McCoy v. Odom

GOLDTHWAITE, J. The question presented on the first of the several charges given is, as to the effect of that portion of the second section of the statute of frauds of this State in relation to loans. The clause referred to is in these words: “ And in like manner, where any loan of goods and chattels, shall be pretended to be made to any person, with whom or those claiming under him, possession shall have remained for the space of three years, without demand made and pursued by due course of law on the part of the pretended lender; or where any reservation or limitation shall be pretended to have been made of a use, &c.; the same shall be taken, as to the creditors and purchasers of the persons aforesaid so remaining in possession, to be fraudulent within this act, and that the absolute property is with the possession; unless such loan, reservation, &c., were declared by will, or deed, in writing, proved and recorded as aforesaid and it is insisted that, as the charge concedes that the loan in this case was made in another State, where the lender and the borrowers resided, and where the subject of the loan was located, upon this state of facts the property, after its removal by the borrowers voluntarily into this State, is exempted from the operation of the clause of the statute referred to. The rule that the validity of a contract is to be determined by the law of the place where it is made, which is relied on to sustain this position, is recognized to its fullest extent; but the error of the argument consists in its application to the case under consideration. The rule itself, it is to be remembered [506] bas its foundation on principles of comity, rather than right, and creates.no binding obligation on a community, to enforce a contract which is injurious even to its own interests, much less one which is in opposition to its laws. It is certainly competent for Alabama to provide to what extent property within her limits shall bo subject to execution, or in what manner, when brought within her jurisdiction, it is to be affected by certain acts. This is done by every statute of limitation or repose which is passed by her Legislature, conferring the title to property on the party in possession ; and the idea that by the rules of comity, which are always based upon just considerations of public policy, property voluntarily carried within the limits of a foreign jurisdiction is entitled to immunities which are not bestowed upon its own citizens, or exempted from consequences to which they are exposed, cannot be entertained. In view of the facts presented, the question does not involve the validity or enforcement of a contract made in another State; it is simply determining the legal consequences which, by a statutory provision, attach to a certain act committed in this State. The clause of the statute we are examining, in the language of Collier, C. J., in the case of Myers v. Peek’s Adm’r, 2 Ala. Rep. 648, “provides the manner in which one person shall retain his right to personal property, which he permits to go into the possession of another, and declares that if the directions of the act are not observed, the claims of creditors shall prevail, after the possession shall have continued under the loan for three years. Such a possession authorizes a legal conclusion in favor of creditors, which cannot be gainsayed.” These reasons arc equally as applicable to loans made out of the State, as to those made within its jurisdiction. We are aware that the reasoning of this court, in the cases to which we have been cited by the counsel for the plaintiff in error, Catterlin v. Hardy, 10 Ala. Rep. 511, Adams v. Broughton’s Adm’r, 13 Ala. Rep. 731, and Liden v. Taylor, 17 Ala. Rep). 270, as also the case of Turner v. Fenner et al. 19 Ala. Rep. 355, deciding that the continuance of the possession for three years in this State without recording, docs not affect the title of the remainder-man, as to creditors and purchasers from the party in possession, on the ground that in [507] tbe particular cases referred, to, tbe deed creating tbe remainder was executed in another State, is in opposition to tbe conclusions wbicb we have attained; but we all concur that tbe reasons on wbicb those decisions are based cannot be sustained ; and while we feel constrained to adhere to tbe rule established by them, we prefer to rest it on tbe ground on wbicb tbe decision of this court in Smith v. Ruddle, 15 Ala. Rep. 28, is placed, wbicb restrains tbe meaning of tbe words “absolute property,” as used in tbe second section of tbe statute of frauds, to tbe title which tbe'lender bad in tbe property. It follows, that if tbe lender bad tbe absolute ownership of tbe projoerty, tbe fact that tbe loan was made in another State cannot avoid tbe consequences, wbicb result from 'the continuous possession in this State, by tbe borrower, for tbe length of time required by and under' tbe circumstances defined by tbe statute. Upon tbe assumption that tbe loan was made to tbe wife and children, tbe slave having come into tbe possession of tbe husband, it is tbe same in legal effect as if tbe loan bad been directly to him and tbe children, Maull v. Hays, 12 Ala. Rep. 499; and we entertain no doubt that where a loan is made to two, or more, and tbe possession remains with one under tbe loan, and tbe other circumstances required by tbe statute to render tbe possession absolute as to creditors exist, that tbe property can be levied on and sold. We would not be understood as deciding here, that tbe interest of tbe other loanees would be divested, but simply that in tbe particular case put, tbe property could be levied on and sold on execution against tbe borrower in possession, leaving tbe other question open. It follows there was no error in tbe first charge given. 2. Tbe instructions given by tbe court, that if the possession once commenced under that clause of tbe statute of frauds of this State wbicb refers to loans; such possession would not be affected by a gift of tbe same property made in another State, unless tbe same bad been returned into tbe actual possession of tbe owner, was erroneous. It cannot be doubted that if tbe possession of Hudson, under tbe loan, bad terminated, and tbe possession of tbe property passed to tbe children under a valid gift, before tbe creation of tbe debt to tbe defendant in error, that under that state of facts tbe prop [508] erty could not be subjected to tbe payment of the debt of Hudson. Maull v. Hays, 12 Ala. Rep. 499. The execution of the gift, would in law be equivalent to the resumption of the property for the only purpose for which, in such case, it could be required, to transfer its possession to the donee; and to establish the gift, all that was required to be proved was, a declaration of intention by the donor, united with his parting with his right of dominion over the property in favor of the donees. 2 Ala. Rep. 117. It was not in any manner essential to the validity of the gift, to prove an actual resumption of the property by the lender. If the gift was valid and complete, the children being minors and residing with their father, his possession would not in that case be inconsistent with their ownership. Sewall v. Gliddon, 1 Ala. Rep. 52. The question as to the validity of the gift should have been submitted to the jury, with the necessary instructions, and if upon the evidence the possession of the father was referable to the gift to the children, it would have been withdrawn from the operation of this clause of the statute; while on the other hand, if there was no gift, either from the failure to deliver the deed, or from the want of any other circumstance necessary to its validity, and the possession of Hudson was properly to be referred to the loan, the consequences which, in the previous part of this opinion we held, must attach to such possession, would necessarily follow. This part of the charge amounted to instructions to the jury, that the commencement of the possession under the loan rendered it necessary for the lender to resume the actual possession of the property, before he could legally dispose of it by gift, which would be valid as to creditors who had not then acquired liens on the property, and in this it was erroneous. 8. The legal principle asserted by the third part of the charge was also incorrect, in making the right of the defendant in error to condemn the slaves to the satisfaction of his claim, depend entirely on three years prior possession, and the failure to record, without reference to any other fact. The defendant in execution may have had three years possession in this State under the loan, without any rights resulting to a subsequent creditor. If the possession of the defendant in execution under the loan had terminated, as in this [509] case tbe evidence conduced to prove, before tbe creditor acquired a lien on tbe property, by reducing bis debt to judgment and taking out execution, under tbe decision previously cited of Maull v. Hays, tbe property, after sucb change of possession, would not be subject to tbe debts of tbe creditor under this clause of tbe statute. Tbe tendency of the charge in this aspect was to mislead tbe jury, by instructing them in effect, that if tbe defendant in execution, Hudson, bad been in actual possession of tbe property for three years before the levy, it was sufficient to condemn tbe property, although tbe evidence may also have shown that bis legal possession terminated before tbe execution debt was contracted. As' to the evidence objected to, tbe action of tbe court was correct. At tbe most, it could only have been admitted as a •fact, from which tbe creditor might have been presumed to have bad notice of tbe true condition of tbe property, and in this aspect we do not consider it as admissible. It follows, that for tbe error of tbe court in tbe second and third instructions, tbe case must be reversed and the cause remanded.