The essential error in the common theory of debt, is, that it supposes that the creditor acquires no present right of property—at the time the contract is made, or at the time he pays his value to the debtor—in the equivalent which the debtor promises to pay or deliver to him; that he only acquires a right of property in this equivalent when it is finally delivered, or paid to him—which may be days, months, or years after he has really bought it and paid for it. It supposes that he pays his value to the debtor, and passes his right of property in it to the debtor, without at the time acquiring, in return, any equivalent right of property in the value which the debtor is to pay, or to deliver to him.
This error results, in part, in this way, to wit; because the value sold by the debtor to the creditor, is, at the time of the sale, merged in the whole value of all the debtor’s property, and is to remain so merged until it is finally separated and converted into money, for the purpose of delivery, we overlook the fact, that the right of property in it has nevertheless as much passed to the purchaser, (that is, to the creditor,) as if it were already separated from the mass of the debtor’s property, and delivered to the creditor.16
This error is further strengthened by our confounding, in the first place, the idea of a promise, and the obligation of the debt; and, in the second place, the right of property, and the delivery of the property itself. The promise, and the obligation of the debt, as we have already seen, are entirely distinct matters. So also the right of property, and the delivery of property, are entirely distinct matters. Neither depends at all upon the other.17 The right of property is acquired when it is bought and paid for; the delivery only gives the owner the possession of what was already his. A creditor, therefore, acquires a right of property in the value promised to him, at the time he pays his value for it—whether the actual delivery or payment of the value promised takes place at that time, or months, or years afterwards. If this were not so, the creditor, during the whole period, between the time when he pays his value to the debtor, and the time when the debtor finally delivers or pays to him the equivalent value, is without any right of property at all, either in the value he has parted with, or in the value that he is to receive for it. And if he has no rights of property, during all this time, to either of these values, he has, of necessity, no rights at all in reference to them; and never can have by virtue of his contract. He only holds a promise, which could be used as evidence of his rights of property, if he had any such rights; but which, on the theory that he has no such rights, can be of no use whatever.
If it be now established, that the value paid by the creditor to the debtor, and the value promised by the debtor to the creditor, are merely equivalents, that are mutually bought and sold for each other; and if it be also established that the right of property, in each of these equivalents, passes to its purchaser, at the same time that the right of property in the other equivalent passes to its purchaser, to wit, at the time of the contract, instead of at the time of delivery, these facts furnish us with an explanation, or definition of the true legal obligation of a debt. They define this obligation to be the obligation of a seller to preserve for, and deliver to his purchaser at a time agreed upon, value, which he has sold him, and the right of property in which has already passed to him.
If this definition be correct, a debt (or sum due) is merely an amount of value, which has been sold by one person to another, and is to be delivered to him at a time subsequent to the sale. And a debtor is merely one, who has sold value to another, but retains the custody and use of it for a time after the sale, and is bound to deliver it to the purchaser, on demand, or at a future time agreed upon.
If these definitions of debt, debtor, and the obligation of a debt, are correct, they prove that from the time the contract (by which the debt is created) is entered into, up to the time the value due is to be delivered, the debtor is the mere bailee of the creditor; for a man, who continues to hold property, that he has sold to another, is merely the bailee of the purchaser; he is the mere holder, user, and hirer of the value, which he himself has sold, but not delivered; and all the necessary consequences of bailment follow; and the legal principles of bailment apply. One of these principles, as has before been stated, is that if the property bailed be lost or injured during the bailment, without any fault or culpable neglect on the part of the bailee, the loss falls on the bailor, or owner.
Second Argument.
It is a principle of natural law, that a contract for the conveyance of property is void, unless there be property owned by the maker, for the contract to attach to, at the time it is made. If, for instance, A should give to B, a deed of a farm, which A did not own, the deed would be void. It would convey no rights to B, simply because A owned no such farm for the contract to attach to—or, what is the same thing, because it is, in the nature of things, impossible that he could convey to B any rights, which he did not himself possess. And even if A should afterward become the owner of the farm, the deed that he had previously given of it to B, would give B no title to it. To convey the farm to B, a new deed would have to be given, simply because, at the time the first deed was given, A had no right of property in the farm, for his contract to attach to and convey. His first deed being void, at the time it was given, it could never afterwards be made a legal conveyance of rights subsequently acquired.
Again. If A should make a contract, purporting to convey to B his (A’s) right, as heir, in his father’s estate, while his father was yet living, the contract would be void, simply because, while his father was living, he had no right, as heir, in his estate. And even after his father should have died, and he should have become heir to his estate, B could not hold it under any contract that had been made prior to A’s becoming entitled as heir—all for the simple reason, that at the time the contract was entered into, there was no legal right or property in A, for his contract to attach to and convey. And if it attached to nothing at the time it was entered into, it never could attach to anything. No contract, that a man can enter into at one time, can, in the nature of things, be made a legal conveyance of any rights which he did not then possess, and which he should only acquire subsequently.
If A were to give to B, a bill of sale of a horse, which he (A) did not own, B would acquire no rights to the horse by it; simply because A had, at the time, no ownership, or right to the horse, that he could convey. And even if A should afterwards become the owner of the horse, B could not hold him, or claim him, under the bill of sale that had been previously given—solely for the reason that, as there was no right of property, in A, to the horse, at the time the bill of sale was given, the contract was void. It conveyed nothing, because the maker of it had no rights that his contract could convey. There was nothing for the contract to attach to. The contract being void at the time it was entered into, nothing that might happen afterwards could make it a valid conveyance of rights subsequently acquired. B could then get the horse only by a new sale, or a new contract, to be made after A had become the owner of the horse.
In all these three cases, that have been named, where the sale proved void, for want of any right in A to the thing purported to be sold, B could recover back his consideration money, on the ground of its having been paid without any equivalent, or value received. And in an action to recover it, he could use the deed, bill of sale, or other contract, as evidence that he had paid the consideration money; but the contract itself would convey him no rights, either to the land, the inheritance, or the horse, simply because A, at the time of making the contract, had no rights that he could convey. And B would recover his consideration money, solely because the grant or contract had conveyed him no rights.
These cases are put simply to illustrate the principle, that a contract, for the conveyance of property, is void, and conveys no rights whatever to the grantee, unless the grantor be the possessor, at the time the contract is entered into, of the rights his contract purports to convey. Any subsequent ownership, that he may acquire, is not transferred to the grantee by any contract made previous to his becoming the owner. There being, in the grantor, at the time the grant is made, no such rights as the contract purports to convey, the contract is void, inoperative; and being void at that time, nothing