9 Johns. 337 | N.Y. Sup. Ct. | 1812
This case is not of much moment, in respect to the amount of property, but it is very important, as to the principle involved in the decision.
■ The facts lie in a narrow compass. Mecker, on the 2d of August, 1810, obtained judgment against Holt. On the 29th of August, Holt sold his goods and chattels (being a quantity of blacksmith’s tools) to the plaintiffs, partly for cash, and partly to . satisfy a debt due to them. The articles were specified in the bill of sale, and the bill contained an agreement, that Holt was to retain the use and occupation of the goods, for the term of three months.
The question arising upon this case is, whether the sale to the plaintiffs, under the above circumstances, was valid in law, as against the judgment creditor.
As between the parties to it, a sale of chattels unaccompanied, by possession, may be valid. It may even be validas against a creditor, who was knowing and assenting to the sale. It was so ruled in Steel v. Brown and Pary, (1 Taunt. 381.) but this is not such a case. Here was a judgment creditor affected by the sale.
The statute of 13 Elis, and which has been re-enacted with as, (sess. 10. c. 44. s. 2.) makes void all grants and alienations of goods and chattels, made with intent to delay, hinder and defraud creditors. This statute, as it has been frequently observed, by the English judges, was declaratory of the common law; and the true principles of law in relation to such sales, are to be found in a series of judicial decisions, both before and since the statute tif Elisabeth. The great point is, whether the fact of permitting the vendor to retain possession of the goods, did not render this sale fraudulent in law, notwithstanding such permission was inserted in the deed as a condition of the contract, if there had been no such insertion, but the sale had been absolute on the face of it, and possession had not immediately accompanied and followed the sale, it would have been fraudulent, as against creditors 5 and the fraud, in such case, would have been an inference or conclusion of law, which the court would have been bound to pronounce. This is a well settled principle in the English courts. It is to be met with in a variety of cases, and especially in that of Edwards v. Harben; (2 Term Rep. 587.) and it has been recognised and adopted by some of the most respectable tribunals in this country, (Hamilton v. Russell, 1 Cranch, 309. Davies v. Cope, 4 Binn. 258.) But it by no means follows that such a sale, with such an agreement attached to it, and appearing on the face of the deed, is necessarily valid. There must be some sufficient motive, and of which the court is to judge, for the non-delivery of the goods, or the law will still presume the sale to have been made with a view to “ delay, hinder or defraud creditors.” Delivery of possession is so much of the essence of the sale of chattels, that an agreement
The cases in which a postponed delivery has been allowed, are all of them special, as I have already observed. In Bucknal v. Roiston, (Prec. in Cha. 285.) the goods were sold to A. the lender of money on bottomry, and the sale was in the nature of a mortgage or security for the loan, and he trusted B. the borrower to negotiate and sell the goods for A.’s advantage. The Lord Chancellor held the sale good, even against a judgment creditor, as the trust appeared upon the face of the bill of sale, and it was not to give a false credit, but for a particular purpose agreed upon at ibe time of sale. In Cole v. Davies, (1 Ld. Raym. 724.) it was ruled by Holt, Ch. J. that if goods of A. are seized upon fi. fa. and sold to B. bona fide, and for a valuable consideration, though B. permits A. to have the goods in his possession, upon condition that A. shall pay to B. the money, as he shall raise it by the sale of the goods, this will not make the execution fraudulent, and a subsequent act of bankruptcy by A. would not defeat the sale. This case carried the permission of retaining the possession to the greatest length, perhaps, of any in the books. The last observation of Lord Holt was clearly inaccurate, as it is contrary to the provision in the statute of Janies, and contrary to what was said by the Lord Chancellor in the preceding case; but the case itself is confirmed by a late decision of the C. B. in Kidd v. Rawlinson. (2 Bos. & Pull. 59.) It was there decided that the purchaser at a sheriff’s sale may leave the goods in the possession of the defendant, out of benevolence, and for a temporary and honest purpose. But Lord Eldon distinguished that case from one of a creditor buying goods to satisfy Ms own debt, and he places reliance on the circumstance that the parties did not stand in the relation of debtor and creditor. He said that the purchaser might be considered as the donee of the goods, lending money to the original defendant to purchase them through the medium of the sheriff, and taking a bill of sale, as a security for the money. In such cases it has been frequently said not to be absolutely fraudulent, or not so in point of law, to permit the donor to continue in possession. The only inquiry would be as to matter of fact, whether the transaction was really and intrinsically fair and honest. The case of Buck
The same doctrine, accompanied with the same distinction, has been laid down in Pennsylvania, in the case of Waters v. M‘Clellan. (4 Dall. 208.) Shippen, Ch. J. there observed, that “ in the case of a voluntary sale of goods, the law, both in Pennsylvania and England, regards the continuance of the debtor’s possession as a badge of fraud. In England, the law is the same where the sale is made by the sheriff; but in Pennsylvania, a different rule in that case has prevailed: and where a relation, or friend, after a fair purchase at public sale, leaves the goods in the occupation and use of the debtor, it never has been deemed a fraud upon creditors.” The learned judge who pronounced that decision, could not have recollected the point ruled by Lord Holt, in Cole v. Davies, and he could not have known of the decision of Lord Eldon, for the two decisions were concurrent in point of time.
The cases of marriage settlements form another exception to the general rule. In those cases, the goods are conveyed to trus- , tees for the use of the wife, and the law which countenances those settlements, permits the wife, as cestui que trust, to have the possession as part of the trust, as essential to the object of the settlement, and as being considered the same as possession by the trustees. The case of Haselinton v. Gill, (3 Term Rep. 620. in nolis,) of Cadogan v. Kennet, (Cowp. 432.) and many others which might be referred to, all proceed upon this principle, and they, of course, have no bearing upon the present question. Indeed, there is no case which sanctions such a sale as the one in the present, instance; for here no reason whatever appears for withholding delivery of possession, and the sale must, therefore, be considered, in judgment of law, as fraudulent and void against the creditor, Fraud is a question of law, and especially, when there is no dispute about the facts. It is the judgment of lam on facts and intents, as has been frequently observed by judges of the greatest eminence. The length of time for w hich the possession is to be withheld is not material, and does not affect the principle. Thus, in the late case of Paget v. Perchard, (1 Esp. N. P. 205.) the
The general principle involved in this discussion, is extremely important to the commercial interests of the community, and to confidence and integrity in dealing. The law, in every period of its history, has spoken a uniform language, and has always looked with great jealousy upon a sale or appropriation of goods, without parting with the possession, because it forms so easy and so fruitful a source of deception. Lord Kenyon said that he lamented that it was ever decided that the possession and apparent ownership of personal property might be in one person, and the title in another, and he thought it would have been better for the public, if the possession of such property (except in the case of factors) were to carry the title. (7 Term Rep. 234.) The value of the principle, and its necessity, were perceived and felt as early as the age of Glanville; for be observed, when speaking of pledges, (Lib. 10. c. 8.) that “ when a thing is agreed to be placed in pledge, by a debtor to a creditor, and delivery does not follow, it becomes a question what shall be done for the creditor in that case, since the same thing may be pledged to other creditors both before and after. And it is to be observed, that the court will not re-gard such private arrangements, nor intermeddle therewith, or sustain a suit thereon.” This was acknowledging the mischief, and admitting the remedy, under the same enlightened view of public policy and private interests, which some of the decisions of Lord Mansfield announce, at the period of the full growth and maturity of the commercial system. There is also a case in the Book of Assises, f. 101. pl. 72. 22 Edw. HI. which is much fin the present purpose. An action of trespass was brought for wrongfully taking some cattle, and the jury found that the defendant had received from the bailiff the beasts, on an execution which had issued for him against one B. and that the beasts belonged to B at the time of the judgment, and that he afterwards, by deed, gave them to the plaintiff to delay the execution: and the jury being required by the court to say who took the profits of the same
We may, therefore, safely conclude, that a voluntary sale of chattels, with an agreement, either in or out of the deed, that the vendor may keep possession, is, except in special cases, | and for special reasons,| to be shown to, and approved of by, the court, fraudulent and void, as against creditors. This is clearly not one of those cases, and the defendant is, therefore, entitled to judgment.
Judgment for the defendant.