Claster Bros. v. Katz

Citations

• 6 Pa. Super. 487
• 1898 Pa. Super. LEXIS 186

Syllabus

<p>Sale — Fraud—Rule of Smith v. Smith to be strictly construed.</p> <p>The intention of the buyer of goods at the time of purchasing them, not to pay, together with his insolvency at the time and his knowledge of it not communicated to the seller, will not avoid the sale after the delivery of the property sold. This is the ru^e of Smith v. Smith, 21 Pa. 867, recently recognized and followed as authority in Pennsylvania, but it is a rule which is declared to be not in harmony with that of a majority of other states, nor with sound policy or the principles of business honesty, and the courts will construe it strictly and will not go a step beyond it. Any additional circumstance which reasonably involves a false representation will be held sufficient to take the case out of the rule.</p> <p>Where, in addition to insolvency known to the buyer and undisclosed to the seller, the buyer, before the delivery of the goods confesses a judgment enforceable at once, knowing that the effect of its enforcement will be to disable him from continuing his business, and it is so used, these .additional circumstances are sufficient to take the case out oí the strict rule oí Smith v. Smith.</p>