text:
    No. 9525.
    Thomas Pickles vs. McLellan Dry Dock Company et als.
    Under its police power, the State has the right to recall and abrogate any powers previously conferred on any municipal corporation and to vest such powers in another and distinct State functionary.
    Hence, the Legislature had the power to, as it did by the Act Ho. 7 of 1870, abrogate the Police Jury of the Parish of Orleans, right bank, and to vest powers of the same in the city of Hew Orleans, to which that territory including Algiers became henceforth attached.
    Under that legislation, the city of Hew Orleans was clothed with the exclusive power and authority to regulate the use of the river banks on the right bank of the river in Algiers, and that power included the authority of allotting such space as in its discretion was necessary for a public ferry landing.
    The legal exercise of that power is incompatible with the right of a riparian owner to encroach, for his personal use, on any portion of the space thus allotted for the ase of a public ferry.
    Such an attempt will he rebuked by the courts, and all obstructions of that nature must he removed.
    The case of Watson vs. Turnbull, 34 Ann, 698, affirmed.
    APPEAL from the Civil District Court for the Parish of Orleans. Lamm8, J.

      Llana & Lutler for Plaintiff and Appellee:
    1. The defendant is hound by the same rules in pleading and in making proof as plaintiff; and an answer which merely refers to a contract as invalid, must state specific defects, or, on exception at the trial, defendants will not he allowed to prove any defects.
    2. Defendants cannot attack collaterally a contract between plaintiff and the city of Hew Orleans; nor have they any interest or right to question such a contract.
    3. Seotion 23, Acts 1870, Ho. 7, p. 40, refers to contracts requiring disbursements by the city of Hew Orleans, engagements where the interest of the city is to give the least price, to adjudicate to the “lowest bidder,” as mentioned in this act. It has no reference to the sale of rights where the highest price is required: to leases,rcontraots for farming out, power to collect wharfage, to run ferries and the like. These are powers given in other sections of the charter, Sec. 23 being expressly mad© to regulate all oases where the city is the payer and her coffers are to he opened,
    4. Ho riparian owner, within or without the city limits, can claim the power to exclude the public from the landing or hank fronting his property on the Mississippi river; nor can he permanently place a dry dock before the hank on his property. 6 Ann. 450; O. C. 455.
    5. Within the corporate limits the city has had full power delegated io it to regulate the riverfront, assign landings, establish femes and fix or appoint moorings, and in carrying out these powers it has full right to determine the amount of river frontage or water space required for its ferries.
    6. Private right must yield to public needs, and for a public purpose (tbe city being the sole judge of necessity) the corporation can establish its ferry landings wherever in Its opinion it is best to be. The municipal control dominates private claims. Dillon Mun. Corp., 3d ed , 107,114; 5 Ann. 36; 6 Ann. 450; 8 H. 211; 18 La. 122; 5 Herger, 189; 3 III. 53; 10 Wall. 502.
    7. Even if plaintiff had no right to any ferry or landing, that would not entitle defendant to usurp the river front and monopolize the hank.
    8. Aware of this, they pretend to a title from the Legislature by Acts 1840, p. 130, sec. 17, and its re-enactment in 1855. These acts give no such rights as defendants assert. Tb ey invest tlie police jury -with the control to clear away buildings and remove things from off the land, and have no reference to the water front or mooring of vessels, etc. Furthermore, these acts are the charter of a police jury, and contain a limitation on its powers. The police jury, with its limited powers, no longer exists; the city now controls, and without those limitations, under laws which make no exceptions. The Act of 1840, and its repetition, has long ago passed away — was repealed hy the charters of the city, and cannot avail defendants even had the extinct laws ever had any reference or application to the matters like those at issue here,

      W. 8. Benedict for Defendants and Appellants.
   The opinion of the Court was delivered hy

Poché, J.

Plaintiff, as lessee by transfer of the city of New Orleans, of a feny known as the Third District Perry, plying from the foot of Esplanade street to Olivier street, on the opposite hank, complains that the defendant Dry Dock Company lias, hy driving piles and locating a portion of their dock in front of Ms landing, illegally encroached on the space of one hundred and fifty feet allowed him under his contract for landing conveniences of his ferry-boat at the foot of Olivier street.

Hence, he brings this suit with a view to obtain redress through a judgment ordering the removal of the illegal obstructions interposed hy the defendant company, and,he cites the city to defend and protect him in the full enjoyment of his contract.

The city intervenes and joins plaintiff in his prayer for redress.

For answer the defendants plead the general issue, and specially urge their right to locate their dock and to drive piles in the bed of the river, as complained of, on the ground of the ownership by one of their incorporators of the riparian property in front of which they are operating, and on the authority of the Police Jury of the Parish of Orleans, right hank, under whose ordinances they had established their dry dock, which is a necessity of commerce and navigation, and that no part of the space occupied hy them is necessary to the conveniences of the ferry.

They also allege that the piles, as driven hy them, are beneficial and not injurious to the ferry landing, and that plaintiff has not complied with the contract which he has set up as the basis of his action.

They prosecute this appeal from a judgment in favor of plaintiff as prayed for.

The consideration of two bills of exceptions reserved hy defendants involves the discussion, in a great measure, of all the law which governs the case.

The first bill grew out of defendants’ objection to the introduction in evidence of the notarial contract of lease between the city and plaintiff, the objection being that the contract did not show on its face, and no evidence had been offered to show, that the contract had been awarded in compliance with the clause of the city charter which provides that “all contracts for public works, or for materials or supplies ordered by the council, shall be offered by the controller at public auction, and given to the lowest bidder who can furnish security satisfactory to the council, or the same shall, at the discretion of the council, be advertised for proposals.” * * *

The district judge correctly ruled that the objection went to the effect and not to the admissibility of the evidence. How could the court decide whether or not the document contained proof of the manner in which the contract had been concluded, without admitting and considering it in all its parts?

But referring the objection to the alleged nullity of the contract for the reason contended for, we look in vain in defendants’ answer for any averment of such illegality; hence, they were correctly ruled out of a position which had not been set up in their pleadings. The practical result of defendants’ contention on this point would be a judgment annulling and setting aside a contract between the city and a lessee of an important franchise, useful and almost indispensable to the public, by means of a collateral attack, in a suit which merely involves the question of the power of the city of New Orleans, within her corporate limits, to regulate and control the use of the river banks, and to restrict private parties in their claim of unbridled license to enjoy the use of said river banks as their interests may suggest.

That mode of attack of a contract finds no sanction in law, and it cannot be tolerated in practice.

These considerations are sufficient in themselves to dispose of all the positions assumed by the defendants touching the alleged illegality and nullity of plaintiff’s contract, and they preclude all discussion of the grounds of such nullity,

The other bill involves the alleged error of the trial judge’s ruling-in excluding proffered evidence to show a dedication to public use by the police jury of the space sought to be occupied by the defendants, as necessary to commerce and navigation, to show the occupation by them under the rights of a riparian proprietor, and to show further that the space thus occupied was not necessary, and had never been adapted, to the use or conveniences of a public ierry, and the use of the same by the defendants and their predecessors for over fifty years.

There is no merit in this contention.

Under a proper exercise of its police power, the State had the undisputed right to recall and to abrogate all the authority previously granted by the legislature to the former police jury of the parish of Orleans, (right bank) and to vest the same power in another and distinct State functionary. That is precisely the meaning and the practical effect of Act No. 7, of 1870, which incorporated that portion of the parish of Orleans in the city of New Orleans.

Under that legislation all the powers conferred to the city of New Orleans under its charter could be legally exercised over every foot of the territory which had thereby become a part of that city. Abascal et al. vs. Bouny, 37 Ann. 538. And among those powers, one of the most important was the right to regulate the use of the river banks, to establish and control wharves and ferries, and to designate the places of mooring for ships and steamboats.

It follows, therefore, that from the moment that Algiers became a portion of the city of New Orleans, all the previous ordinances of the police jury of the parish of Orleans, right bank, purporting to confer landing or mooring privileges, and which had been granted under a power since abrogated, had to yield in force and effect to the regulations of the council of the city of New Orleans on the same subject-matter, and that the latter alone became the law binding on all alike.

Numerous decisions of this Court, in perfect harmony with general jurisprudence on similar questions, have settled beyond the domain of possible discussion the doctrine that a city vested with the powers enumerated in the charter of the city of New Orleans has the undoubted and necessary power to regulate the use of the banks of any water course on which it borders, and that in this State such authority is not restricted by Article 455 of our code, which declares that “the use of the banks of navigable streams or rivers is public,” and “that according everyone has a right freely to bring his vessels to land there,” etc. It is now well settled that this general right must be modified and controlled by municipal regulations when adopted in conformity with chartered authority.

In the case of Watson et al. vs. Turnbull. 34 Ann. 856, (which singularly is not refen-ed to by either counsel in this suit), we had occasion to examine our jurisprudence on this question.

The contention in that case on the part of plaintiffs was that the city of New Orleans had no right to place “hitching posts” along the river bank in front of their property, on the ground that they had already placed, at their own expense, all the posts that were required, and that there was no necessity of commerce requiring the placing of 'such posts by tlie city, and that by such act the city would deprive the riparian owners of their free use.'of the'banks of the river.

.The Court held: “Within the corporate limits, the city of New Orleans, under her charter and under the general law, has the right to control, manage and[administer the use of the river banks for the public convenience[and[utility, to establish wharves and landings.” * * *

“Riparian proprietors have no right to appropriate to their exclusive use these banks, and tlieyjhave no private property in the use thereof, which is public. The discretion of the city authorities in determining what are proper and[needed facilities for commerce, and on what part of the river bank, within her limits, they should be established, is manifestly not a proper subject for judicial control or interference. Whatever incidental damage may result to proprietors from the exercise of these unquestionable corporate rights, is damnum absque injuriet.”

We have taken the pains of making this copious extract from that opinion for the reason that it covers almost all the points which we are now discussing, and because it formulates a rule of law of easy understanding, as a logical.result of numerous adjudications which we had examined, and to which we refer in the opinion.

We have carefully considered tlie[authorities relied on by defendants, but they do not refer to cases which involved the corporate powers of the city[of New Orleans to regulate the use of the river banks within its limits.

They [can draw no more strength from the case of Ellerman vs. Morgan’s R. R., 34 Ann. 698, as the point in contest herein was not involved in the issues therein discussed. We said there: “The case presently before this court is not one in which the city seeks to prevent the defendants from using their wharf in any manner, or to appropriate it and enjoy it for other purposes.”

One of those'[questions is presented in the instant case, and that is the right of the city to prevent the defendant company from using its wharves and docks in a manner injurious to the public or in conflict with franchises or privileges emanating from her authority.

From tlie foregoing considerations it follows that under the law as it is now settled, it is immaterial to the real issue in this case, whether the defendants were or not riparian owners, whether they had obtained any franchises from the former police jury, and whether the space allotted to plaintiff was or not necessary to the ferry landing or to the conveniences of the public, and we may add that the defendants were without legal authority to raise the objection that plaintiff had not fulfilled his contract. Werges vs. Railroad Co., 35 Ann. 648.

Evidence on all these points was therefore manifestly irrelevant, and it was properly rejected.

Under these views we leave defendants without any law to support their contention, for, as stated in the first part of this opiuion, all the principles of law applicable to their case were involved in their bills of exceptions.

Our examination of the testimony has satisfied us that plaintiff’s complaint is well founded ; that defendants have illegally encroached on a portion of the space allotted to him under his contract with the city, and we therefore conclude that the judgment appealed from is correct in all particulars.

Judgment affirmed.


source: Caselaw Access Project

author: Fenner, J.

license: Public Domain

text:
    No. 9543.
    J. M. Villavaso et al. vs. Louis Barthet et al.
    On appeal from an order dissolving an injunction on bond, when a motion to dismiss tbe ap* peal on tbe ground tbat tbe interlocutory order appealed from could not work an irreparable injury, our decree denying tbe motion to dismiss and holding that the acts enjoined, if committed, would operate irreparable injury, necessarily involves the conclusion that the injunction should not have been dissolved on bond, and hence the dissolving order appealed from must be avoided and reversed.
    APPEAL from the Civil District Court for the Parish of Orleans. Houston, J.

      W hite é Saunders for Plaintiffs and Appellants.

      JE. H. McGdleb and B. B. Hormcm for Defendants and Appellees.
   The opinion of the Court was delivered by

Fenner, J.

The plaintiffs obtained an injunction in the court a qua. It was dissolved on bond by that court. From the dissolving order, this appeal was taken. The defendant ajipellees moved to dismiss the appeal on the ground that the dissolving order was interlocutory in its nature, entailing no irreparable injury and, therefore, not appealable.

The motion to dismiss was denied for the reason that the acts enjoined, if committed, would operate irreparable injury.

Under this finding it follows the order dissolving the injunction iras error, and must now he reversed.

It is, therefore,’ ordered, adjudged and decreed,, that the order dissolving plaintiffs’ injunction, herein appealed from, he annulled, avoided aud reversed, appellees to pay costs of this appeal and of the proceeding to dissolve in the lower court.


author: Bermudez, C. J.

text:
    No. 9585.
    James A. McCoy vs. Joseph H. Weber and James Fahey.
    A. notary will not bo bold individually responsible for paying tlie price of sale, deposited bv tbe purchaser, to tbe ostensible owner and vendor in tbe absence of proper instructions given to him and accepted by him to pay it otherwise.
    APPEAL from the Civil District Court for the Parish of Orleans. Lagarus, J.

      T. M. Gill for Plaintiff and Appellant.

      W. B. Lancaster, H. Ohiapella and Ohas. Louque for Defendants and Appellees.
   The opinion of the Court was delivered by

Bermudez, C. J.

The plaintiff sues to annul a sale of real estate made by oue Guérin to the defendant Weber, or to recover from the latter and Fahey, the notary who passed the act, the price of sale, $2250.

He charges that the property belonged to him, although in Guerin’s name; that it was understood with Guérin, Weber, Fahey and himself that the money would be paid to him, but that Weber paid it to Fahey, who gave it to Guérin.

He urges that, as the price was not paid to him, the sale should be annulled, but that the sale may be maintained, provided he recover the price from Weber and Fahey.

Guérin is not made a defendant, but Weber and Fahey are. Guerin, however, testified. They deny all averment's to show any undertaking by them to retain the price for plaintiff’s account, to fix any obligation on them in this regard.

From an adverse judgment plaintiff appeals.

It appears that the property was put for sale in the hands of Iloey, a real estate agent; that Guérin, in whose name the property stood, gave to McCoy, who handed it to Hoey, a paper, which was not produced, the tenor of which was a disclaimer of title; that this paper was, after a purchaser had been secured, delivered promiscuously with others to Fahey, without calling his attention to it; that Fahey uever knew of tbe existence of such paper, and probably destroyed it; that the parties called at the notary’s office two or three times ; that Weber, the purchaser, paid the price into the notary’s hands; that it was applied by that officer to tbe payment of the broker’s bills, to the retirement of notes secured on the property, to the discharge of taxes due, and that the residue, $575, was paid by Fahey to Guerin, who, on collecting the amount of the check given him therefor, paid it over to Mrs. McCoy, plaintiff’s wife.

There is nothing to show that Fahey was ever instructed in writing or otherwise by Guerin to pay the price to McCoy, or that McCoy ever informed Fahey that the money was not to be paid to Guerin, but to him, McCoy, alone.

The evidence shows that Fahey once asked plaintiff who the money was to go to, and that plaintiff did not answer the question.

It also establishes that plaintiff requested Guerin to attend the signing of the act jointly with him, McCoy, who claimed the price, for otherwise he would not get it and that there was an understanding (to the reverse of plaintiff’s allegation) that the nionejr was to be paid to Guerin, who was recognized by McCoy as the person who was to receive the price.

There is not a scintilla of evidence that Fahey ever agreed to act as the agent of either McCoy or Guérin. It is apparent that Ms participation in the matter was purely official, except as regards the retirement of the notes, secured on the property, of which he was the bearer at the time of the transaction.

The only ground on which he could have been liable, would have been a disregard of Ms obligations as McCoy’s agent and consequent injury.

Mandate is an act by wMch one person gives power to another to transact for Mm and in his name one or several affairs. R. C. C. 2985.

It is a contract which is completed only after the acceptance of the mandatory. R. C. C. 2988.

If the person said to have been instituted attorney in fact pleads that he has not accepted, it is incumbent on the principal to show he has. R. C. C. 2990.

One surely cannot be held liable for not having done that which he was under no obligation to do, for it is only from the assumption of the duty that responsibility attaches in case of breach.

- A previous Court once properly held that, when the agent’s instructions are so ambiguous as to leave it doubtful whether he should pay a fund entrusted to Mm, to one creditor or to another, and acting in good faith he pays it to the one not intended, the other has no action against him. 6 Ann. 466; Story on Agency, 74.

It follows from the circumstances of this case and the law by wMeli they are ruled, that, as Fahey never was instructed and never accepted to pay the price to McCoy, and as he acted in good faith and officially only throughout in the matter, he is not responsible for what he has done. His duty was to have paid, as he did, the money to the ostensible owner and vendor. In doing this, he carried out his mandate as a depository of the fund, under Weber’s instructions.

' There is no evidence to saddle any liability on Weber, the purchaser.

Judgment affirmed.


author: Pociié, J.

text:
    No. 9581.
    F. Gomez, Jr., vs. Isaac Levy.
    A stipulation in a contract between a planter and his manager that the latter would receive as compensation for his services one-third of the net proceeds of the crops raised by him must be construed to mean the proceeds realized from the crops alter deduction of all charges and outlay, such as costs of cultivating, of saving, of shipping and of selling the same.
    In such a contract, a stipulation that the manager or employee is to share in the losses of the enterprise cannot be construed as including the loss of working animals by death from natural causes.
    APPEAL from the Civil District Court for the Parish of Orleans. Lascurm, -J.

      Gibson, Hall & Montgomery and T. M. Gill for Plaintiff and Appellant.

      Thos. J. Gooley for Defendant and Appellee.
   The opinion of the Court was delivered by

Pociié, J.

This litigation grows out of the following contract in writing, made between the parties, for the year 1881 and renewed by mutual consent for the year 1882 :

“State of Louisiana, parish of Pointe Coupee: agreement entered into this day between the undersigned, Isaac Levy and Francis Gomez, Jr.:

“Article 1. Isaac Levy agrees to give unto Francis Gomez, Jr., ($) one-third of all the net proceeds of all sugar, molasses and corn that he, as manager of said Isaac Levy, may make on the Unique plantation for the present year, 1881.

■ “Article 2. Id consideration of the above agreement said Francis Gomez, Jr., agrees to share (-J-) one-third of all losses which may occur on the said Unique plantation for the present year, 1881, and furthermore agrees to. devote his entire time and labor to the best of his ability to make a crop of cane and corn on said Unique plantation, as above stipulated.

Thus done and signed this 11th May, 1881.

Signed: . ISAAC LEVY.

E. GOMEZ, Jr.

Plaintiff claims one-third of the net proceeds of the crop of 1882, which he alleges amounted to $5770 10, it being one-third of the following items:

Net proceeds of sugar, molasses and cotton..............$13,061 55

2659 bbls. of corn, worth $1 25 per bbl................... 3,323 75

185 loads of hay, at $5 00 per load......................'. 925 00

Total....................'......................... $17,310 30

The defense is substantially a general denial, followed by a statement of the gross proceeds of the crop and of the expenses of making, saving, shipping and selling the same, under which defendant contends that plaintiff would be entitled to only $276 21, against which he pleads in compensation and reconvention a store account due to him by plaintiff, two promissory notes subscribed by the latter, and damages in the sum of ñve thousand dollars for alleged mismanage; ment of his planting interests by plaintiff during the year 1882.

Judgment was rendered in favor of plaintiff for $471 34, with costs of main action, and in favor of the defendant for the store account, $114 10, and for the amount of the two prommissory notes, $513 14, and dismissing as in case of non-suit the demand in reconvention for damages. Although the contract made no reference to the cotton raised on the plantation, yet i.t appears from the record that in his account with plaintiff, the defendant gave him credit for the proceeds of the cotton, hence this matter is eliminated from the discussion.

The contract makes no mention of any intention to include the hay crop in the division of the crops, and defendant correctly resists the claim of plaintiff to participate in that element of the crop. It is not even shown that any hay was raised for the market, and the record shows that hay was made to be used and actually fed as forage for the working animals employed in the cultivation of the cane crop, which was the staple production of the plantation.

Hence, plaintiff can urge no legal claim to any portion of the hay thus made, either in kind or in estimated value.

The main contention in the case hinges upon the true meaning of what the parties contemplated as the net proceeds of the sugar, molasses and corn raised by the manager.

Plaintiff’s counsel argue that the net proceeds of the sugar and molasses consist of the price obtained on the market for the same, after deducting costs of transportation and storage, and commission on sales.

Such a result would soon cause to dawn an era of prosperity to sugar planters which would far exceed their fondest hopes and their wildest dreams.

Such a construction excludes the unavoidable costs of raising the cane, of grinding the same, and of boiling the same into sugar and molasses, the very costs which too frequently prove so disastrous to that industry.

The net proceeds of any undertaking, either in agriculture or in commerce or other pursuits, must be understood in law, as well as in common sense, to be that which remains after the deduction of all charges or outlay.

This is not only the generally admitted meaning of the words, but it was the precise intention of the parties, as shown by the stipulation contained in the second clause of the contract, wherein it is agreed that Gomez, the manager, was to share one-third of the losses which might have occurred on the plantation during the year covered by the contract.

As the record stands, we are not clearly informed as to the meaning of what the parties contemplated by the net proceeds of the corn to be raised on the plantation.

It is conceded that no corn was intended for sale, and that none was raised in excess of the actual need of the plantation, hence flows the embarrassment of the construction.

But defendant concedes that plaintiff is entitled to the market value of one-third of the corn made on the place in the year 1882, which had not yet been used, and which remained on hand at the end of that year, when the contract of the parties expired.

This concession operates an < quitable solution of the question in this case, for the record shows that when the corn raised during the previous year had given out, and it became necessary to buy feed for the stock, it was charged on the plantation account, one-third of which was then contributed by the manager.

The mode of supplying the plantation, both for the wages of the laborers and for other expenses, was by means of a store kept thereon for the account of defendant, through an agent of his. All the money and all supplies necessary to the proper cultivation of the crops were furnished from that store to the manager, and charged to the plantation, and the account thus kept was subject to the manager’s inspection. It appears from the record that the account was inspected by-Gomez, and by him found correct up to the month of September, and that at the end of the year, on a further examination of the account, he expressed his satisfaction with the same, save some items which will be hereinafter considered.

The principal items now contested by his counsel, are insurance of the sugar-house and taxes assessed on the plantation.

These items had been charged when he made,his examination about the month of September, and his failure to object then now precludes him from contesting them.

But the charge of $250, for oxen and a mule which had died, met with a serious objection on 1ns part. We do not understand that the loss of working animals, by death from natural causes, can be included in the losses incurred by the cultivation of the crop. Hence, the manager’s objection to that item, which was made in due time, is reasonable and legal, and- it must therefore prevail. The balance of the account is supported by competent and satisfactory testimony.

The objection urged by plaintiff’s counsel to the introduction of- the account, on the ground that it was taken from defendant’s books, which are not admissible in evidence in his favor, is not founded in law or in fact.-

The account was introduced in connection with the testimony of defendant’s agent who had controlled it, and of the' book-keeper who had posted it, and that is good evidence.

There is no more merit in their contentien to exclude all testimony intended to support defendant’s reconventional demand. Their objection could at most apply to the effect of the proffered evidence.

The allegations of the answer were sufficient, although .not very clear and explicit, to admit testimony on the various claims included in the reconventional demand. That evidence shows the correctness of the store account and of the two promissory notes which had been annexed as part of the reconventional demand. The account represented personal purchases of Gomez from the store in 1882, and the two notes represented similar indebtedness for the year 1881, and not as he now contends, his portion of the losses of the planting venture in 1881, from which he had been released by the defendant.

We have considered the evidence on defendant’s claim for damages caused by plaintiff’s mismanagement, neglect and want of skill during the year 1882, and we leave it with the clear conviction that it utterly fails to make out a case against him.

The record shows to our entire satisfaction that Gomez was able, efficient, attentive and faithful in the performance of all his duties, and that the faults attributed to him were committed in obedience of defendant’s special orders and directions.

Although the testimony is conflicting on the question of the market value of corn, and of the quantity thereof remaining on the x>lace at the end of the year 1882, we conclude, after fully weighing the evidence, that corn was worth one dollar per barrel at that time and place, and that eighteen hundred barrels remained on band at the end of the year, thus entitling Gomez to $600 on that score.

We balance the accounts between the parties as follows:

Gross proceeds of the crop — sugar, molasses, cotton........$14,522 13

Expenses of cultivation (deducting $250 as above)......... 13,443 09

Net proceeds......................................$ 1,079 04

One-third to Gomez .. .•........■.............................$359 68

His share in the corn............................,.......... 600 00

Total accruing to Gomez.............................$959 68

That allowance in subject pro tanto to the aggregate amount of the store account and of the promissory notes, to wit: $627 24.

It is therefore ordered that the judgment appealed from be amended by increasing the amount recovered by plaintiff from $471 34 to $959 56, and by rejecting absolutely defendant’s reconventional demand for damages, which bad been dismissed as in case of non-suit; and, as thus amended, said judgment be affirmed, at defendant’s costs in both courts.


author: Todd, J. Poo hé, J.

text:
    No. 9512.
    J. M. Seixas, Syndic, vs. The Citizens’ Bank of Louisiana.
    In a revocatory action three things are requisite to maintain it — fraud on the part of the vendor, knowledge on the part of the vendee, and actual injury to the other creditors.
    Knowledge may be express or constructive.
    As a general rule the knowledge of the agent is the constructive knowledge of the principal .
    Where an agent acts in double capacity, as in case a president of a bank contracts on the jmrtof the bank with himself as an individual, or as the representative of a firm of which ho is a member, if, in such transaction, the president of the bank is faithful to tlio interests of the bank, bis principal, and his action is favorable to the bank, bis knowledge of any material fact bearing on the validity of the contracts, such, for instance, as his own or his firm’s insolvency, will be neld to be tbo knowledge of the bank. If, on the contrary, the agent or bank president acts only for his own or his firm’s benefit, regardless of tbe interests of tbe bank, bis knowledge will be not regarded as tbe knowledge of tbe bank.
    Section 1808, R. S., strikes with nullity all contracts which an insolvent enters into with intent or purpose to give one creditor a preference over another, if made within three months next preceding his failure. The word “failure ” in this statute means judicial failure, or a failure declared by a judgmont or order in an insolvent proceeding.
    APPEAL from the Civil District Court for the Parish of Orleans. Monroe, J.

      Bayne t& Denegre for Plaintiff and Appellee:
    The exception by defendant of lis pendens was properly overruled by the court. The Tubal Cain, 9 Federal Rep., 836; 7 Wallace, 619; 14 Ann., 383; 3 Sumner, 165; Godfrey vs. Hall, 4 La., 158 ; 17 La., 480; 6 Mart, N. S., 517 ; 13 Ann. Rep., p. 233.
    The evidence shows that in March, 1884, Oarriére & Sons were indebted to the defendant for “ over-draft ” by themselves and their friends for about $596,380.32, for which they Transferred securities exceeding $300,000, and when said transfers were made, they were and had been for a long time hopelessly insolvent. These transfers are in fraud of the rights of their creditors, and will be set aside. Blodget vs. Hogan, 10 Ann., 19; 6 Ann. 552, Pratt vs. Creditors; 5 Robinson, 288; 37 Ann. 510; Black, syndic of Pilsbury. vs. Richardson, 37 Ann., Rep.; 17 Wallace, 487; 2 Wood’s Rep,, 23.
    The bank cannot claim the fruits insulting from an illegal or fraudulent act of their agent and repudiate the knowledge of his insolvency which he had at the time of making tbe transfers. 9 Federal Reporter, 273; 36 Conn. 100; American Law Register, vol. 10, N. S.. p. 572; Bump on Fraudulent Conveyances, 234; 9 Bush, 609; 101 TJ. S. 328.
    Tbe word “ failure ” in Section 1808 of tbe Revised Statutes of Louisiana has tbe signification wbieb is given to it among tbe definitions in Art. 3556, Sec. 11, of the Civil Code, and tbe transfers made within three months prior to tbe 4th or 10th of June are stricken with nullity; C. C. 3556 ; Sec. 11, Code Napoleon, 457; Kennedy vs. Savings Institution, 36 Ann. 8; 4 Martin, 30; 7 Martin 30 ; 2 Martin N. S. 64; 5 Martin N. S. 620; 6 Martin N. S. 66; 3 Martin N. S. 29 ; 26 Ann. Rep. 297; 2 La. 556; 2 Ann. 45; 1 La. 500; 2 La. 82; 23 Ann. 37; 7 Touillier, 381; Mayer vs. Heilman, 91; TJ. S. 500; 94 XT. S. 557; 16 Wallace, 610; Case Beever vs. Citizens’ Bank, 2 Woods, 23; 3 Story, 544; 17 Federal Rep., 665.
    The knowledge of tbe president or cashier of tbe bank of tbe insolvency of Carrier© & Sons when tbe transfers were made is tbe knowledge of tbe bank Wade on Notice, Secs. 32 and 33. 677, 681, 682 and 683; 3Gtk Conn. Rep., 100, republished in Am. Law Rep. 10, N. S., p. 572, with notes of leading cases; 19 Vermont, 310; 33 Vermont; 10 Bush, 44; 13 La. 526; 14 Ann. 711; 2 Ann. 319; 1 Martin N. S. 367; 36 Conn. 395; 11 Wallace, 366; 38 Iowa, 261; 113 Mass. 391; 121 Mass. 400; 2 Missouri, 282-367; 2 Hill, 451; 96 TJ. S. 35; 7 Federal Reporter, 340; 101 TJ. S. 328; Atlantic Reporter, vol. 1, pp. 417-485; 34 Vermont, 262, 112; English Common Law, Rep. 466; Dunlap Paley’s Agency, 265, 102, TJ. S. 263; 19 Wallace, 678, 114, TJ. S. 561, 96 TJ. S. 36 It makes no difference if the president or cashier is acting in a double capacity, for himself and tbe bank, if Ms acts benefit the bank, and tbe bank retains the advantages arising from his acts. This is true even where the motive of the debtor was not to give preference, but merely to court the favor of his creditor for future advantage to himself.
    An insignificant or trifling legal consideration which might be sufficient to support a contract •will not suffice to defeat a revocatory action
    The transactions disclosed in the record gave a preference to the bank by the insolvent firm of which the president of the bank was a member and tbe manager. In making these transactions be was not adverse to tbe bank, and they are not within any excoption which defeats the operation of tlie general rule that knowledge of the agent is knowledge of the principal.
    Under the low of the State, No. 91 of 1877, it was the duty of the president and directors to know and publish ‘ ‘ overdrafts,” and under the law and tlie facts disclosed in this case, notice is imputed to them. 1 Johnson, Ch. 261; 2 Hill, 451. The law imputes notice to them of what it requires them to know and to do. Morse on Banks and Banking, p. 101; 1 John, 261, and authorities cited above.

      Henry 0. Miller for Defendant and Appellant:
    The case presents, besides other issues, the question of fact, whether the defendant, the Citizens’ Bank, gave the cash value for certain notes and assets, sued for by plaintiff'. The proof shows the bank acquired these notes and assets for its cash loans and cash discounts, obtained by the firm in due course of their account, and on the notes and assets sued for, then pledged or discounted.
    The mere fact that the ffrra of A. Carriére & Sons had an overdrawn account in tbe Citizens’ Bank is no impediment to giving them fresh loans and discounts on collaterals; nor is there any warrant to say, that if such loans and discounts on collaterals are paid to the firm, that the credits for the fresh loans and discounts are to be imputed to the antecedent overdraft, and the bank is to have no title to the collaterals on which it pays out its cash.
    "When the bank lends money on collaterals, afterwards discounts the collaterals, crediting the debtor in account with the proceeds, and the debtor checks on the account thus credited to take up his notes given for the loan, the discount thus credited and checked upon by the debtor is, in effect, the consummation of the pledges to the bank, and the discount merely applies to the collaterals to the pledged debt. 14 La., p. 321; 9 Ann., p, 539.
    The discounts by the bank of pledges acquired for cash paid affords no basis for the revocatory action, although, when the collateral is discounted, the account of the debtor is overdrawn and he is actually, insolvent, unless the pledges are of greater value than the loans for which the pledges were acquired. 9 Ann., p. 539; 14 La., p. 321.
    By the discount of the note pledged, the pledge is no longer held by the title of pledge, but tbe discount makes the bank the owner of the note. 3 La. 575; Bouvier Law Dictionary, verbo “Discount.”
    The knowledge of the agent will not be deemed the knowledge of the principal when it is the interest of the agent to withhold, and be does withhold, his knowledge from his principal. See the authorities cited in the brief.
    The pledge for an antecedent debt is a valid pledge, unless the pledgor is insolvent to the knowledge of the pledgee, and the other conditions exist, to sustain the revocatory action. R. S. S. 1808 , Acts 1817, p. 131; 11 La., p. 94 ; 4 Bob. 403 ; 6 Ann. 93.
    The three months next preceding his failure, specified in the 1808th Section of the Revised Statutes, means the three months next preceding the filing of the debtor’s petition, praying to be allowed to surrender bis property to bis creditors. 4 La., p. 256; 15 La., p. 123; Civil Code, Art. 2054; Code of Practice, Art. 165.

      White & Saunders on tlie same side:
    I — STATEMENT OF FACTS.
    1. Emile Carriére was president of defendant bank until March 12, 1884. Hrom that date till June 9, 1884, Mr. T. D. Miller was acting president. Mr Carriére having withdrawn on account of illness, continued so in name hut not in fact. Mr. E. Carriére was also sole managing partner of the firm of A. Carrére & Sons.

      2. Tlie firm of A. Carriére & Sons suspended business and went to protest on June 10, 1884. It made a surrender under the insolvent laws of Louisiana, on July 18, 1884.
    3. While Mr. Carriére was in fact, as well as in right, president of defendant bank, he per- * mitted his firm to overdraw its account and to borrow the bank’s funds to the amount of • over §200,000. He also permitted Emile DeSmet, owner of a saw-mill, and M. Escobal, owner of a tobacco factory, to overdraw their accounts and borrow to an amount of several hundred thousand dollars. All these overdrafts and borrowings were secured by pledges of collaterals belonging partly to A. Carriére & Sons, and partly to DeSmet and Escobal,
    4. After Mr. Carriére ceased to act as president of the bank, he had several transactions with it, through its then acting piesident, either borrowing additional money or changing the form of the contracts entered into before March 12, while he still acted as president.
    5. The firm of A. Carriére & Sons was enormously insolvent for several years before its suspension.
    6. Erom time to time, A. Carriére & Sons were permitted to withdraw certain of thepledged securities under an agreement to substitute others. The substitutes were partially furnished in the course of a few weeks.
    7. The questions of fact arising under the evidence are—

      a. Had any officers of the bank, besides Emile Carriére, actual knowledge of the insolvency of A Ca'riére & Sons?

      b. Whose property, at the time of pledging, were the several collaterals held by the bank ?
    c. Were the transactions during the last year between the bank and A, Carriére & Sons intended by the parties, or by the firm, to be a securing of the existing debt of the firm to the bank, or did the firm simply intend and secure its own benefit f

      d. Whether several of the transactions after March 12 were or were not in substance only reproductions without material alterations, save in form, of contracts entered into before that date, and giving the bank all the securities apparently held under the later contracts.
    e. Whether, where the contract was in terras and as far as the evidence shows a loan on notes secured by pledge, the Court could consider this a covert securing of the existing overdraft — the evidence further showing that within the five days following the transaction the firm drew out much more than the amount of the loan, and their deposits were several thousand dollars less.
    II — QUESTIONS OE LAW.
    1. Constructive Knowledge. In contracts between a corporation and one of its officers, acting in his own interest, the corporation is not chargeable with knowledge of facts affecting the transaction known to such officer and not otherwise known to the corporation. In re European Bank, 5 Chan. Appeal, 353; Winchester vs. Railroad Co., 4 Md. 231; Barnes vs. Gas Co., 27 N. J. Eq. 33; Wickersham vs. Zinc Co., 18 Kans. 481; Lucas vs. Bank of Darien, 2 Stew. (Ala.) 280; Beckham vs. Hendren, 76 Ind. 47; In re Garity vs. Merchants’ National Bank, 139 Mass. 332.
    2. Meaning of “Failure” in § 1808 of Revised Statutes of Louisiana. The three months mentioned in § 1808, R. S., count back from the day of the filing of insolvency proceedings in court, and not from the time of actual insolvency, suspension of business, or going to protest.

      a. Bauduc vs. Creditors, 4 La. 246; Martin vs. Drum, 12 Ann. 494; Bank of Mobile vs. Harm, 6 Ann. 711.
    b, History of Insolvency Act in this State, and meaning in which term “failure ” is incontestabJy used in other sections of these acts. Act 1808, pp. 50, 70, 72; Act 1817, pp. 126, 136,138; Report of Jurists on Amendments to Civil Code, 1823, p. 392; Acts 1855, p. 432.

      c. Use of word “failure” in this sense in Civil Code and Code of Practice. C. P. Arts. 165, 278, 279; C. C. Art. 3027.

      d. Analogy from other systems of bankruptcy laws. Rev. Stat. U. S. § 5128, ct seq.; Mayer vs. Heilman, 91 U. S. 501.
    3. Contemporaneous consideration required to support transaction within three months. Any legal consideration sufficient — money not the only consideration.

      4. As to renewed and reproduced contracts. The bank having always held the securities to which the contracts relate, and not intending to diminish its security, can hold under the earlier if not under the later. Seixas vs. Brugier, 37 Ann. 509.
    5. As to exchanged securities. Where the bank permitted pledged securities to be withdrawn, under an agreement that others should be substituted therefor, the substitutes when given are validly held as effectually under the pledge as had been those withdrawn. Id.

    6. Loans to an overdrawn depositor. Where a bank lends, on pledge of securities, to an overdrawn depositor, it is bound to pay such expositor’s checks to the amount of the loan, and cannot be permitted to compensate its debt on the loan with the depositor’s overdraft. Holán vs. Shaw, 6 Ann. 46; Morgan vs. Lathrop, 12 Ann. 257; Breed vs. Purvis, 7 Ann. 53; Hancock vs. Citizens’ Bank, 32 Ann. 590.
   The opinion of the Court was delivered by

Todd, J.

This is a suit brought by the syndic of the insolvent firm of A. Carriére & Sons to recover of the Citizens’ Bank a large number of securities which, it is alleged, were illegally acquired by the bank, and to have the transfers of the same declared null, as having been made in fraud of the creditors of the said insolvents.

Some of these transfers are sought to be annulled under the revocatory action, proper, as provided by the Civil Code, and others are assailed as coming under the operation of Section 1808 R. S., relative to contracts made by insolvents within three months next preceding-failure.

The answer is a general denial, a special denial that, at the date of the several transactions, the bank knew of the insolvency and a further averment in substance, that the transactions attacked were legal and valid, and for no cause subject to be annulled.

The judgment of the lower court was in favor of the plaintiff for the larger part of the securities and assets claimed in the suit, and also for $83,063.50 for assets collected by the bank.

From this judgment the bank has appealed.

A. Carriére & Sons were private bankers in the city of New Orleans. They did an extensive business for many years, and enjoyed the very highest credit throughout this country and Europe, up to the time of their failure.

The firm went to protest on the 10th of June, 1884, and on the 18th of July following, made a cession of their property under the insolvent laws of the State.

Emile Carriére, one of the members of the Arm of Carriére & Sons, was, up to the 9th of March, 1884, and many years prior thereto, president of the Citizens’ Bank, and it was during his presidency that several of the'transactions between the bank and his said Arm took place, which are attacked in this suit.

For a long time prior to the failure of A. Carriére & Sons, their account with the Citizens’ Bank had been largely overdrawn, the overdraft amounting at times to several hundred thousand dollars; and it is charged that the transfers of the securities by that Arm to the bank, against which this action is directed, were illegal preferences given by the firm to the bank, when in a condition of hopeless insolvency, and that insolvency at the time known to the bank, in the payment or reduction of that large overdraft or pre-existing indebtedness.

Some of these transfers were made more than three months before the failure and others within the three months next preceding that event. The nullity of the former is sought to be declared under the revocatory action and of the latter under the provisions of Sec. 1808 of the Revised Statutes.

I.

We wall Arst direct our attention to the consideration of those transactions sought to be reached by the revocatory action.

This well known action is that given by Art. 1969 of the Civil Code for avoiding “ all acts done by a debtor with the intent of depriving his creditors of the eventual rights they have on the property of such debtor.”

It is requisite to maintain this action that three things be shown— fraud on the part of vendor; knowledge on the part of the vendee, and actual injury to the other creditors. C. C. 1984; 3 M. 605; 4 R. 408.

The evidence leaves no doubt that, at the dates of these several transfers, Carriére & Sons were insolvents; in fact, they were in a state of insolvency long prior thereto. It moreover appears, however, that they had so well succeeded in keeping their condition a secret, that their insolvency was known to no one, not even to those having the most intimate business relations with thorn until about the time their notes were protested, 10th of June, 1884, and as stated before, up to that time they enjoyed the very highest credit both at home and abroad.

There is nothing in the record to show that, at that date, the insolvency of the Arm was known to or even suspected by any officers of the bank then exercising their functions in its control and administration. There was no express notice to the bank of the insolvency of -the Arm.

At the dates, however, that the overdrafts of Carriére & Sons were made and some of the subsequent transactions took place, by which, it is alleged, these overdrafts or the antecedent indebtedness of the firm evidenced thereby, was affected or reduced, Emile Carriére, the leading member and manager of the business of Carriére .& Sons, was president of the bank, and the insolvency of his firm was known to him; and it is urged that his knowledge of this fact was constructive notice to the bank, by which the bank was bound; and that such notice invalidated all the transactions by which the bank received the assets or securities embraced in these transactions entered into whilst Carriére was president of the bank and afterwards.

We do not, however, propose to discuss this question of knowledge or constructive knowledge here, but will reserve it for another part of this opinion.

As stated before, the bank expressly denies that any of the several transactions assailed were transfers, made to secure an antecedent indebtedness, but avers that they were all made in the usual course of their business and for a valid, present or contemporaneous consideration, and therefore do not come within the scope of the revocatory action or of Section 1808, Revised Statutes.

We prefer, therefore, to address ourselves first to the determination of the real character of the transactions assailed, and if we find one or all of them do not meet the conditions asserted by the bank for its protection and above set forth, the legal principles interposed by the bank for its further protection will then be considered.

On the 19th of March, 1883, A. Carriére & Sons borrowed from the bank $60,000, and pledged certain collaterals as security for the loan, which was evidenced by a pledge note, on the back of which were enumerated the collaterals pledged.

At that time their account with the bank was overdrawn $179,384.76. They at the same date made deposits to the amount of $113,564.18; and immediately checked out $91,158.79, the amount thus cheeked out ■exceeding their loan by $22,400. Payments were made on the note amounting to $10,000, and for the balance of $50,000 they drew their check on the bank on the 24th of April, 1884, which amount was credited on their overdrawn account, and the collaterals pledged retained by the bank.

Tt is urged by plaintiff’s counsel that this check discharged the debt for which these securities were pledged. No claim was made for the collaterals by the Garrieres, and they have since remained in possession of the bank.

The money paid out by the bank on the faith of these collaterals, was never, in fact, repaid to the bank. The cheek on the overdrawn account cannot be considered as a payment extinguishing the obligations, but should rather be viewed as merely changing the evidence of the debt for which the pledge note was given.

This was the view of the matter taken by the judge of the first instance, and his judgment rejecting the plaintiff’s demand for these securities was correct; and the amendment asked by the plaintiff changing the judgment in this respect cannot be allowed.

II.

On the 15th of February, 1884, A. Camére & Sons received $50,000 more from the bank, for wdiich they gave their two notes of $25,000 each, secured by a pledge of collaterals. The pledge reads as follows:

“ City or New Oxíleans, February 15, 1885.

“Whereas, the Citizens’ Bank of Louisiana has discounted certain promissory notes for the sum of twenty-five thousand dollars each, made by A. Garriere & Sons, to the order of the Citizens’ Bank, dated on the 15th day of February, 3884, payable 75 and 90 days after date thereof;

“Now, in order to secure the full payment of said promissory notes at maturity, the undersigned, A. Carri&re & Sons, do hereby pledge to said Citizens’ Bank of Louisiana the following property, to-wit:

[Here follows a list and description of the securities pledged].

“And it is hereby agreed, that in the event of the non-payment of said note at its maturity, the president and cashier of said bank are hereby authorized, jointly or separately, as agents of the undersigned and of the bank, to cause said pledged property to be disposed of for cash, at pxxblic or private sale, at the optioxi. of said bank, without recourse to legal proceedings, and to this end to sign on the books of the corporations or companies, whose shares are hereby hypothecated as above, any and all transfers of said stock that may be necessary in the premises, in accordance with the rules and regulation of said corporate bodies or companies, and the proceeds of said sale shall be appropriated to the payment of the aforesaid notes, with interest accrued thereon, if any, and all commissions, costs and charges attending said sale.

(P. 418). [Signed] A. CARRIÉRE & SONS.”

The collaterals pledged for this loan amounted to $57,354.38, and on the same day the Carriéres checked out $57,012.54.

The lower court maintained the validity of this transaction, and no amendment is asked for by the plaintiff.

III.

On the 12th of March, there purports to.be another loan by the bank to the Carrieres of $100,000. Notes were executed by A. Carriére & Sons for said amount, and collaterals pledged in the same manner and form as before to secure their payment. The notes were then discounted and the proceeds placed to their credit and checked out by the firm. It was, undoubtedly, a real loan.

There is nothing to distinguish this transaction from that of the 15th of February previous, except that in that case the amount planed to the credit of the Carrieres, (proceeds of discount) was checked out by the Carrieres on the same day, and in this instance several days elapsed before the amount was entirely drawn from the bank. This circumstance, in our opinion, makes no difference as to the legal effect of the transaction. It is contended that the amount derived from the discount was compensated by the prior indebtedness resulting from the overdraft. If such was the case, why did not the same principle or effect apply to the previous loan ? If compensation did take place, it took idace at the very instant the amount was placed to the credit of the Carriéres, and it was not a question of a day or a week or even an hour. In fact, however, compensation does not result in such case.

Application for a loan was made by Carriére, which was granted; promissory notes for amount of same were executed by him and collaterals pledged to secure them; the notes were discounted and the proceeds placed to the credit of his firm, and when this was done, the amount so placed stood as a sum deposited by or for the firm.

Such a deposit cannot be compensated by a previous debt without the consent of the depositor, and here there was no consent. This principle is well settled. 6 Ann. 46; 7 Ann. 53; 12 Ann. 257; 32 Ann. 590.

The judge a quo thought, from the fact that the amount was not checked out for several days, and from the further supposed fact that the transactions took place after Emile Carriére’s attention had been drawn to his overdraft by Mr. Miller, the acting president of the bank, that the loan was a simulation, and that the collaterals were turned over to the bank really on account of the antecedent debt.

In regard to the latter fact, the judge was mistaken, since the evidence shows that it was not till the last week, in March, that Mr. Miller spoke to Carriére respecting the overdrafts, and this affair, as stated, occurred on the twelfth of that month, and at that time, and even when mention was made to Carriére of the overdraft, not the slightest suspicion was entertained by Mr. Miller of .the entire solvency of the firm. It. was evidently regarded and intended by both parties as a loan and the judge was in error in holding otherwise. What strengthens this conclusion is the fact that the money was borrowed by the bank in New York to raise the funds for the Carriéres, and their notes indorsed by the bank, negotiated there for that purpose, and one of the notes at least was subsequently paid by the bank.

There is not a particle of evidence that any part of the money received under this loan was ever repaid the bank.

For the purpose of showing such repayment a number of checks drawn by the Carriéres in favor of the bank were introduced in evidence. Three only of these checks were dated in March, and they are shown to have related to other and different matters, and-were in no way connected with the affairs in question.

IV.

On the 16th of May, 1884, the Carriéres borrowed from the bank $20,000, and' on the 19th of same month $21,000, aud on the 31st of same month $15,500 — all secured by pledges. The securities pledged for these loans were, at the respective dates of the several loans, already in possession of the bank. Some, under the prior pledges of the 19th of March, 1883, and the 15th of February, 1884. The securities belonging to the prior pledges and repledged for the loans of May, were insufficient to pay the preceding pledges. We have held that their prior transactions were valid, and that the bank could legally hold the securities acquired under them. So far then as relates to these securities, that is, to those received under the pledges of the dates mentioned, and repledged in the May loans referred to, it is unnecessary to determine whether the bank derived any right to them under these last loans, since her title to them was perfect under the previous pledges.

V.

Next we will consider the alleged pledge of securities in January, 1884.

The judge a quo held that there was no such pledge, and the bank was not therefore entitled to hold the securities claimed under it. We do not concur with the judge’s conclusion in this respect. It is certain that Emile Carriére did deliver to tiie cashier of the bank certain securities, with instructions to retain them for the bank; that they were placed by the cashier in an envelope, to themselves, properly marked, and he, acting for the bank in his official capacity, kept possession of them for the bank. If this transaction was not attended with all the formalities observed in the other pledges above mentioned,.still it was substantially a pledge, and fully authorized the bank to retain the securities unless invalidated for some other cause than the lack of form.

■ Tlie confusion on this point doubtless arose from a statement made by Mr/Carriel e about the same time when his attention was called to the overdraft of his firm by the cashier. It was to the effect that all he had in the bank was security for his overdraft, which, of course, would include the claims of the firm in the bank for collection, which were entirely at his (Carribre’s) disposal, and to withdraw at his pleasure, and which could not therefore be the subject of a pledge.

But still, it is beyond question that Mr. Carribre did, deliver to the cashier, as stated, certain designated securities with the positive instruction to retain them for the bank on account of or as security for the overdraft. It is contended by the counsel for the bank that the “overdraft” mentioned or alluded to in this transaction, and which the securities pledged were designed to secure, did not refer to the past or then existing overdraft, but to future overdrafts by the firm. And the fact that Carribre’s overdrafts rapidly increased after this affair up to March following, nntil it even exceeded in amount the securities pledged, lends some color to the contention. But another consideration makes it a matter of no importance whether the pledge was for the one purpose or the other; and this brings us to the discussion of a legal principle which is, in itself, a potent factor in the decision of the case, viz: the question of knowledge on the part, of che bank touching the insolvency or insolvent condition of the Carribres at that time.

This point has been elaborately argued by counsel on both sides, and they have brought a vast array of authorities to support their respective contentions.

It is plain that, if these collaterals were pledged to secure the past overdraft of A. Carribre & Sons, representing their antecedent indebtedness to the bank, and the bank knew at the time of the insolvency of tiie firm, the transaction could be reached and avoided by the revocatory action.

We have no doubt but, at that date and long prior thereto, the condition of the Carribres was one of complete insolvency.

We are equally as well satisfied that up to that time the bank, its officers,-and we might say “all the world,” was in entire ignorance, of .that fact.. It is urged, however, that, as Emile Carribre was at the time of this transaction the-president of the bank — -and was of course thoroughly cognizant of the insolvency of' his firm, of which he was the leading and. managing member — his ( Carribre’s ) knowledge was the knowledge of the bank and operated as constructive notice of the fact of insolvency of the firm.

We have weighed with care and deliberation the able argument of counsel on this point, and have studied diligently and exhaustively the numerous authorities cited by them, and our conclusion is this:

That, as a general rule, the knowledge of an agent is the knowledge of the principal. And even where an agent deals in a double capacity for his principal and himself at the same time, and where his acts are evidently designed and intended to benefit or favor the principal to his own prejudice or that of his creditors, even in such case his knowledge of his condition or other material fact will be regarded as the knowledge of the principal. But where such agent seeks his own personal interest or advantage in the affair, without benefit to his principal, then his knowledge cannot be held to he the knowledge of the principal.

Let us test these rules by the facts, circumstances and surroundings of this transaction and see how it results.

The evidence makes plain that the firm was at the time wholly insolvent, and had been so for several years; that this insolvency had been carefully and successfully concealed, and in consequence the vast credit the firm enjoyed at home and abroad remained unimpaired. The business of the firm mainly was dealing in exchange, domestic and foreign, and its large credit was the foundation upon which it acted. It was in truth the very life of the firm, without which it could scarcely exist for a day.

Under this state of things, Carriére’s prime motive was to continue to conceal his unfortunate condition and maintain his credit. His only hope of succeeding in this rested on the Citizens’ Bank. If he maintained his credit with that institution, he could still retain the presidency of it, and thereby avail himself of the opportunity that such a position afforded to draw on its resources and obtain its money to prop up the sinking condition of his firm and perhaps retrieve its desperate fortunes. It is not at all evident that at that time Carriére contemplated failure. He or his firm had so long subsisted on credit only, that he evidently believed that by the ingenious methods pursued in the past it could continue to do so, and with the help of the bank’s means within his reach he might weather the storm and come' out finally all right.

The necessity was upon him, therefore, to make some show to the bank to avert any suspicion of his real condition that might be deduced from his heavy overdrafts, not only with this bank but in nearly every other bank in the city and in seveial of the largest banking establishments of the old world.

In this great crisis, can we readily believe that Garriere placed those January securities with the bank to benefit the bank alone, by paying-in part his existing debt to it, without ulterior purpose in view looking to Ms own advantage? We cannot reasonably so conclude. The heavy drafting that followed this transaction, and the salient fact that after this he succeeded in obtaining some $200,000 from the bank, affords confirmation strong of the wholly selfish purpose that actuated him in this transaction. He was driving a bargain for himself alone.

Under these circumstances, we are forced to the conclusion that the bank should not be held to a constructive knowledge of the insolvent condition of A. Garriere & Sons at that time and in the affair in question, and that this want of knowledge protected the bank as relates to this transaction; and the same must be held valid and the bank entitled to keep the securities then received. In re European Bank, 5 Chancery Appeal Cases (Law Reports), p. 358; Lucas vs. Bank of Darien, 1 Stew. (Ala.) 280, 295; Winchester vs. Railroad Co., 4 Md. 231; Barnes vs. Trenton Gas-light Co., 27 N. J. Eq. 33; Peckham vs. Hendren, 76 Ind.

On the — day of January, 1884, the bank made a loan of $6,600 to one H. Lange. Lange gave his note for the amount and pledged certain State bonds as security for the loan. Emile Garriere, without authority so far as the record discloses, withdrew these, bonds from the bank and substituted for them two promissory notes called and described as the Benachi notes. Mr. Lange made no complaint of this substitution, so far as we can discover. The bank has never been paid this loan. The plaintiff seeks to recover the notes deposited in lieu of the State bonds. Lange got full value for the bonds, and the bank security was weakened or impaired by the substitution. We conclude from all the evidence touching1 this matter, that it was a bona fide loan and that the plaintiff could not legally have deprived the bank of the State bonds originally pledged and cannot reach the notes substituted therefor. The substitution or its validity is settled by the Brugier case, 37 Ann. 509.

VI — DeSmet Transaction.

On the 20th of January, 1884, the account of one Emile DeSmet with the Citizens’ Bank was overdrawn to the amount of about one hundred thousand dollars. This overdraft was by the permission of Emile Garriere, then .president of the bank, and who acknowledged himself responsible for the same.

This indebtedness was evidenced by eight promissory notes of De-Smet, secured by a mortgage on certain saw-mills at Moss Point, Miss., and a pledge of a number of collaterals. These collaterals were held by the bank from the time of their delivery to the 12th of May following. On that day they were given up to DeSmet, in order that he might transfer the mills to Carriére & Sons with the understanding that they were to remortgage the property to the bank on receiving title thereto from DeSmet. This understanding wascarriedoutonthellthof the same month the. transfer was made and the new mortgage executed. This arrangement was made at the request of Mr. Miller, the president pro tem of the bank, who preferred the obligation and mortgage of the Carriéres to that of DeSmet

Besides the mortgage on the mills given by DeSmet, the bank held DeSmet’s note for $41,111 due on the 28th of January, 1884. In part settlement of this note on the same day that it matured the bank acquired from DeSmet notes amounting to $38,000, and for the difference between the discount of their notes, and note owing by DeSmet he gave his check in payment.

• These notes or collaterals were handed by E. Carriére to the cashier of the bank, who received them as coming from and belonging to DeSmet, and there is no satisfactory proof that the Carriéres had any interest in them.

On the 9th of April, 1884, the overdraft of DeSmet amounted to $104,000, and on that day there was a partial settlement between the bank and DeSmet. The $38,000 of notes which had been discounted for DeSmet were charged back to him. This made DeSmet’s indebtedness, with interests, amount to $145,000, for which sum he gave his notes, indorsed by A. Carriére & Sons, secured by pledge of the mortgage notes for $100,000 already held by the bank and the $38,000 notes discounted in the previous January as stated, and on that day recharged to DeSmet’s account. To these notes was added a pledge of another note of $10,000, making $48,000 of notes held by the bank, these notes being known as logmen’s notes. After the transfer of the mills from DeSmet to the Carriéres on the 15th of May, already mentioned, a final settlement was made with DeSmet. His indebtedness then amounted to $195,000.

The Carriéres assumed the payment of this entire sum, and gave a new mortgage on the mills to secure the same in lieu of the one previously given by DeSmet.

There can be no question in our opinion that this mortgage was valid at least to the amount of $100,000, the amount of the prior mortgage given by DeSmet on the same property. Beyond that sum, it is useless to inquire since the property sold for only $38,000. It is not pretended by the plaintiffs’ counsel that this mill property was worth more than $70,000.

The mortgage given by DeSmet on this property was not assailed. The transfer to the Carrieres of the mills was, as stated, with the distinct understanding and agreement that they would assiime the debt of DeSmet, and mortgage anew the property, so soon as they received title, as security for the debt assumed. The affair cannot well be viewed in any other light than the substitution of one debtor and one mortgage for another. 1

It is, however, urged in opposition to this view of the matter, that all the securities connected with this debt of DeSmet did not belong to DeSmet, but to the Carrieres, and that the pledging of them to the hank was the act of the Carrieres as guarantors of the debt and not the act of DeSmet.

DeSmet was the real debtor to the bank to the amount stated above, resulting from his overdraft, and notes of which he was the maker. The liability of the Carriéres for the debt was secondary or contingent, that of guarantors or indorsers. The collaterals pledged as additional security were notes payable to DeSmet, and the evidence of a title to any of these securities in the Carriéres is, by no means, satisfactory and it is incumbent on plaintiff to prove this. We think, therefore, that it is safe to conclude that the transaction touching this debt was the act of DeSmet, although made through and by Emile Carriére, who felt himself bound for its payment.

But, suppose that we are mistaken in regard to this, and that all these securities belonged to the Carrieres, and that the debt for which they were pledged was their debt and in making the pledges of January and April, 1884, which embraced all these securities, the mortgage notes of DeSmet and the collaterals mentioned, Emile Carriére was acting for his firm and the pledge was made not for DeSmet’s debt bwj for the debt of the firm, would such considerations annul the pledge and entitle the plaintiff to recover the property and securities 7

At that time, (the 7th of April, 1884), Emile Carriére still remained as the managing partner of his firm, hut he had ceased to be president of the bank. Mr. Miller became acting president of that institution on the 9th of March, 1884, and permanent president on the 7th of June following.

After the former date, Garriere had nothing whatever to do with the bank — he neither had unexercised any authority in its management or administration. Now, were this affair of the 7th of April a.n undistinguished pledge or transfer of securities for the overdraft or antecedent debt of Carriére & Sons to the bank, there would be no cause to annul the transaction if the bank at the time had no knowledge of the insolvency of the firm and this settlement or partial settlement was made more than three months prior to th,e failure of the firm. In fact, the securities in which this affair of the 7th of April was founded, had been placed with the bank in the preceding January, as shown above, and this transaction as well as the subsequent ones of May mentioned, of the transfer of the mills to Carriere & Sons and the remortgaging them to the bank, related to the transaction in January. All these several acts were but parts or details of one transaction having its beginning and foundation in January, 1884.

At the time of this settlement of the 7th of April, and its complete consummation in May, the situation in one very important respect had changed. Carriere was no longer president of the bank, and had nothing to do with its business or management. He was not acting in any double capacity in this affair, but represented himself or his firm alone. The bank acted through its then president, Mr. Mil ley Apart from the question of the insolvency of the Carriéres, the transaction relating to this DeSmet business was unassailable. As before stated, there was not then any suspicion of this insolvency on the part of the bank or its officers that we can discover from the evidence, but Carriere dealt and was dealt with as a solvent member of a solvent Arm, and from the circumstance of being then in no manner connected with the bank, he stood in the attitude of a stranger to it.

VII.

This brings us to another important question as to whether the 7th of April was within the three months next preceding the failure, for if it was, the want of knowledge touching the condition of the firm, could not save it from the operation of Sec. 1808, R. S.; and this necessitates another and further inquiry, and that is, when did the failure of A. Carriere & Sons take place?

That question is, when did the failure of A. Carriere & Sons take place ?

To determine this we must first refer to the law bearing on the disposition of property made by insolvents within three months preceding failure.

That law in the section above mentioned, 1808 R. S., reads thus:

That any debtor, who shall be convicted of having, at any time within the three months next preceding Ms failure, sold, engaged or mortgaged any of his goods and effects, or of having otherwise disposed of the same, or confessed judgments in order to give an unjust preference to one or more of his creditors over the others, shall be debarred from the benefit of this Act. and the said deeds or acts shall be declared null and void; provided, however, that if the purchaser of such property shall prove that the said property was either sold or engaged to him for a true and just consideration, by him bona fide delivered at the time of such deed, then and in that case, the said sale and mortgages shall be declared valid.”

Our first inquiry must be touching the meaning of the term or word “failure” as used in the section.

The history of the legislation connected with this section is well calculated to throw some light on this point and will assist us at arriving at a proper conclusion touching the true meaning of the term referred to.

As early as 1808, we find an act entitled : “An act for the Relief of Insolvent Debtors in Actual Custody, etc.”

The 17th section of that act is identical with Sec. R. S. 1808.-above quoted, except that, instead of the words “ three months previous to his failure,” in the latter section, we read “three months previous to his arrest and imprisonment” in the former.

In 1817, the legislature extended the benefit of voluntary surrender to debtors not imprisoned as well as to those who were, and passed a general insolvent law under the title of “an act relative to the voluntary surrender of property and to the mode of proceeding as well as for the disposal of the ‘debtor’s estates and for other purposes.’”

This act was reproduced with but slight changes in 1855, and the 25th section of it ipsissimis verbis constituted the Sec. 1808 R. S. referred to.

Thus it will be seen from the history of this legislation that, the provision of this section last named, (R. S. 1808) was originally, and all subsequent amendments and re-enactments, part of a statute the declared object of which was mainly to deal with the cession of property by insolvents, or judicial insolvency. This word “failure” is several times used in other sections of the act, and obviously with no other meaning than judicial failure or judicially declared insolvency.

It is also used in the same sense in the articles of our codes. C. P. 165; C. C. 3027.

All bankrupt laws contain a similar provision with our State insolvent laws prohibiting the giving'of preferences by the debtor within a stated period to the actual bankruptcy, and this period dates back from the commencement of the proceedings in bankruptcy — that is the application of the insolvent debtor for the benefit of the bankrupt law.

And in speaking of the importance of thus fixing a definite and known limitation in the bankrupt law, the Supreme Court of the United States, in the case of Mayer vs. Hellman, 91 U. S. 501, uses this language:

“There is sound policy in prescribing a limitatio i of this kind. It, would be iu the highest degree injurious to the community to have the validity of business transactions with debtors, in which it is interested, subject to the contingency of being assailed by subsequent proceedings in bankruptcy.”

Apart from any legal authorities or precedents, reason and a consideration of the purposes of the statute would teach that the word “failure” as there used, does not siguify a condition of insolvency uncertain and undetermined, but refers to a fact authoritatively fixed, an event certain and determined. The statute otherwise would lead to the greatest confusion and embarrassment andoften to thegrossest injustice. It is what may be termed severe in its provisions, a harsh law, for it strikes with nullity all contracts giving a preference, although the creditor may have acted in the best of faith and in entire ignorance of the insolvency of his debtor. Such a provision should be rigidly construed, and the proscriptive term against the right to contract should be narrowed down to the shortest limit consistently with the language and plain intent of the law.

It is, however, urged that we must accept in this instance the meaning of the word as declared in Art. 3556, Sec. 11, C. C., and failure is there defined to be “the situation of a debtor who finds himself in the impossibility of paying his debts.”

This definition, if it be one, evidently refers not to an established fact or known event, but to a mere condition. There is a serious obstacle in the way of taking this meaning of the term failure used in the statute, as illustrated by the facts of this very case. The evidence shows that the Carriéres were in a situation to find themselves “in the impossibility of paying their debts” for months and even years before their declared failure. To take such condition as the statutory meaning of failure, would necessarily imply that contracts made in the course of their business, years before, their judicial or known insolvency, could be annulled so soon as this condition of insolvency and the commencement of it could be found out or disclosed. No such contention has ever been set up, and it is palpable that such a construction would do violence to the intent and meaning of the law.

Another consideration presents itself to our minds as leading to the same conclusion. This insolvent law, the section of which we are discussing, was a law of universal application, that is, it was applicable-to all persons in the condition described, without regard to their callings or pursuits, and whether they belonged to the commercial or npn-commercial class.

Some circumstances — such for instance as a protest of Ins note— might be sufficient to make known a failure with respect to a banker or a merchant, or others engaged in a commercial business. Whilst a like circumstance would be without such significance with regard to a planter or others engaged in similar callings.

An insolvency, judicially declared, would remove all doubt and uncertainty, and afford the very highest evidence of the fact of failure. It would place the initial point from which the prescribed term, the “tiempo inhábil,” of three months, was to be traced back, beyond all controversy. Then the contracts which, under the rigid provisions of the statute, were to be stricken with nullity, would be so completely hedged in by fixed boundaries as to be of easy ascertainment.

We are not left alone to reason and conjecture on the rules of construction to guide our opinions on this point: the courts have not been altogether silent on the subject.

The first case in point is that of Banduc vs. His Creditors, 4 La. 247. On the 17th of April, Banduc gave a special mortgage to secure an antecedent debt. On July 30, three and a half months afterwards, he made a cession of his property. It was claimed by some of his creditors that this mortgage should be annulled, as having been given within three months of his actual and known insolvency, though more than three months before his cession or judicial insolvency. The decision of the lower court sustained the mortgage. On appeal it was tried before Chief Justice Martin and Associate Justices Matthews and Porter. In the opinion of Justice Matthews we find the following emphatic declaration on this point. He said:

“Whatever may be the doctrine established by the decisions of the tribunals in France, in relation to the time of failure, as recognized by the laws of that country, whether it be the period of the actual cession of property by an insolvent, or that of his inability to meet his engagements, as evidenced by the protest of his notes, etc., I consider it useless to inquire, believing, as I do, that the absolute nullity of contracts, made by a debtor, as fraudulent towards his creditors, and such as our insolvent laws declare to be void, are those contracts alone which are made within the three months preceding his actual failure and surrender of property.” P. 256.

It is, however, insisted by the counsel for plaintiff that this expression is the opinion of Judge Matthews alone, and should not be regarded as authority.

Judge Martin also read an opinion in the ease, and whilst he does expressly announce his concurrence with Judge Matthews on this particular point, he must necessarily have concurred with him. Both judges agreed that the creditor did not know of the debtor’s insolvency, and Judge Martin must also have believed that “failure” meant judicial failure as announced by Judge Matthews, since, if he had counted the three months as beginning at an earlier date — that of the actual (though not declared) insolvency of the debtor, he must have set the contract aside on the ground that it was entered into within the three months in contravention of the prohibition in the statute.

Judge Porter dissented on .the ground that, though the transaction took place more than three months before the cession, and though dissenting, he nevertheless, in the course of his opinion, stated that it had always been his impression that “failure” meant judicial failure, and was to date from the cession as declared by Judge Matthews, though the argument then heard had somewhat shaken his belief on this point.

Since all three of the judges seemed to be in accord on this point, although it may not be held the strictest accord, we think the decision as relates to this point entitled to due weight.

The case of Bank of Mobile vs. Harris, 6 Ann. 711, has a significant-bearing on this point-. Prom tire facts of that case the inference is plainly deducible that there was an entire acquiescence in the doctrine of the Bandue case. A party who was notoriously insolvent, but made no surrender of his property, executed a mortgage in favor of his brother to secure an existing debt after he had been protested. It was attacked on the ground that it gave a prefer ence.

If the failure of the insolvent was to date from the protest of his draft — his actual insolvency — -then the mortgage was a nullity because given within the three months next preceding actual insolvency and protest. The opposing creditor was represented by the most learned and distinguished counsel — -Messrs. Benjamin & Micou — yet no suggestion by them, nor the slightest intimation from the court, that the contract was stricken with nullity, because made witliin the prohibited period. On the contrary, the discussion turned and the decision rested entirely on the knowledge and bona fides of the preferred creditor.

Again in the case of Martin vs. Drumm, 12 An. 494, the Court said with respect to this matter:

“The presumption established by the Act. of 1817, re-enacted in .1855, (R. S. p. 257, 5 28), applies evidently only lo cases in which proceedings are instituted against the insolvent to deprive him of the benefit of the insolvent laws, on the ground of his having given an unjust preference to one or more of his creditors over the others.”

We think we have said enough to make it apparent that the conclusion is well nigh irresistible from these various considerations, that failure is not to be taken in the true sense of the statute as dating from actual insolvency, protest or other like circumstance, but from actual cession or insolvency judicially recognized and declared.

We have been referred to the recent case of Black, Syndie, vs. Richardson Savings Bank and Kennedy, and Seixas, Syndie, vs. Brugier, as opposed to the conclusion reached by us on this point. None of these cases have any direct hearing on this question, for in noue of them was there any issue raised as to the true meaning of the term as found in this section of the Revised Statutes.

It is, however, urged that such a construction would be uufortunate, inasmuch as it would allow an insolvent debtor too much latitude in the disposition of his property and in fraudulent-contracts against his creditors, and that it would place it in his power to defeat even the main object of the law by delaying to make a cession of his property or refusing to make one altogether.

This contention will lose its force when we consider that the creditors of an insolvent have the right, whenever a. state of insolvency exists, to compel him to make a cession or surrender.

The insolvency of A. Carriére & Sons and their cession made on the 18th of July, 1884, and the conclusion reached on the point just discussed, would subject to the operation of the Statute just considered only those transactions between the Garrieres and the Citizens’ Bank, as occurred after the 18th of April, 1884, leaving those before that time subject only to the revocatory action.

The DeSmet transaction having preceded the date above mentioned is excluded from the operation of the Statute, and is governed by aud subject to the revocatory action alone, and this includes the affairs connected with it of May, which, as we have shown, were but parts'of the same transaction and but the carrying out of the previous understandings or agreements of the previous January and April.

VIII.

Manuel Escobal pledged to the Citizens’ Bank certain collaterals and twenty-two bales of leaf tobacco to secure two notes given by him to the hank for $8,000 and $5,000 respectively. The lower court maintained the bank’s title to the securities, and there has been no amendment of the judgment asked for in this respect, and we are therefore relieved of the further consideration of the transaction.

'Escobal bad overdrawn bis account with the bank for several years, with the permission of Emile Carriére. On the 29th of March, 1884, the overdraft amounted to $111,984, abd for which Emile Carriére acknowledged himself responsible, and Carriére & Sons furnished their four notes to the bank to cover said amount; securities were pledged and discounted as before, and a check drawn by the Carriéres in favor of the bank for the proceeds. Escobal’s account was thus closed. The Carriéres were to pay the debt and Escobal was released.

The release of Escobal by the bank was a good and sufficient consideration for this transaction with the Carriéres. It does not require a moneyed consideration to protect the contract from the operation of Section 1808, R. S., or the reach of the revocatory action. Any legal consideration will suffice. Their assumption of Escobal’s debt, whereby the bank released him from liability, was a good and sufficient consideration for the contract, and we see no reason to question its validity or the title of the bank to the securities received under it.

Even, however, if the consideration was not sufficient and contemporaneous, but was nothing more nor less than a transfer or pledge for an antecedent debt, it cannot he annulled for reasons given with respect to the DeSmet; affair. The same principles and reasons apply to all transactions between the parties occurring in tire interval preceding the 18th of April, 1884, and the 9th of March of tire same year, the date when Mr. E. Carriére retired from the presidency of the bank, which includes the pledges of the 12th of March, as well as those of the 29th of March aud 7th of April, specially mentioned above.

IX.

There is some mention made in the opinion of the judge a quo in tile record, of a pledge of the 7th of June, 1884. It does not seem to be an object, of much contention, since it is not mentioned in the brief of plaintiff’s counsel, and briefly referred to by one of defendant’s counsel. It consisted of the discounting of a number of collaterals received bj the bank under its several pledges, aud putting the proceeds to the credit of Carriére & Sons. This was done by direction of Mr. Miller, the president, as explained in his testimony after the death of Mr. A. Carriére, so as to close the account. It lias no significance or hearing whatever that we can see upon the issues in the case.

X.

On the 23d of April, 1884, Mr. E. Carriere^by permission, withdrew some of the securities acquired by the previous pledges and substituted other paper in lieu of them. These substitutes are claimed by the syndic. We think the substitutes took the same status of the notes withdrawn, and the bank held them by a right equal to that entitled to hold the original. The substitution is covered by the Brugier case, 37 Ann. 509.

This completes the review of all matters and issues presented in the case, the examination of which has consumed mm h time and involved great labor.

It is therefore ordered, adjudged and decreed that the judgment of the lower court be affirmed in the following particulars, to wit:

1. In so far as it maintains the validity of the pledges executed by A. Carriére & Sons to the Citizens’ Bank of March 19, 1883, and February 15, 1884, and recognizes the title of bank to the securities received under them.

2. In so far as it maintains the right of the bank to hold and retain the other securities mentioned, designated and described in the opinion and judgment, whether embraced or included in said last mentioned pledges or not.

3. In so far as it rejects the demand of plaintiff to the bonds of the St. Louis, Atlantic, Canal and Transportation Company, and the disposition made in the decree respecting them.

That in all other respects it is further ordered, adjudged and decreed that the judgment appealed from be annulled, avoided and reversed, and the plaintiff’s demand be rejected with costs of both courts.

Bermudez, C. J. concurs in the decree.

Concurring Opinion.

Poo hé, J.

While I concur in the decree rendered in this case, I am not in accord with all the reasons contained in the opinion as adopted by the majority of my associates, and I therefore rest my concurrence on the following considerations:

The essence of success in all actions intended to abrogate contracts entered into by insolvent debtors, at the instance of one or more of their creditors, is the intention of the debtor to injure some of the creditors and to benefit others.

In the revocatory action, the intention must be proved against both the preferred creditor and debtor, together with knowledge of the creditor touching the state of insolvency of his debtor.

In the action under Section 1808 of the Revised Statutes of 1870, it is sufficient to prove the intention of the insolvent debtor in the contract assailed, to give an unjust preference to one or more of bis creditors over the others, without any proof of either knowledge or intention on the part of the preferred creditoi.

A careful consideration of all the facts connected with the numerous transactions assailed in this case, has forced on my mind the clear conviction that, in all the contracts between the Citizens’ Bank and the firm of A. Carriére & Sons, through the instrumentality of Emile Carriére, either when he was-acting in his dual capacity or when he was dealing as the manager of his firm with his successor as president of the hank, Emile Carriére never was animated with the least intention of benefiting the bank.

The record shows, beyond any reasonable doubt, that for several years previous the firm of A. Carriére & Sons was alarmingly insolvent to the full and almost exclusive knowledge of Emile Carriére, who found in the bank and its funds the only'means of sustaining the waning credit of his firm both at home and abroad, but principally with their‘foreign correspondents.

Now, in order to quiet tlie alarm, and to lull the lurking suspicion of the directors of the bank, which were gradually arising from the unreasonable overdrafts, and from bis suretyship on account of the ravenous demands of dangerous customers, such as DeSmet and Escobal, he quickly heeded the warnings of the cashier, and reduced his overdrafts by sundry contracts of pledge; hut it is clear to my mind that he was not actuated with any motive to enhance the condition of the bank as a creditor, hut that his simple and very apparent purpose was to pave his way to other overdrafts and to a constant bleeding of the hank of its resources.

By those means, his true intention was concealed, a false sense of security was created in the minds of the managers of the bank, and bis double dealing game was successfully played until the occurrence of tlie fatal catastrophe; the death of bis father, opened the eyes of all, and burst his ingenious bubble.

The result was that, at the date of their failure, while the indebtedness of the firm to the bank, had assumed a different form, it had not been practically affected to the advantage of the bank, but that, on the contrary, that corporation was one of the heaviest sufferers in the disaster.

The record shows that, on the wake of each of the pledges made to the bank, tlie firm of A, Carriére & Sons invariably drew repeated and immense amounts of cash, which had the effect of swelling the amount of their indebtedness to the bank, on that score, to an extent exceeding the amount of their original overdrafts.

I therefore conclude that through and by means of the multifarious transactions included in plaintiff’s attack, there was no intention of benefiting the bank on the part of Carriére, and that practically no such effect can be attributed or traced to any of the contracts which have been subjected to judicial test in this controversy.

Entertaining these views, I find no necessity for the discussion of the vexed questions of the knowledge of the agent as an equivalent to the knowledge of the principal, and of the date from which the three months contemplated by Section 1808 should be computed. Hence I take no part in the discussion of either of these questions, and I am not committed to the views of the majority therein.