text:
Jones v. Van Benthuysen/Opinion of the Court

Sidney A. Stockdale, late collector of internal revenue at New Orleans, was sued by Van Benthuysen to recover a tax illegally exacted of him. The case was tried by a jury, and a verdict and judgment rendered for the plaintiff below. Stockdale died pending the suit, and this writ is prosecuted by his executrix.

The facts of the case, as presented to the jury, are embodied in a short bill of exceptions, from which it appears that the plaintiff was a commission merchant, whose business was the sale of manufactured tobacco for others; that he stood charged on the books of the assessor of that district with sales of tobacco amounting to $1,256,000, on which was assessed a tax of two per cent, which he paid to the collector under protest.

The ground of this protest is that the sales so made by him, as shown by the bill of exceptions, 'were made while the tobacco was in bond, and was situated in the bonded warehouse; that said tax was assessed and collected upon the value of the tobacco and upon the amount of stamps which by law was required to be affixed upon the same before it was released from the bonded warehouse; that the value of the tobacco so sold was $787,855.67, and the amount of stamps placed upon said tobacco was $468,144.33; and that plaintiff, as a commission merchant, charged his commission as against his principals, both upon the value of the tobacco in bond and upon the amount invested in said stamps; that the special tax was assessed and collected upon both the value of the tobacco and the amount of the stamps.'

The court refused to charge that the tax on the sales made by plaintiff was properly assessed by the defendant on the gross amount of them, namely, $1,256,000; but the jury was instructed that the special tax of two per cent upon the amount of sales of dealers in tobacco could not properly be collected upon the stamps which were required to be affixed upon the tobacco in bond, and that to the extent of the tax upon the stamps, which plaintiff had paid, he was entitled to recover.

The act of July 20, 1868, c. 186, under which these taxes were assessed, enacts that 'dealers in tobacco, whose annual sales exceed $100, and do not exceed $1,000, shall each pay $5, and when their annual sales exceed $1,000, shall pay in addition $2 for each $1,000 in excess of $1,000. Every person whose business it is to sell, or offer for sale, manufactured tobacco, snuff, or cigars shall be regarded as a dealer in tobacco.' 15 Stat. 125, 152.

Undoubtedly this statute only intended to impose a tax upon the sales of tobacco, and if the dealer was also the owner of stamps to be used in paying the duties on tobacco, he could sell them separately in any quantity, without being liable to a tax for such sales. When unattached to the tobacco they do not enter into its value, and they can be bought and sold at their face value as an independent commodify, to be used when and wherever the purchasers choose to do so. For such sales no tax is imposed upon the seller or the buyer.

On the other hand, we are of opinion that when they are once attached to the tobacco and cancelled, and can never be lawfully used again, they cease to have any separate and independent value, and that which they had previously has become merged into that of the tobacco. All subsequent sales are made upon the basis of the increased value the tobacco has acquired by the payment of the stamp duty, and can never be estimated apart from this.

It would seem to follow from this that if the stamps for which the plaintiff was charged by the collector were not affixed to the tobacco at the time he made the sale, no tax should be charged to him for that value. On the other hand, if the stamps were affixed at the time of the sale, they then entered into the value of the tobacco purchased, and the broker who made the sale should be taxed on the price of the tobacco as it was sold.

In the case before us it is stated that the aggregate sum of $1,256,000 of sales on which plaintiff paid the tax was made up of a vast number of separate sales, during a period running from April, 1869, to January, 1872, of which he made monthly reports to the assessor. It is obvious that the owner of the tobacco in a bonded warehouse might have sold it without any stamps on it, as the law did not require the stamps to be affixed fixed until it was about to be removed. And we see no reason why a single lot of tobacco might not be sold several times before it came to a purchaser who wished to take it out of the warehouse, when for the first time the stamps would be attached. For such sales as this no tax could be rightfully assessed for the value of the stamps. After the stamps were attached their value necessarily constituted part of the price for which the tobacco sold, and for this price the dealer should be taxed.

It follows that, in deciding the liability of the plaintiff to taxation on these sales, it is important to know in the case of each sale whether the stamps had been affixed to the tobacco at the time of the sale or not.

There is in the bill of exceptions nothing which enables us to ascertain this fact, nor from which the jury could ascertain it. The language of the bill of exceptions is that the sales of tobacco for which the disputed tax was collected 'were made when the tobacco was in bond, and was situated in the bonded warehouse,' but not a word to show whether the stamps had then been affixed to the tobacco or not.

Under these circumstances we do not think the court was authorized to charge that, 'if the jury found as a fact that such tax had been livied and collected from plaintiff, not only upon the proceeds of tobacco sold in bond, but upon the amount of stamps required to be affixed upon such tobacco before it could be delivered from the bonded warehouse,' that to the extent of that sum plaintiff was entitled to recover.

The right to recover did not depend upon the amount of stamps required to enable the tobacco to be taken out of the warehouse, or that might have been affixed long after the sale, but upon whether said stamps were affixed to the tobacco at the time of the sale, and, therefore, entered into the purchase price.

Judgment reversed, with directions to grant a new trial.


text: Talk:Jones v. Van Benthuysen/Opinion of the Court

license: Creative Commons - Attribution Share-Alike - https://creativecommons.org/licenses/by-sa/4.0/


text:
Boogher v. Insurance Company

ERROR to the Circuit Court of the United States for the Eastern District of Missouri.

This was an action by the New York Life Insurance Company against Davis R. Boogher and his sureties, upon a bond executed by them Dec. 22, 1871, and conditioned as follows:--

'Whereas the above bounden Davis R. Boogher has been appointed by said company as their agent for the purpose of procuring applications for life insurance, and performing such other duties in connection therewith as may be intrusted to him: Now, if the said Davis R. Boogher shall pay or hand over all moneys belonging to said company which shall at any time be received by him, or for which he shall be liable, whether the same shall be or shall have been received by him personally and solely, or by, through, or together with any co-partner, co-agent, sub-agent, or other person, including all moneys so received prior to the date of this instrument (if any such there be), as well as that received thereafter, as also all moneys which he now owes, or hereafter may owe, said company, either on account of advances to him or otherwise, and shall faithfully discharge his duties as said agent, then this obligation shall be void, otherwise to remain in full force and effect. It being understood and agreed that this obligation shall not be annulled or revoked without the consent of the above-named company, but shall be and remain in force as long as said Davis R. Boogher shall continue to be the agent of said company, whether under his existing appointment or any future one, and whether such present or future agency be sole, or whether said Davis R. Boogher be joined with any other person or persons, and until all transactions under such agency shall have been finally adjusted and settled, and all liabilities of said Davis R. Boogher by reason thereof shall have been discharged.'

Boogher was at that time employed by the company as soliciting agent under a contract of appointment dated Oct. 27, 1871, which took effect November 1 of that year. The contract, after minutely prescribing his duties and the rate of commission to be allowed upon premiums on policies of insurance effected by or through him, provides for his discharge as agent and the forfeiture of his right to commissions on renewals in the event of any dereliction of duty. A new contract of appointment, made Dec. 23, 1873, differs from the preceding one as to the rate of commissions allowed, and contains the following:--

'14. The commissions as above subject to the stipulations and limitations herein contained, shall continue to be paid to the said agent, or in case of his death, to his personal representatives, for the term of ten years from the date of each policy, provided he shall continue to act exclusively for said company for term of five years; but in case said agent shall be discontinued for cause by said company, then all commissions which would accrue to him under this or any former contract shall be forfeited to said company unconditionally.'

'15. This contract abrogates all former ones, so far as new business is concerned.'

The breach of the condition of the bond alleged was, that Boogher misappropriated funds of the company amounting to $1,400.

The defendants traversed the breach, and claimed as a special defence, that as the acts complained of related to new business transacted after the date of the second appointment, the bond was abrogated, and that they were therefore released from liability thereunder.

Boogher filed a separate answer by way of counter-claim for $6,000 damages, alleging that the company had broken the contract of Dec. 23, 1873, by refusing to permit him to collect the premiums on insurances effected by him, and by refusing to perform the contract on its part, or to pay him according to its terms.

The company denied any breach on its part of the contract of employment, and alleged that Boogher, prior to the institution of the suit, had been discharged for cause, and that, therefore, all his rights to commissions were unconditionally forfeited.

By the act to regulate practice in civil cases in Missouri, 'all or any of the issues of fact in the action may be referred, upon the written consent of the parties.' Wag. Stat. 1041, sect. 17; Gen. Stat. 169, sect. 17. 'All testimony takes before referees shall be reduced to writing, and if either party shall except to the competency of a witness, or the admission or exclusion of evidence, or any other matter to which exceptions may be taken, the referees, if required, shall state the particulars lars of the exceptions in their report.' Wag. Stat. 148, sect. 39. 'The referees shall, in all cases, report. . . showing the. . . proceedings had, and return the same, together with the testimony taken, to the court.' Id., sect. 40. 'All exceptions to the report. . . shall be in writing, and filed within four days, in term, after the report is filed. . . .' Id., sect. 41. 'If exceptions are allowed, the matter may again be referred, with instructions, if necessary; but if the report is confirmed by the court, judgment shall be rendered thereon in the same manner and with like effect as upon a special verdict.' Id., sect. 42.

In this case the record shows the following entry: 'Now come the parties by their attorneys,. . . and this cause being regularly called for trial, and both parties being ready, it is ordered that a jury come; and thereupon comes said jury, to wit,. . . twelve good and lawful men, duly sworn and impanelled well and truly to try the issues joined herein; and now, by consent of parties, it is ordered that a juror be withdrawn, and said juror being withdrawn, it is ordered that this cause be referred to Amos M. Thayer for final report, subject, however, to exceptions.' Under this order the referee tried the cause and made his report, stating the issues tried and his findings of fact and law thereon. The testimony was returned with the report, and certain exceptions taken before him were noted in the return. The defendants appeared in court and objected to the confirmation of the report, filing twenty-two separate exceptions, most of which were to the effect that the findings of fact were not sustained by the evidence. The others were as follows: '4. The conclusions of said referee in said report are not sustained by his findings of fact therein. 5. Said report is erroneous and not in accordance with law. . . . 8. The referee erred in finding that the special plea of release in the answers herein had not been sustained. . . . 15. The referee erred in admitting the accounts mentioned in the report as evidence against the defendants. 16. The referee erred in admitting incompetent and irrelevant testimony in favor of plaintiff. . . . 19. The referee erred in admitting in evidence a note of $1,000, dated Oct. 8, 1873.'

Upon the hearing by the court the evidence was read together with the report, and, after argument, the exceptions were overruled as a whole. To this the defendants excepted generally. A new trial was then moved for, and overruled. To this another exception was noted. The court made the following order and finding:--

'Now come the said parties by their attorneys,. . . and the exceptions to the referee's report herein being submitted to the court, and the same having been duly considered, it is ordered that said exceptions be overruled, and that the report of the referee be and the same is hereby confirmed and approved, and thereupon this cause is submitted to the court upon the pleadings and the report of said referee, on consideration whereof the court finds that the defendant, Davis R. Boogher, is indebted to the plaintiff by reason of the breaches of the writing obligatory sued upon in the sum of twelve hundred and seventeen dollars and fifty-two cents.'

Judgment was thereupon rendered against the defendants for the penalty of the bond sued on, to be discharged upon the payment of said sum and costs of suit.

A bill of exceptions was then taken, which sets forth the report of the referee, the testimony before him with the objections noted, the exceptions to the report, the exception to the order confirming it, the motion for a new trial, the order overruling it, and the exception thereto.

The defendants sued out this writ, and assign for error: '1. That the referee erred in finding in favor of the defendant in error, on the counter-claim of Boogher, and the court erred in confirming the finding. 2. The undisputed facts in the case, established by the testimony of the defendant in error, fail to support the finding of the referee, that Boogher was discharged for good cause, because of an 'unauthorized detention of plaintiff's funds,' and the court erred in confirming that finding. 3. The pleadings of the defendant in error are not supported by any evidence; and, 4. The special plea of discharge was fully sustained, as appears by the pleadings and findings of the referee, and the court erred in not rendering judgment for plaintiffs in error thereon.'

Mr. Shepard Barclay and Mr. Linden Kent for the plaintiffs in error.

Mr. Frederick N. Judson, contra.

MR. CHIEF JUSTICE WAITE delivered the opinion of the court.

title: Boogher v. Insurance Company


text: Talk:Boogher v. Insurance Company

title: Talk:Boogher v. Insurance Company


text:
Boogher v. Insurance Company/Opinion of the Court

It is, to say the least, doubtful whether cases tried in the circuit courts by a referee, in States where such a practice exists, can be reviewed here. While, since the act of 1872, c. 255 (17 Stat. 196, now sect. 914, Rev. Stat.), the practice, pleadings, and forms and modes of proceedings in civil causes, other than equity and admiralty causes, in the circuit and district courts, must conform, as near as may be, to the practice, pleadings, and forms and modes of proceeding existing at the time in like causes in the courts of record of the State within which such circuit or district courts are held, the review of a case in this court is regulated by the acts of Congress and not by the laws of the States. This was decided in United States v. King (7 How. 833), where the precise question arose under the act of 1824, c. 181, regulating the practice of the courts of the United States in the district of Louisiana. 4 Stat. 62. The Seventh Amendment to the Constitution provides that 'no fact tried by a jury shall be otherwise re-examined in any court of the United States, than according to the rules of the common law.' The Judiciary Act of 1789, c. 20, sect. 12 (1 Stat. 80), provided that the trial of issues of fact in the circuit courts should in all suits, except those of equity and of admiralty and maritime jurisdiction, be by jury; but it has always been held that if the parties waived a jury a judgment after trial by the court would not be erroneous. Kearney v. Case, 12 Wall. 275. Such a judgment, however, would not be reviewable here, because, as was said by Mr. Chief Justice Taney, in Campbell v. Boyreau (21 How. 223), 'if, by agreement of parties, the questions of fact in dispute are submitted for decision to the judge upon the evidence, he does not exercise judicial authority in deciding, but acts rather in the character of an arbitrator. . . . And as this court cannot regard facts found by the judge as having been judicially determined in the court below, there are no facts before us upon which questions of law may legally and judicially have arisen in the inferior court, and no questions, therefore, open to our revision as an appellate tribunal.' To get rid of this difficulty and give parties the right of review here, if they submitted their issues to a trial by the court, the act of 1865, c. 86, sect. 4 (13 Stat. 501; Rev. Stat., sects. 649, 700), was passed. In this way it was provided that issues of fact in civil cases in the Circuit Court might be tried and determined by the court, without the intervention of a jury, 'whenever the parties, or their attorneys of record, file with the clerk a stipulation in writing waiving a jury. The finding of the court upon the facts. . . shall have the same effect as the verdict of a jury.' Provision was also made for presenting for review here by bill of exceptions the rulings of the court in the progress of the trial, and, when the finding was special, for extending the review to the determination of the sufficiency of the facts found to support the judgment.

The doubt we have is whether the act of 1872 enlarged the existing modes of subjecting cases to review here. There is no express provision of that kind, and on its face the act is confined to the practice, pleadings, and modes of proceedings in the circuit and district courts. Any allusion to a review here seems to have been studiously avoided. The act of 1865 was not repealed. On the contrary, that act, as well as the one of 1872, was brought into the Revised Statutes, and it is now, as sect. 700, the only statute which provides for a review here of cases where an issue of fact in a civil cause has been tried in the Circuit Court otherwise than by a jury.

This objection was not raised in the argument, and its final determination may perhaps with propriety be postponed, as, if the trial before the referee is treated as a trial by the court, we think the judgment must be affirmed. In Kearney v. Case (supra), it was held that unless there was a written stipulation of the waiver of a jury filed with the clerk, there could be no review here of a case tried by the court. Such a stipulation in writing is a prerequisite to our right to re-examine. We said, however, in that case (p. 283), if it affirmatively appeared in any part of the record proper that such a writing was made and filed by the parties, we might take jurisdiction, even though the stipulation itself, or a copy of it, should not be sent up with the transcript.

It nowhere expressly appears in this case that a stipulation was filed, but inasmuch as an action of this kind could not, upder the Practice Act of Missouri, be referred without the written consent of the parties, and this was referred by consent, we think we must assume that a consent was given in shch form as to authorize what was done under it. The withdrawal of a juror after the trial was begun and the consent to a reference necessarily implied a waiver of a jury; and as this consent to be available must have been in writing, it follows that the waiver which flowed from the consent was also in writing. We think, therefore, it sufficiently appears that the stipulation which the act of Congress requires was entered into.

We have often held that the act of 1865 (sects. 649, 700, Rev. Stat.) does not permit us to consider the effect of the evidence in the case, but only to determine whether the facts found on the trial below are sufficient to support the judgment, and to pass on the rulings of the court in the progress of the trial presented by a bill of exceptions. For all the purposes of our review the facts as found and stated by the court below are conclusive. The Abbotsford, 98 U.S. 440, and the cases there cited. Neither can we consider this case unless the facts found by the referee, when confirmed by the court, are treated as the finding of the court. In that way alone can it with propriety be said that the facts have been determined judicially by the court, so as to be made the foundation of a review here of the questions of law properly raised on them in the record.

Upon the facts as found and reported there can be no doubt of the correctness of the judgment. Indeed, no complaint is made, by an assignment of error or otherwise, on that account. This brings us to a consideration of the bill of exceptions, and the only exceptions which we there find to the rulings of the court are: 1, To the overruling of the objections to the referee's report; and, 2, to the order overruling the motion for a new trial. We have many times decided that the rulings of the circuit courts on motions for a new trial are not reviewable here on writ of error. Railway Company v. Twombly, 100 U.S. 78. The whole case, therefore, turns on the exception to the overruling of the objections to the report. This exception is a general one, to the single order overruling the twenty-two specific objections as a whole. We have uniformly held that 'if a series of propositions is embodied in instructions (to the jury), and the instructions are excepted to in a mass, if any one of the propositions is correct the exception must be overruled.' Johnston v. Jones, 1 Black, 209; Rogers v. The Marshal, 1 Wall. 644; Harvey v. Tyler, 2 id. 328; Lincoln v. Claflin, 7 id. 132; Beaver v. Taylor, 93 U.S. 46. The same rule should be applied to cases of this kind. Here are, so to speak, a series of propositions in respect to the report of the referee. They were overruled and excepted to in a mass. If one of the propositions was correct, therefore, the exception will not be good. The party should, by his exception, direct the attention of the court to the specific proposition or propositions on which he relies, and separate it or them from the rest.

Among the objections to the report included in the general exception are many relating to the sufficiency of the evidence to support the findings. These cannot be re-examined here. But if we consider the action of the court on the objections to the sufficiency of the evidence as not included in the general exception, the difficulty is not removed, because the five remaining objections embrace separate matters. Some of them are confessedly not well taken, and have not been mentioned here, either in the argument or assignment of errors. Only one is relied on, and that the eighth, which is to the effect that the referee erred in finding that the special plea of release had not been sustained. This, taken in connection with the pleadings, raises the question whether the legal effect of the second agreement between the parties, which was in writing and set forth in the complaint, was to cancel and discharge the bond sued on. We have no hesitation in saying that it did not. The bond was not one of the agreements which that instrument abrogated.

This disposes of the case, and leads to an affirmance of the judgment.

Judgment affirmed.


text: Talk:Boogher v. Insurance Company/Opinion of the Court


text: Author:Charles Wallwyn Radcliffe Cooke

title: Author:Charles Wallwyn Radcliffe Cooke


text:
National Bank v. Whitney

ERROR to the Supreme Court of the State of New York.

The facts are stated in the opinion of the court.

Mr. Theodore Bacon for the plaintiff in error.

Mr. W. Harris Day, contra.

MR JUSTICE FIELD delivered the opinion of the court.

title: National Bank v. Whitney


text: Talk:National Bank v. Whitney

title: Talk:National Bank v. Whitney


text:
National Bank v. Whitney/Opinion of the Court

It appears from the record that the defendant Whitney, some time previously to 1871, executed to Maria Crocker a mortgage upon certain real property situated in the county of Genesee, in the State of New York, to secure an indebtedness to her; that in a suit brought for that purpose the mortgage was foreclosed and a decree entered for the sale of the premises; that such sale was had, and the amount received satisfied the debt and left a surplus of over $3,800, which was paid into court. The present controversy is between subsequent mortgagees and judgment creditors for this surplus.

On the 12th of January, 1871, Whitney executed a mortgage upon the same premises to the National Bank of Genesee, providing in terms for the payment of $5,000, one year from its date, whth interest, but declaring that it was made as collateral security for the payment of all notes which the bank held at the time against him, and for his other indebtedness then due or thereafter to become due. This mortgage was recorded on the 19th of September, 1872. It subsequently appeared from an examination of the accounts between the parties that his indebtedness at the date of the mortgage was $3,200, and that this was paid before Sept. 16, 1872.

On this last day Whitney executed two other mortgages upon the same property, one to Homer Bostwick and the other to Edward McCormick. The one to Bostwick was executed as security for the payment of liabilities and indebtedness which already had been or might thereafter be incurred by him on account of Whitney, either by indorsement or otherwise, to an amount not exceeding $2,500. This mortgage was recorded at noon on the day of its execution. The amount of the liability subsequently incurred by Whitney to Bostwick exceeded the sum named. The mortgage to McCormick was executed as security for similar liabilities and indebtedness which might be incurred by him for Whitney, to an amount not exceeding $1,500, and was recorded at forty-five minutes past one of the day of its execution. The amount of liabilities incurred by McCormick for Whitney exceeded the sum named.

It is unnecessary to give the particulars of other subsequent incumbrances, as under no circumstances could any of the surplus be applied to their discharge. In any view that can be taken of the mortgages mentioned, the surplus in controversy will be exhausted by them.

The principal question for our determination relates to the validity of the mortgage of Whitney to the national bank, so far as it applies to future advances to him. His indebtedness existing at the execution of the mortgage has been satisfied. His indebtedness subsequently incurred amounted at the sale of the premises to $5,160. If the mortgage for the future indebtedness can be sustained as a valid instrument for that purpose, the entire surplus will be absorbed for its payment, excepting such portion as may be first payable to McCormick, by reason of the fact that he took his mortgage without notice of the one to the bank. It is contended that the mortgage to the bank, so far as it applies to future advances, is invalid, because a mortgage of that character is prohibited by the national banking law. That law, after in terms authorizing every national banking association to loan money on personal security, declares that it 'may purchase, hold, and convey real estate for the following purposes, and for no others: First, such as may be necessary for its immediate accommodation in the transaction of its business; second, such as shall be mortgaged to it in good faith by way of security for debts previously contracted; third, such as shall be conveyed to it in satisfaction of debts previously contracted in the course of its dealings; fourth, such as it shall purchase at sales under judgments, decrees, or mortgages held by the association, or shall purchase to secure debts to it.'

The question presented is not an open one in this court. It was determined in the case of National Bank v. Matthews, at the October Term of 1878. It there appeared that Matthews and another person had given their joint note a mercantile company for $15,000, secured by a deed of trust on certain real property in Missouri, executed by Matthews alone. Soon afterwards the company assigned the note and deed of trust to the Union National Bank of St. Louis, to secure a loan made to it at the time. The loan was not paid at its maturity, and the bank directed the trustee to sell the premises. Matthews thereupon filed a bill to enjoin the sale, and obtained a decree for a perpetual injunction, upon the ground that the loan was made upon real security, which was forbidden by the statute. The Supreme Court of the State affirmed the decree, and the case was brought here, where the decree was reversed and the cause remanded, with directions to the court below to dismiss the bill.

In coming to this conclusion this court considered the transaction in two aspects: first, as not being within the letter of the statute, because the deed of trust was not executed to the bank; and, second, as a loan upon real-estate security.

Viewed in the first aspect, the court held that as a mortgage the deed of trust was merely an incident to the note, and a right to its benefit, whether it was delivered or not with the note, passed with the transfer of the latter. If the loan had been made upon the note alone, the benefit of the deed as a mortgage would have inured to the bank by operation of law. Of course that which the law would give independently of a direct transfer by the mortgagee, the statute did not intend to defeat because such transfer was made.

Viewed in the second aspect, as a loan upon real-estate security, the court observed that, so treating it, the consequence insisted upon did not follow; that the statute did not declare such security void, but was silent on the subject; that had Congress so intended it would have been easy to say so, and it can hardly be presumed that this would not have been done, instead of leaving the question to be settled by the uncertain result of litigation and judicial decision. And after citing numerous cases where a disregard of statutory prohibitions has not been held to vitiate the contracts of parties, but only to authorize actions by the government against them, the court held that the prohibitory clause of the banking law did not vitiage real-estate securities taken for loans, and that a disregard of them only laid the association open to proceedings by the government. 'The impending danger,' said the court, 'of a judgment of ouster and dissolution was, we think, the check, and none other, contemplated by Congress. That has been always the punishment prescribed for the wanton violation of a charter, and it may be made to follow whenever the proper public authority shall see fit to enforce its application.'

The construction of the act of Congress thus given has been acted upon by the national banks throughout the country ever since it was published. It is not unreasonable to suppose that they have conducted their business and made loans to a large amount in reliance upon it, and that in many cases great injury would follow a departure from it. Judicial decisions affecting the business interests of the country should not be disturbed except for the most cogent reasons, certainly not because of subsequent doubts as to their soundness. The prosperity of a commercial community depends, in a great degree, upon the stability of the rules by which its transactions are governed. If there should be a change, the legislature can make it with infinitely less derangement of those interests than would follow a new ruling of the court, for statutory regulations would operate only in the future.

The decision in the case cited controls the present case, and in conformity with it we must hold that the mortgage to the bank, so far as the subsequent incumbrances are concerned, is to be regarded as a valid security for the future advances to the mortgagor. Whatever objection there may be to it as security for such advances from the prohibitory provisions of statute, the objection can only be urged by the government. Fleckner v. United States Bank, 8 Wheat. 338-355.

But it appears from the record that the mortgage to McCormick was taken by him without notice of the prior mortgage to the bank, which had not then been registered. He has, therefore, a right as against the bank to prior payment of the $1,500 and interest, for which amount his mortgage was a lien upon the premises.

Bostwick took his mortgage with notice of the one to the bank. He cannot, therefore, claim any of the surplus until the debt of the bank is paid. The surplus should, therefore, be first applied to McCormick's claim, and the balance to the claim of the bank.

It follows that the decree of York must be reversed, and the York Must be reversed, and the case remanded with directions to enter a decree in conformity with this opinion.

So ordered.

MR. JUSTICE MILLER and MR, JUSTICE HARLAN dissented.

A petition for a rehearing having been filed MR. JUSTICE FIELD, at a subsequent day of the term, delivered the opinion of the court.

By the decision in this case we held that, in the distribution of the surplus moneys in court, the claim of McCormick should be paid before that of the bank. He took his mortgage without notice of the one to the bank, which had not been registered. The bank now asks a rehearing of the case on this point, contending that, under the decisions of the New York courts, the priority of its mortgage cannot be displaced. It cites the statute of the State to show that the recording act gives priority only to the mortgage first recorded, when that is executed for a valuable consideration, which, according to those decisions, means some new consideration advanced at the time; and that a mortgage for a pre-existing indebtedness is not protected by a prior record, against a non-recorded mortgage for value. Here the mortgage to McCormick was given to secure-to the extent of $1,500-a previous liability and indebtedness, and such as might be subsequently incurred. The previous indebtedness at the time equalled the whole amount of the intended security.

There would be force in the position of the bank if its own mortgage stood in any better condition. When the McCormick mortgage was executed-Sept. 16, 1872-the indebtedness of Whitney to the bank was paid, and his mortgage remained in force only for any future indebtedness which he might incur. For such future indebtedness it could not cut out the mortgage to McCormick, executed for an existing indebtedness, and of which mortgage the bank had notice For advances afterwards made, the mortgage to the bank was a subsequent incumbrance.

As between two mortgages,-one for a past indebtedness, and one for an indebtedness to be subsequently incurred,-the one for the past indebtedness must have precedence, if first recorded.

The petition for a rehearing by the bank must, therefore, be denied.

The petition of McCormick to be allowed costs out of the fund in court must, according to the usual practice of the court in such cases, be also denied. His costs are chargeable against the bank which contested his right to be paid out of the proceeds in court. If paid out of the fund, they would reduce by their amount the moneys properly applicable to the indebtedness of Whitney.

Petition denied.


text: Talk:National Bank v. Whitney/Opinion of the Court


text:
Cucullu v. Hernandez

APPEAL from the Circuit Court of the United States for the District of Louisiana.

The facts are stated in the opinion of the court.

Mr. Joseph P. Hornor and Mr. William S. Benedict for the appellant.

Mr. Thomas J. Semmes, contra.

MR. JUSTICE WOODS delivered the opinion of the court.

title: Cucullu v. Hernandez


text: Talk:Cucullu v. Hernandez

title: Talk:Cucullu v. Hernandez


text:
Cucullu v. Hernandez/Opinion of the Court

On Feb. 1, 1850, the complainant, Joseph S.C.ucullu, was the owner of certain real estate situate in the parish of St. Bernard, in the State of Louisiana, known as the Myrtle Grove Plantation. On the day mentioned he made and delivered to one E. Villavaso his note of that date for $10,000 borrowed money, due in twelve months, and secured the same by an act of mortgage, dated Feb. 7, 1850, on said plantation; and on Feb. 4, 1853, he made another note, also for $10,000 borrowed money, due in one year, payable to himself, and indorsed and delivered it to the same Villavaso, and secured it by another act of mortgage on said plantation. No part of the money which Cucullu by these notes promised to pay has ever been paid. The mortgages executed to secure the notes were duly inscribed in the proper mortgage office, but have never been reinscribed.

On Sept. 28, 1857, Cucullu sold and conveyed the Myrtle Grove Plantation to one Augustus W. Walker for the purchase price of $135,000. Twenty-five thousand dollars of the consideration was paid in cash, and for the residue Walker gave his notes, two for $5,000 each, both payable Jan. 31, 1858; six for $13,333, payable respectively on December 10 in the years 1858, 1859, 1860, 1861, 1862, and 1863; and he assumed to pay for Cucullu the two notes above mentioned, made by him for $10,000 each, payable to Villavaso. To secure the payment of these obligations for the purchase-money, including the Villavaso notes, Walker, in the act of sale from Cucullu to him, granted a mortgage on the Myrtle Grove Plantation, with vendor's privilege in favor of Cucullu.

The two notes for $5,000 were never paid; it is conceded that they are prescribed, and they do not appear in this case.

Walker paid in full the second of the notes for $13,333, being the one which fell due Jan. 10, 1859, and one half of the first note for $13,333, being the one which fell due Jan. 10, 1858. The other half of this note, with interest, and the four other notes for $13,333, remain wholly unpaid. These unpaid notes of Walker were all claimed by Cucullu, in the bill filed in this case, to be his property.

The mortgage granted in the act of sale by Walker to secure the obligation entered into by him for the payment of the purchase price of the Myrtle Grove Plantation was duly inscribed and twice reinscribed in the mortgage office, according to law, thus preserving the privilege of the mortgage. By act dated Feb. 4, 1858, between Villavaso and Walker, the time for the payment by the latter of the Cucullu notes was extended until Feb. 1, 1859.

In 1860 Cucullu, desiring that the notes for $10,000, given by him to Villavaso, and secured by mortgages on the Myrtle Grove Plantation, should be paid off by Walker, who had assumed their payment in the manner above mentioned, began a suit against Walker in the District Court for the Parish of St. Bernard, to compel him to pay them, and he prayed that Walker be ordered and adjudged to discharge the said Villavaso mortgages. To this suit Walker filed an exception, in which he alleged that the petition disclosed no cause of action; the exception was overruled. Walker then filed an answer, denying that the Villavaso notes were due, and alleging that they had been extended and renewed. The court gave a decree for Cucullu, treating the suit as one to enforce the specific performance of Walker's contract to pay the Villavaso notes and mortgages. This decree was reversed by the Supreme Court of Louisiana, on the ground that Villavaso was not made a party to the suit, and the cause was remanded in order that Villavaso might be brought in.

Thereupon, on Oct. 7, 1861, Cucullu filed an amended petition, in which he averred that, 'by the decision of the Supreme Court rendered in this case, the holders of the mortgage notes and claims, the payment of which petitioner sought to enforce in his original petition, were necessary parties to the suit;' the amended petition, therefore, prayed that Villavaso be made a party, and judgment rendered as prayed for in the original petition.

Villavaso, having been cited, filed an answer to the amended petition on Feb. 7, 1862, in which he averred that Cucullu had no cause of action against him, because he being the holder and owner of the two notes of Cucullu for $10,000 each, secured by the mortgages of Cucullu to enforce their payment, had already issued executory process against Walker on his contract to pay these notes. After the filing of this answer nothing was done in the suit, and it is still pending.

On Oct. 21, 1981, a petition was filed in the District Court of St. Bernard Parish by Villavaso against Walker to foreclose the mortgages given by Cucullu to him on the Myrtle Grove Plantation to secure the two notes made by Cucullu for $10,000 each. This suit was a writ of seizure and sale taken out against Walker, who was Cucullu's vendee, and who was, at the time the writ was issued, in possession of the plantation. The writ bore date Nov. 21, 1861.

In this suit Hernandez, on Oct. 1, 1874, intervened and filed his petition, averring that he was the owner of certain of the notes made by Walker to Cucullu, and secured by mortgage on the Myrtle Grove Plantation, and claiming that the Walker mortgage had precedence of those from Cucullu to Villavaso, because the latter had not been reinscribed within ten years, and praying an injunction against the sale of the plantation under the writ of seizure and sale, which had been issued upon the mortgages given by Cucullu to Villavaso. The injunction was allowed. Before this suit was finally terminated, Villavaso sold out to one James E. Zunts his interest therein, and all his title to the notes executed by Cucullu, and to the mortgages on the Myrtle Grove Plantation given to secure them, and Zunts was substituted as plaintiff in the suit.

The court declared Hernandez, by reason of his ownership of the Walker notes, to be a first-mortgage creditor on the Myrtle Grove Plantation. Zunts, the vendee of Villavaso, alone appealed from this judgment. It was affirmed by the Supreme Court in May, 1876, on the ground that Villavaso had not preserved the priority of his mortgages as against Hernandez, who was declared to be a third person, by proper reinscription, and therefore Hernandez, representing a part of the second mortgage, had priority over the first.

On Aug. 7, 1875, the mortgaged property had been sold by the sheriff, and adjudicated to Zunts for $10,000. He paid no part of the purchase-money, because he claimed the right, as first mortgagee, to retain the entire price as in part payment of his mortgages.

After the decision in favor of Hernandez, just mentioned, Zunts, by notarial act dated July 7, 1877, sold and transferred to Hernandez 'all his right, title, interest, claim, and demand, of whatsoever nature or kind, in and to Myrtle Grove Plantation.'

Hernandez having thus, as he claimed, acquired all the rights of Zunts in the suit, took a rule to compel the sheriff of St. Bernard Parish to execute a deed to him for the Myrtle Grove Plantation on payment of $10,000, the price at which it was struck off to Zunts at the sale made on Aug. 7, 1875. This rule was made absolute July 7, 1877.

On Nov. 23, 1877, the bill in this case was filed by Cucullu. He claimed to be the owner of five of the notes made by Walker for the purchase-money of the Myrtle Grove Plantation. He averred that the plantation was the property of the succession of Walker, the mortgagor, but that it was claimed by Hernandez and various other persons, each of whom asserted title to four of the Walker notes, which he, the complainant, claimed as his property, and to collect which he had brought the suit to foreclose.

On March 23, 1879, the Circuit Court made a decree in the case, by which it was declared that the title to the Myrtle Grove Plantation was in the succession of Walker; that Cucullu was the holder and owner of the unpaid notes made by Walker and secured by his mortgage on said plantation, being the same mentioned in the bill of complaint, amounting to the sum of $57,000, with interest, as claimed in the bill, and that the same continued to be a lien upon said plantation; that Hernandez, by purchase from Zunts, the vendee of Villavaso, was the owner of the two notes for $10,000 made by Cucullu and secured by mortgages on said plantation before its sale by Cucullu to Walker. The decree directed the sale of the plantation and the application of the proceeds, first, to the payment of the Cucullu notes held by Hernandez, and the surplus, if any, to the payment of the Walker notes held by complainant; the effect of the decree being to give priority to the notes and mortgages executed by Cucullu.

The complainant Cucullu alone appealed from this decree. This fact eliminates from the case many controversies decided by the Circuit Court, and the evidence applicable thereto, and leaves only for decision by this court these questions: Whether the Villavaso notes and mortgages were subsisting obligations; whether Hernandez was their owner; and whether, as such owner, he was entitled to priority of payment over the unpaid Walker notes and the mortgage by which they were secured, and of which Cucullu was decreed to be the owner.

The complainant insists, firstly, that Hernandez is not the owner of the Villavaso notes; that the act of transfer by Zunts to Hernandez, dated July 7, 1877, conveyed only the rights of Zunts as purchaser of the plantation at the sheriff's sale, made on Aug. 7, 1875; and to support this view the complainant refers to the affidavit of Zunts, filed by him in the Circuit Court in support of a petition for rehearing in this case. In this affidavit Zunts declares that by said act he did not transfer to Hernandez the Cucullu notes, but only his rights as purchaser of the Myrtle Grove Plantation under the sale of Aug. 7, 1875.

This affidavit cannot be considered in evidence, for two reasons: first, because the transfer by Zunts to Hernandez being in writing must speak for itself, and the purpose of Zunts in executing the transfer must be derived from it, and not from his subsequent declarations; and, second, even if the evidence were competent, it should have been presented in the form of a deposition regularly taken, according to the equity rules by which the witnesses might have been subjected to cross-examination. The affidavit, being purely ex parte, cannot be considered on the final hearing.

Looking at the act of transfer from Zunts to Hernandez, we think that by a fair construction it conveys the Cucullu notes and mortgages. It purports to transfer to Hernandez 'all the right, title, interest, claim, and demand, of whatsoever nature or kind,' of Zunts in and to the Myrtle Grove Plantation. These terms clearly include a conveyance of the rights of Zunts as mortgagee of the plantation.

But if the transfer had specifically and in terms conveyed to Hernandez the rights of Zunts as purchaser under the sale of Aug. 7, 1875, and nothing more, we think it would have carried with it the notes and mortgages under which the sale was made. By virtue of the transfer the vendee would have the right to use them to pay his bid. This clearly implies title to the notes, and the mortgages by which they were secured. The fact that the sale was not effectual to convey the title did not divest Hernandez of his claim to the notes and mortgages, and reinvest them in Zunts. It is a question between Zunts and Hernandez. Zunts sold to Hernandez his rights as adjudicatee, and all other title and claim which he held to the Myrtle Grove Plantation; he received his pay for the transfer; he has no rights left, either as a purchaser or a mortgagee, and whatever interest he had in either character is vested in Hernandez by the act of transfer.

But a conclusive answer to complainant's claim, that the ownership of the Cucullu notes and mortgages was not transferred to Hernandez by Zunts, is found in the bill of complaint, which is framed on the assumption of such ownership by Hernandez. The bill avers that 'said James E. Zunts, by public act, in the city of New Orleans, on the 16th of April, 1877, did sell and transfer unto said Joseph Hernandez all his pretended right, title, and interest in and to said Myrtle Grove Plantation, and all his pretended rights in and to the said suit of E. Villavaso, James E. Zunts subrogated, versus Augustus W. Walker, No. 413 of the docket of the Second Judicial District Court of the Parish of St. Bernard, and all his pretended right in and to the notes sued on, and the pretended privileges and rights of mortgage thereunto attached, whatever they might be; and the said Joseph Hernandez, in consequence of said transfer and sale by James E. Zunts, now claims and pretends to be the owner of said property hereinbefore fully described.'

After such an averment in the bill of the purpose and effect of the act of transfer between Zunts and Hernandez, it does not lie in the mouth of Cucullu to say that the act did not convey to Hernandez the title to the Cucullu notes and mortgages. The effect of the act of transfer is not put in issue. What Hernandez claims to be its legal import is admitted by the bill, and that is the end of the controversy upon the point. We think, therefore, that the title of Hernandez to the Cucullu notes and mortgages must be considered as settled.

Secondly, It is insisted, however, by complainant, that even should the title of Hernandez to these notes and mortgages be conceded, nevertheless it can avail him nothing, because the notes are prescribed.

Article 3540 (3505) of the Civil Code of Louisiana declares: 'Actions on bills of exchange, notes payable to order or bearer, except bank-notes, those on all effects negotiable or transferable by indorsement or delivery, and those on all promissory notes, whether negotiable or otherwise, are prescribed by five years, reckoning from the day when the engagements were payable.' By article 3551 (3516) of the same code, prescription may be interrupted in the two modes laid down in article 3516 (3482); viz., first, by a natural interruption, as when the debtor makes acknowledgment of the debt, or, second, by the institution of a suit against the debtor.

One of the Cucullu notes fell due Feb. 1, 1851, and the other Feb. 4, 1854. By his act of sale of the Myrtle Grove Plantation to Walker on Sept. 27, 1857, Cucullu declared that these notes had been renewed and would fall due Feb. 4, 1858.

The complainant claims that this was the last natural interruption of the prescription on the notes by Cucullu, and that as no suit has ever been instituted against him on the notes by any person, or any demand made upon him for their payment, the notes are prescribed.

By the act of sale from Cucullu to Walker of the Myrtle Grove Plantation, under date of Sept. 28, 1857, Cucullu acknowledged the notes given by him to Villavaso to be valid debts, and specified the time when they would fall due. Walker agreed to pay the Cucullu notes in the place and stead of the latter, and such payment was to be in part payment of the purchase price of the plantation.

Walker made payments of interest on these notes from 1858 up to Feb. 4, 1861. It is the settled law of Louisiana that payments made by a purchaser of property who assumes as part of the price a debt due by his vendor, is an interruption of prescription as to that debt, both as to the purchaser and vendor. Cockfield v. Farley, 21 La. Ann. 521; Collier v. His Creditors, 12 Rob. (La.) 398. So that prescription on the Cucullu notes was interrupted as late as Feb. 4, 1861.

But on Feb. 2, 1860, Cucullu, as we have seen, instituted suit against Walker, to enforce the latter's contract included in the act of sale to him of the Myrtle Grove Plantation, to compel him to pay the Cucullu notes. To this suit Walker appeared and made various defences, and the case has been pending from that time until now, and still remains undisposed of. In our opinion this suit is a natural interruption of the prescription, for it is an acknowledgment by Cucullu, in the most explicit form, that the notes are unpaid and of his liability to pay them. It is an acknowledgment that continues from day to day as long as the suit remains pending, so that it is not merely an interruption but is a suspension of the prescription. Furguson v. Glaze, 12 La. Ann. 667; Barrow v. Shields, 13 id. 57.

The claim, therefore, that the Cucullu notes are prescribed will not hold.

Thirdly, It is next insisted by complainant that the mortgages given by him to Villavaso, not having been reinscribed, as required by the Code of Louisiana, within every period of ten years after their date, have become prescribed, and have lost their lien upon the property described in them.

It is clear from the decisions of the Supreme Court of Louisiana that this result follows only as to third persons, and not as to the parties to the mortgage. A mortgage to affect third persons must be inscribed in the mortgage office, and to preserve its original rank as to them, it must be reinscribed before the expiration of ten years from the original inscription. The policy of the law is to make an investigation of liens easy and simple, and therefore, except for legal mortgages in favor of minors and married women, no search for mortgages in the mortgage office is required for a greater period than ten years prior to the date of search.

But this applies to third persons only, and not to the mortgagor or his heirs.

'By the words 'third persons' are to be understood all persons who are not parties to the act or to the judgment on which the mortgage is founded.' Civil Code art. 3343.

'Consequently neither the contracting parties nor their heirs, nor those who were witnesses to the act by which the mortgage was stipulated, can take advantage of the non-inscription of the mortgage.' Civil Code, art. 3344.

By the omission to reinscribe a mortgage within ten years from the date of the first inscription, the effect of the inscription and not of the mortgage itself ceases. The mortgage remains unimpaired as between the mortgagor and his heirs, and the mortgagee.

The general doctrine as stated has been repeatedly declared by the Supreme Court of Louisiana. Bonin v. Durand, 2 La. Ann. 776; Haines v. Verret, 11 id. 122; Seyburn v. Deyris, 25 id. 483.

The rule was applied to a witness to the mortgage in the case of Brown v. Sadler, 16 id. 206.

From these provisions of the Code of Louisiana and the decisions of the Supreme Court of the State it is clear that no inscription of the Villavaso mortagages was necessary to affect Cucullu. He being the mortgagor, they remained valid as against him, without inscription or reinscription, and preserved their rand over a subsequent mortgage in which he was the mortgagee.

It is claimed, however, by complainant, that although the doctrine may apply to the original inscription it does not apply to the reinscription of a mortgage; that unless reinscribed within ten years from its date the mortgage becomes prescribed and ineffectual to bind even the mortgagor.

This claim does not seem to us to be founded in reason or to be sustained by any decisions of the Supreme Court of Louisiana. On the contrary, that court, as will be seen by the cases above cited, makes no distinction, so far as this question is concerned, between the original inscription and subsequent reinscriptions.

We think, therefore, that neither the lien of the mortgages executed by Cucullu nor their priority as against the subsequent mortgage executed to him by Walker has been lost.

The complainant claims, fourthly, that Hernandez is estopped from setting up the mortgages from Cucullu to Villavaso as superior to the mortgage from Walker to Cucullu, because, in his intervention in the case of Villavaso, Zunts substituted, v. Walker, he had claimed that the mortgages from Cucullu to Villavaso had lost their lien for want of reinscription, and the complainant asserts that this claim was sustained in that case by the Supreme Court of Louisiana.

An examination of the petition of Hernandez in that case, and the decision of the Supreme Court, shows that the question of precedence between the mortgages was raised on a different state of facts from that on which the question arises here.

Hernandez, in the suit of Villavaso v. Walker, in which Cucullu was not a party and did not in any way appear, claimed that the mortgages from Cucullu to Villavaso had, for want of reinscription, lost their rank as against him, he being the owner of the mortgage from Walker to Cucullu. The Supreme Court of Louisiana sustained this view, and put its decision expressly on the ground that Hernandez was a third person in the acts of mortgage given by Cucullu to Villavaso, which had not been reinscribed.

In the present suit Cucullu is a party, and is insisting that the mortgages given by himself to Villavaso have lost their lien for want of reinscription, and that the mortgage given to him by Walker should have priority.

The question whether the Walker mortgage, in the hands of Hernandez as owner, is entitled to priority over the Cucullu mortgages when held by Villavaso, because the latter had not been reinscribed, is very different from the question whether Cucullu, when claiming to be the owner of the Walker mortgage, can assert priority over the mortgages executed by himself to Villavaso, because the latter had not been reinscribed.

In his intervention. Hernandez claimed priority for the Walker mortgage as against Villavaso, holder of the Cucullu mortgages, because, as to the latter, he was a third person and the mortgages had not been reinscribed. In this case it is Cucullu who claims priority for the Walker mortgage, which, he says, he owns, against his own mortgages to Villavaso, for want of the reinscription of the latter. But as to the mortgages made by himself, he is a party and not a third person, and as to him no reinscription is necessary.

The position of Hernandez in his petition in the case of Villavaso v. Walker is not inconsistent with his claim here, and his claim in this case has not been decided against him by the Supreme Court of Louisiana in the case referred to. See Villavaso v. Walker, 28 La. Ann. 775.

Fifthly, the complainant claims that the notes given by Cucullu to Villavaso were novated, and that Cucullu was released by the extension of the time for their payment, granted to Walker by Villavaso, by the act of Feb. 4, 1858.

This claim is based on article 3063 of the Civil Code, which declares: 'The prolongation of the time granted to the principal debtor, without the consent of the surety, operates a discharge of the latter.'

To make this article applicable, it must appear that by the act of Feb. 4, 1858, by which Walker agreed with Cucullu to pay the notes executed by the latter to Villavaso, Walker became the principal debtor, and Cucullu the surety.

It cannot, we think, be reasonably claimed that a debtor is converted into a surety by his creditor's acceptance of an additional promise from a third person to pay the debt due him by his debtor. There is no element of suretyship in such a contract, unless it be that the additional debtor might be regarded as surety for the original debtor. The relation between the creditor and the original debtor is not changed by such as arrangement.

It is, however, a sufficient answer to this claim to say that the bill of complaint contains no allegation in reference to the extension of the time of payment granted by Villavaso to Walker, and no claim that Cucullu was discharged thereby, and no allusion in made to the subject in any part of the pleadings. The claim that, by the contract of Walker with Cucullu to pay his notes to Villavaso, Walker became the principal debtor and Cucullu the surety, and that, by the indulgence given by Villavaso to Walker, Cucullu, as such surety, was discharged, appears in the case for the first time in the brief of complainant's counsel.

The evidence to show the facts on which this claim is based cannot be regarded, for there is no averment in the bill to which it can be applied. It is not pertinent to any issue in the case. Whitely v. Martin, 3 Beav. 226; Smith v. Clarke, 12 Ves. Jr. 477; Langdon v. Goddard, 2 Story, 267; Gordon v. Gordon, 3 Swans. 400.

Lastly, It is averred by complainant that the purchase made by Hernandez from Zunts, of the notes and mortgages given by Cucullu to Villavaso, was the purchase of a litigious right; and even if the notes and mortgages are valid claims, no more can be recovered by Hernandez than he paid to Zunts, and this sum complainant avers to be $2,100.

This claim is based on article 2652 of the Civil Code of Louisiana, which declares: 'He against whom a litigious right has been transferred, may get himself released by paying to the transferee the real price of the transfer, together with the interest from date.' The next article, 2653, defines what is a litigious right, as follows: 'A right is said to be litigious whenever there exists a suit or a contestation on the same.'

This claim cannot be sustained, for two reasons: First, Hernandez did not purchase the Villavaso notes until after the judgment in the Supreme Court thereon. The right ceases to be litigious when judgment has been rendered. Marshal v. McCrea, 2 La. Ann. 79. Secondly, it has been repeatedly decided by the Supreme Court of Louisiana that the purpose of article 2652 was to prevent litigation, and therefore a defendant who, instead of paying the price of the transfer, contests the suit and prolongs the litigation, defeats the very object of the article, and cannot exercise the privilege it gives. The complainant should have paid or tendered to Hernandez the real price of the transfer with interest from date. He would then have been in a position to claim the benefit of article 2652. He cannot, after contesting the claim inch by inch and up to the court of last resort, cancel it by paying what it cost his adversary. Leftwich v. Brown, 4 id. 104; Pearson v. Grice, 6 id. 233; Rhodes v. Hooper, id. 356; Evans v. De L'Isle, 24 id. 248.

We think that the attempt of Cucullu to get rid of the notes and mortgages given by him to Villavaso, or postpone them to the subsequent notes and mortgage given to himself by Walker, must fail, and ought in equity to fail. Thirty years ago he borrowed from Villavaso $20,000, and to secure this money executed mortgages to him on the Myrtle Grove Plantation which he then owned. He has never paid that debt. He afterwards sold the plantation to Walker and took his notes for part of the purchase-money, and for the residue his stipulation to pay the Villavaso notes and mortgages. Walker has not paid them. While enforcing the lien of the Walker mortgage and bringing the property to sale to satisfy it, equity requires that out of the proceeds the notes of Cucullu to Villavaso should be first paid, unless some reason in law exists by which they are postponed. We have been able to find no such reason. We think the decree of the Circuit Court was right, and that it should be affirmed; and it is

So ordered.


text: Talk:Cucullu v. Hernandez/Opinion of the Court


text:
Railroad Companies v. Schutte

APPEALS from the Circuit Court of the United States for the Northern District of Florida.

The facts are stated in the opinion of the court.

Mr. George F. Edmunds, Mr. William A. Maury, Mr. Samuel F. Phillips, and Mr. James M. Baker for the Florida Central Railroad Company.

Mr. James M. Baker and Mr. James Baker for the Jacksonville, Pensacola, and Mobile Railroad Company.

Mr. George F. Edmunds, Mr. Samuel F. Phillips, and Mr. Joseph B. Stewart for the Western North Carolina Railroad Company.

Mr. Matthew H. Carpenter and Mr. Wayne Mac Veagh, contra.

MR. CHIEF JUSTICE WAITE delivered the opinion of the court.

title: Railroad Companies v. Schutte


text: Talk:Railroad Companies v. Schutte

title: Talk:Railroad Companies v. Schutte