25 Iowa 464 | Iowa | 1868
The only questions made in this case arise
upon the instructions given by the court to the jury, and the refusal to give others asked by the plaintiff. Without giving the instructions at length (they cover thirteen pages of the transcript), we will content ourselves by simply stating and deciding the questions involved in them.
This section of the statute, which is the same as section 1193 of the Code of 1851, has heretofore been under review in this court. In Miller v. Bryan (3 Iowa, 58) the plaintiff in the action (which was replevin) claimed the property by purchase; no bill of sale was recorded and the vendor continued in possession. The defendant was the sheriff and had seized the goods as the property of the vendor, under writs of attachment against him. The court instructed the jury, that if the vendor kept
' ' The case of Crawford v. Burton (6 Iowa, 476) was also a controversy between a purchaser and an attaching creditor. The bill of sale was so defectively acknowledged as that no notice was imparted by its record. There was judgment for defendant. On appeal to this court that judgment was reversed, because, if the creditor had notice of the sale, that would be sufficient, although the bill of sale was not acknowledged or recorded. Citing Miller v. Bryan, supra, and Code of 1851, §§ 1193, 1211.
McGavran v. Haupt (9 Iowa, 83) is decisive of the question made in this case, as to the construction of the statute. In that case, the controversy, as in this, was between the mortgagee in an unrecorded mortgage, and an attaching creditor of the mortgagor. The court, per Stockton, J., say, “The question for our decision is, whether a mortgage of personal property, executed and acknowledged, but not recorded, where the mortgagor retains possession, is valid against existing creditors, with notice of the mortgage at the time of its execution. The provisions of the statute are peculiar. Code, § 1193. * * * * We think the validity of the mortgage is not made to depend solely on the fact of its being recorded before the goods are seized by the creditor oh his legal process ; and that actual notice of its contents to the creditor is sufficient to give to the claim of the mortgagee, by virtue of his unrecorded mortgage, duly executed and acknowledged, a preference over the creditor with notice.”
The opinion of the court in the case last cited, also clearly holds that the phrase “ without notice,” in the statute, applies to both creditors and purchasers; that such is a, fair construction of the statute, as well as reasonable in itself. This point is therefore res adjucHeata. Not only so, but the decision is in accord with the judgment of the court, as now constituted. Nor is there, in our opinion, any soundness whatever in the argument at bar, to the effect, that such a construction of the statute tends to enable parties to commit, or facilitate them in the perpetration of, fraud. The filing of a mortgage for record, and the recording thereof, is but constructive notice of its existence; and, if a party has notice of its existence otherwise than by its record, the full purpose of the statute is attained. Fraud cannot be perpetrated under cover of a notice to a party otherwise than by record, any more easily in degree or effect than when the notice is communicated by means of recording. Any distinction in this particular is imaginary, not real.
In support of this, we might cite the decisions under the early English registration acts, as well as under certain of our State laws. The early English,'and some of our State statutes, made no exception in terms, as to purchasers, etc., with notice; but all conveyances, mortgages, etc., were declared to be invalid as to subsequent purchasers, etc., unless recorded; and yet nothing is better settled in England and in this country, than that a purceaser of a legal title, will be liable to all equities of which he had actual or constructive notice at the time of the purchase; and a purchaser by deed duly registered
We refer to this doctrine for the purpose of showing the radical error of counsel, in supposing that fraud would be facilitated by holding the words “without notice,” in our statute, to apply to creditors as well as to purchasers. For if the courts of equity, both in England and in this country, found it necessary, in order
It follows, from the foregoing, that the court erred in-holding, that the words “ without notice,” in the section of the statute quoted, did not apply alike to creditors and purchasers, as it did by refusing the second instruction asked by plaintiff, and in other of the instructions given.
It may be proper, though perhaps unnecessary, to add, that the different construction which obtains in Ohio, New York, Massachusetts and other States, grows out of the different, not to say peculiar, language of the statutes of those States, and hence we do not deem it necessary to review the authorities from those States, cited and ably enforced by counsel in argument at bar.
This question has not been directly decided by this court, as applied to conveyances of personal property by mortgage or bill of sale. But the same words, “ without notice,” are used in the section in relation to real estate in substantially the same connection. Rev. § 2220. In English v. Waples et al. (13 Iowa, 57), which was a controversy between two mortgagees of real estate, the mortgage last in date having been first recorded, this court stated and held the general rule as follows: The last mortgagee
It is held, in the case of Wilson v. Miller & Beeson (16 Iowa, 111), which also was concerning real estate, that, where a party has actual knowledge of another’s rights, or, what is the same thing in law, designedly abstains from making inquiry for the purpose of avoiding knowledge — or, in other words, where a party knows the rights of another, or fraudulently determines not to know them — in either case, he is not a bona fide purchaser.
The doctrine of these cases, if it is applicable to bills of sale and mortgages of personal property, as well as to conveyances and mortgages of real estate, is decisive of the question made in this case. We can see no reason or principle upon which to rest a distinction between the two classes of property. The words of the statute are the same in the one case as in the other. As a matter of conscience or equity, one man has no more right to appropriate the personal property of another, without consent or compensation, to his own use, than to thus appropriate his real estate. Whatever would bind the conscience of a man in the one case would bind it in the other. We feel constrained therefore to hold., as we do, that the word “ notice” as used in one statute, means notice either actual or constructive.
In the notes to Le Neve v. Le Neve (2 Lead. Cases in Eq. 152), the learned American annotators in the com
Applying this law to the facts as disclosed by the testimony, extracts of which are given above, there can be but little difficulty in determining that the notice was actual within the liberal rule thus stated. But it is clear from all the instructions, as well by those given as by those refused, that the learned judge who tried this cause did not use the term actual notice with any such liberality of construction; he used the term in the sense of positive information as distinguished from a knowledge of facts and circumstances which would lead to such information. The authorities are reasonably well agreed, that where a party designedly abstains from making inquiries for the purpose of avoiding knowledge, such conduct is mala fide in itself and will not relieve the party from the effects of the knowledge his inquiries would have developed. Even where the doctrine of constructive notice is held the most rigid, and clear and decisive proof is required, those courts also hold, that, where a party has designedly abstained from inquiry for the purpose of avoiding knowledge, such conduct would show that the party had a " suspicion ” of the truth and a fraudulent determination not to learn it, and therefore, would charge the party with notice of whatever an inquiry would have imparted. Jones v. Smith, 1 Harris Ch. 43; Whitehead v. Jordan, 1 Young & Coll. 328.
In view, then, of the special facts of this case, we have even less hesitation in holding that the court erred both
The doctrine of this instruction is, that, although a party has constructive notice of a mortgage, he may defeat it by his belief that the mortgage is void. In other words, that the belief of a party will determine the rights of his adversary. This cannot be the law. The rights of a party are to be determined by the facts, not upon belief simply. The belief of the attorneys of Northrup, Taylor & Co., that the mortgage was fraudulent, could not make it so; and the rights of the parties under the mortgage ought not and cannot be effected by such belief.
In Ferrars v. Cheny (2 Vern. 383), the defendant purchased an estate with notice of a post-nuptial settlement, which comprised the estate in dispute ; it was argued in his behalf, that there was no recital of the articles for a settlement entered into before the marriage ; and that for aught that appeared to the defendant, the deed was fraudulent as against a purchaser; but the court held, that he ought to have inquired of the wife’s relations, who were parties to the deed, whether it was voluntary or made pursuant to an agreement before marriage, and, having notice of the deed, must purchase at his peril, and be bound by the effect and consequence of the deed. 2
Without enlarging upon the question in this opinion {already too much extended), it may, perhaps, be admitted, that the weight and number of authorities hold with the court below, that a mortgage cannot cover after acquired property, unless possession thereof is taken. (See .the authorities cited by counsel in their briefs.) But
The eighth instruction, as given, was not of itself necessarily erroneous; and yet the plaintiff was entitled to the modification as asked.
We have thus disposed of every question made in the case, and the judgment of the District Court is
Reversed.