author: Mr. Justice CATRON

text:
    James McCoy, Appellant, v. Zachariah Rhodes and his Wife, Luminda Montgomery.
    Where a bill in chancery alleges- that certain lands were entered in the name of- a third person, with a view to cover them from the creditors of the person who had entered them, and this allegation is denied in the answer and not sustained.by proof, the bill pro tanto must be dismissed.
    But where the party entered the lands in his own name, and afterwards conveyed them to this third person, but the deed to the third person was not recorded until after a judgment had been obtained.by a creditor, and recorded in the parish where the land lies, against the party who made the entry, it will not be sufficient merely to set up in the answer that this third person furnished the money .with which to purchase the lands. The equity must be proved.
    By the laws of Louisiana, no notarial act concerning immovable property has ef-
    ■ feet against third persons until it shall have been recorded in the office of the judge of the parish where such property is situated. Therefore, where there was a judgment against the holder of the legal title, rendered in the intermediate time between the execution of a deed and its being recorded, and the judgment was first recorded, the subsequent recording of the deed could not abrogate the lien of the judgment.
    The forty-seventh and forty-eighth rules of chancery practice explained. ■
    This was an appeal from the Circuit Court of the United States for the District of Louisiana, sitting as a court of equity! It was a bill filed, by McCoy against Rhodes and wife, under the following circumstances.
    On the 6th of December, 1839, Rhodes purchased in his own name from theUnited States, under the preemption law of 1838, and entered at the land-office at Ouachita, Louisiana, the following parcel of land: N. W. quarter of section 29, township 10 north, range 10 east, containing 160-j-o^r acres; and paid for the same $1.25 per acre, making in the whole $200.25.
    ..On -the next day, viz. the 7th of December, 1839, Rhode's executed a deed for the above' property to "Eli Montgomery, a.resident of the city of Natchez, in the State of Mississippi. The .consideration stated in the deed was $1,500 cash: It was executed before Lewis F. Lanney, parish judge and ex officio notary public of the parish of Concordia, in Louisiana. This deed,, howevqr, was-not recorded in the office of the judge of the parish until the 10th of December, 1841.
    On the 10th of December, 1839, Rhodes entered at the land-office, in the name-of Montgomery, the following pieces of land, viz.: S. W. quarter and west half of N. E. quarter of section 29, = 240yo!o acres; S. E. quarter of section 30,= 161-1^0% acres; N. W. quarter of section 32, = 160 acres.
    These three parcels' were éntered, as has just been remarked, in the name of Montgomery.
    On the 2^th of February, 1840, James H. McCoy obtained a judgment against Zachariah Rhodes in the Ninth District Court in the parish of Concordia for $ 1,546.27, with interest thereon at the rate of eight per cent, from the 26th of March, 1839, till paid, and costs.
    On the 7th of March, 1840, this judgment was duly recorded -in the office of the parish judge and ex officio recorder of mortgages in and for the parish of Concordia.
    On the 10th of December,-1841, Montgomery recorded the deed which had been executed to him by Rhodes on the 7th of December, 1839, and on the same day executed a deed of the three parcels of land which had been entered in his name, to Thomas J. Ford of Adams County and State of Mississippi. The consideration is stated in the deed to have been the following, viz.: —The sum of three thousand dollars cash, which the said Eli Montgomery doth hereby acknowledge to have received, and the eight promissory notes of the said Thomas J. Ford, of even date herewith, and payable to the order of the said Eli Montgomery, for the amount and for the time as follows, viz.:’ First, a note for the sum of eight hundred dollars; second, a note for the sum of one thousand dollars; another note for the same sum of one thousand dollars, and a note for the . sum of five hundred and thirty-three dollars thirty-three and one third cents, all payable on the 1st day of January, 1843; -next, the two notes of the said Ford, for the sum of one thousand dollars each, and' also a note for the- sum of thirteen hundred and thirty-three dollars thirty-three and one third cents, payable on the 1st day of January, 1844; and lastly, the note of the. said Ford for the sum of three thousand three hundred arid thirty three dollars, thirty-three and one third cents, payable- on the 1st day of January, 1845, all paraphed by me, the said notary, ‘ Ne varietur,’ to, identify them here- • with, and payable at the office of the judge of' the parish of Concordia.”
    .The wife of Montgomery renounced all'her rights of dower and rights of every kind in and to the property, which stood -.mortgaged for the payment of the notes.
    On the 2d of November, 1842, Ford -conveyed the property to Mrs. Lumind.a Rhodes, for the consideration of ten thousand dollars. Zachariah, the husband of Luminda, being present, declared that he accepted this act for his said wife, and “ duly ■ authorizes and assists her herein.”
    On the 28th of January, 1845, James H. McCoy, a citizen of the State of Mississippi, filed his bill in the Circuit Court of the United States for the District of Louisiana, against' Zachariah Rhodes and Luminda Montgomery his wife. It averred-that Rhodes conspired with Montgomery to cheat and , defraud the complainant; that the conveyance of the 7th of December, 1839, from Rhodes to Montgomery, was fraudulent and void; that the entry of the lands on the 10th of December, in the ñatee of Montgomery, was fictitious and fraudulent, and that the whole transaction was intended to benefit Rhodes and defraud his creditors; that Luminda, the wife of Rhodes* was the niece of Montgomery; that the recording of the judgment on the 7th of March, 1840, operate^ as a judicial mortgage upon all the lands; and played for a sale of the lands in order to discharge the judgment.
    On the 3d of December, 1845, Rhodes and wife answered the bill. They admitted the entry of the lands, but averred that they were paid for with money actually furnished by Montgomery, and were intended to be his property; that Montgomery afterwards sold the lands to Ford, and that the respondents had no interest or participation therein; that after said sale was made, the notes "of the said .Ford were paid to this respondent, Luminda Montgomery, by the said Eli Montgomery, for moneys due to her from the estate of her deceased father, Joseph Montgomery, of whom the said. Eli Montgomery was executor, or administrator of his estate, and that the said notes being secured by mortgage on all the said lands, and the said Ford having become embarrassed, and unable to pay the same, the lands were taken by this respondent, Luminda, in satisfaction of- said notes, by agreement between these respondents and said Ford, and the conveyance made accordingly, for the sole use of this respondent, Luminda.
    .They then denied all fraud* combinations, deceptions, or cheating, &c., &c.
    A general replication was put in and depositions were taken.
    On the 24th of January, 1848, the cause came on to be heard on the bill, answers, exhibits, and proofs, when the Circuit Court decreed that the complainant’s bill should' be dismissed, with costs.
    A petition for a rehearing was afterwards filed, alleging that the decree was erroneous, in this amongst other things, that the recording of McCoy’s judgment was., prior in .date to the recording of the1 deed from Rhodes to Montgomery, by which deed the land entered on the 6th of December was conveyed to Montgomery; the judgment being recorded on the 7th of March, 1840, and the deed on the 10th of December, 1841.
    But' the court overruled the application for a rehearing, upon which the complainant" appealed to this court.
    It was argued by Mr. Butterworth, for the appellant, no counsel appearing for the appellees.
    The points taken by the- counsel for the appellant were the "following: —

      The claim of the plaintiff for a mortgage on the northwest quarter, of section 29, which was entered in the name of. Rhodes, has three distinct and separate foundations, any one of which is sufficient to support it.
    Even if the statement in the answer, that Rhodes entered it as the agent of Eli Montgomery, &c., were true; or if he had transferred it, for a good and valuable consideration, to Montgomery, and in good faith; still, as the legal title did vest in Rhodes, arid it was. not again divested, as to complainant, by transfer and record thereof, while the mortgage of complainant had, in the mean time, become fixed upon it; under the laws of Louisiana, there is no question that the mortgage-creditor’s claim prevails oyer that of the vendee. (See Act of 1810, in Bullard and Curry’s Digest, p. 596, § 7, No. 37. See Adelaide Mary v. Francois Lampré, 6 Rob. 315; 2 La. R..124; Gradenigo v. Wallett, 9 Rob. 16; Carraby v. Desmarre et al., 7 Martin, N. S. 661; Duplessis v. Boutté, 11 La. R. 346; Lee v. Daramon and another, 3 Rob. 162.) But the case of Gravier et al. v. Baron et al., 4 La. R. 239, is among the earliest, and is - one of the most important, cases on the subject. In that case, the land had been alienated in 1815; in 1824 a judgment was obtained against the. vendor, which was recorded- in the parish of St. Mary’s, where the land lies. ■ The public act of sale made in 181.5 had not, been recorded in St. Mary’s parish before'the judgment was there recorded. The claim of the creditor was, in that case, preferred to that of the vendee.
    The English law, we know, is othérwise; but the decisions of our Supreme Court, on the construction of our- statute law, which is a local law of property, must govern the case. The inconvenience.of two different cons'tructio.ns, diametrically opposite, of the same local law of property, has ever been appreciated by this court; and doubtless it will be regarded in this case.
    But the fact is, the assertion in the answer, that Rhodes was the agent of Eli Montgomery in making the .entry of said quarter-section, is absolutely false, as appears from the record. He made that entry in virtue of the act of .Congress of' the 22d of June, 1838, granting preemption rights to actual settlers,' &e.
    He was required, by the terms of the act of 1838, to swear that he actually settled on the land, occupied, and entered it for himself aloné, and for no one else. (See. 5. Statutes at Large, 251.) The register and receiver swear that he did enter the said quarter-section in virtue of his preemption right, under said act of 1838.

      The depositions of the register and receiver, &e., taken in connection with the requirements of said act, are conclusive against yielding any credit whatever to the answer of defendants. We must beg leave to remark, however, that, if false statements are made in the answer, no perjury is thereby committed by Mrs. Luminda Montgomery, as she has not swont to her answer at all. It was . sworn to only by Rhodes, the other defendant.
    It being established, then, that this land was entered by Rhodes for himself, in virtue of his preemption right, under the act of 1838, of course there can be no pretence for insisting on the validity of the transfer of said quarter-section by Rhodes to Eli Montgomery. The answer says it was made in pursuance of a previous, agreement to that effect. If any such previous agreement existed, and yet the land was entered according to- law, the agreement was corrupt, and in'violation of law, and the conveyance made in pursuance thereof is void to all intents and purposes.
    Any thing done in violation of a prohibitory law (says our Louisiana Code, Art. 10) is null.
    The same thing has ever been maintained in the courts of England and in this court. See Bank of United States "v. Owens,, 2 Peters, 538.
    That no valúe passed from Montgomery to Rhodes for this transfer is too. apparent, from all the circumstances of the case, to .admit of a doubt.
    The deed says, it is true, that the consideration of the. transfer was $ 1,500 cash, in hand paid; but the answer negatives the existence of any such thing,; it says, the entry was made by Rhodes, as the agent of Montgomery, and the transfer was made in pursuance of. a previous- agreement, without stating what was the consideration of the previous agreement; while the depositions of the register and receiver, and the documents attached to them, prove conclusively that Rhodes was entitled to enter said quarter-section in virtue of the preemption granted him by the act of 1838, and that he did so enter it.
    All this certainly proves, that no consideration ever passed .from Montgomery to Rhodes, for said sale and transfer of said northwest quarter of section No. 29, T. 10, R. 10.
    It must be apparent, then, that the said quarter-section, by the entry thereof in the name of Rhodes, on the 6th of December, 1839, in virtue of his preemption right under the act of 1838, vested in him all the title, both legal and equitable, to said tract of land. It is also equally apparent, that no consideration was given by Eli Montgomery for the transfer thereof to him, in December, 1839;. .and also, that, even if said transfer had been made for a good, adequate, and valuable consideration, and in good faith, yet, under the laws of Louisiana, in consequence of the failure to record the deed in Concordia until long after the judgment of complainant had been there recorded, it was ■of .n.o validity whatever as- to the rights of complainant, as tó whom the said sale is the same as if it had never been made. See' 6 Robinson, 315.
    What has been said abpve is peculiar to the lot or quarter-section of land entered in the name of Rhodes.
    We have some things still to say, which are alike applicable to all the lands on which complainant claims a mortgage.
    In the answer, it is stated that the notes of Ford were paid by Eli Montgomery to Luminda Montgomery, in satisfaction of moneys due her from her father’s estate, &c.; and that these notes were given by her to Ford, as the price of the transfer from him to her of the lands mentioned in the bill.
    No proof whatever has been offered in support of the allegation of the answer, that the notes were paid by Eli Montgomery to Luminda, in satisfaction of moneys due her from her father’s estate. The truth of the answer was put in issue by the replication; and therefore this allegation of the answer requires proof. See opinion of Chancellor Kent, in Hart v. Ten Eyck, 2 Johns. Ch. Í59, 90, and authorities there referred to:—
    “ When the answer is put in issue, the defendant must support by proof all the facts upon which he means to insist, while the plaintiff may rely upon every fact admitted, which he conceives material, without being bound to the admission of any others. But when the answer is offered in evidence at law, n6 part of it is immediately in issue. It is only parcel of the evidence, and- if one side introduce it, the other may insist upon the whole being read; and if read, it does not necessarily follow that it must be wholly admitted as true, or wholly rejected as false. The credit of any and every part is left to the jury, who are not bound to believe equally the whole answer, but .'may believe what makes against, without believing what makes for, the party who swears in the answer. This rule is applicable to every kind of evidence, and has been often acknowledged by the judges at law.” /
    “ The distinction, therefore,” as Evans says, “ is not between courts of law and equity, but between pleadings and evidence. If an answer is introduced collaterally, it ought to be treated precisely as in a court of law,” &c. •

    Here it is admitted by the answer, that the notes were given to Luminda Montgomery; and though stated to be in payment, &e., yet no proof is administered of the indebtedness of Eli Montgomery, and therefore, under all the circumstances of the case, the allegations of fraud seem to be fully proven.

      As the matter stands, it is clear that Luminda Montgomery gave no consideration for the notes; and by consequence it is also true that Eli Montgomery gave no consideration for the land.
    The conclusion deduced from this rule of evidence, as applicable to this case, is much strengthened by the fact, that an •important part of the answer has been disproved by two credible witnesses, and by documents; and therefore the rule applies to the whole answer, that, if a witness is provento have wilfully sworn falsely in one particular, his whole testimony is discredited;
    The truth is, the lands were always, in fact, the property of Zachariah Rhodes, except while the title was in Ford, during which time he held the notes of Ford for the unpaid price. These notes were finally given up to Ford in consideration of a transfer of the lahd, &c.
    But even if it were true, as is stated in the answer, that the notes of Ford were given by Eli Montgomery to Luminda in ' satisfaction of a just debt due her for moneys coming from her father’s estate, still it would form no ground for dismissing the complainant’s bill; because the lands were acquired on the 7th of November, 1842, during the existence of the community between the defendants; and • although the deed is taken in the name of the wife, and even if the price was paid with the proper funds or effects of the wife, they are still the property of the community. (See- Civil Code of Louisiana, Art. 2371 : see also 10 La. Rep. 148; lb. 181.)
    If the defendant Luminda Montgomery has applied her proper effects in the purchase of the lands, (which is denied by complainant,) she has a tacit mortgage on all the immovable property of her’ husband, and on the immovablés, of the community (which, includes these lands), for thq satisfaction thereof. This claim she must set up against the complainant (after suit instituted against her husband for separation of property) by original, or cross bill, &c.
    . She has not set it up, nor could she be heard to set it up in an answer.
    We think it fully established, then, that, even if the acquisition of the lands was made with the funds of Luminda Montgomery., and the deed taken in her own name, as it was, still She cannot lawfully oppose the foreclosure of complainant’s mortgage.
    But it is not true that the lands were acquired with her funds or effects. In any form of action against her husband, his heirs, or his creditors, it is indispensably necessary for her to establish, by proof, that the property was acquired with her funds or effects. This has not been done in this case, nor could it be done, because it is not true.
    In 'the answer it is stated that the debt due complainant was contracted by Zachariah Rhodes prior-to his intermarriage with Ruminda Montgomery, which took place on the 28th of December, 1834; and that therefore it cannot be satisfied out of the effects of the com'munity.
    The record shows, that the judgment of McCoy against Rhodes was rendered on the 24th day of February, 1840, with interest thereon from the 26th day of March, 1839. If the debt was contracted prior to the 26th of March, 1839, it does not appear by any evidence in the record; and the presumption of law is, that that is the date of its origin.
    If the fact was otherwise, the respondents, should show it by evidence. The answer, as above said, cannot establish the fact.
    Since the above was written, we find, on inspection of the papers in the case, in the Circuit Court, that a copy of the record of the suit of McCoy v. Rhodes, in the State -court, is on file, and we suppose it was offered in evidence. .If this is true, it appears by that record that the debt was contracted by Rhodes on the 12th of August, 1838.
    We therefpre rely on the following propositions ¡as established: —
    1. The land which is designated as the northwest quarter, of section 29, in township 10 of range 10, was entered at the land-office, and purchased by Zachariah Rhodes in his own name, and for his own use, from the United States, on the 6th day of December, 1839, in virtue of a Settlement thereon, and preemption right granted him under the act of Congress of 1838, granting preemption rights, &c..
    2. That said quarter-section of land,'though nominally conveyed, by public act dated on the 7th day of December, 1839, from Zachariah Rhodes to Eli Montgomery, was, because the conveyance to Montgomery was fraudulent, still actually the property of Rhodes, until the 10th of December, 1841,'when it -was, at the instance of said Rhodes, conveyed by Eli Mont-' gomery to Thomas'J. Ford.
    3. That the said transfer to Montgomery did not have any effect as against complainant; because the said conveyance was made without any lawful consideration, and with intention of defrauding creditors; and also because the deed of transfer was not recorded in the conveyance office of the parish of Concordia, until long after the judgment of complainant had been recorded in the mortgage office of said parish, within whose limits, at that time, the land lay.

      Note.— Since the recording of the judgment of complainant, and since the recording of the conveyance of Rhodes to Montgomery, that part of the then parish of Concordia in which the land lies has been stricken off from Concordia, and it now forms a part of the parish of Tensas.
    4. That the entry of the other lands in the name of Eli Montgomery, made by Rhodes on the 10th day of December, 1839, át the land-office at Monroe, was, in truth, an entry and purchase of said lands by said Rhodes for his own use and benefit; and that the use of the name of the said Montgomery was intended as, and was, a fraud upon the creditors of Rhodes; and consequently-said lands, from the date of the purchase until the 10th day of December, 1841, (when they Were conveyed and sold by. Eli Montgomery, at the instance of said Rhodes, to Thomas J. Ford,) remained and continued to be the property of Zachariah Rhodes. That consequently, the judgment of complainant operated as a mortgage on all said lands from the date of its record in the mortgage office of Concordia, to wit, 7th March, 1840.
    5. That from the 2d day of November, 1842, when all said lands mentioned in the bill were conveyed by Thomas J. Ford to Luminda Montgomery, the lands all beeame the property of the community existing between said Zachariah Rhodes and Luminda Montgomery, his wife; and as such, (evert if not, before that time, subject to the debt due complainant,) became affected with the mortgage claim set up in the bill.
    Note.— The division of the parish of Concordia did,not take pláce till 17th March, 1843. See Session Acts of 1843, page 35.
    • (The judgment of complainant was recorded in Concordia on the 7th of March, 1840.) ’
    6. That the judicial mortgage of complainant attached to, and became fixed on, all the lands mentioned in the. bill, from and after the 7th day of March, 1840, the date on which it was recorded.
   Mr. Justice CATRON

delivered the opinion of the court.

McCoy recovered a judgment against Rhodes, in a State court of Louisiana, for the sum of $1,546, on the 24th of February, 1840 ; and on the 7th of March following this judgment, was recorded in the mortgage office of Concordia parish. The bill seeks to subject certain lands in possession of Rhodes to satisfy the judgment. . Three of the traqts were entered as United States lands, in the name of Eli Montgomery, but which the bill, alleges were the property of Rhodes, and covered by Montgomery’s title to prevent Rhodes’s creditors from reaching them. This is directly denied by the answer, and, there being no proof to the contrary, complainant must fail as respects these three parcels. The bill also seeks to subject a fourth tract, entered by Rhodes (December 6,1839) in his own name, and conveyed to Montgomery next day, December 7,1839. This deed was first recorded, in the proper office of Concordia, December 10,1841; and is for the northwest quarter of section' No. 29, T. 10, R. 10 east, containing 160T\°ff acres. '

On the 10th of December, 1841, Montgomery,conveyed the four- tracts to Thomas J. Ford, who afterwards (November 2, 1842) rescinded the contract of purchase, and conveyed to Ljiminda Montgomery Rhodes, wife of Zachariah Rhodes. Rhodes and wife are the only defendants. In regard to the northwest quarter of section No. 29, they jointly answer and say: —

“ True it is that this respondent, Zachariah Rhodes, did, on the 6th day of December, 1839, enter at the land-office at Ouachita, Louisiana, the northwest quarter of section No. 29, in township No. 10 of range 10 east, and that he took a receipt for two hundred dollars and twenty-five cents, the price thereof under the laws of the United States; but .these respondents aver that the entry aforesaid was made by this respondent, Rhodes, for Eli Montgomery, of the State of. Mississippi ; that the said Eli Montgomery did furnish the money to pay for the same, and the same was actually paid for out óf the moneys so furnished by the said Montgomery; and that the conveyance of the same to the said Montgomery by this responden cde as set forth in the said complainant’s bill, was made to complete the legal title in his, said Montgomery’s name, according to- the original intent of all parties, and as equity and justice required; this respondent, Z. Rhodes, having .only acted as the agent of the said Montgomery, and for his use, in making said entry, and paying the said money; and .not with any view to. cheat, defraud, or wrong the said plaintiff, as is falsely charged in said plaintiff’s bill.”

Respondents admit thát the entry was made in Rhodes’s own name, and was, when made, prima ‘facie liable to be seized on execution as his property ;• but then, in avoidance of this admitted liability, they allege that Montgomery’s money was paid into the land-office, and that this was done in .fulfilment of some previous agreement between Rhodes find Montgomery, by which an equity existed in the Matter to have the benefit of Rhodes’s preemption right of entry, as an actual settler.

There is no proof in the cause of the facts above set forth by the answer. That Montgomery furnished the money paid, and that the land was .entered for his use under a previous ^ agreement, are facts within the peculiar knowledge of respondents ; they are not responsive to charges made by the bill, but set up as an independent defence. Tn such case the rule is, “ that a discharge set up in avoidance, coupled with an admitted liability, if the answer be replied to, (as here it is,) must be proved by the defendant.”' • '

This is the settled rule. Hart v. Ten Eyck, 3 Johns. Ch. 88; Napier v. Elam, 6 Yerger, 112.

As the respondents cannot make evidence for themselves, and thereby establish an equity in Montgomery, it follows that tfye defence must fail so far as the- equity set forth is relied on. Having disposed of this part of- thé controversy on the pleadings and want of proof, it-becomes unnecessary to examine what bearing the act of July 22, Í838, c. 119, (5 Stat/at Large, 251,) has on the foregoing facts. -

The next, ground of defence relied on is the conveyance made by Rhodes, to Montgomery of the 7th of December, 1839. It was recorded December 10, 1841. -According to the .statute law of Louisiana, no notarial act concerning immovable property has effect against third .persons, until the same shall have been recorded in the office of the judge of the parish where such property is situated. In relation to third persons, the act of sale not recorded is considered as void.

For an exposition of the Louisiana statute we refer to the case of Gravier v. Baron.(4 Louisiana R. 239), and which has been since followed by the Supreme Court of Louisiana. The~ - deed from Rhodes to Montgomery being a notarial act, it took effect on the 10th of December, 1841, against McCoy, the judgment creditor; and as the lien of the judgment, or- judicial mortgage, attached the 24th of February, 1840, when the title was in Rhodes the debtor, this deed is of no force as again.st . the judgment, nor are the subsequent deeds founded on it; and therefore McCoy has a right to .have the northwest quarter df section No. 29 sold. .

Some supposed difficulty exists on .the head of jurisdiction for want of parties, Eli' Montgomery not being before the court. We do not deem him a necessary party to this suit; he has no interest in the land,j and no right to contest the valid-. ity of the judgment against Rhodes. And, in the next place, we are of opinion that all necessary parties were before-the Circuit Court according to the forty-seventh and forty-eighth rules of chancery practice published by us in 1842, as the' bill alleges that Eli Montgomery permanently resided beyond the jurisdiction of the court; which was not contested by plea, nor was any objection made below against proceeding to a final decree for want of parties.

For the reasons stated, it is ordered that the decree dismissing the bill be reversed, and that the cause be remanded to the Circuit Court, there to be proceeded in according to this opinion.

Order.

This cause came on to be heard on the transcript of the record from the Circuit Court of the United States for, the District of Louisiana, and was a’gued by counsel. On consideration whereof, it is now here ordered, adjudged, and decreed by this court, that the decree of the said Circuit Court in this cause be, and the same is hereby, reversed, with costs, and that this cause be, and the same is hereby, remanded to the said Circuit Court, for further proceedings to be had therein, in conformity to the opinion of this court.


source: Caselaw Access Project

author: Mr. Justice McLEAN

license: Public Domain

text:
    Penelope McGill, Plaintiff in error, v. Josephine H. Armour.
    Where a creditor brought an action against an executrix in the Circuit Court of the United States for Louisiana, and the petition only averred that the petitioner was shown to be a creditor by the accounts in the State court which had jurisdiction over the estates of deceased persons, and then proceeded to charge tho executrix ' with a devastavit, and exceptions were taken to the petition as insufficient, these exceptions must be sustained.
    The petition should have gone on to allege further proceedings in the "State court analogous to a judgment at common law, as a foundation of a claim for a judgment against the executrix de bonis propriis, suggesting a devastavit,.'
    The laws of Louisiana provide for compelling the executrix to file a tableau of distribution, which is a necessary and preliminary step towards holding the executrix, personally responsible. The petition, not having averred this, was defective, and the exceptions must be sustained.
    This case was brought up, by writ oi error, trom the Circuit Court of the'United States for the District of Louisiana.
    As the decision turned upon a question of pleading, it is proper to insert the petition, and, the. exceptions which were taken to it, by way of'demurrer.
    The petition was as follows.
    “ To the Honorable the Judges, of the Circuit Court of the United States, held in and for the District of Louisiana, the petition of Penelope McGill respectfully shows :
    “ That she is a resident and citizen of the State of Mississippi.
    “ That Josephine Hurd Armour is a citizen of the State of Louisiana, resident in New Orleans.

      “ That Josephine Hurd Armour is indebted to, and became liable to pay to, your petitioner the sum of $ 7,510.66, with eight per cent, per annum' interest thereon, from and' after the 6th day of June, 1843, till paid, in the manner following, to wit: —
    “ On or about the 31st day of August, 1843, James Armour died indebted to your petitioner in the sum of $ 7,510.66, with interest, as above stated, the items of which debt are set forth in the papers annexed, and marked A and B.
    “ That, before his death, James Armour promised in writing to pay eight per cent, per annum interest on the funds which petitioner left in his hands, that is, on the sum of $7,510.66, until their payment.
    “ That, at his death, James Armour left a will, in which he appointed Josephine H. Armour, the executrix of the, said will, and dispensed with the necessity-of requiring her to give security.
    “ That, on the llth day of September, 1843, she filed her petition in the Probate Court of the parish of Orleans, praying the appointment of executrix of the last will of James Armour, on which said day she was appointed, and took the oath required bylaw; and on-the 16th day of September, 1843, she was fully authorized to do all-acts-as executrix of the will of James Armour, and as such took possession of all the property of said James Armour.
    “ That James Armour, at the time of his death, owned.property in New Orleans which was appraised- at $ 70,058.61, and in the parish of Jefferson he owned property which - was appraised at $ 800; all of which came into the hands of said Mrs. Josephine H. Armour as the property of James Armour, deceased.
    “ That she has used for her own benefit all oi said property, except as herein below stated, and has appropriated no portion thereof to the payment of the debts of James Armour.
    “ That among the property of the said succession of James Armour were found the following described notes: two notes of John Graham, each for $ 629.06, due on the 1st days of August, 1842 and 1843, payable to and indorsed by Buchanan, Hagand, & Co.; a note of Dougall McCall for $ 3,803.90, due 7th June, 1841 ;■ three notes of C. A. Warfield, for $ 619.67 each, due two, four, and six months after the 3d day of May, 1841; a note of J, K. Patterson for $ 550, due on 1st November, 1841; a check of James Pardon, Brother, & Co.,_on the City Bank of New Orleans, for $ 100; another check of the same drawers, on the Commercial Bank of New Orleans, for $ 120; a due bill of William Christie for $ 250; a draft of Francis D. Newcomb, on Rice Garland, for- $ 75; four promissory notes of Fr&ncis D. Newcomb, all dated 15th December, 1842, each for $> 954.76, due at six, twelve, eighteen, and twenty-four months after date. All of which several debts were dúe to James Armour at the time of his death, and have since become worthless and prescribed by means of the negligence of said Mrs. Armour; and all said claims bore interest at the rate of eight per cent, per annum, from their dates till paid.
    “ That, by means of said negligence, she has made herself liable to the creditors of the said James Armour for the amount of all said claims, $! 11,760 and interest at ten per cent, from the several dates above mentioned until payment.
    “ That she received and applied to her own use the family residence of James Armour, valued at $ 15,000; she sold two lots on Camp Street, near Felicity road, worth $ 600; the property in the parish of Jefferson, worth $ 800; the slaves Sampson, Betsy and child, Emily, Esther and child, Sarah, and Calvin, worth by appraisement $> 2,750; also, the household furniture and plate, carriage, &c., valued at !§ 1,000, making $ 20,150; all of which she used for her own benefit, and did not pay to the creditors of James Armour any portion of the proceeds, although all said property belonged to James Armour.
    “ That the said Mrs. Armour owed said succession, of James Armour $ 411.35, at the time of his death. She collected from the various debtors of the estate of James Armour the various sums which are stated in the annexed invento :y to be due by the persons therein named, and not hereinbefore set forth, which said several debts amount to fifty thousand dollars.
    “ That, by receiving the property enumerated in said inventory, as the executrix of her husband’s will,-she became bound to use all due diligence in collecting the property of said James Armour; and also became bound to apply all the proceeds to the satisfaction of the debts of James Armour.
    “ That the said property was more than sufficient to pay all the debts of said James Armour, if the said Mrs. Josephine H. Armour had used due diligence in collecting and in paying over the proceeds of the property of said estate.
    “ That, on the 13th day of December, 1843, the said Mrs. . Josephine H. Armour filed, in the Probate Court of the parish of Orleans, a provisional account of the affairs of the said1 succession, with which she filed a statement of all the creditors of said estate, by which it appears that James Armour owed only forty thousand dollars, to pay which Mrs. Armour had the sum of seventy-one thousand dollars.
    “ That, in the said list of. creditors, your petitioner is named and acknowledged to- be a creditor of said succession of James Armour, for the sum sued for herein.

      “ That, upon opposition made to the said account and list of creditors, it was adjudged that.the said estate of Armour owed to your'petitioner the said sum of money; as also that the debts of the succession amounted to forty thousand dollars.
    “ That, by means of the neglect and the misapplication of the funds of said succession, Mrs. Josephine Hurd Armour has become liable to pay the said debt to your petitioner, and also to pay damages to the amount of eight thousand dollars, and eight per cent, per annum interest from 6th June, 1843, till paid.
    « The' premises considered, petitioner prays that the said Josephine Hurd Armour be cited, and, after due proceedings, that she be condemned to pay- your petitioner the sum of $ 7,510.66, with eight per cent, per annum interest from the 6th day of June, 1843, and damages as above stated. Petitioner prays for a trial by jury, and for general relief in the premises.

      “ Stockton & Steele,

      Attorneys for Plaintiff.”

      ' In March, 1848, the defendant filed the following exceptions and answer.
    “ And the said Penelope McGill, by her attorneys, comes into court, and, pursuant to the rules and practice in this honorable court, files now this her exception and answer to said petition.
    “ She excepts to said petition, and prays that the same may be dismissed without further answer, for these reasons: —
    “ First. The said petition, and the matters and things therein contained, are not good and sufficient in law to charge this defendant, and show no cause of action against her.

      “ Second. The said' petition is insufficient, for the reason that all parties interested in the further settlement of said accounts therein referred to are not made parties to said petition, and the defendant cannot be called upon by each creditor of the testator to render an account of-her actings and doings.
    “ Third. The said defendant excepts to the jurisdiction of this honorable .court, sitting as a court of common law, to determine and adjudge the matters involved in said petition, and says that the same are only cognizable in chancery, and according to the form of proceedings in equity.
    “ Arid if the said exceptions should be overruled, and the said defendant be required to make further answer unto said petition, then, for answer to the same, she states : —
    “ That she denies, generally and specially, each and all of the allegations in said petition contained, except such as are hereinafter admitted. She admits that she was appointed the executrix of the last will and testament of her deceased husband, James Armour; that she duly qualified. as executrix as aforesaid, and took upon herself the administration of said estate.
    “She further states, that she has endeavored faithfully and honestly to discharge her duties as executrix, and avers that in all things she has administered the effects of said estate according to law; that she made full, true, and perfect inventory of the property of said succession, and all proper diligence in collecting the debts of said succession; disposed of the property .thereof under and in obedience to the order of court; made reports of her actings and doings, and presented formal tableaux of distribution, which were duly approved and homologated by the Probate Court of the parish, of Orleans, in which such matters were properly cognizable.
    “ The said defendant'further states, that the said succession of James Armour is and was at the death of the testator utterly insolvent', and that she is a creditor of said estate, recognized as such by the proper tribunal, and entitled to be paid before petitioner; and, álthough. so recognized for a large amount, the assets are wholly insufficient to discharge the said claim; besides many other ordinary creditors, whose claims are equally as meritorious as the petitioner’s.
    “ Wherefore defendant prays for trial by jury, and that judgr ment be rendered against petitioner; and-she will evér pray, &c.
    “ W. C. Mtcou,
    D. Hunton.”
    In May, 1848, the Circuit Court, after argument, sustained the exceptions, and dismissed the suit, at the plaintiff’s costs. The plaintiff sued out a writ of error, and brought the case up to this court.
    It was submitted upon printed arguments by Mr. Butterworth, for the plaintiff, in error, and Mr. Benjamin, for the 'defendant in error.
    The counsel for the plaintiff in error considered that the Circuit Court, by its judgment, had decided the three following points, in each of which there was alleged to be error: — 1st. That no cause of action was shown in the petition; 2d. That no proper parties were made; and 3d. That the suit should have been upon the equity side of the court. But as the décision of this court turned exclusively upon the first point, that one only will be noticed.
    First. We think the petition shows good cause of action: no one disputes that an executor is responsible personally to some one for the value of the property received by him; either for its restoration in kind, or for its value, if the property or its value has been lost by his negligence whilst it remained in his possession. See 11 La. R. 22; 9 Rob. 405, 447 ; 9 La. R. 49; 3 Martin, N. S. 707; 7 Rob. 478. .
    . This responsibility is directly in favor of the parties for whose, benefit the property is received by the executor.
    According to the law in Louisiana (and we believe everywhere else) creditors of the deceased have a right-to be paid out of the funds in the hands of the executor, in preference to all other persons, whether legatees or heirs.- Civil Code, Art. 1627. And they are the parties principally interested in so much of the property as is needed to satisfy their claims; consequently, the account must be rehdered to them of the property received, and payment must be made to them, if it is destroyed. No one else is interested in this matter.
    Now, the plaintiff has set forth that the defendant received property worth $ 71,000, and that the debts were only $ 58,000; that she has destroyed a large amount of the notes, allegations, &c., by permitting them to become prescribed and worthless; that she has converted to her own use properry worth $ 20,000, and that she has collected debts due to the estate, of James Armour worth $ 50,000 ; that she has paid no one any thing, and that all this money, $ 71,000, was received as funds with which to pay plaintiff’s debt, and that there is no other fund from which it can be paid.
    There is a tacit or quasi contract, made by an executor in receiving property of a succession, that he will pay it to the . parties to whom it rightfully belongs, that is, first to the creditors, then to the legatees, then to the heirs of the deceased.
    ; Plaintiff sets forth that this quasi contract has been violated so far as she is concerned, and she asks its enforcement; also, she says the defendant received property to the value of $ 71,000, which.property was received by her to pay this very debt, and that, by the negligence of the defendant it has partly become worthless, and that she has herself, consumed and used the balance, and thus she has damaged the plaintiff to the whole amount of her debt. Thus she shows two good causes of action against the defendant. " _
    The' counsel for the appellee replied to this point as follows.
    1st. The petition .is insufficient.
    - As the demand is for a judgment de bonis propriis, the action is in the nature of a devastavit, at common law.
    In order to sustain such a suit at common law, there must be judgment and execution. 1 J. J. Marshall, 362; Erving v. Peters, 3 Term Rep. 685.

      Action may be brought upon the judgment, without execution, upon a suggestion of a devastavit, but it is usual to sue out a fieri facias, and state the judgment, writ, and return. 2 Williams on Executors, 1224, with numerous cases cited.
    The reason why the judgment without execution is sufficient is stated on the same page. •“ The foundation of the action is the judgment obtained against the executor, which, as there has been already occasion to show, is conclusive upon him to show that he has assets.” 2 Williams, 1224.
    Hence, whenever the executor is sued at common law, lie must, at his peril, plead ple-ne administravit; if he fail to do so his silence is a confession "of assets, and he is not permitted ever after to deny that he has sufficient assets to pay the demand. 3 Term Rep. 690; 3 Bac. Abr., tit. Executors (M.); Siglar v. Haywood, 8 Wheaton, 678.
    There is no .averment of judgment or execution in the petition. It is true that the plaintiff alleges that her name .and debt were placed on a list of debts, and that on opposition it was adjudged “that the estate of Armour owed petitioner the' said sum of money.” But this is a very different thing from the judgment against an executor at common law. Such a judgment rendered simply is proof of assets; but a mere decree that the estate owed the debt is no judgment whatever against the executor, and no proof of assets on suit for devastavit.
    The proceeding to which the petition alludes is peculiar to the laws of Louisiana. No creditor is permitted to bring suit for the debt of the estate, without first presenting his claim to the administrator. • If the claim’ be acknowledged in writing by the administrator, the creditor “ may present it to the judge, that it may be ranked amongst the acknowledged debts of the succession.” Louisiana Code of Practice, art. 984, 985. If the administrator refuse to acknowledge the claim, then the creditor may bring suit. Art. 986. But the judgment obtained gives no priority, and the creditor can only obtain payment concurrently with the other creditors. Art. 987. And when the administrator has funds to pay, he calls all the creditors together, to receive the amounts due them respectively. . Art. 988.
    The judge is empowered to direct the sale of property for payment of debts, and when the representative of the estate has funds, he calls the creditors together, by publications notifying them that a dividend has been declared, and a tableau thereof filed in court, in accordance with which the funds will be distributed after approval by the judge. In other words, estates are administered in Louisiana like bankruptcies. The executor-* is the assignee, and he makes payments or declares dividends only under the orders of the court.
    The acknowledgment of the executor is often made, as in this instance, by filing in court a list or statement of the debts of the succession. This list approved or homolo'gated establishes the debt as against the succession, and entitles the credi-. tor to participate in any future dividends. Such is the judgment of the plaintiff in this suit. How different it is from the judgment necessary at common law to support the action of devastavit, is too obvious to require any argument. It is' different in its effects and its legal consequénces. No execution can issue upon it, and it- does not imply assets in the hands, of the executor. Such a judgment is therefore insufficient to support the action.
    If it be pretended thfit the mode of proceeding in Louisiana . precludes any other form of judgment, we reply that such is not the case.' The rights of creditors are fully protected under our laws. If he has reason to believe that there are funds in the hands of the executor, he may call upon him by rule, and enforce its distribution. He may even demand the exhibition of his bank-books and accounts, to/ascertain if he have funds. Act of 1837, Bullard & Curry’s Digest; Kenner v. Duncan’s Executors, 3 Mart. N. S. 563.
    Such a distribution of funds in hand is a judgment in favor of each creditor for the dividend awarded to him. Morgan et al. v. Their Creditors, 4 La. R. 174; Nolte et al. v. Their Creditors, 7 Mart. N. S. 644; Preston v. Christin, 4 La. Ann. Rep. 102.
    It is, moreover, a judgment ol assets to the amount of the dividend, and if after such, a judgment the executor fail to pay,. execution issues against him de bonis propriis. Code of. Practice, Art. 994 and 1057. 1
    " It is thus obvious that the laws of Louisiana, do afford the same remedies as the common law against estates. If the petition contained an averment that a tableau of distribution had been 'filed and homologated, confessing the possession of assets, and awarding full payment to the plaintiff, then she would be in precisely the same position with a creditor having á common law judgment against an executor, and could maintain her action of devastavit. The petition contains no such allegation.
    The reason of the rule applies to both systems equally. Under neither can the executor be vexed by personal pursuit, until it has been established judicially that payment cannot be obtained de bonis testatoris. . Until that be ascertained, no personal action lies against the executor. All the cases cited in the printed brief of plaintiff’s counsel support this view of the laws of Louisiana.. The creditors and heirs may sue for an account, but no case can be cited in which such an action as ' the present has been sustained in this State, without showing a necessity for it, by proving that payment cannot be had from the goods of the succession.
    The position assumed in plaintiff’s brief, that the executor is responsible to creditors for the property that comes into his hands, and for his fidelity in administration, is fully admitted, but it is denied that the courts of Louisiana will, entertain a suit in the nature of a devastavit, without showing that the assets of the estate have been in some form exhausted. If the allegations of the petition be true, it is obvious that this suit is both unnecessary and vexatious. If property to the amount of over $ 70,000 in value has come to the hands of the defendant to pay debts of only f¡ 40,000, it is apparent that she is liable fpr the assets as executrix. She may be forced, under the heavy penalties imposed by law, on a breach of- trust, to sell the property, collect the debts, and distribute the proceeds in the form prescribed by law. The plaintiff does not pretend that she has attempted to procure payment in that form. She alleges no rule against the defendant, no tableau of distribution confessing ássets, — no step whatever against her in her representative capacity, taken ineffectually.. It is idle- to say that the executrix retains and appropriates to her own use the property and funds of the estate. If such property and funds be in her hands, she can hold them only under the control and supervision of the court. She is compelled by law and by the ditties of her office to administer and distribute, and no proof can. be received that she has not done so, except a judgment of the proper court. Such a judgment any creditor aggrieved may always provoke. The .petition alleges, no such judgment; thé suit is therefore merely vexatious, and deserves no favor.
    The point is expressly decided in a case in the Louisiana Reports, and1 we quote the .opinion at length, to show that the ■principles above stated are fully recognized in Louisiana.
    “ The plaintiff is appellant from a decree setting aside an order of sequestration which he had previously obtáined. This order had been issued on his allegation that Tarbe and. Nash: had made a surrender of their property to their creditors, in the year 1837; that John Tarbe, one of the insolvents, had, been appointed syndic of their creditors, and by the latter dispensed with giving security as such ; that the defendant had illegally disposed of part of the property surrendered, by selling it ,at private sale, and that he was about to dispose of a quantity of other property belonging to the estate in the same illegal manner, to the prejudice of plaintiff and that of all the other creditors. We think that the court below did not err. The whole proceeding appears to us irregular and unwarranted by law. When a syndic has been legally appointed, and has taken charge of the estate intrusted to him, no-individual creditor can sue him for a debt, or interfere with his administration. He may be ruled to produce his bank-book, file a tableau of distribution, and pay privileged debts, &c., but he should not be suffered to be harassed by suits brought by individual creditors, who allege ór fear mismanagement on his part. If he has been guilty of malfeasance or gross negligence, he.can, in due course of law, be removed from office by the creditors, and made liable in damages in his individual capacity. 6 Martin, N. S. 126; Laws of 1837, p. 96.” — Lallande v. Tarbe, Syndic, 15 La. Rep. 442.
    .This decision was made with reference to a syndic of insolvents ; but the mode of administration, and the rules applicable to it, are precisely the same in estates or successions.
    It is thuá established that the petition shows no sufficient ground for an action of devastavit, either according to the laws of Louisiana or the common -law.
    If it were admitted that such a judgment as is required at common law could not. be obtained in the State courts, this plaintiff could not be excused from obtaining it on that account.. She is a citizen of another State, and the federal courts are open to. her. She might there have obtained judgment and issued execution against'the executrix, and the return of the writ would have justified the present action. But she seeks to avoid' compliance with the requisites of the-law, and prefers to prosecute her suit without ascertaining by judicial proceedings that, such a suit is either admissible or necessary. That she has chosen a course so irregular is significant of the want of foundation for her demand.
   Mr. Justice McLEAN

delivered the opinion of the court.

A writ of error to the Circuit Court of the United States for the District óf Louisiana brings before us this case.

A suit was commenced by the plaintiff in the Circuit Court against the defendant, on a claim of debt amounting to the sum of $ 7,510, with interest, which James Armour, husband of the defendant, in his lifetime owed to the plaintiff. He died, having executed a will and made the defendant his executrix. Ehe filed her petition in the Probate Court at New Orleans, and was duly authorized to act as executrix.. At the decease of her husband, it is alleged, a large amount of property came into her hands as executrix, which she usecl for her own benefit, and neglected to pay the debts of the estate. And it averred that a misapplication of the funds has made the defendant _ liable in her individual capacity, and the plaintiff prays that' she may be condemned to pay the above sum, &c.

. The defendant demurs to the petition, on the ground that it is not sufficient in law to charge' her, for want of parties, and that the matters are only cognizable in chancery. And she answers that she has fully administered, having made a full inventory of the property of said succession, and used all proper diligence to collect the debts, and disposed of the property in obedience to the order of the court; made reports of her acts, and presented a formal tableau of distribution, which was duly approved and homologated by the. Probate Court. That the estate proved to be insolvent, and that the defendant is a creditor, recognized as such by the proper tribunal, and is entitled to a preference, &c.

At the trial the suit was dismissed, at the plaintiff’s costs.

This was a procedure at law under the forms adopted by Louisiana, and the question is, whether it is maintainable. The plaintiff demands a judgment de bonis propriis, against the defendant, no other step having been taken, or notice given, before the commencement of the present action. At common law an executor or administrator is not chargeable on a devastavit, until a judgment shall be obtained against him. He is bound to defend himself by legal pleading, and can have no relief in equity; If he suffer judgment by default, it is an admission of assets, and also if he file a plea in bar which he knows to be false. So if he pleads only the general issue, and has a verdict against him. If he plead pi ene administravit, and on this plea assets ■ are found to be in his hands, he is liable only to the amount of such assets. 3 Bac. Abr., Executors, (M).

Estates by the law of Louisiana are administered under the special orders of the Probate Court. By the. Code of Practice, Art. 984-988, no' creditor is permitted to bring suit without first presenting his claim' to the administrator. If the claim be . admitted by the administrator-in writing, it is filed among the acknowledged debts of the succession. If the claim be rejected, the' creditor may bring suit. But a judgment gives no priority.

By articles 1167,1168, and 1169 of the Civil Code, the curator of a vacant succession can pay no debts, except privileged ones, until three months after the succession. is opened, and then under the order of the judge. When the time for payment arrives, he must present his petition to the judge, with a statement- of the debts due. And if the funds in his hands shall be insufficient to pay the debts in full, he is required to make a tableau of the distribution and present it to the judge, with a prayer that he should be authorized to make the payments accordingly. But if the administrator or curator “ neglect or refuse to file a tableau of the estate, and obtain the order of the judge to make payment, he can be compelled to do so on the demand of the interested, or in default thereof render himself responsible in his personal capacity.” Kennei et al. v. Duncan’s Executors, 3 Martin, N. S. 570.

This last procedure is as indispensable under the Louisiana law to authorize a proceeding against the executor or administrator to make him personally responsible, as an action and judgment are necessary at common law to charge him with a devastavit. And it does not appear from the petition in the case before us, that any order of the judge was obtained as required, or that any proceedings were had to compel the defendant to exhibit á tableau of distribution, by which it would appear whether the executrix had assets in her hands to pay the whole or any part of the debt of the plaintiff. This action was commenced at law, and the fact is alleged that a large amount ,of assets came into the possession of the defendant which have been misapplied, on which ground a personal liability is sought to be enforced against her. . This the law does not authorize. An executor or administrator by the laws of Louisiana is considered, in this respect, ,as a Syndic of an insolvent estate. In 6 Martin, N. S. 126, the courCsay, when' a syndic has been legally appointed, and has taken charge , of the. estate intrusted to him, no individual creditor can sue him for a debt or interfere with his administration. He may be ruled to produce his bank-book, file a tableau of distribution, &c., but he should not be suffered to be harassed by suits brought by individual" creditors,- who allege or fear mismanagement oh his part.

The judgment of the Circuit Court is affirmed, with costs.

Order.

This cause came on to be heard on the transcript of the record from the Circuit Court of the United States for the District of Louisiana, and was argued by counsel. On consideration whereof, it is now here.ordered and adjudged by this court, that the judgment of the said Circuit Court in this case be. and the same is hereby, affirmed, with' costs. .


author: Mr. Justice WOODBURY

text:
    The United States, Plaintiffs in error, v. Thomas Gibbes Morgan, Thomas W. Chinn, Micajah Courtney, Josiah Barker, and the Heirs and legal Representatives of John Davenport, deceased.
    Although a bill o.f exceptions is imperfectly drawn, yet if this court can ascertain the substance of the facts, and the questions on which the judge instructed the jury are apparent, it will proceed to decide the case.
    Where a collector received treasury-notes in payment for duties, which were cancelled by him, but afterwards stolen or lost, altered, and then received by him again in payment for other duties, he is responsible to the government for the amount thereof.
    So also he is responsible, to a certain extent, where treasury-notes were received by him in payment for' duties, cancelled, but lost or purloined (without his knowledge or consent) before being placed in the post-office to be returned to the Department.
    And this is so whether the notes be considered as money or only evidences of debt by the Treasury Department.
    But the extent, above mentioned, to which his responsibility goes is to be measured by a jury, who are to form, their judgment from the danger of the notes getting into circulation again, the delay and inconvenience in obtaining the proper vouchers to settle accounts,-the want of evidence at the Department that the notes had been-redeemed, or from any other direct consequence of the breach of the collector’s bond.
    This case was brought up, by writ of error, from the Circuit Court of the United States for the District of Louisiana.
    It was a suit brought upon a collector’s bond against Thomas Gibbes Morgan, the principal, and Thomas W. Chinn, Micajah Courtney, Josiah Barker, and John Davenport, sureties. The bond was executed on the 14th of. December, 1841, and recited that Morgan had been appointed collector of the customs for' the district of Mississippi, in the State of Louisiana, on the 25th of June, 1841. It was in the usual form, with a. condition that Morgan “ has truly and faithfully executed and discharged, and shall continue truly and faithfully to execute and discharge, all the duties of the-said office.” The penalty was $120,000.
    The suit was brought on the 15th of December, 1843, and the breach is thus set out in the petition: —

      “ Now'these petitioners, by their -attorney aforesaid, aver and expressly charge that the condition of said bond or writing obligatory has been broken in this, to wit, that-the said Thomas Gibbes Morgan had not truly and faithfully executed and discharged, nor did said Thomas Gibbes Morgan continue truly and faithfully to execute and discharge, all, the duties of the said office according to law. That the- said Thomas Gibbes Morgan did, both before and after the time of the signing, of said bond, and while he was collector as aforesaid, receive as said'collector large sums-of money belonging to petitioners, which he has in part only paid to petitioners, leaving. the balance of $ 274,775.17, which was received by said Morgan as said collector, and while he'was said collector, and which said balance said Morgan has refused to pay to petitioners, and yet retains the same in his possession, though often directed and requested by petitioners to pay the same to them. That said Morgan has not, since the first quarter of the year. 1843, transmitted the returns of his accounts as said collector for settlement to the proper officer, as he is required by law to do, and for that reason petitioners are unable to. specify-the items of said balance, but they reserve the right, by amended petition or otherwise, of furnishing .a detailed statement of said Morgan’s account as sáid collector so soon as he shall transmit his quarterly returns as aforesaid; by means whereof a right of ’action has accrued to these petitioners to have and recover the penalty of said bond or writing obligatory, which, though amicably requested, said obligors refuse to pay,
    “ That said pétitioners also reserve the right of proceeding, by amended petition or otherwise, against the said Thomas Gibbes Morgan for any other or greater sum than the penalty of sáid bond herein sued for, even should the same exceed the said balance of $ 274,775.17, inasmuch as, from the omission and neglect of said Morgan to furnish said quarterly returns, petitioners are unable to finally adjust the accounts of said Morgan ás said collector.”
    The defendants answered with a general denial; as in a plea of nil debet. y ■
    " On the 27th of January, 1848, the cause came on for trial in the Circuit Court, ánd continued during that day, the 28tb, and the 29th. The record stated the impanelling of the jury, the opening of the ease by the district attorney, the fact that evidence was given on the part oUthe plaintiffs and On the part of"the defendants, and the following yerdict of the jury: —
    “ Verdict in favor of the United States, viz.:
    For the balance acknowledged, .... $32,400.13 And commissions, . . ■. ... . ■ . 28,169,44
    Amounting to ., . . . . . $ 60,569.57
    . “John Castellano, Foreman.

      “New Orleans; Jannn.rv 29th; 1848 ”
    The verdict was recorded and judgment entered up on the 9th of. February, 1848. But the record did not show, in any part of it, what the evidence was which was given either on the part, of the plaintiffs or defendants. The following bills of exception refer to, but do not state it.

      “ And afterwards,, to wit, on the 4th day of February, 1848, the following bill of exceptions was filed by the United States district attorney: —
    “ The United States v. Thomas Gibbes Morgan and others. In the United States Circuit Court in and for the Fifth Circuit and District of Louisiana.
    “ Be it remembered, that, at the December term of said court, on the trial of the above-named case, on this Saturday, the 29th day of January, in the year 1848, after the argument on both sides had been closed, and before the jury.had retired, the attorney of the United States for the district aforesaid prayed the court to charge the jury as follows, to wit:—
    “ First. That T. G. Morgan,, and the sureties on his official bond, were liable in law for the sum of $ 99,915.27, an amount of treasury-notes received by T. G. Morgan, collector, in payment of public dues, and lost by him, or stolen-.from him while in his possession, after they had been marked ‘ cancelled,’ and before they were deposited in the post-office; for which purpose they had been put up in a bundle. ,
    “ And, on the day and date aforesaid, the attorney of the United States aforesaid further prayed the court to charge the jury,—
    “Second. That the defendant, T. G. Morgan, and-the sureties on his official bond, were liable in law for the sum of f 1,074.89, being the amount of two treasury-notes of five hundred dollars each, and the interest thereon; which notes were received in payment of public dues by T. G. Morgan, collector, stolen from his office, altered, and afterwards again received by him.

      “ The court refused to give the above charges as required, but charged the jury that, if they believed, from the evidence before them, that the treasury-notes in controversy were received by the defendant in payment of revenue, and that he took receipt upon the back of them when received from th'e persons paying them in, and cancelled them on the face of each according to law, and had them put into a bundle in the usual manner for transmitting them to the Treasury Department, and gave orders to the person who had been in the habit of delivering them at the post-office to deposit them there fst transmission? and they were lost or purloined without the knowledge or consent of .defendant, he is /hot answerable to the plaintiff for them. . And the court further charged the jury, that if they believed from the evidence that the two treasury-notes, amounting to $ 1,074.89, were part of the treasury-notes so cancelled, and intended to have been forwarded to the. '■¿Treasury Department, but had been subsequently so-altered without the knowledge or consent of the defendant, so as to make them appear to be genuine, and he afterwards received them in payment of duties believing them to be genuine, he'is not responsible to the plaintiff for them, but is entitled to a credit on the account of the plaintiff for that amount.
    “ Wherefore, the attorney of the United States aforesaid tenders this his bill of exceptions to the said refusal, and prays the same may be made a part of the record.
    . “ Theo. H. Me Caleb, [l. s.]

      U. S. Judge.

    “ And afterwards, to wit, on the 5th day of February, 1848 the following bill of exceptions, taken by the counsel of tht defendants, was filed: —
    “ The United States v. Thomas Gibbes Morgan and others.
    In the United States.Circuit Court, in and for the Fifth Circuit and District of Louisiana.
    “ Be it remembered, that, at the December term of said court, on the trial of the above-named case, on this Saturday, the 29th day of January,' in the year 1848, after the defendants had introduced evidence to show that the item charged by the said T. G. Morgan in his account for the second quarter of the year 1842, for safe-keeping and disbursement of public moneys from 12th July, 1842, to 26th July, 1843, being commission thereon, amounting to the sum of $ 28,169.44, was reasonable and just under the circumstances, and which said item had been disallowed by the accounting officer of the Treasury Department; and after the argument on both sides had been.closed, and before the jury had retired, the counsel for the defendants aforesaid requested and prayed the court to charge* the jury as follows: —
    “ That the defendant, T. G- Morgan, when acting as collector of the customs, not being under the law a disbursing officer, and the payment of the drafts drawn on him by the Treasurer of the United States not being in the course- of his duties- as collector, he is entitled to 'a reasonable compensationfor his risk and trouble in keeping and disbursing the money. '
    “ The court refused to give the above charge as required, but charged the jury that, under the law, the defendants were not entitled to the credit and compensation by them claimed as aforesaid.
    “ Wherefore the defendants, by their counsel, tender this their* bill of exceptions to the said refusal^ and pray that the same-may be made a part of the record.
    “ Theo. H. McCaleb, [l. s.]

      U. S. Judge.”'

      The attorney for the United States sued out a writ of error, and brought the ease up to this court.
    It was argued by Mr. Crittenden (Attorney-General), for the plaintiffs in error, no counsel appearing for the defendants.

      Mr. Crittenden

    contended that the court erred, to the prejudice’of the United States in the instructions given, and also in refusing to give .hose requested on their part, and that the defence allowed by the court below did not discharge, and ought hot to discharge, the collector and his sureties in this action on his official bond, and referred to United States v. Prescott, 3 Howard, 578.
   Mr. Justice WOODBURY

delivered the opinion of the court.

This was an action on an official bond, given to secure the faithful performance of duty by one of the defendants, as collector of the port of New Orleans.

His appointment took place in June, 1841, and the bond was dated in December of the same year, and the condition was averred to have been broken in 1843 by not paying over large sums .of money collected foij’ the United States, and by not making seasonable returns of his accounts.

The. breaches were denied, and at the trial it would seem that evidence was given in relation to them, and the jury returned a verdict for the plaintiffs for $ 60,569.57.

But something like $ 100,000 more appear to have been claimed, which the jury,, under the instructions given by the court, disallowed, and^exceptions were thereupon filed to these instructions.

The object and character of the exceptions are intelligible by means of what is stated by the judge in connection with them, though no preliminary evidence is set out, on which the points of law arose.

This mode of drawing up a bill of exceptions is defective, as the material facts or proofs on which the instructions rest should be inserted before the instructions, in order that we may see.if the points arise on which they are given, and to which exception is taken. Zeller’s Lessee v. Eckert et al. 4 Howard, 297, 298; Vasse v. Smith, 6 Cranch, 233, 234; 3 Howard, 555, 556.

The treasury transcript in support of the suit, and the precise breach, and the instructions or circulars .from the Department as to the mode of cancelling and transmitting the notes in the present case, should appear, so far as material, as well us the evidence, how they were in fast cancelled, arid what Iras' probably become of them since. /

But considering that we can, by way of inference from the instructions in the'form in. which they were given, ascertain the substance of the facts, and save delay in sending the case back for a fuller and more technical bill before deciding thé points of law presented, we have concluded to state our. opinion now on those points.

And neither party can complain of this, when, as here, neither has objected to the imperfect form of this bill, and when the questions on which the judge instructed the jury are apparent, and are not pretended to have been abstruse or irrelevant, but related to the gist of the matter in controversy. Etting v. Bank of the United States, 11 Wheaton, 59.

The material,facts, from what is developed in the charge, seem to have been, that the collector, received near100,000 for duties in treasury-notes, and cancelled them; but after being. put up in a bundle to be sent to the Treasury Department, through the post-office, and orders given to the servant accustomed to deliver packages there to deliver these, the bundle was stolen or lost.

It appeared further, that two of these notes for $ 500 each were soon after altered and presented to the collector in payment of other duties, and recéived by him as genuine.

One of the instructions excepted to was, that if these last two notes were taken by the collector without his knowledge or consent to their alteration, and if they appeared, to' be genuine, and he believed them to be so, he was not liable for their amount and interest.

But we- all agree in opinion that this instruction was erroneous. A collector is bound to take genuine money or notes rather than counterfeit ones, or the government would be exposed to infinite frauds and losses. The collector, too, need not thus suffer in a case like this, as he is required to keep a register of all treasury-notes received, and from whom taken; and if any prove to be counterfeit, or altered, he has a remedy in his own name, or that of the government, for the amount on the person who paid them in.

It is well settled, likewise, that an attempted payment in counterfeit money, as cash, is in law no. payment. Ellis v. Wild, 6 Mass. 321; Young v. Adams, Ibid. 182, 186; Jones et al. v. Ryder et al., 5 Taunton, 488; Salem Bank v. Gloucester Bank, 17 Mass, 1, 27, 28; 2 Johns. 455; 6 D. & E. 52. And as the collector here has given a discharge for the duties to the amount of these notes, and has acknowledged the receipt of payment for the duties to the government, as well as the importer, and received or paid over nothing for them which he was authorized to receive, he must stánd chargeable for that amount.

. He was; no more justified in taking cancelled treasury-notes for duties than in taking waste-paper, and it was his particular duty to see that théy had not been cancelled or counterfeited; and in the schedule of the treasury-notes, which he was obliged to keep, he had ample means of detection. Though the government might still possess a remedy against the importer for the duties, there having yet been no valid payment by him, yet this is no bar, if they choose to resort to their remedy on the bond of the collector, for his official negligence and wrong in taking for their revenue counterfeit or cancelled notes.

The other instruction presents a question of more difficulty. It was, that the collector was not liable for the treasury-notes which he had received for duties, if they had been duly cancelled, after received, and were put up and ordered to be delivered at the post-office for transmission to the Treasury Department, though they were lost or purloined (without his knowledge or consent) before placed in the charge of the post-office.

A majority of us think that this instruction also was erroneous. It is manifest that, if the notes, though cancelled for security in keeping them till transmitted, were still to be regarded for any purpose as money, the collector must be considered as liable for their amount till paid to the Department, or actually delivered at the post-office, in conformity with the orders of the Department. It would then be a liability on his bond to pay over what money he had received, as that manifestly had not here been done; or it wrould be a liability to perform his .duty as'promised in his oath and bond, and as required by law and treasury instructions, — to transmit or pay over the notes, and which, considering them as money, it cam not be pretended he has done. On this it is enough, in support of his continued responsibility, to refer to the United States v. Prescott, 3 Howard, 578.

But were these notes, when lost, still money ?

It is true that originally they were by law to be received as money. (Act of 12th October, 1837, 5 Stat. at Large, 202, § 6.) • The fact that he is liable for the interest on these notes after received and cancelled, and until they reach the Department, appears to favor the idea that, the notes were still, for some purposes at least, to be treated as continuing money between the collector and the Department. (5 Stat. at Large, 203, §7.)

But if this view be not cleany sustainable, and we doubt whether, under all the circumstances, after cancelled, they can be regarded as money,.or money’s worth, for the purpose of sustaining this action, yet it is clear that they still possess some value as vouchers, and as evidence for the Treasury Department that they have been redeemed.

It is still clear, also, that, though cancelled, the Treasury Department, unless having possession of them, is exposed to expense and loss by their being altered, and the cancellation removed or extracted, and their getting again into circulation, as two did here, and being twice paid by the government.

For that reason',' these notes, though cancelled, are, by law and treasury orders, to be transmitted to the Department, and when received there are to be credited to the collector; but not till then, as a general rule. If the collector, therefore, fails to send them there or to do all which is proper to get them there, by having them put into the actual possession of some public transmitting agent like the post-office, he fails in his duty; and it is not enough for him to say, in justification, as in this case, and as the court below upheld, that he gave orders to the accustomed servant to put them in the post-office.

That servant was his own agent, and not the agent of the Treasury Department. He allowed the notes to be lost or stolen before reaching the post-office. His employer must suffer by his neglect or unfaithfulness rather than third persons. The condition of the bond of the collector has, therefore, in ■ this view, never been fulfilled, and primó facie he is technically liable for its penalty, and is in justice, as well as law, respon- . sible for the amount of the iniury thus caused by himself or his own agent.

The rule of damage would be the amount of the notes, — unless it appeared, as here, that they had been cancelled, and unless it was shown that the government had suffered, or was likely to suffer, damage less than their, amount. How much is the real damage, under all the circumstances, is a question of fact for the jury, and should be passed on by them at another trial.

Only that amount rather than the whole bond need, in a liberal view of the law, and of his bond, be exacted; and that amount neither he nor his sureties can reasonably object to paying, when he, by the neglect of himself or his .agent, has caused all the injury which he is in the end required to reimburse. And if any equities exist to relieve him from that, none of which are seen by us, it must be done by Congress and not the courts of law.

Any thing less than this, — any less strict rule, in the public administration of the finances, would leave every thing loose or unsettled, and cause infinite embarrassments in the accounting offices, and numerous losses to the government.

The argument which has been pressed to exonerate him even from this extent of liability rests on.an erroneous impression thlat he was acting as a bailee, and under the responsibilities of only the ordinary diligence of a depositary as to the cancelled notes, when in truth he was acting under his commission and duties by law, as collector, and under the conditions of his bond. The collector is no inore to be treated as a bailee in this case than he would be if the notes were still considéred for all purposes as money.

He did not receive them as a bailee, but as a collecting officer. He is liable for them on his bond, and not on any original bailment or lending.

And if the case can be likened to any species of bailment in forwarding them, by which they were lost, it is that of a common carrier to transmit them to the treasury, and in doing which he is not exonerated by ordinary diligence, but must answer for losses by larceny and even robbery. 2 Salk. 919; 8 Johns. 213; Angel on Carriers, §§ 1, 9.

Finally, we decide on this last question as a matter of law this, and this only, namely, that .the collector is liable for all the actual damages sustained by his not returning the notes as required by law and official circulars; or for not putting them in the post-office so as to-be returned. (5 Stat. at Large, 203.) But how much this damage was is a matter of proof before the jury,-fixing the real amount likely to happen from their getting into circulation again, as two of them did here, from delay and inconvenience in obtaining the proper vouchers to settle accounts, from the want of evidence at the Department that the notes had been redeemed, or from any other direct consequence of the breach of the condition: of his bond, and of his instructions under it.

. Their return in the mode prescribed was by the original treasury-note law deemed important “ to promote the public-interests and convenience, and secure the United States and .the holders of said notes against fraud and losses.” (Sec. 12th of the act of 1837, before cited.) The neglect to do this is a manifest and injurious breach of his bond.

The judgment below, then, must, for both of these instructions excepted to, be reversed, and the case sent back for another trial, in conformity with the principles we have laid down.

Order.

This cause came on to be heard on the transcript of the record from the Circuit Court of the United States for the District of Louisiana, and was argued by counsél. On consideration whereof, it is now here ordered and adjudged by this court, that the judgment of the said Circuit Court in this cause be, ^ind the same is hereby, reversed, and that this cause be, and the same is hereby, remanded to the said Circuit Court, with directions to award a venire facias de novo.


author: Mr. Chief Justice TANEY

text:
    Erich Christian Ludwig Gruner, Claimant of the Schooner Fairy, her Tackle, &c., Appellant, v. The United States.
    Where a vessel was libelled in the District Court and sold by agreement of partie», and the proceeds of sale amounted only to $ 850, which was paid into the registry, this is insufficient to bring the case within the, jurisdiction of this court, although an agreement by counsel was filed admitting the value of the vessel to be more than two thousand dollars.
    This agreement would be evidence of the value if nothing to the contrary appeared in the record. But the decision of the court would only determine the right to the proceeds of sale, viz. $ 850, and the case must therefore be dismissed, for want of jurisdiction.
    This was an appeal from the District Court of the United States for the District of Texas.
    The facts in the case are sufficiently stated in the opinion of the court.
    It was argued by Mr. Sherwood, for the appellant, and Mr. Crittenden (Attorney-General), for the appellees.
   Mr. Chief Justice TANEY

delivered the opinion of the court. The schooner Fairy was seized by the collector of the port of Galveston for a violation of the registry acts of the United States, and libelled in the District Court for the District of Texas.

A few days before she was seized by the .collector, she had been seized by the sheriff of Galveston County upon process of sequestration issuing from a State court at the instance of Gruner, the appellant. He appeared in the admiralty. court, and denied that the vessel was liable to forfeiture under the registry acts ; and averred that he had an equitable lien upon her to the full amount of her value, by reason of certain transactions with a man by the name of Fruh, which are set out at large in his answer; that he had proceeded to enforce this lien in the proper court of the State of Texas, and had obtained process of sequestration against the Fairy, which had been duly served, and that she was in the custody of the sheriff of Galveston County upon this process .when she was seized by the collector; and he denied that the'District Court had jurisdiction to proceed against her when she was previously in custody of the law upon process from the State court.

While the suit was pending in the District Court, a written agreement was filed between the district attorney and the proctor for the claimant, by which it was stipulated, that, upon the attorney for the United States procuring an order from the District Court for the sale of the vessel, and upon a similar order being obtained from the State court, the vessel should be sold, and the proceeds paid into the registry of the District Court of the United States, to abide the ultimate decision of the suits in the two courts; the rights of neither party to be prejudiced by the sale. The sale was accordingly ordered; and the schooner was sold by the marshal for $> 850, and the proceeds paid into the registry. . And upon the final hearing of the case the court condemned the Fairy as forfeited to the United States, and disallowed the claim of Gruner under the sequestration from the State court.

There is an agreement in the record signed by the attorneys of the parties, admitting that the schooner was worth over two thousand dollars.

This brief statement will show how the question of jurisdiction arises in this court. And as we think the case must be disposed of upon that question, it is unnecesary to state more particularly the facts, or the points of law which arose on the trial, and which are fully discussed in the printed arguments filed'in the case.

The vessel has been sold by the consent of the parties, and the proceeds of sale paid into the registry. This sum of money is the only matter in controversy in this court; and if the decree'of the District Court is affirmed or reversed, the decision would do nothing more than determine the right to this money; and the sum paid into the registry is far below the amount necessary to give jurisdiction to this court.

It is true that there is an admission by the parties, as we have already stated, that the vessel was worth more than two thousand dollars. And this admission would be evidence of the value where nothing to the contrary appeared in the record. But the consent or agreement of parties cannot give j urisdiction to this court. Its appellate power is regulated and limited by law. And as it appears on the face of the record that the sum in controversy is below two thousand dollars, the appeal must be dismissed for want of jurisdiction.

Order.

This cause came bn to be heard on the transcript of the record from the District Court of the United States for the District of Texas, and was argued by counsel. On consideration whereof, it is now here ordered, adjudged, and decreed by this court, that this cause be, and the sam is hereby, dismissed, for want of jurisdiction.