Case ID: ohio-st_19/html/0476-01.html
Source: Caselaw Access Project
Author: {"author": "Hay, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

John M. Secrist v. The German Insurance Company.
    1. Under the act of Congress of July 29, 1850, “to provide for recording the conveyances of vessels,” etc., a bill of sale, or conveyance of a steamboat, registered according to the laws of the United States, is void as against an attaching creditor of the vendor, unless the biU of sale or conveyance be recorded in the office of the collector of customs where the boat is registered or enrolled, or unless such creditor, at the time of his attachment, have actual notice of the bill of sale or conveyance.
    2. In a suit by the vendee against such attaching creditor to recover posses■sion of the boat, where the bill of sale is not recorded, proof that the creditor had actual notice of the bill of sale or conveyance, at the time of the attachment, is indispensable to a recovery; constructivemotice merely is not sufficient.
    8. The act of Congress requiring bills of sale, conveyances, etc., of vessels of the United States to be recorded, is not unconstitutional. Whites Bank v. Bmitk, 7 Wallace, 646.
    Error to tbe court of common pleas of Hamilton county. Reserved in tbe district court.
    On tbe 25th day of July, 1864, Secrist brought an action of replevin, in tbe court of common pleas of Hamilton county, against 'William Long, sheriff of tbe county, to recover tbe possession of tbe steamboat “ Ladonia,” which bad been attached as tbe property of one Samuel Gamage, at tbe suit of tbe German Insurance Company. Tbe company, being tbe party having tbe real interest, was admitted to defend in tbe place of tbe sheriff. Tbe cause was tried to tbe court, and at tbe request of tbe plaintiff there was a special finding of facts, upon wbieb judgment was rendered for tbe company. Thereupon tbe plaintiff filed bis petition in error in tbe district court to reverse tbe judgment, on tbe ground that tbe court erred in tbe judgment rendered on tbe facts found, which are substantially as follows:
    On tbe 7th day of July, 1864, Samuel Gamage, being indebted to tbe plaintiff, sold to him tbe steamboat “ Ladonia ” for eight thousand dollars, which amount was credited to him on tbe plaintiff’s account. Gamage was then tbe c wner of tbe steamboat, and gave a bill of sale in tbe usual form, and of that date. Tbe sale was made at Louisville, and tbe plaintiff partially loaded the boat with freight for Cincinnati, where it arrived about the 12th of the same month. The plaintiff kept the same captain, officers, and crew which had been previously on the boat, and when it arrived at Cincinnati it was tied at the public landing in that city. The officers and crew were discharged, except the watchman, who remained on .the boat and had charge of it. The watchman was the same one who had been on the boat when it was owned by Gamage, and continued on in the same capacity after the bill of sale to Secrist, and had the actual custody of the boat when it was attached. The bill of sale from Gamage to Secrist was never recorded in the office of the collector of customs, where the boat was enrolled, until July 29th, 1864. On the 20th day of the same month, the German Insurance Company caused the boat to be seized as the property of Gamage, by a writ of attachment issued in a suit the company had brought against him in Hamilton county, on a note for $8,561.50, which was due to the company at the time the bill of sale was made by Gamage to Secrist. The company afterward recovered judgment on the note. At the time the boat was attached, neither the German Insurance Company nor its officers or agents had any actual notice of the sale from Gamage to Secrist.
    The district court reserved the case to this court for decision.
    
      Oollins c& Herron for plaintiff in error:
    1. It being admitted that Secrist’s title was good as against Gamage, the grantor in the bill of sale to Secrist, we claim that it is equally good against the attaching creditor of Gamage ; that an attaching creditor, by his seizure, merely reaches any right or equity which his debtor may have in the property seized. Ohio Code, secs. 194, 200, 217, 221; Sheldon v. Simonds, Wright’s Rep. 725; Manly v. Hunt et al., 1 Ohio, 258; Barr v. Hatch, 3 Hammond, 527; Carty v. Fenstemaker, 14 Ohio St. 457; Morgan v. Spangler, 14 Ohio St. 102; Farmers' and Mechanics' National Bank v. King, 57 Penn. St. 202; Buffington v. Gerrish, 15 Mass. 156; Parker v. Fan, 2 Browne, 331; Drake on Attachment, secs. 220, 510; Wakefield v. Martin, 3 Mass. 287; Starr & Smith v. Moore, 3 McLean, 354; Crocker v. Pierce, 31 Maine, 177.
    As, therefore, Gamage had no rights or interest in the “ Ladonia,” even in the purview of the statute of the United States referred to, when the defendants seized her as his property, the defendant took nothing by the seizure.
    2. It is not apparent from the record that the defendant Long had no notice of plaintiff’s purchase and possession of the boat when he seized her, under the order of attachment, and when he claims to have acquired a lien or title. It'is found only that the German Insurance Company had no such notice; but the German Insurance Company has been let in as a co-defendant merely, not substituted as defendant under the 44th section of the code, if, indeed, it could be. The court cannot presume that the sheriff, under whom the Insurance Company claims, had no knowledge of Secrist’s title. The presumption is, that he would have been informed of it by the watchman who was left on board.
    Moreover, Secrist’s possession was open and notorious, and that of itself affords presumption of notice. Possession is notice of every matter which might have been learned from the party in possession. Losey v. Simpson, 3 Stockton, 246; Priest v. Rice, 1 Pick. 164; Flagg v. Mann, 2 Sumner, 554; Tuttle v. Jackson, 6 Wend. 226; Bush v. Golden, 17 Conn. 594; Landes v. Brant, 10 Howard, 375; Morton v. Robards, 4 Dana (Ky.), 258.
    The statute did not intend to make it a crime to omit to record a bill of sale; and if the sheriff would work a forfeiture of Secrist’s interest in the boat, he should be held to strict proof of his ignorance of Secrist’s rights.
    3. The true intent of the act of Congress in requiring the record of bills of sale of steamboats, etc., was to protect those who might be prejudiced by the failure to record; such as subsequent purchasers or mortgagees in good faith, who have dealt with the vendor, ignorant of the prior deed or mortgage, and it becomes a question which of two innocent parties shall suffer.
    Now, how was the German Insurance Company of Louisville, or the sheriff of Hamilton county, prejudiced by plaintiff’s omission to put his bill of sale on record? See 4 Kent’s Com. 168, 548; Jackson v. Burgott, 10 Johns. 457; Campbell v. Moseby, Littell’s Select Cases, 362; Le Neve v. Le Neve, 3 Atk. 646; Morton v. Robards, 4 Dana (Ky.), 258; Hall v. Hudson, 2 Sprague, 65; Thomas v. The Kosciuske, 11 N. Y. Leg. Observer, 38-44; Abbott’s Nat. Dig., vol. 4, 167; Priest v. Rice, 1 Pick. 168.
    4. The intent of the act of Congress is the same as that of other registry acts, and, if in any way different, it is not with a view to punish those who buy in good faith in ignorance of the law, or who, throqgh force of circumstances, are unable to have their bill of sale recorded at the proper place before an attaching creditor of the vendor may seize. Potter v. Irish, 10 Gray, 416; The Martha Washington, 25 Law Reporter, 22; Parker Mills v. Jacot, 8 Bosworth, 162; Garwood v. Garwood, 4 Halstead, 193; The Ætna Ins. Co. v. Aldrich, 26 N. Y. 101; 6 Cal. 303; 1 Parsons' Maritime Law, 49, 50; Parsons' Mercantile Law, 329, 330, note.
    Finally, we claim that the act of Congress, if intended as anything more than a revenue law, was intended only to correct an inconvenience resulting from the fact that large steamers and vessels rarely change possession when there is a change of ownership. They are not susceptible of delivery like ordinary chattels, and are often abroad upon voyages when sold or mortgaged. Hence their title should be apparent at their home-port, and parties may deal with those as owners who appear of record to be the owners. If any one has a latent interest not apparent of record, he shall not set it up to the injury of one who has acquired an interest subsequently for value and in good faith.
    But, on the other hand, no one can take advantage of the failure to register unless he has been prejudiced by it. An unregistered bill of sale conveys the equitable title to the vendee, and his equity is superior to the equity of a general creditor, whose claim existed prior to the unregistered title, but who had fixed, no lien upon the specific property by a seizure; and a general creditor cannot by an attachment override the equity of the vendee, or reach any other interest in the property than his debtor had at the time in equity, which, in the case at bar, was nothing.
    
      Lincoln, Smith c& Warnock for defendant in error:
    1. Neither party has a superior equity. Both were creditors of Gamage. Secrist advanced nothing on the boat. He simply credited Gamage so much on account. Therefore, if he has failed to make his title good by not complying with the requisitions of the statute regulating the sale of steamboats, he has no superior equity to strengthen his title.
    The language of this statute expressly covers this ease, and is clear, plain and unambiguous. There is no room for interpretation or doubt. It says, “Wo hill of sale, mortgage, hypothecation,” or “coiweycmce” (thereby including sales and transfers of all kinds) “ shall be valid against cmy person other, than the grantor,” etc. In other words, any person, excepting the grantor, etc., and those having actual notice, can take advantage of the not recording the bill of sale. Woodbury v. Berry, 18 Ohio St. 456.
    The statute is valid, and was intended to regulate such conveyances. It has been frequently before the courts, and its validity and extent fully maintained. Hays v. Pacific Steamboat Company, 17 How. 596; Sinnot et al. v. Davenport et al., 22 How. 227; Mott v. Ruckman, 8 Blatchford, 17; The Parker Mills v. Jacot et al., 8 Bosworth, 161; Potter v. Irish, 10 Gray, 416; White's Bank v. Smith, 7 Wallace, 646; Chadwick v. Baker, 54 Maine, 9; Blanchard v. Dolliver, 1 Clifford, 463; Aldrich v. Ætna Insurance Company, 8 Wallace, 491.
    The findings show that neither the German Insurance Company nor its officers nor agents had any actual notice of the bill of sale, sale, or change of possession of said steamboat from Gamage to Secrist; that nothing took place from which such notice could be inferred. Secrist made nc change in the officers of the boat.
    Hence the propriety of this statute, which makes a record title necessary, and requires a record as the evidence of title and actual notice to subsequent purchasers or creditors of an unrecorded title.
    But constructive notice or presumptive notice of such sale is not sufficient. The defendant must have actual notice to defeat its attachment, and the court have already found it had no actual notice.
    See Pomroy v. Stevens, 11 Metc. 244; Jackson v. Elston, 12 Johns. 454; Flagg v. Mann, 2 Sumner, 554, 555; Jackson v. Given, 8 Johns. 137; Jackson v. Van Valkenburg, 8 Cowen, 260; Richardson v. Smith, 11 Allen, 134.
    As to the validity of sales of vessels under the English statute on the subject, see McCalmont v. Rankin, 19 E. L. & E. 176; Duncan v. Tindall, 20 id. 224; Hughes v. Morris, 12 id. 291.
    As to the distinction between the English and American navigation acts, see Weston v. Penniman, 1 Mason, 316; Phillips v. Ledloy, 1 Wash. C. C. R. 229; Mosey v. Buchanon, 16 Peters, 215.
    It is claimed by the plaintiff that the German Insurance Company by its attachment could only reach whatever interest Gamage had in the boat at that time, and as Secrist’s title was good against Gamage, it was also good against an attaching creditor of Gamage. But the question still arises, what was Gamage’s interest at that time, as defined and reg^. ulated by this statute? Was it all divested? He could undoubtedly have made an effectual sale of the boat to any one not having actual notice of the prior sale to Secrist. There was an interest then which he could convey. Now why could not the same interest be attached ? This statute makes no distinction. It says, “ No bill of sale, etc., shall be valid against cmy person,” etc. Any person may take advantage of it by pursuing the usual remedies.
    This registration act is intended to regulate the title, to-boats (Aldrich v. Ætna Insurance Company, 8 Wallace, 491), and, as an element of the title, is binding upon the State as well as the Federal courts. Our remedial law of attachment thus seizes whatever the debtor himself could have conveyed at the time, and thus holds it for the attaching creditor. Lessee of Parker v. Miller et al., 9 Ohio, 108; Lessee of Scribner v. Lockwood, 9 Ohio, 187; Lessee of Paine v. Mooreland, 15 Ohio, 435, 443; Holliday v. Franklin Bank, 16 Ohio, 533; White v. Denman, 16 Ohio, 59; White v. Denman, 1 Ohio St., 110; Bloom v. Nogle, 4 Ohio St., 45; Tousley v. Tousley, 5 Ohio St., 78; Fosdick v. Barr, 3 Ohio St. 471; Calais Steamboat Company v. Van Velt's Adm'rs, 2 Black, 373.
   Hay, J.

The action was brought to recover the possession of a steamboat. Both parties claim under Samuel Gamage. The plaintiff purchased the boat, July 7, 1864, for a sum which was to be applied on a debt due to him from Gamage. He took a bill of sale of the boat, but did not procure it to be recorded in the office of the collector of customs, where the boat was registered, until the 29th day of that month. In the mean time — on the 20th day of the same month — • the defendant attached the boat as the property of Gamage, to satisfy a debt of the defendant against him, which was then in suit.

It is not disputed but that the bill of sale, as between the ¡plaintiff and Gamage, transferred the boat to the plaintiff. But it is claimed on the part of the defendant, that the bill -of sale was void as to the Insurance Company, and that it ■might, therefore, attach the boat as the property of Gamage. 'This claim is based on the first section of the act of Congress of July 29, 1850 (9 U. S. Stat. at large, 440), which is as follows:

“No bill of sale, mortgage, hypothecation, or conveyance .-of any vessel or part of any vessel of the United States shall -be valid against any person other than the grantor or mortgagor, his heirs and devisees, and persons having actual noitice thereof; unless such bill of sale, mortgage, hypotheca tion, or conveyance be recorded in tbe office of tbe collector of customs where such vessel is registered or enrolled.”

It is not disputed but that the steamboat in question navigating the Ohio river, and enrolled according to law, was a “vessel of the United States,” within the meaning of this section. It is explicitly provided that no till of sale or convey anee of any such vessel shall be valid against any person, other than the grantor, Ms heirs or devisees, and persons having actual notice thereof, unless it te recorded. The defendant was neither the heir nor devisee of Gamage, the grantor of the plaintiff. Unless, then, the defendant (through its officers or agents) had actual notice of the sale to the plaintiff, the conveyance was, according to the. clear and plain reading of the statute, invalid, as to the defendant, at the time of the attachment, which was before the bill of sale was recorded.

But the record shows that the defendant, as a matter of fact, had no “actual” notice of the sale to the plaintiff, at the time of the attachment, nor any notice thereof whatever, unless the facts as found amount in law to notice. There was no such change of possession after the sale, or other fact made to appear, as would warrant the inference of notice of the sale to either the defendant’s agents or to the sheriff; for the boat remained after the sale in charge of the same officers as before; and when it was attached, it remained in charge of the watchman alone, who held the same position both before and after the sale. But, however tMs may be, the notice contemplated by the statute is actual notice, as distinguished from constructive notice. Actual notice is a fact to be found upon evidence, and is not merely a legal inference from other established facts; therefore, the finding of the fact by the court, that the defendant had no actual notice of the sale, is conclusive. Pomeroy v. Stevens, 11 Metc. 244; The Parker Mills v. Jacot, 8 Bosw. 161.

The defendant, then, when the attachment was served, did not come within any of the exceptions of the statute, and can claim its protection against the unrecorded bill of sale to the plaintiff; unless, as.claimed in behalf of the plaintiff, it is to be construed as applying only to subsequent purchasers and mortgagees for a valuable consideration, and not to creditors. This objection would come with more force from a purchaser upon a consideration other than ar existing debt. In this case both the parties were creditors of Gamage, and each are striving to obtain the property upon their respective debts; neither, therefore, can claim a superior equity to the other. • Undoubtedly the statute was intended for the protection of subsequent loona-fide purchasers and mortgagees, but there is nothing in the language of the section to indicate a purpose to coniine its provisions to them alone. The language used renders an unrecorded sale as much invalid in favor of the liens obtained by creditors, as it does in favor of purchasers and mortgagees. We cannot hold otherwise without changing the obvious meaning of the section, and hold that to be valid which it declares shall not be valid. The act in question relates, like other recording acts, to conflicting interests and liens on property, withoflt reference to the particular mode in which they are acquired. Mott v. Ruckman, 3 Blatch. 71.

It is suggested that the act relates to the government revenue only, and that, if it has a broader application, the first section, to that extent, is in conflict with the constitution. These questions, we apprehend, are settled against the claim of the plaintiff, by the tribunal of last resort in the construction of the acts of Congress. White's Bank v. Smith, 7 Wal. 646; Aldrich v. Ætna, Ins. Co., 8 Wal. 491.

It is claimed, moreover, that as a creditor can take no better right by attachment than that of his debtor, the defendant must fail, as the debtor had parted with his interest in the property before the attachment. But at the time the boat was seized, the conveyance by which the debtor had parted with his interest, as we have seen, was invalid as to the attaching creditor; therefore, it could not be asserted against such creditor.

As to the defendant, Gamage held a leviable interest in the boat, and that was attached before the sale took effect as to the defendant. Gamage might have sold the boat to the defendant to be applied on his debt, and if the defendant had procured the bill of sale to be recorded on the day the boat was attached, without notice of the sale to the plaintiff, it cannot be doubted but that the defendant would have held the boat'; for, with an equal equity, the defendant would have the prior legal right. That which might thus be obtained in payment on the defendant’s claim, might be subjected by legal process to apply thereon. It is the invalidity of the sale as to the defendant, and not the manner in which the defendant obtained the property, which defeats the plaintiff’s right against the defendant.

The statute is no less effective in favor of an attaching creditor without notice, than it is in favor of a purchaser; and to this effect are the authorities. Pomeroy v. Stevens, 11 Metc. 244; Potter v. Irish, 10 Gray, 416; The Parker Mills v. Jacot, 8 Bosw. 161.

The judgment of the common pleas is affirmed.

Brenkeehoff, C.J., and Scott, Welch, and White, JJ., concurred.