Haven v. Low

Woodbury, J. 1. We are satisfied, that the interest of Henry Mutter, in the present action, was balanced ; and. therefore, that he was properly admitted to testify. Thus, if the action terminate in favor of the defendant, the value of the sloop will go towards the payment of the witnesses’ debt to John Mutter ; but, on the other hand, the witness, at the same time, will become liable to pay from other funds the debt of the plaintiff. Had the sloop been purchased, or mortgaged to the plaintiff, with views fraudulent in fact, the witness, after her loss, might not be liable to refund to him the consideration received. Rob. Frauds 591, 596.—Hob. 72.—1 Dyer 194, 296.— Prec. in Ch. 80.—4 John. R. 598.—Sands et al. vs. Codwise et al. But no such views are imputable to the plaintiff: and whatever may have been the character of the sale to Chamberlain & Swazey, the design of the plaintiff was evidently to obtain only a collateral security for his own account, and for the sum advanced to Chamberlain & Swazey, to obtain from them the assignment of that security. Hence, should the security fail as against the other creditors of the witness, yet the debt due to the plaintiff would remain in full force. It arose not ex turpi causa, It could not- be merged by any thing merely collateral; and there is no pretence of an actual payment on release.(l) 2. The next point is our direction to the jury, that the defendant was not justified in attaching the sloop on account of any supposed equity of redemption, which still belonged [16] to Henry Nutter. At the trial, and in the argument, both parties have treated the contract between Henry Nutter and the plaintiff as a mortgage. Consequently, we shall so com aider it, whatever doubt might otherwise arise (1), that the writing executed by the plaintiff did not prevent the sale itself from being absolute : or whatever doubts might exist, whether the sloop was not intended as a pawn, (2 Caines Cases in Er. 202.-Cortelyou vs. Lansing.—Yelv. 178 n.,) and, therefore, the conveyance void, because not accompanied by an actual delivery of the article pledged. Justin, Inst. B. 4.—T. 6 S. 7.— Yelv. 178 n.— 15 Mass. Rep. 480.— 6 Mass. Rep. 425, Portland Bank vs. Stubbs et al. (1) 15 Mass Rep. 480. It may be considered, also, as a mortgage directly between Henry Nutter and the plaintiff; because the assignment from C. & S. was by Henry NuttePs consent, and the obligation to re-convey rati to him alone. Thus considered, the equity of redemption is not the subject of attachment on execution. Most of the cases in the books relate to pawns, which were Icing confounded with mortgages of personal estate ; but the principles which exempt the equity in both from seizure are similar. Com. Di. “Execution" C. 4.—5 John. 34.—Wilkes et al. vs. Ferris.—8 East. 467—Tidd. 917.* The analogy, also, to the equity of redemption in real estate is strong ; for that was not liable to execution, either at common law, or by the 29th Charles II.—Powell on Mges. 339.—1 Vez. Jn. 431.— Lyster vs. Dolland.—3 Brown’s Ch. Rep, 480.—5 B. et. Pul. 461, Metcalf et al. vs. Scholy et al.— 8 East, 467. : And it is now liable in different states only by express statute, or by implication from other statutes, recognizing the equity of redemption in real estate as a legal, rather than an equitable interest. 7 Mass. Rep. 139.— 8 ditto 555.— 9 ditto 103.—10 John. Rep. 481.—1 Day. Rep. 93. 3. The only remaining question is, whether the mortgage oecame void in consequence of the sloop’s continuing in the possession of the mortgagor. It is well settled, that a mort [17] gage of personal property is valid as between the parties, though the property be not actually delivered to the mort-5 John. Rep. 261, 262.—8 ditto 97.—2 Caine’s €⅛. 178 note, and authorities gagee. in Er. 202.—1 Atk. 165.—Yelv there collected. (l)M.feE. 594, Edwards vs. Harbin.— 1 Cranch 301, Hamilton -vs. Russell. — 9 Jot Rep. 333, Stur-tevantetal. vs* Ballard. But it is contended, by the defendant, that, in respect to the creditors of the mortgagor, such a transaction is per sé fraudulent, and therefore void. There are authorities which countenance this position.(1) On the contrary, there are numerous other authorities which seem to hold, that if the possession of personal property, after either a sale or mortgage, be retained by the former owner, that circumstance alone is not conclusive evidence of fraud; but only ¡prima facie evidence, and may therefore be rebutted ot explained. 3 Coke 81, Twine’s case.—Cowp. 432, Cardogan vs. Kennett.—2 Bos. et Pul. 59, Kidd vs. Rawlinson.—1 Lord Ray.286, Maggott vs. Mills, 724.—6 East 257.—5 D. & East 424.—2 Wm. Black. 701.—1 Burr. 484, Worsley et al. vs. Mathes et al.—3 Espin. Cases 574.—5 Espin, Cases 25.— 1 Maule & Selw. 251, Leonard vs. Baker, 335, Muller et al. vs. Moss, 354.—Bull. N. P. 258.—Rob. Fraud. Conv. 558.— Taunton 823, Watkins vs. Birch et al.—1 John. Cases 156.—5 John. Rep. 286.—8 John. Rep. 444.—12 John. Rep. 323.—15 John. Rep. 430.—5 Taunt. 512.—4 Dallas 208.—4 Mass. Rep. 661.—8 Mass. Rep. 257.—12 Mass. Rep. 131, 494.* The difference between these two positions is highly im* portant; because the firspone devolves the question of fraud upon the court ; the last one, upon the jury: the first one requires an opinion to be formed on a single circumstance, and admits no explanation; but the last one looks to the whole transaction, and admits every honest apology or extenuation. But, as a general principle, fraud is a question of fact; or. at the farthest, is a mixed question of law and fact, where the court decide what circumstances and intents are com18 peteni: to prove fraud, but the jury decide, whether those circumstances and intents exist in any particular transaction. 1 Wm. Bl. 196.—Foxcraft vs. Devonshire.—1 N. H. Rep. 257.—State vs. Little, and authorities there cited. (1) 5 D.& E. 426 Estwick vs. Caillard.— 8 D. & E. 529, Nunn v. Wilsmore. Perhaps the only exceptions are cases, in which special statutes declare, that some act shall constitute fraud ; or where a fraudulent intent is inevitably inferable from some act’ anc^ both of these acts are admitted or proved.(1) The act of possession, however, by the former owner, after a ' . * sale or mortgage, has never been declared fraudulent by express statute ; and it is not an act, which, from its nature, inevitably indicates fraud. For, by this act, the general funds of the debtor are not diminished, nor the security of his creditors in any degree lessened. Nor can any body suffer by it, unless a new credit is actually given, or an old one extended under a mistaken belief, that the property remains unsold. But the few cases of this kind, which may happen, ought not to introduce so stern a rule as to make such conveyances void against every description of creditors. It is obvious, too, that the small number who, during such possession, may give a new or extend an old credit, are seldom inevitably misled and injured by that possession. They often receive express notice of the previous sale. Sometimes the notoriety of the sale has been such as incidentally to have reached them. When these circumstances have not happened, this and every other class of creditors should, before giving credit or making an attachment, diligently inquire as to the title of the property in possession of the debtor. In purchases of personal property the rule of caveat emptor applies, though the vendor may be in possession of it; and, in levies, it is no harsher to apply a similar rule of caveat creditor. We know it has been a subject of regret with some jurists, that in every country, as in some parts of Germany, possession should not always be deemed conclusive evidence of title. 4 D. & E. 640.—7 & E. 334.—Lord Kaimes’ Tracts 85. But such a rule would make a vast inroad upon our system ; and the frequent necessity of entrusting personal estate to other than the actual owners — to clerks, domes [19] tics, factors, mechanics, and borrowers, forbids the application of the rule in any case whatever. When the. creditor makes proper inquiry, he may ascertain that, in his particular case, the naked fact of possession after a sale is the only indication of fraud ; and, perhaps, that indication, weakened by clear evidence of a full consideration paid, of perfect publicity in the sale, and of little prior indebtedness in the vendor ; or he may find that indication strengthened by the converse of one or all of these circumstances. (1)1 Burr, 484. Again, he may ascertain that there was an express condition in the sale itself for a loan of the property to the vendor ; and, considering the nature of the property, and the character and situation of the parties, that this condition ought to cast no suspicion of dishonesty on the transaction. Thus cases will occur to every one, where property might be honestly loaned for a time to the vendor from mere charity ; other cases for hire ; and others still for the property to be repaired, freighted, or manufactoried. In others, it may be left with the vendor from simple procrastination as to its removal ; in others, where the sale was a mortgage, from a common but erroneous opinion, that the mortgagee has no right to possession till condition broken,and in others, because the property is of so ponderous a nature, as to render a speedy removal inconvenient in the usual course of business. The length of time it was left or loaned, whether for hours, months, or years, would frequently much strengthen or weaken any presumption of fraud. In fine, possession of property being retained by the vendor after a sale, is not per se a fraud ; but, in the language of Lord Mansfield, “ being only evidence of fraud, may be explained.”(l) The whole circumstances should be submitted to the jury, and “ from all parts of the transaction taken together,” (6 East. 265, arguendo) it should be determined, whether the contract of sale was or was not “ fraudulent in the concoction of it.” 5 Es. Ca. 25, by Ld. Ellenborough. In other words, if this act of possession were not of an ambiguous character, fraud might always be inferred from it by the court; but appearing in so “ questionable a shape,” as it often does, fraud, if accompanying it, is a presumption [20] t0 ma(^e hJ the jurJ ⅛ the whole case, and is not “ de-lermina*:)le any positive rule of law.” PhilL Ev. (£px, 15.) Judgment on the verdict. Footnotes [*] 16 Mass. Rep. 320, Burlingame vs. Bell. [*] 2 Barn. & Aid. 135, Robinson et al. vs. M’Donald et al.—248 Stringer vs. Murray et al.—1 Broderick & Bing. 506, Steward vs. Lolme.—19 John. Rep. 218, Ludlow vs. Hurd et al.—1 Gow. Ni. Pr. 33.—Armstrong- et al. vs. Baldock.—3 Moore 11, Woodham et al. vs. Baldock.—17 John. Rep. 102, 334; Dickenson vs. Cook.