author: Slidell, 0. J. Lea, J. Buchanan, J.,

text:
    F. McIntosh v. Merchants’ and Planters’ Insurance Company. J. Culbertson, Receiver, v. W. L. Cushing, opponent and appellant.

    The Merchants’ and Planters’ Insurance Company, (established under the provisions of the Act of 1848, for the organization of corporations in this State,) having become insolvent, was, by judgment of court, put into liquidation under a receiver. Among its assets were a number of notes drawn by sundry persons; the following is the purport of one of them: “Twelve months after date, (or sooner if required to meet assessments made by the company,) I promise to pay to the Merchants’ and Planters’ Insurance Company, or order, five hundred dollars for value received.” The receiver brought suit on these notes, jffelcl:

    1. The unmatured notes stood as security for the performance of any contract which it was lawful for the company to make, and which had been made previous to the expiration of tme year from the date of the note.
    2d. Although the charter says that the notes are to be given for the security of those who shall insure previous to the formation of the permanent fund — yet where it is also stated the notes are only to be held for a year, and the notes themselves are payable in a year, they must be considered as guarantee notes, liable for debts created before the formation of a permanent fund, and before the maturity of the notes, but not after their matui ity.
    8. Por the expenses of the liquidation, all the guarantee notes are liable pro rata. After charging these expenses, pro rata, upon all the solvent notes, the residue of the moneys collected upon them re • spectively, should be treated as distinct funds, applicable by a proper classification to the particular class of claims for which the particular note, according to_its date and the date of its maturity is held responsible. If any of the makers are insolvent, thatshouldnot release the solvent makers from liability to the full amount of their notes. Premiums should not be credited on any note, nor any thing but actual cash'payment made in fulfilment of the promise contained in the note. A maker who has a lawful claim against the company, should not be allowed to offset it, but only to participate in the dividend upon claims of its class as any other creditor.
    The State claimed taxes. The tax on capital was disallowed; the tax on insurance companies was allowed, but without privilege*
    One clause of a charter should not be construed in so large a sense as to silence other clauses where, without violence to the language, a construction can be given which will make all harmonize.
    The contract of suretyship is not to be extended to any other sulyect, to any other person, o'r to any other period of time, than is expressed or necessarily implied in it.
    An agreement on the part of the makers of the notes to continue their liability for a longer period . than one year from the dates of the notes, must be inferred from the fact, that the notes were found among the papers of the company, when put in liquidation. BucIiwxom, J., dissenting.
    Prom the terms of the charter, the notes constituted the assets — the capital of the company_“for the security of those who should insure previous to the formation of the permanent fund” • and the capital could not be withdrawn previous to the happening of that contingency — the formation of that fund. Yoorhies, J., dissenting.
    APPEAL from the Fifth District Court of New Orleans, Augustin, J.

      Durant & Horner, for J. Oulbertson, Receiver, and W. Christy. J. A. Mabin, E. L. Goold, O. M. Emmerson, E. K Durell, and E. Rawle, for defendants and appellants.

      The cases in which Pike, Macmurdo, M. White & Co., Meggett, Christy, Harrison, Robbins, Bridge & Brother, Cronan, and Dougherty, were parties, wore consolidated and tried with the above

   Slidell, 0. J.

(Osden, J., recusing himself.)

At first blush, it might seem that the notes which we may call guarantee notes, are applicable only to the satisfaction of claims based upon policies of insurance. But a careful analysis of the 4th section will show, I think, that other liabilities of the company are also protected by them. Not less than five, nor more than ten per cent, was demandable in cash on the day of commencing business, on which day the company could not bo liable for losses on policios; and the reasonable inference is, that the money was to go into the general treasury of the company, and was to be used for other wants of the company, as office furniture, books, rent, salaries, &c. Such items would enter into the account of “ profits and losses,” spoken of in the same section. It must be remembered, that equality is equity; and as there is no express preference given to holders of policies, I think it must be inferred that the object was to protect them with other creditors. I think any person dealing with the company in any matter incidental to its business, whether taking a policy, or leasing it an office, or becoming an employe, or furnishing books or furniture, or making any contract which it was lawful for the company to make, had a right to consider the notes, unmatured at the time of such contract, as standing for his security.

II. I am of opinion, that no maker of a guarantee note is liable to contribute to any loss or liability under a policy of insurance, or other lawful contract made by the company, unless such contract was made previous to the expiration of one year from the date of his note.

This second proposition is not so free from difficulty,, but I apprehend it must be adopted upon a survey of all the provisions of the charter pertinent to the subject matter.

From a perusal of the charter, it appears that the company was to start its; business, and issue policies, without anj’ cash capital. Hence some other provision was necessary for the protection of persons assured,, or otherwise lawfully contracting with the company,, in case of losses, and the inadequacy of premiums received to meet them. This provision was made by the guarantee notes.

But it was expected that in time an amount from premiums would be accumulated sufficient to form a capital, and ft was supposed' that this result would be accomplished partially or wholly, by the first year’s business. See section 5th and 21st. At the same time, it was unreasonable to expect parties would be willing to enter into a guarantee for a time entirely uncertain. A term, therefore, for the operation of the guarantee was stipulated,, to wit, one year— “ the said notes shall be hold by the company for the term, of one year” — by which I understand that the maker was not to guarantee any policy issued, or contract made, more than a year after the date of his note. Still it might happen that the business of the company might not so prosper,, as to realize profits enough to form a fund that would give confidence to customers; and hence the provision for an extension of the guaranty by future consent — “ The makers of said notes may, however, agree with the directors, that their notes shall remain in possession of the company for a longer time than one year, upon the same terms as hereinbefore set forth.”

This seems to me the only interpretation which will give effect to all the expressions of the charter with reference to which these notes were given, and to the language of the notes themselves. One clause should not certainly be construed in so large a sense, as to silence other clauses, where without violence to the language, a construction can be given, which will make all harmonize. When, therefore, the charter says, the notes are to be giyen for the security of those who shall insure previous to the formation of the permanent fund, &c., and the same charter says, the notes are only to be held for a year, and the notes themselves are payable in a year, I understand the whole, taken together, as contemplating a contract to this effect: “ To the amount of this note, I guarantee the payment of any person effecting insurance in, or otherwise lawfully dealing with this company, or who has lawfully so dealt, previous to the formation of a permanent fund, and before the expiration of one year from this date.”

I look upon these notes, although certainly anomalous in their character, as partaking of the nature of contracts of suretyship ; and the rule is well settled, that such a contract is not to be extended to any other subject, to any other person, or to any other period of time, than is expressed or necessarily included in it.

I do not think the mere fact that the notes remained in the possession of the corporation, can be construed into a new agreement of the nature contemplated in the last clause of section 4th. Let it be observed, that the company necessarily had a right to retain the notes until the class of liabilities they were intended to protect, had been liquidated and ascertained. To any creditor who pretends to have acted on the faith of these notes, it is fair to say, the notes were not ordinary promissory notes, but showed on their face, they were made with reference to the charter, and the charter showed the terms of the makers liability ; you had no right to infer there was a new agreement to extend the term from the mere fact of the retention of possession, without a new agreement endorsed on the notes, or otherwise destinctly shown. I understand the guarantee notes taken in New York by mutual companies, are, in their form, promissory notes, in the legal sense ; that is, a written engagement to pay to another person therein named or his order, or to bearer, absolutely and unconditionally, a certain sum of money at a time specified therein.

A few other points remain for consideration. I think a guarantee note is liable for claims originating before its date, although not for claims originating after its maturity. But for the expenses of the liquidation, all the guarantee notes are liable pro rata. After charging these pro rata upon all the solvent notes, the residue of the moneys collected upon them respectively, should be treated as distinct funds, applicable by a proper classification to the particular class of claims for which the particular note, according to its date and the date of its maturity, is held responsible. If any of the makers are insolvent, that should not release the solvent from liability to the full amount of their notes. Premiums should not be credited on any note, nor any thing but actual cash payment made in fulfilment of the promise contained in the note. A maker who has a lawful claim against the company, should not be allowed to. offset it, but only to participate in the dividends, upon claims of its class, as any other creditor.

We think Bcates has no right to collect the tax on capital claimed by him for the State, and that the State is a creditor without privilege for the tax on insurance companies and the penalty as claimed.

It is to be regretted that an instrument so important as the charter of a corporation, by which complicated rights and liabilities are to be controlled, should not have been framed with greater accuracy and perspicuity. I admit there is ground for diversity of opinion; but the conclusions I have expressed are those to which my mind has been brought after repeatedyonsidoration of this difficult subject. *

I refer for further elucidation of the subject, to the opinion prepared by Judge Lea,

Pursuant to the opinion of the majority of the court:

It is therefore decreed, that the judgments in these eleven consolidated causes, be reversed, and that these consolidated causes be remanded as to all the parties, for further proceedings in one suit and in concurso; the costs of the appeals to be paid by the receiver and appellee.

Campbell, J. concurring.

Lea, J.

(Judge of the Second District Court of New Orleans, sitting in the place of Ogden,'J., who recused himself.)

Invited, in accordance with the provisions of the Constitution, to serve as a makeweight in the determination of this case, between the equally balanced opinions of the members of this court, I would be content to rest the decision upon the exposition contained in the opinion of Chief Justice Slidell, but as it has been considered by a majority of the court, that, under the circumstances of the case, it would be satisfactory to the parties litigant herein, that I should present a separate statement of the reasons upon which my opinion is based, I have, though it involves a repetition of opinions already expressed, prepared the following memorandum, having reference only to those points upon which there was a division of opinion.

The Merchants and Planters’ Insurance Company was established under the provisions of the Act of 1848, for the organization of corporations in this State.

Its act of incorporation was confirmed on the 80th of October, 1849. The objects of the incorporation are set forth in- the 2d and 17th Articles of its charter. Having become insolvent, it was put in liquidation on the 28th of January, 1852, and a receiver appointed. Among its assets were discovered certain notes, drawn by sundry persons, in the following form:

New Okleans,-, 1849.

Twelve months after date, (or sooner if required to meet assessments made by the company,) I promise to pay to the Merchants and Planters’ Insurance Company, pr order, -dollars, for value received.

Signed, A. B.

The receiver has brought suits against the several drawers of these notes, and one of the questions to be determined is, what is the nature and extent of their liability ? This is to be ascertained by a comparison of the notes themselves, with the provisions of the charter of the company and the statute in virtue of whose provisions the company was organized.

The Act of 1848, page 75, section 20, provides : “ That the amount of the fund subscribed, as the capital wherewith any such company shall commence its business, as well as the manner in which the payment of such fund is secured, if not paid in cash,- — . shall be stated in the act of incorporation.” This it appears was not done, but it is urged that the notes sued upon having been furnished in accordance with this provision of the statute, constitute “ t7ie capital” of the company and, as such, are as much the property of its creditors, as if they had T)een “paid in cash."

For the purpose of the argument, it may be assumed that they do constitute the capital upon which the company transacted business, but if it was provided in the charter, that instead of proceeding to transact business upon a cash capital either paid in, or borrowed, they would go into operation with no greater security than guarantee notes, payable in accordance with the provisions of the charter, it does not appear to me that the character of the obligation can be changed, because they constitute its only capital.

The drawers of the notes, in accordance with the charter, furnished to the company certain conditional obligations; such as they were, they constituted the security which creditors looked to in their transactions with the company, and such as they are, they must make the most of them, whether they are or are not the capital of the company. For all the purposes for which they exist as obligations, they a/re the property of the company.

The question is not to whom do the notes belong ? But what is the extent of the liability of which they are the evidence ?

It appears to me clear, that the notes do not purport an absolute liability. The liability and the extent of it depends entirely upon the occurrence of losses by the company. If the company loses nothing, the drawers are bound for nothing. If the losses of the company exceed its profits, they promise that they will contribute according to assessment to make good the deficiency. They gain nothing in any event; they do not participate in the profits of the company, (except so far as they may be insurers,) and the only stipulation for their benefit is, that they shall receive six per cent, interest upon their advances or payments, until the same shall be reimbursed.

Now this, it appears to me, is a contract of suretyship. It is the same as if A and B should say to 0 and others, here is our friend D, who is about entering into business without capital; for the purpose of enabling him to obtain credit, we promise that if the losses in his business during the first year exceed the profits, we will make good the deficiency according to assessment, in a sum not to exceed $1000 each, it being well understood, that upon such payment or advances as we may make, we shall receive six per cent, interest until the same is reimbursed. Now, if this contract were reduced to writing, signed by each of the parties and placed in its possession, this fact could not alter the nature of the obligation, it would still be a contract of suretyship obligatory upon each of the parties according to its tenor.

Nor is the nature of the obligation affected by the fact, that most of the drawers are corporators, since it is not in their capacity as such that the notes are given. This is evident from the fact, that some of the defendants were not parties to the act of incorporation, and it was contemplated by the charter itself, that such notes should be given by others than those who were parties to the act. See the commencement of the 4th article of the charter, where it is provided, that “each appearer or party to this act, or any other person, may give,” &c. It is not obligatory upon those who are corporators, that they shall give such notes, and those who are not corporators may give them, and in this case have given them.

Considering the obligations then as those of sureties, what is their extent as to time and amount ?

It appears to me that it would be inconsistent with the express provisions of the 4th article of the charter, to extend the responsibility of the drawers beyond the liabilities of the company incurred within the year during which the notes were respectively held. The express language of the article is, “ and the said notes shall be held by the company for the term of one year.” The concluding sentence provides, “that the makers of the said notes may, however, agree with tire directors, that their notes shall remain in possession of the company for a longer time than one year, upon the same terms as hereinbefore set forth.” In the absence of any such agreement, (and none such is proved,) it would seem that the liability of the parties as to the period of time within which the obligations are to have effect, are fixed in terms by the language of the 4th article. The mere fact that the notes remained in the possession of the company, cannot be construed into such an agreement, as such provision was nQj. acoompanied with any stipulation that they should so remain “ upon the same terms as before set forth.” Moreover, it was the right of the company to retain the notes until the liability of which they were the evidence had been fixed and liquidated. If the liability is not limited to one year, it must be indefinite, and the terms of the charter appear to me to repel the idea that an unlimited responsibility as to time was assumed.

The next question presented for solution is, for whose benefit were these obligations given ?

It is urged that the guarantee notes are applicable to the satisfaction of no class of claims except those based upon losses insured against by the company; and this proposition rests upon the construction of the first sentence of the 4th article of the charter — “ For the security of those who shall insure previous to the formation of the permanent fund,” &c. This whole section is liable to misconstruction, in consequence of the loose manner in which it is expressed, but I think there is force in the argument which refers to the liability of the drawers of the notes to the assessment which is directed to be made, and the payment which is to be demanded, when the “ company shall sustain losses greater than its profits will enable it to pay,” and it appears to me to be both plausible and reasonable to consider the words “ profits” and “ losses,” as used with reference to their general signification as commercial terms, and the word “security” in the connection in which it is used, as meaning “safety,” or “ certainty.”

It is to be observed, that the whole business of the company was restricted, by its charter, to transactions in the different branches of insurance. The company could not lawfully make any contracts other than those incident to the business of insurance, but it is evident that there might be numerous liabilities growing out of, and necessarily incident to the lawful business of the company, other than its insurance risks, and the question is,'whether the liability of the defendants, as guarantors, is to be restricted to this latter class of obligations, or to be considered as extending generally to all the lawful liabilities of the company. In the absence of proof to the contrary, it is to be presumed that the debts of the company wore contracted in the course of their legitimate transactions, and if so, though they may not be contracts of insurance, are they not entitled to the benefit of the security provided by the terms of the 4th section. For instance, a contract may have been made for a supply of lumber to rebuild a house destroyed by fire, and of which the company were insurers, is not the creditor, in such a case, entitled to the benefit of the security?

Upon the other points urged in the arguments at bar, I believe there is no division of opinion in the court, moreover they are fully embraced in the opinion prepared by the Chief Justice, and therefore it is unnecessary to refer to them further than to express my concurrence in the opinions expressed.

1st. That Pike's claims, as a seizing creditor, cannot be recognized, for the reason that the obligations seized were not liable in law to be sold for the benefit of a single creditor. The charter provides, that they shall be applicable, either to the satisfaction of the claims of the mass of the lawful creditors of the company, or at least of those who may have become creditors within the year preceding the maturity of the notes. Gushing's claim also comes under this head.

2d. As respects the defence set up by Dougherty, I concur in the opinion, that he is not entitled to any credit for premiums paid by him or brought to the company through his influence. This note was not a premium note, but was given, as all the other notes were, as a guarantee note. His verbal under standing with the actuary, admitting it to have been proved, cannot impair the effect of his written obligation, which is of the same tenor and purport with the other guarantee notes. Nor can ho be permitted to establish a privilege in his own favor by compensating his claim as an insurer against his liability as a guarantor.

If the views hereinbefore expressed are correct, Maemurdo's liability stands on the same footing with that of the drawers of the other notes.

Buchanan, J.,

dissenting. I differ from the majority of the court on the single point, that tbe makers of guarantee notes are not bound upon contracts made by the company, after one year from the dates of their respective notes. I think, on the contrary, that we must infer an agreement on the part of the makers of those notes, to continue their liability, from the fact of their being found among the papers of the company, when put in liquidation,

Voorhies, J., dissenting. The charter of the Merchants’ and Planters’ Insurance Company, incorporated under the provisions of an Act entitled, “ an Act to provide for the organization of corporations of this State,” approved March 16th, 1848, was declared to be forfeited by a decree of the District Court, dated the 28th of January, 1852. A report, showing the amount and nature of the assets and liabilities of the company, was filed by a receiver appointed for that purpose. This report has given rise to various oppositions, both on the part of the creditors and of the corporators of the company. The fourth article of the charter is in these words:

Eor the security of those who shall insure previous to the formation of the Permanent Fund, each appearer or party to this act, or any other person, may give his or her promissory note, drawn in favor of the company, and made payable in the following manner; Not less than five, nor more than ten per cen-tum of the amount on the day of commencing business, if required by the Directors, and the balance of the amount at such times, and in such instalments as the Directors may require; but payment of said notes shall not be demanded unless the company shall sustain losses greater than its profits will enable it to pay; and the said notes shall be held by the company for the term of one year, and in case of losses by the company exceeding the profits, and the Directors should require the payment of any part of said notes, prompt payment thereof shall be made; and in default thereof, the makers of said notes shall forfeit and pay the whole balance due, which shall be collected in any court of competent jurisdiction. The makers of said notes may, however, agree with the Directors, that their notes shall remain in possession of the company for a longer time than one year, upon the same terms as hereinbefore set forth.

The notes given under this article of the charter, were classed in the Receiver’s report as part of the assets of the company, on which suits were instituted against several of the makers, namely : John Macmmdo, Denis Gronan, Elliott Robins, John A. Dougherty, Bridge & Brother, and Maunsel White & Go. These suits were cumulated with the concurso, or oppositions to the report, but separate judgments were rendered in several of them, and appeals taken therefrom. On the oppositions, the corporators who were condemned to . , , . . , . . , pay their notes, and the creditors whose claims were rejected, have also appealed from the judgment homologating the receiver’s report.

It is contended by John Macmurdo, one of the appellants, that the obligation contracted by him was that of suretyship, limited in its terms under the charter to twelve months; that the Directors of the company having failed to make any assessment, or to call on him for losses, or to make any arrangement with him to keep his note, within that period, his obligation ceased and was at an end. This proposition is certainly untenable. From the fact that nearly all the notes bear different dates, it is unreasonable to infer that it ever entered into the contemplation of the parties, that their liability should be limited to the losses occurring within the term stipulated for the payment of their respective notes, particularly when it is considered that some of their notes were given long after the act of incorporation had been signed by them. The terms of the charter repel such a construction, which, if conceded, would necessarily lead to a variety of assessments, more or less intricate, especially if made in reference to the ai^ustment of the incidental expenses of the company, which obviously constituted a part of the losses intended to be secured by these assets. Hence, under this construction of the contract of the parties, made in reference to the charter, the difference in relation to the dates of their respective notes, must be considered as immaterial.

It is cleai-, from the terms of the charter, that the notes thus given constituted the assets, the capital of the company “ for the security of those who should insure previous to the formation of the Permanent Fund.” Now, it may be asked, how could this capital be withdrawn as such security, previous to the happening of that contingency — “the formation of the Permanent Fund?” As no Permanent Fund was ever formed, the negative of this question would seem to be repugnant to the palpable meaning of words. The position that the obligation must be viewed in the light of suretyship contracted for the benefit of the company, is equally untenable, either on principles of law or of equity. The hope of gain, as in all aleatory contracts, formed the consideration of the notes given by the corporation, the extinguishment of which depended on the formation of the Permanent Fund as provided for by the 5th Article of the charter, in these words;

There shall be.set apart, as soon as the business and profits of the corporation will allow it, a Permanent Fund, of the amount of $200,000 ; and for the formation of said fund, all the profits arising from Insurance or any other source, during the first year, except so much as may be required for paying the subscribers, as hereinbefore mentioned, and expenses, shall be set apart for that purpose, &c.

The clause in this Article, that the profits of the first year, after certain deductions, should be set apart for the permanent fund, was evidently based on the hope that the corporators expected to realize such profits, but were disappointed. This does not shake in the least, my construction of the contract, which is, besides, fortified by another article of the charter in those words: “All persons who shall have paid their notes, or any part thereof, shall be entitled to reimbursement of such amount, with six per cent, per annum interest.”

In relation to the other notes, the same question arises. It is however urged by Dougherty, that the note given by him, is entirely different from the others which were' given under the 4th Article of the charter-; that it was given merely as an earnest that he would bring business to the office equal to its amount— $4,000. Having signed the charter, he must be treated as one of the corpora-tors. His note cannot be distinguised from the others, except as to its date. As we have already seen, this must be considered as immaterial and not altering the nature of his liability. Under the 4th Article of the charter it is expressly provided, that “ for the security of those who shall insure previous to the formation of the permanent fund, each appearer or party to this act, or any other person, may give his or her promissory note, drawn in favor of the company,” &c. Under this stipulation, as one of the corporators, it is clear that he cannot escape from his liability. The decisions on which he relies to sustain the grounds of his defence, were based upon premium notes of Mutual Insurance Companies, whose charters -were essentially different in many respects from the one under consideration, and therefore cannot aid us in our examination.

The question arising out of the oppositions of the creditors who are appellants, are next to be considered.

J. W. Pike, as a judgment creditor, claims a privilege on the assets of the company, by virtue of a seizure made under an execution of his judgment.

The liabilities which the company had authority to contract, wore expressly prescribed by the 17th Article of the charter, in these words:

The Board of Directors shall have full power to do all acts necessary to carry into effect the purposes of the corporation, which are declared to be, to make insurance upon ships and all other vessels, steamboats, and all other river or lake craft, upon freight, seamen’s wages, goods, wares, merchandize, gold and silver, bullion or money, against all maritime risks, risks of rivers or lakes, or such as are usually insured against. Also upon houses, stores and buildings, every kind whatsoever, and on goods, wares, merchandize, furniture, and other articles, against fire. Also, upon bottomry and respondentia, and upon the lives .of all persons, free or slaves, and granting annuities, &c.

As already stated, incidental expenses necessary to carry on the business of the company, must also be included among its legal liabilities. Its assets constituted the common pledge of its creditors. Privileges secured by the charter cannot therefore bo affected by the seizure of any one of its creditors so as to prejudice the rights of the others. Conceding the correctness of Pike's judgment, his seizure clearly gave him no privilege to be paid out of the common pledge in preference to the other creditors.

In relation to the claim of J. W. Seates, as collector of State taxes, I think his opposition was properly overruled by the District Court. The assets of the company, consisting only of the notes of its corporators, cannot be fairly considered as coming under the operations of the statute. Its profits alone could have constituted such capital, and its insolvency show's that none were ever realized. It is urged by the opponent, that the State is entitled to a privilege for its claim. The counsel has not favored the court with any authority on the subject, and I am not aware of any law granting such privilege. I think, however, the claim as allowed, should be paid concurrently with those classed on the tableau to be paid for losses out of the proceeds of the guarantee notes.

In the opposition of L. Gushing, the record show's that he is the owner of an adjusted claim in favor of B. Coffins, for the sum of $1,080, on a policy of insurance of the company for losses, which he acquired at Sheriff’s sale, under an execuyon issued on a judgment in his favor against said Coffins, in which sa'^ comPany was garnisheed. This claim should also be entitled to he paid concurrently with the other claims, out of the proceeds of the guarantee notes> but not with privilege, as claimed by virtue of his seizure, for the reasons assigned in the opposition of PiJce.

I am, therefore of opinion, that the judgments rendered by the District Court in favor of the Receiver against Denis Cronan, Bridge & Brother and John Dougherty, should be affirmed with costs in both courts; and that the tableau should be amended by placing thereon the claims of Cushing and Scales, to be paid concurrently with the other creditors, out of the proceeds of the guarantee notes, and so amended that the judgment of the District Court homologat-ing said tableau should be affirmed with costs.


source: Caselaw Access Project

author: Buchanan, J. Buchanan, J.,

license: Public Domain

text:
    Succession of Sarah Baum.—John Kellar, Opponent, v. John D. Fink.
    An executor who permits a person to retain the money of the succession in his hands and appropriate it to an assumed debt against the succession does not thereby incur the penalty of 20 per cent, interest per annnura, under the Act of 13th March, 1887; the funds neyer having come into the hands of the executor.
    An executor of an estate administered another estate as syndic, and filed, as syndic, an account, which was homologated, showing an indebtedness to the succession which he administered. Held,: That this amount came to his hands as executor, within the meaning of the Act of 13th March, 1837, and for notplacing it on his account, he was liable to the penalty imposed by that Act.
    An executor who neglects to account for money received, does not superadd the forfeiture of his commissions to the penalty imposed by the 3d section of the Act of 13th March, 1887.
    APPEAL from the Second District Court of New Orleans, Lea, J.

      G. Schmidt and J. D. Mix, for opponent and appellant, W. C. Micou and Bl. D. Ogden, for defendant.
   Buchanan, J.

Sarah Baum, the wife of John Kellar, for some reason or other, only known [to the parties, chose to keep her marriage secret during many years, although cohabiting with her husband: a strange instance of a woman preferring the worse than equivocal position of a concubine to the honorable and advantageous one of a married woman. She made her will as a single woman, naming as her executor, her son-in-law, Peabody, who, proving-unfaithful to his trust, was removed, and Thomas Powell was appointed by the court in his place. Powell also became a defaulter and was dismissed; and in 1842 John D. Pink was appointed dative testamentary executor, and has held the trust ever since.

Shortly after the succession was opened, John Kella/i' instituted suit against the executor to be recognized as the husband of Swah Baum, and claiming an interest as surviving- partner in community in her succession. This suit remained a long time untried. The Canal Banlc, in 1842, intervened asa credit- or of Kella/r's, and prosecuted the case to a final judgment, and it was decided in the Supreme Court in 1845. The case will be found reported in 11 Robinson, page 314. In that case the court affirmed the decision of the court below, which declared that John Kella/r was the husband of ScurahBawn, and ordered that the property heretofore considered as belonging to the succession of the latter, be inventoried as belonging to the community.

In conformity with this decision, an inventory of the community property was made by Duplessis, Notary, on the 16th January, 1846.

It is worthy of note, that Fink assisted at this inventory, and signed the same in his capacity of dative testamentary executor of Sarah Baum.

On the 18th November, 1843, Finis rendered an account showing the amount of assets and liabilities of the estate, and payments made by the executor, to that date. In the list of passive debts, in that account, is found an item of $750 due to X. W. Hoffman, which will be the subject of further remark. The balance in the executor’s hands by this account was $131 05.

On the 17th January, 1846, after the judgment of the Supreme Court, recognizing Kollwr as the husband of Swrah Bavm, and decreeing all the property of the latter to belong to the community of acquets, Mr. Fink filed another account of administration, divided, like the former one into four heads. 1. Sums due to the estate. 2. Sums received by the executor. 3. Debts of the estate. 4. Sums paid by the executor. According to this account, the amount which had come into the hands of the executor to date, including $131 05 balance from previous account, was $1836 73; that of the payments made by him $1645 02, including the debt of Hoffman for professional services, of $7 50, included in the former account, and of the debts of the estate unpaid, $188 38. The balance in the hands of the executor according to this account, was $191 71; which after satisfying all the debts unpaid, would have left the sum of three dollars and thirty-three cents, balance to the credit of the estate.

On the 17th May, 1852, Jolvn' Kellao’, styling himself surviving partner in community with the deceased, and -creditor of the succession, took a rule upon the executor Fink to file a final account of his administration and exhibit his bank book.

Fink excepted to this rule, averring that all the debts of the estate, except attorney’s fees and court charges had been long since paid, and denying Kel-la/r's quality of surviving husband and partner in community of Sarah Baum.

The exception being overruled, and the rule made absolute, the dative testamentary executor filed an account of his administration on the 10th July, 1852, showing a balance due himself from the estate in final settlement, of $144 08 and outstanding debts, in addition to the amount of $700.

The account was opposed by Kellar, personally and as tutor of the grandchild and heir of Saralt Bourn, on several grounds, which will be examined in their order.

1st. That the executor had collected a debt due the estate by the Oanal Bank of $15,000, which was not accounted for.

The evidence satisfies us that the claim against the Gamal Bank was never received either by the executor himself, or any person acting for him. It appears that H. W. Hoffman, Esq., as attorney of John KeTla/r, received the sum of $6964 24, in full settlement of that claim, and we find in the record an account current of Mr. Hoffman with Mr. Kellar, consisting on the debit side of that sum of money, and on the credit side of various charges in offset of the same, and showing a balance due Mr. Hoffman of $76 06. In our opinion, this account current needs not be considered in the present case. It has nothing to do, properly speaking, with this issue. The question here is about the liability of Fink, as execute», to-account for this claim against the Ganal Barilc. The proof having failed to establish that it was ever received by him or for him, as executor, it becomes immaterial and irrelevant to this issue, to enquire into the correctness of the charges made by Hoffman in this account current.

The 2d and 3d grounds of opposition, oppose the items of fees of Hoffman contained in the executor’s account, item by item, as being exorbitant, unjust, and not allowable; and claim damages of 20 per cent, according to the Act of 1837 from the executor, for having paid Hoffman without an order of court.

The executor has debited himself, in his account under consideration, with the following sums:

1849, ffeb 20. Cash received by Hoffman, as counsel of the executor .

and appropriated to the payment of his ('Hoffman's)

claims for foes against the estate,.$595 50

ditto ditto . ..764 83

ditto ditto ------- 678 87

Total.$2,039 20

On the opposite or credit side of the account of the executor are various items of fees for professional services- rendered by Mr. Hoffman. In considering the admissibility of these charges,, the facts of the cause,, as above stated, require us to divide them into two classes.. 1st- Those bearing date previous to the rendition of the former account filed by the executor,, and 2d, Those accruing since that time.

The fees of Mr. Hoffman, of the first class,, amount to $2,025, upon which the account gives a credit of $750, “as per account of executor on file,” and leaving a balance still due of $1,275. We thinkthat this charge of $1,275 cannot be allowed. The record shows that Mr. Hoffman had been the legal adviser of the executor from the commencement of his administration. The accounts of November 18, 1843 and of January 17, 1846, are therefore binding upon Mr. Hoffman, no less than upon the executor himself As we have seen, that of November, 1843, states the amount due by the estate to Mr. Hoffman to be $750 ; and that of January, 1846,, shows that said claim was then paid, and states the debts existing at the time of filing the second account,, among which there is nothing charged as due to Hoffman.. These are to- be taken as confessions that Mr. Hoffman has been paid in full for his claims against this estate up to the date of the last of the two accounts in question.

The second class of items of fees of Mr. Hoffman for professional services in this account, embraces five items, viz :

1848 — Suit of Martin v. Fink, executor,.$400 00

Defending intervention of McHenry, in suit of Fink, executor,

v. Ma/i'Un, by injunction.- 250 00

Suit of Fink, executor, and Black v. Martin & McHenry, to

annnul sale, in District and Supreme Courts, - - - - 375 00

Obtaining injunction against Levy, auctioneer, to arrest sale

of property, - -- --.- 50 00

Collecting judgment against Martial LeBevf, as security of

McHenry,. 5000

$1,125 00

The evidence of various witnesses has been taken in relation to the reasonableness of the charges thus made, and we think that this point is sufficiently established. We therefore allow the claims of Mr. Hoffman against the estate to the extent of $1,125. But it appears that the executor has allowed Mr. Hoffman to retain in his hands a sum of two thousand and thirty-nine dollars and twenty cents for about four years and to appropriate that sum to assumed claims of Mr. Hoffman against the estate, instead of depositing said sum in bank. Eor this the opposition claims that the executor be mulcted in damages.

The Act of March 13, 1837, section 3d, provides “That all executors, administrators, etc., shall deposit all moneys heretofore collected by them as such and all the moneys hereafter collected, as soon as the same shall come into their hands, in one of the chartered banks of this State, or in one of their branches, allowing interest on deposits, etc; and if any executor, etc., shall fail to comply with the provisions of this section, etc.,, then such executor shall be condemned to pay to the use of the estate twenty per cent, per annum interest on the amount not so deposited.” We do not think this penalty attaches in the present case, which does not come within the letter of the Statute; the funds in question never having come into the hands of the executor. We do not mean to be understood as deciding that the executor is- not liable to account for all funds collected by his attorney, in the same manner as if they had been collected by himself. But penal Statutes should be strictly construed ; and of this nature is the 3d section of the Act of 1837. See also case of Pigneguy’s estate, 7 Rob.

4th, The fourth ground of opposition relates to a certain judgment of Powell v. Levy bought by the executor at sheriff’s sale for the account of this estate, and which judgment the opposition states has been collected by the executor. The record shows that the judgment in question was bought by the executor for the account of this estate, as alleged, for the sum of $150, and that the executor credited the estate, in his account of 18th November, 1843, with said sum sf $150, as if the same had been received instead of being paid out. Levy, the judgment debtor, appeal's to have taken the benefit of the State Insolvent Law and also of the United States Bankrupt Law of 1841. In the State Court, the executor oí this estate was syndic of Levy’s estate, and as such filed a tableau of distribution which was homologated in November, 1844, allotting a dividend of $675 2-2 to himself as holder of Powell's judgment. In the United States Court the commissioners in bankruptcy filed a report which was homo-logated in August, 1844, allotting a dividend of $36 98 to Thomas Powell, on his judgment.

The executor has evidently been guilty of breach of duty in treating this judgment thus bought at sheriff’s sale as his individual property; and we think the District Judge erred in not allowing damages under the Act of 1837, upon the sum of $675 22, it being clear from the record, that that amount was in his hands in November, 1844, the date of the judgment of homologation of his account as syndic of Levy, in the First Judicial District Court of Louisiana. As to the dividend of $36 98, the dividend declared in the United States District Court for this District, there is no proof that it has come into his hands. He cannot, therefore he charged with damages,under the Act of 1837. But wo think that he is liable for that sum, it being his duty to have collected it, if he has not done so.

5th. The fifth ground of opposition is to the commissions of the executor, charged in the account; which commissions the opponent contends have been forfeited by the misconduct of the executor. The correctness of the amount of the charge is not disputed; and admitting that the executor has laid himself liable to the penalty of the 3d section of the Act of 1837, by neglecting to account for funds received, the Statute does not superadd the forfeiture of his commissions to that penalty.

6th. The sixth and last ground of opposition is to the items of debts still due and unpaid by the succession, viz: Robert Farr, $490-, Williams, $160; Dr. Darezac, $60. As to Farr's debt, we observe the identical amount of $490 charged, as paid him by Mr. Hoffman, in his account with Reliar, already spoken of. It is probable, therefore, that it has been paid. There is, besides, no proof in the record of the correctness of this claim or that of Williams. As to the claim of Dr. Damezae, it would seem to be a balance of a larger amount ($140) charged as due by the estate, in the executor’s account of 18th November, 1843; and which is not among those mentioned as paid in the account of 17th January, 1846.

Having thus gone through the opposition to the account filed, it only remains to notice an item in that account to the credit of the estate, which seems to have crept into it through error, and should be stricken off. It reads as fol-’ lows:

M To this amount paid by John Rellwr, to M. W. Hoffman, balance of

his fees, and carried on the other side, - $321 80”

This amount is the balance against Relian' in account current with Hoffman, about the Oanal Bamk judgment collected by Hoffman for Reliar, as above mentioned.

We have already expressed our opinion that this whole matter is irrelevant to the present issue. If Relian' has, in point of fact, paid Mr. Hoffman the balance of $321 80, as herein stated, it is not seen how that payment can count to the debit of Fink, executor, in account with Sm'ah Baum’s estate, unless it be as a mere counter entry to balance an entry on the credit side of this account. It appears, indeed to be stated in that way; but a careful perusal of .the account has not shown us any such credit entry. The sum of $321 80 is therefore to be deducted from the debit side of the executor’s account.

We state the account as follows:

Debit side of the account of the executor as filed, - $3,817 64

From which deduct

Cash paid by Reliar to Hoffman, .... §321 go

Balance due John D. Fink, ..... 144 08

- 466 88

3,351 66

And add to the debits

Dividend on Powell's judgment against Levy in the District

Court,. 675 22

“ in United States District Court, - - - 36 98

712 20

Less this amount paid by Fink at sheriff’s sale for said judgment, -. 150 00

562 20

Damages at twenty per cent, per annum, for ten years, on $525, proved to have come into the hands of the syndic

for account of the estate, in 1844, ... 1,050 00

-1,612 20

Corrected amount to Fink's debit, ... $4,963 86

Credit side of the account, as stated by the executor, $3,817 54 From which deduct balance charged as due IToffman prior

to 1844,. 1,275 00

- 2,542 54

Corrected balance to credit of the estate, - - $2,421 32

It is therefore adjudged and decreed that the judgment of the District Court be reversed ; that the oppositions herein filed be sustained, the balance due by the executor in account, established at the sum of two thousand four hundred and twenty-one dollars and thirty-two cents, for which judgment is hereby rendered in favor of John Kellar against John D. Fink, personally; and that the costs of the court below be paid by the estate, except those of the appeal, which, together with the costs of this court, shall be paid by the appellee.

Buchanan, J.,

on application for rehearing. It is ordered that the judgment rendered by this court on the 22d May last be amended so as to read as follows :

It is ordered and decreed that thejudgment of the District Courtbe reversed; that the oppositions herein filed be sustained, the balance due by the executor in account established at the sum of $2,421 32, for which judgment is hereby rendered in favor of John Kellar against J. B. Fink personally, and that the costs of the court below be paid by the estate, except those of the appeal, which, together with the costs of this court, shall he paid by the appellee; and it is further ordered that the rehearing prayed for in this case be refused.


author: Vookhies, J.

text:
    Succession of E. L. Whitten—A. L. Johnson, Tutor, et als. Appellants.
    "Where the succession is not accepted purely and simply by the heirs, its liability to them can not be adjudged without its being legally represented in the suit. If accepted purely and simply, such liability to the heirs would be extinguished by confusion.
    A defendant can not be bound by a judgment where no judgment by default was rendered and no issue joined.
    APPEAL from the District Oourt of the parish of East Baton Rouge, Burk, J.

      E. T. Merrick, for plaintiff. G. Ratliff, for opponent and appellant. J. W. Seymow’, Attorney ad hoc.

   Vookhies, J.

(Slidell, O. J., absent.)

Elisha L. Whitten died without issue, leaving his mother, Cassandra Whitten, and his collateral kindred as his legal heirs, and Martha Ohaney as his surviving spouse.

On the 27th of April, 1841, Cassandra Whitten as administratrix of his estate, filed an account of her administration, showing .that the proceeds of the assets amounted to the sum of $11,220 18, and the debts and charges to $9,492 74, leaving a balance of $1,727 44, for distribution among the heirs, defendant, as stated by her, on the collection of the notes given by the purchasers at the probate sale of the property of the estate.

Martha Cfhtmey, the surviving spouse, and Melessa 0. Whitten, one of the heirs, opposed the correctness of the account, the former alleging besides, that some of the debts charged were contracted previous to the marriage and hence were not chargeable to the community. During the pendency of the opposition, Cassandra Whitten died and Bailey B. Chaney was appointed administrator of the estate. In 1848, a judgment was rendered by the District Court, homologating the account. It was, on appeal to the Supreme Court, reversed and the cause remanded to make proper parties.

On the 3d of July, 1849, Melessa C. Whitten filed a petition, alleging that the administrator had failed and neglected to have the legal notices given of the filing of the account, and prays that ho should be ruled to show cause why the same should not be done within the time prescribed by law. The names and places of residence of the heirs are set forth in her petition, and also that of the surviving spouse, in which she concludes with a prayer, that all the parties interested be legally cited, and that a partition be made among them according to law, and the opposition previously made to the account sustained, &c. Bailey D. Chaney, filed an answer, admitting his appointment as administrator of the estate of Elisha, L. Whitten, deceased, but denying that any part of the funds thereof had ever come into his hands. He averred that he had instituted a suit against William Kelly, for the recovery of the price of a negro, but was defeated. That he was not aware of the existence of any other property, except a small tract of land, the value of which would not defray the expenses necessary to effect its sale. The heirs also filed answers, some of whom adopted the opposition of Melessa C. Whitten to the administratrix’s account, and denied the solvency of the community. On the 11th of January, 1850, B. D. Chaney filed a supplemental answer, in which he alleged that all the property administered upon by Cassandra Whitten, was the separate property of Elisha L. Whitten, the acquets and gains having been absorbed by the debts of the community; hence the surviving spouse had no interest in the estate. That as all the heirs of Cassandra were also the heirs of Elisha, whatever claims existed in favor of one estate against the other, were extinguished by confusion. That the children of Cassandra N. Whitten, one of the heirs of Elisha, had received $600 of the administratrix, whose estate had been sold and partitioned among her heirs. On the 17th of July, 1851, Bailey B. Chaney, filed a petition, or plea, in which he claimed as administrator of the estate of James J. Chaney, deceased, all the right, title, and interest of Martha Wells, arising out of the estate, as surviving spouse of Elisha L. Whitten, by virtue of a forced alienation under an execution issued on a judgment against her in favor of said estate. As it does not appear that this plea was ever notified or issue joined on it by the proper parties, it is deemed unnecessary to notice it any farther. Upon these issues, the cause was tried by the District Court, and from the judgment thereon rendered this appeal was granted to the opposers.

The opposition to the account filed by Cassandra Whitten as administratrix, is the only matter involved in litigation. It does not appear from the record, that B. B. Chaney ever received as administrator, any part of the funds or effects therein specified, or that he ever filed any account of his administration.

Considered in any point of view, it is obvious that the opposition of the heirs is not maintainable. If the succession of Cassandra Whitten, he considered as not accepted purely and simply by them, how can its liability be adjudged without its being legally represented in this suit? If accepted purely and simply, it is clear that such liability would become extinguished by confusion.

In relation to the claim of the surviving spouse, it is clear that the judgment homologating the account of the administratrix cannot affect her rights. As already seen, after the cause was remanded by the judgment of the Supreme Court, the proceedings were changed, and she was cited as one of the defendands to an action of partition among the heirs, but it does not appear that she ever joined issue, or that a judgment by default was ever taken against her.

It is therefore ordered, adjudged and decreed, that the judgment of the District Court be affirmed with costs in both courts, without prejudice to the right of Martha Chaney, wife of Samuel Wells, to proceed against the legal representative of the estate of Cassandra Whitten, deceased, and legal heirs of said Elisha L. Whitten, to enforce whatever claim she may be entitled to in the succession of the latter as surviving partner of the community.


author: Slidell, C. J.

text:
    Nolan Stewart, Executor, v. Caldwell & Hickey.
    A commercial firm in New Orleans, styled “ Caldwell & Hickey” and composed of Jolm Caldwell and Daniel Hickey, was dissolved in 1841, when the partners removed to Baton Rouge, where they afterwards resided. They established a planting partnership in East Baton Rouge, under the same name, “ Caldwell & HickeyIn 1848 Caldwell obtained an advance from a factor, which enured to the benefit of the planting partnership, and gave a note signed “ Caldwell & Hickey,” with McCalop as surety. Stewart, the executor of McCalop, who, as surety, had paid the note, sued CaldAoeU <& Hickey as commercial partners. There had been no published notice of the dissolution of the New Orleans partnership, but its members had wholly withdrawn from mercantile business and never used the old mercantile name, as such, subsequently to its dissolution. McCalop, who resided in West Baton Rouge, not far from the residence and planting establishment of the defendants, never dealt with the New Orleans firm, or looked to it with any view of responsibility; therefore held: That Hickey was only liable, as an ordinary partner, for one-half of the amount.
    If one of the members of an ordinary partnership, without authority, sign the partnership name to a note, the partner, who has knowledge of its existence, and does not object, and to whose benefit the consideration for which it was given enures, is jointly bound, but where the partner signing the firm name had no authority to give the note, the copartner who had no knowledge of its existence, and neither ratified nor received any benefit from it, is not bound.
    An instrument in this form : “We jointly and severally promise,” and bearing the signatures of Caldwell & Hickey,” an ordinary partnership, and of “James McCalop,” exhibits on its face two debtors in solido, to wit: one solidary debtor, the firm of Caldwell & Hickey, and another solidary debtor, James McCalop.

    0. 0., 2696, 2697, 2843, 3023.
    APPEAL from the Sixth District Court of the parish of East Baton Rouge, Burk, J.

      George Eustis and R. H. Marr, for plaintiff. T. G. &P. H. Morgan, for defendants and appellants.
   Slidell, C. J.

This appeal is taken by the defendant, Daniel Hickey, from a judgment in which he has been condemned to pay the whole amount of two notes, one for $2,500 and the other for $550, to the plaintiff, who is the executor of James MeCalop.

The notes are signed thus: “ Caldwell & Eickey." One is dated in Decem-her, 1848, and the other in February, 1S49. Both were protested for non-pay-nient, and were taken up by McCalop>, who was the surety in the former note, and the endorser of the other.

It was Caldwell, who wrote the signatures of those notes. The ground upon which Eickey was held liable for the whole of the notes, was, that he was considered by the court below liable as a commercial partner.

We are unable to concur in the opinion of the District Judge that Eickey is liable as a commercial partner.

Caldwell & Eickey had been commercial partners in New Orleans, under the partnership stylo of “ Caldwell & Eickeybut that firm ceased to exist in 1841, when the partners removed to Baton Rouge, where they afterwards resided. They had established a plantation in East Baton Rouge, and their planting partnership was carried on under the same name, Caldwell & Eickey. There does not appear to have been any published notice of the dissolution of the New Orleans partnership ; but it is clear that they withdrew wholly from mercantile business, and there is no evidence of the use of the old mercantile name, as such, subsequent to the breaking up of the firm in New Orleans. Nor is it in evidence that McCalop ever dealt with the New Orleans firm, or looked to it with any view of responsibility on these notes. His residence was in West Baton Rouge, not far from the residence and planting establishment of the defendants.

We are of opinion that Eickey is liable for one-half of the amount of the note of $2,500, as an ordinary partner of the planting firm of Caldwell & Eickey. It is true no express authority is shown to have been given by him to Caldwell to bind the firm in the form of a promissory note, but wo hold him liable by reason of the consideration for which the note was given, his knowledge of its existence without objection, and its having enured to his benefit as pai'tner. The facts proved are these: Kelly & Conyngham, a commercial house in New Orleans, the payees of the note, were factors of the plantation, keeping their account in the name of the planting firm, Caldwell & Eickey. It was given to them by Caldwell to obtain an advance to the firm on their crop, and was charged in an account rendered by the factors, of which a copy was transmitted to Eickey, who did not make objection, and who, we may reasonably infer from the whole evidence, was not ignorant of its having been drawn and used for the purpose above mentioned, and tacitly assented to the transaction.

It has, however, been contended by the counsel for the plaintiff, that they are entitled to hold the defendant, Eickey, liable in solido (although the firm of Caldwell & Eickey was a planting, not a commercial partnership) by reason of the language of the contract, and the circumstances under which it was given.

The note is in these words :

$2,500. Louisiana, December 80, 1848.

Twelve months after date, we, jointly and severally, promise to pay to Kelly & Conyngham, or order, at their counting-house, in New Orleans, twenty-five hundred dollars, for value received, to bear interest at eight per cent, per an-num from maturity, if not paid.

Caldwell & Hickey.

James McCalop.

The circumstances under which it was given are thus detailed by Conyngham, of the house of Kelly & Conyngham: “ The note was given for an advance upon the crop, and an agreement with Galdwell & Mickey that if they would give James Me Galop as security, we would give them the advance. The note was cashed by us for the benefit of Galdwell & Eielcey.” -Again he says: “ I have been their merchant for the transaction of plantation business, but I know of no other business of a different nature, in New Orleans, of theirs.” The balance of $1527 92, charged February 19, 1849, was made on plantation business of Galdwell & Mickey. “ The note was given for an advance on the crop of Galdwell & Mickey." The account annexed to the testimony of this witness is headed “ Galdwell & Mickey's account with Kelly & Gonyngham." There is no evidence of what passed between McGalop and Galdwell or Mickey at the time McGalop signed the note, nor of anything having been said or done ait the time, between McGalop and Kelly <& Gonyngham, save what appears on the face of this note.

Now, looking to the face of this note, we do not give the words, “wejointly and severally promise,” the meaning claimed by the plaintiff’s counsel. It is said for the plaintiff that they point to the solidary liability of Galdwell and Mickey, and are meaningless unless so understood, because Me Galop's obligation to pay the whole debt resulted by operation of law from the fact of his being surety.

We think the instrument exhibits on its face two debtors in solido, to wit: one solidary debtor, the firm of Galdwell & Mickey, and another solidary debtor, James McGalop.

It is not admissible to say that unless understood in the sense cláimed by the plaintiff the' words are meaningless because McGalop's obligation to pay the whole debt resulted by operation of law from the fact of his being surety. The answer is that these words do alfect materially the obligation of the surety to the pajmes; for the surety who binds himself in solido with the principal debtor renounces the plea of discussion; and “the effects of his engagement,” says the Code, “ are to be regulated by the same principles which have been established for debtors in solido." Art. 8014. Troplong, cautionment, No. 289.

It is true, as argued for the plaintiff, that the contract of suretyship implies a mandate, and that Art 2995 declares that “if theattorney has been empowered by several persons for an affair common to them, every one of those persons shall be bound jointly and severally {insólido) to him for all the effects of the procuration.” But of whom was McGalop the mandatary? Not of two individuals, John Galdwell and Daniel Miclcey, but of the firm, Galdwell & Mickey. He is authorized by the firm to pay the debt for it, and his recourse for indemnity is to the firm. That firm being, under our law, an “ ordinary particular partnership,” its members are not bound in solido. Oivil Code, 2696, 2697, 2843, &c., Ma/i'ker v. Brashear, 16 La. 69. Let it be observed there is no evidence, direct or circumstantial, that McGalop acted otherwise than at the solicitation of the firm, or that Kelly & Oonyngham, in this transaction, dealt otherwise than with the firm. Oonyngham speaks throughout his depositions of the advance and the note as the affair of the firm, Galdwell & Mickey. Considering the transaction in this light, our conclusion in no wise conflicts with the doctrine of suretyship, as expounded by the commentators, and embodied in our Code.

It is obvious also that, under his subrogation, McGalop acquired no right against Mickey as a solidary debtor. If Kelly <& Oonyngham had sued Mickey they could only have held him liable as member of an ordinary partnership, of the planting partnership of Galdwell & Mickey with which they dealt.

We waive the consideration of the question whether the English text of Art. 3023, which is a literal copy of an article in the Code of 1808, is to control the Prench text, which is a literal copy in both Codes of an article of the Napoleon Code. We deem it sufficient to say that this is not according to the terms of the contract, a case of “several principal joint debtors, for the same debt.” It is the case of one principal debtor, the firm of Caldwell & Mickey, in whose name the note is signed. McCalop was the surety of that firm.

Respecting the other note of $550, we find no sufficient reason to hold the defendant liable for it at all. As we have already said, the commercial partnership had ceased. The planting partnership did not involve an authority to the partners to bind each other in this form ; it is not satisfactorily proved that Caldwell had authority to bind Miekey ; nor is it proved, as in the case of the other note, that Mickey knew of its existence and impliedly ratified it, nor that its proceeds enured to his benefit. See Benton v. Roberts, 4 An., 216.

It is therefore decreed that the judgment of the District Court be reversed; and it is further decreed that the plaintiff, Alfred A. Williams, now the dative executor of McCalop’s estate, [said Williams having succeeded Nolan Stewart, deceased] recover of the defendant, Daniel Mickey, the sum of twelve hundred and fifty dollars, with interest at the rate of eight per cent, per annum, from the eleventh of January, eighteen hundred and fifty, until paid, and costs of suit in the court below; those of the appeal to be paid by the plaintiffs; and it is further ordered and decreed that upon the claim which is founded upon the note of five hundred and fifty dollars there be judgment in favor of the defendant.


text:
    Martin Gordon, Jr., for the use, &c. v. Succession of E. W. Diggs and R. B. Sykes.
    A steamer was sequestered, and released on bond. In an action against the sureties on the bond» they pleaded that the steamer had been, subsequent to the sequestration, seized and sold by another creditor, and the proceeds, to the knowledge of plaintiff, paid into court and distributed among the creditors. By the Cowi't: The creditor was not bound to resort to the fund in question, and thereby involve himself in a litigation'with third persons, which, for aught that appears to the contrary, might have been fruitless, and which resort he was not requested by the sureties to use»
    0. 0. S018»
    APPEAL from the Second District Court of New Orleans, Lea, J.

      Durant & Mornm\ ior plaintiff and appellant. L. Bhjma, for B. B. Bylces, defendant. Wolfe & Singleton, for succession.
   Slidell, C. J.

The defendants, Sykes, and the executor of Diggs, were sued upon a bond given by them as sureties of Levistones, to release a sequestration of a steamer owned by Levistones and others, which issued in the suit of Gordon v. steamer Cincinnati, Levistones, and others.

Under the answer of Sykes, we think the genuiness of his signature was not, put in issue. C. P. 324.

The District Judge did not err in considering the matter specially pleaded by Sykes, as not constituting a discharge of the surety. The plea, and the showing made under it were, that the steamer was subsequently seized in another suit, was sold at judicial sale, and the proceeds, to the knowledge of plaintiff, distributed among other creditors, and that plaintiff, if be bad asserted his privilege, might have received payment out of that fund.

Under the bonds, the principal obligor and his sureties were bound to restore the property sequestered, and released, or satisfy the judgment, at least to the amount of its value, which was much more than the judgment rendered in the cause.

The creditor was not bound to resort to the fund in question, and thereby involve himself in a litigation with third persons, which, for aught that appears to the contrary, might have been fruitless; and which resort he was not even requested by the sureties to use. Under the case of Parker v. Alexander, 2 Ann. 188, Louisiana State Bank v. Ledoux, 3 Ann. 680, it is clear that much of the defence was properly disregarded.

It is also clear that by the nature of that contract, and in the absence of express words therein to the contrary, the sureties were solidarily liable. Our code declares, that when several persons have become sureties for the same debt, each of them is liable for the whole of the debt in case of insolvency of any of them. Article 8018. In this, it follows, the rule of the Roman law, si plures sint fidejussores, quotquot erunt numero singuli in solidum tenentur. The article gives, it is true, the right of division ; bilt the exception of division was not pleaded. See McCausland v. Lyons, 4 Ann. 274, and the authorities there cited.

The appeal in this case was taken by Sykes. It was applied for by petition, and he gave bond in favor of the plaintiif only. The succession of the other surety, Diggs, is not properly before us, either as appellant or appellee, and we cannot therefore inquire into the correctness of the judgment as to Diggs, as we are requested to do by the plaintiff in his answer to the appeal.

Judgment, as to Sykes, affirmed with costs.


author: Slidell, C. J. Ogden, J.,

text:
    Parham & Lowry v. Mrs. Sarah M. C. Cobb el als.

      P. & L. having obtained an order dissolving an injunction which had issued in favor of Mrs. GoVb^ she took a suspensive appeal, which the Supreme Court dismissed, but when the case came up on its merits, it affirmed the decree dissolving the injunction. P. & L. sued the sureties on the appeal bond of Mrs. Cdbb% for damages resulting from the injunction which she had obtained. Held: the sureties were not liable — their obligation being only to satisfy the judgment in the case appealed, and not one which might afterwards be obtained in another suit in the shape of damages occasioned by an injunction,
    C. 0. 2207.
    APPEAL from the District Court of the parish of Madison, Perkins, J.

      Snyder & Hynes, and Amonette, for plaintiff. Perkins & Bemiss, for defendants.
   Slidell, C. J.

The action is upon an appeal bond given to enable the defendant, Mrs. Oobb, to obtain a suspensive appeal from an order made in the suit of Mrs. Cobb v. Parham & Lowry. The circumstances were these: Mrs. Oobb and Lowry being joint owners of an estate called the Buckhorn Plantation, and being engaged in a litigation respecting their partnership affairs, submitted their difficulties to arbitrators, who made an award divesting the possession of both proprietors, and putting the estate in the hands of Parham, to be administered for the benefit of both, according to the provisions of the award. In violation of this compact, Mrs. Gobb got out an injunction, and by means thereof, succeeded in ousting the receiver and getting the estate into her own hands. Parham and Lowry obtained, on rule, an order dissolving the injunction and reinstating Parham, upon condition of giving a bond in the sum of $62,600. The purpose of that bond was to secure Mrs. Gobb the restoration of the plantation and crops that might be gathered, pending the suit, if she should ulti• mately succeed in maintaining it. Its amount was fixed by the Judge at $62,600, upon evidence estimating the slaves at $45,000, the annual crops at $12,000, the teams and stock at $3,000, and the corn crop at $2,600. This order was made in the month of April, 1848, and the amount of the bond was a very proper one, considering that Pwrham would probably gather the crops of 1848, before the decision of the cause, besides having possession of the slaves, stock, &c., a species of property liable to be carried off during the litigation. The object of Mrs. Gobb in asking a suspensive appeal from this order restoring Parham's possession, was to keep the property and crops in her own hands ; and the court in granting it, prescribed the very same sum, $62,500, as the amount of her appeal bond in favor of Lowry and Parham, for a suspen-sive appeal, fixing $100 as .the the amount of the bond if she took only a devo-lutive appeal. This appeal came before the Supreme Court in 1849. The court was of opinion that the conditional order of dissolution was properly rendered, and that a suspensive appeal should not have been allowed; and by its decree the appeal was dismissed. See 4th Annual, 147. At the same time, the court also affirmed a decree dissolving Mrs. Gobb's injunction after a hearing on the merits. Ib. 148.

It is said the sureties on this appeal bond are not liable for the value of one-half of the crop of 1848, which, during the pendency of the appeal, Mrs. Gobb gathered and converted to her own use.

The bond, which we have already stated, was for $62,500, refers in its condition to the order authorizing Lowry and Pa/rhmn to bond and the order of suspensive appeal taken from it, which order may be fairly considered as embodied in the bond, and as entering directly into the contemplation of the sureties; and the condition then goes on to say “if the said Sarah M. G. Gobb shall prosecute her said appeal, and shall satisfy whatever judgment may be rendered against her by the said Supreme Court on said appeal; or if the same shall be satisfied by the proceeds of the sale of her estate, real or personal, if she be cast in her said appeal, then this obligation to be void, otherwise to remain in full force and virtue.” The decree of the Supreme Court was in these words: “ It is therefore ordered, adjudged and decreed, that the appeal taken in this case be dismissed at the appellant’s costs.”

This decree was substantially an affirmance of the order to bond, as being a lawful order and one from which an appeal should not have been asked nor granted; and under it, I think, the principal and sureties were answerable to Parham and Lowry for the restoration, not only of the land, slaves and stock, but of the crops. All these were comprehended in the order, and must be considered, under the circumstances, as clearly entering into the contemplation of the sureties at the time they added their faith to that of their principal, and enabled her by doing so to obtain the suspensive appeal from that order. Under the terms of the bond, the sureties were responsible for the satisfaction by their principal of whatever judgment might be rendered against her by the Supreme Court on said appeal. The only substantial satisfaction of that judgment by Mrs. Cobb, would have been not merely the restoration of the land, slaves and stock, but the restoration of the crop, which at the time was growing on the land, and which it was the clear purpose of the order, from which the appeal was taken, to put into the possession of ParJiam, one of the obligees in the appeal bond. But this restoration has not been made, and by Mrs. Cobb's act has become impossible, she having converted the crop to her own use. I think this case is distinguishable from Cartwright's case, by reason of the recitations in the bond.

It is said that the value of the crop was a matter pertinent to the partnership affairs, and should have been sued for in the action decided at the present term brought by Lowry against Mrs. Cobb. See ante, page —. No such exception was made below to the action, and it would be manifestly inequitable to permit it here; for in the suit to which we refer exception was expressly made to any claim being considered there for the crop of 1848, because claim was made therefor in this suit; to which exception being sustained, Lowry submitted, and an order of nonsuit on his motion was entered in that case, as to so much of his demand as related to that crop.

We are of opinion the demand in reconvention and plea in compensation were properly disregarded. See the case of Parham & Lowry v. Cobb and Harris, 7 Annual, page —. See also, Civil Code, 2207.

The appellees ask an increase of the judgment; but an examination of the evidence has not satisfied us the jury erred in the amount awarded.

In the view we have taken of the evidence, we consider the amount awarded by the jury, as a full indemnity for Lowry's share in the crop of 1848, converted by Mrs. Cobb to her own use, and we therefore think that so far as that crop is concerned, the sum of $2000, portion of the judgment of $3000 rendered in the suit of Parham & Lowry v. Cobb & Harris, No. 2564, of the records of this court, (being No. 1688 of the records of the District Court,) should be considered as given for the same cause of action, to-wit: Lowry's share in the net crop of 1848, and therefore that two-thirds of any collection ■which has been or may be made on said judgment for $3000 against said Harris, ought to enure as a credit in favor of the succession of Mrs. Cobb on the present judgment.

The only point of difference between myself and my brethren, is as to the liability of the sureties on the appeal bond, and as to them in accordance with the opinion of the majority delivered by Mr. Justice Ogden, the judgment must be reversed.

It is therefore decreed, that the judgment in favor of the plaintiffs against the succession of Sarah M. C. Cobb and of her husband, O. B. Cobb, be affirmed ; it being also considered by the court that two-thirds of the amount of the judgment of Parham & Lowry v. Harris, is to be considered as having been rendered for the same cause, viz : said Lowry's share of the said crop of 1848, for which the present judgment was rendered, and that for two-thirds of any collection which has been or may be made on said judgment against Harrris by said plaintiffs, the successions of said Scoi'ah M. C. Cobb and of said O. B. Cobb, deceased, shall be entitled to claim a credit on the present judgment.

And it is further decreed, that the judgment against the other defendants and appellants, sureties, be reversed, and that there be judgment against said sureties in solido for the amount of the costs of this suit in the court below, and the costs of the appeal in the case of Cobb v. Parham & Lowry, No. 1273, of the records of this court, and No. 1364 of the records of the court below, for the ascertainment of which costs this cause is remanded.

It is further decreed, that one-half of the costs of this appeal he paid hy the said succession of Sarah M. 0. Gobi and O. B. Gobi, and one-half by the plaintiffs.

Ogden, J.,

dissenting. The condition of the appeal bond executed hy Gobi and wife on which the suit is instituted, is expressed in the terms of Art. 579 of the Code of Practice, which declares, “that the appeal bond must set forth in substance, that it is given as surety that the appellant shall prosecute his appeal, and that he shall satisfy whatever judgment may he rendered against him, &c.” When the plaintiff appeals from a judgment rejecting his demand, the only judgment which the appellate court can render against him, is one condemning him to pay the costs of his appeal — the term suspensive appeal as used in the Code of Practice, has no meaning, except as applied to a judgment rendered against the defendant in a suit. When the plaintiff has resorted to one of the ancilliary remedies provided by law, and which may either precede, accompany or follow the demand he makes, he is required to furnish bond and security and where as in the present case, the remedy so resorted to is an injunction, the court is vested with full discretion to fix the amount of the bond in a sum sufficient to indemnify the party defendant against any loss or damage, which may be occasioned to him by the injunction. If, therefore, the injunction is dissolved by an interlocutory order from which the plaintiff has a right to appeal, the injunction bond affords the appellee the same security against loss, which the plaintiff in ordinary cases derives from the suspensive appeal bond, executed by the defendant who appeals from a judgment, the execution of which he desires to suspend until he can obtain a judgment on the appeal. If the injunction bond is not for a sufficient amount to afford that security, the defendant in injunction has only himself to blame, for not requiring that a bond for a larger amount should be given. If in the present case, the Judge when he granted the injunction, or afterwards on the application of the defendant, had fixed the amount of the injunction bond at a sum approximating even that which he afterwards required for the appeal, or being a just proportion to the interest involved, the rights of the parties would have been settled in the case reported in Ann. R., which was an appeal from a judgment rendered against the surety on the injunction bond, and in which the surety was condemned to pay $3000, the full amount of that bond, as part of the loss which the present suit on the appeal bond has been brought to recover, and the only ground for which appears to be, that owing to the insufficiency of the injunction bond which was only for $3000, a full reparation for the loss sustained by Lowry, in consequence of the injunction, cannot be had, unless he is permitted to recover an-additional sum as damages from the security on the appeal bond, the amount of which being $-, is large enough to cover all losses.

But we are not permitted to extend the obligation of the surety beyond what is expressed in the bond itself, and what the law has declared to be the legal obligation of the surety in such a case, which is to satisfy whatever judgment may be rendered against the appellant. The clear, legal intendment of such a bond, is that the surety shall be bound in place of the appellant to satisfy the judgment which may be rendered in that particular case — the obligation is not to satisfy a judgment which may afterwards be obtained in another suit in the shape of damages occasioned by the resort which had been had to an extraordinary and oppressive remedy by injunction which gives rise to a subsequent and separate action. The judgment against the defendant as surety on the appeal bond, condemns him to pay a sum of money which his principal was not condemned to pay either by the judgment of the lower court from which the appeal was taken, or by the judgment of the appellate court. The appeal was taken from an interlocutory order dissolving the injunction, on the defendants in the injunction giving bond and security to deliver the property in the same state in which it was at the moment of issuing the injunction according to Art. 307, O. P. It was held on the trial of the appeal in this court, that this conditional order of dissolution of the injunction was properly rendered, and the court say, “ a suspensive appeal should not have been allowed.” See the case of Cobb et al. v. Parham et al., 4th Ann. R., 147. The case Jure v. First Municipality, 2d Ann. R., 321, was referred to by the court in support of the opinion expressed in Cobb et al. v. Parham et al., that a suspensive appeal should not have been allowed — that was the case of an application for a mandamus to compel the Judge of the Eifth District Court to grant a suspensive appeal from a similar conditional order of dissolution of an injunction under the same Article of the Code of Practice. The refusal of the application is placed on the ground that an appeal is permitted from an interlocutory order only in cases where the order may work an irreparable injury. We think the Judge improperly allowed an appeal from an order dissolving the injunction conditionally, as it could not work an irreparable injury. From the nature of such an appeal, being one taken by the plaintiffs against whom in that case there neither had been nor could be any judgment except for costs, the surety on the appeal bond, undertaking to hold himself responsible for whatever judgment might be rendered against his principal, contracted only an obligation co-extensive with that of his principal, which could not extend beyond the costs of the suit. Such is the law defining the obligation of one who becomes security on an appeal, and such are the terms of the appeal bond signed by the defendant in this case.

In the case of Cartwright v. McMillan, 3d Ann. 685, the court say, “ We must take the obligation as it is; not as it might have been, or as the court might have ordered it to be made. The liabilities of the surety must not be extended.”

The court in the present case, might have ordered a bond to be made in such a form as to render the surety on that appeal bond liable in the same manner that the surety on the injuction bond was liable, and we think great caution should be exercised, by the District Judge in ordering of the appeal bond in cases of appeal, out of the ordinary course, to be so framed as to fix the liability of the surety, but wo are not authorized to disregard the condition inserted in this bond, which is expressed “ to satisfy whatever judgment shall be rendered by the Supreme Court,” — it is the condition which fixes the liability of the surety to a bond taken injudicial proceedings, and it would be unsafe to regard the amount of the bond or the surrounding circumstances, as indicative of an intention on the part of the surety to bind himself in any different manner from that which results from the clear, legal import of the condition which is added to the obligation.

The case at bar is not different from what it would have been, if on dissolution of the injunction after trial on the merits, the plaintiff had appealed, and had giy0n a bond in a large amount, conditioned to satisfy whatever judgment should be rendered against him in the Supreme Court. The surety on such an appeal bond, no matter what the amount, could in no event be liable for more than costs and for all loss and damage arising from the injunction, the defendant must look to the bond given on suing out the injunction.