Chenery v. Palmer

The first opinion of the Court was delivered by Mr. Justice Heydenfeldt, Mr. Chief Justice Murray and Mr. Justice Terry concurring.

If the conveyance from Hutchinson to the plaintiff was a sale of the property, then it was void as to creditors for the want of immediate delivery, by the 15th section of the Statute of Frauds.

That it was not an actual sale, but only a mortgage, might be a question to be investigated between vendor and vendee, to prevent an attempted fraud by one against the other; but where the rights of third persons are to be affected, it is not the province of either to alter or vary the terms of the written instrument, given and accepted between them as the evidence of their respective rights.

If the bill of sale was, by a private understanding between the parties, to operate only as a mortgage, then it was a secret trust to the extent of the surplus over the debt secured, for the benefit of the vendor, and void by the 11th section of the same statute. It was placing the property beyond the reach of his creditors, who certainly had the right, except it maybe under peculiar circumstances, to avail themselves of the surplus. In what manner this could be done, it is unnecessary here to determine, and may depend upon the circumstances of each case.

Wherever there is no dispute as to the facts, and the law upon those facts declares a transaction fraudulent and void, it is not a question for the jury. The Court in such case may direct the jury how to find, or set aside the verdict if they find the contrary. See Billings v. Billings, 2 Cal. R.

Upon the whole case as presented by the record, the judgment helow is correct, and must be affirmed.

On the re-hearing, the opinion of the Court was delivered by Mr. Chief Justice Murray. Mr. Justice Terry concurred.

A re-argument was had in this case, upon a suggestion that advances had been made by Chenery to Hutchinson, after the delivery of the property in question.

If the relation of the parties had béen that of bailor and bailee, or pledgor and pledgee, then there would be no doubt but the plaintiff might assert his claim for these advances, thus made upon the property in his possession. There is no evidence however that the original contract was ever abandoned. In fact, it appears from the testimony of Hutchinson that these same advances were contemplated and agreed ón at the time of the original sale or mortgage. Under these circumstances the contracts must be regarded as an entirety, and however honest the intentions of the parties, the law from motives of public policy having-declared the contract void, all subsequent acts under it must relate to its inception, and are alike tainted with fraud.