Page 147 U. S. 539
The bill alleged that the defendant, on January 28, 1884,
executed and delivered to the plaintiff five promissory notes for
$12,600 each, payable to the plaintiff's order on January 1 in
1885, 1886, 1887, 1888, and 1889, respectively, with interest
Page 147 U. S. 540
at the yearly rate of eight percent, and on the same day, by
authentic act of mortgage, passed before a notary public in the
presence of two witnesses, a copy of which was annexed to the bill,
mortgaged the lands in question to secure the payment of these
notes, which was duly paraphed by the notary,
ne
varieture, to identify them with the act of mortgage, and that
the last two notes, copies of which, with the paraph of the notary
thereon, were also annexed to the bill, and interest since July 1,
1887, had not been paid; that Shattuck & Hoffman, a commercial
firm named in the mortgage, had no interest in these notes, and the
plaintiff believed they had no interest in the act of mortgage and
that, under these notes and the mortgage, there was past due, and
owing to the plaintiff, the sums of $27,216, with interest since
January 1, 1888, on $25,200 thereof at the rate of eight percent,
and on $2,016 thereof at the rate of five percent
The copy of the act of mortgage annexed to the bill showed that
it was made to secure the payment of the notes to the plaintiff and
also to secure the payment to Shattuck & Hoffman of advances
made by them to the defendant under a written agreement between
them and him of the same date, not exceeding the amount of his debt
to the plaintiff, and authorized the mortgagees, in case any of the
debts thereby secured should not be paid at maturity, to cause the
mortgaged property
"to be seized and sold under executory process, without
appraisement, to the highest bidder, for cash, hereby confessing
judgment in favor of said mortgagees, and of such person or persons
as may be the holder or holders of said promissory notes, and all
assigns of said Shattack & Hoffman, for the full amount
thereof, capital and interest, together with all costs, charges,
and expenses whatsoever,"
and further provided that in the event of a foreclosure of the
mortgage and sale of the premises,
"then out of the proceeds of said sale the said indebtedness to
said Gilbert M. Richardson, whether held by said G. M. Richardson
or his assigns, shall be paid by priority over said indebtedness
sue or to become due to said Shattuck & Hoffman or their
successors and assigns."
Upon the filing of the bill, on June 29, 1888, the court
Page 147 U. S. 541
made the following order:
"Let a writ of seizure and sale issue herein, as prayed for, and
according to law, to satisfy complainant's demands, as set forth in
the foregoing bill and petition. Let the marshal seize and take
into his possession, according to law, the property described in
the foregoing petition, and then let the sale of this property be
stayed till the further orders of this court."
On June 30, 1888, the clerk of the court issued to the
defendant, and the marshal served upon him, a notice, in these
terms:
"Take notice that payment is demanded of you, within three days
from the service hereof, of the amount specified in the writ of
seizure and sale granted on the bill of complaint herein, a copy of
which accompanies this notice, with interest and costs, and in
default of payment within that delay the property referred to in
said bill of complaint will be seized and sold, according to law,
subject to the order on said bill. A further delay of one day for
every twenty miles distance from your domicile to this city at
which place this Court is held is allowed you by law."
On the same day, the defendant, appearing for that purpose only,
prayed for and was refused an appeal or writ of error from that
order to this Court.
At the next term of the circuit court, on November 19, 1888, the
defendant, appearing for the purpose of the motion only, moved that
all the orders and proceedings in the case be quashed and set aside
for want of jurisdiction, and also because, if the circuit court
had authority, under any circumstances, to issue executory process,
no case was made in the bill for issuing it, for want of authentic
evidence, inasmuch as the mortgage appeared upon its face to have
been made to include a private agreement between the defendant and
Shattuck & Hoffman, a copy of which, verified by his oath, was
annexed to the motion, and also
"making known unto the court that he will make no other and
further appearance or pleading herein at all times believing the
proceeding void in law, and this Court without jurisdiction over
the same,"
and praying that if the court should refuse to quash the
proceedings, he might be allowed an appeal to this Court from the
order of seizure and sale.
Page 147 U. S. 542
On November 22, a writ was issued to the marshal commanding him
to seize and take into his possession, according to law, the
property described in the mortgage and to sell it to satisfy the
plaintiff's demands as set forth in the bill, and repeated in the
writ,
"said sale to be for cash, without appraisement, and said sale
to be stayed until the further orders of the court, under its order
dated June 29, 1888, on the bill herein,"
and to make return of his proceedings to the court.
On November 24, the plaintiff moved to strike the defendant's
motion from the files as not being allowed by the rules of the
court or by the laws of Louisiana, and the court denied the motion
to quash, as well as the motion to strike from the files, but
granted the appeal upon the defendant's giving bond in an amount to
be fixed by the court, and referred the case to a master to report
the facts to enable the court to determine that amount.
On the return of the master's report, the court, on December 7,
1888, made the following order:
"This cause came on to be heard, and was argued by counsel,
whereupon the court, on consideration thereof, and further
reconsidering the whole matter with reference to the order or
decree awarding executory process herein, and the defendant's
applications for appeal therefrom, doth now order that so much of
the order of June 29, 1888, awarding executory process herein, as
directs the marshal to stay the sale of the property directed to be
seized till the further orders of the court, be stricken out, and
that all orders made subsequently to the date of the defendant's
application for an appeal, on June 30, 1888, except the order or
reference to the master to report the facts upon which the amount
of bond could be determined and fixed, be revoked, and that an
appeal, to operate as a supersedeas, be allowed to said defendant
nunc pro tunc as of said 30th day of June, 1888, according
to his petition then presented, on his giving bond as required by
law, with good and solvent surety, in the sum of one thousand
dollars. And it is further ordered that the marshal, on the filing
of such bond, release from seizure the property he has seized
herein, and that the exceptions to the order of reference be
overruled. "
Page 147 U. S. 543
On the same day, the defendant gave bond accordingly to
prosecute his appeal to this Court "from the decree rendered on
June 29, 1888."
MR. JUSTICE GRAY, after stating the facts in the foregoing
language, delivered the opinion of the Court.
At October term, 1888, this Court denied a motion to dismiss or
affirm, submitted on briefs under Rule 6. But on fuller
consideration of the case, and in the light of the oral arguments
of counsel, we are constrained, although the question is not free
from difficulty, to hold that this Court has no jurisdiction,
because the order appealed from is not a final judgment or
decree.
By the Louisiana Code of Practice, an act of mortgage, passed
before a notary public in the presence of two witnesses, with an
acknowledgment and identification of the debt thereby secured,
imports a confession of judgment, upon which the creditor is
entitled to executory process, and to obtain, without previous
citation to the debtor, an order for the seizure and sale of the
mortgaged property for the payment of the debt. Arts. 63, 98,
732-734. But the clerk of the court is required to give notice of
this order to the debtor three days before the sale, adding a day
for every twenty miles between the place of his residence and the
place where the court is held. Art. 735. If such notice is not
given to the debtor, the proceeding is erroneous.
Saillard v.
White, 14 La. 84;
Hart v. Pike, 29 La.Ann. 262. The
debtor may obtain an injunction to suspend the sale if before the
time of sale he files in the court his opposition, in writing,
under oath, alleging that the debt has been paid or remitted or
extinguished, or that the time of payment has been extended, or
that the act of mortgage is forged or obtained by fraud, violence,
or other unlawful means, or that he has a
Page 147 U. S. 544
liquidated account to plead in compensation, or that the action
for the debt is barred by prescription. Articles 738, 739.
The provisions of that code making the acknowledgment of the
debt and mortgage in solemn form before a notary public conclusive
evidence upon which, without previous notice to the debtor, the
creditor may obtain an order for the seizure and sale of the
mortgaged lands to satisfy his debt bear some analogy to
proceedings (never denied to be due process of law) which were well
known where the common law prevailed before the adoption of the
Constitution of the United States, such as the recognizances called
"statute merchant" and "statute staple," in England, and similar
recognizances in Massachusetts, taken before a court or magistrate,
and upon which, when recorded, execution might issue without
previous notice to the debtor and be levied upon his lands or
goods. 2 Bl.Com. 160, 341, 342; Bac.Abr. "Execution," B;
The
King v. Giles, 8 Price, 293, 316, 351; Mass.Stat. 1782, c. 21;
Albee v. Ward, 8 Mass. 79, 84; Rev.Stat. c. 118; Gen.Stat.
c. 152; Pub.Stat. c. 193.
In Louisiana, however, the act before the notary, as well as the
order for seizure and sale, includes no lands but those described
in the mortgage, and although the creditor may obtain that order
without previous notice to the debtor, the sale cannot take place
until the debtor has had notice and opportunity to interpose
objections.
This proceeding therefore is a civil suit
inter partes,
which, where the parties are citizens of different states, is
within the jurisdiction conferred by Congress on the circuit court
of the United States. Act of September 24, 1789, c. 20, § 11, 1
Stat. 79; Rev.Stat. § 739; Act of March 3, 1875, c. 137, § 1, 18
Stat. 470; Act of March 3, 1887, c. 373, § 1, 24 Stat. 552; Act of
August 13, 1888, c. 866, 25 Stat. 434;
Toland v.
Sprague, 12 Pet. 300;
Levy v.
Fitzpatrick, 15 Pet. 167;
Chaffee v.
Hayward, 20 How. 208,
61 U. S. 215;
Marin v.
Lalley, 17 Wall. 14. And the proceeding, though in
summary form, is in the nature of a bill in equity for the
foreclosure of a mortgage, and clearly belongs on the equity side
of that court.
Brewster v.
Wakefield, 22 How. 118,
63 U. S. 128;
Walker v.
Dreville, 12 Wall. 440;
Page 147 U. S. 545
Marin v.
Lalley, 17 Wall. 14;
Idaho & Oregon Co. v.
Bradbury, 132 U. S. 509,
132 U. S.
515.
The debtor being entitled to notice and hearing before an actual
sale of the property, it would seem, upon principle, that the order
for a sale must be considered as interlocutory, only, and not the
final decree in the case, at least when the debtor does, within the
time allowed by the code, come in and contest the validity of the
proceedings.
McGourkey v. Toledo & Ohio Railway,
146 U. S. 536,
146 U. S. 545,
146 U. S.
547-549, and cases there cited.
By the decisions of the Supreme Court of Louisiana, indeed, such
an order, "exhausting the power of the court
quoad the
application," although its execution may be stayed on the
opposition of the debtor, is subject to appeal under the practice
in that state. Louisiana Code of Practice, arts. 565, 566;
Harrod v. Voorhies, 16 La. 254;
Mitchell v.
Logan, 34 La.Ann. 998, 1003;
Ralston v. British &
American Mortgage Co., 37 La.Ann. 193. But the practice of the
decisions of the state in this respect cannot control the appellate
jurisdiction of this Court from the circuit court of the United
States, as defined by act of Congress. Rev.Stat. § 691;
Luxton
v. North River Bridge, ante, 147 U. S. 337,
147 U. S.
341.
Upon the question whether the order of seizure and sale was a
final judgment, the case of
Levy v. Fitzpatrick, above
cited, is much in point, and was fully discussed in the opinion
delivered by Mr. Justice McKinley, who was peculiarly familiar with
the law of Louisiana. In that case, a writ of error to reverse the
order of seizure and sale, made without previous notice to the
debtors, was dismissed for want of jurisdiction, and Mr. Justice
McKinley, speaking for the whole court, said:
"Had this proceeding taken place before a judge of competent
authority in Louisiana, the debtors might have appealed from the
order of the judge to the Supreme Court of that state, and that
court might, according to the laws of Louisiana, having examined
and decided upon the errors which have been assigned here. But
there is a marked and radical difference between the jurisdiction
of the courts of Louisiana and
Page 147 U. S. 546
those of the United States. By the former, no regard is paid to
citizenship of the parties, and in such a case as this no process
is necessary to bring the debtors before the court. They, having
signed and acknowledged the authentic act according to the forms of
the law of Louisiana, are, for all the purposes of obtaining
executory process, presumed to be before the judge. Louisiana Code
of Practice, arts. 733, 734. An appeal will lie to the Supreme
Court of Louisiana from any interlocutory or incidental order, made
in the progress of the cause, which might produce irreparable
injury.
State v. Lewis, 9 Martin 301, 302;
Broussard
v. Fralian, 4 Martin 489;
Gurlie v. Coquet, 3 Martin
(N.S.) 498;
Seghers v. Antheman, 1 Martin (N.S.) 73;
State v. Pitot, 12 Martin 485."
But as the judge went on to say, "the jurisdiction of the courts
of the United States is limited by law, and can only be exercised
in specified cases." He then observed that by the Judiciary Act of
1789, c. 20, § 11, giving the circuit court of the United States
original jurisdiction of suits at common law or in equity between
citizens of different states, no judgment could be rendered by a
circuit court against any defendant not served with process, unless
he waived the necessity of service by entering his appearance in
the suit, and that, by § 22 of the same act, only final judgments
of the circuit court could be reviewed by this Court on writ of
error, and added:
"It is obvious that the debtors were not before the judge in
this case, by the service of process or by voluntary appearance,
when he granted the executory process. In that aspect of the case,
then, the order could not be regarded as a final judgment within
the meaning of the twenty-second section of the statute. But was
the order a final judgment according to the laws of Louisiana? The
fact of its being subject to appeal does not prove that it was, as
has already been shown. Nor could it
per se give to the
execution of the process, ordered by the judge, the dignity of a
judicial sale. Unless at least three days' previous notice were
given to the debtors, the sale would be utterly void.
Grant v.
Walden, 6 La. 623, 631. This proves that some other act
was
Page 147 U. S. 547
necessary on the part of the plaintiffs to entitle them to the
fruits of their judgment by confession, and in that act is involved
the merits of the whole case, because, upon that notice, the
debtors had a right to come into court and file their petition,
which is technically called an 'opposition,' and set up as matter
of defense everything that could be assigned for error here, and
pray for an injunction to stay the executory process till the
matter of the petition could be heard and determined. And upon an
answer to the petition coming in, the whole merits of the case
between the parties, including the necessary questions of
jurisdiction, might have been tried and final judgment rendered.
Code of Practice, Arts. 738, 739. From this view of the case, we
think the order granting executory process cannot be regarded as
anything more than a judgment
nisi. To such a judgment, a
writ of error would not lie. The writ of error in this case must
therefore be dismissed."
15 Pet.
40 U. S.
170-172.
The single ground of that decision, as appears by these extracts
from the opinion, was that there had been no final judgment in the
circuit court. The point that the case, though coming from the
State of Louisiana, where the distinction between common law and
equity is not preserved, yet, being essentially a suit in equity in
the circuit court of the United States, should have been brought to
this Court by appeal, and not by writ of error, was not considered
or noticed, and had not then been decided, although it is now well
settled.
McCollum v.
Eager, 2 How. 61;
Walker v.
Dreville, 12 Wall. 440;
Marin v.
Lalley, 17 Wall. 14.
In
Marin v. Lalley, above cited, the order of seizure
and sale was made by the circuit court on March 28, 1872. The
defendants afterwards came in, filed various objections,
oppositions, and answers, and prayed that the proceedings might be
quashed. The court on June 3 ordered that "the objections and
answers of the defendants to the order of seizure and sale be
overruled," and the defendants on June 13 appealed, as appears on
referring to the record, from
"the order for executory process, entered herein on the 28th day
of March, 1872, and made final on the 3d day of June, 1872, by
Page 147 U. S. 548
judgment of this honorable court."
The appeal taken by the defendants in that case, and which this
Court refused to dismiss on motion, was not an appeal from the
original order of March 28, but from that order as made final by
the judgment of June 3, and was therefore an appeal from that
judgment. It was of this final order, made after notice to and
opposition by the defendants, that Chief Justice Chase, in
delivering judgment, said:
"It is in substance a decree of foreclosure and sale, which has
repeatedly been held to be a final decree. . . . If there were any
doubt as to the finality of the original order, there can be none
that it became final when the answer and objections were overruled.
That order seems to have been made contradictorily with the
debtors. Their opposition was overruled, and their property decreed
to be seized and sold to pay their debts."
And he distinguished
Levy v. Fitzpatrick, above cited,
on the ground that the order there held not to be a final judgment
was "the original order, without the three-days' notice, and
without any act on the part of the debtors." 17 Wall.
84 U. S.
17-18.
The present case appears to us to be governed by
Levy v.
Fitzpatrick, and to be likewise distinguishable from
Marin
v. Lalley.
The original order of the circuit court for a seizure and sale
was made June 29, 1888, and directed the marshal to seize the
property, but to stay the sale until the further orders of the
court. On June 30, a notice, together with a copy of the bill and
order, was issued by the clerk and served on the defendant, and the
defendant, appearing specially for the purpose, prayed for an
appeal from that order, which was denied. These were all the
proceedings which took place at the first term.
At the next term, the defendant, on November 19, again appearing
specially, moved to quash the proceedings, and, if that should be
refused, renewed his prayer for an appeal from the order of June
29. The writ of seizure and sale was not issued to the marshal
until November 22, and directed that the sale should be stayed
until the further orders of the court, under its former order. On
November 24, the court denied
Page 147 U. S. 549
the motion to quash, and granted the appeal upon the defendant's
giving bond in an amount to be determined. On December 7, the
court, reconsidering the whole matter with reference to the order
of June 29, and to the defendant's application of June 30 for an
appeal from that order, ordered that so much of that order as
directed the marshal to stay the sale until the further orders of
the court be stricken out, and that an appeal, to operate as a
supersedeas, be allowed to the defendant
nunc pro tunc as
of June 30, 1888, on his giving bond in the sum of $1,000. The
defendant gave bond accordingly to prosecute his appeal "from the
decree rendered on June 29, 1888."
It thus clearly appears that the only appeal claimed by the
defendant was from the original order of seizure and sale of June
29, 1888, made before notice to the defendant, and was allowed, as
of June 30, upon the application which he had then made, as soon as
he had notice of that order, and that no appeal was, in terms or by
implication, claimed, applied for, allowed, or taken, from the
order of December 7, which was the final order of the circuit court
in this case.
It necessarily follows that the order appealed from was not a
final decree, and that the appeal must be dismissed for want of
jurisdiction.
We are the more ready to accept this conclusion because we have
no doubt that if, upon this record, the appeal could be treated as
having been taken from the final decree of December 7, no reason is
shown for reversing the judgment of the circuit court. The only
objections taken below to the order and proceedings, as appears by
the motion to quash, were that the circuit court had no
jurisdiction, and that there was no authentic evidence of the debt
to Shattuck & Hoffman, secured by the same mortgage as the
notes to the plaintiff. But that the circuit court, sitting in
equity, had jurisdiction of the case has been already shown, and,
there being authentic evidence of the plaintiff's debt, the want of
like evidence of the separate and distinct debt to Shattuck &
Hoffman, which by the express terms of the mortgage was subordinate
to the debt to the plaintiff, is immaterial.
Chambliss v.
Atchison, 2 La.Ann. 488, 491;
Renshaw v. Richards, 30
La.Ann. 398;
Page 147 U. S. 550
Dejean v. Hebert, 31 La.Ann. 729;
Soniat v.
Miles, 32 La.Ann. 164.
Appeal dismissed for want of jurisdiction.
MR. JUSTICE SHIRAS, not having been a member of the Court when
this case was argued, took no part in its decision.
*
ART. 63. When the hypothecated property is in the hand of the
debtor, and when the creditor, besides his hypothecary right, has
against his debtor a title importing a confession of judgment, he
shall be entitled to have the hypothecated property seized
immediately, and sold, for the payment of his debt, including the
capital, the interest, and the costs, pursuant to the rules
provided hereafter for executory proceedings.
"ART. 98. The proceedings are ordinary when citation takes
place, and all the delays and forms of law are observed. They are
executory when seizure is obtained against the property of the
debtor, without previous citation, in virtue of an act or title
importing confession of judgment, or in other cases provided by
law."
"ART. 732. Executory process can only be resorted to in the
following cases:"
"1st. When the creditor's right arises from an act importing a
confession of judgment, and which contains a privilege or mortgage
in his favor."
"2d. When the creditor demands the execution of a judgment which
has been rendered by a tribunal of this state, different from that
within whose jurisdiction the execution is sought."
"The proceeding by provisional seizure (attachment) or
in
rem resembles in some sort the executory process, but should
not be confounded with it, as they are subject to different
rules."
"ART. 733. An act is said to import a confession of judgment, in
matters of privilege and mortgage, which it is passed before a
notary public, or other officer fulfilling the same functions, in
the presence of two witnesses, and the debtor has declared or
acknowledged the debt for which he gives the privilege or
mortgage."
"ART. 734. When the creditor is in possession of such an act, he
may proceed against the debtor or his heirs by causing the property
subject to the privilege or mortgage to be seized and sold on a
simple petition, and without a previous citation of the
debtor."
"ART. 735. In obtaining this order of seizure, it shall suffice
to give three days' notice to the debtor, counting from that on
which the notice is given, if he resides on the spot, adding a day
for every twenty miles between the place of his residence and the
residence of the judge to whom the petition has been
presented."
"ART. 738. The debtor against whom this order of seizure shall
have been rendered may obtain an injunction to suspend the sale if,
before the time of sale, he files in the court issuing the order
his opposition, in writing, alleging some of the reasons contained
in the following article, and of which he shall swear to the
truth."
"ART. 739. The debtor can only arrest the sale of the thing thus
seized, by alleging some of the following reasons, to-wit:"
"1. That he has paid the debt for which he is sued."
"2. That he has been remitted by the creditor."
"3. That it has been extinguished by transaction, novation, or
some other legal manner."
"4. That time has been granted to him for paying the debt,
although this circumstance be not mentioned in the contract."
"5. That the act containing the privilege or mortgage is
forged."
"6. That it was obtained by fraud, violence, fear, or some other
unlawful means."
"7. That he has a liquidated account to plead in compensation to
the debt claimed."
"8. And finally that the action for the recovery of the debt is
barred by prescription."
"ART. 740. When the judge grants an injunction on the allegation
under oath of any of the reasons mentioned in the preceding
article, he shall require no surety from the defendant, but he
shall pronounce summarily on the merits of his opposition if the
plaintiff requires it."
