could reclaim them even from attaching creditors. In support of their title, they undertook to make proof of what Cohen had stated to the commercial agencies, of what Benjamin & Co. had communicated to them, and of the amount of assets which Cohen had when he bought the goods. For this purpose, they put Cohen and the clerks of the agencies on the stand. When the clerks who collected the information were produced, they were asked what Cohen had stated concerning his affairs. Only one of them produced his report to the agency. The other brought what purported to be a copy. Neither of them undertook to state precisely what Cohen had said. They could only tesuty that, when they made their inquiries, they took down certain memoranda, and from those memoranda were able to speak gen. erally about his statements. The reports which were furnished to Hirsh, Elson & Co. were produced. When the plaintiffs endeavored to show by Cohen that the statements were not true, they met with very little success. The invoice of the sheriff, which was probably not very much in excess of the values, very clearly showed that the stock was worth in the neighborhood of $11,000. The only difference between the representations and the facts, if any, lay in the difference between his statement of the value of his realty and its actual worth. Cohen's evidence was the only proof on this subject. It was proven by an abstractor that he had no title to the lots in Hartman's addition, but it was clearly demonstrated that Cohen had traded for the Broadway Terrace. This property was worth as much as the lots. This we must assume, for there was no evidence disputing it. Cohen was interrogated concerning these statements in July, and testified to their accuracy and their truth. He likewise testified that he purchased the goods in good faith, and intended to pay for them when he bought them. There is nothing to impeach this statement, unless we are at liberty to assume it to be inaccurate because he subsequently failed to pay and was found to be insolvent when the parties attempted, by their attachments, to realize enough to pay all the claims.

When the case was concluded, the court gave several instructions to the jury. The jury were told that if they believed the statements were false, and Cohen's condition was not as he gave it, and the plaintiffs, relying on the reports, sold the goods, they must find for them. The court further told the jury, even though they might find from the evidence that the statements were substantially true when made, yet if afterwards Cohen's financial condition was substantially changed, and the jury believed "that, at the time of the purchase of the said goods in controversy from the plaintiffs by said Cohen, the financial condition of said Cohen was substantially different from the report and statement made by Alfred Benv.39P.no.3-23

jamin & Co. and the report made to Bradstreet's Agency in 1892, then it became and was the duty of said Cohen, before purchasing said goods of the plaintiffs, to make a statement to the plaintiffs of the change which had taken place in his financial condition; or if you believe from the evidence that, at the time of the purchase of said goods in controversy from the plaintiffs, the said Cohen had no reasonable expectation of paying for the same, and you further believe from the evidence that the plaintiffs sold the goods to said Cohen relying upon the statements made by said Alfred Benjamin & Co. and the said report of said Commercial Agency, then, in that case, it is your duty to find for the plaintiffs." Acting under these instructions, the jury found with the plaintiffs, and the attaching creditors appealed.

The equities here are manifestly with the diligent creditors who instituted the suits to collect their debts, and the appellees are not entitled to maintain their judgment, even though the facts may have justified the verdict, unless the jury were aptly and correctly instructed respecting the law. We are not prepared to concede either proposition. We should not, however, disturb the judgment because we disagreed with the jury, but for the legal errors apparent in the record. Commercial agencies are well-recognized instruments in the commercial world for the transaction of business between different places. They probably subserve a useful end, and in many ways are advantageous to those who are engaged in commerce. In the quick and rapid transactions of modern times, they are very much relied on to settle the question of the responsibility of the merchant who seeks to trade with the wholesale and jobbing house. Their means are, doubtless, subject to criticism, and they are often used to the detriment of the merchant, as well as to his advantage. As an original proposition, I should be very much inclined to doubt whether, in the absence of a specific purpose on the part of the buyer to deceive a particular seller, a statement made to a commercial agent, even though the agent might report it to his foreign correspondent, could be made the basis of an action for false representations. I should also question whether a vendor could rescind a sale on the hypothesis that he had been led to make it because of what was reported to him by the agency, without ample and satisfactory proof that the statement was made to the agency with both knowledge and intention on the part of the vendee that it was to be transmitted or furnished to that vendor. There are, however, some cases which declare the doctrine and hold that a representation made to a commercial agency without reference to any immediate transaction between the one making it and some other, may still be proven by a vendor who, relying on it, makes a sale after he has received a report which embodies sub

stantially what the merchant has said. We are not disposed to dissent from the authorities on this subject. We prefer to say that, admitting that this is the law, vendors who rely on it to set aside sales as against attaching creditors must make clear and satisfactory proof both of the representations and their falsity. The trouble with most of these agencies is this: they do not rely on what the merchant has stated as much as they do on the general information respecting his financial status, which they are able to gather in the community. The reporters combine what has been stated with what they have been able to learn, and many times color it as their interests or information may warrant; so that, when the report reaches the foreign correspondent, it is a far different thing from an accurate transcript of what the home merchant has said. Probably the reports which are furnished the vendor would be admissible as an element in the proof, but they must be supplemented by evidence of the actual representations which were made by the buyer. This would not be accomplished by producing the reports which the clerks made to the home office. The evidence in this regard must be a substantial narration of the buyer's statements, which, in turn, must be in effect, if not in accurate restatement, reproduced in what was furnished the seller. The rules of evidence permit no other method of proof, and the rights of attaching creditors cannot be affected unless the vendor can sustain his title by clear and convincing evidence of the fraud of the vendee. The burden should be placed on the vendor. He has parted with the possession of his goods. The sale is complete. Credit is given. The purchasers have a title which is indefeasible if they got title at all. To invalidate the transaction, the seller relies on the falsity of a statement which was made to an agency, and was made perhaps months before the transaction in question, and virtually to the public generally, and without specific intent. It is not inequitable to require him to make close, strict, and satisfactory proof both of the representations and their falsity. The testimony in the present case did not rise to that level in either particular. The clerks who claimed to have interviewed Cohen were produced. Their memory of what he said was neither clear, accurate, nor positive. But waiving the unsubstantial and unsatisfactory character of their evidence, which should have been submitted to the jury with instructions respecting it, the case lacked evidence of the falsity of the representations.

The plaintiffs produced one witness who had examined the records and failed to find the lots in Hartman's addition which Cohen said he owned. There was some discrepancy between the facts and what one of the agency's employés said concerning Cohen's statement respecting the title to the Chicago property. Nothing further was offered on this

subject. The first was entirely destroyed by Cohen himself, who was put on the stand by the plaintiffs. It appeared from his testimony that the July statement concerning the Hartman lots was absolutely true. After that date the lots were not sold, but were traded for other improved property in Broadway Terrace, which was of equal value. That much, then, of his statement, was not false. It is assumed by counsel that they have a right to eliminate the real-estate value from this statement in order to demonstrate the falsity of his representations. The argument is a non sequitur. The representation that he owned the lots was accurate. His opinion of the value was another proposition. On it a false representation can hardly be based. The difference between the facts and the statement which Cohen made about the Chicago property was unsubstantial.

There is another matter to which attention must be directed before the general principles of law which will be applied to the instructions can be understandingly stated. There was nothing in the evidence to show that Cohen had any design to defraud Hirsh, Elson & Co. when he bought the goods. The case is barren of proof even tending in that direction. The only thing which admits of that construction, or of an argument respecting it, must be drawn from the fact that, when his assets were seized by the sheriff, they did not yield on execution sale enough to pay his debts, -a circumstance which would probably apply to the property of most men in business if they were suddenly called upon to liquidate. In fact, Cohen directly testified that he purchased the goods in good faith, and fully intended to pay for them. This he might have done but for the pressure of the panic, which had then already commenced to be felt.

This statement and argument must satisfy the professional mind that the court did not instruct the jury in accordance with the law. There are two phases of the instruction which is quoted to which attention must be directed. The jury were told substantially that if they believed from the evidence that Cohen, at the time of the purchase, had no expectation to pay, their verdict must be for the plaintiffs. This does not accord with the law. The instruction lacks a fundamental element required by all the cases, to wit, a design not to pay. Some of the authorities undoubtedly go to a great length in requiring definite proof of facts from which the intention not to pay can be fairly and easily demonstrated. Others lack that vigor of expression, and will permit the jury to infer the design and intent not to pay, providing they find from the proof enough to satisfy them that the intention existed. Some, perhaps, go still further, and permit the jury to infer the intent not to pay from proof of the insolvency of the buyer at the time of the purchase; but

there is no well-considered case which we approve which permits an instruction in the form which the court adopted in this case. A reasonable expectation not to pay is not enough. The jury ought to have been carefully instructed that they must find the buyer had the intent and design not to pay at the time he made the purchase or the title would pass. Gavin v. Armistead, 57 Ark. 574, 22 S. W. 431; Reticker v. Katzenstein, 26 Ill. App. 33; Armstrong v. Lewis, 38 Ill. App. 164; Morrill v. Blackman, 42 Conn. 324; Garbutt v. Bank, 22 Wis. 384; Zucker v. Karpeles, 88 Mich. 413, 50 N. W. 373; Redington v. Roberts, 25 Vt. 686; Swarthout v. Merchant, 47 Hun, 106; Hotchkin v. Bank, 127 N. Y. 329, 27 N. E. 1050; Bank v. Bamberger, 77 Tex. 48, 13 S. W. 959; Manufacturing Co. v. Keeler, 65 Hun, 508, 20 N. Y. Supp. 388; Klopenstein v. Mulcahy, 4 Nev. 296; Smith v. Smith, 21 Pa. St. 367. These cases, with many others, hold the necessity of proof of a fraudulent intent on the part of the buyer at the time of the transaction. Few of the states go to the extent of the Pennsylvania cases. Personally, I am not prepared to quarrel with that court. They have rested their decisions on a broad and impregnable basis. To entitle the vendor to rescind the sale, as against the subsequent vendee or attaching creditor, when he has parted with the possession of his goods, he should be able to show an actual artifice and design whereby he was misled; otherwise the sale must stand. If all the cases pursued this welldefined policy, there would be much less litigation of this description. We do not so declare the law, because the current is the other way, but we do insist that there must be some proof of design, or some evidence offered from which the jury would be at liberty, under well-defined and well-stated rules of law, to find that the intent existed. In this case there was no such proof. jury would not have been warranted on the case made to find the existence of such intent. It was expressly negatived by Cohen's own testimony, and by all the circumstances surrounding the transaction.

The

The other part of the instruction which has been quoted is subject to even stronger criticism. In it the court left the level of common every-day life, and entered a moral region with which few men are familiar. The jury were told that if, after Cohen had made his statements to the commercial agencies, he found his financial condition altered, so that in some substantial respect his statement would not be true, he was bound to publish the fact of his insolvency. There is no such responsibility. As a general proposition, the buyer is under no obligation whatever to furnish unsought information either as to his present or his changed condition. We do not intend to decide that when there have been dealings between the parties, and the purchaser has become ab

solutely bankrupt, or has reached a financial condition which would warrant the inference and amount practically to proof of a design not to pay, and render the transaction a fraud on the seller, he may withhold information of his condition. No such case is presented. If there was any change in Cohen's condition, there was no such radical alteration as would even tend to establish a fraudulent purpose. There was nothing to evidence a design not to pay. The language of the instruction "if they found Cohen's condition substantially changed" was not sufficiently guarded, restricted, and well defined. The court left out of it the idea which should have been its controlling feature, to wit, the fraudulent purpose. This is more manifest from the conclusion which directs the jury to find with the plaintiffs if they conclude Cohen had no reasonable expectation to pay. The folly of the principle is apparent. No merchant struggling under difficulties could survive a communication of this sort 24 hours. ery creditor would become a suitor, and every suit would be begun by attachment. The instructions were erroneous.

Ev

For the errors which were committed by the trial court, as they have been stated, this case will be reversed, and remanded for a new trial in conformity with this opinion. Reversed.

(5 Colo. App. 489)

GOMER v. STOCKDALE. (Court of Appeals of Colorado. Feb. 11, 1895.) SUIT BY ASSIGNEE REAL PARTY IN INTERESTPLEADING AND PROOF RIGHTS UNDER MORTGAGE ASSERTION UNDER GENERAL DENIAL.

1. The assignee of a claim may sue thereon as the "real party in interest," though the assignment is on condition that when the claim is collected the whole, or some part, must be paid over to the assignor.

2. Defendant sold the timber on her land, taking as security for the purchase-price notes a mortgage on the mill machinery to be used in sawing the timber. The vendee failed to pay the notes when due, and assigned his interest under the contract to plaintiff, who sued for the value of certain lumber and the machinery which defendant had seized. Held, that defendant should plead the mortgage, to entitle her to assert her full rights under it.

Error to district court, Arapahoe county. Action by Philip P. Gomer against Laura E. Stockdale. There was a judgment for deRe fendant, and plaintiff brings error. versed.

J. W. Horner, for plaintiff in error. John: S. Gibons and G. S. Raymond, for defend ant in error.

BISSELL, P. J. During the year 1887, Laura E. Stockdale was the owner of some lands in Park county, and Matthew C. Jackson was a mill man engaged in making lumber. In August the parties made an agree ment which, in respect to those terms essential to the decision, substantially provided

that Jackson might erect his mill machinery and such temporary structures as were essential to his milling operations on certain parts of the land. The owner also sold him the tree tops, and the cut and standing timber, with the right to fell the trees and reduce them to lumber. The consideration on Jackson's part was represented by 13 promissory notes, of $500 each, maturing monthly, beginning with the 10th of September, 1887. To secure payment of this paper, Jackson agreed to give a mortgage on the mill machinery. He executed this security. Jackson paid only a part of the note that matured in November, and defaulted on the other notes. Afterwards, by a written instrument, he sold and transferred to the present appellant, Gomer, all his rights and interest under the contract. At the time he ceased operations, there was considerable lumber at the mill, amounting to about 40,000 feet, and some 30,000 feet of unreduced logs, either at the mill or cut in the woods. Subsequent to the transfer, Gomer made demand for the lumber and the logs, and, when the owner refused to surrender, brought this suit. It is very peculiar in its form and in the structure of the pleadings, which do not seem to be well adapted to the protection or preservation of the defendant's rights. The plaintiff set up title to the lumber and the logs as a first cause of action, alleged the taking and removal by the defendant Stockdale, stated the value, and prayed judgment. The second cause of action was of the same nature, though it related solely to the mill and its machinery, and the temporary structures occupied by the men. In the answer to the first cause of action, the agreement was set up, the execution of the mortgage stated, and it was alleged on behalf of the defendant that the taking was under and pursuant to the authority conferred in the mortgage. There was a general denial, and another defense which is past easy apprehension. It was stated that the transfer to Gomer was without consideration, and the action was prosecuted in the interest of Jackson. As a defense, of course, it amounted to nothing, although it seems to have been of considerable force in the progress of the trial. So far as concerned the second cause of action, which related to the mill, the defendant denied generally. On these issues the parties went to trial. The plaintiff proved the amount of lumber and logs at the mill, in the woods cut and ready for reduction, and the value. He produced the transfer, and proved the consideration, which was apparently the settlement of some debts between Gomer and Jackson. The defendant introduced no testimony at all. There was an attempt, by the cross-examination of the plaintiff's witnesses, to show that, as between Gomer and Jackson, the transfer was not made in good faith, for a valuable consideration; that the assignment was colorable, and the suit prose

cuted for Jackson's benefit. It was not pretended, nor was any evidence introduced to establish, that, because of the agreement between Gomer and Jackson, the defendant was prejudiced, or had any defense which would not have been available against Gomer as well as against Jackson. It was assumed that if Gomer paid no valuable consideration for the assignment, and Jackson was to receive the benefit, Gomer must, of necessity, fail in the suit. There was some loose evidence tending to show that some of this stuff had been taken under attachment, but there was nothing which would warrant a finding that it had been thus taken. fact, counsel admitted during the progress of the trial that part of the property had come into the defendant's possession. On the conclusion of the evidence, the court charged the jury that if they should find the bill of sale was not made in good faith, and that it was without any consideration, Gomer would not be the real plaintiff; and if they found, under those circumstances, that he was simply a nominal plaintiff, they must find for the defendant.

In

Whatever may be the equities of the case, or the real fact concerning the responsibility of the defendant, it is manifest the question was not necessarily settled by the verdict of the jury. The whole case, in the minds of the jury, may have turned directly on the question as to the character of the transaction between Gomer and Jackson. There was evidence enough offered to raise a suspicion in the minds of the jury that Gomer and Jackson had arranged to maintain this suit in Gomer's name, for the recovery of the value of the lumber and the logs, hoping thereby to escape any responsibility on Jackson's part for a failure to carry out his contract, other than what was enforceable by virtue of the chattel mortgage. The testimony concerning the transaction between Gomer and Jackson was not very satisfactory in these particulars, and it is very manifest the plaintiff was prejudiced by the court's instruction on this subject. There is much controversy in the various states respecting that almost universal code provision, that a suit must be prosecuted in the name of the real party in interest. Until the true construction of that act is settled in any particular state, there is much room for discussion. It has been often adjudged that the term "real party in interest" is but a synonym for the phrase the "person having the legal title." It has accordingly been decided that it is no infraction of this statute to bring the suit in the name of the person to whom the claim has been assigned, whether it be an open account or otherwise, although there may be annexed to the transfer the condition that, when the sum is collected, the whole or some part of it must be paid over to the assignor. Bliss, Code Pl. 51. Meeker v. Claghorn, 44 N. Y. 349; Allen v. Brown, Id. 229; Bassett v. Inman, 7 Colo.

In answering the second defense, the defendant simply denied generally the allegation of the complaint. This second cause of action concerned the mill and its machinery, and was brought to recover for its taking. If, as would appear from the record, all this property was seized under the chattel mortgage which Jackson had executed, that instrument, if valid, would protect the defendant from a suit for damages for its removal. It is questionable whether, under the general denial, the defendant could make the proof essential to the protection of her interests, as against that cause of action. From the entire record, it is very clear to us the security should be pleaded and proven in order that the defendant might have the full benefit of whatever claim she could rightfully assert under it. Since this case must be reversed, and the time has gone by in which an application could be rightly made in this direction, the judgment will be reversed, with leave to the parties to apply to the lower court for a correction of the pleadings on both sides, as they may be advised. For the error committed by the court in its instructions to the jury, the judgment will be reversed, and the case remanded. Reversed.

(5 Colo. App. 535)

AULD et al. v. TRAVIS. (Court of Appeals of Colorado. Feb. 11, 1895.)

AGISTMENT-LIEN-PRIORITY.

T., Q., and another became partners for marketing cattle. Q. was to furnish as many cattle as could be profitably handled, and manage the business, and T. was to furnish his ranch as his share of the capital, while the other partner was to provide the money for current expenses. Q. bought 1,000 cattle on time, secured the price by chattel mortgage thereon, and placed them on the land, on which T. had a large quantity of hay, which he turned over to the firm under an agreement that he should receive pay at $4.50 per ton for so much as was used. T. received from his partners a sum in excess of two-thirds the agreed price of the hay. Held, that T. had no agistor's lien on the cattle for feeding them, which was superior to the lien of the mortgagees, under 2 Mills' Ann. St. § 2854 (Gen. St. § 2118), as amended by Acts 1889, p. 232, which provides that any ranchman, farmer, etc., to whom any cattle shall be intrusted for feeding, shall have a lien on such animals for the sum due therefor.

ty.

Appeal from district court, Saguache coun

Bill by Dewitt C. Travis against W. T. Auld and others for an injunction. From a

On

ants Auld and McCorkle appeal. Reversed. On the 19th day of October, 1892, appellee, Charles E. Quincy, and W. F. Reed, by a written agreement, became partners, for purchasing, feeding, handling and marketing cattle, for a term of five years. Appellee, a ranchman, leased to the partnership, for the purpose of pasturage, three tracts of pasture land, aggregating about 5,700 acres. By the terms of the contract, appellee was to furnish the land as his contribution to the capital of the firm, free of rent and charge. Quincy agreed to furnish as many cattle as could be handled profitably, at the market price of cattle, take entire charge of the cattle, and manage the entire business, including the employment of assistants, the purchase of new stock, and the sales of cattle. Reed was to furnish the money necessary for current expenses of the partnership, not to include the purchase of cattle; the profits of the business to be divided equally between the three partners. Pursuant to such agreement, on the 21st of October, Quincy brought to the ranch of Travis 603 head of cattle, and placed them on the fields designated in such contract. On October 28th he brought other 444 head of cattle, and disposed of them in like manner. the premises set apart upon the contract, Travis had cut and stacked a quantity of hay estimated at 400 tons. Such hay was measured by Travis, and turned over by him to. Quincy for the use of the partnership, for which he was to receive pay proportionately from his partners, at the rate of $4.50 per ton, for so much as was used. Upon measurement there was found to be about 290 tons, all of which was fed to the stock. Under the contract, Quincy took entire control of the supervision, management, and feeding of the cattle, employing and controlling all help. Travis turned over the possession of the different tracts of land designated, and the hay, but exercised no control or supervision whatever. The cattle were bought by Quincy from appellants, Auld and McCorkle, upon credit, and a chattel mortgage was executed by him to secure the purchase price. On the 16th of March following it is alleged the cattle were at tached as the property of Quincy on a writ from Arapahoe county. Thereupon, under the provisions of the mortgage, appellants took possession of the cattle, or, being about to take such possession and remove them, appellee brought this action, alleging in his complaint: (1) That he was a ranchman; that on October 21 and 28, 1892, Quincy brought to his ranch, and intrusted to him for the purpose of feeding, pasturing, and keeping, the 1,047 head of cattle; that the cattle were by him, as agistor, pastured and kept until the 17th of March, 1893, and that the pasturage was worth $1,534.40; that from and after December 3, 1892, he, at the special instance and request of Quincy, fed