author: Watkins, J.

text:
    No. 12,690.
    James A. Erwin et als. vs. Charles Chaffe et als., and Tutorship of the Minor Heirs of Mrs. M. C. Erwin, No. 393, Probate; Opposition to Account, (Consolidated).
    Syllabus.
    -A certain sanctity attaches to a judicial sale which has been made after the due performance of all legal formalities and requirements; and, in the absence of clear proof of fraud or unfairness, it is but a reasonable presumption that the public officers and other functionaries have performed their duties in that regard.
    And when the positive evidence of several competent witnesses supports the ap praisement, it is but just, in the interest of an orderly administration of the law, that the validity of such sale be maintained, notwithstanding a number of credible witnesses were produced at the trial to testify that the property was really worth much more.
    ON appeal from the Seventh Judicial District Court for the parish of Madison. Montgomery, J.

      Stone & Holmes, (J G. Hawkes, of counsel), for Plaintiffs, Appellants.
    TF M. Murphy, for Defendant, Appellants.
    Argued and submitted February 23, 1898.

      Opinion handed down November 21, 1898.
    Rehearing refused January 9, 1899.
   The opinion of the court was delivered by

Watkins, J.

Alleging themselves to be the lawful heirs of Mrs. Matilda 0. Erwin, deceased, the five plaintiffs join in this suit against the several defendants, principally, for the revocation and annulment of all the judicial proceeding's and acts of sale and mortgage whereby their alleged title to the property known and designated as the California plantation has been divested, and for other purposes which are ancillary thereto.

On the trial in the court below, there was a judgment pronounced of the following- tenor, viz.:

First — That the plaintiffs be recognized as the heirs of Mrs. Matilda 0. Erwin, deceased; and that they do have and recover judgment in their favor and against M. P. Erwin, tutor, for the sum of $19,500,. with interest thereon at five per cent per annum as follows, viz.: on $10,152.86 from the 5th of September, 1890, and on the remainder thereof from date of this decree.

That the legal mortgage resulting from the registry of an abstract of inventory of the estate of Mrs. M. C. Erwin be recognized for the full amount of said judgment, upon the real estate of said Erwin in the parish of Madison, whether owned by him individually, or as his interest in the residue of the community estate after payment of community debts; and that this mortgage shall take effect and have priority from the date of the registry of said abstract of inventory, viz.: the 30th of September, 1890.

Second — That plaintiffs be recognized as creditors of the community heretofore existing- between their father and mother aforesaid, M. P. and M. C. Erwin; and to them as creditors said M. P. Erwin is decreed liable in solido with said community for the sum of $10,152.86, and interest thereon at five per cent per annum from the. . 5th of September, 1890.

Third — That the plaintiffs be recognized as owners of one-half of the residuum of the community estate, after the payment of community debts.

Fourth — That all the acts of mortgage described in the pleadings as-Raving- been executed by said 1V1. P. Erwin subsequent to the 5th of September, 1S90, on the California plantation, described in plaintiffs’ petition, as well as those executed by subsequent claimants or holders of said plantation, and the claims which those acts purport to secure, be each and all, decreed to be of no effect, either against said community, or against the claims of the plaintiffs, either as creditors off said community, or as owners of one-half off the residuum of same .after payment of community debts.

Fifth — That the claims evidenced by the notes identified with acts of mortgage upon said California plantation as follows, viz.: J.. H. ■Gilfoil and M. P. Erwin to Chaffe & Powell and West, of date 6th of February, 1891; that of M. P. Erwin to J. IT. Gilfoil, of date March 18th, 1892; that of M. P. Erwin to Chris-Sharp Commission Co., of -date 4th of January, 1893, be declared, each one and severally, illegal, and rejected as of no effect as against said community, or the rights of plaintiffs as creditors, or as owners of same.

Sixth — That the sale by the sheriff under executory proceedings styled FI. and C. Newman vs. M. P. Erwin et ads., of date 15 th of April, 1893, and adjudication of said California plantation thereunder to the defendant, J. B. West, and the act of sale of same date by said West to the defendant, 0. A. Williams, with vendor’s lien and mortgage retained for the purchase price; and also, an act of mortgage of •same date by said Williams to said Chris-Sharp Commission Co., and by said Williams to Chaffe, West & Co. of dates respectively ApriJ 15th, 1893; and by said Williams and said M.P.Erwin of date November, 1894; and act of sale by the sheriff to Charles Chaffe of date 24th of August, 1S95, be, each one and all, decreed to be null and void and of no effect.

Seventh — That said California plantation be recognized as, and decreed to be the property of the said Erwin community and that possession of same be restored to said community; and that the said defendants, M. P. Erwin, 0. A. Williams, Chaffe, Powell and West, Chaffe, West & Co., and J. B. West, be decreed to be solidarily bound for and required in solido to account and pay over to said Erwin community the rents and profits of same to-wit: the sum of seven hundred dollars per anvmm for the years 1893 and 1894; and that the defendants M. P. Erwin, Chaffe, Powell and West, Chaffe, West and Co., J. B. West and Charles Chaffe be decreed solidarily bound for and required in solido to account and pay over to the said Erwin community the rents and revenues of said California plantation, viz: the sum of seven hundred dollars per annum for the years 1895, and for each subsequent year until possession thereof be restored to said community,, and that said several sums of seven hundred dollars each bear interest at the rate of 'five per cent, per annum from the 31st of December of the year same is due and payable.

Eighth — That the mortgage executed by M. P. Erwin in favor of' II. and C. Newman, of date January 22nd, 1881, be reinstated as a. valid and existing mortgage upon said California plantation, and recognized as being of the same rank and dignity as it had prior to the 15th of April, 1893; and that Chaffe, Powell and West be recognized as creditors of said Erwin community for taxes paid, according- to an itemized statement annexed; and the amount of said taxes be credited on the judgment herein rendered against them for revenues, and the ba'ance of the judgment against them for revenues be credited on the mortgage note for three thousand three hundred dollars in favor of II. & C. Newman, of which Chaffe, Powell, & West are recognized owners- and holders.

Ninth — That M. P. Erwin be removed from 1hc tutorship of the. Erwin minors, and that their uadertutor take the necessary steps to-obtain the appointment of a suitable person as undertutor for them; and that the account filed by the tutor be so amended as to conform to-the decree.

From that judgment both plaintiffs and all the defendants, except M. P. Erwin, have prosecuted appeals; but one transcript of the proceedings has been filed.

The plaintiffs are the issue of the marriage of M. P. Erwin and' Matilda C. Erwin — one of them being an emancipated minor, and the-other four minors represented by their undertutor, their father and' natural tutor being one of the defendants — their mother having died intestate in 1890, possessed of some separate property and money, and an undivided half interest in the assets of the matrimonial community.

Amongst other valuable properties the community owned and possessed was the California plantation in Madison parish, upon which-rested a conventional mortgage and vendor’s lien securing the payment of a note in favor of IT. and C. Newman for the capital sum of three thousand three hundred dollars falling due January 22nd, 1891 —subsequent to the death of plaintiffs’ mother.

It is alleged that the defendants, Ohaft'e, Powell, and West,, through the instrumentality of, and co-operation with their father,. M. P. Erwin, subsequent to their mother’s death, acquired said note and mortgage of II. and C. Newman, and foreclosed said mortgage in the name of the latter — in executory proceedings entitled II. and 0. Newman vs. M. P. Erwin — and caused the California plantation to be adjudicated to J. B. West, another of the defendants, and a member of the firm of Chaffe, Powell, and West, on April ISth,. 1893.

It further alleged, that the purposes and objects to be thereby attained were to divest the community of its ownership of said property and discharge the legal mortgage of the plaintifls thereon, resulting from the recordation of an abstract of an inventory of the property of the community, on the 30th of September, 1800.

That it was further agreed by the aforesaid parties, that said adjudicatee should transfer said California plantation to a party to be-interposed for Erwin and that, to carry out and consummate that, agreement, one C. A. Williams, a nephew of Erwin residing in the-adjoining parish of East Carroll, was selected as the person to take title to the property, and hold same for Erwin, and that the property was conveyed to him accordingly.

This adjudication to West, and his conveyance to Williams, are attacked in this suit, and their annulment and revocation is the chief aim and object to be thereby attained; and it is charged that all the-various sales and mortgages, etc. thereafter made, are necessarily,, subsidiary thereto azid founded thereon.

The plaizitiffs allege, that at the death of their mother on September 3th, 1890, not only was she the owner and possessor of separate paraphernal money and property in her own right, but that the community was solvent and perfectly able to satisfy all just demands against it, including that of H. and C. Newman under which said sale was made to West; and, hence, there was no occasion for the same to have been made.

That H. and 0. Newman were not urging or demanding payment of this debt, but, on the contrary, had, but recently previous to said' agreemezit under which said sale was made, granted Erwin an extension of twelve months; and that they only yielded an acquiescence therein at the request and entreaty of Erwin and West; and that a-sale made under such a state of facts is illegal and void, and in violation of their rights as beneficiary heirs of their mother, and should be annulled and revoked — especially in view of the fact that the sale was made for a wholly inadequate consideration.

The plaintiffs charge, that it was stipulated and agreed by and between Erwin and Chaffe, Powell and West, as one of the considerations thereof, that the person who was selected to receive title was to ■execute a note and first mortgage on the property in favor of H. and C. Newman for the amount of their debt; another note and mortgage for several thousand dollars in favor of the Chris Sharp Commission Company of St. Louis; and, also, to lease, same to Erwin and waive his lessor’s lien on the crops on the plantation in favor of Chaffe, Powell, and West, to whom he was to further mortgage same for several thousand dollars, to secure the crop advances they had agreed to make to Erwin in 1893.

These stipulations plaintiffs allege to have been consummated and ■carried out by the conveyance of West to Williams, and by Williams to the parties aforesaid; and these acts and transactions are pointed ■out by the plaintiffs as conclusive proof that the price of adjudication to West was wholly inadequate, notwithstanding same appeared to have been two-thirds of the amount of the appraisement as made— they being no parties thereto, individually.

The plaintiffs charge, thar any and a.ll matters of indebtedness which figure in the various transactions named, were contracted, if at all, subsequent to their mother’s death, and did not bind the community, and, that same, in no manner, inured to their benefit or advantage, and can not be treated as any part of the legal and valid consideration of said acts.

The defendants rest their case solely upon that judicial sale to West, and affirm that the price paid was the full value of the property; and they insist, that, notwithstanding West conveyed the property to Williams immediately after the sale to him at the request of Erwin, for the price of nine thousand dollars, the same was wholly upon terms of credit, and Williams having failed to make any payment thereon, Chaffe, Powell and West foreclosed the mortgage and the property was adjudicated to C. Chaffe for Chaffe, Powell, and West, at the price of three thousand dollars, thus evidencing the fact that nine thousand dollars was an excessive valuation therefor.

On the law and evidence, the Judge a quo sustained the plaintiffs’ view and annulled the sale of April, 1893, and, likewise, all the acts of sale and mortgage which were thereon subsequently executed; and. it, at the same time, reinstated the Newman mortgage in the name of Chaffe, Powell, and West as the assignees thereof — recognizing same-as ranking the plaintiffs’ legal mortgage.

The effect of the aforesaid decree is to restore the California plantation as it stood at the time of the dissolution of the community and. to recognize the plaintiffs as creditors of the community for the sum of ten thousand one hundred and fifty-two dollars and eighty-six. cents, with legal mortgage from date of registry, September 30th,. 1890, and as being entitled to one-half of the residuum of the community after its debts have been paid.

Its further effect is, that neither the rights and claims of the plaintiffs shall be, in any way, affected by either the acts and transactions-of the defendants, nor either of them, or by the claims, or matters of account which figure in them.

The plaintiffs proceeded by rule against M. P. Erwin, tutor, to account, and when he had filed his account, they filed an opposition thereto demanding an increased allowance in their favor; and those proceedings were cumulated with the principal action and the whole ' were tried together and but one judgment rendered.

From that decree the tutor has not appealed, and neither of the appellants has made any assignment of errors in this court, nor presented any application for the alteration in the amount thereof.

The contentions of the plaintiffs are sufficiently summarized in-their brief as follows, viz:

That the judgment should be amended in the following particulars (1) by rejecting the claim of Chaffe, Powell and West, as the - owners and assignees of the Newman debt; (2) by rejecting their claim for taxes paid; (3) by increasing the amount of the annual’ rental of the California plantation and the plaintiff’s credits in connection therewith; (4) by increasing the amount of their allowance against the community on account of the paraphernal claims of their' mother.

As appertaining to these numerous and complicated issues, the following statement will suffice for a perfect understanding of the situation, to which our opinion must be chiefly directed, viz.:

1. That the community owed Mrs. Matilda C. Erwin, at her death,, a paraphernal debt of ten thousand one hundred and fifty-two dollars and eighty-six cents, which is recognized as due to the plaintiffs as her legal heirs, with legal mortgage from the 30th of September, 1890, the date of its registry.

2. That II. and C. Newman held a note of M. P. Erwin for the .sum of three thousand three hundred dollars, of date January 22, 1887, secured by mortgage and vendor’s lien on the aforesaid California plantation, falling due on the 22d of January, 1891, and that .same was a community debt, and the mortgage securing same was the first and ranking incumbrance thereon.

3. That Chañe, Powell & West were the owners and holders of two notes aggregating five thousand one hundred and sixty-seven dollars, of date March 18, 1892, secured by an act of mortgage which was executed by M. P. Erwin on his undivided one-half of the California plantation, and that said notes purport to evidence the balance which the community owed, at that date, to the firm of Gilfoil & Erwin, a planting and commercial partnership — Erwin having personated the community therein.

4. That Chañe, Powell & West held a mortgage upon other property of date 6th of February, 1891, for the sum of eight thousand eight hundred dollars, and that same is by defendants alleged to be .an indebtedness of the community.

5. That M. P. Erwin executed an act of mortgage on the California plantation on the 4th of January, 1893, for the sum of two thousand five hundred dollars, confessedly a community indebtedness.

6. This was the state of affairs on the 15th of April, 1893, when, under foreclosure proceedings, J. B. West became adjucatee of the California plantation, for the use and benefit of Chaffe, Powell & 'West, for the price of about four thousand three hundered dollars, the said firm having purchased the note and mortgage of II. and C. Newman and used their names in the executory proceedings.

7. That the property was appraised at the sum and value of six thousand dollars contradictorily with M. P. Erwin, tutor, and the bid ■ of J. B. West exceeded two-thirds of that amount.

8. That on the day of the sheriff’s sale, the 15th of April, 1893, J. B.West, the adjudicatee, conveyed said California plantation to one C. A. Williams, of the parish of East Carroll, and a nephew of M. P. Erwin, for the sum and price of nine thousand dollars, exclusively upon terms of credit, retaining a mortgage and vendor’s lien upon the property.

9. That on the same date the purchaser, C. A. Williams, executed .a mortgage on same property in favor of the Chris Sharp Commission Company for two thousand eight hundred dollars^ same being a community indebtedness.

10. That on the same date said 0. A. Williams executed another mortgage on the same property in favor of Chaffe, Powell & West for • eight thousand eight hundred dollars, same purporting to secure crop .advances to be made to MI. P. Erwin as his tenant during the year 1893.

11. That said Williams executed a like mortgage in favor of ■Chaife, Powell & West for a like sum, securing similar crop advances, .and bearing date of November, 1894.

12. That C. Chaffe, representing Chaffe, West & Co., successors to ■Chaffe, Powell & West, became the purchaser of the California plantation on the 24th of August, 1895, at the price of three thousand •dollars, under executory proceedings in the foreclosure of the mortgage C. A. Williams executed in favor of J. B. West, he having made •default in the payment of his note at maturity thereof.

From the foregoing statement it is quite evident that the crucial ■question in the case, and that to which our attention must be first •directed, is the validity or invalidity of the judicial salo of the California xfiantation which was made on the 15tli of April, 1893, as upon it depends the validity or invalidity of all subsequent transactions and proceedings.

And for the purposes of the discussion of this question it may be .assumed that the Erwin community was perfectly solvent on the date ■of its dissolution, by the death of MIrs. Mlatilda C. Erwin, on the 5th ■of September, 1890, and that the paraphernal claim of ten thousand ■dollars, which plaintiffs inherited from her, is unquestionably valid .and binding upon the community at the date their legal mortgage was recorded, September 30, 1S90.

The case presented upon the record is that of a creditor of the community wdiose claim is either secured by a mortgage inferior in rank, ■or not secured at all, seeking to improve his situation by purchasing ■a first and ranking' mortgage upon the property of his debtor from another creditor so as to enable him to foreclose the latter and acquire the property without running the risk of successful competition at the •sale, he being a purchaser with full subrogation to the rights of said ■creditor.

The proof discloses, and the fact is, that Ohaffe, Powell & West purchased from Ii. and C. Newman their mortage of three thousand three hundred dollars, with accumulated interest, which antedated the death of the plaintiffs’ mother, paying' therefor the full amount of same principal $nd interest.

That soon after having acquired same they commenced executory proceedings in the foreclosure of said mortgage, same having been inaugurated in the name of IT. and C. Newman, upon the California plantation as the property of the Erwin community, and that all of same were commenced and conducted against M. P. Erwin, tutor, representing the succession and heirs of Mrs. Matilda C. Erwin, and against him personally.

That, after having had same duly appraised and advertised according to law, said property was adjudicated to J. B. West for the use and benefit of Chaffe, Powell & West, the assignees of II. and C. Newman, for the sum of about four thousand three hundred dollars, and credited same upon the writ of seizure and sale — the amount of the bid being in excess of two-thirds of the appraisement of the property.

There is no question of the validity of the II. and C. Newman debt, or of the fact that Chaffe, Powell & West became the purchasers thereof for a valid and full consideration, nor is there any question of the fact that they were creditors of the partnership of Gilfoil & Erwin, and of the Erwin community, subject to settlement.

Consequently, the only question there can be in regard to the validity of the sale is in reference to the adequacy of the price-pretermitting for the present discussion of the plaintiffs’ charge that the parties to the executory proceedings interposed Williams as a person to take title for M. P. Erwin.

From the record it appears that at the time of the death of the plaintiffs’ mother, the California plantation was held and owned, in division, by the Erwin community and J. II. Gilford, the latter ■ being the owner of one-fourth, and the former of three-fourths.

That in 1891, subsequent to her death, proceedings were commenced for a partition thereof, and later a division in kind was made, the plaintiffs representing the community acquiring about seven hundred and eighty acres in full ownership.

Of this, the plaintiffs claim, and the trend of their testimony is, that there is about six hundred acres in cultivation, and.was at the date of the death of Mrs. Erwin, and of the date of sheriff’s sale.. That its rental value was three dollars to six dollars per acre, and that its sale value was from twelve thousand dollars to fifteen thousand •dollars, at those dates respectively. And the plaintiffs cite the fact as •one possessing some significance; that the whole property was estimated in the partition proceeding- at twenty-three thousand dollars, .and that their share would be equal to seventeen thousand dollars.

They charge in their petition that, in the course of the executory proceeding's which led up to the judicial sale of April 15, 1893, two .appraisers were selected and appointed to value the property, and “that they were induced to and did falsely appraise and value same at ■ the sum of six thousand dollars, which was less than one-third of its value at the time of the appraisement,” but an examination of the testimony fails to.disclose any such a state of facts.

The testimony of a great many witnesses was taken, and they ■entered into all the details and particulars applicable to the California plantation and many other plantations in its immediate vicinity, but it would serve no useful purpose to attempt an analysis of it. Suffice it to say that it shows that the California plantation embraces about six hundred acres of cleared land, and is situated about one mile back from the Mississippi river, and in the rear of other plantations which .arc in front of it and situated on the bank of the Mississippi river.

Some of the plaintiffs’ witnesses testify that all of the cleared land, •or nearly all, was in cultivation in 1890 and 1893, and produced full • crops, and several of them state that the plantation as a whole was worth at the date of the sheriff’s sale, in April, 1893, as much as twelve thousand dollars, or fifteen thousand dollars.

One of them who professed great familiarity with the place said that, in his opinion, it was worth ten thousand dollars, or twelve thousand dollars.

By one witness, for the defendant, who cultivated this plantation in 1876, and knew it quite familiarly subsequent to that time it was, said it was badly damaged by the overflow of the Mississippi in 1882, and that was the means of closing' its jn-incipal drains, which pass to the rear, and that same reduced the cultivable area and consequently its value very greatly as a plantation.

Another witness says that, to his knowledge, there is great deal of the open land on the plantation, in the rear portion thereof, which has been badly drained for many years, and, on that account, same has '.been rendered very unproductive.

Another witness states that a large portion of the plantation has remained uncultivated since 1892, and :the uncultivated portion has been allowed 1o grow up in weeds, and on that account he is of opinion that it could not have been sold for as much as five thousand dollars in cash in April, 1893.

Another witness testified that there was no gin on the plantation,, and had not been for many years, and that great inconvenience resulted from that fact to its operation.

Two other witnesses state, positively, that six thousand dollars was-a full valuation for the property in April, 1893, and the sum of four thousand three hundred and thirty-five dollars, bid by I. B. West at the sheriff’s sale, was reasonable and quite as much as either of them would have given for the property in its condition.

It further appears that quite a disastrous overflow of the Mississippi river occurred in May, 1893, immediately subsequent to the sheriff’s sale, whereby the California plantation was inundated and greatly damaged, and, naturally enough, witnesses in testifying some-years afterward of the value of the property were somewhat confusing in their statements, and in many instances inaccurate.

A careful examination and scrutiny of the testimony have not'served to confirm us in the correctness of the conclusions arrived at' in this regard by our learned brother of the District Court; on the contrary, it has satisfied us that under all the circumstances the appraisement of the property at six thousand dollars was a reasonably fair valuation therefor.

A certain' sanctity attaches to a judicial sale which has been made after the due performance of all legal formalities and requirements, and in the absence of clear proof of fraud, or unfairness, it is but a reasonable presumption that public, officers and other functionaries-who participated therein have performed their duties in that regard.

And when the positive evidence of several competent witnesses-supports the appraisement, we feel disposed, in the interest of an-orderly administration of justice, to maintain the validity of the sale, notwithstanding a number of witnesses have been produced at the trial to testify that the property sold was really worth much more.

With reference to the plaintiffs’ charge that the sheriff’s sale was one of consent, and intended by all the parties thereto as a means of investing a title in M. P. Erwin, and that Williams was a person-interposed to carry that purpose into execution, there is need of but little being said.

From all the evidence, we think it clear that Chafe, Powell & West being creditors of the community, and of M. P. Erwin individually, were desirous of bettering- their condition by acquiring the note of II. and Ü. Newman against the community, particularly in view of the fact that same was secured by a vendor’s lien and mortgage, and ranked all other debts of the community, and on that account purchased same with full subrogation to all of their rights and privileges..

That was a valid transaction, and at a sale in the foreclosure of said mortgage, J. B. West, representing Chafe, Powell & West, had a perfect right to buy the property.

Consequently, if it be admitted to have been the preconceived, intention of that firm that the property should be thereafter conveyed, to Williams as a party interposed for M. P. Erwin, and that same was an illegal transaction, the revocation of same would only result in. reinvesting the title in them, and not in its annulment.

Being invested with a title by the sheriff’s adjudication, they had a. perfect right to sell the property to any one they chose, and that being the case there was not the slightest impropriety in their making am agreement beforehand to sell to some designated person, unless such person was an intending purchaser with means to buy.

Of course such arrangements should not be employed as a means of suppressing bids or preventing competition at the sale.

Such was the conclusion this court arrived at in the case of Mortgage Company vs. Pierce, 49 An. 390.

The complaint made in that case was of minors; that the judicial sale was a matter of an agreement and combination between their father and natural tutor and the' mortgage creditors, the object of which was to vest a title in their father.

In the course of our opinion the Chief Justice, speaking for the court, said: ,

“The British and American Mortgage Company had the legal right to enforce payment, and neither Bierce, nor the succession of the wife, could control the corporation in the exorcise of that right.

“They were without power to stay the executory proceedings which followed. The sale which resulted from these proceedings was a * public one at which any person was at liberty to buy. Had the seizing creditor bought for precisely the same price for which the property was adjudicated, there certainly could have been no legal obstacle in the way of its doing so if the proceedings themselves were proper and legal. Nothing was done, or alleged to have been done, which was either intended to deter bidders or to have resulted in doing so.

“It is argued that the price bid was much below the actual value of the property, but the mortgagor, the mother of the intervenors, had herself waived the benefit of appraisement.

“There was no legal reason why Hoffman, of the firm of Shattuek & Hoffman, could not buy the property at the offering.

“When the adjudication was made to him, and the price under the •orders of the attorneys of the seizing creditors was credited upon the writ, the debt of Mrs. Pierce was instantly, as between her and the British and American Mortgage Company, paid and extinguished, and the ownership of the property passed at once to Hoffman. * * * If either the seizing creditor, or Hoffman, looking forward to the possibility of becoming a purchaser at the sale, had, in view of that contingency, made promises or arrangements, based upon that fact, with Pierce,'this would have been doing with their own what they had a right to do. If the title passed to Hoffman by the sale as it did, the seized debtors had no ground of complaint; certainly none so far as Hoffman was concerned that he should make use of his own ownership so as to benefit their father. They might be able to find fault with their father that he should not subsequently have given them the benefit of any arrangement which he had been able to malee, but they could not make their father, preferring to follow his own interest rather than theirs, if such was indeed his course, turn to the disadvantage of Hoffman who owed them no duty.”

That is a case quite similar in all of its leading features to the instant one.

See also Amato vs. Ermann & Cahn, 47 An. 976; Gilkerson, Sloss & Co. vs. Bond & Williams, 44 An. 844, both of which are of like tenor.

The result of the foregoing conclusions is to maintain the sheriff’s sale to J. B. West for the use of Chaffe, Powell & West, under the executory proceedings in the foreclosure of the mortgage and vendor’s lien of H. and 0. Newman on the 15th of April, 1893, and the effect of this decree will be to reinstate all the sales and mortgages' which were predicated thereon, subsequently, and to leave all of those preceding said sale in the condition in which they were after the sale was made.

This decree will not, in any manner, affect the judgment of the judge a quo in respect to the community, or the settlement thereof, as its scope and effect are to eliminate the California plantation therefrom, only.

It is therefore ordered, adjudged and decreed, that the judgment appealed from be so amended as to reject and disallow that portion of the plaintiffs’ demand which relates to the annulment of the sheriff’s sale and adjudication to J. 33. West of the California plantation, of date April 15, 1893, and all the acts and transactions appertaining thereto, and to maintain the validity and legality thereof, and that as thus amended same be in all other respects affirmed, the cost of. appeal being taxed against the plaintiffs and appellants.


source: Caselaw Access Project

author: Waticins, J. Breaux, J. Miller, J.

license: Public Domain

text:
    No. 12,571.
    Numa Jordy vs. Sophie Muir, His Wife.
    Syllabus.
    Jurisprudence has affirmed the principie, that the ability of the wife to acquire;, during the marriage, property in her own name and for her separate, paraphernal account, is an exception to the general rule which is established by the Civil Code, and it must be strictly and rigidly construed.
    That, in order to sustain her title, she is required to prove that she had paraphernal effects at her disposal adequate to enable her to make the new acquisition.
    That it is against the policy of the law, and the spirit and letter of our system-of legal community, to sanction contracts made by married women, under the pretext of investing her paraphernal effects when the amount invested bears no just proportion to the value of the property that is substituted therefor.
    On Reiieauing.
    The recital in the act by which the wife purchases, that it is made with her paraphernal funds, the husband a party to the act, the sale made on credit, is evidence for her to charge the husband with the amount of the cash payment, it being established he subsequently sold the property and received' and applied the proceeds.
    ON APPEAL from the Civil District Court for the Parish off Orleans. Them'd, J.

      Armand Romain and Charles A. Butler for Plaintiff and Appellee.

      A. B. Philips and Albert Voorhies for Defendant and Appellant.
    Argueed and submitted April 18, 1898.
    Opinion handed down May 30, 1898.
    Rehearing granted June 30, 1898.
    Argued and submitted (on rehearing) November 7, 1898.
    Opinion handed down January 9, 1899.
   The opinion of the court was delivered by Watkins, J.

The opinion of the court, on the application for rehearing, was delivered by Breaux, J.

The opinion of the court, on rehearing, was delivered by Miller, J.

Waticins, J.

The demand and prayer of the plaintiff are for a judgment of divorce, a vinculo matrimonii, from his wife, the defendant, forever dissolving the bonds of matrimony between them, and granting him the custody of their minor children.

On the trial there was judgment rejecting the plaintiff’s demands, and one rendered in favor of the defendant, decreeing a separation a mensa et thoro, and giving- her “the permanent care and custody of the minor children” of the marriage, the defendant’s money demand being- dismissed.

In the lower court the defendant filed a rule for a new trial solely ■on the ground that her money demand against her husband had been rejected, affirming the correctness of the judgment in all other respects, and the same having been discharged, she prosecutes this appeal, the plaintiff having acquiesced in the decree as rendered, confessing thereby that the charge of adultery he had preferred against his wife was not sustained by the evidence.

Hence the question presented for decision is rather one of money than of divorce.

In the answer of the defendant she avers that “in the month of April, 1895, she gave to her husband her check for two thousand three hundred dollars, proceeds of the sale of her paraphernal property, old No. 232 N. Galvez street, which said property was sold for two thousand five hundred and fifty dollars, he receiving the check from her amounting to two thousand three hundred dollars, and that he collected same, and converted it to his own use,” for which sum she prays judgment against him personally.

It appears from other averments of her answer that those alleged transactions occurred during the marriage, which was celebrated on the 11th of March, 1879, and the deed of sale which was executed in favor of the defendant bears date December 10, 1886.

The position assumed in argument by defendant’s counsel is that the property acquired thereby became the separate paraphernal property of the wife, and that the proceeds of its sale were likewise; and the receipt and use of the proceeds by the husband created a paraphernal indebtedness in her favor for which she is entitled to recover judgment in such suit as this.

On the contrary, it is assumed in the argument by plaintiff’s counsel that the property purchased became and was an asset of the matrimonial community at the time existing between the spouses, and that the proceeds were likewise — the purchase price of said property having been paid with funds and money of the community.

To this last contention defendant’s counsel replies that the plaintiff is equally estopped from urging the aforesaid plea as a defense, because he appeared before the notary who passed the act of sale, and in his presence, and that of witnesses, signed and ratified the sale to his wife as parairhernal property, and can not now be heard to gainsay or deny that act of ratification and acquiescence in an action to which the husband and wife are the only parties — no creditor of either asserting any interest therein.

For this last contention counsel for the defendant relies upon the support furnished by the opinions of this court in Kerwin vs. Hibernia Insurance Company, 35 An. 33 and Maguire vs. Maguire, 40 An. 579, and having consulted those decisions we have found that the plea of estoppel was maintained in each of them.

But in Succession of Bollando, 41 An. 491, the court held thats under appropriate averrments, error might be shown, the act reciting that the property “was acquired by (the) wife with her paraphernal funds and for her separate benefit and advantage, although (the husband) was a party to the act.”

And in the same case (42 An. 24) we repeated what was said in the first report of that case; that the husband “must be held to establish the error by strong, legal, and convincing evidence.”

But even giving' the defendant the full benefit of those decisions, she is, at all events, bound by the recitals which are contained in the act of sale to her.

Consulting- them wo find the following, viz.:

“That Charles Garvey” * * * for the consideration and on the terms and conditions hereinafter set forth and expressed, does by these presents grant, bargain, sell, etc., * * * unto Mrs. Sophie Muir, wife * * of Joseph Numa Jórdy * * * her said husband, with her here present * * * accepting and purchasing with her own separate paraphernal funds, for herself, * * the following described property, to-wit, etc.”

Omitting the description of the property the consideration is thus .stated, to-wit:

“This sale is made and accepted for and in consideration of the price and sum of two thousand five hundred dollars, of which the sum of seven hundred and sixteen dollars and nineteen cents has been paid in cash by said purchaser to said vendor, and for the balance of said price said purchaser assumes and binds herself to pay in the lieu and •stead of said vendor, a certain promissory note, drawn by said vendor to his own order and by himself endorsed, dated 12th of September, 1885, and made payable for four hundred dollars in two years after date” (and secured by mortgage), * * * and for the balance of said price said purchaser has made and furnished her two promissory notes, drawn by him to her order, and countersigned by her said husband to authorize her, dated this day, and made payable each .for the sum of six hundred and ninety-one dollars and ninety cents respectively, at one and two years after date,” and secured by vendor’s lien and mortgage.

From the foregoing it appears that of the total price the sum of •seven hundred and sixteen dollars and nineteen cents only was paid on the execution of the deed, and that she assumed and promised to pay for the vendor a mortgage note which burthened the property, and executed two notes for the aggregate balance of one thousand three hundred and eighty-three dollars and eighty cents, secured by mortgage and vendor’s lien on the same.

The question necessarily arises on the face of the act containing those recitals, whether it carried to the defendant a separate paraphernal title to the property.

We are not disposed to think it did.

In Bouligny vs. Fortier, 16 An. 209, our predecessors gave this question most serious and thoughtful consideration, and in the course of their opinion, said:

“We have stated that the right of the wife to invest or reinvest her paraphernal effects is derived from the liberal interpretations given to Articles 2361 and 2367 of the Civil Code. Were it not so, the investment would inure to the community to the extent of the amount invested. Wo have searched in vain, in our reports, for a case where the right of the wife to invest beyond her means was sanctioned by this court, but we have, on the contrary, found numerous decisions, either setting aside conveyances made to the wife, on her failure to• shoiv adequate means, or maintaining similar conveyances by reason of such adequate means.

“Ellis vs. Rush, 5 An. 116; Squier vs. Stockton, 5 An. 742; Young vs. Young, 5 An. 611; Metcalf vs. Clark, 8 An. 286; Pearson vs. Pearson, 15 An. 119; Clark vs. Norwood, 12 An. 596; Cormier vs. Ryan, 10 An. 688; Bass vs. Larche, 7 An. 104.

“As the ability of the wife to acquire, during marriage, property in-her own name and for her separate account, is, in our jurisprudence,, an exception to the general rule (C. C; 2374). Ir must be, therefore, strictly and rigidly construed and,, consequently, the wife is required not only to -prove that she had paraphernal effects at her disposal, but also that they were ample to enable her, reasonably at least, to make-the new acquisition, othemoise[ the contract will be treated as a contract of the commimity. * * *

“The authority to invest does not carry with it the unbounded liberty to run into wild and ruinous speculations, and was never intended to place the wife, having paraphernal property, on a footing of perfect equality with a wife separated in property by judgment or by contract, as would be the case did we hold the third opponent toller contract.

“We therefore conclude that it is against the policy of the law, and the spirit and letter of our system of legal community, to sanction contracts made by the wife, under the pretext of investing her paraphernal effects, when, as in the case at bar, the amount invested bears no proportion to the value of the property substituted in its place, but on the contrary, that all such acquisitions belong to the community, saving always to the wife her action for the reimbursement of the price contributed by her.”

In that, as in the instant case, the wife attempted to purchase a piece of real estate in her own paraphernal title during the existence of her marriage, to a large extent upon terms of credit, the greater portion of the purchase price being represented by the vendees’ assumption of the vendor’s obligations, which were secured by mortgage on the property.

To our thinking there is a strong analogy between the two cases, in each of which the wife, during her marriage, sought to acquire paraphernal property, largely upon terms of credit, without making any proof of her possession of adequate separate property or revenues to meet her obligations at their maturity.

Under this state of facts it goes without saying that same would have to be mot by the application of community revenues when they become duo, to avoid seizure and sale of the property, and this result demonstrates clearly that the wife had no separate title at the time of the sale.

But there was evidence administered by the defendant at the trial which strengthens the conclusion that the property was not her paraphernal property, same being to the effect1 that the credit of the purchase price was paid by the husband to a great extent.

The statement of Numa Jordy, Jr., one of the children of the marriage, is shown by the following interrogation, to-wit:

“Q. Who paid the notes as they, became due ?

“A. My mother and father both; they both threw in and helped. My mother gave music lessons, and she borrowed money when she did not have the requisite amount — the required amount.”

In addition to this the fact was developed that the plaintiff was in the employ of the firm of Stauffer, Eshelman & Co. at the time the deed was executed, and borrowed from them the sum of seven hundred and fifty dollars on that day, that being about the amount which was paid in cash for the property as recited in the deed.

The cashier of the firm, as a witness, makes the following statement, viz.:

“I will state to the court that when I received instructions to pay ■ out those sums it was stated to me, and instructed, that I should make .a memorandum that this money was to be refunded by monthly payments, and that it was given for the purpose of paying up for a residence.”

After making this statement the following occurred, viz.:

“Q. Will you swear, also, that these advances were made by you as .an agent of the firm, through instructions of the senior member of that firm, and that those instructions were that those advances were to be made on condition and for the purpose of meeting partial payments on a residence — due on a residence ?

“A. To the best of my recollection these were my instructions.”

To the foregoing interrogatory, and the answer sought, counsel for the defendant objected on the ground that the testimony i was “hearsay, irrelevant and incompetent,” and his objection having been overruled he reserved a bill of exceptions.

In our opinion the testimony was relative and competent. It was not hearsay, because the alleged instructions came from the senior member of the firm, and it was not made to appear that they were given primarily by the plaintiff.

This evidence goes to strengthen the inference that is to be drawn from the book-entry showing that the amount the plaintiff borrowed on the day of the sale was the identical money used in making the purchase.

Altogether we are thoroughly impressed with the belief, founded upon the law7 and the evidence, that the sale did not invest a separate paraphernal title to the property in the defendant, and resting our decision upon this basis we feel constrained to hold that the judge a quo decided the case correctly.

Juclgmeut affirmed.

On Application por a Rehearing.

Breaux, J.

Plaintiff sued for a divorce. Defendant reconvened ■and prayed for a separation from bed and board and for a judgment ■on a moneyed demand representing her paraphernal rights.

Plaintiff’s demand for a divorce was rejected.

Defendant’s prayer for a separation a mensa et thoro, and for the-care and custody of the children of the marriage was granted.

To this extent the judgment is a finality. To this length it will be-affirmed by our decree.

Now as to the remainder of the case, relating exclusively to a moneyed demand, defendant applies for a rehearing on the ground that she is entitled to relief, at least, to the amount set forth in her application for a rehearing.

She avers that there is no estoppel in her favor as to the amount, claimed, but that there is proof sustaining her moneyed demand growing out of a declaration contained in an act of purchase made during the existence of the community, to which act her husband was a party. That, subsequently, an act of sale was made during the existence of the community, also signed by her husband, containing' recitals, which she avers also sustain her moneyed demand. The asserted proof contained in these deeds is supported, she alleged, by the-statement of her witnesses.

As relates to this moneyed demand only, a rehearing is granted.

As to it only the issues are left open for re-argument, consideration- and final decision.

Rehearing is refused save as to certain issues stated in foregoing-reasons.

Ox Rehearing.

Miller, J.

The sole issue now before us arises on the‘demand of the defendant aginst her husband for judgment for the amount of her paraphernal funds she claims he received and applied to his own use.

To prove her demand she mainly relies on the statement in the act of sale of immovable property to her that the purchase was with her paraphernal funds, her husband being a party to the act, the purchase-having been effected during the marriage, and it being established that the husband subsequently sold, received'and applied the proceeds¡ of the property thus purchased. The purchase price was part cash and part to be paid on one and two years credit. We held that in a purchase of that character by the wife to maintain her title she must' show that besides the paraphernal funds used in the cash payment she had such means to an amount adequate to make the credit payments, and in this connection we cited the leading case of Bouligny vs. Fortier, 16th Ann. 209. It is insisted on the rehearing that on this branch of the case we failed to give effect to the recital in the act claimed to furnish full proof against the husband that the entire price was paid with paraphernal funds, and of his liability for the proceeds received by him from the sale of-the property.

The right of the wife under our Code to administer and alienate her separate or paraphernal property, has been deemed to carry her right to acquire paraphernal property during; the marriage. Our' jurisprudence in this respect exempts such acquisitions from the general rule, that all property bought during the marriage by either spouse falls into the community. ' But to maintain the wife’s title to property bought by her during the marriage she must prove that such purchases are made with paraphernal funds not under the husband’s administration. Civil Code, Articles 2383, 2384, 2390, 2400. Terrell vs. Cutrer, 1st Rob. 367; Stroud vs. Humble, 2nd Ann. 367; Bouligny vs. Fortier, 16th Ann. 209; Miller vs. Handy, 33rd Ann. 166. In a controversy like this between the spouses, no creditors asserting rights, the recital in the act of purchase that it is made with paraphernal funds, is undoubtedly entitled to appropriate effect and our decisions have accorded that effect. Barbet vs. Roth, 16th Ann. 271; Succession of Wade, 21st Ann. 343; Kerwin vs. Insurance Co. 35th Ann. p. 33; Succession of Bellande, 42nd Ann. 242. When along with that recital the entire price is paid cash, there would seem to be no difficulty in applying the husband’s admission in the recital, to the entire price. In this case, we are asked to give to. the recital the effect of an admission by the husband not only that the cash paymeut was with paraphernal funds, but that the future payments, i. e. the credit portions of the price were paid with such funds. The wife’s capacity to acquire paraphernal property is necessarily limited by the paraphernal means she possesses, and an admission by the husband of her use of paraphernal funds naturally referable to the time when she buys, could not easily be applied as admission of future payments with such means. . On this question of the wife’s competency to buy on credit reason would seem to suggest that in such cases the proof, at least, should be exacted beyond such a recital as we find in this act and should show that she was possessed of paraphernal funds adequate not only for the cash, but to meet the credit payments, and our decisions on the line of public policy, as well as law, have enforced the necessity of such proof. The wife has produced testimony to show she had the means to buy, but we think it fails of its purpose. The testimony tends to prove that after her marriage she gave music lessons, besides followed the occupation of a milliner and borrowed from friends. But the earnings of the wife, not separate in property, fall into the community, and the debts incurred by the spouses arc community debts. Civil Code, Arts. 2402, 2403. Davock vs. Darcy, 6th Robinson, p. 342; Chauviere vs. Fliege, 6th Ann. p. 56. Hence payments of the credit installments of the price from such resources would not aid her pretensions in this controversy, that the property was paraphernal.

This is not, however, a demand for the property; that has been sold, the husband has received the proceeds and she seeks a judgment against him for the amount of the proceeds as her paraphernal funds. In this form of controversy, it seems to us that the declaration of the husband, in the act of purchase, that it was made with paraphernal funds, may, with reason, be applied as an admission that the cash payment was with paraphernal funds. We more readily reach this conclusion in view of the testimony in die record, not at all definite as to the amount, that she had some money when she married. The recital is, in our view, to be accepted as an admission that her paraphernal funds, to the extent of the cash payments, were used in the purchase of the property, and hence, to that extent, her claim as a creditor of the husband, in our opinion, is sustained.

It is therefoi-e ordered, adjudged and decreed that our previous decision be avoided, and it is now ordered and decreed that the judgment of the lower court, in so far as it dismisses the money demand of the defendant, he, and it is hereby reversed and set aside, and that the defendant recover from plaintiff, her husband, the sum of seven hundred and sixteen dollars, with legal interest and costs.

Absent, Nighollr, C. J.


author: Watkins, J. Blanchard, J.

text:
    No. 12,564.
    Samuel Cupples Wooden Ware Co. vs. Illinois Pickling and Manufacturing Co.
    Syllabus.
    It appearing from the evidence, that what has been given the appearance of a corporation, is a corporation in name only, and not in reality: one under which an individual has transacted his business, debts apparently due by the corporation to third persons will be decreed and treated as debts of the individual; and debts which are apparently due by the corporation to the individual, will be treated as debts due by himself to himself, and, consequently, extinguished by confusion.
    ON appeal from the Civil District Court for the parish of Orleans. King, J.

      Farrar, Leahe & Lemh for Receivers, Appellees.

      Carroll & Carroll for II. B. Guinle and L. F. Bouchereau, Creditors,, Appellants.
    W. S. Parherson and Bice & Montgomery for M. McGraw Wooden? Ware Co.; Joseph Campbell Preserve Co.; Lievre, Frieke & Co.; S.. Oppenheimer; Arguenbahm & Ramie, and George S. JVIepham & Klein, Opponents and Appellees.

      E. N. Whittemore & C. F. Claiborne for Edward Thompson; Tre— pagnier & Bros.; James Grennon, Henry B. Schreiber & Bro.; Ong, Hiller & Co., Limited, and M. Schwartz & Co., Opponents and Appellees.

      Edivin T. Merrich for Illinois Glass 9°-> Opponent, Appellee.

      Harry H. Hall and P. M. Milner for C. S. Burt & Co., Ltd., Opponents and Appellees.

      Dart & Kernan for John M. Monlaur, Creditor, Appellee.

      Chretien <& Suthon for A. Donovan^ William Dubille and J. U. Iver, Creditors, Appellees.

      M. Voorhies for Felix Tiblier, C. S. Williams and A. Halt, Creditors, Appellees.
    Argued and submitted March 10, 1898.
    Opinion handed down June 25, 1898.
    Rehearing refused January 9, 1899.
   Opinion of the court was delivered by Watkins, J.

Opinion of the court on Application for Rehearing was delivered by Blanchard, J.

Watkins, J.

On’ the 2nd of December, 1895, the plaintiff, a corporation domiciled in the city of St. Louis, Missouri, filed a suit in the Civil District Court of the parish of Orleans, alleging that they were creditors of the defendant company in the sum of six hundred and nine dollars and fifty-five cents.

They also allege, that the defendant has mismanaged its affairs, and that its board of directors have manipulated its stock and have used its moneys and resources for that purpose.

That a great number of suits have been instituted and are pending against it.

That it has been seized for rent by IT. B. Guinle, an officer of the corporation; and that though its assets are large and valuable the corporation is insolvent and unable to pay its debts.

That some of the assets have been sequestered by creditors claiming vendors’ liens on the property seized; and that the corporation recently applied for a respite which was at once refused.

On these averments, an order was granted requiting the defendant to show cause why a receiver should not be appointed; and in that proceeding several other creditors of the defendant intervened and reiterated the averments of the plaintiff and joined in the application for the appointment of a receiver.

The defendant made a return, stating it to have been a fact, that it had applied for a respite and that its application had been refused; but that it had since gone into voluntary liquidation, and that said proceedings were then pending.

The judge, considering the cause shown to be sufficient, appointed ■ one receiver; and subsqueutly, upon due proceedings, had appointed a .-second one to co-operate with the first one.

Soon thereafter an order was granted directing- a sale of the assets ■ of the defendant’s to be made for cash in accordance with law and the inventory on file; and that the proceeds thereof be distributed . amongst its creditors — the inventory disclosing personal property only, •valued at seven thousand seven hundred dollars.

At this juncture, IT. B. Guinle filed a motion to stay the sale, and ;sell certain portions of the property under a separate appraisement.

His allegations are substantially as follows, viz.:

That he is a creditor of the defendant in the sum of fifteen hundred .and fifty dollars, with interest, etc., for rent, to and including February 1st, 1896, of the premises occupied by the company, as more fully appears from his pending- suit against the defendant — the ope to which the plaintiff adverted in its petition.

■ That he is a creditor for the further sum of twenty thousand dollars, less a credit of one thousand seven hundred and sixteen dollars and ten cents, “due him as a balance on the property sold by him, to ■said company as set forth in the act of sale dated March 30th, 1895, * * and as more fully appears< from two promissory notes, one for eighteen thousand dollars, and the other for two thousand dollars —subject to credits aggregating- one thousand seven hundred and ■sixteen dollars and ten cents, etc.”

That a large portion of the property and articles which were sold to said company is now in the establishment and factory thereof; and on the ltlh of December, 1895, an order of court was made which directed the receivers “to convert the raw materials in the factory of the company, into manufactured articles and to temporarily continue its business of the company in order to effect a liquidation of its affairs,” and that all proceeds coming' into their hands should be paid, over to him as lessor, in satisfaction of the debt due him.

'That on December, 1895, the receivers obtained a further order which directed a sale of said assets at public auction for cash.

He represents, that it is better for the interests of all parties con- • cerned, that said receivers continue to carry on business of said company as provided in the order first referred to, for the reason that articles sold in the usual course of business will realize much larger sums than if sold at public auction; and consequently, a larger amount paid on his debt.

Eor these reasons, he opposed said rule; but if a sale is made, then and in that event he is entitled as landlord to be paid the amount due • him as rent by preference and priority over all parties whatsoever out of the proceeds of all the property sold; and that he is further entitled as vendor to be paid by priority and preference out of said proceeds the amount due him on the purchase price thereof.

He claims the right to have made a separate sale of the objects affected by his lessor’s and vendor’s liens; and when the sale is made ■ that the proceeds thereof be kept separate and apart, so as to be easily identified from other proceeds of sale.

To the foregoing effect, Guinle prayed for a rule on the receivers to show cause why the aforesaid relief should not be granted; or in the alternative that the sale be made, then to show cause why his said demands should not be paid from the proceeds of sale realized.

To this motion was appended a list or statement of the property and effects which are referred to.

Notwithstanding the foregoing opposition, the sale was made on the 27th of January, 1896, and Guinle appeared at the place of sale and bid on goods and merchandise to the amount of two thousand six hundred and two dollars and sixty-five cents — same being a portion of the property he had sold the defendant; and he thereupon took rule on the receivers to show cause why the goods should not be delivered to him and the amount of his bid be credited upon his aforesaid claims.

Thereupon Morris McGraw, Wooden Ware Company, Limited, appeared and filed an answer to the two rules of Guinle aforesaid, and' therein set up the following special defenses thereto, viz.:

First — That it filed a suit aaginst The H. B. Guinle Manufacturing Company, Limited, on February 14th, 1894, the record of which ■ is annexed.

Second — That subsequent to the institution of said suit, said company went into liquidation, and Guinle was appointed liquidator.

Third — The defendant in this suit was a corporation organized by ■Guinle, and he was owner, practically, of the two corporations.

Fourth — That while acting as the liquidator of the former, “with- • out any order of court, or authority of any kind, Guinle transferred the assets thereof to the defendant;” and thereupon said corporation -was made a party defendant to the suit above referred to.

Thereupon it alleges, that all of the aforesaid proceedings “were really and in truth the acts and proceedings of the said H. B. Guihle, ■and were for the purpose of defeating the rights of creditors of whom •the Morris McGraw, Wooden Ware Company, Limited, was one;” and ■'its prayer is, that Guinle’s rule he denied.

Upon objection being made, the court struck out this answer and Telegated the McGraw Company to an intervention or direct action.

On the 3rd of February, 1896, the aforesaid rule was made absolute.

On the 7th of April, 1896, the receivers filed a provisional account upon which appeared the following items, viz.:

“Amount retained by IT. B. Guinle under order of court. .. .$3,582.59

“H. B. Guinle, general account.......................... 428.45

These two amounts aggregate..........................$4,011.04

To this account various oppositions were filed, and that of Morris McGraw Wooden Ware Company, Limited, was amongst the number — its opposition being directed at the two items above mentioned — ■ and the court was requested to strike same from the account for the ■reasons it assigned in its aforesaid answer to the rule of Guinle.

Several other creditors of the defendant oppose those items of the ■account and demand that the first amount “which H. B. Guinle was allowed to retain, should he restored to the active mass of this estate; and should be paid by said Guinle to said receivers, to he by them ■distributed according to law, etc.”

They allege that U. B. Guinle is no creditor, at all, of the defendant: and that the resolution of the hoard of directors of the defendant authorizing a purchase of certain property and assets from H. B. 'Guinle. as well as its organization thereunder, and the sale thereof as evidenced bv an authentic act of May 30th, 1895, were mere simulta-tions, gone through with as a mere matter of form, conveying no substantial rights — concluding as other oppositions did, and demanding, some relief.

H. B. Guinle also opposes the account on various grounds, but mainly for the reason'that his claims and demands, as set forth in his opxsosition to the sale, are not sufficiently set out either in detail or amount, and he prays that same be increased accordingly.

The foregoing statement of the pleadings and issues of this case is the best summary that could be intelligently made of them, in view of the fact that declarations, answers, oppositions, rules, orders, etc., occupy one hundred and nineteen pages of the transcript — a palpable • abuse of justice.

Especially is this the case, in view of the further fact, that the prominent, if not the only issue in the case is whether or not II. B. Guinle and the Illinois Pickling and Manufacturing' Company are one and the same, as opj>onents allege; for it conspicuously apx>ears that the creditors of the defendant are resisting the large claims of Guinle ■ for rent arid price of goods sold, on the ground, chiefly, that the defendant corporation was a legal fiction, representing and being Guinle himself — debtor and creditor being merged into one.

On the trial, the judge a quo held as follows:

First — That the opposition of ITypolite Guinle x>raying to be placed ’ on the iprovisional account as lessor for the sum of sixteen .hundred and sixty-five dollars, and as vendor for twenty thousand dollars, be and the same is rejected.

Second — That the oxopositions of other opponents — enumerating them — be sustained to the extent, that the two items mentioned supra, of three thousand five hundred and thirty-two dollars and fifty-eight cents, and four hundred and twenty-eight dollars and I'orty-five cents, be stricken from said account.

Third — That II. B. Guinle bo ordered to pay over to the receivers the former sum of three thousand five hundred and eighty-two dollars- and fifty-eight cents.

II. B. Guinle filed a motion for a new trial mainly on the ground that the evidence failed to show that said transactions were simulations; but on the contrary fully established their reality and validity..

Pending the disposition of the motion, II. B. Guinle tendered a plea of one year’s prescrixrtion against the demands of the opponents; and' subsequently the judge a quo overruled both the application for new trial, and the plea of prescription.

From the judgment thus rendered, the opponent, FL B. Guinle alone, prosecutes an appeal, and that a devolutive one; except one creditor, who demands the right to have its claim for thirty dollars placed on the account as an ordinary one.

After stating the case, the judge a quo said in his reasons for judgment : ■ ;

“That careful consideration this case, and considering the fact that H. B. Guinle was in court, heard the testimony taken on the trial of the opposition, and failed to take the stand to contradict or explain the evidence against him; and, also, failed to testify on his own opposition in support of his claim, the court is of opinion that H. B. Guinle is the real debtor of the opponents; that the Illinois Pickling and Manufacturing Company, Limited, was a corporation only in name, not in reality, a name under which H. B. Guinle transacted, business; that the debts due by said company were clue by Guinle; that the lease of the building made by them to the Illinois Pickling Company was a lease to himself, and the sale by him of the goods by him purchased from the FI. B. Guinle Manufacturing Company, Limited( to said Illinois Pickling Company was in reality a fictitious sale of property from himself to himself; that he is not a creditor of the Illinois Pickling- Company as landlord or vendor, and the various acts of loase aud sale were mere simulation's.”

These reasons are clear-cut, concise and unanswerable; and our ex-amintion of the record has fully satisfied us of their absolute correctness.

And, if solitary circumstance were wanting, a single link necessary to complete the chain of evidence, Guinle’s perfect silence in the presence of all of his accusers, and his utter failure to speak in support of his own opposition is quite sufficient to justify the court in resolving any doubt — if there be a possible doubt in the case — against him.

To such issues as arc here presented no plea of prescription can avail him.

Judgment affirmed.

On Application for Rehearing.

Blanchard, J.

Our attention has been called to the fact, among other things, that our opinion .failed to make mention of the claim of L. E. Bouchereau for notarial services, the correctness of which was admitted at the trial, and which the district judge, in recasting ■the account, through error, placed among the ordinary accounts, whereas it is entitled to be placed among the privileged debts.

This state of facts is exhibited by the record, and the claimant has appealed from the judgment.

He is entitled to relief, and our decree should be so amended as to place his claim for thirty dollars for notarial fees, on the schedule of privileged debts.

In all other respects the opinion is found correct.

It is therefore ordered and decreed that the judgment of this court be so amended as to entitle the appellant, L. E. Bouchereau, to have his claim of thirty dollars for notarial services placed upon the schedule of privileged accounts; and it is further ordered and decreed, that in all other respects the application for a rehearing be refused.


author: Breaux, J.

text:
    No. 12,894.
    Mrs. W. D. Smith et al. vs. Howard D. Smith, in re., Mrs. W. D. Smith Applying for a Writ of Certiorari to the Court of Appeals, First Circuit, State of Louisiana.
    Syllabus.
    Fee of Attorney.
    The value of the services involves only a question of fact within the exclusive appellate jurisdiction of the Court of Appeals.
    Good Wild.
    A partnership carrying on business of an insurance agency which has been dissolved, as relates to “good will” leaves nothing in the nature of property right.
    The partnership bad terminated by death of one of the partners. The other had the right to continue the business of an insurance agency in his own name and he was free to take the agency offered him in his own name.
    Compensation Not Allowed Partner for Services.
    No allowance under the rule of interpretation of the courts is to be made for services rendered by a partner in the absence of an agreement.

      Price & Barksdale and 17. A. Van Hook for Petitioners.
    .Respondents in propriae personae.

      -Graham & Pearce for Defendant, W .H. Smith.
    Submitted on briefs August 1, 1898.
    Opinion handed down December 5, 1898.
    Rehearing refused Janury 9, 1899.
   The opinion of the court was delivered by

Breaux, J.

The plaintiff, (relator here) personally and as tutrix, ■commenced suit on July 8, 1897, aginst Howard W. Smith, surviving partner of the firm of E. & PI. Smith.

The .late Eugene Smith was her husband and the father of the minor whom she represents as natural tutrix. He died on March 11th, 1898.

In her suit she complained of the charge made by the defendant, surviving partner, for services rendered; she claimed the profits of an insurance business carried on by PToward E. Smith, after the firm was •dissolved, and one-half of the price of the sale of the insurance business at one time carried on by the firm, and also interposed opposition do the fee of the attorney.

Her petition contained other demands which were sustained by the judge of the District Court, and which no longer present issues to be •determined.

The return of the judges to the order nisi, which was issued by this ■court, was, as relates to the facts, that the defendant was conducting •an insurance business for the partnership, and supervising their outside partnership affairs; that the earnings of the common labor of the partners, and the profits of their insurance, went into the partner■.ship.

Under the advice of a family meeting, held in May, 1893, Howard Smith, surviving partner, assumed the charge of the partnership' affairs, (except the insurance business, the return shows), and conducted it for its liquidation.

In November, 1893 a second family meeting was held for the minor and in accordance with its recommendation, exchanged the farm owned by the partnership for the half interest of a commercial business.

This mercantile business was continued for 1894 and 1895 under the name of Smith and Gullet.

Ry agreement with the firm, Gullet’s services to the firm were to be equalled and compensated by defendant’s, Smith’s, service, thereto.

In November, 1895, another family meeting was held for the minor, under which a partition was made between plaintiff and defendant.

In September, 1896, a provisional account was filed by the tutrix, which was homologated in October, 1896, purposing to liquidate the affairs of the partnership of Smith and Gullet, and of the partnership ■ of E. & II. Smith.

The purpose of the suit brought by plaintiff in July, 1897, was to assail and to have declared null the various family meetings, and the provisional account of tutorship.

Wo proceed to take up for determination, the remaining questions-brought up in the application to have the judgment of the Oourt of Appeals and that of the District Court reversed.

Feb of Attorney.

The first complaint giving rise only to an issue of fact, as we appreciate it, is that relating to the fee of attorney. An amount, two hundred dollars, was charged to the minor alone, though plaintiff contends' she owed only one-fourth of the amount, and that the remainder was due by the partnership of E. & II. Smith.

We are informed by the court’s return, that the attorney’s fee was-moderate in amount, and that the services were rendered in the interest of the minor alone, and not to the firm of E. and II. Smith.

Wo have seen that in course of the settlement of the succession a number of family meetings were held and accounts for the minor were-filed.

The District Oourt, and the Oourt of Appeals having determined' that the services were rendered to the minor alone, and that they were moderate, we would not be warranted in holding', that, as to this mere question of fact, there was error in the courts’ decision.

Claim roe tiie Good Will of the Partnership Carrying on an In-’ sueanoe Business.

It appears that the insurance business was bought for the sum of two hundred and fifty dollars; this amount was paid for tangible property transferred by the vendor, and for the business.

After the termination of the partnership, E. H. Smith, the defendant, gave notice to the insurance companies of his brother’s death, and the agencies were renewed with defendant.

We understand, as relates to this insurance business, that the' tangible property was divided.

Defendant continued, after the termination of the partnership, the-insurance business in his own name, until about December, 1898, when he sold the business and its “good will” for five hundred dollars,, and retired from the business.

The foregoing is in substance respondent’s statement of facts about the insurance business, and wo do not gather from the argument of counsel, that it is erroneous in any substantial particular.

Did the plaintiff have an interest in the “good will” of the business sold by defendant, some months after the dissolution of the partnership, is the question before us for decision.

We have seen that the partnership, at the time of the sale, had been terminated by the death of one of the partners, and the evidence discloses, that after his death, the surviving partner claimed the business, in his own name.

There can be no right to the “good will” of an insurance agency which has been for some time dissolved.

The firm was not in business, and could have no “good will” to' transfer.

The agency was one of trust and confidence on the part of the' companies represented, and success among those who secured insurance was dependent upon the individual industry of the agent.

The good will had no value, save the value which the agent gave it by his exertions.

At the termination of the partnership, as we appreciate the issues, the companies represented by the late firm had the right to select .another agent.

Had the companies appointed another agent than the defendant, Be would not have been bound to any one for the good will of the late firm.

The appointment of the defendant, did not have the effect of giving .a property right to a business (or good will) which had no such right.

A definition ought to assist in considering the case.

“Good will” is the advantage or benefit which one has beyond the mere value of the capital or other property employed, which arises from the encouragement the establishment or firm receives on account •of its local position, reputation for skill, or from other circumstances.

Stoi’y on Partnership, Section 99.

In the case before us for decision, we do not discover that after its termination, there remained any of the values to which, in our view, the definition refers.

The business was not continued in behalf of the firm, or in its name.

As we gather from the facts, the business sold by the defendant was not in any way the business of the dissolved firm.

It was defendant’s business, built up by his own labor. For about •seven months, (i. e. from the date of his partner’s death), he had conducted the insurance business in his own name and for his account.

"We will not assume, in the absence of evidence, that the business sold seven months after the dissolution, was the business conducted by the dissolved firm, and therefore, the business which the defendant .sold for five hundred dollars.

Begarding a dissolved insurance agency, the Supreme Court of Texas said: “The agencies which the partnership had secured were ■determinable at the will of the principals, and there could be no property in them.

“They actually ceased upon a dissolution of the firm, and that said partner was left free to continue business in his own name.”

Bice vs. Angelí, 72 Texas, 250. See also, Menendez vs. Holt, 128 U. S. 522.

In our judgment, the District Court and the Court of Appeals correctly held that defendant could not be held for half of the alleged value of the insurance business.

With regard to plaintiff’s claim to half of the alleged profits of the insurance business subsequent to the death of E. PI. Smith, we agree with our learned brothers of the Circuit Court of Appeal, that it could-only be demanded on the theory that the partnership of E. and FL Smith, as relates to the insurance continued after the death of E. W.. Smith, but there was no partnership after his death; we have seen that the partnership as related to the insurance business, was not continued for partnership account.

Charges op Surviving Partner for Services to Firm.

Lastly; plaintiff complains of the amount charged by the defendant, for managing the partnership business after dissolution by the death, of her late husband.

Prior to his death, neither charged for services rendered to the-partnership.

All agree, that it is the rule that labor and services of a partner in the accomplishment of partnership operations are not to be charged', unless under an agreement.

Taylor vs. Ragland, 42 Ann. 1020. Hull vs. Executor, 12 Ann. 129. Story on Partnership, See. 185.

There was no agreement entered into between plaintiff and defend- • ant in regard to -payment for labor and services of the defendant to> the partnership.

It is true, that about the time that defendant began to render-services for which he claims payment, after the death of his partner, he notified plaintiff of his intention to charge for one-half of the value-of the services; it may be, that she was quite well aware that defend- • ant would insist upon payment.

But it does not appear that she gave her consent thereto, on the con- - trary, she stated, that she did not think it was right; but that if it" was right, she would pay it.

An attempt was made by mutual friends to adjust the difference-between plaintiff and defendant.

Matters remained in this situation, and nothing further was done or said about this claim, until at the settlement it was presented as one of the items of indebtedness.

In our judgment, there was no acquiesence (equivalent to a required" agreement between the partners) on the part of the plaintiff.

In accounting b,v the liquidating partner, the general rule is to ascertain the value of the assets, and to deduct the aggregate debts and expenditures.

The balance is to be divided. The services required for the liquidation or the management of the business, are rendered to the partner.ship as much to one partner as to another.

The liquidating partner becomes the employer, also the employe, •of the partnership.

In this dual capacity, he is not expected to charge for labor and services, unless by or under a special agreement.

Where partners, or those who represent them, after the dissolution of the partnership, continue the business without any new agreement, they will be presumed to continue business under the original agreement, neither can demand payment for services rendered during the partnership.

Uradley vs. Chamberlain, 16 Vermont 615.

A partner cannot be allowed compensation for liquidating the affairs of the partnership without an agreement for such an allowance. Gyger’s Appeal, 62 Penn. 80. Piper vs. Smith, 1 Head 74. Fox on Partnership, page 12.

A partner is only entitled to just allowance for actual charges and 'expenses for managing the trust after dissolution.

The partnership in respect agreed upon was a continuing one, but whether continuing with a view of general business to which it had been previously engaged prior to its dissolution, or for the purpose of liquidation, we understand that it comes within the rule that no compensation ‘is due to the partner who rendered extra service to the company; no agreement having ever been made to authorize such a cbai’ge.

For reasons assigned, it is ordered, adjudged and decreed, that the rule nisi which was issued by this court be discharged as relates to the fee of attorney and the asserted “good will” of the partnership of E. and H. Smith.

It is ordered, adjudged and decreed, that as relates to services of the defendant in the management, and for his services in the way of work in the store, an item of six hundred dollars, charged to the partnership, be disallowed and rejected; and it is decreed that the surviving partner of IT. W. Smith account to the partnership for the said sum.

To that extent the order which was issued by this court is affirmed, at cost of the defendant and respondent, Smith.