Arper v. Baze

By the Court Emmett, C. J. The record in this case shows that on the 7th of October, A. D., 1850, one John R. Fish located a military land warrant upon the land which is the subject of this action, and on the 9th of November following transferred his certificate of location to Amherst Willoughby and Simon Powers, and accompanied said transfer with a warrantee deed of the land so entered. This deed was immediately placed upon record, but owing to the defective acknowledgment (it having been acknowledged before a judge of probate, see Arper vs. Baze, 6 Minn. Rep., 220,) the record thereof was unauthorized, and was not therefore notice to any one. This defect, however, did not vitiate the deed itself. On the 31st of May, 1852, Willoughby and Powers conveyed the land to the Plaintiff by deed, which was recorded June 2, 1852. On the 12th of November, 1850, Henry M. Rice brought an action against said Fish and attached said land as his property. — 112 — On the 19tli of June, 1852, Rice, having recovered a judgment against Fish in said action, and issued an execution thereon, purchased said land at the sale by the sheriff, receiving a deed therefor on the 1st day of December, 1852, which was duly recorded the same day. Afterwards by deed dated June 24, and recorded June 27, 1853, Rice conveyed the same property to the Defendant. In the meantime Willoughby and Powers, as the assignees of the said certificate of location, obtained a patent for the land in their own names, but not until after they had conveyed to the Plaintiff. The patent bears date August 25, 1852, and was duly recorded of that date, in the Land Office at Washington, but it does not appear ever to have been recorded elsewhere. These facts all appear from the pleadings or stand uncontra-dicted, and show conclusively that both parties must eventually resort to Fish as the common source of title. Quite a number of interesting questions were raised on the trial, but the main, if not indeed the only question of fact submitted to the jury was that of fraud in the transfer from Fish to Willoughby and Powers. The Defendant insisted that said conveyance was without adequate consideration; that it was made with intent to defraud creditors; that Willoughby and Powers were cognizant of said fraudulent intent; that the deed was therefore void as to creditors, and as to Rice under whom he claims. The evidence produced to sustain this charge of fraud was to this effect. That Rice had furnished Fish with the land warrant by which the land was located, and was by the arrangement to be secured by a lien on the land; that Fish had neglected to give this security, and Rice’s attorney had threatened to commence proceedings against him unless the matter was at once attended to; that Fish thereupon promised to come down from St. Anthony, where he resided, to St. Paul, and attend to it in a day or two; that instead of so doing he shortly afterward came to St. Paul on a Sunday, in the night time, and without going near Rice gave the deed to Willoughby and Powers, which was executed about three o’clock on Monday morning following, and then fled the — 113 — country; that said Powers himself called upon the judge of probate, who drew the deed, about nine o’clock P. M. of said Sunday, and engaged him to be or remain up, so that said deed could be made as soon as Monday arrived; that about midnight Powers, Willoughby and Fish came to the office of the said judge of probate, when it was found that Fish did not have with him the said certificate of location; that thereupon he went to St. Anthony-after it, returning with it about three o’clock A. M., when the deed was executed and ¿the certificate transferred; that when he so returned, Fish remarked to Powers that “they were all up and at work in Rice’s office,” being the office of the attorney who had threatened to commence proceedings against him as before stated; and that in a conversation about the matter subsequently, Powers told Lambert, said judge of probate, that they were getting out an attachment against all of Fish’s property, and he wanted to protect himself.- In answer to this, and to explain the midnight character of the transaction, said Powers was called as a witness and testified that they knew nothing of Rice’s claim, nor of any fraudulent intention on the part of Fish towards his creditors; that Fish came to them, in great perturbation of mind, stating that one Northrup, of St. Anthony, had threatened to kill him, and had actually followed the stage down in which he (Fish) came to St. Paul, and attempted several times to shoot Mm on the road; that he was leaving the country for fear of Ms life, and wanted them (they being engaged in the livery business) to take Mm out of the country, and also to buy his land, so that he might pay them what he owed to them, and be enabled to get away; that accordingly they made the purchase, paying him the money therefor, all except about $40, which went to pay their account against him and for sending him away at that time; and that Fish did not say to him, on his return from St. Anthony with the certificate of location, that “ they were all up and at work in Rice’s office,” or any thing to that effect. He also stated that Fish’s statements about Nor-tM-up were corroborated by Northrup himself, though at what time does not certainly appear-. — 114 — It was further shown that after the parties left the office where the deed was drawn, Fish and Powers, about four o’clock in the morning, called up the register of deeds of the county of Ramsey, went with him to his office, and had the deed filed for record. This is substantially the evidence introduced in relation to the question of fraud, and had the jury been left entirely free to decide upon its credibility and effect, in all probability the verdict would have been correct. But there were various questions of law raised by the parties, upon which the court was constrained to instruct the jury, which in our opinion materially interfered with the determination of the simple question of a fraudulent intent on the part of Fish, and a knowledge thereof on tbe part of Willoughby and Powers. We cannot, therefore, give to this verdict the effect which otherwise it would most certainly be entitled to. The court amongst other matters held, and in effect so instructed the jury, that notwithstanding Fish may have made the conveyance to Willoughby and Powers with intent to defraud his creditors, and that fradulent intention known to his grantees; yet, if .the Plaintiff was not shown to have been cognizant of the fraud at the time of Ms purchase, he would not be affected by it; and that neither constructive nor actual notice even, of the previous j>roceedings in attachment, could make any difference as to him; that he was not limited to the same right or title as against Rice or the Defendants, wMch Willoughby and Powers had. This, it will be perceived, cast upon the Defendant the whole burthen of proving that the Plaintiff had knowledge of the alleged fraud, and, in the event of failure, rendered it entirety unnecessary to consider whether any fraud had been committed at all. As regards the first of the above propositions, we cannot say that it was improper so to charge the law, although the Appellant has made that a prominent point for reversing the judgment. We refer to it here for the purpose' of showing’ that in the absence of any evidence tending to show a knowledge of the alleged fraud in the Plaintiff at the time of his purchase, the jury probably did not think it necessary to pass upon the question of fraiid. It was — 115 — in the latter part of the ruling, as above set forth, that the court erred, if at áll, and this we propose briefly to consider. ' The statute under which these attachment proceedings were commenced, authorized the lands of the debtor to be taken under the writ, and, after judgment, to be sold in satisfaction thereof the same as if they had been levied upon by execution — Sec. 7, ch. 68, of the Laws of 1849. The sheriff was also required, when lie levied an attachment upon real estate, to make a certified copy of the writ and of his return thereon, and to file and record the same in the office of the register of deeds of the proper county, in the book of mortgages (all of which appears to have been done in this instance); and from the time of such filing the statute declared the attachment to be and remain a lien on all the real estate described as attached in the return — Id., ch. 69, sec. 8. It would be hard to divine the object of this record if it ivas not to give notice to all the world that the land had been attached', or the value or object of the lien given thereby, if it did not reach the interest of the debtor in the land as it then existed, and secure it for the benefit of the attaching creditor from that time forward. And if, so far as creditors were concerned, the land was still to be considered as belonging to the attachment debtor; I am unable to perceive why the lien did not attach precisely as if no conveyance had ever been made or attempted; nor can I see how, under such circumstances, the lien thus given and secured could be divested or in any manner affected by any subsequent transfer on the part of the debtor or any one else. To hold otherwise would seem to nullify the statute. If, however, the record of the attachment was not constructive notice to every one of the lien on the interest of the debtor, then there was nothing to prevent him from depriving the attaching creditor of all benefit from the levy, by selling to the first person willing to buy without examining the records, in which case the latter would take the property discharged of the lien. If it had been personal property that had been seized on ■the attachment the officer would have taken it into his custody, and although Willoughby and Powers might have claimed and insisted that it had been assigned to them for a valuable considr — 116 — eration and in good faith, yet no one conld have pm-chased of them in any way so as to relieve the property of the lien of the attachment; because, while in the possession of the officer it would have been in the custody of the law, and that possession would have been sufficient notice to all purchasers of the lien of the attachment. Now, in the case of real property, this manual custody or possession is seldom if ever possible, but instead thereof the law provided a record which answered the same purpose, so far as giving notice was concerned, and I have never been able to see why it is not equally efficacious. Again, let us suppose that Fish, under the same circumstances, had assigned to Willoughby and Powers a stock of goods, and Rice, having a judgment against Fish, and claiming that the assignment was fraudulent as against creditors, had levied an execution on the goods as the property of Fish,, and taken them out of the possession of Willoughby and Powers' — -does any one doubt that Rice would hold the goods if he could establish the fraud, and that it would be utterly out of the power of Willoughby and Powers to divest them of the lien of the levy ? The most they could do, in that case, would be to dispose of their interest, which was liable to be divested entirely by proof of fraud in the transfer from Fish. It is an every day occurrence for a creditor who doubts the good faith of an assignment by his debtor, to levy upon and oftentimes to sell the property assigned regardless of the assignment, depending upon Instability to establish the fraud. And when he succeeds in making the fraud apparent, the property is treated as if no transfer or assignment had ever been made or attempted. In this respect I know of no difference, whether the property involved be real or personal. If the sale be fraudulent, the property is still considered as belonging to the debtor, and the taking is justified; and it can make no difference whether the property is levied upon under an execution or an attachment, as it is equally beyond the reach of the fraudulent assignee. If it were not so, I could see no manner of advantage in attaching the property of a fraudulent debtor, where there has been an assignment, however apparent the fraud and the assignee’s knowledge thereof. — 117 — We regard the levy of the writ of attachment in this case as having the effect of securing to Rice a lien upon the interest of Fish (the extent of which would depend entirely upon the question , of fraud), and the recording thereof, as provided by the statute, us preserving that interest in statu quo until the rights of the parties then interested could be determined; so that no person having notice thereof, either actual or constructive, could obtain of Willoughby and Powers any better title to the land than^that by which they held it. We hold, therefore, that the court erred in refusing so to charge the jury, as requested by the Defendant, believing that such refusal, in connection with the instruction which the court did . give in reference to the necessity of bringing knowledge of any fraud home to the Plaintiff, (as to which there was not a particle of evidence,) had the effect of withdrawing the question of fraud altogether from the consideration of the jury, and that they rendered their verdict without deciding upon that question. The Plaintiff takes the ground, however, that the government patent for the lands to Willoughby and Powers, and their deed to him, give to him a perfect title of record, and therefore it is immaterial about the title to Fish, or whether the deed from him to Willoughby and Powers is ever recorded, and that it is sufficient for his purpose that he can trace his title direct to the patentees. We do not think under the admissions of the pleadings and the ' facts proved, that the Plaintiff can thus ignore the real origin of his title, or gain any exclusive advantage from the patent. He. wras not in the least misled, or influenced by it in making his purchase, because it had not been issued at that time. He knew that his grantors claimed only through Fish, and that if the patent was to be obtained in their names, it must be solely because they were the assignees of Fish. The facts and pleadings show and admit that the patent was issued to them as such assignees, and, if I am not mistaken, the patent itself will be found on examination to recite that fact. The Plaintiff relied, in his purchase, exclusively on the validity of the assignment from Fish to Wil — 118 — lo'ughby and Powers for tbe perfection, of Ms title; and we must, in this action, determine the rights of the parties precisely as we wo.uld had no patent yet been issued. . The Plaintiff further contends that all the proceedings in attachment were void because of alleged non-observances of the statute; but we do not think he can raise this question in this collateral manner. We are far from satisfied, however, that there was any material omission. Another point made by the Plaintiff is, that the instructions which the Defendant asked the court to give the jury were irrelevant and immaterial, because the only question involved was one of fraud, and of that there was no evidence. We agree with the Plaintiff that, if there was no evidence from which a jury might find fraud, then, although the court may have erred in his rulings in other respects, the verdict should not be disturbed; but we cannot say that, if the jury had passed directly upon the question of fraud, and had found against the Plaintiff', we would have felt authorized to set aside the verdict as having no evidence to sustain it!, because they might have disbelieved entirely the evidence offered by the Plaintiff; and there was some evidence On the othgr side which, believed and unexplained,' might justify a jury ill finding that Fish had a fraudulent intent in making the conveyance to Willoughby and Powers, and that that intent was known to them when they took the conveyance. A new trial must be granted.