167 N.W. 164 | S.D. | 1918
Lead Opinion
This action, wtas brought by plainltiiff as trustee in bankruptcy of one Tbomlas Edige, bankrupt, to- set.aside a sale of personal property made by 'such' bankrupt to his- wife, the defendant ¡herein. Edge filed a petition in bankruptcy on April 13, 19x6, was' ¡adjudged bankrupt on April 14, 1916, and plaintiff was appointed and qualified as trustee on May 8, 1916. This action was begun on June 13, 1917. Tttxie complaint attacked the said sale both upon the ground of actual fraud and also¡ under section 2369 of the Civil Code. At the trial, and before the receipt of evidence, plaintiff withdrew the charge of actual fraud, leaving as the only issue to be tried ¡as to whether or not there w.as such a delivery and change oPpossession of the property sold as would render such sale valid under section 2369, Civil Code. Sulch section reads:
“Every ,transfer o!f persona! ¡property' other than a thing in action, or a ship or cargo at sea, or in a foreign port, and every lien thereon, other than a mortgage, when allowed by few, and a •o'cintraot ¡c|f bottomry oir respondentia, -is conclusively 'presumed, if mlade by a person having at the time the possession, or control •of the property, and not aocompamied 'by an immediate delivery, and -fallowed by an actual and continued change Of'possession of things transferred, to be fraudulent ¡and therefore void, against ■those who 'are his creditors white he remains in possession,- ¡and ■the successors in interest of such creditors, and against any parson ¡on whom his estate devolves in trust for the benefit of others than himself, and against purchasers -and incumbrancers in good faith subsequent ¡to the transfer.”
Regardless -of the ¡above f-adt, the trial uotort received a great masis of testimony" having no bearing upon any question except that of actual fraud. Eurthermore, the trial count made extensive
Appellant contends' that there was- not an immediate delivery
“To be, ais against those who are hiis creditors, fraudulent amid thierefore void during the period in which be 'continues to remain in) possession.”
'Respondent urges that the filing of the bill of sale should be cionisiidereid in her favor. In ¡this she is in error. There is no statute authorizing the filing -of 'bills of salle and rendering such filing, or even' a recording thereof, notice to any one. If our statutes authorized suoh a filing and made it 'constructive notice, such notice might he held tioi excuse a visible and open change of possession where otherwise it woluld be required. When the circumstances surrounding a s'ale ¡are such as to render incom venient, ilf not Impossible, such visible change of possession as wtoiuld ordinarily be necessary under section 2369, is not the vendee bound to take advantage of such means as the statute provides for giving notice off >dkim off ownership? Should section 2369 be held to be inoperative owing to the 'fact that, under oUir law, husband! and wife may deal with one another, or, even through a husband1 and his wife are given the right to' make transfers the one to the other, sholuild not such right be so exercised as to comply with the spirit of section 2369 — should not the parties furnish such evidleoce ¡off delivery and change off possession as the law makes possible? Section 2369 is a statute of frauds, enacted to prevent the ¡opportunity olf fraud. There is. no class of cases that callsi more urgently for such a statute than ■that oif safes between 'those oiolsel'y related. To< hold that, merely because a husband and wife cannot conveniently make visible and notorious the ichainge off possession' off property transferred from one toi ¡another, they are put in a class by themselves', and need not even comply with reasonable statutory provisions providing methods off giving notice of change off ownership, is to malee section 2369 inoperative in a class of cases wherein it is most needed. To avoid' laying down poor Haw, let us remember that a perfectly hcina fide salte from a husband to a wife is no moire sacred than any other bona fide sale, and that 'all come under the (provisions off section 2369. Respondent . cites and1
“The sale shall be open ‘anidl public; that itlbe world may be 'apprised oif the change of ownership.”
The decision in Clark v. Elsie, 21 S. D. 113, 110 N. W. 88, Cited by respondent, contains nothing having the slightest bearing upon, the question, now before us. Respondent has cited [Morgan v. Ball, 81 Cal. 93, 22 Pac. 331, 5 L. R. A. 579, 15 Am. St. Rep. 34. Sympathy for the vendee in. that case resulted, in poor law. The court in Murphy v. Mulgrew, 102 Cal. 547, 36 Pac. 857, 41 Am. St. Rep. 200, has rejected its: holding in the former case, anidl has since adhered strictly to the rule that no distinction' ooulidi be mlade between salles between husband and wife and other safes'. And sudhi court also', held! ini this last case thtat the filling of a schedule of property owned by the wife, if fifed subsequent to the time of sale, wloiuMi not validate Such sale. It said:
“From, the evidence of the plaintiff, it will be perceived .that no actual' change of possession of this' property took place at ithe time of the delivery of the bil'll of sale; but, óm the contrary, in all its surroundings, it remained entirely in sit'atu quo. Mrs. Murphy attempts to escape the legal effect of the foregoing evidence 'by the claim that she bad1 appointed her husband her agent to take the poisis'e'ssioini and control! of the horses for her, and; as such agent, his possession whs her possession'; but there i's nothing to be urged ini .flavor of such a 'contention. Bbith the letter and the ithe recognition, of such ,a principle. The object of the statute is to require notice to the world olf the transfer of personal property, spirit of the law contained in section 3440 would be defeated, by in order that men may be able to deal' with each other upon equal terms, anidl from a common level. The efficacy of the statute would be entirely destroyed if .the vendor were allowed to remain in possession of the property as' the agent of vendee, in the absence oif any notice to the wiorlidi of1 such a .change -oif conditions. Sluich a practice wioluild be in 'direct conflict with the terms of the statute 'itself. We do not find) a syllable of evidence in the record that 'would indicate to' tire outside world that a change of ownership had taken place as to itlbies'e horse's; and we can hardly imagine a base where the provisions elf tih.e statute could have been more*315 entirety disregarded. Morgan v. Ball, 81 Cal. 93, 22 Pac. 331, is munch stronger for the vendee; in. its facts; amid! the language relied upon by respondent, taken from the case of Williams v. Lerch, 56 Cal. 334, has been well and justly criticized in the case of Etchepare v. Aguirre, 91 Cal. 293, 27 Pac. 668 [929, 25 Am. St. Rep. 180]. Tihe fact that a vendor 'and vénidiee -are husband and wife, or parent and -child, is no reason, why the provisions olf the statute -should -receive a different or more liberal construction. •Those conditions; give the statute no additional elasticity. The •rute of aan-s-tru-Gtiio-n is the same in all- -cases,' 'and the relationship ■existing between the parties- is a matter wholly immaterial.”
See, also, O’Kane v. Whelan, 124 Cal. 200, 56 Pac. 880, 71 Am. St. Rep. 42, and George v. Pierce, 123 Cal. 176, 55 Pac. 775; 56 Pac. 53. It is quíte probable that the count had in mind -the decisions in Morgan v. Ball, sliipra, and in Roberts v. Burr, 54 Pac. 849, when, in George v. Pierce, supra, it said:
“In some exceptional oas-es presenting (bar'd law the court, in its construction 'and interpretation of the fa-cts; may have leaned-a little too far toward' tine 'administration of s-ubsantial justice. But beyond this .it has never gone, and the law of this- question stands to-day -exactly .as it did' 38 years -ago.”
Any adthdrities such as Porter v. Bucher, 98 Cal. 454, 33 Pac. 335, where the property wias- of a nature not subject to ordinary delivery, are of no value in determining this -case, as the nature Of tihe property would affect tire kind of delivery necessary if 'the vendee were some one else than the wife of the vendor, just as it would affect it if the vendee was1 the wife o-f1 the vendor.
In.-every -case wherein a sale has been -upheld; excepting the case oif Morgan v. Ball, supra, there will be found 'some fact or facts clearly 'distinguishing slurih case from- this one. Thus in Webster v. Sherman, 33 Mont. 448, 84 Pac. 878, -cited by -respondent, one of -the laonitro-ll'ing facts- was- -the taking by the vendee o-f ami assignment o-f her husband’s live stock brand- -and the recording of th'.e same In- the vendee’s name Not -only might the -respondent have idlon-e as was done in that oase, or pu-t another brand on -all' the stock except th-e hogs, 'and thlus validated the safe of -tlie horses add! -cattle (sections 2932-2947, P. C.), but she might have complied with th-e provisions o-f -se-dtioto 101, 'Civil Code. Sudh statute provide®:
*316 * * a fxiJil and1 compílete inventory of the separate personal property df the wiilfe may be miad'e out and signed1 by her, acknowledged or proved in the manner provided by law far the acknowledgment or .proof of .a grant of -real (property by an unmarried woman, and recorded in 'the Icffiae of the register of deeds of the county or 'subdivision in' which 'the parties reside. The filing of tlie inventory in the register's office is notice and prima facie evidence of the title of the wife.”
Let it not 'be understood! that we hold that there could not’ have been'a valid sale of property, from Edge to his wife under the facts df this case if section xoi, 'Civil Code, did' not exist ■and we had no law unidor whlfidh stock could be branded' and the 'brand registered. We do not pass on that question. We do hoik! that, where the circumstances surrounding a sale prevent there being a change of possession.' open aadi visible to the world, the vendee must give such constructive notice, provided for by statute, as will tend 'bo apprise the world' of the change in- ownership of the property ipurchlasedl.
The judgment and order appealed from are reversad.
Dissenting Opinion
(dissenting). W'e do not concur in the conclusión reached by our 'majority brethren. The - rule .announced in the majority opinion finds no' support in any statute. It concedes that there may be a valid sale of property from the husband to the wife without any compliance with the provisions of section' ioi, Civil Code, or with’ section's 2932-2937, Piol'itilca'l Code, and yet says:
“Where the circumstances surrounding a sale prevent there being a change of possession open and visible to the world Hie vendee must give such constructive notice provided for by statute as will tend to apprise the world of the di'ange in ownership of the property purchased.”
Just what (is meant by “oomisfrMetive notice 'provided by statute” 'is not apparent. The statute does- require immediate delivery and: continued change of possession, which' are in themselves 'substantive facts. But nowhere does the statute require or ¡provide for “constructive notice which, will tend1 to' apprise tlie world of .the di'ange in possession of the property purchased.”
We are aware that courts are not i.11 harmony as to what constitutes delivery and possession of property as between hus
“Uipou receiving -the bill of sale I put it áway and said in substance to him ‘Yioiu take charge of this property and manage it for me’ ”
—'whereupon the court says:
“From the evidence Of the plaintiff it will be perceived' 'that no actual' .change of possession of this property took place at the time of the delivery of the bill of sale, but, on the contrary, in all its surroundings: it remained 'entirely in sratu quo.”
The court further says:
“We can hardly imagine a case where the provisions of the statute could have been more entirely disregarded.”
It was in referring to the matter of delivery that that court used the language quoted in the majority opinion., to wit:
“The fact that a vendor and vendee are husband and' wife or parent 'and child is no reason why the provisions of the statute should receive different or more liberal1 construction.”
The facts in that case differentiate it so strongly from this case that it cannot be 'deemed 'controlling. Again the California court, in George v. Pierce, 123 Cal. 172, 55 Pac. 775, 56 Pac. 53, said:
“The law tcif this question stands today exactly as it did 38 years .ago”
- — referring to .the case of Stevens v. Irwin, 15 Cal. 503, 76 Am. Dec. 500, in which the court held:
*318 “The delivery must foe maidte of the property * * * Bo&seission must he canitiniudus, not taken -to be surrendered back again,' not formal1 hut substantial:.”
The crucial fact'in this case is not that there w‘as no delivery — that must he conceded — but that there was not continued change of possession. There is not a scintilla of evidence that itbie possession following a valid delivery -was taken “to he surrenldlered( back again; n'ot formal, but substantial.” The correct rule fa stated in 12 R. C. L. § 83, that:
“Chahge'of possession! is jiulst as necessary in transactions between husband and wife * * * as'between strangers-, * * * but, owing to- the situation' of the parties, a state of -facts may be sufficient’ 'change between such persons which would not be sufficient undeh ordinary circumstances/'
The “continued change' of possession” in the present case was as compifete as -was possible, so long as the husband! and wife continued! tol live- together on the common homestead. In Porter v. Bucher, 98 Cal. 454, 33 Pac. 335, the California Supreme Court said:
“It never was the diesigm of this statute to give such- extension of meaning to this phrase, ‘confihu'ed change of 'possession/ as to require, upon a penalty of the forfeiture of the goods, that this vendor should never have- any control over or use of them. This iconstnuction, if madle without exception-, would lead! to very unjust and absurd results.”
The results anlticlipated by this remark appe'ar to have been attained in the present case.
The judgment of the trial court should he affirmed