the same. The facts, so far as material to the present case, may be briefly summarised as follows:—Pallant on the 12th December last, being in insolvent circumstances, sold the whole of his stock-in-trade and effects to Teesdale, the consideration being four acceptances at 3,6, 9, and 12 months. On the 14th December Pallant filed a deed of arrangement, to which his creditors on the 3rd day of January refused to assent, and on the same day he filed a declaration of insolvency. On January 9, Mr. Berry the present plaintiff was elected creditors’ trustee, and duly accepted the trust. On the 16th of January Pallant and Teesdale were served with a writ, and notice of intention to apply for an injunction restraining them from selling, dealing with, or parting with the pos-session-of the goods, chattels, stock-in-trade, &0., mentioned in the declaration, so that prior to any sale to Lonbere, Pallant and Teesdale know of the application for the injunction. The sale to Loubero took place on the 20th January under circumstances which will be more fully detailed hereafter, and on the following day the injunction was granted, which was made perpetual on the 14th February, and at the same time the sale by Pallant of the plant, machinery, stock-in-trade to Teesdale was declared fradulent and void as against the plaintiff and the creditors of Pallant. It may I think be consideredsettledlaw that where goods have been fraudulently obtained, a subsequent sale to a bona fide purchaser cannot be avoided. An innocent purchaser from the fraudulent possessor may acquire an indefeasible title to it though it is voidable between the original parties, so that in the present case the sole question is—Was Lonbere an innocent, a bona fide purchaser ? and to answer this question it will be necessary to ascertain .the circumstances pnder which the gale was effected, first premising that there can be no sale in market overt in the colony of New Zealand, and that even if such a sale could be held it must be held openly in order to change the property, and that such a sale as that by Teesdale to Lonbere, in a warehouse at the rear of a shop, would not be a sale in market overt, and would ;,not therefore change the ownership. According to the evidence, the defendant, accompanied by his ' assistant Dodds, went on January 20, at the request of Teesdale to look at some goods which Tees-

dale wanted to sell—a job lot Dodds called if The goods were up tho stairs of the back factory, at the rear of tho shop. Teesdale opened the door ; Loubere and Dodds looked at the goods. Loubere made an offer of £SO, which was then and there accepted. Loubere and Dodds both knew that Pallant was insolvent, and though Dodds asserted that he was not aware of any arrangement between Pallant and Teesdale, the defendant Loubere admitted that ho knew that the goods were originally Pallanfs, and that it was because he knew Pallant was insolvent, and had seen notice of his insolvency in the newspapers, that he required Teesdale to show how he became possessed of them. The production of an invoice purporting to deal with a thousand pounds worth of property without any further inquiry into the matter satisfied the defendant, though he knew that the goods were originally Pallaut’s, and that Pallant was insolvent, and forthwith the goods are hurried into an express van and removed, the price paid for them being from 50 to 100 per cent, below the marketable value, I cannot conclude that this transaction was a bona fide one, or that the defendant was an innocent purchaser ; and therefore give judgment for the plaintiff for £IOO and costs.