Gardner v. McClure

By the Court — Flandrau, J. — The English statute of frauds and perjuries enacted as follows : That no “action shall be brought upon any contract or sale of lands, tenements or hereditaments, or of any interest in or concerning them, unless the agreement upon which.such action shall be brought, or memorandum or note thereof, be in writing and signed,” &c. It was customary for parties borrowing money, to secure the creditor by depositing with him the title deeds of land. Sometimes these deposits were accompanied with a written memorandum stating the purpose for which they were made, and sometimes they were entirely without writing. Prior to the registry acts, such deposits furnished creditors with a valuable security by giving them a lien upon the deeds themselves, without creating any interest or estate in the lands, because the owner could not recover possession of the deeds without paying off the incumbrance, and he could not conveniently deal with the land without them. It was similar to a solicitor’s lien, viz : a right to hold the deeds so as to enforce payment by embarrassing the debtor, but unaccompanied by any charge upon the estate. Adams’ Eq., 323. Had such securities been confined to the deeds alone, no infraction of the Statute of Frauds would have occurred. But the Courts, desirous probably of carrying out what they considered the intention of the parties, circumvented the plain provisions of the statute of frauds by creating the fiction that the deposit of the deeds with the creditor was in itself evidence not only ti'.at the deeds were to operate as a security, but such security was to be effectuated by a mortgage. Adams’ Ry., 334. This was first so held in the case of Russel vs. Russel, 1 Bro. C. C., 269. It was followed by Featherstone vs. Fenwick and Harford vs. Carpenter, 1 Bro. C. C., 69, note, and Birch vs. Ellames, 2 Aust., and became the settled law of [261] England. Eor the history of the rise and progress of this doctrine, see Coote on Mort. ch. 9, p. 166; 1 Haddock's Ch., 537; Cross on the law of lien, ch. 10, p. 143; 4 Kent's Com., 154; 2 Story's Eg. Jur., sec. 1020; Adams' Doctrine of Eq., 333; 1 Hill, on Mort., p. 599. These writers all concur as to the origin of the doctrine being with the case of Russel vs. Russell, and they are equally harmonious in their expressions of regret that it ever-was adopted, whenever they indulge in any comments upon the subject. It has always been ■ a source of profound regret also to the equity Júdges of England who have followed Lord Thurlow, that he decided the case of Russel vs. Russel as he did. In the case of Exparte Hooper, 19 Ves., 477-8-9, Lord Eldon, the most experienced of.the Lord Chancellors of England, said, “with great deference to Lord Thurlow, who first held that the deposit of a deed necessarily -implied an agreement for a mortgage, I repeat that this decision has produced considerable mischief; and that the case of Russel vs. Russel ought not to have been decided as it was. And again in Exparte Whitread, 19 Ves. Jun., 211, he said that in his opinion the judicial decisions establishing this doctrine approach to a virtual repeal of the statute of frauds; and while he admitted that he was bound by the decisions, -he refused to extend them any farther. See also, exparte Kensington, 2 Ves. & Bea., 83. In Norris vs. Wilkinson, 12 Ves. Jun., 192, Sir "William Grant expresses great disapprobation of the doctrine, and thinks it a violation of the statute of frauds. See also Exparie Hcdgh, 11 Ves. Jun., 403. In Adams' Eg., 334, the author declares the conclusion by which the implied agreement for a mortgage is arrived at to be unsatisfactory. In H addock's Chancery, vol. 1, 538, it is declared that the explanation by parol of a deposit of title deeds has often been lamented. He says “deposits are not favored especially when contradicting a written instrument. It were well perhaps if no such mortgages were permitted ; they seem contrary to the spirit and letter of the Statute of Frauds,” &c. 1 Meriv.,p. 9 ; Exparte Combe, 17 Ves., 369. In Coote on Mortgages, 222, the author, after going fully over the cases, makes the following comments as the result of [262] bis observations and researches :. “ On a review of the decided cases establishing this mode of mortgage security, it is, pei’haps, to be regretted, that the old. law was not adhered to, and the principle upon which the Statute of Frauds was founded, more respected.' For, although -equity, by declaring the deposit itself to be evidence of an agreement executed, has contrived to evade the strict and literal wording of the statute; yet it is manifest that the door has been in some degree open to fraud and perjury.” The regrets expressed by the Judges and elementary writers were, more particularly, addressed to those cases which hold that the mere deposit, without any writing, declaring the design and purpose with which it is made, may be shown by parol to create a mortgage upon the land, than to those cases in which the deposit is accompanied by a memorandum in writing, as in the case at bar. Yet, unless the writing is sufficient in its terms, and manner of execution, to create the interest or estate in the lands intended by the parties, the distinction is unsound, and the Statute of Frauds presents an .obstacle as insuperable in the one case as in the other. The instrument that was executed by Pell at the time of the deposit, does not pretend to create any interest in the land described in the deed deposited, but refers solely to the deed itself, and is entirely clear. It is not executed with the forms required by the statute to pass an interest in real estate. Shaubhut vs. Parrot, decided July Term, 1861 ; and it is as nrach an infringement of the Statute of Frauds to hold that such a writing can create a mortgage upon the land, as it was-in Russel vs. Russel, where the title-deed was deposited without any writing. Our statutes on this subject are more exacting than that of England at the time of the decision of Russel vs. Russel, Comp. Stats., 396; Id., 451, sece. 6, Id., 400, sec. 30. The doctrine established by the English cases seems to have been adopted in some of the United States and rejected by others. It is unnecessary, and, perhaps, unprofitable, to attempt to discover which way the weight of authority lies. The custom of givitig such security has never obtained in this country to any extent, and never can, as long as we adhere to [263] our system of registering all titles to land. Tlie important question for our determination is, whether we should admit the binding authority of precedents confessedly founded in error, and fasten upon our young State the antiquated heresy that' has been productive of nothing but evil for three quarters of a century. "Were we in the situation in which Lord Eldon found himself when he was called upon to decide the same question, we would not hesitate a moment. The rule sta/re decisis et non quieta movers, we regard as of quite as much importance as any in the administration of justice. Had our predecessors adopted this rule, it would have been infinitely better to stand by their decision than to depart from it, even if we doubted the soundness of their holding. Any commercial question is much better settled in a manner so that all men may act upon it, than to be left -fluctuating between conflicting decisions, and this, even if it is settled upon principles of questionable authority. Nothing would be more.painful to me than to see. á spirit arise in the State to unsettle judicial determination,' and nothing can' be more disastrous to the business interests of the country. "We think, therefore, that whenever a question is presented for the first time, and we become satisfied that the courts in England, or in any of the States, have adhered to a rule which they confess to be erroneous, simply because they are bound by precedents of their own making, it is our duty, as well as our privilege, without violating any rule of decision, to adopt the view most consonant with reason and principle,' in order that our successors may not. be tempted, when the question arises again, to emancipate the State from the shackles of venerable error, by doing then, what we should do now. In the case of Selby vs. Stanley, 4 Minn. R. 74, we were discussing a question where it was manifest that the English courts had adopted and adhered to a rule.which they admitted was not the best one, but from which they could not depart. In accepting the principle, which they regretted had not been adopted in the beginning, we made use of this language which 4s applicable to the case at bar. “ In a new State like our own, we enjoy the advantage of all the light which has [264] been thrown upon questions, without being tied down by precedents which are admitted to be founded in error ; and, therefore, we are free to select, as a basis of our decision, whatever may appear to be founded on principle and reason, rejecting what is spurious and unsound, even if dignified by age, and the forced recognition of more learned and able Judges.”' It is our opinion that the deposit of the deeds, and the execution of the accompanying writihg, did not create any interest in the land in favor of the depositary. The Defendant objects to the complaint on the ground that the Plaintiff sues by his initial letters, and not his full name,. We could not say, from a mere inspection of the record, that such was the case. The Plaintiff may have adopted the name under which he sues. If, however, a Defendant who has a Christian name, cf which “ J.” is the initial, should be sued, and judgment taken against him by such initial letter, very serious questions might arise as to whether subsequent purchases would be bound to know that the judgment was against the land of John, Jacob, or James, or whether they would be bound to notice such a judgment at all. It is very bad practice to designate either Plaintiff or Defendant by the initial letters of their names in a' judicial proceeding ; but a demurrer will not lie for the defect. Order overruling demurrer reversed, and judgment ordered for Defendant.