Complete Works. Lysander Spooner
whether he were already in debt? If his debtor were to answer falsely, and thereby induce him to give him credit on the idea that his (the debtor’s) property was free from any prior lien, the act would be one of swindling towards the prior creditor, and would be properly punishable as swindling, especially if the prior creditor should suffer any actual harm from the second lien; and perhaps it would be the same if he did not suffer any. The case would be parallel to that of a man, who, after having given one mortgage of land, should afterwards, before that mortgage was recorded, give another mortgage to another person, who had no knowledge of the first mortgage; and should thereby deprive the first mortgagee of his prior lien.
Debtors would have little or no temptation to practise such frauds; for it would not only make them liable as swindlers, but also liable in damages, where any actual loss should be suffered by the first creditor; and for these damages their future earnings would be liable forever, as will hereafter be shown, and not merely their present property, as in case of debt. If, therefore, a debtor should be unable to obtain a second credit on account of the lien of a prior one on his property, his true course would be to do the best he could with the means in his hands, until his present debt should come to maturity, then pay it, or pay to the extent of his ability, and thus cancel it. He would then be free to contract a new one.
It perhaps might be expedient for debtors, when contracting second debts, to take written acknowledgments from their creditors that their former debts (naming them) were disclosed to them. This would put it out of the power of creditors to impute fraud to their debtors; and would also prevent any collision between creditors as to the order of their respective rights. Probably, however, this precaution would be unnecessary, for the burden of proof would always be upon the second creditor to show the fraudulent concealment, and not upon the debtor to prove his disclosure, or that no disclosure was asked. The second creditor’s own testimony would be inadmissible to give himself a prior lien; and, uncorroborated, it would be suspicious testimony even in a criminal prosecution for swindling. The probability, therefore, is, that for want of proof of any fraud, if for no other reason, there would be no collision among creditors, as to the order of their respective liens, unless second creditors, at the time of giving credit, should take written declarations from their debtors that there were no prior liens on their property. And debtors would not, of course, dare to put false declarations of that kind in writing, because they would thereby convict themselves of swindling. So that there would be no collision among creditors on this ground unless in some few cases, where debtors might be such open villains as to put their fraudulent representations in writing.
The principle stated in this note would be no obstacle to a debtor’s selling or exchanging any property in his hands for an equivalent value of a different kind, provided he should act according to his best judgment, and with no intent to lessen the value of his creditor’s security; because the lien of his creditor is not a special lien on specific articles of property, (none such being designated by the contract,) but upon the amount of value that inheres in all the property in his hands—which value he has an implied authority from the creditor to convert into different forms, by labor and traffic, at his discretion, (as will be more fully shown in the next chapter.) And when he sells an article for money, or makes an exchange of it for another commodity, the exchange is a mere conversion of the same value into a different form. The creditor’s right attaches to it, or adheres to it, in its new form, in the same manner, and to the same extent, that it did in its original one.
15. Ogden vs. Saunders, 12 Wheaton, p. 340.
16. Suppose A sells to B, and receives his pay for, an hundred bushels of grain, out of a certain mass consisting of a thousand bushels; and A promises that he will separate the hundred bushels from the mass in which they are merged, and deliver them to B in one month from the time of the contract. In this case the right of property in the hundred bushels, passes to B, the purchaser, at the time of the contract—and if the mass should be destroyed before the delivery, (without any fault on the part of A) the loss of the hundred bushels would fall upon B, the purchaser and owner of them. And this is but a parallel to the case of debt, where A should sell to B, and receive his pay for, an hundred dollars’ worth of yalue out of his (A’s) whole estate; and should promise that this hundred dollars’ worth of value should be separated from the mass of his estate, (in which it is merged,) converted into money, and delivered to B, the purchaser, (or creditor,) in one month from the time of the contract. In this case, as in the case of the grain, the right of property in the hundred dollars’ worth of value, would pass to B, the purchaser of it, at the time of the contract; and if the whole estate of A, in which B’s hundred dollars’ worth of value was merged, should then be lost or destroyed prior to the delivery, without any fault or culpable neglect on the part of A, (the bailee, or debtor,) the loss of the hundred dollars’ worth of value would fall upon B, the purchaser and owner of it.
17. The delivery may sometimes be important as evidence of the right of property, when there is no other evidence of it. But it is of no importance to the right itself, if the right can be proved by any other testimony. And a promise to deliver property, and an acknowledgment that the property has been paid for, (as in the case of a promissory note,) are as good evidence that the right of property has passed to the promisee, as is the delivery itself.
18. The validity of this assent, for the conveyance of property, results from the facts that men have an inherent right to dispose of their property; that they can dispose of it only by the consent, or assent of their minds, or wills to do so; and that, consequently, whenever this consent, or assent, takes place, it actually passes the right of property, (in the thing to which it applies,) to the person to whom the proprietor designs it to go. It is truo the law requires some outward manifestation of this assent—such as a delivery of the thing sold, or a written or oral contract as proof of it—before it (the law) will declare that the right of property has actually passed to another; but this is required, not because the outward manifestation is of any intrinsic importance, but because we can have no evidence of a man’s mental sensations except from some outward exhibition of them.
19. Although a deed of land, or a bill of sale of a horse may contain an agreement that the possession shall remain in the seller for a time; and although such an agreement would imply that the horse or farm was left in his possession to be used by him, still it would not, as in the case of a note, (or bill of sale of dollars,) imply that the horse or farm might, in the mean time, be converted into any other shape for use, or be exchanged for any other commodity; because the horse and farm, unlike the money, are productive and useful in their present shape.
20. It will be understood, when I say that the right of property in the “money” passes to the purchaser at the time it is sold, or contracted for, (though not delivered until a future time,) that I mean, not the right of property in the identical pieces of money that are to be delivered, or paid, but (for the reasons heretofore given) the right of property in an amount of value, existing in some shape or other, in the debtor’s hands, equivalent to the money, and which is to be converted into money in time for the delivery.
21. This distinction between the liability of a debtor, on his contract, for the money itself, and his liability, for the same amount, in an action on the case for damage, where the loss has been occasioned by his fault or negligence, is an important one in several respects, as regards both debtors and creditors, (as has heretofore been shown,) notwithstanding the amount recoverable in each case should be the same.
22. This prima facie claim may be defeated as to any particular property in the hands of the debtor, clearly distinguishable from the bulk of his property, and which the debtor can show to have been either loaned or given