Farmer v. Evans ( 1917 )

The members of this court concur that, under Crosby v. Huston, this case should be rendered for appellant. If the case cited is authority for the action of this court, it must, in my judgment, rest upon the theory that the policy of our law is to protect an innocent purchaser. The Supreme Court in that case evidently recognized the lex loci contractus as controlling in the construction of the contract, but refused to give extraterritorial effect to a foreign law as to notice to the hurt of a bona fide purchaser in this state.

The rule of caveat emptor, it occurs to me, in this country does not fully apply as to title.

"It seems universally to be conceded here, if the seller is in possession of the goods, the warranty of title accompanies the sale, upon the grounds that his undertaking to sell, under such circumstances, is of itself an affirmation of his title." Mechem on Sales, § 1302.

It is an implied warranty as to the whole title and protects against partial defects, liens, etc. Id. § 1304. Therefore the rule of "let the buyer beware" does not necessarily follow. If the seller is a fraudulent possessor and has no right to sell, the purchaser may get no title, not because he is required to be on his guard, but because the seller has no title to convey; but a mortgagor has title — the right of possession and the right to sell ordinarily. The purchaser, in the absense of a statute, as a rule, is not charged with notice of an equity.

"It is a well recognized doctrine in equity that a bona fide purchaser of the legal title to property, who pays a valuable consideration therefor, without notice, actual or constructive, of the right of other persons, is entitled to protection against others who may have equitable title to or interest in the thing purchased; and it matters not whether the thing purchased be real or personal property." Hill v. Moore,62 Tex. 610.

It appears from Jones on Chattel Mortgages, in the section cited, that the duty is on the purchaser of property recently brought into one state from another, to inquire there whether the property is incumbered. It has never been the rule, as I understand, to require a purchaser in this state to inquire if there is an outstanding equity against the property. If he has no notice of it, he is not charged with knowledge. The fact that our statute does not require, as contended, the registration of chattel mortgages on property brought to this state from another, does not necessarily establish that it is not the policy of this state to protect an innocent purchaser. We think it is manifest that the Supreme Court of this state, in the case cited, has determined the question that a purchaser is not required to go into another state to ascertain if there was a mortgage recorded therein. It is said in Crosby v. Huston:

"But, whatever may have been the effect of registration in Mississippi, it cannot be extended beyond the territorial limits of the state. The operation of such municipal regulation is local, and cannot affect property in a foreign jurisdiction."

But, as we understand by a great many decisions, it is held that under the rule of comity it will be so extended so as to effect notice. This would charge a purchaser with notice of an equity of which he was utterly ignorant. It appears to me the Supreme Court recognized that such a rule would defeat the policy of this state.

I concur in the result reached in this case.