P. and P., owners of three sugar plantations in Louisiana,
leased the sugar house on one of them with all its machinery and
such defined land in that plantation as might be found necessary
for its use, to F. and F. for a term of years. The lessees agreed
to buy during the term, and the lessors agreed to sell and deliver
to them during that time, the sugar cane grown on the three
plantations. Elaborate provisions were made respecting the conduct
of the business and the manner of fixing from time to time the
price of the cane. The thirteenth article was as follows:
"The price of cane as above determined shall be paid as follows:
two and 75/100 dollars per ton shall be paid every Monday for the
cane delivered during
Page 167 U. S. 128
the preceding week, until the delivery is completed. The
balance, if any, per ton, shall operate as a lien and privilege to
the full extent of such balance on the first bounty money received
by the parties of the second part on sugar produced from cane
ground at the Barbreck sugar house, and the said parties of the
second part covenant and agree to consecrate solely to the payment
of such balance all bounty payments so received by them, until the
whole of the said balance shall have been paid."
The twentieth article was as follows:
"The parties of the first part agree to keep all such books and
records as are required by the United States government in relation
to the bounty, and to furnish to the parties of the second part all
the details which may be necessary to enable them to effectuate
their bounty rights."
The lessees, with the consent of the lessors, transferred their
rights and their interests under the lease to a corporation which
assumed their obligations thereunder. This corporation became
involved, and a receiver was appointed in an equity suit brought by
the Burdon Company. The lessors intervened in this suit, claiming
that their claim for the balance due on the purchase price and also
their claim for cane delivered to the lessees were secured by a
lessor's privilege, under Louisiana law, on the property of the
lessees at the sugar house, and the latter also by an equitable
lien on any bounty that might thereafter be collected by the
receiver. The circuit court decided that the intervenors were
entitled to the lessor's privilege, and to an equitable lien on the
bounty. An appeal having been taken from this decision, the circuit
court of appeals certified the facts to this Court and propounded
the following questions:
"
First. It being shown that the cane sold by appellees,
J. U. Payne & Company
et als., to the Ferris Sugar
Manufacturing Company, Limited, pursuant to the contract between
the parties, was grown on lands not embraced within the limits of
the premises leased to the Ferris Sugar Manufacturing Company,
Limited, are appellees, under the laws of Louisiana, considered in
connection with the provisions of the contract, entitled to the
lessor's privilege to secure the payment of the purchase price of
such cane?"
"
Second. Under the terms of the thirteenth article of
the contract between the Paynes and the Ferrises, and to secure the
payment of the price of the sugar cane sold and delivered under
said contract, have the appellees H. M. Payne, J. U. Payne and the
members of the firm of J. U. Payne & Company an equitable lien
upon the bounty money collected from the United States by the
receiver in this suit?"
"
Third. If the second question shall be answered in the
affirmative, can such equitable lien, under the laws of Louisiana,
be so enforced in the present suit as to appropriate the bounty
money to the payment of the claim of the Paynes, to the exclusion
of the general creditors of the Ferris Sugar Manufacturing
Company?"
To these several questions, the Court now make answer as
follows:
(1) The first question is answered in the negative.
(2) The second question is answered in the affirmative.
(3) The third question is answered in the affirmative.
Page 167 U. S. 129
The Circuit Court of Appeals for the Fifth Circuit, desiring the
instruction of this Court for the proper decision of certain
questions arising in the above-entitled cause, certified the
statement of facts set out in full in the margin,
* and thereon
propounded the following questions:
Page 167 U. S. 130
"First. It being shown that the cane sold by appellees, J. U.
Payne & Co.
et al., to the Ferris Sugar Manufacturing
Company, Limited, pursuant to the contract between the parties, was
grown on lands not embraced within the
Page 167 U. S. 131
limits of the premises leased to the Ferris Sugar Manufacturing
Company, Limited, are appellees, under the laws of Louisiana,
considered in connection with the provisions of the contract,
entitled to the lessor's privilege to secure the payment of the
purchase price of such cane? "
Page 167 U. S. 132
"Second. Under the terms of the thirteenth article of the
contract between the Paynes and the Ferrises, and to secure the
payment of the price of the sugar cane sold and delivered under
said contract, have the appellees, H. M. Payne, J. U.
Page 167 U. S. 133
Payne, and the members of the firm of J. U. Payne & Company,
an equitable lien upon the bounty money collected from the United
States by the receiver in this suit?"
"Third. If the second question shall be answered in the
Page 167 U. S. 134
affirmative, can such equitable lien, under the laws of
Louisiana, be so enforced in the present suit as to appropriate the
bounty money to the payment of the claim of the Paynes, to the
exclusion of the general creditors of the Ferris Sugar
Manufacturing Company? "
Page 167 U. S. 136
MR. CHIEF JUSTICE FULLER, after stating the facts in the
foregoing language, delivered the opinion of the Court.
Page 167 U. S. 137
By article 3183 of the Revised Civil Code of Louisiana, it is
provided:
"The property of the debtor is the common pledge of his
creditors, and the proceeds of its sale must be distributed among
them ratably unless there exist among the creditors
Page 167 U. S. 138
some lawful causes of preference."
By article 3184: "Lawful causes of preference are privilege and
mortgages." By article 3185: "Privilege can be claimed only for
those debts to which it is expressly granted in this Code." By
article 3186: "Privilege is a right, which the nature of a debt
gives to a creditor." Article 2705 provides:
"The lessor has, for the payment of his rent, and other
obligations of the lease, a right of pledge on the movable effects
of the lessees, which are found on the property leased. . . ."
And by article 3263, this privilege is made superior to the
privilege of a vendor.
Judge Parlange, holding the circuit court, was of opinion that,
under the terms of the contract, the purchase price of the
Page 167 U. S. 139
cane delivered by the sellers, the lessors, to the purchasers,
the lessees, was secured by the lessors' privilege, because, under
the contract, the obligation to pay the price of the cane was one
of the essential obligations of the lease, and therefore covered by
the words "other obligations of the lease." 78 F. 417.
Counsel's contention is that, by reason of these words, the
privilege extends to every obligation created by a contract of
lease, and
Warfield v. Oliver, 23 La.Ann. 612,
Fox v.
McKee, 31 La.Ann. 67, and
Henderson v. Meyers, 45
La.Ann. 791, are cited as maintaining that view. In the first of
these cases, it was held that the obligation resulting from a
clause in a lease providing that the lessee should repair and keep
in repair the leased premises was secured by the lessor's
privilege. In the two other cases, it was decided that when a
contract of lease provided for an attorney's fee in the event of
suit to recover the rent, the amount of the stipulated fee was also
so secured. But it may be observed that repairs to be made to
leased property are in their very nature incidental to a lease of
the property, and that such a stipulation as to an attorney's fee
is a mere accessory to the rent itself.
It is further contended that the Code Napoleon and the Louisiana
Code on the subject of the lessor's privilege are substantially
alike, and that the French commentators and the decisions of the
French courts support the proposition that the lessor's privilege
secures not only the rent, but also advances made during the course
of the lease for the execution of the lease; that the meaning of
the Louisiana law should be regarded as settled by this
construction, and that, as the price of the cane delivered under
this contract would be secured by the privilege of the lessor under
the law of France, the same conclusion follows here.
Article 2102 of the Code Napoleon provides that the lessor shall
have a privilege for "the repairs which the tenant is bound to make
(
reparations locatives) and for everything that concerns
the execution of the lease." Many French commentators are referred
to as establishing that under this provision, the privilege of the
lessor extends to and secures advances made by him to a lessee, and
they undoubtedly maintain that,
Page 167 U. S. 140
under the French law, the amount due for raw material delivered
by a lessor to the lessee of a manufacturing establishment for the
purpose of being worked at the factory, under the terms of the
lease, would be secured by the lessor's privilege.
Laurent, Droit Civil Francais, vol 29, 4th ed. 1887, ยงยง 407,
408, states the principle thus:
"By execution of the lease, we understand all the obligations
which the law or the contract imposes on the lessee. Those which
the law establishes are considered as agreed between the parties.
All, therefore, concern the execution of the contract. . . . Are
advances which the lessor makes under the contract of lease to the
lessees secured by his privilege? The affirmative is adopted by
jurisprudence. It is incontestable when the advances concern the
lease -- that is to say, the rights and obligations which result
from it. In this case, both the letter and spirit of the law are
applicable. But if a loan of money were made to the lessee, in the
contract of lease, without there being any relation between the
loan and the lease, this would not be an advance; it would be an
ordinary loan, and the law gives no privilege for such a loan.
Jurisprudence adopts this view, for if it grants a privilege to the
lessor for the advance which he makes, it is because these advances
concern the lease. The owner of an iron furnace stipulates to
furnish to the lessee of his furnace the wood necessary to operate
it; it has been adjudged that such an advance is privileged. Such
is also the case when the lessor furnishes beets to the lessee of a
sugar factory. The lessor furnishes 10,000 francs to the lessee of
a mill as a fund to be used in operating it. The advance being
intended to operate the mill, therefore its object was the
execution of the lease, and the claim is privileged."
The only decision of the French courts cited in argument is
referred to by Laurent, and is the case of
Vanderaghen c.
Decocq, decided April 18, 1850, by the Court of Appeals of
Douai (not by the Court of Cassation, as inadvertently stated by
counsel), and reported in 1 Journal du Palais, vol. 56 (1851), p.
395.
The following statement made by the court of original
Page 167 U. S. 141
jurisdiction was adopted by the Court of Appeals in affirming
the judgment:
"Considering that, as regards the claim of 6,800 francs for
rentals, the privilege of Decocq is not contested by the defendant,
and is, besides, expressly established by article 2102 of the Civil
Code; that, according to Par. 1 of that article, the same privilege
takes effect for repairs chargeable to the tenant, and for
everything that concerns the execution of the lease; that it is by
virtue of a clause of the lease, and for the execution of that
clause, and in order to insure the operation of the factory leased,
that the Decocqs have delivered and furnished to Blanquart beets to
value of 8,086 francs; that Art. 9 and following of said lease
required them to plant beets on 53 hectares and 19 acres, and to
furnish and deliver to the factory the entire product of the crop
at the price of 16 francs per 1,000 kilos of beets, and under a
penalty of 150 francs damages for each 35 acres of beets not
delivered; that all the authors and jurisprudence grant the
privilege of Art. 2102 to the lessor, who has made advances and
furnished commodities, as in this case, by virtue of a clause of
the lease, and for the execution of the lease, it is held that
under the terms of Art. 2102, the claim of Decocq is privileged as
well for the beets furnished as for rentals."
Whether the language of the Louisiana Code "every obligation of
the lease" may not justly be held to be narrower than the words
"everything that concerns the execution of the lease," as found in
the Code Napoleon, and therefore whether the latter would secure by
the lessor's privilege an advance made by the lessor, which would
not be so secured under the Louisiana law, we need not discuss, for
even conceding that the two Codes are alike, and that the
provisions of both support the theory relied on, yet we think that
under the provisions of this contract, the price of the cane was
not secured by the lessor's privilege. The test applied by the
French writers to ascertain whether the particular obligation is
secured by the lessor's privilege is whether the obligation created
by a particular clause in a contract of lease is really a part of
the contract of lease proper, or an obligation necessary
Page 167 U. S. 142
for its execution. Thus, Laurent, as we have just seen,
says:
"But if a loan of money were made to the lessee in the contract
of lease without there being any relation between the loan and the
lease, this would not be an advance; it would be an ordinary loan,
and the law gives no privilege for such a loan."
And the conclusion of the Court of Appeals of Douai in the case
cited rested on the fact that the particular contract there
considered made the price of the beets a part of the contract of
lease, and intended for the execution of the lease.
It is clear, then, that though we concede the view of the
Louisiana law contended for by appellee, the question still
remains: did the obligation to pay for the cane as stipulated in
this contract make such obligation a part of the lease itself, or
did the duty to pay under the contract result not from the lease,
but from another and distinct contract -- namely, one of sale, not
contemplated by the parties to be considered as a part of the lease
as such, and therefore not secured by the lessor's privilege? The
learned district judge proceeded on the ground that there was an
identity between the French and the Louisiana law, that the
interpretation of the one was persuasive in respect of the other,
and that, under both laws, the privilege claimed should be allowed;
but to reach this result, he also held that the contract was
brought within this view of the law because the sale of the cane,
as between the parties to the contract, was "an essential
consideration of the lease, both on the part of the lessors and
lessees."
We should remember that the contract must be so construed as to
give meaning to all its provisions, and that that interpretation
would be incorrect which would obliterate one portion of the
contract in order to enforce another part thereof. Civil Code, Art.
1951. And that, as privileges under the law of Louisiana are in
derogation of common right, they cannot rest on implication, and
can only result from express terms or from clear and irresistible
intendment.
Shaw v. Grant, 13 La.Ann. 52;
Citizens'
Bank v. Maureau, 37 La.Ann. 857.
In
Case v. Taylor, 23 La.Ann. 497, the Supreme Court
of
Page 167 U. S. 143
Louisiana said: "It matters not what name the parties have given
to the instrument; its character is determined by its constituent
elements." Article 2063 of the Revised Civil Code of Louisiana (an
article not found in the French Code) provides:
"A
conjunctive obligation is one in which the several
objects in it are connected by a copulative, or in any other manner
which shows that all of them are severally comprised in the
contract. This contract creates as many different obligations as
there are different objects, and the debtor, when he wishes to
discharge himself, may force the creditor to receive them
separately."
And article 1883, that "every contract has for its object
something which one or both of the parties oblige themselves to
give, or to do, or not to do."
The writing before us embodies in fact two contracts -- a
contract of lease and a contract of sale. If we were compelled to
treat it as a single indivisible contract, what would be its proper
denomination? The sale of the cane was manifestly more important to
Payne & Co. than the lease of the sugar house. By the contract,
they severed their lands into two parcels; leasing, for a time and
price fixed, one part thereof with the sugar house, and retaining
the remainder, which they were to cultivate, and the crop upon
which the Ferrises agreed to purchase. Apparently the lease was the
inducement to the sale, rather than the sale the inducement to the
lease. So that if there was a loss of identity, which form of
contract absorbed the other? We do not think, however, the effect
of the document was to fuse the two into one, but that a contract
of sale and a contract of lease were both provided for. The
preamble recites:
"Whereas the said L. Murray Ferris and William L. Ferris,
parties of the second part, as aforesaid, have proposed to
contract, upon the terms and conditions hereinafter provided,
for a lease of the Barbreck sugar house and
the
purchase of the crops of the three aforesaid plantations."
And articles one to five regulate in substance the relations
between the parties as landlord and tenant, while articles six to
thirteen govern the sale of the crops.
Article six says:
"The parties of the first and second part
Page 167 U. S. 144
hereto further covenant and agree mutually
to sell and
purchase, respectively, upon the following terms and
conditions, all the cane which may be grown on the three aforesaid
plantations,
viz., the Barbreck, St. Peter's, and
Anchorage plantations, except such as may be needed each season as
seed for the following year."
Article eleven: "The price to be paid by the parties of the
second part shall be graduated according to the percentage of the
sucrose content of the juice of the cane," etc.
Article thirteen:
"The price of cane as above determined shall be paid as follows:
two and 75/100 dollars per ton shall be paid every Monday for the
cane delivered during the preceding week, until the delivery is
completed. The balance, if any, per ton, shall operate as a lien
and privilege to the full extent of such balance on the first
bounty money received by the parties of the second part on sugar
produced from cane ground at the Barbreck sugar house,"
etc.
We do not see how it can be successfully denied that there was a
contract of sale as well as a contract of lease, and, this being
the fact, it is impossible to so read the writing as to destroy the
one in order to give effect to the other. And, in interpreting the
contracts, if all the obligations which they created, excepting
those essentially necessary to the existence of the contract of
sale, should be attributed to and treated as obligations of the
lease, this would not make the duty to pay for the cane an
obligation of the lease, because price is of the essence of the
contract of sale, under the law of Louisiana, and without price
there can be no sale. Civil Code, Art. 2439. This conclusion is
strengthened when we consider that the contracting parties
themselves sedulously separated the obligation to pay the price of
the cane from the other obligations by stipulating that the price
should be secured by a privilege and lien entirely independent of
the lease. Thereby the duty to pay for the cane was treated as
resulting from a sale, and secured by a privilege specially
provided for upon the bounty money, which is inconsistent with the
view that the contracting parties contemplated that the duty to pay
for the cane resulted not from a sale, but purely from a lease. It
is true
Page 167 U. S. 145
that the mere taking of security for the obligations of the
lease would not import that the lessor's privilege created by law
in favor of these obligations was abrogated, yet when the necessary
effect of the contract under consideration is to separate the duty
to pay for the cane from the obligations of the lease as such, and
to secure it separately, the stipulation as to security is entitled
to great weight, as tending to show that the parties regarded the
obligations of the lease as one thing, and the obligation to pay
the price separately secured as another.
Privilege, says the Code, is the right "which the nature of the
debt gives to the creditor." Now the stipulation was that the price
of the cane should be secured by a privilege on the bounty money,
and this clearly justifies the assumption that the parties
proceeded on the theory that the price of the cane arose from a
different consideration and created a different obligation from the
obligations created by the lease.
Again, the twenty-second article of the contract expressly
provided for the continuance of the lease at the option of the
lessee, the manufacturing company, even after the lessors had been
discharged from all obligation cultivate or deliver cane to the
company. That article is:
"It is further mutually understood and agreed that, in case the
bounty now paid upon sugar by the United States government is
removed during the term of this contract, then and in that event,
either of the parties hereto may, at their option, terminate the
contract; but, as regards the parties of the first part, it is
understood and agreed that this right of terminating the contract
shall extend only so far as their obligation to cultivate and
deliver cane is concerned; the right and option being reserved to
the parties of the second part, in the event of an exercise by the
parties of the first part of their right of termination under this
section, to continue the lease as herein stipulated under the same
terms and conditions, except as hereinabove provided."
How can it be concluded that the cultivation, delivery, and sale
of the cane, on the one hand, and the payment of the price
therefor, on the other, was an essential and necessary part of the
continuance of the contract of lease, when the contracting
Page 167 U. S. 146
parties themselves declared that, although all obligation to
cultivate and deliver cane and to pay for the same should be
dispensed with, the lease itself might continue to exist for its
full term? And it may be observed in this connection that the
contingency as to the bounty had happened before any delivery
whatever had been made under the contract. If, in the year
following, the vendor had exercised his option to cease delivering
cane and the vendee had continued to lease, could it have been said
that there was no lease because the obligation to deliver cane had
disappeared, when the contract itself provided that this should not
be the case? As the contract of lease provided for the erection by
the lessor of new machinery in the sugar house, and therefore must
be considered to have contemplated a debt as arising from its
execution, it appears to us that it was the plain duty of the
lessors, if their intention was that the purchase price of the cane
should be an obligation of the lease secured by a lessor's
privilege, to have so stipulated in unambiguous terms. And as this
was not done, but, on the contrary, as the obligation to pay for
the cane was stated in the contract as arising from the sale, and
was separated from the obligations of the lease by the reservation
of a privilege and lien on the bounty money, the rule of strict
interpretation precludes us from so reading the contract as to
enlarge its terms to import a privilege not necessarily resulting
therefrom.
Nor do we think that the twenty-fifth article, providing that
"this is an entire contract, each stipulation and obligation herein
being a part of the consideration for every other," tends to impair
the conclusions we have indicated. The parties treated the written
agreement as embodying both a sale and a lease, as independent
contracts. (Code, Art. 1769.) The contract of lease is essentially
commutative (Code, Art. 2669), and Article 1768 of the Code defines
such contracts thus:
"Commutative contracts are those in which what is done, given,
or promised by one party is considered as equivalent to or a
consideration for what is done, given, or promised by the
other."
It was because the parties considered the agreement as embodying
independent stipulations that the
Page 167 U. S. 147
provision before quoted was inserted, for it would otherwise
have been superfluous, while, considering them as independent
contracts, the stipulation making them interdependent created the
right to rescind the one in case of the violation of the other.
We hold, then, that the price of the cane delivered under the
contract was not secured by the lessors' privilege, and that the
first question must be answered in the negative.
2. The thirteenth article of the contract reads as follows:
"The price of cane as above determined shall be paid as follows:
two and 75/100 dollars per ton shall be paid every Monday for the
cane delivered during the preceding week until the delivery is
completed. The balance, if any, per ton, shall operate as a lien
and privilege to the full extent of such balance on the first
bounty money received by the parties of the second part on sugar
produced from cane ground at the Barbreck sugar house, and the said
parties of the second part covenant and agree to consecrate solely
to the payment of such balance all bounty payments so received by
them, until the whole of the said balance shall have been
paid."
If it was within the power of the contracting parties to create
an equitable lien upon the bounty collected, the terms of the
contract effectuated that purpose.
Walker v. Brown,
165 U. S. 654.
The right of the parties, however, by the contract to create an
equitable lien, and the power of a court of equity to enforce such
lien are denied upon the ground that as, by the provisions of the
law of Louisiana, equality of distribution is the rule among
creditors, and preferences can only result from privileges and
mortgages, and as the subject matter from which the lien here arose
was not one of the cases to which the law of Louisiana gives a
privilege, therefore an equitable lien could not be created by
contract or enforced in violation of the terms of the statutes of
Louisiana. But, without passing on the correctness of this
proposition, we think it has no relation to the matter under
consideration. The bounty on sugar was derived wholly from the Act
of Congress of October 1, 1890, providing therefor (26 Stat. 567,
c. 1244) and the Act of
Page 167 U. S. 148
March 2, 1895, making a partial allowance for the repealed
bounty (28 Stat. 910, c. 189);
United States v. Realty
Company, 163 U. S. 427. The
bounty was given, by the terms of the act of 1890, not to the
manufacturer of sugar manufactured within the United States, but to
the producer of such sugar from "beets, sorghum and sugar cane
grown within the United States." In this way, the law, in
conferring a bounty, created a link between the manufacturer of the
sugar and the grower of the beets, sorghum, or cane from which it
was manufactured. And this connection between the manufacturer and
the grower being created by the act of Congress in conferring the
bounty only for sugar manufactured from cane grown within the
United States, the relation between the grower and the manufacturer
was one arising from the laws of the United States, and not from
the local law of the State of Louisiana. As a transfer of the claim
against the United States derived from the bounty could not have
been given by the manufacturer who received the cane of the grower
without a violation of section 3477 of the Revised Statutes, the
contention of appellants denies to the grower of cane, on its
delivery to a manufacturer, any security whatever; but this would
be incompatible with the purposes and objects of the acts of
Congress, and would cause the statutes of Louisiana to operate
upon, and, in a measure, render nugatory, laws of the United
States. The parties to the contract had in view in making it the
necessary relation between them accorded by the act of Congress,
for the contract stipulated that the parties of the first part
should
"keep all such books and records as are required by the United
States government in relation to the bounty, and to furnish to the
parties of the second part all the details which may be necessary
to enable them to effectuate their bounty rights."
The right to collect the bounty having arisen from a law of the
United States, and the provisions of that law creating a necessary
relation between the grower and the manufacturer, making them, in
effect, joint producers of the sugar, the right to the equitable
lien stipulated by the contract was not controlled by the
provisions of the local law of Louisiana, even although, as a
general
Page 167 U. S. 149
rule -- and in regard to this we express no opinion -- the
effect of that law would be to deprive contracting parties, except
when expressly allowed, of the right to contract for an equitable
lien, and to deny to courts of equity the power to enforce the
same.
These considerations lead to an affirmative answer to the second
and third questions.
The first question is answered in the negative, and the
second and third questions in the affirmative, and it will be so
certified.
Page 167 U. S. 130
*
"1. H. M. Payne, J. U. Payne, and J. U. Payne & Co., a
commercial firm composed of J. U. Payne, J. U. Payne, Jr., and R.
W. Foster, all residents of New Orleans, La., were the owners of
three contiguous plantations in St. Landry parish, Louisiana, known
as Barbreck, St. Peter's, and Anchorage."
"2. On June 16, 1892, they entered into the following contract
with L. Murray Ferris and Wm. L. Ferris, of Poughkeepsie, New York,
which was duly recorded:"
" This indenture made by H. M. Payne, J. U. Payne, and the firm
of J. U. Payne & Co. all residents of the City of New Orleans,
State of Louisiana, as the parties of the first part, and L. Murray
Ferris and William L. Ferris, both residents of the City of
Poughkeepsie, State of New York, as the parties of the second part,
witnesseth that whereas the said H. M. Payne, J. U. Payne, and the
firm of J. U. Payne & Co., parties of the first part, as
aforesaid, are the owners and proprietors of three certain
plantations, to-wit, the Barbreck, St. Peter's, and Anchorage
places, their respective interest in the said three plantations
being of record in the said parish; and"
" Whereas the said L. Murray Ferris and William L. Ferris,
parties of the second part, as aforesaid, have proposed to
contract, upon the terms and conditions hereinafter provided, for a
lease of the Barbreck sugar house, and the purchase of the crops of
the three aforesaid plantations,"
" Now, therefore, the said parties of the first part, each for
and as regards his respective interest in the said plantations, and
the said parties of the second part, jointly and severally, hereby
contract, obligate, and bind themselves as follows, to-wit:"
" Article First. The parties of the first part grant to the
parties of the second part, upon the terms and conditions hereafter
provided, a lease, for a period of ten years, of the sugar house
situated on the Barbreck plantation, together with all the
machinery and appurtenances thereto belonging, it being understood
and agreed that this lease shall cover and include all the present
enclosure around the Barbreck sugar house and so much in addition
towards the Anchorage plantation as may be necessary to provide
space for handling cars, and, further, the land between the cane
yard and the bayou, except the public highway, which shall be used
in common by the parties hereto, provided that the lease shall not
include any cabins or dwelling houses which may be situated on the
aforesaid premises, the parties of the first part reserving to
themselves the right to remove any and all such cabins or dwelling
houses off the said premises which the parties of the second part
shall have the right at their option, to require."
" And it is agreed and understood that the lease shall further
cover and include the right to make such additions, alterations, or
modifications to or in said sugar house as the parties of the
second part may desire to make, using at their option, all the
brick and other material now on the aforesaid premises, the right
being further reserved to the said parties of the second part to
drain the aforesaid leased premises into the regular plantation
ditches and drains."
" But the parties of the second part hereby covenant and bind
themselves to make at least, and in any event, such additions and
alterations to and in said sugar house as will enable it
conveniently, and in suitable time, to take off the crops of the
Barbreck, St. Peter's, and Anchorage plantations."
" Article Second. The consideration of the aforesaid lease shall
be the sum of twenty thousand dollars ($20,000), or two thousand
dollars ($2,000) per annum, which the parties of the second part
bind and obligate themselves to pay in semiannual installments of
one thousand dollars ($1,000) each, the first installment to be due
and payable on the first day of January, 1893, and the others every
six months thereafter."
" And it is understood and agreed that while all the terms and
stipulations of this contract shall be absolutely and irrevocably
binding from the date of its execution, the rent, as above
stipulated, shall not begin to run until the first day of October,
1892."
" Article Third. It is further understood and agreed that there
shall be built immediately, or as soon as practicable after the
execution hereof, a tramway and bridge from the Barbreck sugar
house through the St. Peter's plantation, on the Barbreck side of
the bayou, to the boundary line of the Prosser plantation, for the
purpose of conveying the crops of the said plantation to the sugar
house."
" The parties of the first part contract and agree on their part
to grade the beds of the said tramways and to haul all the
necessary materials for their construction, the parties of the
second part covenanting and agreeing on their part to furnish all
the material and to complete the tramways and build the bridges
after the grading and hauling aforesaid shall have been done."
" And after the first crop season after the execution hereof,
the parties of the second part bind and obligate themselves to
build, on the same terms and conditions as are provided above, a
branch tramway from the main tramway on the Barbreck plantation,
hereinabove provided for, across the St. Peter's bridge and through
the St. Peter's field on that side of the bayou up to the line of
the Morgan Railroad. And the parties of the second part shall have
the privilege of carrying the tramways entirely through all or
either of the said three plantations, so as to be able to extend
them beyond."
" Article Fourth. The parties of the second part shall further
have the right of way for a railroad to connect the Barbreck sugar
house with the Morgan Railroad, including the consent of the
parties of the first part to their building a railroad bridge
across the bayou at the grade level of the Barbreck cane yard, and
the further right to construct and operate telegraph and telephone
lines along all the aforesaid tramways and railroad."
" The parties of the second part shall further have, during the
lease, a full and complete right of way over the road connecting
the Barbreck sugar house and the railroad depot, and the further
right to establish and operate during the lease at some suitable
place on one of the three aforesaid plantations, a kiln for burning
brick."
" Article Fifth. But it is distinctly understood and agreed that
the aforesaid tramways and railroad must be so constructed as not
to interfere with the drainage facilities of the aforesaid three
plantations, or either of them."
" And as the courses of the aforesaid tramways and railroad are
not definitely fixed herein, it is further understood and agreed
that as soon as the said courses shall have been mutually agreed
upon and the tramways and railroad built, they shall
ipso
facto become the courses contemplated herein, and neither of
the parties hereto shall have the right to change the same or
either of them without the other's consent."
" Article Sixth. The parties of the first and second part hereto
further covenant and agree mutually to sell and purchase,
respectively, upon the following terms and conditions, all the cane
which may be grown on the three aforesaid plantations,
viz., the Barbreck, St. Peter's, and Anchorage
plantations, except such as may be needed each season as seed for
the following year."
" Article Seventh. The parties of the first part shall cultivate
the plantations in cane, or so much thereof as would be justified
by usual and improved agricultural methods."
" Article Eighth. The cane shall be delivered at the sugar house
or at the tramways at the option of the parties of the first part,
to cars furnished by the parties of the second part; the said cars
to be loaded to their full capacity by the parties of the first
part."
" Article Ninth. The parties of the first part shall have the
absolute right to deliver on and after the fifteenth day of October
of each season, and the parties of the second part shall be bound
and obligated to accept, unless hereinafter provided to the
contrary, so much cane each working day as shall represent the
average amount necessary to be delivered per day, to complete the
delivery by the twenty-fifth day of December following; the said
average to be based upon the number of working days between the
fifteenth of October and the twenty-fifth of December, and the
total estimated tonnage of the three plantations."
" The said estimate shall be made on the first day of each
October by the parties of the first part, and shall be submitted in
writing to the parties of the second part, who shall have the right
to make a personal inspection of the crop; and, in case of a
disagreement between the parties hereto as to the tonnage, they
shall agree upon an umpire, whose decision and estimate shall be
final and binding on all parties hereto."
" Article Tenth. The parties of the second part shall not be
bound to accept cane frozen standing more than eight days after a
freeze, but windrowed cane uninjured by freeze shall be paid for on
the same basis as uninjured standing cane."
" And all cane must be cut as close to the ground as
practicable, and not above the first red joint, and it must be
delivered promptly after cutting, freed from trash, as is customary
in Louisiana. Nor shall the parties of the second part be bound to
accept any cane the juice of which shall test less than 9 percent
sucrose."
" Article Eleventh. The price to be paid by the parties of the
second part shall be graduated according to the percentage of the
sucrose content of the juice of the cane, as expressed at the mill,
and the average market price, as determined by the New Orleans
quotations of prime yellow clarified sugar, during each delivery
week, plus the bounty; this price to be estimated on a basis of
four dollars per ton for cane when the sucrose content of the juice
is 11 percent and the average market price of prime yellow
clarified sugar, plus the bounty, is five and a half cents per
pound, or 6.6 cents for every one percent of sucrose in the juice,
thus:"
" 11 percent x 6.6 x 5 1/2, equals $4.00."
" Article Twelfth. The parties of the first part shall have the
right to appoint a representative who shall have access to the mill
at all times for the purpose of testing the juice or for any other
purpose legitimately and reasonably pertaining to the interests of
the said parties of the first part under this contract."
" The juice shall be tested daily, or as often as either party
may desire, and immediately, or as soon as practicable, after it is
expressed. And in case more than one determination is made during a
day, the average result shall be taken as the basis of payment for
that day. And in case of disagreement between the parties hereto as
to the percentage of sucrose content, Dr. W. C. Stubbs, of New
Orleans, shall be the umpire, and his decision and figures shall be
binding."
" Article Thirteenth. The price of cane as above determined
shall be paid as follows:"
" Two and 75/100 dollars per ton shall be paid every Monday for
the cane delivered during the preceding week until the delivery is
completed. The balance, if any, per ton, shall operate as a lien
and privilege, to the full extent of such balance, on the first
bounty money received by the parties of the second part on sugar
produced from cane ground at the Barbreck sugar house, and the said
parties of the second part covenant and agree to consecrate solely
to the payment of such balance all bounty payments so received by
them, until the whole of the said balance shall have been
paid."
" Article Fourteenth. But whereas there is recorded against the
premises hereinabove leased a mortgage to secure the payment at
maturity of four promissory notes, each note being for the sum of
four thousand one hundred and sixty-six dollars and sixty-six cents
and bearing interest at the rate of four percent per annum from the
first day of January, 1890, until they respectively mature;
and"
" Whereas, the said notes mature on the first of January, 1893,
the first of January, 1894, the first of January, 1895, and the
first of January, 1896, respectively,"
" Now therefore, in order to secure the parties of the second
part in the quiet enjoyment of the said leased premises and the
prompt payment of the said notes, principal and interest, as they
respectively mature:"
" It is understood and agreed that the parties of the second
part shall have the right and privilege of reserving each season,
until all the aforesaid notes shall have been paid, the rent which
may be due under the terms of this contract on the first day of
January of each season, and, in addition, so many of the cash
weekly payments for cane, hereinabove provided for, next preceding
the first day of January of the said season, as will, together with
the rent as aforesaid, aggregate the amount, principal and
interest, of the note falling due on the first of January of that
season."
" The amount so reserved shall be held by the said parties of
the second part in trust for the parties of the first part, and, in
case the said note is not promptly paid at maturity by the parties
of the first part, then, for their own protection, the parties of
the second part shall have the right to apply the amount reserved
as above provided to the payment of the note, principal and
interest, charging the amount so applied to the account of the
parties of the first part."
" But if the parties of the first part shall promptly pay at
maturity the note falling due on the first of January of any
season, then in that event, the amount reserved, as above provided,
by the parties of the second part for the payment of that note,
shall immediately become due and payable to the parties of the
first part."
" The parties of the first part further covenant and agree to
remove all other liens and privileges on the leased premises, and
to keep the same free from all other liens and privileges during
the term of this lease."
" Article Fifteenth. In the event of a temporary closing and
shutting down of the mill as the result of fire, explosion,
breakage, or other purely fortuitous cause, the parties of the
second part shall not be bound to receive cane during such time,
and shall not be liable in damages to the parties of the first part
for such nonreceipt; but during such temporary shutting down of the
mill, the parties of the first part shall have the right to dispose
of so much cane as the parties of the second part would otherwise
have been compelled, under the terms of this contract, to receive
in any way they may see fit, and they shall furthermore have the
right to use for such purpose, free of charge, all the tramways,
cars, and other transportation facilities of the parties of the
second part."
" And the parties of the second part stipulate and agree to use
every reasonable effort to repair, and make all such delays as
short as possible."
" Article Sixteenth. In case of total loss of the sugar house,
mill, and machinery by fire or otherwise, this contract may be
terminated at the option of the parties of the second part."
" Article Seventeenth. It is agreed and understood that the
value of the Barbreck sugar house, machinery, and appurtenances, as
they stand at the date of this contract, shall be estimated by
three appraisers to be appointed as follows: one by each of the
parties hereto, and the third by these two."
" And the parties of the second part covenant and agree to take
out thereon, in the name and for the benefit of the parties of the
first part and to keep in force during the term of this contract, a
policy of insurance against fire for the full value as above
determined, provided that this valuation shall not exceed the sum
of ten thousand dollars, and to pay the premium on the said policy,
for the benefit of the parties of the first part, during the term
of this contract."
" Article Eighteenth. The parties of the second part further
covenant and agree to pay during the term of this contract any and
all extra taxes which may result from increased assessment of the
leased property on account of the improvements put upon it by the
said parties of the second part."
" Article Nineteenth. On the termination of this contract by
limitation, or as otherwise provided therein, the parties of the
second part shall have the right to remove and take away all the
improvements, of whatever kind or description, including tramways,
which they may have put upon the leased premises, on condition,
however, of paying, before such removal, to the parties of the
first part, an amount which shall represent the depreciation in
value of the sugar house, machinery, and appurtenances belonging to
the said parties, as a means of manufacturing sugar from cane, the
present value to be that determined by the appraisement hereinabove
provided for, and the value at the termination of this contract to
be determined by a similar appraisement; it being understood and
agreed that the latter appraisement shall be made solely with
reference to the relative efficiency and value of the said sugar
house, machinery, and appurtenances for the manufacture of sugar
from cane, without regard to the profits of the industry, or the
depreciation in value of same as the result of the introduction of
new and improved machinery or methods of manufacture."
" Article Twentieth. The parties of the first part agree to keep
all such books and records as are required by the United States
government in relation to the bounty, and to furnish to the parties
of the second part all the details which may be necessary to enable
them to effectuate their bounty rights."
" Article Twenty-First. Nothing in this contract shall be
construed as to authorize the establishment or conduct of a store
of any sort or description upon the leased premises by the parties
of the second part or others."
" Article Twenty-Second. It is further mutually understood and
agreed that in case the bounty now paid upon sugar by the United
States government is removed during the term of this contract, then
and in that event either of the parties hereto may, at their
option, terminate the contract, but, as regards the parties of the
first part, it is understood and agreed that this right of
terminating the contract shall extend only so far as their
obligation to cultivate and deliver cane is concerned, the right
and option being reserved to the parties of the second part, in the
event of an exercise by the parties of the first part of their
right to termination under this section, to continue the lease as
herein stipulated upon the same terms and conditions, except as
hereinabove provided."
" Article Twenty-Third. And whereas, the parties hereto
recognize that, despite the genuine and earnest efforts of the
parties of the second part to construct and put in operation the
contemplated mill in time for the next grinding season after the
execution hereof, such a consummation may be rendered practically
impossible by events absolutely beyond the control of the said
parties hereto, it is therefore understood and agreed that if, by
reason of such unforeseen events, it shall become practically
impossible to construct and put into operation the said
contemplated mill in time for the next grinding season after the
execution hereof, then and in that event the said parties of the
second part shall be bound to receive, under the terms and
conditions of this contract, during said next grinding season, only
the cane grown on the Barbreck plantation, and the parties of the
first part shall have the right to dispose of the St. Peter's and
Anchorage crops during said season in any way they may see fit,
with the privilege of using for such purpose, free of charge, any
and all the transportation facilities of the parties of the second
part."
" But nothing in this section shall be so construed as to
relieve the parties of the second part from their obligation under
this contract to purchase the crops of the three aforesaid
plantations in case of their failure to construct and put in
operation the said contemplated mill in time for the next grinding
season if such failure shall result from the financial inability of
the said parties of the second part to meet their engagements, or
from a want of exercise by them of all due caution, prudence, and
foresight to that end."
" Article Twenty-Fourth. It is further understood and agreed
that the parties of the second part shall have the right and
privilege of subrogating to their rights and liabilities under this
contract at any time during the term thereof, a corporation duly
organized, provided it be satisfactorily shown that the said
corporation be legally organized and competent to contract; that it
is the absolute owner and proprietor of the property, machinery,
rights, and effects of every kind and description which shall have
belonged to the parties of the second part hereto, and shall be
situated upon the three aforesaid plantations, or either of them,
and that the said property, machinery, rights, and effects are free
from any and all liens and incumbrances except the lien of the
lessors under this contract, and on this condition the parties of
the first part covenant and bind themselves to accept the aforesaid
corporation as the substitute of the parties of the second part
hereto, and to release the said parties from any and all subsequent
liability hereunder."
" Article Twenty-Fifth. It is finally understood and agreed that
this is an entire contract, each stipulation and obligation herein
being a part of the consideration for every other."
" In witness whereof, the aforesaid parties have hereunto
affixed their hands on this 16th day of June, 1892."
" [Signed] H. M. Payne"
" J. U. Payne"
" J. U. Payne & Co."
" [Signed] L. Murray Ferris"
" Wm. L. Ferris"
"3. Under article twenty-four (24) of said contract, the said L.
Murray Ferris and Wm. L. Ferris transferred all their rights and
liabilities under said contract to the Ferris Sugar Manufacturing
Company, Limited, a corporation organized under the laws of
Louisiana."
"4. The McKinley Tariff Act, passed October 1, 1890, which
provided for a bounty to sugar producers, was repealed on August
28, 1894, and on September 3, 1894, it was stipulated between the
parties to said contract that the provisions of articles eleven and
thirteen thereof should be extended so as to apply to any bounty
that might thereafter be granted by Congress to sugar produced from
the crop 1894."
"5. The Ferris Sugar-Manufacturing Company, Limited, operated
the Barbreck sugar house under the terms of said contract from
October, 1894, to January 4, 1895, and the said parties of the
first part, J. U. Payne & Co.
et al., delivered to the
said Ferris Sugar Manufacturing Company during that season, under
said contract, ten thousand three hundred and seventy-seven
(10,377) tons of cane grown upon premises other than those leased
to said Ferris Company, for which the said Ferris Company owed a
balance on the purchase price of four thousand five hundred and
sixty-four and 73/100 dollars ($4,564.73) on the contract basis of
$2.75 a ton, and a further sum of six thousand five hundred and
seventy-nine and 30/100 dollars ($6,579.30) in the event that the
bounty should be collected."
"6. In the fall of 1894, the Ferris Sugar Manufacturing Company,
Limited, became heavily involved in financial difficulties, and
prior to this a number of creditors (among them, the Reading Iron
Works Company and John H. Murphy) recorded vendors' privileges upon
the machinery by them to the said Ferris Sugar Manufacturing
Company, Limited, and erected by it in the said Barbreck sugar
house."
"7. On January 4, 1895, the Burdon Central Sugar Refining
Company, Limited, a corporation organized under the laws of New
York, and an unsecured creditor of the Ferris Company to the extent
of forty thousand four hundred and four and seventy-four
one-hundredths dollars ($40,404.74), its entire debt, filed a bill
in equity in the Circuit Court of the United States for the Eastern
District of Louisiana alleging that the Ferris Sugar Manufacturing
Company, Limited, was heavily indebted and insolvent, and that its
assets would be sacrificed by numerous creditors who were about to
bring suit. The bill prayed for the appointment of a receiver to
take charge of all the assets of said company. On the same day, the
defendant company filed an answer, with a resolution of its board
of directors annexed authorizing such action, admitting all the
facts charged in the bill and uniting in the prayer for a receiver.
A receiver was thereupon appointed."
"8. On March 25, 1895, H. M. Payne, J. U. Payne, and J. U. Payne
& Co. filed a petition of intervention in this suit, stating,
among other things not relevant to this certificate, the said
balance of $4,564.73 and of $6,579.30 due them for cane delivered
to the said Ferris Sugar Manufacturing Company, Limited, and
claiming that both sums were secured by a lessor's privilege on the
property of the defendant company at the Barbreck sugar house, and
that the latter sum, namely, $6,579.30, was also secured by an
equitable lien on any bounty that might thereafter be collected by
the receiver. The receiver and the Ferris Company filed an answer
to this petition, admitting the correctness of the amounts claimed,
but denying that they were secured as averred. The Burdon Central
Sugar Refining Company adopted the answer of the receiver. Issue
was joined by replication, and the matters in issue were referred
to a master to report upon the law and the facts. The master
allowed the amounts claimed by interveners, but rejected their
claims both to a lessor's privilege to secure these amounts and to
an equitable lien on the bounty. Upon exceptions to the master's
report, the court decreed that interveners were entitled to a
lessor's privilege upon the movable effects of said Ferris Company
and of third persons upon leased premises to secure both said sums
due for the unpaid price of the sugar cane, in addition to an
equitable lien on the bounty to secure the said sum of $6,579.30,
in preference to all other creditors of the said Ferris Sugar
Manufacturing Company, Limited."
"9. From this decree, the Burdon Central Sugar Refining Company,
complainants, the Reading Iron Company, and John H. Murphy,
interveners in this suit, as creditors of the Ferris Sugar
Manufacturing Company, Limited, for large amounts, took an appeal,
and made the following assignment of errors:"
" First. Said court erred in decreeing that said interveners, J.
U. Payne
et al., are entitled to a privilege and right of
pledge, as lessors, upon the movable effects of the defendant on
the leased premises, to secure the sums due said interveners for
cane sold and delivered by them to said defendant, amounting to
$4,564.73 and $6,579.30."
"Second. Said court erred in decreeing that said interveners are
entitled to an equitable lien on the bounties which may be
collected on sugars made from cane belonging to said interveners,
and taken off by the defendant or its receiver."