Webster v. Denison

The opinion of the court was delivered by Redfield, Ch. J. The only question in the present case is, whether a creditor is at liberty to make use of a confession of judgment, by his debtor, and a sale of his personal property upon execution, to create a lien merely upon such property to secure the debt. For if that can be done, we do not perceive why this was not fairly done. It has often been held, that an absolute conveyance of property from a debtor, owing other debts at the time, to secure one creditor, and which is represented by the parties and justified as being an actual absolute conveyance of the property, is, for that reason alone, void. Barker v. French, 18 Vt. 460, and French v. Barker, in a subsequent volume. So it is always regarded as fatal to the character of a sale of personal property, by the debtor, to his creditor, in payment of his debt even, if he owe other debts at the time, and still hold a secret confidential interest in'the property, which entered into the original sale, as one of its elements or considerations, and which is agreed to be kept secret. And it seems to us, that the use attempted to be made of this judgment and execution sale, is liable to most of the objections above stated, and to others, perhaps. [497] 1. It is upon its face, and in its very nature, an absolute sale of the property. It can be nothing else. The law does not recognize any such sales on executions, as conditional sales, or defeasible sales, or sales vesting a title, liable to be defeated by redemption. This use of such a sale was therefore, in the strictest sense, a perversion of the legitimate use of the proceeding. 2. If any such trust existed, as the testimony tended to show, and the jury under the charge must have found, it was of necessity, secret, and so, fraudulent. No man would expect any such trust, or equity of redemption. It seems here that this trust was the consideration and moving cause of the note and confession, on the part of the debtor. Without that, very likely he would not have given the note or confession. And, as between the parties, it seems questionable, whether the creditor could, in equity, have maintained his absolute title to the property. 3. This is applying the privilege of letting property, sold on execution, remain in the debtor’s possession, to defeat the very rule to which it was intended as an exception only, for the ease of the debtor. For if every kind of perversion of the proper purpose of the sale is to be allowed, with impunity, provided only that it be done under the shield of a sheriff’s sale, the court may as well at once abolish the rule, as to give an exception so wide in extension, as to include all cases coming within the rule itself. The rule of law, that an absolute deed of land, or bill of sale of personal property, if agreed to be merely a mortgage, or pledge, is good for that, as against the creditors of the vendor, is peculiar to this State; every where else, such a trust, or confidence, is regarded as so far inconsistent with the deed, as to destroy its operation as a mere security. But in a case of this kind, the vendee makes his deed void, by claiming an absolute title, even on the trial of his action, for the security. Barker v. French, supra. And the present case goes even beyond the limits of our own decisions upon this subject. Here the conveyance is incapable of conveying any other but an absolute title. If it were to have any other operation, by covert or latent understanding, between the parties, it would tend constantly to mislead others. For no one would be expected to inquire, whether a sale upon execution was absolute, since ex vi termini, it imports that, and nothing else. [498] The proper distinction in the law, between bona Jides and mala Jides, is, that the former requires the thing to be, in fact, just what it purports to be. And nothing could be farther from the simple definition of bona Jide, than to have an absolute sale of property, upon execution, voidable, by reason of some secret understanding between the parties, to create a mere lien. For, if the thing is valid between the parties, (and it must be, if it is any where) then a court of equity may be invoked to give the debtor a right of redemption. The extension of the exemption of sheriff’s sales from the general requisites of other sales, as to change of possession, to cases of this land, would be liable to very great abuse, and would, we think, be likely to invite it. Judgment affirmed.