Layson v. Rogers

LEONARD, Judge, delivered the opinion of the court. There are three classes of cases in which our written law provided, as early as 1816, that the possession of personal property should be considered as the real ownership in. favor of creditors and purchasers from the party in possession, unless the true condition of the title was manifested by a deed or will. authenticated and recorded in the manner prescribed for that purpose — a gift, from one who continued in the possession notwithstanding the gift — a loan, where the borrower had remained five years in the uninterrupted possession of the thing borrowed — and all limitations of personal property, by way of condition, reversion, remainder or otherwise, where the future right was separated from the present possession. (Act of January, 1816, 1 Terr. Laws, 489.) And subsequently, at the revision of 1845, a similar provision was made in reference to mortgages and deeds of trust of personal property. (Tit. Fraudulent Conveyances, sec. 8.) The act of 1816 did not originate here, but came to us from Virginia, from whose statute book (12 Henning’s Statutes) it has been copied into the laws of several of the western states ; and the provision of 1845 was adopted from the Massachusetts act in relation to mortgages of personal property. (Rev. Stat. of Mass. ch. 74, sec. 5.) The main, indeed the only, purpose of these statutes being, not the protection of the. party himself, but to suppress frauds upon creditors and purchasers, which were found to be so easily perpetrated by means of feigned or secret transactions of this character, it has been frequently insisted in the application of them to cases occurring in real life, that, if the party has actual notice, it was equivalent to the recorded instrument, and ought to be so considered in construing them, in [195] analogy to the construction that was originally adopted in reference to the required registry of conveyances of real property, in order to render them valid against the same class of persons. But this construction has, it is believed, been uniformly rejected' in reference to the act of 1816, not only in Virginia, where the act seems to have originated, but also in all the states where it' has been re-enacted; the courts holding that the object of the legislature, in the particular cases provided for, was, whenever the possession was separated from the right of property, to place the latter where the apparent ownership was in favor of creditors and purchasers, unless the transaction was accompa- • nied by a recorded instrument, and in this manner to shut out and conclude in all such cases all questions as to the real title. Accordingly, it was decided in Virginia, in 1811, in Gay v. Moseley, (2 Munf. 543,) that five years’ continued possession, of a slave by the borrower transferred the ownership to him in favor of a creditor who had actual notice of the unrecorded deed, and the same doctrinéis acted upon in Tennessee. (Andrews v. Hatfield, 3 Yerg. 39,) and a similar construction seems to prevail in Massachusetts in reference to their provision concerning mortgages of personal property (Travis v. Bishop, 13 Metc. 304); and this court adopted the same construction-of the act of 1816 in Cook v. Clippard, (12 Mo. 379,) where it was determined that the purchaser of a slave from a borrower, who had continued in possession five years without any recorded instrument manifesting the loan, acquired the title, although he purchased with full knowledge of the circumstances. These decisions, we may remark, do not conflict with the English adjudications upon their registry laws. These acts contain no exception excluding from their operation a party having notice, and the English law courts never ventured to put such an exception into them by construction. It is true, the English court of chancery did this substantially by holding that, although the statute bound the legal title, the notice bound the conscience of the second purchaser, and converted him, notwithstanding the statute, into a trustee of the legal title for the [196] benefit o£ tbe party who by bis first purchase was justly entitled to tbe land ; but yet this equity precedent would bardly justify us, when called upon to put a legal construction upon tbe act, now under consideration, in declaring that creditors and purchasers with notice are excepted out of its operation. Indeed, this equity doctrine of notice has thus far, it would seem, been confined in England to conveyances of real property, which is subject to a double ownership, equitable as well as legal, and it is by no means certain that a court of equity would extend it to transfers of personal property, which the interests of commerce and the convenience of daily life would seem to subject to a different consideration. In answer to the case of Sanger v. Eastwood, (19 Wend. 161,) to which we have been referred in argument, we may remark, that the construction there given to the provision in the New York code concerning mortgages of personal property proceeds upon the peculiar language of their act. Bona fide creditors and purchasers are the words there used, and the same words in their registry laws for the conveyance of real property having been previously construed, by reference to the equitable doctrine of notice, to exclude such as had notice of the true condition of the title, the same construction was applied to them here, and resulted in the decision referred to. But our legislature have not incorporated this doctrine into our statute now under consideration, either by excepting out of its operation parties with notice, as they have provided in reference to parties who have notice of unregistered-conveyances of real property, or by expressly confining the act to bona fide creditors and purchasers, as is done in the New York act; and their omission to do so would seem to furnish an additional, if not a conclusive reason, against our incorporating it into the law by judicial construction. In the case now before us the instrument of gift transfers-the slave, reserving the use and benefit of his labor to the grantor during her life, and expressly authorizes the grantee to take possession of him as his property at her death. It purports on its face to be made in consideration of the love the [197] grantor bears ber grandson, the grantee, and is designated by the party herself as a “ deed of gift and bill of saleand the. instruction of the court was, that, although not recorded, it was valid between the parties to pass the title, and that it was also valid against the defendant if “he purchased with notice of the prior transfer.” The instruction, it is thus seen, proceeds upon the assumption that an unregistered gift, in good faith, unaccompanied by the possession, is valid against a subsequent purchaser with notice ; and whether this be so, is the question that has been argued before us as the turning point in the case, and upon which therefore we shall determine it. In the construction of the statute there is no difference in reference to the matter of notice between a loan and a gift, and assuming that the transaction between the grandmother and the grandson was a gift (and such apparently was its real nature, no matter what form it may have assumed), according to the case of Paul and Clippard the title remained in the giver, notwithstanding the gift, in favor of a purchaser with notice of the unregistered gift, and the second instruction given at the instance of the plaintiff was therefore erroneous. It has been suggested that the statute embraces only gifts of present interests, because they only are capable of being accompanied by the possession, and that it ought not to be construed to extend to future estates in personal property like the present, which it is said must be looked upon as substantially a remainder to take effect in possession after the expiration of the grantee’s life interest; but we do not feel the force of this suggestion. Both the words and the spirit of the act extend equally to gifts of future as well as present interests, and we see no ground whatever for making any distinction between them in the construction of the statute, unless it be that every future interest is to be considered as falling within the clause that provides for limitations by way of condition, remainder, &c., in which event the present limitation, if unregistered, would be void even if founded upon a valuable consideration. But this matter has not been argued before us, and we refrain [198] from expressing any opinion about it. It is -enough for the case now presented, that, in our opinion, a gift is void against a purchaser, whether it be of a present or of a future interest, unless it be accompanied by the possession of the thing given, or by a recorded instrument of gift, and the! result is the judgment must be reversed, and the cause remanded for a new trial; and, Judge Ryland concurring, the court so order.