CHAPTER I.

COLLECTIONS AND RECOVERY.

COMMERCIAL AGENCY RATING-FALSE STATEMENT.

Though a merchant makes to a commercial agency a statement in some respects false, to be used in giving him a rating, which he knows is intended to be used by others as a basis for determining whether or not credit will be extended to him, yet, where no credit is actually extended until after the lapse of a considerable period, such, for instance, as 60 days, the person extending the credit and parting with the possession of his goods in pursuance thereof cannot assume that the statement is still operative, unless the person credited expressly reaffirms the truth of the statement, or at least knows or has reasons for believing that he is obtaining the credit on the faith of the representations made in the statement, and by remaining silent misleads the other party. Treadwell vs. State (La.), 27 S. E. Rep. 785.

RECOVERY-RECISSION OR CANCELATION OF CONTRACT.A contract of an intoxicated person is voidable at his election only.

Lacy vs. Mann (Kan.), 53 Pac. Rep. 754.

RECOVERY-SALE-FRAUD-RESCISSION.—

Where goods were expressed C. O. D. by a vendor in another State to a vendee in Georgia, which were entirely different from those embraced in the contract of sale, and the amount of the C. O. D. charges were paid by the vendee

to whom the goods were delivered by the express company, and where, immediately upon the discovery of the fraud or mistake, the vendee tendered back the goods to the express company, and notified the vendor, by letter, of his action, the vendor being a nonresident and not accessible, an action by attachment will lie in favor of the buyer against the seller. for the purchase money paid for the goods, without any further tender or offer of rescission.

Cohen vs. Lasky (Ga.) 30 S. E. Rep. 531.

RECOVERY-RESCISSION-WHERE BUYER OFFERS LESS PRICE THAN CONTRACTED FOR.

In the case of an executory contract for the sale of goods to be paid for after delivery, if during the time for delivery the buyer notifies the seller that he will not pay the contract price for the goods, but only a less price, the seller has a right to act on this as a repudiation of the contract, and stop delivery; and, if thus acted on, he has his action for damages.

Armstrong vs. St. Paul & Pac. Coal Co., Minnesota.

RECOVERY-FRAUDULENT CONTRACT-RESCISSION.

A party defrauded in a bargain may, on discovering the fraud, do one of two things-he may rescind, and demand back what he has parted with, or he may affirm the contract and sue for damages. If he elects to rescind, he must do so as soon as circumstances permit after the discovery of the fraud. He cannot speculate on the chances and wait until he can see whether it will be most to his advantage to rescind or abide by the contract.

Norfolk & N. B. Hosiery Co. vs. Arnold, New Jersey.

SALE-MISREPRESENTATIONS BY VENDOR.—

A vendor who makes a false statement regarding a fact material to the sale, either with knowledge of its falsity or in ignorance of its falsity, when from his special means of information he ought to have known it, and thereby induces his vendee to purchase to his damage, is liable in an action

at law for the damage the purchaser sustains through the misrepresentation, or to have the sale rescinded in a suit in equity, at the option of the purchaser.

Moline Plow Co. of Kansas City, Mo., vs. Carson, U. S. C. C. of App., 72 Fed. Rep. 387.

RECOVERY-NO RECOVERY IF PART OF DEBT ILLEGAL.—

A note taken to secure an account, items of which for sales on Sunday and for liquors illegally sold are blended with legal items, is entire and indivisible, and hence there can be no recovery thereon.

Wadsworth vs. Dunnam (Ala.), 23 So. Rep. 699.

RECOVERY-SALOONKEEPER-BILL OF SALE IF INSOLVENT IS, AGAINST CREDITORS, PRIMA FACIE FRAUDULENT.

An agreement between a saloonkeeper and a merchant selling him goods that he will, in case of insolvency, turn over his stock of goods to such merchant, is void as against other creditors. Also, a bill of sale by an insolvent saloonkeeper of his entire business is, against creditors, prima facie fraudulent.

Chevalier vs. Crimmins, Sup. Ct., Cal., 34 Pac. Rep. 929.

RECOVERY-WHERE MORTGAGE IS GIVEN ON FRAUDULENTLY ACQUIRED GOODS TO COVER PREVIOUS DEBT OF PURCHASER.

Goods fraudulently purchased under circumstances which entitle the vendor to a rescission for fraud do not become the property of the purchaser, so as to enable him to mortgage them to an-existing creditor as security for an antecedent debt, and thus create a mortgage lien superior to the title of the vendor, who, on discovery of the fraud, rescinds the sale and reclaims the goods, the mortgagee not paying anything nor parting with anything as a consideration for the mortgage, but the consideration being the antecedent debt only.

Dinkler vs. Potts (Ga.) 15 S. E. Rep. 690, 1892.

RECOVERY-MORTGAGE BY OWNER IN POSSESSION VOID

AGAINST CREDITORS.

The Supreme Court of Minnesota holds that a mortgage on a stock of liquors is void as to creditors of the dealer, where it appeared that by agreement between the parties the dealer was to retain possession, with power to use the proceeds in maintaining the business, and in his own support and for his own benefit, without satisfying the mortgage debt.

RECOVERY-AMOUNT PAID CANNOT BE RECOVERED BACK.

Although Rev. Code 1893 provides that all debts contracted for liquor sold in quantities less than half a gallon are not collectible, the amount paid on such debt cannot be recovered back.

Connally vs. McConnell (Del.) 39 Atl. 773.

RECOVERY-MONEY PAID FOR LIQUORS IN IOWA CANNOT BE RECOVERED AFTER UNREASONABLE TIME.

N. P. Wind & Co. of Ottumwa, Iowa, sued Iler & Co. of Omaha, Neb., in Mills County, Iowa, in 1891, to recover under the Iowa liquor law some $30,000 paid by them to the defendants for liquors during the years 1881, 1882, 1883 and 1884. The testimony in the case brought out the fact that three of the seventy or seventy-five orders had been made through Iler & Co.'s traveling man, all others having been made by the plaintiffs by mail or telegram. Wind & Co. had never at any time made any demand on the defendants for the recovery of the money paid them until after the commencement of the action.

The Judge directed a verdict for defendants, holding (1) As the shipments were made in original packages they come under the decision in the Leisy vs. Hardin case, and money paid for the goods cannot be recovered.

(2) The sales being closed in Nebraska, the Iowa law was not violated.

(3) A demand is necessary before bringing an action of this kind in order to create a liability, and such a demand must be made within a reasonable time.

RECOVERY OF AMOUNT PAID FOR LIQUOR-KEGS AND CASES NOT RETURNED.

The Gipps Brewing Company brought suit against Charles de France in Iowa for $2,635.35, alleged to be due for beer sold and delivered to the defendant and for kegs and cases not returned. The defendant, as a counterclaim, asked a judgment for the amount of money he had paid plaintiff for beer, and by direction of the court a verdict for $1,006.80 was given the defendant on the ground that the agreement between the parties was in violation of law, because it was to be performed in Iowa.

RECOVERY-AGREEMENT FOR REBATE.

Where defendant sold liquors to plaintiff for more than its market value, agreeing to return part of the excess to plaintiff at the end of the six months if it appeared that plaintiff had made purchases from no one else, the fact that one of plaintiff's agents, accidentally, without plaintiff's `knowledge, and without intention to violate the understanding of the parties, made a purchase from another person, will not prevent recovery by plaintiff of such excess.

Gottschalk Co. vs. Distilling & Cattle Feeding Co., U. S. C. C. (Ill.) 62 Fed. Rep. 901.

RECOVERY-NOT ENFORCIBLE WHERE LIQUOR CONTRACTED FOR IS KNOWN TO BE SOLD ILLEGALLY.—

An agreement by the purchaser of a saloon to pay for beer sold by the prior owner is not enforcible by the seller of the beer where he knew that it was to be retailed in violation of law.

Terre Haute Brewing Co. vs. Hartman, 49 N. E. Rep. (Ind.) 864.

RECOVERY-ILLEGAL SALES-VENDOR CANNOT RECOVER.—

Where intoxicating liquors are bought in another state, with the intention of selling them in Maine in violation of law, the vendor cannot maintain an action to recover the purchase price in any of the courts of this state, by reason of Rev. St. ch. 27, §56. And it is immaterial whether or not