Nalle v. Young - 160 U.S. 624 (1896)
U.S. Supreme Court
Nalle v. Young, 160 U.S. 624 (1896)
Nalle v. Young
Submitted October 15, 1895
Decided January 20. 1896
160 U.S. 624
In 1868, Y., a citizen of Louisiana, being then married, mortgaged his interest in certain real estate in that state to E. H., his wife joining in the mortgage. In 1870, the father of Mrs. Y. died, leaving a policy of insurance in her favor. Y. collected this sum and converted it to his own use and the use of the community. In 1876, by a transaction between Y. and the residuary legatee of E. H., who was also indebted to Y., her said indebtedness was discharged, and Y.'s interest in that mortgage was assigned to Mrs. Y. in replacement of her paraphernal moneys and property, so secured and converted by her husband. In 1881, Mrs. Y. became entitled to a further sum on the final settlement of her father's estate, which was in like manner received by Y. and converted to his own use and that of the community. In 1881, on the petition of Mrs. Y., filed in 1881 in a suit against her husband for a dissolution of the community and a separation of property, a decree to that effect was made by the
state court, and it was farther adjudged and decreed that Y. was indebted to Mrs. Y. in the sums so received by him from her father's estate, with recognition of mortgage on the property described, and the property be sold to satisfy said judgment and costs. In 1882, in order to enable Y. to borrow from N. & Co., Mrs. Y. executed a mandate and power of attorney, authorizing the cancelling and erasure of the mortgage to E. H. What was done under that power was afterwards claimed by Y. and by Mrs. Y. not to amount to such cancellation, and by N. & Co. to be effective. A mortgage to N. & Co. was then executed by
Y., and the inscription of Mrs. Y.'s mortgage was then renewed. In 1883, N. & Co. commenced proceedings to foreclose their mortgage (Mrs. Y. not being made a party to the suit) and obtained a decree of foreclosure in 1886. The property was duly appraised according to the law of Louisiana, and at the sale, no sufficient bid was made. It was then advertised for sale on a credit of twelve months. In 1887, Y. notified the marshal that Mrs. Y. had an encumbrance on the property prior to the mortgage to N. & Co. (stating the amount of it), and that a sale for less than that amount would be invalid. Notwithstanding this notice, a sale was made for a less sum. This sale was attacked by Y. and Mrs. Y. by various proceedings set forth in the opinion of the Court, which resulted in a decree setting aside the sale, and adjudging that the attempted renunciation by Mrs. Y. of her special mortgage was invalid, and that that mortgage should be recognized as the first mortgage on the property, superior in rank to the mortgage of N. & Co.
(1) That Mrs. Y. must stand upon her legal mortgage, resulting from the receipt of her paraphernal property and recognized by the judgment of 1881, decreeing a separation of property, or upon a judicial mortgage arising from that judgment, or on the contract between herself and the residuary legatee of E. H.
(2) That if her mortgage be held to be legal or judicial, its existence was not a bar to the confirmation of a sale for an amount insufficient to satisfy it, and that it could not rank the special conventional mortgage of N. & Co.
(3) That by the transaction between the residuary legatee of E. H. and Mrs. Y., the respective debts were discharged by agreement and compensated each other, and when the principal obligation was thus discharged, the mortgage fell with it, and would not be revived, although the indebtedness were reacknowledged.
(4) That the decree below should be reversed.
Edward Nalle & Co., composed of Edward Nalle and Walter C. Flower, doing business in the City of New Orleans, filed their petition in the District Court for the Ninth district of Louisiana, holding sessions in and for the Parish of Tensas, on May 30, 1883, against Wade R. Young, to foreclose a mortgage, executed on June 2, 1882, to secure Young's note
for $1,632.61, payable December 1, 1882, on his interest in certain real estate in that parish known as the "St. Peter Plantation." The petition alleged "That said Wade R. Young resides permanently out of the State of Louisiana, and is not represented in this state," and prayed for the appointment of a curator ad hoc. The appointment of a curator was made, and citation served upon him. On June 25, 1883, Wade R. Young filed his answer to the petition, wherein he described himself as "a resident and citizen of the State of Mississippi," and on the same day filed his petition for the removal of the cause, accompanied by a removal bond, and June 28th, the district court entered an order transferring the case to the United States Circuit Court for the Western District of Louisiana, which was done accordingly. Plaintiffs thereupon prayed in that court that their petition be allowed to stand as a bill in equity, and, October 12, 1883, the defendant Young filed his answer thereto, admitting the execution of the note and mortgage, but alleging in substance that he had been compelled to pay usurious interest; that the account current between the parties was composed of excessive and objectionable charges; that plaintiffs failed to carry out their agreement and understanding with him, and that, upon a proper taking of accounts, there was nothing or but little due.
In addition to his answer, to which a replication was filed, defendant made a reconventional demand on which, upon a trial thereof, judgment passed against him. November 11, 1884, the cause was revived as to the heirs of Edward Nalle, who had deceased, and they entered their appearance March 24, 1885.
Proofs were taken, and the cause was referred to a master to state an account, who made a report of the amount due to Nalle & Co., less a specified credit. The cause coming on to be heard on the pleadings and proofs, and oral testimony then adduced, a decree was entered November 6, 1886,
"that plaintiff's mortgage on the property described in the act of mortgage annexed to the bill of complaint herein, viz., [here follows description], the said interest of Wade R. Young in the above lands having been ascertained by a survey made by
John Johnson, surveyor, on the 15th of March, 1879, be, and the same is, hereby, recognized, and ordered to be enforced to satisfy the sum of one thousand six hundred and thirty-two 61/100 dollars, with 8 percent per annum interest thereon from the 1st day of December, 1892, until paid, subject to the credit aforesaid, and also for the payment of the attorney's fees stipulated by said act of mortgage, being 5 percent on said amount, and the costs of this suit, to be taxed."
An execution was thereupon issued, and the mortgaged premises seized and sold by the marshal, July 30, 1887, to Mrs. Mary Nalle, wife of Eustis F. Golson.
October 12, 1887, Mrs. B. F. Young, wife of Wade R. Young, on motion of her husband as her solicitor, was allowed to file "her bill and intervening petition, by her husband and next friend," against Nalle & Co., in which she averred that she was married to Wade R. Young in October, 1865, and resided with him continually in the State of Louisiana until the month of February, 1876; that in the year 1870, her father died in the Parish of Catahoula, Louisiana, and left her a policy of insurance on his life for the sum of $5,000, which was collected by her husband for her, and by him converted to his own use, and to the use of the community existing between them; that her father also left a large estate, consisting of property, real and personal, which was sold at probate sale in 1881, and her interest therein, amounting to $2,500, adjudicated to her husband for his own sole use, benefit, and advantage, and for that of the community existing between them, and that her husband had so received the paraphernal moneys and property of complainant in the sum of $7,500, which had been converted by him to his own use, and that of the community, and was now legally due complainant by her husband.
The petition further alleged that, by an act of mortgage in 1868 by Margaret A. Young, William C. Young, and Wade R. Young, as joint owners, St. Peter plantation was mortgaged to Miss Eliza H. Young, to secure their joint and several note for $11,250, with interest at eight percent, from January 1, 1867, and averred that, in the year 1876, by a transaction between her husband and Mrs. S. J. Metcalfe, as
sole surviving residuary legatee of Miss Eliza H. Young, and complainant, an undivided four-ninths of that note and mortgage, being the individual indebtedness of her husband thereon, was assigned to her by Mrs. Metcalfe by express warranty; that a new note was then made and delivered to her, and accepted by her in replacement of her paraphernal moneys and property so secured and converted by her husband. It was further averred that in 1881, complainant brought suit against her husband for a dissolution of the community and a separation of property in the Ninth District Court in the Parish or Tensas, and obtained judgment therein on the ___ day of _____, for said sum of $7,500 and interest, with a recognition of her mortgage on the property described, and a decree dissolving the community of acquets and gains between them; that in 1882, her husband desiring to execute a mortgage on the property in favor of Nalle & Co. to secure advances of money and supplies to enable him to carry on certain planting operations at the request of Nalle & Co., applied to complainant to renounce her prior right of mortgage in favor of Nalle & Co. by authorizing the cancelling and erasure of the inscription of the mortgage transferred to her by Mrs. Metcalfe so as to give Nalle & Co. the first mortgage; that Nalle & Co. refused to make any advances until given priority of rank; that for that purpose complainant executed a mandate and power of attorney authorizing the cancelling and erasure of her mortgage, and "upon such authority, the said mortgage was attempted to be cancelled;" that the mortgage to Nalle & Co. was then executed by her husband, and that the inscription of her mortgage was then renewed. Petitioner then alleged that at the October term, 1886, a decree was rendered at the suit of Nalle & Co., against her husband for the foreclosure of their mortgage, the amount of indebtedness fixed, and the sale of the property ordered; that final process was issued in execution of that decree, and in obedience thereto, the marshal advertised the property for sale for cash on Saturday, July 2, 1887; that on that day the property was appraised, according to the requirements of the Louisiana law, and offered to the highest bidder for cash at not less than two-thirds
of the appraised value, which had been placed at the sum of $6,000, and, no bid having been made, was advertised for sale on a credit of twelve months; that on July 30, 1887, her husband, as defendant, served notice and protest on the marshal of the prior encumbrance in favor of complainant for $7,500 and interest, and that any sale for a price less than the amount of such prior encumbrance would be invalid; that, notwithstanding the notice and protest, the marshal, acting under the
direction of Nalle & Co.'s solicitor, accepted the bid of one of them for $2,000. Complainant charged that her attempted renunciation of her rights authorizing the erasure of her mortgage was of no effect under the laws of Louisiana, and set forth the grounds on which that charge was based; that her mortgage was the first encumbrance, and superior to the mortgage in favor of Nalle & Co.; that no sale could be made to a purchaser for less than the amount of such mortgage, and that the attempted sale was absolutely null and void. It was further averred that Nalle & Co. pretended to have paid the taxes on the mortgaged property for the years 1882, 1883, 1884, 1885, and 1886, amounting to the sum of $624.60, and to have become subrogated by such payments to the privilege of mortgage existing in favor of the state and parish, and claimed a priority of lien on the mortgaged premises in consequence of such payment and subrogation; that no such taxes were legally due on the mortgaged property, and that Nalle & Co. and Mrs. Mary Nalle acquired no right by such payment and attempted subrogation. The petition then charged that the revenue acts of Louisiana for 1880, 1882, 1884, and 1886, in pursuance of which these taxes were levied, were unconstitutional and void as repugnant to the state constitution. It was further alleged that, notwithstanding complainant had a first and prior encumbrance for $7,500 and interest, Nalle & Co. did not make complainant a party to the foreclosure proceedings, according to the practice of the circuit court as a court of equity, and had caused the proceedings to be brought in disregard of complainant's rights, and had endeavored to have the mortgaged property sold and adjudicated to one of themselves for a low price, etc.; that if the
renunciation of complainant was invalid, as charged, no valid sale could be made for a price not exceeding the amount of the prior mortgage, and the attempted sale would be null and void; that if the renunciation, for any reason not known to the complainant, was valid and binding, complainant was entitled to redeem by paying the amount of the prior encumbrances, if any such there might be, and that, for the purpose of securing equitable protection, it had become necessary for complainant to intervene in the foreclosure suit and to oppose the confirmation of the sale, in order that a reference might be made to determine the priority of liens and adjust all conflicting claims.
Petitioner therefore prayed to be allowed to file this intervention pro interesse suo, and that Nalle & Co. (that is, Flower and the heirs of Nalle) be summoned to answer by writ of subpoena served on their solicitor; that the sale of the mortgaged premises by the marshal on July 30, 1887, be not confirmed, but be set aside; that a reference be made to have the priority of liens determined, and all conflicting claims adjusted; that a valid title be assured to the purchaser, and a sale made for the best interests of all concerned; that the attempted renunciation of her mortgage in favor of Nalle & Co. be declared null and void, and her mortgage recognized as the first and superior encumbrance on the property; that the revenue acts of Louisiana for 1880, 1882, 1884, and 1886 be declared unconstitutional, null and void; that the taxes levied in pursuance thereof be declared of no effect, and for general relief. This intervention was not sworn to, and was signed "Wade R. Young, Solicitor." On the 24th of October, 1887, Mrs. Young and her husband prayed to amend their original petition by alleging that although Young removed, with his family, from Louisiana to Mississippi in 1876, he did not at that time establish a residence in Mississippi, and that it was not until January, 1883, that he abandoned finally his intention to return to Louisiana, renounced his residence and citizenship there, and declared himself a citizen of Mississippi, with the intention of remaining permanently.
The copy attached to the intervening petition showed an
act of mortgage, March 18, 1868, by Wade R. Young, William C. Young, and Margaret A. Young, of the Parish of Tensas, to Miss Eliza H. Young, to secure their certain promissory note for $11,250, payable, with interest at eight percent, one year after date, on the property in question, being part of Lake St. Peter's plantation, with a confession of judgment, Mrs. B. F. Liddell, wife of Wade R. Young, and Mrs. Willie T. Evans, wife of William C. Young, ratifying said act of mortgage and renouncing all their rights in the property therein mortgaged, upon due examination, separate and apart from their husbands, and an acceptance by Eliza H. Young. Upon the record of this mortgage in the Parish of Tensas appeared the cancellation of five-ninths thereof, being the indebtedness of W. C. Young, one of the mortgagors, and special legatee for M. A. Young, deceased, leaving four-ninths of the indebtedness of Wade R. Young, for himself, and as special legatee for M. A. Young, deceased, still unpaid; also, the cancellation and erasure of the mortgage, to the extent of the remaining four-ninths, on the 5th of June, 1882, under a power of attorney signed by Wade R. Young and his wife, Mrs. B. F. Young, whereby Charles Young, of the Parish of Tensas, was constituted and appointed attorney in fact with full and complete power, in the name of Mrs. Young, to cause the act of mortgage to be cancelled and erased. This power of attorney was executed June 1, 1882, in the presence of two witnesses, who signed the act with the parties, as did also the notary. The cancellation and power of attorney were duly certified as correct copies of the original, as the same appeared on file and of record in the office of the clerk of the Ninth District Court of Tensas Parish.
The act of transfer from Mrs. Metcalfe to Mrs. Young was dated December 2, 1876, and stated that Mrs. Metcalfe, residing in the Parish of Catahoula, Wade R. Young, of the Parish of Concordia, and Mrs. B. F. Liddell, wife of Wade R. Young, "herein represented by her special attorney and attorney in fact Volney M. Liddell, with a procuration hereto annexed," personally appeared before the notary, an declared that, whereas Mrs. Metcalfe, as sole surviving residuary legatee of
Miss Eliza H. Young, was the holder and owner of the note of Wade R. Young, William C. Young, and Margaret A. Young for the sum of $11,250, secured by act of mortgage, and whereas, Mrs. Metcalfe was indebted to Wade R. Young for certain sums of money, and whereas, Wade R. Young was indebted to his wife, Mrs. B. F. Liddell, for $7,500, the dotal and paraphernal property of his wife, received by him, and converted to his own use, for the repayment of which his wife had a legal mortgage on the interest of her husband in his father's estate; therefore Mrs. Metcalfe transferred and assigned to Mrs. Young four-ninths interest in said promissory note and mortgage, being the portion thereof due by Wade R. Young, and bearing on his interest in the St. Peter plantation, and warranted the validity thereof, and Wade R. Young declared that, in consideration of the transfer and warranty by Mrs. Metcalfe, he thereby acknowledged the receipt of the four-ninths interest of the note and mortgage, and granted to Mrs. Metcalfe an acquittance pro tanto of the sums due by her to him, and Mrs. Young declared that she accepted the transfer and assignment of said four-ninths interest, and, in consideration thereof, and of the warranty by Mrs. Metcalfe of the validity of the note and mortgage, joined her husband
"insofar as the mortgage accorded to her by law to secure the repayment of her paraphernal funds may bear upon the interest of her said husband in the succession of his deceased father, in giving to the said Mrs. S. J. Metcalfe an acquittance and release pro tanto of the sum due by her."
This was signed by Wade R. Young v. M. Lddell, attorney, S. J. Metcalfe, two witnesses, and the notary public, and a certificate was attached by the recorder of Catahoula parish that the foregoing was a true and correct copy of the original act of transfer and agreement on file in his office, and recorded in its records December 6, 1876. There was also a certificate, under date of October 18, 1887, of the Clerk of the Ninth District Court of Tensas Parish that the foregoing was a true and correct copy of the copy of the act of transfer and agreement, "as the same now appears on file in my office, and of record there." The copy of the judgment of Mrs. Young against her husband was as follows:
"9th District Court, Parish of Tensas"
"Mrs. Bethia F. Liddell"
"vs. No. 3050"
"Wade R. Young, Her Husband"
"In this case, a regular trial was had after issue joined, and the law and the evidence being in favor of the plaintiff, and against the defendant, it is ordered, adjudged, and decreed that there be judgment of separation, dissolving the community of acquets and gains between the plaintiff, Mrs. Bethia F. Liddell, and the defendant, Wade R. Young, and that the said plaintiff do have and recover judgment against the defendant for the sum of ($7,500) seven thousand five hundred dollars, with a recognition of her mortgage on the property described in the petition, and that the same be sold to satisfy said judgment and costs."
"Thus, done, read, and signed in open court this 9th day of July, 1881."
"Wade H. Hough"
"Judge 9th District"
This was certified to by the clerk of the Ninth District Court as
"a true and correct copy of original judgment rendered in suit of 'Bethia F. Liddell vs. Wade R. Young, Her Husband,' as the same appears on file and of record, in my office, in Mortgage Book O, page 649 et seq., on June 5, 1882."
On the same day the intervening petition was filed, Young filed what was entitled an "Opposition to Confirmation of Sale" in which it was alleged that plaintiffs had attempted to proceed according to the practice of the courts of Louisiana, and in doing so had violated the rules and practice prescribed in the conduct of equity cases in the circuit court; that there was a want of parties; that there existed a prior encumbrance on the property fully equal to or exceeding its value, and that, by the laws of Louisiana, no valid sale of the property could be made for a price not exceeding the amount of such prior encumbrance. He then set forth the mortgage of 1868, in favor of Miss Eliza H. Young, to secure the $11,250 note; the transaction between Mrs. Metcalfe, his wife, and himself
of 1876; the judgment of 1881 in favor of his wife for $7,500; the renunciation by his wife of her prior right of mortgage in favor of Nalle & Co., and the execution of the mortgage to Nalle & Co. to secure the payment of his note for $1,632.61, with interest at eight percent until paid, and charged the renunciation to have been invalid. The rendition of decree in favor of Nalle & Co. against defendant decree for the foreclosure of their mortgage, the issue of final process in execution of the decree, and the proceedings and sale thereunder were rehearsed at length, as in the intervening petition, and it was averred that his wife's mortgage was a first encumbrance, and that no sale or adjudication could be made to a purchaser for less than the amount of the mortgage. It was further alleged that the marshal, in the second advertisement of the property for sale on twelve months' credit, required the purchaser, out of the price, to deduct and pay in cash an amount for printing, marshal's fees, and clerk's fees, as well as taxes due on the property, and that much the largest amount required to be paid was claimed by Nalle & Co., or one of them, for taxes alleged to have been paid by them or him on the property, the legality of which was contested by defendant and by his wife; that this requirement was an oppressive and unjust act towards the mortgagor, and deterred a purchaser with whom defendant had arranged to buy, and other irregularities were set forth. As to the claim of the payment of taxes for the years 1882, 1883, 1884, and 1885, and as to the taxes pretended to be due for the year 1886, the payment of which the marshal made a condition precedent to the accepting of any bid, no taxes were due, and no necessity existed for the payment thereof, and that Nalle & Co. acquired no rights by such payment and subrogation, and thereupon the grounds on which the illegality was charged were given at considerable length. Defendant prayed that the sale be not confirmed, and be set aside; that his wife be made, or allowed to become, a party to the suit; that a reference be made to a master to settle the priority of liens; that the renunciation of his wife be declared invalid, and her mortgage for $7,500 and interest be decreed the
first lien on the property, and prior in rank to Nalle & Co.; that the revenue acts of Louisiana for the years 1880, 1882, 1884, and 1886 be decreed unconstitutional, null, and void, and the inscription of the mortgage to secure the taxes be erased, as a cloud, and for general relief. And he further prayed that if it be determined that the sale was a valid sale, he might be allowed to redeem by paying to complainants the amount of the debt, interest, and costs, and such other sums as might be found to be legally due.
Defendant also filed what he styled a "cross-bill" against the marshal, Mrs. Mary Nalle, and her husband, Golson, and Nalle & Co., alleging the sale of the property by the marshal, and the acceptance of the bid of Mrs. Mary Nalle, notwithstanding a written protest by defendant against the acceptance of any bid not exceeding $7,500, the amount of the prior encumbrance; that the marshal attempted to transfer the possession of the property to Nalle & Co., or Mrs. Mary Nalle for them, by giving complainants' solicitor an order to take such possession, and that the marshal and Mrs. Mary Nalle were now seeking to evict defendant from the possession of his property, and were trespassing thereon, all of which was without color of right; that the marshal had no power to pass the title to Mrs. Nalle until the oppositions to the sale had been tried and determined, and the sale confirmed, and that, even if he had, the sale was absolutely null and void, because the amount of the bid did not exceed the amount of the prior special mortgage, and prayed for an injunction, whereupon a restraining order was issued, and, subsequently, a writ of injunction.
Nalle & Co. demurred to the petition of intervention, and moved to dismiss the opposition and dissolve the injunction. The motion was denied and the demurrer overruled. Thereupon Nalle & Co. answered the intervening petition of Mrs. Young, and the cross-bill and opposition to confirmation of sale of Wade R. Young, alleging that Mrs. Young was at the time of the erasure and cancellation of her alleged mortgage, to-wit, June 1, 1882, a citizen of the State of Mississippi, and, as such, sui juris in every respect, having, under the laws of said state, full capacity as a feme sole to make any contract
whatever; denying that Wade R. Young moved his family to the State of Mississippi in 1876 with the intention of retaining, or that he did retain, either an actual or constructive domicile in the State of Louisiana; averring that the alleged agreement between Mrs. B. F. Young and Mrs. Metcalfe and Wade R. Young, under date of December. 1876, was null and void, for reasons given, and that Mrs. Young and Wade R. Young, were, in equity and good conscience, estopped from setting up her alleged mortgage. Wade R. Young and his wife filed a replication to the answer of Nalle & Co. and others "to the cross-bill and intervening petition."
The case came on to be heard "upon the cross-bill and opposition to the confirmation of the sale and the intervening petition," and the various papers heretofore referred to were offered in evidence, as well as sundry depositions, and "generally, everything of record in the suit." On June 9, 1890, the court entered a decree whereby it was
"ordered, adjudged, and decreed that the sale of the mortgaged property made by the marshal, in pursuance and execution of the foreclosure decree be set aside, cancelled, and avoided. And it is further ordered, adjudged, and decreed that the attempted renunciation by the intervening petitioner, Mrs. Bethia F. Young, of her special mortgage on the property, was and is invalid and of no effect, and that said mortgage be recognized as the first mortgage on the property, superior in rank to the mortgage of the plaintiffs, E. Nalle & Co., and entitled to be paid by preference. And it is further ordered that the plaintiffs, E. Nalle & Co., pay the costs of the sale and of these proceedings."
From this decree Nalle & Co. and Mrs. Mary Golson, as purchaser, appealed to this Court.