Davis v. Turner
Davis v. Turner
Opinion of the Court
The slaves in. controversy in this case were sold by Wyche to the appellant Davis for their full value, actually paid in cash at the date of the contract; and on the same day, after the agreement was completely made, but before the payment of the price, or the execution of the bills of sale, Davis, at the solicitation of Wyche, and for the mutual accommodation of the parties, hired the slaves to him for a few months, at certain specified rates yielding an adequate compensation for their services. The transaction was perfectly fair and bona fide, without any purpose of defeating the rights of creditors, none of whom were in point of fact in any wise thereby deceived or defrauded. And we are called upon to decide whether this sale is to he condemned as fraudulent and void, and the property subjected to the demand of the appellee Turner, who as creditor of Wyche, levied an attachment thereupon while in possession of the latter, before the expiration of the period for which he had hired the same from Dams. This requires a consideration of what is sometimes called the doctrine of fraud per se.
A creditor has no right to insist that his debtor’s resources shall remain in any given shape. The latter may exchange his goods for any other property; he may sell them and put the money in his pocket, or apply it in his discretion to his debts, his purchases or his maintenance. The creditor having no specific lien must resort to the personal remedies given by law for coercion of payment. -But the debtor cannot divest himself of his apparent, and at the same time retain his substantial ownership, so as to elude the lawful pursuit of his creditors. His doing so in any form or shape is a trick, contrivance or fraud, which the law condemns, and frustrates.
The fraud is therefore to be found in the falsehood of the transaction; in the pretence of a sale when there is none; in the reservation of an interest for the grantor
On the other hand, if there be nothing feigned in the consideration ; if the property has been really sold for a fair and adequate price, actually paid or secured, it is difficult to conceive upon what ground the transaction can be properly treated as fraudulent, though the possession has not been delivered to the purchaser, in the absence of all other evidence of a fraudulent purpose. At least, it would seem reasonable that the grantee should be at liberty to prove that he has acted with perfect good faith, without any design to deceive or injure the grantor’s creditors, and especially that in fact the creditor complaining has been in no wise deceived or defrauded.
Thus, it seems to me, the essential enquiry, in most cases, is whether the consideration be fair and adequate or false and feigned; a question upon which there may be no positive evidence that can be safely relied on, and which must then of necessity be determined by the circumstances attending the transaction, such as the condition and resources of the parties, their connection and dealings with each other, and their course of conduct in relation to the subject. And upon such an enquiry, it is difficult to predicate of any single circumstance that it ought to be conclusive.
It is true that in the most natural and usual course of things, a fair purchaser desires and obtains the posses
When it is said that the grantor’s retaining possession in the case of an absolute sale, renders the contract per se fraudulent, or fraudulent in law, I presume nothing more is usually meant than that it raises a presumption of fraud, so strong as to overrule all evidence whatever to the contrary. Accordingly, most advocates of the doctrine rest it upon the ground, that the inconsistency of the possession with the terms and effect of the deed, is evidence of fraud, which evidence they hold to be conclusive. Here then we perceive the principle already adverted to, that the fraud is to be found in the falsehood of the transaction, and when that falsehood is detected in the alleged consideration, I admit it to be conclusive. I admit, moreover, that the inconsistency of the possession with the terms and effect of the deed, is a circumstance to prove the consideration to be false and feigned; and, in the absence of proof to the contrary, should be considered sufficient for that purpose. But it cannot be denied that it is a circumstance which does not lead necessarily to that result, and sometimes happens not to be irreconcilable with a fair and honest contract, free from all imagination of fraud. If, therefore, the object be to ascertain the merits of the case, it
We are not however left to general reasoning on the subject. The question arises in the construction of a positive statute, the meaning of which is too plain to be misunderstood. Our statute to prevent frauds against creditors, (1 Rev. Code, p. 372,) taken substantially from the statute of 13 Eliz. ch. 5, is directed not against an inconsistent possession, but a fraudulent design; not against fair and honest contracts, but gifts, grants, conveyances, bonds, suits, judgments, &c. made and contrived of malice, fraud, covin, collusion or guile, to the intent or purpose to delay, hinder or defraud creditors; and contains an express proviso that it shall not extend to any estate or interest, &c. which shall be upon good consideration, and bona fide lawfully conveyed or assured to any person or persons, bodies politic or corporate. The common sense meaning of such language is obvious, and ought not to be perverted by an artificial interpretation.
We are sometimes told that the statute is declaratory of the common law, the principles of which would have led to the same results. This is doubtless true, at least to a great extent; but I do not perceive how it affects the construction of the statute. There are no principles of the common law which condemn an act lawful in itself, unless done with a vicious intent; nor even then do they make it a ground of redress, unless such intent has in fact been accomplished.
Twyne’s Case, 3 Coke 80, is an early and leading one upon the exposition of the statute, 13 Eliz., and its principles have been since uniformly recognized, though it seems to me, not always correctly understood. The case differs in material circumstances from the one before us, but it throws much light upon the potency attributable to iucousistoncy of possession with the terms and legal effect of the deed.
It will be seen that the gift to Twyne was on a true and good consideration, but which was used for a false purpose. It was not in truth the moving consideration, or was so in part only. A man has a right to prefer one of his creditors to the rest, but not for the purpose of securing a benefit to himself against their lawful process. The Court inferred from the circumstances, (the whole question of law and fact being before it,) that there was a secret trust for the benefit of Pierce, the nature of which was illustrated by a case thus put: If a man be indebted to five several persons in the several sums of £ 20, and have goods of the value of £ 20, and make a gift of all his goods to one of them in satisfaction of his debt, but there is a trust between them, that the donee
The case before us is not one of a preference given by a debtor to one of his creditors over the rest, but of a sale made to a stranger of certain specific property, for full prices paid in cash at the time of the contract, and all idea of any trust whatever in favour of the vendor is completely negatived by an unquestionably fair agreement for his paying to the vendee ample hires.
There may be cases, it is true, in which a purchase for a full valuable consideration, paid in money at the time of the contract, would be fraudulent against the creditors of the vendor; and doubtless it would be so if such an intent appeared from the evidence. But it is not, in the ordinary course of things, for a man to lay out his money for such a purpose, and it is difficult to suppose any but a malignant motive for his so doing. In a conflict of evidence, indeed, upon the question of
The first authoritative decision, I think, to sustain the proposition that in an absolute sale of personal goods, unless possession accompanies and follows the deed, the sale is to be treated conclusively as fraudulent and void, is to be found in Edwards v. Harben, 2 T. R. 587. That, too, it is to be observed, was the case of a preferred creditor, and though Butter, J. in his opinion uses strong language, it is not free from doubt whether he intended it to be understood beyond the mere naked case of an inconsistent possession.
It is certain that the doctrine of Edwards v. Harben, as commonly understood, has not been established in the English Courts. Dallas, Ch. J. in Steward v. Lombe, 5 Eng. C. L. R. 167, says, that the case of Edwards V. Harben has been dissented from often, and that in Kidd v. Rawlinson, 2 Bos. & Pul. 59, Ld. Eldon, Ch. J. cites and sanctions the following passage from Buller’s Nisi Prius 258: “ The donor continuing in possession is not in all cases a mark of fraud, as where a donee lends his donor money to buy goods, and at the same time takes a bill of sale for securing the money.” And see the remarks and citations of the learned reporter in a note to the case of Bissell v. Hopkins, 3 Cowen 189. A most able and judicious writer in commenting upon Twyne's Case says, (Smith’s Leading Ca. 43 Law Lib. p. 37:) “In the principal case, Pierce the grantor, was indebted to the grantee Twyne, which debt would have been a sufficient consideration to support a bona fide transfer of the goods, and the
In another passage, page 36, the same writer says: “ Though in Edwards v. Ilarben, it was laid down in the express terms above stated, that an absolute sale without delivery of possession, was in point of law fraudulent, the tendency of the Courts has lately been to qualify that doctrine, and leave the whole circumstances of each case to a jury, bidding them decide whether the presumption of fraud deducible from the absence of a transmutation of possession shall prevail. And, indeed, it ought to be observed, that even in Edwards v. Harben, the words of Butter, J. were: ‘ If there be nothing but an absolute conveyance, without the possession, that in point of law is fraudulentby which his lordship may have intended, that where there was nothing, i. e. no facts whatever appearing, except the absolute conveyance and the nondelivery, that then the inference of fraud would be so strong that a jury ought not to resist it. But it is very different in cases where, although the conveyance is absolute, and the possession has not passed, still there are surrounding circumstances which shew that a fraud may not have been intended: in such cases, it cannot properly be said, that there is ‘ nothing but an absolute conveyance without the possession”
And again in the same annotation, p. 37, the writer says, “ It may therefore be safely laid down that, under almost any circumstances, the question, fraud or no fraud, is one for the consideration of the jury. See the judgments in Martindale v. Booth, 23 Eng. C. L. R. 130, where several cases establishing this point are cited; and see Carr v. Burdiss, 5 Tyrwh. R. 316, the
And in a note to a later edition of the same work it is said. “ The modern doctrine is, that it must be left t0 t[ie jury t0 say¡ whether the continuance in possession is fraudulent or not. It is a strong fact, but not conclusive.” Per Tindal, Ch. Justice, in Lindon v. Sharp, 6 M. & Gr. 895, 898.
The Supreme Court of the United States, in the case of Hamilton v. Russel, 1 Cranch 309, 316, adopted and followed, in its broadest sense, the doctrine asserted in Edwards v. Harben; and hence it has found its way extensively amongst opinions and decisions of the State Courts. There the discussions and applications of it have been numerous, perplexed and conflicting, abounding in nice disquisitions and subtle distinctions. In some of the States the doctrine has been rejected altogether, and the statutory enactment adhered to according to its plain and common sense interpretation. In others, it has been recognized with various exceptions and qualifications. Some have adopted it without modification, and even extended it beyond both its letter and its spirit: while in others the war between the rival systems has been waged with precarious and doubtful success: and in one or more, the whole subject has become involved in inextricable confusion. The cases are referred to and briefly noticed in a note to the American edition of Smith’s Leading Cases, 43 L. Lib. p. 40 to 59. A collection of them in extenso would fill huge volumes: an examination of them in detail as authority would present a disheartening and endless circle.
With great deference, it seems to me; that the introduction and pursuit of this doctrine of fraud per se has been prompted by a commendable wish to accomplish a desirable but impracticable object. If a short and easy mode could.be found of cutting up fraud by the roots,
In estimating this peremptory rule as a matter of policy, we must first look to the extent of it. The doctrine of Edwards v. Harben applies only to absolute sales: Butter, J. in his opinion says expressly, “ If the deed or conveyance be conditional, the vendor’s continuing in possession does not avoid it, because by the terms of the conveyance the vendee is not to have the possession till he has performed the condition.” The principle of this exception has frequently, though not uniformly, been extended to mortgages and deeds of trust; in both of which the grantor’s possession usually continues, by express or tacit agreement. And it appears to be the current of decision that the rule is not applicable to marriage settlements or agreements, for. the wife’s benefit, though the husband has the actual possession ; nor to purchases of the husband’s property made by the wife out of her separate estate. So, too, it has been often held that public sales by sheriffs, trustees and others, are not within the rule, though possession be still retained by the debtor. And no one, I presume, has ever supposed it applicable to original loans between parent and child, or any other persons.
Now, the policy of the rule is, in one aspect, to prevent a fraudulent possession from being covered by conveying away the title; and, in another, to prevent an honest possession from gaining a deceptive credit. In either point of view, the rule is too narrow, and goes to the form rather than the substance of the transaction. In simulated contracts, it is easy to mould the conveyance so as to avoid the discrepancy. Nothing more is
So, where the continued possession is honest, the fallacious credit it may give is in no wise attributable to the form of the contract, and the injury results merely from the failure of the supposed ownership. If a man encumbers his property by mortgage or deed of trust, he is no longer to that extent the substantial owner; and if he continues in possession, the probability of his thereby gaining a false credit is quite as great as if he had conveyed by an absolute deed. A preventive of the evil may be found in requiring the parties to give notoriety to the transaction; but that is a matter beyond the province of judicial regulation, and requires the aid of legislative enactment. Accordingly in Virginia the exigency has been provided for by our statute regulating conveyances, 1 Rev. Code, ch. 99, § 4, p. 362; which requires all deeds of trust and mortgages to be registered, as the condition of their validity against creditors.
There are no cases in which the evil of a factitious credit, arising out of the possession of personal property without title, may be more extensive than in those of marriage settlements; the result of which may be, (in the absence of statutory regulation,) to permit the husband to have the possession and ostensible ownership for many years, without prejudice to the rights conferred upon or reserved to the wife by the contract. A provision for the protection of creditors in such cases is em
It must also bo obvious to every one that protracted loans of slaves or other chattels have a strong tendency to mislead the public in regard to the ownership; such as to require, not a violent, but discreet legislation on the subject; which has been introduced into our statute book, by a clause in our act against fraudulent alienations, 1 Rev. Code, ch. 101, p. 373, providing that “ where any loan of goods and chattels shall be pretended to have been made to any person with whom, or those claiming under him, possession shall have remained by the space of five years, without demand made and pursued by due process of law on the part of the pretended lender, or where any reservation or limitation shall be pretended to have been made of a use or property, by way of condition, reversion, remainder, or otherwise, in goods and chattels, the possession whereof shall have remained in another as aforesaid, the same shall be taken, as to creditors and purchasers of the persons aforesaid so remaining in possession, to be fraudulent within this act, and that the absolute property is with the possession, unless such loan, reservation, or limitation of use or property, were declared by will or by deed in writing, proved and recorded,” as directed by the act.
It may be a question of policy worthy of consideration whether our registry laws might not be judiciously extended to absolute bills of sale, so as to require them, as well as deeds of trust and mortgages, to be recorded where possession is not delivered to the grantee. The experiment has been tried in Maryland, but with what success I am uninformed. In that state they have a statute placing deeds of sale and mortgages of personal chattels upon the same footing as to registration, and rendering them void if not recorded, except between the parties, unless there be actual notice or a transmission of the possession.
In the application of the rule of Edwards v. Harben, a rigid adherence to its terms was soon found to be impracticable. Circumstances often occurred to prevent an immediate delivery of possession ; such as the distance of the property, the difficulty of removing it, the possession of it by another, the disabilities of parties, and various accidental causes. We find, therefore, numerous opinions and decisions recognizing the validity of absolute sales, in which possession did not accompany, and some in which it did not even follow, the deed. The dispensations are sometimes absolute, but more frequently with conditions or qualifications assuming a variety of phases. The non-transmission of possession has been excused because of the ponderous, or unwieldy, or irremovable nature of the property; as a windmill on leased premises, bricks in a brickyard, a growing crop, &c. So of unfinished hides in a tanyard and the bark and tools requisite for tanning them; or an article of furniture in the course of construction. So in the case of a slave or other chattel bailed or hired to a third person. So where a delivery of possession is prevented by sickness, death or other accident. So in the case of a
These and the like cases of absolute, or temporary, or qualified dispensation, are sometimes justified on the ground of conformity with the rule itself, inasmuch as it is said that according to its fair and reasonable construction, the possession cannot be regarded as inconsistent with the deed. This would doubtless in most instances be a just view of the matter, if the question were whether there had been a performance of an unobjectionable contract. But the question is of a quite different nature. It is whether the contract itself be not fraudulent and void. The rule declares it to be so conclusively, unless possession accompanies and follows the deed. Now in the cases mentioned, the grantor actually or virtually retains the possession; and the impracticability, or difficulty, or inconvenience of delivering it is not an adherence to the rule, but an excuse or apology for not adhering to it. It is therefore no answer to a conclusive presumption, though it might be, with other circumstances, to one that is only prima facie.
These modifications may mitigate, but cannot justify the positive rule in question ; and they are attended with the practical inconvenience of multiplying collateral issues both of law and of fact, without throwing any light upon the truth and justice of the cause. They involve questions of practicability, of disability, of diligence, of notice, &c., upon which the case may be made to turn, wholly irrespective of the fairness and good faith of the transaction. And it is somewhat remarkable that a person should be convicted of a fraud, upon a nice question whether he has used reasonable diligence, or given due notice.
It is further to be observed that the operation of the rule in question, when applicable, has been to render a single circumstance in the conduct of the parties, posterior too to the making of the contract, conclusive upon the question whether the contract was fair or fraudulent. This I take to be a violation of the well known principle that when a conveyance is not fraudulent at the time, it cannot be made so by matter ex post facto. Shep. Touch. 67, Lady Lambert's Case. On the other hand, by what seems to me a strange incongruity, after the rule has condemned the contract as fraudulent, it becomes, according to repeated adjudications, relieved from the imputation by a transmission of the possession to the grantee, at any time before a creditor has obtained a specific lien by process of execution. The policy of the rule may thus be entirely defeated by a contrivance of the parties. After a supposed credit has been
The truth is, there is something rather loose and indefinite in the idea of a delusive credit gained by the possession of personal property. Some inconvenience may spring from this source, to be guarded against by prudent enquiries on the part of those concerned, and to some extent by legislative enactments, tending to a degree of notoriety in regard to the title. More than this seems to me a remedy worse than the disease; and it is obvious that to prohibit altogether the separation of the title from the possession of personal property, would be incompatible with an advanced state of society and commerce, and productive of much inconvenience and injustice iti the pursuits and business of life.
What has been said will perhaps serve to shew that the doctrine of fraud per se, as derived from the case of Edwards v. Harben, is not only objectionable in principle, and inadequate to the ends professedly in view, but in its administration, besides sometimes working gross injustice, is attended with various difficulties and incongruities. And thus it stood when the case of Sturtevant v. Ballard, 9 John. R. 337, was decided by the Supreme Court of New York.
In Sturtevant v. Ballard, the opinion of the Court, delivered by Kent, Ch. J. was probably suggested by the difficulty of maintaining that doctrine of fraud per se, of which Edwards v. Harben is the text, and numerous American cases the commentary. It strikes out,
This new doctrine of fraud per se approaches more nearly, and less circuitously than the former, the idea of making the possession of personal property carry the title. It is placed by the eminent Judge who introduced it, upon the ground that the continued possession of the grantor affects the validity of the title, and renders it by operation of law fraudulent and void as regards creditors, “ except in special cases and for special reasons, to be shewn to and approved of by the Court.” But he gives us no principle by which the exceptions are to be governed; and what principle can there be under his theory, unless that the particular circumstances shew the transaction to be fair and honest ? Indeed, he says himself, that “ delivery of possession is so much of the essence of the sale of chattels, that an agreement to permit the vendor to keep possession is an extraordinary exception to the usual course of dealing, and requires a satisfactory explanation.” Now, what explanation is so
Tims, for example, he says: “in Bucknal v. Roiston, Prec. in Ch. 285, the goods were sold to A the lender of the money on bottomry; 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 the time of sale.” So, “in Cole v. Davies, 1 Ld. Ray. 724, it was ruled by Holt, Ch. J. that if goods of A are seized upon a 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 the 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.” So, “in Meggott v. Mills, 1 Ld. Ray. 286, it ivas held by the King’s Bench, that if a man lends another money to buy furniture, and takes a bill of sale of the furniture, leaving it in the vendor’s possession, and the contract be honest, it is then valid.”
If I have suggested the true principle of what are called special cases in Sturtevant v. Ballard, to wit, that the possession has been retained for a fair and honest purpose, it is obvious that they must multiply, as the exigency of circumstances may require, until ultimately they destroy the rule itself, or, what is the same thing, reduce it to one that is only prima facie. Indeed, it seems impracticable to preserve unbroken any rule of inflexible rigour on this subject, however inexorable in its terms; for the mind is apt to revolt against the despotism of a judicial dogma that oppresses the
It is, as I humbly conceive, this struggle between the plain and forced meanings of the statute that has filled the American books with cases on the subject too numerous to be even read; and which still harasses the Courts with doubts and difficulties, for which there would seem to be no remedy but to abandon science in despair and return to common sense. I must say, with great deference, that it seems to be carrying a distrust of juries too far to suppose them incapable, with the aid of a wholesome prima facie presumption, to administer justice on this subject in the true spirit of the statute; and that it is better to confine the interposition of the Court to guiding, instead of driving them by instructions, and to the power of granting new trials in cases of plain deviation. And I am apprised of no practical inconvenience that has been felt in those States where the Courts have followed the principle of Lord Mansfield, in Cadogan v. Kennel, Cowp. 432, in which he treats the continued possession of the grantor as only a strong circumstance of fraud, and says such a construction of the statute is not to be made in support of creditors as will make third persons sufferers; and that the statute does not militate against any transaction bona fide, and where there is no imagination of fraud : and so he says is the common law. [This idea of the statute is more fully expressed by the opinions of the Judges in
The doctrine of Sturtevant v. Ballard, has been followed in some subsequent cases in New York and other States, and its principles sometimes intermingled, rather incoherently, with those of the former doctrine it was designed to supplant; but it has not, so far as I have observed, been established any where, unless in Pennsylvania, where the later, contrary to the earlier decisions, have pushed fraud by intendment of law to great lengths. It has certainly not been established in New York, where the continued possession of the grantor has, in the teeth of that authority, been repeatedly held expressly to be only prima facie evidence of fraud; and where the subject is involved by conflicting opinions in much uncertainty and perplexity, despite an act of the Legislature intended to compose the strife, but which has only occasioned a more animated and determined conflict.
Upon the whole, no one can glance at the confused mass of authorities on this subject of fraud per se, without perceiving that what was intended as a safe and easy guide to the detection and suppression of frauds, has only led to an endless maze of disputation. There is scarcely a proposition in regard to the essence or the application of the doctrine, upon which there may not be found a conflict of authorities. It would be tedious and unprofitable to explore a field of authority so entangled and perplexed; and those w'ho doubt the truth of this will be best convinced by making the experiment.
The doctrine of fraud per se, though plausible in theory, is extremely difficult in practice. It seeks to make a mere question of law of that which in the nature of things is a mixed question of law and fact, and carries within itself the elements of perplexity and contrariety. It cannot be established by broad and peremptory assertions of it in judicial opinions, unless carried
Clayborn v. Hill, 1 Wash. 177, was the case of a sweeping sale by an embarrassed debtor of his slaves and other personal property to his son, to whom the same had been previously mortgaged for a debt of dubious character, and the bill of sale recorded, after the creditor’s levy of his execution upon the property in the possession of the son, by whom, notwithstanding the alleged sale it had been held, used and enjoyed as his own. It was a suit in equity in which the whole question of Jaw and fact was to be decided by the Court, and the sale was held to be fraudulent. The question whether the mere fact of the grantor’s retaining possession rendered the transaction fraudulent, was neither discussed nor decided ; and there were no proofs in the case to repel the prima facie presumption of fraud, but on the contrary strong circumstances to confirm it.
Fitzhugh, v. Anderson, 2 Hen. & Munf. 289, was not the case of a sale at all, but of a gift or loan. A son, anterior to our statutory provision in relation to loans, had received from his father sundry slaves, and was suffered to remove with them to a distant county, and to hold and enjoy them as his own for many years, exercising over them every act of ownership, pledging some for the loan of money, obtaining credit in fact for goods, &c. on the faith of his being the real owner, selling some, offering others at private sale, and never intimating that his title was incomplete, until they were about to be sold under an execution, when he made some declarations to the contrary for the purpose, as he afterwards acknowledged, of preventing the sale. The bill was filed by the representatives of the father against the pur
In Alexander v. Deneale, 2 Munf. 341, the Court asserted the broad, and it would seem unlimited, proposition, that an absolute deed of slaves, or other personal property, the possession of which remains with the vendor, is fraudulent per se as to creditors; but asserted it not upon principle, but supposed authority, declaring it, without any discussion of either, to be the settled rule; by which must have been meant the settled rule either in England, or the Federal Courts, or our sister States, nothing having been settled in Virginia on the subject. The case is very briefly and imperfectly reported, and gives no certain information of the true consideration of the deed. That it seems stated the consideration to be 3000 dollars, but we are told that according to the evidence the bill of sale was given to secure the grantees, they being his creditors, to a considerable amount, but what, we are uninformed. The deed appears to have been executed after judgment, and information of it given by the creditor to the debtor, pursuant to his previous request, made, it may be inferred, with the view of defeating the claim. And if we are to understand that the sale was in fact absolute, and the consideration of it a debt due from the grantor to the grantees, then the proposition, taken in reference to that state of facts, did not exclude a distinction, such as has been drawn in South Carolina, between a sale by an embarrassed debtor to a preferred creditor, in satisfaction of his debt, and one to a stranger for a fair price advanced at the time, the vendor’s retaining possession being regarded there as conclusive evidence of fraud in the former, but not in the latter. Or if we are to understand that the
Hardaway v. Manson, 2 Munf. 230, was the case of a sale by a father to his son of a number of slaves for a fair and full consideration, partly paid in discharge of debts of the father, and the residue amply secured to him: an absolute bill of sale was executed and the slaves delivered, but the delivery as to some of them was merely formal; it being stipulated as to them, at the time of the contract, that they should remain with the vendor till the Christmas following, in order to finish the crop. They did so remain, and continued in his possession afterwards, under contracts for hiring from year to year, until one of them was levied upon and sold, at the suit of a judgment creditor of the vendor: and to recover him detinue was brought. There was no conflict in the evidence, which clearly ascertained the facts, and the cause turned upon the question whether the sale was per se fraudulent in regard to the creditors of the vendor. And this Court held that the Court below erred in instructing the jury that the possession of the slave so retained by the vendor, was not only evidence of fraud, but amounted to a fraud in itself; because the weight of evidence touching such possession was a question belonging exclusively to the jury, and ought to have been left to them without any such declaration or direction, unless the Court had been compelled by a demurrer to evidence to decide upon it. This decision throws but little light upon the subject, except as it tends to shew, that the question of fraud is a mixed question of law and fact, and when presented by the issue before the jury, must be decided by them, and not by the Court.
In Thomas v. Soper, 5 Munf. 28, the only point decided was, that fraud against creditors is no ground for impeaching a contract of sale, as between the parties.
Williamson v. Farley, Gilm. 15, was the case of a conveyance by an absolute bill of sale of certain slaves, but only a formal delivery of them, and a hiring of them for a year by the vendee to the vendor for their food and clothing, A few days after the execution of the bill of sale, the vendor conveyed them by a deed of trust, to secure a debt which he owed; and in an action of detinue brought by the trustee in the deed of trust, against the vendee in the bill of sale, it was held, that the Court
In Land v. Jeffries, &c., 5 Rand. 211, 599, a feme about to intermarry with a man who was known to be greatly involved in debt, on the day of and before the marriage, with his consent, executed to her brother then absent in the military service of his country, an absolute and unconditional bill of sale conveying all her personal property, consisting of slaves and furniture, without any consideration of money or other valuable thing passing from the nominal vendee, either expressed in the deed or alleged by the parties. No change of possession followed the deed, either immediately upon its execution, or at any time afterwards; but the property remained in the possession of the feme until her marriage, and afterwards in that of the husband, for several years, and until it was taken in execution by a creditor of the husband ; and was, during this time, used by the husband precisely as if the deed never had been made, he exercising all acts of ownership over it, except that it does not appear he sold any part of it; which possession and use were with the assent of the nominal vendee, after he was apprised of the existence of the deed, which was soon after the marriage. The transaction was held not to be fraudulent per se, nor fraudulent at all, but, as appeared from the parol evidence, for the fair and lawful
Glasscock v. Batton, 6 Rand. 78, did not (so far as can be ascertained from a very imperfect report of the case,) present the naked question of fraud perse; but depended upon various circumstances of fraud and adjustment. It was moreover the case, not of a fraud against creditors, but of a fraud against a subsequent purchaser, which is in some respects diverso intuitu; for the latter lays out his money in the acquisition of the specific property, and when he does so without notice, may be deceived, not only by the bad faith, but the gross negligence of the first purchaser, in regard to the assertion of his demand.
In Claytor v. Anthony, 6 Rand. 285, the doctrine of fraud per se was discussed by some of the Judges, but the cause did not turn upon it, and was adjudicated upon a different ground.
In Sydnor v. Gee, 4 Leigh 535, an absolute bill of sale of slaves was executed for a valuable and full consideration, and the slaves formally delivered at the time by the vendor to the vendee; but the possession was not then actually changed, the parties cotemporaneously with the bill of sale entering into a written agreement, by which the vendee hired the slaves to the vendor for their victuals and clothes, taxes and levies, until the end of the ensuing year; which sale and hiring were with no intent to defraud creditors, but bona fde. At the end of the year, the vendee took possession of the slaves and held them for several years. A creditor of the vendor whose debt accrued prior to the sale, brought suit and recovered judgment against him, and levied his execution upon the slaves in the hands of the vendee’s executor. It was held, in an action between the executor
■ In Lewis v. Adams, 6 Leigh 320, there was a bill of sale for two slaves, for their fair market value, in good faith paid by the vendee to the vendor. The slaves were delivered on the same day to the vendee at his house, by the vendor, who brought them from his own residence for the purpose: one of them was on the same day taken home by the vendor, and the other was sent back to him the next day: and the vendee on the day of the sale executed his bond to the vendor for 50 dollars, payable in twelve months thereafter, for the hire of the slaves, which the vendor engaged in the same instrument to furnish with the necessary clothing; which bond was intended as a substitute for the continuation of the vendee’s possession of the slaves, and as evidence of his title to them. Within twelve months from the date of the sale, the vendee executed and delivered to the vendor a deed of trust, whereby, in consideration of natural love and affection for his daughter, the wife of the vendor, and her children, he conveyed the slaves to a trustee, in trust for the wife and her children, their heirs, executors, administrators and assigns; which deed was duly recorded on the day of its date. The slaves continued for some years in the possession of the vendor, who was embarrassed in his circumstances at the time of the sale, and while in his possession was levied upon by an execution creditor, whose debt accrued prior to the sale. The facts were found by a special verdict, in an action upon an indemnifying bond, at the relation of the trustee, and judgment was rendered upon the verdict for the de
Kroesen v. Seevers, 5 Leigh 434, was the case of an absolute bill of sale, for a valuable consideration, of a slave hired at the time to a third person, with a separate defeasance which rendered the sale conditional. The slave was permitted after the expiration of the bailment, and nonperformace of the condition, to remain in the possession of the bailee. And the bill of sale was held to be good against the creditors of the vendor.
Thus, I think, it will be seen that there is no such certainty and uniformity in our own adjudged cases on this subject, as to preclude us from examining it upon principle, and giving to our statute a fair and just construction, according to its plain meaning and true policy: that although the doctrine of fraud per se has sometimes been asserted in broad terms, it has been upon the misapprehension that the law had been so “ settled” by adjudications elsewhere : that we have never sanctioned the rule of Slturtevant v. Ballard, and practically have repeatedly departed from, or at least modified, the supposed rule of Edwards v. Harben: that it seems now conceded on all hands the continued possession of the vendor after an absolute sale, is open to explanation in some form or shape: and that we are not so restrained by authority as to prevent our allowing an explanation that shews such possession, and the whole transaction to have been fair and honest, and especially where such possession has been held under a bailment, for a valuable consideration, in good faith made from the vendee to the vendor.
In my notice of our adjudged cases, I have not presumed to contrast or discuss the separate opinions in some of them, delivered by learned and able Judges.
I lay no stress in this case upon the proof at the trial of an actual delivery of the slaves to the vendee at the time of the contract; for the hiring of them by the vendee to the vendor at the same time shews the delivery to have been only formal. The substance of the whole transaction was a fair sale on the one hand, and a fair bailment on the other: the two taken together I consider as equipollent with a transmission of the possession, and any thing more as matter of form, such as might attend indifferently a bona fide or a fraudulent sale.
I think there was no error in the instruction given by the Hustings Court to the jury, nor in the refusal of that Court to grant a new trial; and consequently that the judgment of reversal by the Circuit Court is erroneous.
Brooke, J. As to the doctrine of fraud per se, I still adhere to what I said in Land v. Jeffries, 5 Rand. 211. In that case I cited the opinion of Lord Mansfield in Cadogan v. Kennett, Cowp. R. 432, on this doctrine. He said, “ If there is a sale of goods, and the vendor remains in possession and appears as the owner, it is evidence of fraud, because goods pass by delivery only. Such a possession and ownership unexplained by evidence of circumstances accounting for it, make the deed fraudulent per se, upon the general principle that prima facie evidence uncontradicted becomes conclusive of the fact which it is intended to prove. The case of Edwards v. Harben, and the cases in this Court go no further.
It would be a waste of time to produce cases to shew that such explanation may be given when it is confined to unavoidable circumstances exclusive of any agreement or assent of the parties inconsistent with the deed.
Cabell, P. The facts of this case have been so fully and so clearly stated by my brother Baldwin, that no farther repetition of them is necessary or desirable. They involve and require an investigation as to'the effect of the retention of possession of goods and chattels, by the vendor, after an absolute sale thereof.
It may not be improper to state, that I was the Judge to whom the petition for a supersedeas in this case was originally presented, and that after a careful examination of the record, I was decidedly of opinion, that, according to repeated decisions of this Court, the judgment of the Superior Court was correct and ought to be affirmed. Yet, as I was well aware that the opinions of two of the Judges of this Court, (Carr and Tucker,) in the cases of Sydnor v. Gee, 4 Leigh 535, and Lewis v.
It is unquestionably true, that the mere retention of possession by the vendor, does not, of itself, render the deed fraudulent and void. For, as Lord Eldon said, in Lady Arundel v. Phipps, 10 Ves. 140, “the mere circumstance of possession of chattels, however familiar it may be to say that it proves fraud, amounts to no more than that it is prima facie evidence of property in the man possessing, until a title, not fraudulent, is shewn, under which that possession has followed. Every case from Twyne's Case (3 Coke’s Reports 80) downwards proves that.” Indeed, I have always understood it to be universally admitted, that the possession of the vendor, may, in some way, be explained so as to remove and destroy the force and effect of the prima facie evidence of fraud afforded by the retention of possession.
Yet we often see it announced, in general and unqualified terms, even from the Bench, that an absolute deed of personal property, the possession of which remains with the vendor, is fraudulent per se.
Thus in Alexander v. Deneale, 2 Munf. 341, decided in September 1811, where a debtor executed to two of his creditors a deed, which was duly recorded, con
Again, in Robertson v. Ewell, 3 Munf. 1, decided in March 1812, where there was an absolute bill of sale of slaves by an executor, this Court declared that “ the title of the appellee (the vendee) to the slaves in question, being under an executor, who was nevertheless permitted to retain the possession thereof, the same ought to be considered as fraudulent and void.” It is true, that in this case much stress was laid, in the argument, upon the fact that the executor had sold the slave in payment of his own debt. But it will be perceived that the Court did not allude to that fact, but decided
So, also, in Thomas v. Soper, 5 Munf. 28, decided in February 1816. The Court below had instructed the jury t]jat « although in the case of an absolute deed for negroes, where the vendor remains in possession after the execution and recording the same, such deed, as to creditors and subsequent purchasers, is to he regarded as fraudulent and void; yet, as between the vendor and vendee, and their immediate representatives, it was obligatory, and could not be impeached by the testimony offered- by the defendant as administrator of the grantor, which defendant was not himself a creditor.” To this opinion of the Court, a bill of exceptions was filed; and a verdict being found and judgment rendered for the plaintiff, the defendant appealed to this Court, where the judgment was affirmed.
So, again, in Williamson v. Farley, Gilmer 15, decided in April 1820, which was an action of detinue for slaves, and, in many of its circumstances, strongly resembles the case now under consideration. In that case both the plaintiff and the defendant claimed certain slaves under conveyances from Jacobus Christopher; the former by deed of trust dated 13th January 1817, conveying the slaves to him, in trust to secure a debt due to one Tavener; the latter by absolute bill of sale to him by Christopher, dated January 6, 1817, the consideration of which was the sum of 1000 dollars. The subscribing witnesses to this last deed, proved that the slaves were delivered to Farley at the time of executing the deed. They also proved, that at the same time and place, Farley hired the said slaves to Christopher for one year for their food and clothing, and took a bond for their restoration at the end of the year; that the slaves remained in the possession of Christopher from the date of the bill of sale, till about the first of February following, when Farley took possession of them. They
It will be observed that in the first of these cases, the reporter does not give the argument of the bar, and that the Court refers to no authority, and enters into no reasoning, farther than to announce the principle of the decision. The same remark as to the Court, applies to the three other cases. In Robertson v. Ewell, the counsel referred to Alexander v. Deneale, and in Williamson v. Farley, the reporter, in a note, refers to the three preceding cases. But in all of them the Court regarded it as a settled rule, that the possession of the vendor, after an absolute bill of sale, is fraud per se.
How then are we to understand these decisions ? Certainly, not literally; for it would shock common sense and reason to affirm, that the possession of the vendor, is, in all imaginable cases, fraud per se. For, as I have already observed, it is conceded by all, that the mere possession of the vendor is only prima facie evidence of fraud, and that the possession may be explained, so as to remove that presumption.
Such is the rule, as to fraud per se, as laid down in Edwards v. Harben; and to which I have heretofore given my ready assent, in the firm belief that that case had established it as a clear and undoubted principle of the common law of England, adopted by us, on our se
But the question is now gravely submitted for our consideration, whether the rule laid down in Edwards v. Harben, is, in truth, a rule of the common law.
The new lights thrown upon this subject, in my recent investigations, compel me to answer this question in the negative. I am constrained to regard it as an interpolation upon the common law, by the Court of King’s Bench, effected by the influence of that eminent Judge, Mr. Justice Buller; and it is so regarded now, even by the Courts of Westminster Hall, as I will proceed to shew.
The advocates of the rule, refer to the opinion of Lord Coke in Stone v. Grubham, 2 Bulstrode 217, and think that they discover, in that case, the foundation of the rule. It might be a sufficient answer to this suggestion, to say, that that was not the case of an absolute deed. But let us examine the case. It will be observed that none of the circumstances of the case are given, except that it was an action of ejectment; that the deed was, on its face, a conditional deed; and that the retention of possession was in accordance with the deed. Yet it was still contended that that possession was fraudulent, and invalidated the deed. As to this, Lord Coke said, “If a man do mortgage his land, and yet continues his possession, no disseizin is wrought by this ; and so was Winnington’s Case. If it was an absolute conveyance, and a continuance in possession afterwards, this shall be adjudged in law to be fraudulent; for this hath the face of fraud; but otherwise it is, as it is here in this case, where the conveyance was only condition
It would seem that even Judge Buller, not long before the case of Edwards v. Harben, which was decided in the year 1788, regarded inconsistency of possession as only a mark of fraud; for in his valuable work on trials at Nisi Prius, page 257 b. (Bridgman’s edition,) he states, fully and clearly, the facts of Twyne’s Case, and the marks of fraud, on which the Court held it to be fraudulent; but he said nothing about the inconsistency of the possession ; and then he adds, “ But yet the donor continuing in possession, is not in all cases a mark of fraud ; as where a donee lends his donor money to buy goods, and at the same time takes a bill of sale of them for securing the money.” Here, then, we see, that in Twyne’s Case, which was clearly a case of inconsistent possession, he treats the possession as only a mark of fraud; and in the case which he himself supposed, and which, also, was manifestly a case of inconsistent possession, he regarded the possession as not even “a mark of fraud.”
I will refer to one other case, decided before Edwards v. Harben, namely, the case of Martin v. Podger, 2 W. Bl. R. 701. This was an action against the sheriff for taking the plaintiff’s goods; plea, not guilty, and verdict for the plaintiff, with £ 28 damages. On a motion by the defendant for a new trial, it appeared that the- goods in question had been the property of William Martin, the plaintiff’s son, who on the 20th June 1768, made a bill of sale of them to the father, and was after-wards (19th July 1768) arrested and carried to jail, at the suit of one Bryant, for a debt of £ 31. 10. The
I will now examine some of the cases decided in Westminster Hall, since Edwards v. Harben.
And first, the case of Kidd v. Rawlinson, 2 Bos. &. Pull. 59, decided in the year 1800. The abstract of the reporter renders a detailed statement unnecessary. “ The goods of A being taken in execution, and put up to sale, B became the purchaser, and took a bill of sale of the sheriff, but permitted A to continue in possession. A then executed another bill of sale of the same goods to C, a creditor, under which the latter took possession ; whereupon B (the purchaser from the sheriff) brought an action against C for the goods. Held, that the first bill of sale was valid, and that B was therefore entitled to recover.” In deciding this case, Lord Eldon cited, with approbation, the passage from Buffer’s Nisi Prius, which I have quoted above.
Benton v. Thornhill, 2 Marshall 427; 2 Eng. C. L. R. 52, decided in the Common Pleas, in the year 1816. “A, a farmer, executes a biff of sale, on the 26th September, of all his property, absolutely, to B, for a debt of £ 600. B puts his son in possession, A continuing to reside on the premises and to conduct the farm. On the 30th of November, the sheriff takes the stock,
Jezeph v. Ingram, 1 B. Moore 189, and 8 Taunton 838, 4 Eng. C. L. R. 303, decided in the Common Pleas in 1817. The circumstances of this case, as stated in the reporters, are too numerous to be detailed here. I regard it as a case of inconsistent possession. The property in question had been taken in execution by the sheriff. A friend of the debtor in the execution, lent him money to redeem the property from the sheriff, and it was redeemed accordingly; whereupon the lender of the money, took from the debtor an assignment of the goods to secure the repayment of the money; the property remaining in the possession of the vendor, both he and the vendee exercising occasional acts of ownership over it. The title of the vendee was ultimately supported; as will appear in the report of the case by Taunton, p. 844. I cite this case, principally for the sake of the opinions of the Judges, as to the authority of the case of Edwards v. Harben. Chief J. Gibbs and Park, Justice, cited with approbation, the passage in Buller’s Ni. Prius, above referred to. Copley, coun
Latimer v. Batson, in the King’s Bench 1825, 10 Eng. C. L. R. 432. I give the abstract of the reporter. “ The goods of A were seized under a fi. fa. and the judgment creditor took a bill of sale from the sheriff, and afterwards sold the goods to B, who put a man in possession; but the goods remained in A’s house, and were used by him as before the execution. The circumstance of the execution was, however, notorious in the neighbourhood. Another judgment creditor issued a fi. fa. against A, under which the sheriff seized these goods. In trespass against him by B, held, that the jury were properly directed to give a verdict for the plaintiff, or the defendant, as they should be of opinion that the purchase by B was bona fide or otherwise; for that, if the goods were bona fide bought and paid for with his money, the sale was not rendered void by the debtor’s continuing to enjoy the use of the property.” Abbot, C. J. said, “ I am of opinion, that this case was left in a proper manner to the consideration of the jury.” — “ I perfectly agree that possession is much to be regarded : but that is with a view to the good faith of the transaction.” Bayley, J. said, “ In Leonard v. Baker, 1 M. &. Sel. 251; Watkins v. Birch, 4 Taunt. 823, and Jezeph v. Ingram, 8 Taunt. 838, it was held that if goods seized under execution are bona fide sold,” (In Jezeph v. Ingram, the goods were not sold by the sheriff, but by the former owner, who had redeemed them from the sheriff,) “and the buyer suffers the debtor (his vendor) to continue in possession of the goods, still they are protected against subsequent executions, if the circumstances under which he had the
The next case is Martindale v. Booth, in the King’s Bench, 23 Eng. C. L. R. 130. This case is cited for the purpose of shewing the opinions of the Judges of the case of Edwards v. Harben. Littledale, J. said: “ The cases shew that continuance in possession of goods and chattels by a vendor, after the execution of a bill of sale, is a badge of fraud; but I think that under the circumstances of this case, a jury would have negatived the fraud.” Parke, J. said, “I think that the want of delivery of possession does not make a deed of sale of chattels absolutely void. The dictum of Buller, J. in Edwards v. Harben, has not been generally considered in subsequent cases, to have that effect. In Benton v. Thornhill, 2 Marshall 427, it was said in argument, that want of possession was not only evidence of fraud, but constituted it. But Gibbs, Ch. J. dissented; and although the vendor there, after executing a bill of sale, was allowed to remain in possession, Gibbs, Ch. J. at the trial, left it to the jury to say, whether under all the circumstances, the bill of sale was fraudulent or not.” Patteson, J. said, <! There is not sufficient authority for saying that the want of delivery of possession,- absolutely makes void a bill of sale of goods and chattels. It was held in Martin v. Podger, 2 Wm. Blackstone 701, that want of possession was a badge of fraud which ought to be left to the jury. Then if it be a badge of fraud only, in order to ascertain whether a deed be fraudulent or not, all the circumstances must be taken into consideration.”
I will cite only one other case, Linden v. Sharp, 46 Eng. C. L. R. 893, decided in the King’s Bench in 1843, which I cite, like some of the others, not for the sake
I have now completed the examination of all the cases to which I have deemed it necessary to refer; and I think I may confidently affirm, as the result of the whole, that in the estimation of the Judges of Westminster Hall, the rule of fraud per se, as applied by the case of Edwards v. Harben, to the retention of possession by a vendor, has been abandoned, condemned, repudiated ; and that it never formed a part of the common law; but that in all cases the question of fraud or no fraud, as to the possession of the vendor, is a question of fact, to be left to the consideration of the jury, on a view of all the circumstances of the case ; subject, however, to the accustomed power of the Court to instruct the jury, as to the law arising on such/acfe as the jury may believe to be proved; and subject moreover to the salutary power of the Courts to grant a new trial in case the verdict shall be contrary to the evidence. The case of unexplained possession, or as Buller, J. expresses it, “ where there is nothing but the possession,” forms no exception to this general principle. Such a case
As the case of Edwards v. Harben, so far as it purported to establish a general rule, that an absolute deed of personal property, the possession of which remains with the vendor, is fraudulent per se, and void as to creditors, has been thus repudiated in England, and declared not to be law ; and as the decisions of our own Court on this subject, were founded solely on the authority of that case, it becomes manifestly proper for us now to determine whether that case ought still to be regarded as authoritative evidence of the law, or whether it should, as in England, be repudiated and abandoned.
After much deliberation, I am entirely satisfied as to the correctness of the modern decisions of the English Courts, of which I have given extracts; and that there is no such rule known to the common law as that which was supposed to be established by the case of Edwards v. Harben.
And, apart from all authority, I am of opinion, that there is no good reason for such a rule. It is true that the rule has one advantage — the advantage of simplicity ; for it affords a ready and easy solution to all the questions coming within its range. But this advantage is obtained at too dear a price. It is often obtained by a sacrifice of the justice of the case. How can it be otherwise, when in deciding a case, the correct decision of which depends on the good or evil intent of the parties, one single circumstance, (inconsistency of possession,) is arbitrarily seized on, and made conclusive evidence of evil intent, to the total exclusion of every circumstance which would prove good intent! In my long experience, I have had occasion to observe the mischie
Nor do I apprehend any danger to the rights of creditors, from the relaxation or abandonment of the rule of fraud per se. Their rights will be abundantly secured by the universally admitted rule, that the mere fact of retention of possession by the vendor, is regarded as prima fade evidence of fraud as against creditors of the vendor, and will vacate the transaction as to them, unless the vendee shall prove it to have been fair and bona fide. Can justice require us to go farther?
Some of the opinions now expressed, are widely different from those which I have heretofore entertained. The revolution has not been effected without a struggle. Not that I have, for a moment, permitted the pride of self-consistency to stand in the path to duty; but because from the very constitution of our nature, wo feel a prejudice in favour of opinions long formed and often acted on, which, for a time at least, closes our eyes against the light that would shew that we have erred. But I am convinced, and I cheerfully retrace my steps, by heartily concurring in the judgment about to be pronounced, and which will restore the law to the solid foundation of good sense and sound reason, on which it originally stood.
It is the unanimous opinion of the Court, to reverse the judgment of the Circuit Superior Court, and to affirm that of the Corporation Court of the1 town of Petersburg.
Allen, J. concurred with Baldwin, J.
Judgment of the Circuit Court reversed, and that of the Hustings Court affirmed.
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