Court Opinion

ID: 6734571
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:17:16.439504+00
Date Added: 2024-06-11T16:01:43.423720
License: Public Domain

Corliss, J.
(dissenting.) While much that is contained in the prevailing opinions in this case meets my approval, I am compelled to dissent from the decision of the court in reversing the case. The ground on which this decision is placed is that Mikkelson was justified in assuming that the quitclaim had transferred to Percival the right to the purchase price represented by the two notes. In my opinion, this view of the case is unsound. It protects Mikkelson, despite his gross negligence. When he paid| Percival for the deed, he was bound, as a prudent man, to ascer-5 tain whether Percival had a right to receive the purchase price.' The mere fact that he was the grantee in a quitclaim deed would not, of itself, justify Mikkelson in assuming that Percival was also the assignee of the notes. It by no means follows, as a necessary *41consequence, that one who has received the legal title from the vendor in a contract for the sale of real property is also invested with the right to the agreed purchase price. Certainly, the legal effect of a transfer of real property is not ordinarily to pass to the grantee a chose in action. Mikkelson was bound to know that the obligation to convey, and the right to receive the fruits of the conveyance, might part company; that there was no inflexible rule of law that they must forever remain inseparably bound up together. If the grantee of the vendor pays nothing for the property, there is no reason in equity why he should claim the right to receive the purchase price merely because he is the grantee in a .deed. The circumstances surrounding this transaction indicated that Percival had not acquired Shelly’s right to receive the purchase money. The deed was a mere quitclaim. It was executed after Percival had acquired an interest in the property under the foreclosure proceedings. These facts were sufficient to lead a careful man to inquire whether the parties had any other purpose than that of vesting in Percival the legal title which the foreclosure ultimately would give him. Moreover, errors in foreclosure proceedings are not unknown things, and quitclaim deeds are not infrequently given to obviate the legal consequences of such errors. But, even if the facts were different, Mikkelson could not deal with Percival on the theory that he was the owner of these notes, without making any inquiry whether he held them, or they were still in the possession of Shelly, and yet escape the charge of the grossest carelessness. If he went to Percival to demand a deed under the contract, he was bound, as a prudent man, to ascertain whether Percival owned the notes, before paying him the purchase price. It is true that the notes were mere representatives of the purchase price, but this is always the case. A note is only evidence of the obligation which lies behind it. But no one can escape the charge of gross inattention to his affairs who pays to one a debt represented by a note given to another, without ascertaining whether the debt has been transferred to the one to whom he pays it. The most satisfactory *42evidence of such transfer is the possession of the note, and the written evidence of the assignment of it. If the necessary legal effect of a deed, in such a case, were to vest the title to the purchase price in the grantee, the case would be different. But the vendor’s deed to a third person has no such necessary legal effect. In fact, the deed itself never transfers the right to .the purchase price. It is the intent of the parties, as shown by their conduct and by the circumstances of the transaction outside of the deed; that works an assignment of the right to the purchase money. As I have stated before, the obligation to convey, and the right to the purchase money, may part company. They always do when the vendor dies. The naked legal title, burdened with the trust in favor of the vendee, passes to the heirs at law. The right to the purchase price vests in the personal representatives. The heirs must execute the conveyance, but the money must be paid to the personal representatives. Thomson v. Smith, 63 N. Y. 301-303; Potter v. Ellice, 48 N. Y. 323; 2 Story, Eq. Jur. (13th Ed.) 111, 112. It is true that our statute gives the personal representatives the power to execute the conveyance, in such a case. But this does not affect the principal. The obligation and the right may be separated by the act of the vendor, as well as by operation of law. He may convey the naked legal title to one person, and either retain himself the right to the purchase price, or transfer it to another third person. What right had Mikkelson to assume that Shelly had transferred to Percival the right to receive the amount due on these notes, when the notes were not in the possession of Percival? Mikkelson had expressly agreed to pay these notes to Shelly on receiving a conveyance from him or from his grantee. He had agreed to pay them to Shelly on a conveyance to him of the land by a grantee of Shelly. He knew that Shelly might convey the land subject to the obligation to convey, and yet reserve to himself the right to the purchase money. He knew that Shelly had not transferred to Percival either the notes or the contract, for what he could have ascertained by inquiry he is charged with knowledge of, when he fails *43to make such inquiry, it being his duty to make the same; and he also knew that all that Percival had was a mere quitclaim deed, whose utmost legal effect was to transfer the legal title to the land, and yet it is said that he was justified in assuming that he could safely pay the purchase price to Percival. Moreover, -the opinion assumes that Mikkelson dealt with Percival under the contract, when it is obvious that in dealing with him he ignored the contract, and treated the act of Shelly in conveying to Percival as an abandonment thereof. This he had no right to do. From one portion of the opinion of the Chief Justice,- I am led to believe that he agrees with me on this point. But in another part he seems to take the position that the conveyance to Percival was prima facie an abandonment of the contract by Shelly. Whatever might be the rule in a case,' where the contract was silent on the subject, I am very clear that, under the language of the agreement in this case, Mikkelson had no right to infer from the conveyance to Percival any purpose on the part of Shelly to abandon the contract. Mikkelson had expressly agreed to accept a deed from either Shelly or his grantee. The very contingency of a transfer by the vendor before conveyance to the vendee was contemplated and provided for by the parties. For this reason a number of the authorities cited by the Chief Justice do not seem to be in point. I am unable to discover any force in the construction placed by Judge Bartholomew, in his opinion, upon the testimony of Shelly that he had merely quit-claimed his interest, as showing a transfer of the right to the purchase price. The word “interest” unquestionably refers to only the land. That he does not mean to testify that he assigned the right to the purchase price is made clear by his testimony that he had always been, and still was, the owner of the notes. His testimony wq,uld not be true if he had transferred.to Percival the right to the purchase price, for such a transfer would, of itself, vest in Percival the title to the notes. It is possible that, when the purchase price is not evidenced by a note or notes, the conveyance of the land by the vendor to a third person would raise a *44presumption that the vendor intended to transfer the right as well as the obligation. See, on this point, as favoring this view, Sons of Temperance v. Brown, 9 Minn. 157 (Gil. 144;) Ten Eick v. Simpson, 1 Sandf. Ch. 244; Daniels v. Davison, 16 Ves. 249, and 17 Ves. 433. But there'are cases which seem to support the other view. Chinn v. Butts, 3 Dana, 547; Lodge v. Lyseley, 4 Sim. 70; Whitworth v. Gaugain, 3 Hare, 416; Scott v. Coleman, 5 T. B. Mon. 73; Secombe v. Steele, 20 How. 94-107. On this question, it is unnecessary to express any opinion. But when the purchase ( price is evidenced by notes which are not transferred, but retained ? by the vendor, the mere fact of a conveyance cannot create a j presumption that the right to the purchase money has been j assigned. And the vendee is not justified in drawing such inference when he knows that such notes have not been transferred. Such knowledge he is presumed to have when he blindly deals with a third person, making no effort to ascertain the fact. The mere circumstance that the notes are not surrendered to him is sufficient to put him on his guard. The rule is well settled that 1 one who pays a note, without requiring surrender of the posses- j1 sion of it, cannot derive any protection from the payment, if at t the time of payment the note had in fact been transferred toj another. See Kernohan v. Durham, 48 Ohio St. 1, 26 N. E. 982, and cases cited. In view of such a rule, can it be said that the debtor can assume the fact of an assignment from the mere execution of an instrument whose legal effect is not to transfer the note, and, acting bn such assumption, pay the debt to a person not entitled to receive it, without inquiring for the note, or ascertaining whether it has in fact been assigned, and then claim protection as one who has acted with reasonable prudence? The opinion of the Chief Justice exonerates the defendant from liability, although it is conclusively shown on the new tidal that the right to the purchase price was not assigned to Percival, unless it can be proved, by some fact other than the retention of the notes by Shelly, that he (Mikkelson) had notice that Shelly had not transferred them to Percival.
*45(63 N. W. Rep. 210.)
I cannot assent to the reasoning of Judge Bartholomew that the poverty or ignorance of the defendant, or the shrewdness of the plaintiff, should influence us in the least. These questions are important when there is an issue of fraud or mistake or duress to be tried. But in this case we have merely a question of law, to decide. Rules of law cannot be adjusted to the varying faculties and attainments of men. There must be one law for all. In the administration of justice in the courts, ideal justice can never be attained. The most that can be hoped for is a reasonable approximation to it. That this practical justice may in the main be meted out, it is indispensable that the law should be stable. I believe that the practice of doing violence, however slight, to legal principles to accomplish justice in individual cases, has resulted in incalculable injustice to future litigants, by unsettling the law. From the two views that appear to be set forth in the opinion of my associates, — that the right to the purchase price was in fact transferred to Percival, and that Mikkelson was justified in assuming that it was so transferred, — I am constrained to dissent. I think that there was nothing in the case to warrant a finding that the right to the purchase money had been assigned to Percival and I also think that Mikkelson was not justified in assuming that this right had been so assigned. And, in addition, the case shows, to the satisfaction of my mind, that he did not act upon such assumption, but upon the theory that Shelly had abandoned the contract by conveying , to Percival. My vote is for the affirmance of the judgment.
I concur in the opinion of the Chief Justice in all respects except as I have otherwise indicated in this opinion.