text:
Richardson v. Traver/Opinion of the Court

The facts, as shown by the testimony in this case, are these: On or about the nineteenth of December, 1870, Henry J. Traver, the appellee, and Michael Traver, his brother, bought of John Dickson a tract of land in the city of Chicago, containing about 16 acres. They paid to Dickson at the time a small part of the purchase money in cash, and for the balance gave their four joint notes, each for the sum of $5,373.67 1/2, payable respectively in two, three, four, and five years from date, with interest semiannually at the rate of 8 per cent. per annum. The notes were secured by a deed of trust of the property to Enos Ayres, trustee. After the purchase they laid the property off into blocks and lots, making three blocks, numbered 1, 2, and 3, respectively, and subdividing each block into lots. Previous to September, 1872, Michael Traver, who lived in Chicago and had the immediate charge of the property, sold some of the lots, partly for cash and partly on credit. On the fifth of September, 1872, an oral agreement was entered into between the two Travers by which Michael was to take all the cash and notes that had been received from sales, and all the unsold parts of block 2, and all but eight lots of those unsold in block 3, pay the debt to Dickson, and give Henry all of block 1, and eight lots in block 3, clear of the incumbrance of the trust deed to Ayres. In part execution of this agreement Michael at the time conveyed to Henry his interest in block 1 and in the eight lots in block 3. Henry did not convey to Michael until December 20, 1872. On that day, for the consideration of $100 as expressed in the deed, he remised, released, sold, conveyed, and quitclaimed to Michael, in fee-simple, all his 'right, title, interest, claim, and demand' in the unsold lots in block 2 and in block 3, except the eight which had been conveyed to him by Michael, and at the same time transferred to Michael all his interest in the moneys and securities which had been received for the lots sold. In his deed making the conveyance he covenanted that he had 'not made, done, committed, executed, or suffered any act or acts, thing or things, whatsoever, whereby, or by means whereof, the above-mentioned premises, or any part or parcel thereof, now are, or at any time hereafter may be, impeached, charged, or incumbered in any way or manner whatever.' Michael, finding himself unable to pay the note to Dickson which fell due in December, 1872, and the interest on the other notes, entered into an oral agreement with James C. Hyde by which Hyde was to take the property off his hands as he took it from Henry, and pay the debt to Dickson, and relieve the premises conveyed to Henry from the lien of the trust deed to Ayres. Under this agreement Michael conveyed the part of the property to which he held the title to Hyde by deed, with full covenants of warranty expressing a consideration of $16,000, and transferred to him all debts due for lots sold. This deed was dated December 28, 1872, but the transaction was not finally ended until some days after that date. Hyde at the same time assumed orally the payment of the Dickson debt, that being the only consideration for the transfer. At the time of this transfer Hyde borrowed from Richardson, the appellant, through Hammond & Bogue, his agents in Chicago, $10,000, for which he executed two notes, payable three years from date, one for six thousand and the other for four thousand dollars, and secured them by two deeds of trust to Hammond as trustee, each upon different parts of block 2. Together these deeds covered the whole of the block. Hammond & Bogue were only authorized to make loans for Richardson on unincumbered property. They knew at the time they paid the money over to Hyde that block 2 was incumbered by the deed of trust to Ayres, but Hyde promised to pay the past-due note and the past-due interest to Dickson out of the money he borrowed, and obtain a release from Ayres of that block. Hyde did pay the note and the interest past due, and also the note falling due in December, 1873, but, instead of getting a release from Ayres of block 2, he, without the knowledge of Hammond & Bogue, took one of block 3, thus leaving block 2 still under the incumbrance of a lien prior to that for the benefit of Richardson to the extent of the two notes to Dickson falling due four and five years from date.

When the note maturing in December, 1874, fell due, Hyde was unable to meet it, but in January, 1875, he sold 19 lots in block 2, for which he received $6,000 in cash. With this and other moneys advanced by Hammond & Bogue, Bogue went to the bankers to whom both the remaining Dickson notes had been sent for collection, and paid the money for them and took them away uncanceled, they having been previously indorsed in blank by Dickson; that falling due in 1875 being 'without recourse.' One payment of $6,000 was made on the fifteenth of January, and the other, being $5,641.87, on the 29th. On the day the last payment was made, and after the notes had been taken up, Bogue went to Ayres with them and requested him to release block 2 from the lien of the trust deed to him. He stated to Ayres that he was the owner of the notes, and thereupon Ayres executed a release of block 2, which Bogue signed and acknowledged with him. In this release Bogue is described as the 'legal holder of the unpaid notes.' After this Hyde paid Hammond & Bogue the money they had advanced to take up the notes from the bank. Hammond, also, at different times, released a part of the lots in block 2 from the lien of the deed of trust to him for the security of Richardson. The 19 lots which had been sold, and from the proceeds of which the $6,000 came that was paid to the bank upon the notes on the fifteenth of January, were released when that sale was made. The other releases were executed when the advances of Hammond & Bogue were repaid by Hyde.

Henry J. Traver first heard of the release of the lien on block 2 under the trust in favor of Dickson a short time before the fifth of April, 1875, and at that date he brought suit in the circuit court of Cook county against Michael Traver, Hyde, Bogue, Ayres, Hammond, and others who had become interested in the property, not, however, including Richardson, to obtain a release of block 1 from the lien under the Ayres trust deed, on the ground that the Dickson notes had been paid. In this suit he obtained a preliminary injunction restraining Hyde, Bogue, and Ayres from enforcing the trust deed, or selling or disposing of the two Dickson notes. On the thirtieth of June, 1875, while this suit was pending, Hammond & Bogue sent Richardson, in Boston, where he resided, a draft for $400 'in paym't of coupon of James C. Hyde due 28th inst. to 1st prox.' In their letter to Richardson inclosing the remittance, Hammond & Bogue made no mention of any change in the form of his securities, or of the suit which had been begun by Henry J. Traver. On the seventh of October, 1875, Hyde and Hammond & Bogue answered the bill of Traver, and on the 8th Ayres filed his answer. In the answer of Hammond & Bogue they state that 'on or about the time when the first of said two Dickson notes became due, the said Hyde requested these defendants to allow him to pay up said notes for $6,000 and $4,000 then held by said Richardson, and to purchase the said two Dickson notes. And these defendants, acting as the agents of said Richardson, at the request of said Hyde, agreed to and did receive payment of said $6,000 and $4,000 notes, secured by the deeds of trust to this defendant Hammond on said block 2, and this defendant Hammond released the greater portion of said block 2 from the lien of said trust deeds, made to this defendant Hammond as trustee, there being about 10 lots yet remaining not formally released, but this defendant Hammond was and is ready to release the same at any time at request of said Hyde, unless enjoined by the court. And the said Hyde, having paid up the interest on said two Dickson notes and a sufficient amount of the principal to reduce the same to the sum of $10,000, these defendants agreed to and did take said notes by purchase, acting for and in behalf of said Richardson, and the said Richardson is now the legal and equitable owner of the same for full value. And these defendants, as such agents, consented to extend the time of payment of said Dickson notes first becoming due for the period of one year. And these defendants, also at the request of said Hyde, consented to the release of said block 2 from the lien of said trust deed to said Ayres as trustee, and this defendant, Bogue, signed said release, joining with said trustee, but these defendants at that time supposed and believed that said Hyde was the owner of both block 1 and block 2, and knew nothing of the said agreement between said complainant [Henry Traver] and said Michael Traver, and between said Michael Traver and said Hyde. And these defendants, for and in behalf of said Richardson, extended the time of payment of said Dickson note first payable for the term of one year; and the said Dickson notes are now in the hands and possession of these defendants as the agents of the said Richardson, who is the legal and equitable owner of the same, and who paid full value therefor.' The answer of Hyde was in substance the same.

On the eighth of December following, Hammond & Bogue wrote Richardson as follows: 'With regard to the Traver loan, we have to say, from present appearances we do not think there is a prospect of any payment being made at present; but we are of opinion it will be for your interest to institute prompt proceedings to forclose, if nothing is paid. The security on this loan was modified by us from the form as originally taken as follows: At the time of negotiating for the loan there was existing a prior purchase-money security of the same character as that taken by us. Our first arrangement, at the time of the negotiation of the loan, was to have this original incumbrance released, in order that your loan should be a first lien. Instead of the release, we had the original security (being the purchase-money paper secured by deed of trust) transferred to us, for your account, in substitution of the security first taken, and which we hold for your security as a first and prior lien, and we think it advisable, in case no payment is made this month when the payment is due, (December 19th,) that proceedings for foreclosure in the United States court be commenced immediately. We are legally advised and believe that this course will, result in procuring an early settlement, but, if not, it will be a speedy proceeding by which a final result may be reached much sooner than is the case in the other courts. We would like you to advise and direct us in regard to immediate proceedings to foreclose, as we may deem necessary for our interest. An early reply is important. Send all papers of both loans.' Richardson at once sent forward the two notes and deeds of trust, and their receipt was acknowledged by Hammond & Bogue, under date of the thirteenth of December. On the twenty-eighth of December suit was begun by Richardson, in the circuit court of the United States for the Northern district of Illinois, against the Travers, Ayres, Hammond, and certain purchasers of the property, to enforce the lien of the Ayres deed of trust on block 1 for the security of the two Dickson notes. In the bill Richardson stated that 'on or about the fifteenth of January, 1875,' he had, 'for a good and valuable consideration, purchased from the said John Dickson the two notes aforesaid.' Thereupon Henry J. Traver filed a supplemental bill in his suit in the state court, under which he brought in Richardson as a party. Richardson appeared, and, on his petition, the case was removed to the circuit court of the United States for the Northern district of Illinois. When it got there, it was consolidated with the suit which had been begun by Richardson. The circuit court, on final hearing, dismissed the bill of Richardson, and rendered a decree in favor of Traver, canceling the lien of the deed of trust to Ayres on block 1. From that decree Richardson has appealed.

After a careful consideration of the evidence we are satisfied with the decree below. To our minds it is clear that the Dickson notes have been paid by Hyde, not bought by Richardson. Richardson never heard of the transaction in reference to the Dickson notes until nearly a year after it occurred. He held all the time his original notes and the deeds of trust which were given for their security. Long after the time when it is claimed the notes were paid, Hyde, through Hammond & Bogue, remitted him the interest when it fell due, according to the terms of the notes he had in his own hands, and did not intimate in any way that those notes had been paid and others substituted for them. The books of Hammond & Bogue contain nothing to connect Richardson with the taking up of the Dickson notes. The $6,000 which Hyde handed to Bogue, and which he used in taking up the notes on the fifteenth of January, was neither entered to the credit of Hyde nor Richardson. In fact, it nowhere appears in any account on the books. The $5,641.87 which Hammond & Bogue did advance was charged directly to Hyde, and his payments on that account were passed to his credit. In all the conversations with Bogue which have been testified to, he did not intimate that Richardson was the owner of the notes. It is, no doubt, true the parties supposed that by keeping the notes uncanceled they might be so used as to make the lien under the Ayres trust on block 1 available as additional security for the ultimate payment of the Richardson notes; but as Hyde, not Richardson, paid the bank for them, if Hyde could not charge Henry Traver's property with their payment, Richardson cannot. Michael Traver bound himself to Henry to pay the notes, and discharge block 1 from the lien of the trust created for their security. Hyde bound himself to Michael Traver to carry out this agreement which had been made with Henry. When the notes were afterwards taken up from the bank, where they were sent for collection, with the money of Hyde, they were, in legal effect, paid, and from that time the lien on block 1 was discharged. Hyde could not himself enforce them against that property; neither can Richardson. Although Hammond & Bogue advanced a part of the money to take up the notes, it was afterwards repaid to them by Hyde, and that made all the money paid for the notes his own. Hyde, Hammond, and Bogue all swear, with more or less directness, that Hyde paid the Richardson notes, and that this money was used to buy the Dickson notes; but this is contradicted by the well-established facts in the case, and it is apparent, from their own testimony, taken as a whole, that, until long after the Henry Traver suit was begun, they had no idea that they were doing anything more than keeping the Dickson lien alive, as additional security for Richardson. The testimony satisfies us beyond doubt that both Hammond and Bogue knew all about the obligation of Hyde to discharge the lien of those notes on block 1, and that the pretense of a payment of the Richardson notes, and the use of the money so paid to buy them, was all an after-thought. There is not a single act or fact which appears in the transaction to indicate that anything of the kind was in the minds of the parties at the time.

It is said, however, that parol evidence of the agreements between Henry and Michael Traver and between Michael Traver and Hyde is not admissible, because the 'agreements were contradictory to the acknowledgments and in opposition to the plain import of the covenants contained in the deeds. If, by possibility, they could be held as of force between the original parties, they were ineffective and nugatory as to third parties.' Neither Michael Traver nor Hyde deny that the parol agreements were made precisely as charged in the Traver bill, and it is elementary learning that evidence may be given of a consideration not mentioned in a deed, provided it be not inconsistent with the consideration expressed in it. 1 Greenl. Ev. 286; 2 Phil. Ev. 353. In both these deeds a valuable consideration is expressed, and it is not inconsistent with the considerations so expressed to show that the actual considerations were the agreements to pay the Dickson notes. The question here is not as to the liability of Henry J. Traver or Michael Traver upon the covenants in their respective deeds. Undoubtedly their covenants, such as they are, run with the land, but Richardson is not now claiming under the conveyances. The title, if any, which he has to the land embraced in those conveyances is not now disputed. He is suing to collect the Dickson notes by enforcing their lien on property not included in his original security, and the question in the case is whether they have been paid, and in that is involved the further question, whether Hyde, through whom he got the notes, was bound to pay them. To show that Hyde was so bound, his agreement to that effect, as the consideration for the conveyance to him, was proven. As Richardson does not, in this suit, claim anything under that deed, the covenants cannot be used as an estoppel in his favor. The actual facts may therefore be shown.

It is also claimed that 'Richardson is entitled to hold the Dickson security by way of subrogation.' But relief is not asked, either in the bill of Richardson or in his answer to the Traver bill, on that account. In both his bill and answer he puts his claim entirely on the ground of the purchase and ownership of the Dickson notes, and makes no mention whatever of his original loan to Hyde, or of the security which was taken therefor. In the answers of Hammond, Bogue, and Hyde it is distinctly stated that Richardson's notes were paid and the Dickson notes bought with the money realized by this payment. Hammond & Bogue having advanced part of the money to take up the notes, could undoubtedly have held them to secure the repayment of their advances; but, as that repayment has been made, the case stands precisely as it would if Hyde had himself furnished the money originally. But if relief had been asked on the ground of subrogation, it could not have been granted on the facts as they now appear. The notes were paid by Hyde under his obligation for that purpose, and that discharged the security on block 2 as well as on block 1. The question is not whether, if the notes had not been paid by Hyde, and Dickson were now endeavoring to enforce his security, Richardson could require him to exhaust his lien on block 1 before coming on block 2; nor whether, if Richardson's security on block 2 had been diminished by a compulsory sale of that block for Dickson's benefit, he could resort to block 1 to make good his loss; but whether, having voluntarily released his security on block 2, without the consent of or notice to Henry Traver, to enable Hyde to raise the money to take up the notes, he can hold the notes with a lien on block 1 in place of the security he gave up. The doctrine of subrogation, which is a creature of equity, has never been carried to that extent. If Richardson had in good faith paid the notes with his own money to protect himself under his junior security, he would have been put in the place of Dickson as the owner of the notes, and, upon a foreclosure, his rights in block 2 as against those of Henry Traver in block 1 could have been ascertained and protected. But such is not the case. His agents and trustee saw fit, without consulting Henry Traver, to allow Hyde to use block 2 to pay the notes. This block Hyde owned subject to the liens (1) in favor of Dickson, and (2) in favor of Richardson. As against Hyde, Henry Traver had the right to have block 2 sold to pay the Dickson debt before block 1 was resorted to, because Hyde was bound to pay the Dickson debt and release block 1 from incumbrance on that account. Whether, as against Richardson's junior incumbrance on block 2, Traver could require Dickson to sell that block before coming on block 1, depends entirely on the effect of Henry Traver's covenants in his deed of release and quitclaim to Michael, about which we express no opinion, because to our minds it is clear that Richardson, by voluntarily releasing, without the consent of Henry Traver, a part of his junior security on block 2 to enable Hyde to raise the money to discharge the debt to Dickson, was not subrogated to the rights of Dickson under his original security on block 1. If Traver had been consulted, and had consented to the keeping alive of the Dickson notes to take the place of the security of Richardson which had been released, the case would have been different; but as property bound for the Dickson debt was in fact used to pay it with the consent of the Junior incumbrancer, no lien upon other property for the security of the Dickson debt can be kept alive for the benefit of the releasing junior incumbrancer without the consent of those whose interests in the other property are to be affected. The payment to Dickson discharged the debt, and all that pertained to its continued existence.

Decree affirmed.


text: Talk:Richardson v. Traver/Opinion of the Court

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


text:
Middleton v. Inhabitants of the Township of Mullica County of Atlantic

F. Carroll Brewster and F. Carroll Brewster, Jr., for plaintiff in error.

Peter L. Voorhees, for defendant, in error.

BRADLEY, J.


text: Talk:Middleton v. Inhabitants of the Township of Mullica County of Atlantic


text:
Middleton v. Inhabitants of the Township of Mullica County of Atlantic/Opinion of the Court

This is an action of debt brought in the court below to recover the amount of six bonds (or alleged bonds) of the township of Mullica, in the county of Atlantic and state of New Jersey, one being for $500 and the others for $1,000 each. The declaration also contains the common money counts. A copy of the instruments sued on was annexed to the declaration, all being in the following form:

'UNITED STATES OF AMERICA, STATE OF NEW JERSEY.

'[Bond No. 146.]

Amount, $1,000.

'The township of Mullica, county of Atlantic, acknowledge     themselves indebted to Samuel Crowley in the sum of one      thousand dollars, lawful money of the United States; which      sum they promise to pay to the said Samuel Crowley, or to his      order, two years after date hereof, with interest at the rate      of six per centum per annum, payable annually, the aforesaid      sum of one thousand dollars having been borrowed of said      Smuel Crowley, by order of said township committee, pursuant      to a resolution passed January 1, 1864; interest payable at      the State Bank at Camden.

'In witness whereof, the said township committee have caused this bond to be sealed with their seal, and attested by the signatures of their president and clerk, this thirty-first day of December, A. D. one thousand eight hundred and sixty-four.

[L. S.]

[U.S. Revenue Stamp, 50 cents.]

'EDW'D T. MCKEAN, Clerk.

'TIMOTHY HENDERSON, President.'

By one series of counts (six in number) these instruments were severally declared on as the writings obligatory of the township, sealed with its seal, and made payable and delivered to Crowley, as agent of the township, to assist it in passing away and transferring the bonds to raise money thereon for its use and benefit. In another series of counts (also six in number) the instruments are severally declared on as orders of the township, made by its authorized agents, Henderson, president, and McKean, clerk, of the township committee, and made payable to Crowley, as the agent of the township, to pass them away and raise money on them for the township. All the counts averred that Crowley indorsed and delivered the bonds or orders to the plaintiff. The defendant pleaded non est factum to the first six counts, (those in which the instruments were declared on as bonds,) and nil debet to the others, and the statute of limitations (of six years) to all of them.

At the trial, the plaintiff proved the execution of the bonds by Henderson, president, and McKean, clerk, of the township committee, and the indorsement of them by Crowley to the plaintiff; and also put in evidence a book, called the defendant's bond-book, produced by the defendant on the call of the plaintiff, and having the following heading: 'Issue of bonds by the township of Mullica in pursuance of a resolution adopted January 1, 1864.' At page 7 plaintiff read the following list of bonds:

Date of Bond, Number. Amount. To whom issued. When due.

Dec'r 31, 1864. 145 $ 500  Samuel Crowley. Dec'r 31, 1866.

" 146  1,000    "  "

" 147  1,000    "  "

" 148  1,000    "  "

" 149  1,000    "  "

" 150  1,000    "  "

To show that the bonds were executed by lawful authority, the plaintiff read two acts of the legislature of New Jersey. The first (approved March 4, 1864) was entitled 'An act to legalize certain acts of the township of Mulica, in the county of Atlantic, relative to raising money to pay bounty to volunteers and to provide for the payment of the same,' and recited and enacted as follows:

'Whereas, the inhabitants of the township of Mullica, in the county of Atlatic, did on the first day of January, Anno Domini eighteen hundred and sixty-four, vote to pay a bounty of two hundred and twenty-five dollars to each person volunteering to fill the quota of said township under the calls of the president of the United States, (the said quota being thirty-four;) and whereas, the said inhabitants having no authority, under the laws of the state, to offer said bounty or borrow money for the payment of the same; therefore: '1. Be it enacted by the senate and general assembly of the state of New Jersey, that the said township of Mullica be authorized to provide for the payment of said bounties the sum of seven thousand six hundred and fifty dollars, and the interest thereon, by the issuing of their bonds, or township orders, bearing interest at the rate of six per centum per annum, and payable at such times as the township committee of said township may determine: provided, that not less than fifteen hundred nor more than twenty-five hundred dollars shall be raised for the purpose of paying said bonds or orders in any one year, including the interest thereon.

'2. And be it enacted, that the acts and doings of the township committee and of the inhabitants of the said township of Mullica, mentioned in the first section of this act, to raise seven thousand six hundred and fifty dollars, and the interest thereon, to pay bounties to volunteers as aforesaid, to fill the quota of the said township, are valid in all respects, and binding upon the inhabitants and taxable property of said township.'

The other act is not material to the case and need not be recited. Upon the evidence thus presented the court below ruled out the bonds and directed a verdict for the defendant, and the plaintiff excepted. The question raised by the bill of exeptions is whether this direction was erroneous; and this involves the question whether the officers who executed the bonds had any authority to do so. An examination of the organic laws of the state of New Jersey shows that the inhabitants of the several townships in the different counties are corporate bodies, being authorized, at their annual or special town meetings, 'to vote, grant, and raise such sum or sums of money for the maintenance and support of the poor; the building and repairing of pounds; the opening, making, working, etc., roads; the destruction of noxious wild animals and birds; for running and ascertaining the lines, and prosecuting or defending the common rights, of such township; and for other necessary charges and legal objects and purposes thereof as are or shall be by law expressly vested in the inhabitants of the several townships of this state by this or some other act of the legislature.' They are also authorized, at their annual meetings, to elect a clerk, assessors, collectors, commissioners of appeal in matter of taxes, chosen freeholders to represent the township in the county board, surveyors of highways, overseers of the poor, constables, and a judge of election; and in addition to these officers, all having their appropriate duties to perform, they are also, by special provision, authorized 'to elect five judicious freeholders, resident within the township, who shall be denominated the township committee, a majority of whom shall be a quorum, and shall continue in office one year and until others are chosen in their stead, which committee shall have authority, and it is hereby rendered their duty, to examine, inspect, and report to the annual or other town meetings the accounts and vouchers of the township officers, and to superintened the expenditure of any moneys raised by tax for the use of the township, or which may arise from the balance of the accounts of any of the township officers.' Besides the duties here specified, the township committee is invested with certain other powers, such as, in certain cases, to fill vacancies in the other township offices caused by death, removal, refusal to serve, etc., and to call special town meetings when they may deem it necessary, but they have no general authority to act for the township. This must be conceded; and it is clearly shown by the cases cited by the counsel for the defendant.

At the same time, it must be admitted that, in view of the peculiar functions and duties of the township committee, they are altogether the most appropriate officers of the township for the performance of such a duty as the issuing of township bonds, whenever such bonds are authorized to be issued, since the township itself has no permanent presiding officer, or head, but only a temporary chairman, called a moderator, who simply presides over the town meeting by which he is appointed. The question then arises, did the act of March 4, 1864, give the township committed authority to issue the bonds in question? If the act is carefully examined it will be seen that it not only ratified the proceedings of the town meeting held on the first of January, 1864, voting a bounty of $250 to each person volunteering to fill the quota of the township, but that it authorized the township to provide for the payment of said bounties by issuing its bonds at 6 per cent. interest, payable at such times as the township committee might determine. It ratified what had been resolved by the town meeting, and authorized the issue of township bonds to carry that resolution into effect. The question then arises, who were the proper persons to issue the bonds? The town meeting itself certainly could not do it. Is it not the plain inference of the statute that the bonds should be issued under the direction and supervision of the township committee, as they were to fix the time of payment, and were the only body which had the general superintendence of the township finances? And here it is proper to notice that the proceedings of the town meeting on the first of January, 1864, were not given in evidence. Of course, the defendants had them in their possession, and could have produced them. We only know so much of said proceedings as is recited in the act of the legislature. It is possible that the town meeting, besides voting the bounties referred to in the act, directed the town meeting, besides voting the bounties referred to in the act, directed the township committee (as would be natural) to issue the obligations of the township for the purpose of raising the money requisite to pay such bounties. On this point, the bond-book of the township may be entitled to Mullica in pursuance of a resolution adopted January 1, 1864;' and it enumerates in that category the bonds in question in this suit. That is to say, the township book declares and shows that the bonds in suit were issued in pursuance of a resolution adopted January 1, 1864; and this declaration stood there on the book from 1864, when the bonds were issued, until the trial of the suit in 1871. The resolution thus referred to must, of course, have been part and parcel of the proceedings relating to bounties to be paid to volunteers, which were ratified by the act of March 4, 1864.

Taking all these things together, we are satisfied that, by the said act, which ratified the said proceedings, expressly including (as it does) 'the acts and doings of the township committee,' as well as of the inhabitants of the township, and authorizing the issue of bonds to carry out their intentions, with such time of payment as the township committee should determine, it was the intention of the legislature to authorize the execution and issue of such bonds by the township committee. There can be little doubt that this conclusion is in accordance with the justice of the case. Money was raised on these bonds. The plaintiff testified that he purchased them for value of Crowley (the payee) and received them from Crowley, or Henderson, or McKean, he could not recollect which. Evidently the township officers were concerned in the transaction. At all events, the plaintiff purchased them and paid for them; and they were duly entered in the township bond-book as bonds of the township, and there can be little doubt that the township reaped the benefit of the transaction. We have no doubt that they are the valid obligations of the township, and that the court below erred in ruling them out, and in directing a verdict for the defendant. They ought, at least, to have been given to the jury under the evidence in the case.

The judgment of the circuit court is reversed, and the case is remanded, with directions to award a venire facias de novo.


text: Talk:Middleton v. Inhabitants of the Township of Mullica County of Atlantic/Opinion of the Court


text:
Fortier v. New Orleans National Bank New Orleans National Bank

Henry C. Miller and B. F. Jonas, for Fortier.

Thomas J. Semmes and John A. Campbell, for New Orleans Nat. Bank.

WOOD, J.


text: Talk:Fortier v. New Orleans National Bank New Orleans National Bank


text:
Fortier v. New Orleans National Bank New Orleans National Bank/Opinion of the Court

These are cross-appeals from a decree in equity in a cause brought by 'Albert Baldwin, in his capacity of president of the New Orleans National Bank, a corporation organized under the national banking law, against Celestine Louise Fortier,' who was a married woman, the wife of Polycarpe Fortier. The purpose of the suit was to enforce the collection of a note 'drawn,' as the bill avers, 'by the said Celestine Louise Fortier to her own order, and by her indorsed with the authorization of her said husband, dated at New Orleans, March 16, 1877, payable one year after date, bearing interest at eight per cent. per annum from maturity until paid, for ten thousand dollars.' Leon Godchaux was the payee of the note, who, after its maturity, and but a short time before the suit was brought, transferred it to the New Orleans National Bank. The note was secured by a mortgage, executed by Mrs. Fortier, on three squares and six lots of ground in the city of New Orleans, which were her separate property. The bill by which the suit was commenced prayed for an order of seizure and sale of the mortgaged premises, as provided by the Code of Practice of Louisiana. The mortgage was in the ordinary form of mortgages in Louisiana, and was executed in the usual manner before a notary public and competent witnesses. Appended to it was the following certificate:

'The State of Louisiana, Parish of Orleans, City of New     Orleans-Fourth District Court for the Parish of Orleans.

'I, W. T. Houston, judge of the Fourth district court for the parish of Orleans, do hereby certify that on this     fourteenth day of March, 1877, personally came and appeared      before me, at chambers, in the city of New Orleans, Mrs. Celestine Louise Labranche, of lawful age, the wife of     Polycarpe Fortier, of this city, and by virtue of article 127      of the Revised Civil Code of Louisiana, I did then and there      examine the said Mrs. P. Fortier, separate and apart from her      said husband, and she stated that she appeared before me for      the purpose of obtaining the certificate specified in said      article to borrow the sum of ten thousand dollars for her      separate benefit and advantage by mortgaging her separate      property.

'I do further certify that then and there I examined her     touching the object for which the said sum of money was to be      borrowed, and that I have by her declaration, made on oath,      ascertained to my satisfaction that the sum of ten thousand      dollars, which the said Mrs. P. Fortier desires to borrow, is      not for her husband's debts nor for his separate advantage or      the benefit of his separate estate or for the community, but      that the same is solely for her separate advantage, and I      therefore give and sign this certificate in pursuance of said      article, giving my sanction and authority to said Mrs. P.      Fortier, with the authorization of her husband, to      hypothecate or mortgage her separate property for the purpose      of borrowing the said sum of ten thousand dollars.

'Witness my hand and the seal of said court, this fourteenth     day of March, 1877.

W. T. HOUSTON, Judge.'

A writ of seizure and sale having issued as prayed for in the bill, Mrs. Fortier filed her plea and a cross-bill. In the latter she prayed for an injunction to restrain the seizure and sale of the mortgaged premises. The grounds upon which she based her defense to the original bill, and the relief prayed by her cross-bill, were as follows: Admitting that at and before the date of the note and mortgage she was separated in property from her husband, Folycarpe Fortier, she averred that she was possessed in her own right, as of a separate estate, of the property described in the mortgage; that the consideration of the note sued on and secured by the mortgage was in part money lent to her husband by Godchaux, the payee, and in part the payment and satisfaction of a debt due from her husband to Godchaux. To show that Godchaux knew that the money was not borrowed for the separate benefit of Mrs. Fortier, the cross-bill further averred that, before the execution of the mortgage by her, it was agreed between her husband and Godehaux that the loan should be secured by a mortgage on her husband's property; but the titles not proving satisfactory to Godchaux, it was agreed between him and her husband that the mortgage to secure the loan should be placed on her separate property, and that it should be transferred to the property of her husband when his titles were perfected. For the reasons stated, it was averred that the note and mortgage sued on were not binding on her property

There was an answer and demurrer to the cross-bill. The answer denied that the note sued on was given for any other purpose than that expressed in the certificate of the judge appended to the mortgage, and averred that the money raised on the note was all paid to Mrs. Fortier, except the discount, amounting to $1,025, and the sum of $1,200, which was, by her direction, handed to the notary to pay taxes due on the mortgaged premises. The demurrer applied to all those averments of the cross-bill 'tending to show that the said note, and mortgage granted by her,' Mrs. Fortier, 'to secure the same, were not executed for her own use and benefit, in opposition to her sworn declarations made on her examination by the judge of the Fourth district court, and the certificate of the said judge to that effect, and to all those averments in regard to the application made of the money lent by said Godchaux on the faith of said mortgage.' It was shown by the evidence that the mortgage and note were executed in the office of the notary; that Mr. and Mrs. Fortier and Godchaux, the payee of the note and the mortgagee, were present; that upon the execution and delivery of the papers, Godchaux retained from the $10,000, for which the note was given,-First, the discount of 10 per cent. on the face of the note, amounting to $1,025; and, second, the amount of a debt due from Mr. Fortier to him, being the sum of $1,800; that he gave his check to the notary for $1,200, to be applied to the discharge of taxes, etc., which were a lien on the mortgaged premises, and that he paid the residue of the $10,000 by handing to Mrs. Fortier his check on the Union National Bank for $5,975, payable to her order. It was further shown that after Mrs. Fortier received the check, it was deposited by Mr. Fortier, with her indorsement, to his own credit in the Louisiana National Bank, and the deposit was drawn out from time to time thereafter on his checks. The proceeds of the check for $1,200 handed to the notary were applied, after deducting the fees of the notary, to the payment of the taxes, interest, and costs, which were a lien on the mortgaged premises.

Robert Duque, a witness for the defendant, who appeared to be the friend and legal adviser of Mr. Fortier, the husband, testified that the latter, before the execution of the note and mortgage in suit, proposed to Godchaux to borrow of him $10,000, and to secure the same by a mortgage on the Fort Leon plantation, of which he was the owner; that Godchaux declined to make the loan on the security offered on account of some defect in the title, and that the loan was afterwards made on the security of the mortgage in suit, with the agreement between Mr. Fortier and Godchaux that when the former perfected his title to the Fort Leon plantation, the mortgage should be transferred to it, and the property of Mrs. Fortier released therefrom. The testimony of Duque on these points was directly and unequivocally contradicted by the deposition of Godchaux. Godchaux also testified that, before the loan was made to Mrs. Fortier, he went to see the property which was afterwards mortgaged; that he was shown over it by Mrs. Fortier, who told him she wanted to borrow the money to improve the property and pay off the taxes due upon it. This testimony of Godchaux in reference to his inspection of the property and the statements of Mrs. Fortier was not directly contradicted by her, although she was examined as a witness in the case, nor was she questioned by her counsel in reference thereto. She testified that she received no money from Godchaux on the loan made by him, and that she did not receive any money on his check, which she admitted was indorsed by her, and that none of the money loaned was used for her separate benefit. Upon final hearing, the circuit court rendered a decree for the complainant in the original bill for $7,860, with interest thereon from March 16, 1878, and 5 per cent. attorney's fees, having deducted from the amount appearing to be due upon the note of Mrs. Fortier the sum of $2,140, that sum being the amount retained by Godchaux out of the proceeds of the note of Mrs. Fortier for the debt due him by Mr. Fortier, with the interest, etc. The court dismissed the cross-bill with costs. Both parties appealed.

It is first assigned for error by Mrs. Fortier, the original defendant, that, as the bill was filed in the name of 'Albert Baldwin, in his capacity of president of the New Orleans National Bank,' against the defendant, who is alleged to be a citizen of Louisiana, it does not appear that the parties were citizens of different states, and, as no other ground of jurisdiction is averred, the circuit court does not appear to have had jurisdiction of the case. If Baldwin was, in fact, the complainant, there was no ground stated in the petition upon which the jurisdiction of the circuit court could rest, and the objection to the jurisdiction could be made at any time. But the counsel for the bank insists that the bank, and not Baldwin, was the complainant. The question is, therefore, how is the bill to be construed?

It is clear, upon an inspection of the whole record, that the suit was treated by both parties and by the circuit court as the suit of the New Orleans National Bank and not of Albert Baldwin. Every pleading in the case, including the answer and cross-bill filed by the defendant, and every order and decree made by the court, was entitled 'The New Orleans National Bank v. C. L. Fortier.' In the appeal bond given by the defendant the case was described in the same manner. The cause of action set out in the petition was the cause of action of the bank. The plea of the defendant to the original bill treated the bank as the complainant by averring that 'the said bank is not the holder of the note for value, and that the note was sued on in the name of the bank merely to give the court jurisdiction. The answer to the cross-bill was styled the answer of the New Orleans National Bank. It averred that the bank was the holder of the note and mortgage sued on, and that the bill was intended to be, and was, the bill of complaint of the bank and not of Baldwin. There was no replication to this answer. It is plain, therefore, that the defendant carried on the litigation on the theory that the bank was the complainant, and the cause was entertained and decided by the circuit court on the same assumption. We must adhere to the construction of the bill asserted by the bank and acquiesced in by the defendant. The defendant having herself so construed and treated the bill, will not be allowed on final hearing, in order to defeat the jurisdiction, to assert, for the first time, that Baldwin, and not the bank, was the complainant. It follows that the objection to the jurisdiction is not well taken.

We now come to the merits of the case. The contention of the counsel for complainant is that Mrs. Fortier, having by the authorization of her husband and of the judge of the Fourth district court, evidenced by his certificate, been empowered to borrow the money sued for to be used for her separate benefit and advantage, and to mortgage her separate property therefor, is concluded by the certificate of the judge, and cannot be heard to deny that the money was borrowed for her own use, or to assert that it was borrowed to pay her husband's debts, or for his separate advantage. On the other hand, the counsel for the defendant insist that the money was in fact borrowed by Mrs. Fortier for the use of and to pay the debts of her husband, which Godchaux, the payee of the note, well knew, and that the money borrowed was so applied by the husband, and that she is not precluded by the certificate of the judge from showing these facts, and that, being shown, they are a defense to the suit.

By article 2412, Civil Code La. 1825, it was provided as follows: 'The wife, whether separated in property by contract or by judgment, or not separated, cannot bind herself for her husband, nor conjointly with him, for debts contracted by him before or during the marriage.' This article is now article 2398 of the Civil Code of 1870. The supreme court of Louisiana, construing it, has repeatedly decided that a debt contracted by a married woman, whether separated in property from her husband or not, could not be enforced against her unless the creditor established affirmatively that the debt inured to her separate benefit. Dranguet v. Prudhomme, 3 La. 74; Pascal v. Sauvinet, 1 La. Ann. 428; Erwin v. McCalop, 5 La. Ann. 173; Brandegee v. Kerr, 7 Mart. (N.S.) 64; Beauregard v. Her Husband, 7 La. Ann. 294; Moussier v. Zunts, 14 La. Ann. 15. In the case last cited the court say: 'It is a principle that has come down to us from the laws of Spain, that he who contracts with a married woman must show affirmatively that the contract inured to her advantage. The exception was when the wife renounced the sixty-first Law of Toro, but this exception no longer exists.'

This article, thus construed, still continues to be the law of Louisiana, except as modified by the act of 1855, which now constitutes articles 126, 127, and 128 of the Revised Code of 1870. They are as follows: 'Art. 126. A married woman over the age of twenty-one years may, by and with the authorization of her husband, and with the sanction of the judge, borrow money or contract debts for her separate benefit and advantage, and to secure the same grant mortgages or other securities affecting her separate estate, paraphernal or dotal. Art. 127. In carrying out the power to borrow money or contract debts, the wife, in order to bind herself or her paraphernal or dotal property, must, according to the amount involved, be examined at chambers by the judge of the district or parish in which she resides, separate and apart from her husband, touching the objects for which the money is to be borrowed or debt contracted; and if he shall ascertain either the one or the other are for her husband's debts, or for his separate benefit or advantage, or for the benefit of his separate estate or of the community, the said judge shall not give his sanction authorizing the wife to perform the acts or incur the liabilities set forth in article 126. Art. 128. If the wife shall satisfy the judge that the money about to be borrowed or debt contracted is solely for her separate advantage, or for the benefit of her paraphernal or dotal property, then the judge shall furnish her with a certificate setting forth his having made such examination of the wife as is required by article 127, which certificate, on presentation to a notary, shall be his authority for drawing an act of mortgage or other act which may be required for the security of the debt contracted, and shall be annexed to the act, which act, when executed as herein prescribed, shall furnish full proof against her and her heirs, and be as binding in law and equity in all the courts of this state and have the same effect as if made by a feme sole.'

The effect of these articles is simply to establish a new rule of evidence in cases of loans of money made to married women. The cases in which they have been construed by the supreme court of Louisiana show clearly that the contention of the complainant, that the certificate of the judge is conclusive evidence of the fact that the money lent to a married woman was for her sole benefit, and that she will not be allowed to contradict it, cannot be sustained. The construction put upon these articles is that the effect of the authorization and certificate of the judge was to relieve the creditor from the burden of proving that the money lent by him to the wife inured to her benefit, and to cast the burden on the wife to prove that it did not. Bank v. Barrow, 21 La. Ann. 398. In the case of Barth v. Kasa, 30 La. Ann. 940, it was held that prior to the act of 1855 the burden of proof to bind the wife was on the creditor, but that under that act, when the judge's authorization had been obtained, the burden of proof rested on the wife to show that she was not bound. In Claverie v. Gerodias, 30 La. Ann. 291, the plaintiff holding the note of Gerodias, a married woman, secured by mortgage on her paraphernal property, executed by the authorization of the judge, took out executory process thereon. Mrs. Gerodias filed an opposition thereto, on the ground, among others, that her note and mortgage were given for the purpose of securing the debt of the husband to Claverie. The latter admitted that the note was executed by Mrs. Gerodias to enable her husband to obtain the means of carrying on his trade, 'and was given by him to the respondent [Claverie] for that purpose, to the knowledge of his wife.' Upon these facts the court said: 'The law forbids the wife to become security of her husband, or to bind herself or property for his debts. Her note for such a purpose, in the hands of the husband's creditor, who takes it knowingly, is utterly void. The act of 1855 (now articles 126, 127, 128, Civil Code) has no application to such a case as is here presented.' And the court affirmed the judgment of the lower court, which decreed the nullity of the mortgage, the erasure of its inscription, and directed the surrender of her note to Mrs. Gerodias, notwithstanding the fact that the note and mortgage had been executed by virtue of the authorization and certificate of the judge, as provided in the act of 1855. In Barth v. Kasa, ubi supra, it was held that when a married woman has, even under the authorization of the judge, executed her note and mortgage on her separate property to secure it, she may show, by way of defense thereto, that she gave the note and mortgage for the debt of her husband, being induced thereto by her husband and the creditor. So in Hall v. Wyche, 31 La. Ann. 734, it was held that the authorization of a judge to a married woman to borrow money, and execute a mortgage to secure its repayment, does not preclude her from proving that, with the knowledge of the creditor the mortgage was given to secure an antecedent debt of the husband due to him. These cases show conclusively that the contention of counsel for the complainant cannot be maintained.

On the other hand, it does not follow that because the money borrowed by the wife with the authorization of the judge was used to pay her husband's debts, the note and mortgage given therefor are void and cannot be enforced. To make such a defense good it must be shown that the creditor knew when he made the loan that the money was not to be used for the separate benefit or advantage of the wife; for the lender, having in good faith paid the money to the wife, or to another by her direction, is not bound, since the passage of the act of 1855, to see that it is used for her benefit. It has been so held by the supreme court of Louisiana. In McClellan v. Dane, 32 La. Ann. 1197, the defendant was a married woman, who had executed by the authorization of the judge the note and mortgage sued on. She alleged by way of defense that the note and mortgage were obtained from her through the influence of her husband, who received the money for which the note and mortgage were given, and that, therefore, as to her they were without consideration. In support of her defense Mrs. Dane offered evidence tending to show that the money borrowed was subsequently received by her husband, and by him used for his own purposes. This evidence was admitted by the court below, and its admission was declared by the supreme court to be error. In giving judgment the court said: 'The check representing the borrowed money was delivered to the wife, who indorsed the same and received the money which it called for, and to require more from the lender in such cases would be to defeat the very object of the law. * *  * Our jurisprudence is firmly settled on this question, and it is unnecessary to quote authorities in support of the proposition that, in the absence of any allegation of fraud against the creditor himself, married women are bound, as all other persons, by their contracts and mortgages, executed under proper authorization, as required by the law of 1855, (Civil Code, 127, 128,) and cannot be allowed by parol testimony to attempt to disprove the certificate of the judge and their own authentic declarations in acts of mortgage. Nor will the law authorize the inquiry into the subsequent disposition made of the funds borrowed by married women when properly authorized thereto. The law does not and cannot confer upon the lender in such circumstances the power and authority to watch over and control the acts of the married woman who has borrowed money from him, so as to prevent the improper use of the same.' In the still later case of Dougherty v. Insurance Co. 35 La. Ann. 629. the supreme court of Louisiana said: 'Objections founded on the irregularity of the proceedings before the judge, and on the use made of the money and the like, in the absence of fraud or complicity on the part of the lender, have no force. The jurisprudence is now well settled that in such case the lender is not bound to look behind the judge's certificate, and is not concerned as to the actual use of the money after it is paid to the wife or according to her direction.' See, also, Pilcher v. Pugh, 28 La. Ann. 494, and Henry v. Gauthreaux, 32 La. Ann. 1103.

The result of these authorities, succinctly stated, is that since the act of 1855, when a married woman, with the authorization of her husband, and the sanction and certificate of the judge, borrows money, the creditor is not bound to show that the money was used for her separate benefit and advantage, but the debt may be enforced against her, and her separate property mortgaged to secure it, unless she shows that, with the knowledge or connivance of the lender, the money was borrowed and used, not for her separate benefit, but for that of her husband. This conclusion supports the decree of the circuit court. When Godchaux deducted and retained out of the money loaned on the note and mortgage of Mrs. Fortier, the sum of $1,800 to pay a debt due to herself from her husband, and paid over to her, or by her direction only, the residue, he was acting, so far as the sum just mentioned is concerned, in complicity with the husband and in fraud of the law, and he cannot shield himself under the authorization of the judge. This sum, with the interest thereon, was properly deducted from the amount due on the note and mortgage. The $1,200 paid by Godchaux to the notary, by the direction of Mrs. Fortier, to clear off taxes, with the interest and costs, which were a lien upon that property mortgaged by her, was applied for her separate benefit and advantage, and she cannot escape liability for it. As to the $5,975, the residue of the loan, we are of the opinion that the defendant has not made it appear affirmatively by preponderance of proof, as she was bound to do, that the money was borrowed by her with the knowledge or connivance of Godchaux to pay off the debts, or for the use of her husband. Godchaux, therefore, having handed to the defendant a check, payable to her own order, for the residue of the loan, his duty ceased. Under the act of 1855 he was not, as we have seen, bound at his peril to take care that she applied the money to her own separate benefit and advantage. So far, therefore, as the defense to the enforcement of the money paid by the check rested in the averment that the money borrowed of Godchaux was with his complicity borrowed for the use of the husband, and not for the separate advantage of the wife, it must fail.

Complaint is made in behalf of Mr. Fortier that the court erred in enforcing by its decree a loan of money made by a national bank on the security of a mortgage; the contention being that the loan on such a security was unauthorized by the national banking act, and was therefore void. In the cases of National Bank v. Matthews, 98 U.S. 621, and National Bank v. Whitney, 103 U.S. 99, this point is expressly decided against the contention of the defendant, and in the latter case it was also held that an objection to the taking by the bank of a mortgage lien as security for future advances could only be made by the United States.

It follows from the views we have expressed that the decree of the circuit court was right, and should be affirmed; and it is so ordered.


text: Talk:Fortier v. New Orleans National Bank New Orleans National Bank/Opinion of the Court


text:
Lamar v. Micou (112 U.S. 452)

E. N. Dickerson, for appellant.

S. P. Nash and ''Geo. C. Holt'', for appellee.

This is an appeal by the executor of a guardian from a decree against him upon a bill in equity filed by the administratrix of his ward. The original bill, filed on July 1, 1875, by Ann C. Sims, a citizen of Alabama, as administratrix of Martha M. Sims, in the supreme court of the state of New York, alleged that on December 11, 1855, the defendant's testator, Gazaway B. Lamar, was duly appointed, by the surrogate of the county of Richmond, in that state, guardian of the person and estate of Martha M. Sims, an infant of six years of age, then a resident of that county, and gave bond as such, and took into his possession and control all her property, being more than $5,000; that on October 5, 1874, he died in New York, and on November 10, 1874, his will was there admitted to probate, and the defendant, a citizen of New York, was appointed his executor; and that he and his executor had neglected to render any account of his guardianship to the surrogate of Richmond county, or to any court having cognizance thereof, or to the ward or her administratrix; and prayed for an account, and for judgment for the amount found to be due.

The defendant removed the case into the circuit court of the United States for the Southern district of New York, and there filed an answer, averring that in 1855, when Lamar was appointed guardian of Martha M. Sims, he was a citizen of Georgia, and she was a citizen of Alabama, having a temporary residence in the city of New York; that in the spring of 1861 the states of Georgia and Alabama declared themselves to have seceded from the United States, and to constitute members of the so-called Confederate states of America, whereupon a state of war arose between the United States and the Confederate states, which continued to be flagrant for more than four years after; that Lamar and Martha M. Sims were in the spring of 1861 citizens and residents of the states of Georgia and Alabama, respectively, and citizens of the Confederate states, and were engaged in aiding and abetting the state of Georgia and the so-called Confederate states in their rebellion against the United States, and she continued to aid and abet until the time of her death, and he continued to aid and abet till January, 1865, that the United States, by various public acts, declared all his and her property, of any kind, to be liable to seizure and confiscation by the United States, and they both were, by the various acts of congress of the United States, outlawed and debarred of any access to any court of the United States, whereby it was impossible for Lamar to appear in the surrogate's court of Richmond county to settle and close his accounts there, and to be discharged from his liability as guardian, in consequence whereof the relation of guardian and ward, so far as it depended upon the orders of that court, ceased and determined; that, for the purpose of saving the ward's property from seizure and confiscation by the United States, Lamar, at the request of the ward and of her natural guardians, all citizens of the state of Alabama, withdrew the funds belonging to her from the city of New York, and invested them for her benefit and account in such securities as by the laws of the states of Alabama and Georgia and of the Confederate states he might lawfully do; that in 1864, upon the death of Martha M. Sims, all her property vested in her sister, Ann C. Sims, as her next of kin, and any accounting of Lamar for that property was to be made to her; that on March 15, 1867, at the written request of Ann C. Sims and of her natural guardians, Benjamin H. Micou was appointed her legal guardian by the probate court of Montgomery county, in the state of Alabama, which was at that time her residence, and Lamar thereupon accounted for the paid over all property with which he was chargeable as guardian of Martha M. Sims, to Micou as her guardian, and received from him a full release therefor; and that Ann C. Sims, when she became of age, ratified and confirmed the same. To that answer the plaintiff filed a general replication.

The case was set down for hearing in the circuit court upon the bill, answer and replication, and a statement of facts agreed by the parties, in substance as follows: On November 23, 1850, William W. Sims, a citizen of Georgia, died at Savannah, in that state, leaving a widow, who was appointed his administratrix, and two infant daughters, Martha M. Sims, born at Savannah on September 8, 1849, and Ann C. Sims, born in Florida on June 1, 1851. In 1853 the widow married the Rev. Richard M. Abercrombie, of Clifton, in the county of Richmond and state of New York. On December 11, 1855, on the petition of Mrs. Abercrombie, Gazaway B. Lamar, an uncle of Mr. Sims, and then residing at Brooklyn, in the state of New York, was appointed by the surrogate of Richmond county guardian of the person and estate of each child 'until she shall arrive at the age of fourteen years, and until another guardian shall be appointed;' and gave bond to her, with sureties, 'to faithfully in all things discharge the duty of a guardian to the said minor according to law, and render a true and just account of all moneys and other property received by him, and of the application thereof, and of his guardianship in all respects, to any court having cognizance thereof;' and he immediately received from Mrs. Abercrombie in money $5,166.89 belonging to each ward, and invested part of it, in January and April, 1856, in stock of the Bank of the Republic, at New York, and part of it, in March and July, 1857, in stock of the Bank of Commerce, at Savannah, each of which was then paying, and continued to pay until April, 1861, good dividends annually, the one of 10 and the other of 8 per cent.

In 1856, several months after Lamar's appointment as guardian, Mr. and Mrs. Abercrombie removed from Clifton, in the state of New York, to Hartford, in the state of Connecticut, and there resided till her death, in the spring of 1859. The children lived with Mr. and Mrs. Abercrombie, Lamar as guardian paying Mr. Abercrombie for their board, at Clifton and at Hartford, from the marriage until her death; and were then removed to Augusta, in the state of Georgia, and there lived with their paternal grandmother and her unmarried daughter and only living child, their aunt; Lamar as guardian continuing to pay their board. After 1856 neither of the children ever resided in the state of New York. On January 18, 1860, their aunt was married to Benjamin H. Micou, of Montgomery, in the state of Alabama, and the children and their grandmother thereafter lived with Mr. and Mrs. Micou at Montgomery, and the children were educated and supported at Mr. Micou's expense. From 1855 to 1859 Lamar resided partly in Georgia and partly in New York. In the spring of 1861 he had a temporary residence in the city of New York, and upon the breaking out of the war of the rebellion, and after removing all his own property, left New York, and passed through the lines to Savannah, and there resided, sympathizing with the rebellion, and doing what he could to accomplish its success, until January, 1865, and continued to have his residence in Savannah until 1872 or 1873, when he went to New York again, and afterwards lived there. Mr. and Mrs. Micou also sympathized with the rebellion and desired its success, and each of them, as well as Lamar, failed during the rebellion to bear true allegiance to the United States.

At the time of Lamar's appointment as guardian, 10 shares in the stock of the Mechanics' Bank of Augusta, in the state of Georgia, which had belonged to William W. Sims in his life-time, stood on the books of the bank in the name of Mrs. Abercrombie as his administratrix, of which one-third belonged to her as his widow, and one-third to each of the infants. In January, 1856, the bank refused a request of Lamar to transfer one-third of that stock to him as guardian of each infant, but afterwards paid to him as guardian, from time to time, two-thirds of the dividends during the life of Mrs. Abercrombie, and all the dividends after her death until 1865. During the period last named, he also received as guardian the dividends on some other bank stock is Savannah, which Mrs. Abercrombie owned, and to which, on her death, her husband became entitled. Certain facts, relied on as showing that he, immediately after his wife's death, made a surrender of her interest in the bank shares to Lamar, as guardian of her children, are not material to the understanding of the decision of this court, but are recapitulated in the opinion of the circuit court. 7 Fed. Rep. 180-185.

In the winter of 1861-62, Lamar, fearing that the stock in the Bank of the Republic at New York, held by him as guardian, would be confiscated by the United States, had it sold by a friend in New York; the proceeds of the sale, which were about 20 per cent. less than the par value of the stock, invested at New York in guarantied bonds of the cities of New Orleans, Memphis, and Mobile, and of the East Tennessee & Georgia Railroad Company; and those bonds deposited in a bank in Canada.

Lamar from time to time invested the property of his wards, that was within the so-called Confederate states, in whatever seemed to him to be the most secure and safe-some in Confederate states bonds, some in the bonds of the individual states which composed the confederacy, and some in bonds of cities, and of railroad corporations, and stock of banks within those states.

On the money of his wards, accruing from dividends on bank stock, and remaining in his hands, he charged himself with interest until the summer of 1862, when, with the advice and aid of Mr. Micou, he invested $7,000 of such money in bonds of the Confederate states and of the state of Alabama; and in 1863, with the like advice and aid, sold the Alabama bonds for more than he had paid for them, and invested the proceeds also in Confederate states bonds; charged his wards with the money paid, and credited them with the bonds; and placed the bonds in the hands of their grandmother, who gave him a receipt for them and held them till the end of the rebellion, when they, as well as the stock in the banks at Savannah, became worthless.

Martha M. Sims died on November 2, 1864, at the age of 15 years, unmarried and intestate, leaving her sister Ann C. Sims her next of kin. On January 12, 1867, Lamar, in answer to letters of inquiry from Mr. and Mrs. Micou, wrote to Mrs. Micou that he had saved from the wreek of the property of his niece, Ann C. Sims, surviving her sister, three bonds of the city of Memphis, indorsed by the state of Tennessee, one bond of the city of Mobile, and one bond of the East Tennessee & Georgia Railroad Company, each for $1,000, and with some coupons past due and uncollected; and suggested that by reason of his age and failing health, and of the embarrassed state of his own affairs, Mr. Micou should be appointed in Alabama guardian in his stead. Upon the receipt of this letter, Mrs. Micou wrote to Lamar, thanking him for the explicit statement of the niece's affairs, and for the care and trouble he had had with her property; and Ann C, Sims, then nearly 16 years old, signed a request, attested by her grandmother and by Mrs. Micou, that her guardianship might be transferred to Mr. Micou, and that he might be appointed her guardian. And on March 15, 1867, he was appointed guardian of her property by the probate court of the county of Montgomery and state of Alabama, according to the laws of that state, and gave bond as such. Of May 14, 1867, Lamar sent to Micou complete and correct statements of his guardianship account with each of his wards, as well as all the securities remaining in his hands as guardian of either, and a check payable to Micou as guardian of Ann C. Sims for a balance in money due her; and Micou, as such guardian, signed and sent to Lamar a schedule of and receipt for the property, describing it specifically, by which it appeared that the bonds of the cities of New Orleans and Memphis, and of the East Tennessee & Georgia Railroad Company, were issued, and the Memphis bonds, as well as the railroad bonds, were indorsed by the state of Tennessee, some years before the breaking out of the rebellion. Micou thenceforth continued to act in all respects as the only guardian of Ann C. Sims until she became of age on June 1, 1872.

No objection or complaint was ever made by either of the wards or their relatives against Lamar's transactions or investments as guardian until July 28, 1874, when Micou wrote to Lamar informing him that Ann C. Sims desired a settlement of his accounts, and that he had been advised that no credits could be allowed for the investments in Confederate states bonds, and that Lamar was responsible for the security of the investments in other bonds and bank stock. Lamar was then sick in New York, and died there on October 5, 1874, without having answered the letter. Before the case was heard in the circuit court, Ann C. Sims died, on May 7, 1878, and on June 20, 1878, Mrs. Micou was appointed, in New York, administratrix de bonis non of Martha M. Sims, and as such filed a bill of revivor in this suit. On October 3, 1878, the defendant filed a cross-bill, repeating the allegations of his answer to the original bill, and further averring that Ann C. Sims left a will which had been admitted to probate in Montgomery county, in the state of Alabama, and afterwards in the county and state of New York, by which she gave all her property to Mrs. Micou, who was her next of kin, and that Mrs. Micou was entitled to receive for her own benefit whatever might be recovered in the principal suit, and was estopped to deny the lawfulness or propriety of Lamar's acts, because whatever was done by him as guardian of Martha M. Sims in her life-time, or as guardian of the interests of Ann C. Sims as her next of kin, was authorized and approved by Mrs. Micou and her mother and husband as the natural guardians of both children. Mrs. Micou, as plaintiff in the bill of revivor, answered the cross-bill, alleging that Ann succeeded to Martha's property as her administratrix, and not as her next of kin, admitting Ann's will and the probate thereof, denying that Mrs. Micou was a natural guardian of the children, and denying that she approved or ratified Lamar's acts as guardian. A general replication was filed to that answer.

Upon a hearing on the pleadings and the agreed statement of facts, the circuit court dismissed the cross-bill, held all Lamar's investments to have been breaches of trust, and entered a decree referring the case to a master to state an account. The case was afterwards heard on exceptions to the master's report, and a final decree entered for the plaintiff for $18,705.19, including the value before 1861 of those bank stocks in Georgia of which Lamar had never had possession. The opinion delivered upon the first hearing is reported in 17 Blatchf. 378, and in 1 Fed. Rep. 14, and the opinion upon the second hearing in 7 Fed. Rep. 180. The defendant appealed to this court.

[Argument of Counsel from pages 460-463 intentionally omitted]

GRAY, J.

title: Lamar v. Micou (112 U.S. 452)


text: Talk:Lamar v. Micou (112 U.S. 452)

title: Talk:Lamar v. Micou (112 U.S. 452)