Lunt v. Whitaker , 10 Me. 310 ( 1833 )

Parris J.

delivered the opinion of the Court.

The conveyance.from Plummer to the plaintiffs, on the 11th of December, of the horse and other property mentioned in the bill of sale, was a mortgage to secure the, payment of sundry sums due on note and account, and also as security for further advances.

By this conveyance, the right or property passed to the plaintiffs and they acquired the legal title and power of disposing of it, subject only to the condition or right of redemption. . The case of Young v. Austin, 6 Pick. 286, turned upon the point, that the property in the slate had never passed, there having been no delivery, or separation of the quantity contracted for, from the general mass, in which it was included. But that case has no applicability to the one before us. The whole of the personal property mentioned in the instrument of conveyance, was delivered and some of it Was marked with the initials of the plaintiffs’ name. It seems to bo settled that, as between the parties, a mortgage of personal property is valid, although there had been no actual delivery. There is, however, no necessity for discussing that question, as the case does not call for it. There was a sufficient delivery of the whole property, and, no doubt, such, as in cases of absolute, honest sale, would enable the vendee to hold against a subsequent purchaser, ignorant of the former conveyance.

Neither is there any thing in the case tending to shew actual fraud in the transaction; any intention to secrete the property from existing creditors, or to defraud subsequent creditors or purchasers.

There is no intimation that the sum secured by the mortgage was not actually and justly due ; or that there was any such difference between the value of the chattels mortgaged and the sum secured, as to cause even a suspicion of fraudulent intent* The whole arrangement, on the part of the plaintiffs, was bona fide, and such as would have passed to them the property in the horse, even if the sale had been absolute, notwithstanding the vendor had continued the possession. That would be evidence of fraud, but not conclusive, in cases of absolute sales. The continuance of the possession might be so explained as to render it perfectly consistent with honesty in both parties. —< Such has uniformly been the law in this State and Massachusetts, and is understood now to be recognized as sound, both by the English courts, and in tire courts of some of the largest States in this Union. Martindale v. Booth, 3 Barnw. & Adolph. 498; Hall v. Tuttle, 8 Wend. 375; Bissell v. Hopkins, 3 Cowen, 166.

In D'Wolf v. Harris, 4 Mason, 534, Story J. says, “ The “ general rule, upon transfers of personal property, is, that pos- “ session should accompany and follow the deed. But, if by “ the terms of the contract itself, or by necessary implication, “ the parties agree, that the possession shall remain in the ven- “ dor, such possession is consistent with the deed, and does “ not avoid its operation in point of law, unless it be in fact “ fraudulent. Now, in cases of mortgages, the possession of “ the mortgagor, at least, until a breach of the condition, is “ perfectly consistent with the terms of the deed, and the in- “ tention of the parties.”

In the United States v. Hooe, 3 Crunch, 89, Marshall C. J. says, “ The difference is a marked one between a convey- “ anee which purports to be absolute, and a conveyance which, “ from its terms, is to leave the possession in the vendor. If, “ in the latter case, the retaining of possession was evidence of. “ fraud, no mortgage could be valid.” In the learned note to Bissell v. Hopkins, 3 Cowen, 205, it is said, Whichever'way “ the decisions may tend upon the question of possession in the “ vendor, after a voluntary, direct and absolute bill of sale, no “ doubt can be entertained at this day, that a continued possession in a mortgagor of chattels is not, per se, evidence of fraud, either as to purchasers or creditors.”

The reason for a distinction between an absolute conveyance and a mortgage is, that in the latter case, it comports with the legitimate, fair object of the transaction, that the mortgagor should retain possession of the chattel mortgaged until forfeiture ; and this is the characteristic difference between a mortgage and a pledge. It being consistent with the nature of the conveyance that the possession of the chattel mortgaged should remain with the mortgagor, no presumption of fraud arises from that circumstance, until after a forfeiture.

Perhaps it would be better to provide by statute, as has been recently done in New-York, that every mortgage of goods and chattels shall be presumed to be fraudulent; and void as against creditors and subsequent purchasers, unless the same be accompanied by immediate delivery, and be followed by an actual and continued change of possession of the thing mortgaged; or, as in Neiv-Hampshire and Maryland, that no transfer of goods of which the mortgagor shall remain in possession, shall be effectual, unless it be in writing and recorded.

But we have no such statute; —■ and inasmuch as the property in the horse passed to the plaintiffs by the mortgage, it was not in the power of Plummer to make a second sale to the defendant without the plaintiffs’ consent. If the sale to the defendant had been with the plaintiffs’ knowledge and they had interposed no claim to the horse, nor given the defendant any information of their mortgage, our decision would have rested on another principle of law, and would probably have been different. But there is no intimation of such facts in the case. Every thing appears to have been fairly conducted on the part of the plaintiffs, and although the defendant purchased in good faith, and without knowledge of the plaintiffs’ mortgage, yet he purchased what Plummer did not own, and had no right to sell, and consequently could not convey. Every purchaser of goods and chattels is supposed to rely upon the vendor’s implied warranty as to title, and it behoves such purchaser to be satisfied of the soundness of the title, or the ability of his warrantor to make it good.

The defendant may, perhaps, suffer in this case unless his vendor is of sufficient ability to answer for his defect of title; and it may be true that he will suffer in consequence of the horse having remained in the possession of the mortgagor. But we are not permitted to accommodate the law, so as to comport with our own wishes in the various cases that come before us. The hardship of any particular case, if hardship exists, ought not to be allowed a moment’s conflict with the landmarks of the law.