Corning v. Records.

• Decision Date: 29 July 1898
• Citation: 46 A. 462,69 N.H. 390
• Parties: CORNING v. RECORDS et al. (two cases). LOVEJOY v. SAME.
• Court: New Hampshire Supreme Court

46 A. 462

69 N.H. 390

CORNING

v. RECORDS et al. (two cases).

LOVEJOY

v. SAME.

Supreme Court of New Hampshire. Grafton.

July 29, 1898.

Foreign attachment by Benjamin H. Corning against Edward H. Records, defendant, George T. Cruft trustee, and William A. Clark, claimant. Case discharged.

Foreign attachment. Issue between plaintiffs and claimant. There are three suits. Process was served on the trustee July 29, August 13, and August 30, 1896, in the respective suits. Facts found by a referee. The plaintiffs claimed to charge the trustee for "all the personal property of every kind and description in use, during the summer season of 1896, in and about the Maplewood Hotel and premises thereof, in Bethlehem." Prior to June 12, 1896, this property was owned by Albert Geiger, and by him leased to the trustee, Cruft, for one year, the lease terminating October 1, 1896. Under the lease, and during its term, the trustee had possession of the chattels described, at Bethlehem, in this county. After the execution of the lease, and prior to June 12, 1896, Geiger sold the property to the defendant Records. Cruft was notified of the sale, and subsequently held the same as the defendant's, subject to his own rights under his lease. Records' only possession of the property was that of Cruft as lessee for him. June 12, 1896, Records, for a valuable consideration amounting to $5,500, $5,000 of which was cash then paid, executed a bill of sale, under seal, of the property to the claimant, Clark. At the same time, and as part of the same transaction, Records gave Clark his promissory note for $5,500, payable in two months, and Clark gave Records an agreement under seal by which he agreed to reconvey to Records the personal property conveyed to him by Records' bill of sale, upon the payment of Records' $5,500 note according to its terms. The transaction was intended to be, and so far as its nature is a question of fact is found to have been, a mortgage to secure the sum of $5,500. These instruments were executed and delivered at Boston, Mass. The transaction was in good faith, and without any intent to defraud creditors, but there was neither the record nor oath required by Pub. St. c. 140, §§ 5, 6. No possession was taken by Clark, and no notice given Cruft, the trustee, until August 19th, when he received from the claimant's attorneys a request to hold the property "from this time forth for W. A. Clark, Jr.," the claimant. In this letter was inclosed a copy of the bill of sale (Records to Clark), but no reference was made to the agreement to reconvey. The plaintiffs at the time of service, of the trustee process had no knowledge of Clark's claim to the property. Clark claims to hold the property as security for the $5,500 note and interest The plaintiffs deny Clark's title, and ask to have the trustee charged for all the property, disregarding Clark's claim. No attachment was made of the property in the hands of the trustee, except what was made as matter of law by service of the writ upon the trustee.

Bingham, Mitchell & Batchellor and George W. Anderson, for plaintiffs. Smith & Sloane, for claimant.

PARSONS, J.The only issue is between the plaintiffs and the claimant. The question is whether the plaintiffs can take the property without first satisfying Clark's claim for money loaned Records in reliance upon the property as security. The transfer to Clark was in good faith, with no intent to defraud creditors, and as between the parties is conceded to be valid.

The first ground upon which the plaintiffs claim Clark's title is invalid as to them is that the conveyance from Records to him was a chattel mortgage (Jones, Mortg. § 19; Potter v. Locomotive Works, 12 Gray, 154; Carpenter v. Snelling, 97 Mass. 452; Taber v. Hamlin, 97 Mass. 489); invalid because neither sworn to nor recorded (Pub. St. c. 140, §§ 2, 6, 10, 12). Conceding, for the purpose of discussion, that the conveyance was in mortgage, the only question is of delivery or change of possession; for, if there was a sufficient delivery to Clark, his title is good against every one, if he holds by way of mortgage: Clark v. Tarbell, 57 N. H. 328; Smith v. Moore, 11 N. H. 55; Morse v. Powers, 17 N. H. 286; Pub. St. c. 140, §§ 2, 12. At common law, a mortgage of personal property was valid without change of possession. Haven v. Low, 2 N. H. 13; Ash v. Savage, 5 N. H. 545; Holt v. Remick, 11 N. H. 285; Barker v. Hall, 13 N. H. 298. Since the statute, delivery of possession is essential to the validity of such mortgage unless the substitute prescribed by the statute (oath and record) is strictly complied with. No different delivery is required in the case of a mortgage than of an absolute sale. A delivery sufficient to pass the title as against third persons in the one case will in the other. Smith v. Moore, 11 N. H. 55, 65. "The general rule is that delivery of possession is necessary in a conveyance of personal chattels as against every one except the vendor. * * * An actual delivery by the vendor * * * is not in all cases necessary. It is enough if the delivery be such as the situation of the property admits. * * * And, when the goods are so situated as to admit of no delivery, the sale will be valid without any delivery. * * * All cases of sales of chattels which are so situated that there can be no delivery at the time of the sale are within the exception to the general rule, whether the chattels be upon the land or upon the water. Negligence on the part of the vendee to take possession may invalidate his claim, as against creditors or subsequent purchasers without notice; but if there be no laches on the part of the vendee, if he take possession in a reasonable time, his title can in no case be impeached for want of possession." Ricker v. Cross, 5 N. H. 570-572. Among the illustrations given by Richardson, C. J., are sale of a ship and goods at sea. In Conard v. Insurance Co., 1 Pet. 386, 449, 7 L. Ed. 216, it is said: "In case of even an absolute sale of personal property, the want of such possession is not presumptive of fraud if possession cannot, from the circumstances of the property, be within the power of the parties." The same rule applies in case of a ship in a distant port, and of a sale of goods already in the hands of the purchaser, where a change of possession is impossible. Manton v. Moore, 7 Term R. 67. Ricker v. Cross was approved in Patrick v. Meserve, 18 N. H. 300, where the title was held to pass without delivery when the chattels were at a considerable distance from the parties; and in First Nat. Bank of Peoria v. Northern R. Co., 58 N. H. 203, 204, which was trover by the holder of a bill of lading, who had made advances on the goods, against a common carrier, who had delivered the goods to a third party. It is said in the opinion: "The delivery of the bill of lading takes the place of delivery of the goods; for no delivery of the latter is practicable at the time, and the symbolical delivery of the bill is sufficient to pass the title." While the latter case may perhaps stand upon a rule peculiar to bills of ladiug, it is the impracticability of actual delivery which is the foundation of that rule. The rule requiring actual delivery and change of possession in the sale of chattels applies only when the chattels are in possession, and an actual change can be had. Hence, "where the goods sold are in the custody of another, and an order is given to the depositary to deliver them to the buyer, which is presented to him, there the sale is complete." Pinkerton v. Railroad Co., 42 N. H. 424, 452; Stowe v. Taft, 58 N. H. 445; Tuxworth v. Moore, 9 Pick. 346, 348; Plymouth Bank v. Bank of Norfolk, 10 Pick. 454, 459; Pratt v. Parkman, 24 Pick. 42.

In the present case the property is described in the agreement given Records by Clark as "all the personal property in and about Maplewood Hotel premises, at Bethlehem, N. H.,"—a description in substance that given us by the referee. It was located at Bethlehem, the parties were at the time in Boston, and, if nothing else appeared, the property might well be held to have passed without manual tradition, on account of its character and situation relative to the parties, subject to impairment of Clark's title in its validity as to third persons by negligence in him in obtaining actual possession. But a more satisfactory reason why actual manual possession was not given, and a more substantial ground for the conclusion that the title passed without manual tradition of the property rests in the fact that both were impossible. The property was in the possession of Cruft, under a lease for a definite term from Geiger, from whom Records received such title as he had. The lease is not before us, but we infer from the term used that it was a bailment for hire. Under such a contract, Cruft had both the possession and the right to the possession. Records had neither, and never had. The law did not require him to commit a trespass or a breach of the covenants of the lease to enable him to transfer to Clark what Geiger had sold to him. The property during the lease was not subject to levy on attachment or execution against Geiger, Records, Clark, or whoever was the general owner. It could be attached as against them, if at all, only by trustee process (Hartford v. Jackson, 11 N. H. 145; Smith v. Niles, 20 Vt. 315; Drake, Attachm. §§ 245, 246), while Cruft's interest was subject to attachment and levy (Wheeler v. Train, 3 Pick. 255).

As the property could not be levied upon during the term, Cruft could not be charged as trustee as long as he held under the lease. Pub. St. c. 245, § 33. As Cruft, as bailee, had the exclusive right to the possession, not only against third persons, but against the general owner as well (Story, Bailm. § 395), it was not only impracticable, but impossible, for Records lawfully to have actual possession or to deliver it to Clark. The law does not require what is impossible. Records' right...