Welch v. Sackett , 12 Wis. 243 ( 1860 )

By the Court,

Dixon, C. J.

The first question involved in this case, I think, was correctly decided. It seems, to me clear that the concurrent execution and delivery of the two chattel mortgages made the mortgagees tenants in common of the property conveyed. The legal effect was the same as it would have been if the goods had been mortgaged to them by one instrument, to be held by them as a security for their respective claims, and the proceeds, in case of a sale; to be divided between them in proportion to the amounts thereof severally. If an absolute sale of a chattel were to be made at one and the same time to two different persons, by instruments in writing, purporting to convey the whole of it, executed and delivered to each at the -same moment, each having a knowledge of the sale to the other, (a transaction perhaps not likely to happen, but nevertheless not impossible), I imagine that we should find little difficulty in saying that the vendees thereby became tenants in common, each holding an undivided moiety of the article purchased. Neither having any superior right or equity, but both standing on an equality in those respects, the property would be divided. The same would be true of conveyances of real estate under the same circumstances. It can make no difference that the sales or conveyances are conditional. Their effect in this respect is the very same, except so far as the interests of the several vendees or mortgagees are limited and determined by the amount of the demands due to each. The defendants in error (plaintiffs below) were, therefore, not only enabled, but it was incumbent upon them, provided the ™- error so insisted, to join in their action. Hill vs. Gibbs, 5 Hill, 56.

The second question has been determined adversely to the plaintiff in the case of Frisbee vs. Langworthy, decided at the present term, 11 Wis., 375. We there held that a mortgagee of personal property, not in actual possession, might maintain replevin against a person taking the same in defiance of his right, where, by the terms of the mortgage, he was entitled to take possession whenever he deemed that his interest or the safety and security of the debt required. Such was the case of the present mortgagees.

The question which was considered by far the most important, and upon which the counsel bestowed, the most attention, citing nearly all the English and American authorities, calls for the determination, in a case where a mortgage of personal property from a debtor to a creditor, is executed in the absence and without the knowledge of the latter, and delivered to a stranger for his use, of the time at which the title to the property mortgaged vests in the mortgagee, as between him and another creditor of the mortgagor who acquired an interest in it by attachment between the time of the delivery to the stranger and the time when the mortgagee actually received notice of and accepted it. Whilst it must be admitted that there is some conflict in the adjudications upon this subject, still both natural reason and the weight of authority tend to the same conclusion, which is, that the title in such case only vests from the time there is an acceptance in fact on the part of the mortgagee. On principle I think it may be laid down as an indubitable proposition in such case, that the title does not vest in fact, until the mortgagee has actually assented to the conveyanceand consequently, that until' such assent it remains in the mortgagor. While all the courts acknowledge the correctness of principles which lead unerringly to this result, and clearly and positively exclude any other, it is somewhat strange that any should have been found to adopt a conclusion directly opposed to it. All agree that it is necessary to the validity of every deed or conveyance, that there be a grantee who is not only willing, but who does in fact accept it. It is a contract, a parting with property on the part of the grantor, and an acceptance of it by the grantee. Lite every other contract, there must be a meeting of the minds of the contracting parties, the one to sell and convey, and the other to purchase and receive, before the agreement is consummated. If there be anything in legal principles, or in common sense, it is an unpardonable absurdity to say, that a contract can be completed in the absence and utter ignorance of one of the contracting parties; that he can or does, under such circumstances, assent to, or agree to become bound by it. The idea that a contract could be thus made, and that title to property could pass into a party without his knowledge or consent, and out of him without any motion or. act of his signifying his willingness, but merely by his refusal to receive it at all, had its origin at a period in the history of the common law, when the legal mind, instead of being governed in its conclusions by a steady application of the clear and rational principles of the law to plain matter of fact, and by arguments to be drawn therefrom, was too frequently influenced by a mysterious and fanciful logic, that depended for its support upon artfully devised fictions and falsehoods, which for the most part were as repugnant to reason as they were unnecessary to the proper administration of justice. . The discovery that such things could be done, is, I believe, attributable to the inventive skill of Justice Ventbis, as exhibited in the case of Thompson vs. Leach, 2 Vent., 198, decided about the year 1690; at least several courts and judges since that time, with many complaints, have agreed in giving him the credit of having proved something on this subject which none of them could understand. The substance of his proposition is, that a deed of lands made to a party, without his knowledge or consent, and placed in the hands of a third person for his use, is a medium for the transmission of the title to the grantee, and takes effect so as' to vest it in him, the instant the deed is parted with by the grantor, and if the grantee, upon receiving knowledge of it, rejects it, such rejection has the effect of revesting the title in the grantor by . a species of remitter. Inasmuch as this is the only attempt at sustaining it by argument to be found in the books, the more recent cases Raving, without discussion, gone off almost . entirely on the strength of the authorities, I propose to examine some of the positions assumed by him, upon which his L argument mainly depends, and from which, I think, its fallacy and the incorrectness of his conclusions will be clearly made to appear. He admits, what is universally conceded to be an indispensable element of every grant, namely, that it should be accepted by the grantee, and says, “ that an assent is not only a circumstance, but it is essential to all conveyances ; for they are contracts, actus contra actum, which necessarily suppose the assent of all partiesbut avoids the difficulty into which the admission of this well settled principle brings him, by saying, “ that because there is a strong in-tendment of law, that for a man to take an estate is for his benefit, and no man can be supposed to be unwilling to that which is for his advantage,” therefore the law will presume that the grantee has accepted a conveyance before a knowledge of its execution and delivery has come to him. Upon the foundation of this hypothesis, misnamed by him apre-. sumption of law, the falsity and unreasonableness of which are so self-evident that reasoning can hardly make them plainer, he proceeds to the erection of his superstructure. Assent or acceptance on the part of the grantee or other par- • ty to a deed or other instrument, by means of which the title to property, whether real or personal, is to be transferred to him, or by which he is in any other manner to become bound, is a fact, the truth of which is to be established by competent evidence, before such deed or other instrument can be adjudged to have a legal existence. Like every other fact, it may be established by direct evidence, or its existence may be inferred or presumed from other facts already in proof. But I deny that the existence of one fact is to be inferred or presumed from the existence of others, when the connection between the former and the latter is such that according to the course of nature it plainly appears that the former can- ' not exist. In other words, I deny that the existence of any fact may be shown by proving others which conclusively show its non-existence, or that the legitimate mode of establishing the truth of a matter is by indubitably proving its falsehood. Justice does not require, nor does the law tolerate such an absurdity. The learned justice says, that where a deed is executed by the grantor and delivered to a stranger for the use of the grantee, without the previous advice, direction or authority of the grantee, and without Ms knowledge, the law will presume that the grantee assents to it, the moment it is delivered to the stranger. Assent is an act of the mind — that intelligent power in man by which he conceives, reasons and judges, and of which it is a primary, invariable and most familiar law that it cannot act with refer-erence to external objects, iintil, through the medium of the senses, it is impressed with or lenows their existence. Hence, without such impression or knowledge, there can be no assent, no actus contra actum; and to presume it in opposition to the facts, is to presume that wMch.is impossible; wMch the law, the rules and precepts of which are in conformity with the unchanging truths of nature, will never do.

“A presumption,” says Mr. Starkie, “maybe defined to be an inference as to the existence of one fact, from the existence of some other fact, founded upon a previous experience of their connection. To constitute such a presumption, it is necessary that there be a previous experience of the connection between the known and inierred facts, of such a nature that as soon as the existence of the one is established, admitted or assumed, the inference as to the existence of the other immediately arises, independently of any reasoning upon the subject.” Presumptions thus defined, he says, are either legal and artificial or natural, and may be divided into three classes. 1st. Legal presumptions made by the law itself, or presumptions of mere law. 2d. Legal presumptions made by a jury, or presumptions of law and fact. Sd. Mere natural presumptions, or presumptions of mere faót. The definition wMch he so clearly and accurately gives, although applied by him to all presumptions, is perhaps more strictly applicable to the latter class. The assent to a deed or other instrument by the grantee or other party, being a matter of mere fact, it is obvious that to the latter class also would belong a presumption in relation to such assent, in a case where such presumption could properly be indulged. But, whether the presumption be assigned to tire one or tlie other of these classes, the position of the learned justice is equally untenable; for in no instance, not even the most artificial and arbitrary, does the law indulge in presumptions which are directly contradicted by the facts on which they are predicated. The known facts, though often insufficient of their own natural force and efficacy, to generate in the mind a conviction or belief of those which are inferred, are always, to say the least, not inconsistent with or opposed to them. If for example we take the case instanced by Mr. Starlde, of the presumption of the satisfaction of a bond after the lapse of twenty years, without payment of interest or other acknowledgment of its existence, while if a single day less than the twenty years has elapsed, such presumption does not arise, we find it to be extremely arbitrary and technical. No natural reason can be giren why the lapse of the last day should operate to produce in our minds a conviction or belief of payment, while the lapse of all the days and years preceding it does not so operate. Such is not its effect. But as from common experience of the affairs of men, there arises in the mind, after the lapse of many years without payment of interest or other acknowledgment, a strong probability that a debt has been satisfied, and as the law loves certainty and industriously avoids doubts, it has from! these motives arbitrarily fixed a period of time at the expiration of which this probability shall ripen into and take effect as a presumption of law, and at which the rights and position of the parties in reference to such debt, flowing from the mere lapse of time, unaccompanied by other circumstances, shall become determinate and certain. This presumption, which is in so many respects artificial, is in no respect inconsistent with the fact from which it is said to arise. On the contrary, though not conclusively sustained, it is strongly corroborated by the fact; since experience teaches that it is veiy improbable that the -holder of the bond would, unless it were satisfied, permit such a space of time to elapse without receiving the interest or obtaining from the maker some other evidence of its non-payment. The same is true of that most purely artificial presumption, that a bond or other specialty was executed upon a good consideration, which, is so peremptory and absolute in its nature that it cannot be rebutted by evidence; whilst the consideration of another instrument, executed and delivered under precisely the same circumstances, and in the same words, but not under seal, may be freely inquired into and impeached; yet there the conclusion that it was made upon a good consideration is entirely consistent with the facts from which it is drawn; for there is much reason for supposing that without a good consideration, it would not have been sealed and delivered.' Without multiplying illustrations, I think it will be found that in no instance (unless the present case is to form an exception) does the law infer the existence of facts in .clear and direct opposition to those upon which the inference rests. It does not do so here. Reason rebels against it, and neither justice nor equity demands it. The only result of dropping the absurdity will be that, as in the present case, in a contest between two equally meritorious parties, the title to the property of which a conveyance was sought to be made, will be adjudged to be in him whom reason designates as the true owner.

The mistake of the learned justice consisted in his carrying the presumption of law so far as to say that it presumes that a person has consented to that of which he knows nothing, which is an impossibility; instead of saying, what was more truly said by the more logical and cautious courts and judges of his time, and by Lord Ellenboeough, in Stirling vs. Vaughn, 11 East, 623, namely, that, if nothing appears to the contrary, the law presumes that he will accept that which is for his benefit, when he is informed of it, which assent, in the absence of intervening rights or equities, will have relation back to the time of delivery for his use, and make his title good as from that date. After a brief argument of this sort, he proceeds to say, “that very odd consequences and inconveniences would follow, if surrenders should be ineffectual till an express consent of the surren-deree,” and that most disastrous effects upon estates and conveyancing in England would ensue, unless her courts adopted and upheld his absurdity. It is said that one error surely gives rise to another and a greater. This saying was never m0re aptly and forcibly illustrated, than by the fantastic feats which the learned justice makes the common law, the sober common sense of ages, perform by way of getting the title back again into the grantor in case the grantee refuses to accept the conveyance. He says that after, by this kind of one-sided contract, it has got. into him without his knowledge, it remains with him without his consent until he absolutely rejects and spurns the offer, and that then, by some magical power of the law, such rejection, without-deed or other writing, becomes an instrument of conveyance, by which the legal title to land is conveyed from one who has it to one who has it not, against the express wishes of the latter and in despite of his own deed, the highest and most solemn act' known to the law, by which he could rid himself of it It is not surprising that the learned and logical Chief Justice GriBSOif, in Read vs. Robinson, 6 Watts & Sergeant, 329, while commenting upon what he calls “ the masterly argument of Justice Yenteis, in Thompson vs. Leach," says, that “ the difficulty is to comprehend how the remitter can take effect without displacing intermediate interests springing from the rejected deed;” and then, as if in despair of ever comprehending it, he dismisses the subject from his mind by saying, “but the authorities conclusively prove that it may.” All agree that neither the grantor nor the stranger who consents to receive and hold the deed, can, by their acts, bind the grantee, and that the latter may, on receiving notice of it, repudiate it altogether. If the title vests in the grantee at once, it must, of course, vest according to the terms of the conveyance, and in the case of an absolute conveyance, he would have an absolute title. If, after delivery to the stranger, and before notice to the grantee, a creditor of the latter should fasten upon the property by execution or attachment, no reason can be given why he could not hold it. If it is the property of the grantee, it follows, as of course, that the creditor would have this right, and that he would at once acquire a lien to the extent of his demand. Suppose, after this is done, that the grantee, on receiving notice, refuses to accept the conveyance,what becomes of the property ? Does the refusal unbind and set the property free from the seizure of the creditors, and remit the title at once back to the grantor? Or does the intendment of Justice Yentbis step in, in behalf of the creditor as well, and say, because the grant is presumed beneficial to the grantee, and he might, at some future period accept it, that therefore he shall be deemed to have accepted it before the seizure, and at a time when he was utterly ignorant of it, and thus enable the creditor to withhold the property from the grantor, by which means it would happen that although it was neither bought nor sold, the grantor would, without consideration, lose it, and the grantee enjoy the full benefit of it on the same terms? Knowing of no rational or satisfactory answers which can be giren to these and various similar questions which will readily suggest themselves to the reader, I leave them to be replied to by those who maintain that the title to property, real or personal, may, without words written or spoken, or other act of transfer, be thus mysteriously passed and re-passed between parties by contract. I deny that it may be. It seems to me very plain, that it does not pass in fact until the grantee has actually consented to receive it; and, as of course, that it remains with the grantor, who is unable, without such consent, to vest it in the grantee. No other conclusion is consistent with the doctrine that a grant is a contract, and that the assent of the grantee is necessary to give it validity. The justice assumed the question in controversy by saying that the execution and delivery of the deed to the stranger passed the title out of the grantor, and then he was under the necessity of resorting to these further absurdities in order to account for it; for he says, “ that it is not a slight matter, but what the law much considers, and is very careful to have the freehold fixed,” and not “ under such uncertainty, as a stranger that demands right should not know where to fix his action.” If he had considered that the operation of the deed was suspended, or that it did not take effect until the grantee had assented, he would have been saved the trouble of drawing so largely on his imagination to show where the title was, and how it was thereafter to be controlled. It is a matter of no small moment, and of just pride to tlie bench, of England, that Justice Yentris, the time he wrote this wonderful argument, dissented, and that the other members of the court of common pleas, viz.: Pollexfeet, chief justice, and Powell and Rokeby, associates, were of opinion in the case, “that there was no surrender till such time as the surrenderee had notice of the deed of surrender and agreed to it,” and that it was so adjudged by that court; and that the case was afterwards taken by writ of error to the King’s Bench, of which Lord Holt was at the time chief justice, and the judgment of the common pleas “ was there affirmed by the unanimous consent of the whole court.” It was afterwards brought by error into the House of Lords, where, as it is said, upon the reasons contained in Justice Yentris’ argument, the judgment pronounced in both superior courts was reversed. Thus we have on the one side the legal learning, and almost the unanimous opinion of the courts, and on the other the judgment of reversal of the House of Lords, the great majority of whom knew very little, and cared less, about the correct settlement of legal principles.

The argument is of a piece with that kind of reasoning once employed to prove that titles to estates were “in abeyance,” “in nubibus" and “ in gremio legis,” the folly of which is so thoroughly exposed and exploded by the severe and searching logic of Mr. Eearne, in his admirable treatise on Remainders. See pages 360 to 364, inclusive. It was held, in case of a lease to one person for life, remainder to the right heirs of another still living, that no estate remained in the grantor; and because there was no heir, for the reason that no one can be heir during the life of Ms ancestor, but only after his death, and because the tenant took only a life estate, the remainder was said to be in abeyance, in the clouds, or in the bosom- of the law. These opinions were founded upon the very same assumption as that of Justice Yentris, namely; that the remainder passed out of the donor at the time of livery, and consequently that no estate remained in Mm thereafter; and because the title must always be somewhere, the advocates of the doctrine sent it to the clouds; “ though,” says Mr. Eearne, “ by some sort of compromise between common sense and the supposition of an estate passing out of a man, when there is no -person in rerum natura, no object beside hard and hardly intelligible words, for the reception of it at the time of the livery, they are compelled to admit such a species of interest to remain in the grantor, as upon the determination of the estate before the contingent remainder can take place, entitles the grantor, or his heirs, to enter and reassume the estate.”

The questions are so closely allied, and the substrata of the two follies are so exactly alike, that Mr. Fearne’s reasoning is fully in point And it is certainly refreshing, after a perplexing and vain effort to understand that which never was and never will be intelligible, to take up an author, who, like Mr. Fearne, treats the subject upon the principles of common sense. He intimates a conviction, that instead of the title to estates being in the clouds, there is a much stronger probability of caput inter nvMlia conclit, of the head of the inventor of the fiction having been buried or hidden in them. He says: “ I cannot but think it a more arduous undertaking, to account for the operation of a feoffment or conveyance, in annihilating an estate of inheritance, or transferring it to the clouds, and afterwards regenerating or recalling it at the beck of some contingent event, than to reconcile to the principles as well of common law as of common sense, a suspension of the complete, absolute operation of such feoffment or conveyance, in regard to the inheritance, till the intended channel for the reception of such inheritance comes into existence.” The same is true of the delivery of a deed to a third person for the use of the grantee, without his knowledge or previous direction. It is far more compatible with common law and common sense, to say that its operation is suspended until the happening of the event indispensable in the law to its validity, namely, an acceptance by the grantee, than to make the law perform the wonderful exploits of vesting and recalling the title contrary to its best settled and soundest principles. I am of opinion therefore, that the defendants in error took no interest in the goods in question by virtue of their mortgages, until after the plaintiff in error Rad seized them upon process of attachment, and consequently, that they cannot maintain their action.

Much was said in this case, about the manner in which the mortgages were delivered. There can be no doubt that so far as the mortgagor was concerned, the delivery was good. They were placed by him in the hands of a stranger, to he by him delivered to the mortgagees, and thus passed beyond his reach and control, unless the mortgagees, within a reasonable time after notice, should refuse their assent. This made the delivery, as to the mortgagor, valid and binding, which is all I understand the author of the Touchstone to mean, when he says that a deed “ may be delivered to any stranger for and in behalf and to the use of him to whom it is made.” But a delivery by the donor to a third person, for the use of the donee, and an acceptance by the latter, are two very different things. By the former, the donor signifies his willingness to part with the property, whilst by the latter the donee makes known his assent to receiving it, and both must concur before the title is changed or affected. It was formerly, and may perhaps by some be still supposed, that there can be no delivery without at the same time an acceptance; that they are correlative, inseparable parts of the same transaction, and must both occur at the same instant of time; and hence, in part, the fiction of relation, by which in case of a delivery by the grantor to a stranger, the subsequent acceptance by the grantee was carried back in legal contemplation to the time when the grantor gave the deed to the stranger, in order to save the logic of the law and to preserve “the eternal fitness of things.” It seems to me that every case in which it has been adjudged that there may be a delivery to a stranger, and that a subsequent ratification by the grantee will make the instrument effectual for the purposes intended, falsifies this notion and proves that in every such case there may be, what there is in fact, a delivery by the grantor at one time to a thud party, and an acceptance by the grantee from such third party at a subsequent and different time. Such is the common sense of the transaction ; and it is better and more rationally disposed of without than with the aid of the fiction. But if the fiction must be employed, then the maxim, infietione legis semper subsistit equitas, applies, and it will not be allowed to operate when it infringes or violates the rights of strangers. It is only resorted to in furtherance of justice and to prevent injury. In this case the plaintiff in error is a stranger to the mortgages. He represents the rights and interests of the creditors of the mortgagor, who in good faith sued out and levied their attachments upon the goods, thereby lawfully acquiring a lien upon them; and it cannot be said to be in furtherance of justice, to postpone their demands thus legally secured, to those of the mortgage creditors, which are in no sense more equitable or just. The struggle is between innocent persons, to prevent loss, and the fiction ought not to be resorted to fox the purpose of helping one as against the other. The transaction must be left to stand upon its simple and naked truth.

It is unnecessary for me particularly to refer to the cases cited by counsel. Those cited for the plaintiff in error, in their principles substantially sustain the views which I have taken. Many of those cited by the counsel for the defendants in error, are not directly applicable, whilst some of them clearly and positively uphold the opposite doctrine. Of this latter character, besides the English, are Buffum vs. Green, 5 N. H., 71; Wilt vs. Franklin, 1 Binney, 502; and Merrills vs. Swift, 18 Conn., 257. In the first it does not clearly appear whether notice of the execution of the deed or the service of the process of attachment took place first. Both happened on the same day, but the court seem to adopt the theory that the title vested before notice to the grantee, and therefore the time of the service of the writ being immaterial, is not particularly noted. The principle upon which the doctrine rests is not discussed at all. The same is true of the case in 18 Conn. In both it is taken for granted that such is the effect of a delivery to a stranger. In Wilt vs. Franklin there was a dissenting opinion of Justice Brackenridge, in which the fallacy of the reasoning of his two associates is so calmly and clearly brought out that it would be folly for me to do more than refer the reader to it. The case of Doe ex dem. Garnons vs. Knight, 5 B. & C., 671, (12 E. C. L., 351,) was determined upon the binding authority of previous adjudications. The question having hitherto remained undecided in this state, no such obstacle to its correct determination exists.

In the case of Cooper vs. Jackson, 4 Wis., 537, it was expressly ruled, that “it is essential to the legal operation of a deed, that the grantee named therein assents to receive it, and there can be no delivery without such acceptance, but such acceptance need not be in person; it is sufficient if authorized or approved by the grantee.” In that case the title of the grantee was held to be good as against the judgment creditor of the grantor, upon the express ground that there was a previous understanding between the grantor and grantee that the deed should be executed by the grantor and delivered by him to the register of deeds, to be recorded. This the court says constituted the register the agent of the grantee for the purpose of receiving it. Upon this subject the following language is used: “The case at bar falls fully within the principle of Hedge vs. Drew," (12 Pick., 141, previously noticed and commented upon in the opinion). “ Here the grantee saw the deed after it was drawn, and the parties came to the understanding that the deed should be executed and left with the register to be recorded. There was an absolute divesting by the grantor of his estate in the land, and the deed was delivered to the register, who, pro hac vice, may be considered the agent of the grantee to receive it. It is readily distinguishable from the cases where the grantor executes the deed without the hnowledge of the grantee." In the case of McCourt vs. Myers, 8 Wis., 236, there was no attempt by the mortgagor to deliver the chattel mortgage to the city clerk, or any third person, for the use and benefit of the mortgagees, and consequently no question upon the effect of such delivery arose. The only point adjudicated was, that the mere act of the mortgagor in causing the mortgage to be filed in the office of the clerk, was not such a delivery as would operate to give the mortgagees any title or interest in the goods specified in the mortgage.

The judgment of the circuit court is reversed, and a new trial awarded.