
    Saunders and Martin vs. Turbeville, et als.
    
    1. Where goods were delivered under a contract of sale with a condition made at the time of sale, that a note for the purchase-money'should be given with an endorser: Held, that no title to the goods passed till the note with an endorser was given according to the contract, and that the goods were subject to be attached in equity by the owners, in the hands of a trustee' to whom they had been subsequently conveyed.
    2. Where goods are obtained by fraud, the contract nf sale is void and the property in them remains in the original vendor.
    3. Where the owner of goods delivers them under a contract of sale, and subsequently proposes to take a deed of trust on them from the individual to whom he has delivered them, takes notes for the payment of the purchase-money paya-, ble at different times from the times of the original ppntract, and takes a power of attorney to confess judgment and also takes an assignment of other effects to secure the payment of such notes: Held, that such proposition ■ and acts are in affirmance of the title ofthe vendee, and that the original owner shall not be hoard to urge that the title to the goods do' not pass. ,
    4. Where a 'deed of trust was made to save harmless certain securities against ponlingent liabilities, the vesting the owner of the goods with power by the deed to keep possession of them, and to continup selling them by retail, and tp aepount for the proceeds, does not render the deed fraudulent, as against the creditors of such individual.
    5. Where such individual, to whom the goods were so entrusted as aforesaid, by the provisions of the deed, appropriated them contrary to the provisions of the deed: Held, that this constituted no evidence of fraud on the part of the beneficiaries in the deed, there being no proof that they had any knowledge of such fraudulent misappropriation of the effects.
    This bill was filed on the 8th day of May, 1838, in the chancery court at Qallatin, by Martin & Saunders against Turbeville and others, for the purpose of having a contract .of sale and a deed of trust declared void, Saunders & Martin were wholesale merchants and partners in the town of Nashville. Turbeville was a retail merchant in the town of Springfield, in Robertson county. On the 7th of April, 1838, Turbeville applied at the house of Saunders & Martin for the purchase of a lot of goods. The pecuniary condition of Turbeville was not regarded as being very good. As he had but little capital upon which to embark in the business, and as he was somewhat inexperienced, Saunders offered to sell him the goods which he wanted, but required personal security for the payment of the money.
    The bill charges, that Turbeville was embarrassed in his circunvr stances and that complainants were unwilling to sell him the goods ■without personal security; that Turbeville promised to give Thomas B.[Matthews as endorser on notes which he would execute, payable at nine and ten months after date, with interest after six months; that complainants regarded Matthews as satisfactory security for the money, and thereupon, upon that express condition, delivered him goods of the value of $1409 86.
    The allegation of the bill in reference to this agreement of Tur-beville was denied by the answer of Turbeville and by the parties for whose use the deed of trust was made. . Turbeville admitted, however, that he promised to give him as an endorser, if he could get him to endorse for him, but denied that such promise was a condition precedent to the delivery of the goods.
    The goods were accordingly set apart in the store house, and Turbeville left Nashville for Springfield. On his way home he met a waggoner with his waggon which presented an opportunity to get the goods from Nashville to Springfield on favorable terms, and gave the waggoner an order on Saunders & Martin for the delivery of the goods to him, which was done accordingly. Saunders wrote the notes for the payment of the purchase-money, payable to T. B. Matthews, for the amount due according to their understanding of the terms of the contract, and transmitted them to .Turbeville by the next mail after the purchase of the goods, with the request that he would sign them and: get the endorsement of Matthews and return them to complainants at Nashville. The testimony bearing upon this point is set forth in detail in the opinion of the court which follows hereafter. Turbeville applied to Matthews to procure his endorsement of the notes, but Matthews refused to endorse them for him. Turbeville, for the time, said and did nothing more in reference to the endorsement.
    Turbeville had previously administered upon the estate of his deceased father, Wm. Turbeville, and had given W. Powell, W. Kirby, Thomas B. Matthews and R. Bartlett as his securities for the faithful performance of the trust. Turbeville held in his hands some three or four thousand dollars of the money of the estate, and the distributees had instituted suit against him and his securities for their respective shares of such estate. See Harrisonvs. Tur-beville, ante p. 242. Becoming alarmed at their situation, and being apprehensive of loss, they demanded of ‘Turbeville indemnity. Turbeville on the 20th of April, executed a deed of trust purporting to be intended to save harmless the said securities in the administration bond. This deed, after reciting that Turbeville had administered on his father’s estate in the county of Robertson, and had given the above named individuals as securities in a penal bond for the sum of $10,000, for a faithful administration of his trust, and that there was in his hands about the sum of $4000 due the distributees, bargained and sold,'for the purpose of indemnifying the said securities, to Spencer Turbeville, one negro boy, one horse, some household furniture, and “all the merchandise or goods now in the store house of M. J. Turbeville, supposed to be worth about four thousand dollars, the same to have and hold in trust for the said securities and for no other purpose whatever; that is to say, if the said M. J. Turbeville shall discharge the said bond and thereby exonerate them, (the said securities,) from all liability thereupon, then this deed to be v-oid, but if said securities shall be damnified, or likely so to be, by reason of any judgment being rendered against them, then and in that case, that said S. Turbeville, on the requisition of either of said securities, is hereby empowered out of the above described property, either by sale or otherwise, to raise so much money as will meet said judgment or judgments,” after giving notice, &c., or “if otherwise, the said trustee with the said Miles J. shall continue to sell off said goods by retail, keeping the accounts raised from the date of these presents distinct from those heretofore made, and at all times allowing said securities access to said books for inspection, and should they think fit, they may at any time appoint another trustee in the room of said Spencer Turbeville, and such as may be appointed shall pay off to said Miles J. all such balances as may be due said Miles J. after discharging so much as the securities may be liable for.” This deed was acknowledged by M. J. Turbeville on the 23d of April, 1838, and registered on the 25th.
    Turbeville continued in the possession of the goods, sold portions of them, and applied the proceeds to such purposes as suited him, without regard to the deed of trust, and secretly and clandestinely conveyed some of them, boxed up, to the State of Mississippi. He also removed the slave. It does not appear, however, that his faithless conduct was known or approved by the beneficiaries in the deed.
    When these facts were communicated to Saunders & Martin, to wit, about the 1st of May, 1838, Saunders went down to Springfield for the purpose of attending to the investigation of the matter. On his arrival, he called on the defendant, Turbeville, and charged him with having violated the agreement upon which he obtained the goods, to wit, the giving his note with an endorser. This, Turbeville admitted at some times, and at others equivocated on the subject. Saunders demanded a deed of trust on the goods. This, Turbeville refused, declaring he had already conveyed them. Turbeville then, at the instance of Saunders acting upon legal advice, gave him his notes for the value of the goods, due, and also executed a power of attorney to one Green, to confess judgment on the notes. He took an assignment of the notes and accounts of Turbeville as collateral security for the payment of these notes, and other smaller notes, which they held on him.
    These were found wholly insufficient to satisfy the debts, most of them being on insolvent persons, although Turbeville had represented them as being ample for the satisfaction of the claims of the house of Saunders & Martin on him. The bill alleges, that the complainants did not intend in the acts thus done to sanction the previous fraudulent conduct of Turbeville, or to abandon any of complainants legal rights as to the goods.
    The bill prayed that an attachment might be ordered to be issued, commanding the sheriff of Robertson county to seize the goods and hold them to abide the decision of the court, and also an injunction restraining the defendants from selling or disposing of said goods or any part of them, and from collecting any debts due upon any previous sale of such goods, &c. Rucks, circuit judge, on the bill verified according to law, ordered the issuance of the writs, which were issued accordingly.
    At a subsequent period, the complainants filed a supplemental bill in which they alledged, that they had obtained judgment against the defendants, had procured the issuance of afi. fa. which was in the hands of the sheriff of Robertson county, and that they had directed him not to sell the goods, till the further order of the court.
    The securities answered, and alledged, that they were informed and believed, the sale of the goods was absolute and unconditional, and declared that the deed of trust, made for their benefit, was made in good faith and was not fraudulent. The complainants filed replications to the answers, and the case came on for hearing at the October term of the chancery court at Gallatin, 1840, on the bill, answer, replications, exhibits and proof. Ridley, chancellor, presiding, being of the opinion that the goods were sold and delivered without any condition, and that the deed of trust executed on the 20th of April, for the benefit of Turbeville’s securities, was not fraudulent in law or in fact, dismissed the bill of complainants and taxed them with the costs. From this decree complainants appealed to the supreme court.
    
      F. B. Fogg, for complainants.
    The general principle is, that where there is no bankrupt law, an insolvent debtor may prefer one c2-editor to another, but such preferences are to be viewed with jealousy and should be strictly construed so as to guard against abuse and fraud. Riggs vs. Murray, 2 John. Chan. Reports, 565, 577.
    In this case there are two questions:
    1st. The property in the goods sold by complainants did not pass, for two reasons; first, it was conditional, and an endorser was to have been given. The proof fully sustains this. Saunders’ statements made at the time of the contract, before the goods were delivered, are part of res gestee, and therefore proof. See 11 Pickering, 362. See, also, as to conditional sales, 1 Paige’s Ch. Rep. 312: 6 John; Ch. Rep. 437: 17 Mass. Rep. 606: 4 Pickering, 449. Secondly, Turbeville was insolvent and concealed that fact, and the goods did not therefore pass. 1 Paige’s Ch. Rep. 492 : 2nd do. 171, 2.
    2nd. The deed of trust is fraudulent. There was no change of possession. 7th Paig. Ch. Rep. 163: 3 Rand. Rep. 410. The fact as to Turbeville’s carrying off the goods and negro is fully proved; the deed reserved to him the power of control and sale.
    3d. Saunders was induced to make the arrangement in Springfield by fraud and misrepresentation, and of course it was void, and Saunders & Martin could not be deprived of their previous rights thereby.
    
      James Campbell, for defendants.
    1. If goods are unconditionally sold and delivered, the vendor must look to his security. The goods were not procured by fraud, and no right of property was reserved at the time. See Chapman vs. Lathrop, 6 Cowen, 110: 2 Mason, 236 :■ 2 Marsh. Ky. Rep. 576.
    2. The possession of the goods by Turbeville and sale of them, for the purpose of carrying into effect the deed of trust, as provided in the face thereof, is not inconsistent with the rights of the securities and not fraudulent in law. There is no pretext for the assertion, that the deed was not made for bona fide purposes.
    3. The subsequent fraudulent disposition of a portion of the goods by Turbeville cannot affect the rights of the beneficiaries of the deed, as there is no evidence that they assented to his conduct or sanctioned it in any way whatever. 18 John. Rep. 515.
    
      W. A. Cook, for complainants.
   Gkeen, J.

delivered the opinion of the court.

The original bill in this case alledges, that the complainants had sold M. J. Turbeville a parcel of goods on condition that he would give a note for the price with one T. B. Matthews as endorser, and that, relying on his performance of this condition, they had delivered to him the goods, which in a few days afterwards he conveyed in trust for the security of the other defendants, who were his securities for the faithful administration of his father’s estate, and that he had wholly failed to obtain the endorsement of Matthews, or give them security for the price of the goods. They insist that they did not part with their title to the goods, until the condition of the sale was complied with, and this not having been done, they have a right to reclaim them, notwithstanding the deed of trust in favor of the other defendants.

The supplemental bill states, that the complainants had obtained a judgment at law against Turbeville, upon which a fi. fa. had issued, and had been levied on said goods, but that they had directed the sheriff not to sell until the matters could be heard in equity; that the deed of trust for the benefit of the other defendants was fraudulent and void, and prays a decree to set it aside, and that the property be sold for the benefit of the complainants.

Turbeville, in his answer, denies the contract for the goods to have been as the hill states it, or that there was any condition in the sale, and states that complainant, Saunders, suggested to him that Matthews would endorse his note, upon which suggestion, defendant promised to'procure the endorsement of Matthews, if in his power; that Matthews refused to’endorse for him, and that the goods were delivered without condition to him, and obtained without fraud on his part, and were conveyed, to the other defendants without fraud, to indemnify them for liabilities they were under for him.

The^ other defendants insist that the title to the goods was vested absolutely in Turbeville, by the sale and delivery, and that the coii-veyance for their benefit was fair and bonafide.

George Thomas-, one of the clerks of Saunders & Martin, states that on the evening the goods were sold^ arid before they were invoiced, Mr. Saunders remarked1 to him, that said Turbeville had agreed to give T. B. Matthews-, of Robertson coünty, as endorser on the notes. Mr. Saunders told witness, he would not sell Turbe-ville goods without an endorser.

Wm. A. Walsh, another clerk in the complainants’ store, states, that on the evening that Turbeville laid by the goods, and before they were invoiced or delivered, he heard Mr. Saunders say that he considered it a first rate sale, as Turbeville had to give Thomas B, Matthews of Robertson county as security.

H. S. Kimble states, that J. W. Saunders, of the firm of Saunders & Martin, went to Springfield, where Turbeville lived, in a few days after Turbeville had received áñd opened the goods he had purchased of Saunders &. Martin, and after the goods had been conveyed to a trustee for the security of the other defendants; that Saunders and Turbeville went to.the office of the witness, where Saunders urged Turbeville to give him a deed of trust on the goods also. Turbeville refused, and Saunders adverted to many arguments to induce Turbeville to comply, 'and among others remarked, “you know, Mr. Turbeville, that when you bought oUr goods, you were to give Mr. Matthews as your endorser, and having failed to do so, I think you cannot object to doing any thing you can to secure our debt.” To the frequent repetition of these remarks, Turbeville would sometimes drop some short expression of indirect acknowledgement, and Sometimes he would remain silent, but refused,to give the deed of trust. Turbeville told Saunders that if he would wait a few days, he would still give him security. But Saunders insisted that his credit was gone, and that no o'fie would be his security. Saunders urged him to make an assignment of his books and accounts, which Turbeville had stated were worth four thousand dollars. Turbeville still insisted he Would give good security, but finally yielded, and made the assignment. Saunders Urged that the books and accounts from the slight examination he had given them would not be sufficient to secure him. Witness proposed that Turbeville should make a power of attorney to some person to confess a judgment in favor of Saunders & Martin at the next term of the circuit court, which would enable Mr. Saunders to test the validity of the deed of trust. The parties agreed at once to this proposition, and the power of attorney was executed.

J. Green, states, that after complainants filed their bill, he had a convei’sation with Miles J. Turbeville, in which he stated to Tur-beville that he had heard that the purchase of the goods was made upon condition that he was to give Thomas B. Matthews as endorser foffthe purchase, which said Turbeville did not deny to have been the contract.

The goods were sold on the 7th of April, 1838, and on the 8th the complainants wrote a letter to Tui’beville at Springfield, enclosing two notes, one at nine months and the other at ten months, for the amount of the bill of goods, in which they state, “that agreeably to our understanding they are both made payable to T. B. Matthews, who will cheerfully endorse them, we have no doubt.”

In a postcript to the same letter, they offer to sell Turbeville hats,' and tell him to send an order for any he might want. The deposition of Miles J. Turbeville was taken in behalf of the other defendants, and states in substance, the facts as they are stated in hjs answer. The deed of trust is dated the 20th of April, 1838 and was registered on the 25th of the same month. The goods in controversy and other property, were conveyed to Spencer Turbe-ville in trust, to secure the other defendants as securities of said Miles J. Turbeville.

Upon these facts it is insisted, by the’complainants counsel, that the goods were sold to Turbeville upon a condition precedent, that he was to execute a note for the price, with Thomas B. Matthews as endorser, and that not having done so, the property in the goods did not pass, notwithstanding the delivery of them to him. From the .most careful scrutiny of the evidence in this cause, we are unable to arrive at the conclusion, that there was such condition precedent.

There is no admission by Turbeville that such a condition was made part of the contract. On the contrary he denies its existence in his answer, and also in his deposition. If the testimony of Thomas and Walsh be admissible as part of the res gestee, this evidence is only proof of the fact, that Saunders said Turbeville had agreed to give Matthews as endorser. Kimble and Green only prove statements in the presence of Turbeville that he was to give Matthews as security, which he did not deny.

If the terms in which the statements are made, were to be taken as the terms of the contract, we cannot perceive that it contains a condition precedent, that the security was to be given before the title to the' goods- could vest in Turbeville; but when we take into view the letter of the complainants, referring to the endorsement of Matthews as a matter understood between the parties, which they had no doubt he would do, and urging additional purchases of goods, which dt was proposed to send to his order, it is apparent, that although it had been agreed, that a note with Matthews’ endorsement should be procured, if practicable, yet that the sale of the goods did not depend upon that as a condition.

The expression in the letter, that they had no doubt that Matthews would cheerfully endorse the notes, is indicative of their confidence in Turbeville, and their willingness to trust the procurement of Matthews’ endorsement by him. In the same letter too, they offer to extend further credit for additional goods, without mentioning the subject of security for them. Add to this, the goods were delivered to the carrier without requiring the security first to be given, or annexing any condition whatever thereto.

Mr. Saunders’ treatment of the case agrees with this view of the facts. Although Turbeville had been several weeks in the possession of the goods, no step is taken in relation to the claim, until he heard of the assignment to the defendants. ■ And then when he went to Springfield, although he alleged that the assignment was fraudulent, yet he set up no claim to the goods as his property. On the contrary he urged Turbeville to give him a deed of trust also on the goods, thereby acknowledging the title to them to be in him. When he failed to obtain a deed of trust on thegoods, he took notes due at their date, instead of nine and ten months afterwards, with a power of attorney to confess judgment on them, and as a security for this payment, he sought and obtained an assignment of Tur-beville’s books and accounts. After so many acts in relation to this subject, each predicated upon the supposition of Turbeville’s ownership of the goods, the right of the complainants to attach them as their property could not be countenanced, even if the proof in relation to the contract were much stronger than it is.

This view of the case is decisive also of the other ground upon which they insist they are entitled to the goods. If Turbeville were guilty of fraud in procuring the goods, the contract of sale would be void, and the complainants would have remained owners, But no such allegation is made by Mr. Saunders at Springfield, nor does he claim any title to goods for such cause. Independent of this, we do not perceive any evidence in the record going to establish the charge of fraud upon Turbeville in the procurement of the goods. Upon the whole, therefore, we think the title to the goods did pass to the purchaser by the sale and delivery, and that the complainants trusted to the good faith of Turbeville, and the willingness with which they supposed Matthews would endorse the notes.

2. The next and only remaining question is, whether the deeds of trust are fraudulent, either upon their face, or for facts extrinsic thereof, proved in the cause. It is contended that the provision in the deed, that Miles J. Turbeville, with the trustee, was to continue to sell off the goods by retail, constitutes them fraudulent.

This proposition, it is true, gave Turbeville the joint possession of the goods, and thereby puf it in his power to waste them, or put the proceeds of the sales in his own pocket, and it may therefore have been, and, as it has turned out, doubtless, was an imprudent arrangement. But this stipulation is not inconsistent with the conveyance, as the Trustee was to remain in the joint possession of the goods, and as Turbeville’s possession was not for himself, but as the agent and servant of the parties for whose benefit the deed was ¿nade. If he were honest and trustworthy, this arrangement'would he manifestly for the benefit of all concerned. He was acquainted with the business and could manage it better than one who knew nothing about it. The sales, too, would be made at a higher price than would have been produced at auction. And as we are not to suppose in advance that a man will act dishonestly, we can perceive nothing in this arrangement indicative of a fraudulent intent in the parties to the deed.

As to the existence of facts extrinsic of the deed, that render it fraudulent, we do not perceive them. It is true, Turbeville used a small portion of the funds to pay a debt due from him to a third person, and it is probable, that in violation of his trust and of honesty, he abstracted a portion of the goods, and conveyed them to Mississippi. But there is no proof, nor ground to suspect that the other defendants knew of or consented to these acts, and if no fraud is to be inferred from the fact that he was constituted one of the agents to sell the goods, surely none can be imputed, because of his subsequent faithless conduct. -

We think, therefore, that the hill must.be dismissed. But as the circumstances of the case furnished grounds, which well warranted this investigation, and as this proceeding has probably saved to the parties a considerable portion of the effects secured by the deed, the costs of the cause in this court will be paid out of the fund do controversy. Affirm the decree.  