Phillips v. Reitz , 16 Kan. 396 ( 1876 )

The opinion of the court was delivered by

Brewer, J.:

This was an action of replevin, and the question was as to the validity of a sale claimed to have been made by one I. N. Phillips to plaintiff. Defendant was sheriff of Johnson county, and under an execution against I. N. Phillips levied on the property. The property consisted of livery stock in the .city of Olathe. Plaintiff was a farmer living some miles off in the country. The sale was made at the farm of plaintiff. He was not from the time of the sale to the time of the levy in Olathe, and I. N. Phillips remained in the actual charge, though, as was claimed, as the agent of plaintiff. The errors alleged are in the giving of instructions. The two propositions to which specific objection are made are —

1st, “The unexplained possession by the vendor, after the sale, is conclusive evidence of fraud.”

2d, “The actual participation by the vendee in the vendor’s fraudulent intent, is not necessary to avoid the sale. It is enough if he knew of such intent, or of facts sufficient to excite the suspicions of a prudent man, and put him on inquiry.”

That good faith is as essential to support a sale like one before us, as a sufficient consideration, will not be questioned. Twyne’s Case, 3 Coke, 80; 1 Smith’s Leading Cases, 42; Baldwin v. Peet, 22 Texas, 780; Chandler v. Van Roeder, 24 How. (U. S.) 224; Pullevin v. Newberry’s Adm’r, 41 Ala. 1168. And that a continuance of possession is evidence of a want of good faith, as well as a want of sufficient consideration, is settled by the statute. Gen. Stat., p. 504, § 3. That possession may be retained, and still there be a valid sale, is also clear, and so in unmistakable language the court instructed the jury. And this instruction, as to the effect of an unexplained possession, must be considered in reference to and as qualified by the other instructions. There has been a vast amount of controversy as to the effect of a retained possession upon an alleged sale, when challenged by a creditor, or subsequent purchaser. It is all based upon the idea that possession follows title, and that where there is a transfer of title there should be a change of possession. In some courts it has been held, that a failure to change possession is so inconsistent with a transfer of title that it creates a presumption of law against the alleged sale. This presumption of law,no evidence of the good faith of the parties, and of the payment of full consideration, can overthrow. In others, such failure to change possession is merely evidence against a sale, which may be explained. The presumption is one of fact, and like all presumptions of fact open to explanation by other testimony. It is like the presumption of guilt which flows from the possession of recently-stolen property. It casts upon the possessor the duty of explanation. (See for a full discussion of this question and the authorities thereon, Twyne’s Case, and notes thereon, in 1 Smith’s Leading Cases, Hare & Wallace’s notes, pp. 47, and following.) Our statute has accepted the latter construction, and provides in the section cited, that “Every sale * * * unaccompanied by an actual and continued change of possession, shall be deemed to be void, * * * until it is shown that such sale was made in good faith, and upon sufficient consideration.” In other words, proof of actual good faith, and payment of sufficient consideration, does away with the presumption which flows from a retained possession — shows that such possession does not imply a retained title, or a secret trust — in short, explains the possession. Until it is so explained, it is evidence against the sale; and unless so explained, it is conclusive evidence. To that extent, and only to that extent, do we understand the instructions of the court, taken as a whole, to have gone; and in that is no error. (See upon this, Ayres v. Moore, 2 Stewart (Ala.) 336; Peck v. Laud, 2 Kelly (Georgia) 1; Flemming v. Townsend, 6 Georgia, 104; Beers v. Dawson, 8 Georgia, 557; Robinson’s Ex’rs v. Robards, 15 Mo. 459.)

As to the second objection, the court distinctly charged that the vendee must be a party to the fraud to avoid the sale, and then, in another instruction, apparently in explanation of what was necessary to make him a party to the fraud, charged that it was enough if he knew of the vendor’s fraudulent intent, or of facts sufficient to put him upon inquiry. Is this error? We think not. Knowledge of facts sufficient to excite the suspicions of a prudent man, and put him upon inquiry, is, as a general proposition, equivalent to knowledge of the ultimate fact. Garaby v. Bayley, 25 Texas, (Suppt.) 294; Pitney v. Leonard, 1 Paige Ch. 461. And if the vendee knew of the fraudulent intent of the vendor, and bought with that knowledge, he can scarcely claim to be a bona fide purchaser, for he was knowingly helping the vendor to accomplish the fraud and do the wrong.

' There appearing no error in these rulings, the judgment must be affirmed.

All the Justices concurring.