PATCHIN v. ROWELL

The plaintiffs sold and delivered certain personal property to one L, who never paid them for it. While in L's possession, the defendant purchased the property from him in good faith for a valuable consideration, but did not then take possession of it. A little later L orally declared that he placed the property in the possession of the plaintiffs, though no visible change of possession took place, and thereupon accepted from them a conditional bill of sale of this and other property. The plaintiffs' only motive in this transaction was to obtain security from L for the balance due them. Shortly thereafter the defendant, who had no knowledge of the plaintiffs' claim or of the conditional bill of sale, took and retained possession of the goods until they were replevied from him more than a year afterward. Held that the defendant by virtue of his purchase and subsequent possession acquired a valid title as against the plaintiffs, whose loss, whether as mortgagees or as purchasers of L, was due to their own failure to take the goods into their possession. An absolute sale accompanied with a delivery, passes title to the goods, whether they are ever paid for or not. A debt due from the vendor to the vendee is a valuable consideration for a sale of goods. While the retention of possession of personal property by the vendor after a sale, does not affect the rights of the parties as between themselves, it does render the sale invalid as against subsequent attaching creditors of the vendor without notice, and bona fide purchasers without notice who secure possession of the property. A change in the possession of goods sold, sufficient to protect them against an attaching creditor, is not accomplished by a mere oral declaration of the seller that he places them in the possession of the buyer. Nor can the title of such a buyer, under such circumstances, prevail as against either a prior or subsequent bona fide purchaser who acquires possession without notice of the former's claim. However valid a mortgage or sale of personal property unaccompanied by possession may be as between the parties, it cannot prevail against a prior bona fide purchaser of the property for value, who acquires possession before he has any notice, actual or constructive, of the alleged mortgage or sale. A demand and a refusal to comply therewith within a reasonable time, are prerequisites to an action of replevin against one who is in the lawful possession of the goods as a bona fide purchaser. A single action of replevin against two or more defendants, each of whom is in the exclusive possession of a portion of the goods and chattels replevied, presents a clear case of misjoinder of parties and causes of action.

WHEELER, J.

The facts found show that the sale of goods by the plaintiffs to Lanyon on July 25th, 1908, was an absolute sale, and that delivery was then made of the goods so sold. The title to these goods, therefore, passed to Lanyon, notwithstanding that they were not then, nor subsequently, paid for.

Lanyon's sale of these goods about the first of October, 1908, to Rowell, was bona fide and made upon a valuable consideration, and hence was a good sale between the parties. Meade v. Smith, 16 Conn. 346, 361; Price v. Heubler, 63 Conn. 374, 376, 28 A. 524.

The plaintiffs' claim, that the sale was void between the parties, is without merit.

Since Rowell did not take possession of the goods, his title, as against a subsequent attaching creditor without notice, could not stand; nor could it stand against a bona fide purchaser without notice, who secured possession. This is a rule of policy of our law and inflexibly maintained. Capron v. Porter, 43 Conn. 383, 388.

Lanyon, after his sale to Rowell and while in possession of these goods, orally declared that he placed these goods in the possession of the plaintiffs, and thereupon the plaintiffs gave him a conditional bill of sale of these goods, together with other goods then sold. If we assume that this constituted, between Lanyon and the plaintiffs, a bona fide sale for a valuable consideration, and that the instrument given was a valid bill of sale, — neither of which questions do we feel it necessary to decide — we must conclude that the oral declaration that Lanyon placed the plaintiffs in possession of these goods, without any act indicating a change of possession, did not constitute a change of possession sufficient to convey title as against an attaching creditor. The plaintiffs concede this rule. In their brief they say: "General creditors, without a doubt, might have attached upon a claim against Lanyon the property which had been sold by the plaintiffs to Lanyon prior to the date of the execution of the conditional bill of sale; that is, creditors whose claims were in existence at that time." Equally ineffective would such a claimed change of possession be against a subsequent purchaser acquiring possession without notice, or against a prior purchaser who subsequently acquired possession without notice. The finding shows that the plaintiffs never purchased these goods of Lanyon. At most, all that they obtained was a mortgage of these goods as security for the payment of their debt. Morin v. Newbury, 79 Conn. 338, 340, 65 A. 156. "When a mortgagee leaves the property mortgaged in the possession of the mortgagor, possession under such circumstances may be treated as an index of title; it is inconsistent with the real transaction which demands a change of possession, and the mortgagee deliberately puts himself in a false position." Romeo v. Martucci, 72 Conn. 504, 510, 45 A. 1, 99.

However good this security may have been between the parties to the conditional bill of sale, it cannot prevail against Rowell, who took possession having neither actual nor constructive notice of it. Rowell had the right to take possession of the goods he had previously purchased, and his right to take possession would have been no better had it been exercised coeval with his purchase. Lanyon retained possession of these goods until he vacated his offices. There was, and there had been, nothing to indicate his sale to the plaintiffs. Upon his vacation of the offices Rowell took possession of them and of these goods, and held possession of the goods until the replevy from him some sixteen months later. Rowell had no notice of the plaintiffs' claim to these goods. He came into their possession by virtue of a prior bona fide purchase for value, and his possession and title are unquestionably good against the plaintiffs.

Whether the plaintiffs be regarded as purchasers or mortgagees of these goods, the position in which they find themselves was of their own making, and their loss is due to their direct failure to take the goods out of Lanyon's possession into their own. Their loss is in no legal sense attributable to Rowell, and the finding explicitly negatives any suggestion of fraud on his part.

The facts found show that Rowell had the lawful possession of the goods as a bona fide purchaser at the time of the replevy. Under such circumstances, a demand and refusal to comply therewith within a reasonable time were prerequisites to the action of replevin. Lynch v. Beecher, 38 Conn. 490, 493. There was nothing of the kind in this case.

The appeal does not raise the question of the right of the plaintiffs to bring a single action of replevin against the three defendants, each of whom was in the separate possession of some of the goods replevied. Lest our silence be construed as approval of the method adopted in bringing this action, we observe that the case presents a clear instance of misjoinder of parties and causes of action.