Where there was a judgment which had been recorded under the
laws of Louisiana, and thus made equivalent to a mortgage upon the
property of the debtor, and the plaintiff assigned this judgment,
and was then himself sued and had an execution issued against him,
his rights under the recorded judgment could not be sold under this
execution, because he had previously transferred all those
rights.
It was not necessary for an assignee of this recorded judgment,
who was defending himself in chancery by claiming under the
assignment, to notice in his pleading an allegation in the bill
that a release of the judgment was improperly entered upon the
record. His assignment was not charged as fraudulent.
The attorney who had recovered the judgment which was thus
recovered and assigned was not at liberty to purchase it when his
client became sued and execution was issued against him.
Page 52 U. S. 233
This suit was originally brought by Stockton in the district
court (state court) of Louisiana by petition to enforce a judicial
mortgage against a plantation and slaves in the Parish of Carroll
which once belonged to Nicholas W. Ford, but at that time was in
the possession of James C. Ford, the defendant below and appellee
here. Ford appeared in the state court, and, being a citizen of
Louisville, Kentucky, caused the suit to be removed to the Circuit
Court of the United States for the Eastern District of Louisiana,
where the cause was treated as a suit in chancery for the
foreclosure of a mortgage.
The whole of the transactions connected with the suit were very
complicated, but it will not be necessary, under the opinion of the
Court, to state them fully. The following summary will render them
intelligible.
On March 11, 1835, the respondent, James C. Ford, sold and
conveyed to said Nicholas W. Ford several parcels of land and a
number of slaves situate in said Parish of Carroll for the
consideration of $80,000 payable in five annual installments of
$16,000 each, the said Nicholas W. Ford thereby giving to the said
James C. Ford a mortgage upon the said land and slaves, to have the
force and effect of a judgment confessed, for said $80,000.
On May 1, 1837, Roger B. Atkinson, of Vicksburg, drew his bill
of exchange in favor of William B. Pryor upon N. & E. Ford
& Co., of New Orleans, for $7,442.74, payable seven months
after date. This bill was accepted by the drawees, but was not
paid, and after it was protested, Pryor became the holder and owner
of it. The firm of N. & E. Ford & Co. was composed of
Nicholas W. Ford, Edward Ford, and William F. Markham.
On June 10, 1837, three only out of the five annual installments
having been paid to James C. Ford by Nicholas and James having come
under other liabilities for Nicholas, Nicholas executed a mortgage
of the land and slaves to secure the whole, and added other
slaves.
On April 25, 1838, Nicholas mortgaged an additional number of
slaves, with the stock, personal property, and crop.
On May 18, 1839, Nicholas mortgaged the then growing crop of
corn and cotton.
In 1839, Pryor brought a suit in the Commercial Court of New
Orleans against N. & E. Ford & Co., upon the bill of
exchange.
On November 25, 1839, William Ford, Jr., a brother of Nicholas
W. and James C. Ford, then aged nineteen years
Page 52 U. S. 234
and theretofore residing with his father, William Ford, in the
County of Bourbon in the State of Kentucky, appeared at the
chambers of the judge of the Ninth District Court, Parish of
Carroll, Louisiana, and obtained a decree for emancipation,
dispensing him from the time prescribed by law for attaining the
age of majority pursuant to the Act approved January 23, 1829.
On November 26, 1839, Nicholas sold to William Ford Jr. all the
property in the Parish of Carroll for certain promissory notes.
In December, 1839, judgment was rendered in favor of Pryor in
the suit upon the bill for $7,442.74, with interest at five percent
from December 4, 1837.
Mr. Stockton, the appellant, was afterwards employed by Mr.
Pryor to attend to his claim against N. & E. Ford & Co.,
and, entertaining a doubt whether the judgment so recovered was
sufficiently specific as to the persons against whom it was
rendered, in December, 1839, commenced a suit in the Circuit Court
of the United States for the Eastern District of Louisiana, in
favor of Pryor, against Nicholas W. Ford, who was the only member
of said firm residing in said district, to recover the amount of
said bill of exchange.
To this suit Mr. Nicholas W. Ford appeared and pleaded a former
recovery by Pryor in the Commercial Court of New Orleans upon said
bill against all the members of said firm of N. & E. Ford &
Co., and on the trial of said cause in support of said plea
produced the record of said judgment so rendered by said commercial
court, which the court held to be a judgment between the same
parties for the same cause of action, and dismissed the suit, with
costs.
On March 12, 1840, Pryor assigned his judgment to Jones, as
follows:
"I hereby transfer to Dr. Joseph Jones all my right, title, and
interest in a certain judgment in my favor against N. & E. Ford
& Co. of New Orleans, obtained in the Circuit Court of
Louisiana at New Orleans for about eight thousand dollars, more or
less. The said Jones first paying the attorney's fees and all other
costs out of the proceeds of said judgment, and then applying the
balance to the payment of such debts of mine as said Jones may be
responsible for, and the remainder, if any, to be paid over to
me."
"WM. B. PRYOR"
"Vicksburg, 12 March, 1840"
Jones afterwards assigned this judgment to James C. Ford, the
appellee.
Page 52 U. S. 235
On January 2, 1841, the judgment in favor of Pryor was recorded
in the mortgage book, making it equivalent to a mortgage.
"I, Felix Bosworth Parish Judge in and for the Parish of Carroll
in the State of Louisiana, do certify the within copy of judgment
to be recorded in my office in mortgage book B, folio 162."
"Given under my hand and seal of office, this 2d day of January,
A.D. 1841."
"[L.S.] FELIX BOSWORTH,
Parish Judge"
On May 12, 1841, William Ford, Jr., sold back to Nicholas all
the property conveyed on 26 November, 1839.
On the same day Nicholas sold and conveyed all the property back
to James C. Ford.
On 7 February, 1842, Charles M. Way and E. T. Bainbridge
recovered a judgment in a suit commenced by them in the Commercial
Court of New Orleans against Pryor and Howard, by which, after a
discontinuance as to Howard, they recovered from the defendant,
William B. Pryor, $718.12, with five percent interest from 22
April, 1847, and costs of suit, with privilege on the property
attached. Mr. Robert Mott was the attorney who prosecuted the suit
for Way and Bainbridge, and Mr. Stockton, the appellant, defended
the suit for Pryor.
On February 17, 1842, Felix Bosworth, Parish Judge of the Parish
of Carroll and
ex officio recorder of mortgages, entered
on the mortgage book a release of the mortgage resulting from the
recording of the judgment of Pryor against Ford & Co. by
writing across the face of the record the following words: "This
mortgage released by payment in full, February 17, 1842. FELIX
BOSWORTH,
Parish Judge."
On 26 February, 1842, execution was issued on said judgment
against Pryor, to the sheriff of said commercial court, upon which
said sheriff seized, and, after all legal formalities had been
complied with, advertised for sale the right, title, and interest
of William B. Pryor in the said judgment recovered in the
commercial court against N. & E. Ford & Co. for $7,442.74,
with interest at the rate of five percent per annum, from 4
December, 1837, and on 17 March, 1842, pursuant to such seizure and
advertisement, said sheriff sold the said judgment of Pryor against
N. & E. Ford & Co. to the appellant for the sum of $300,
and on 19 April, 1842, conveyed the same to him by deed.
Mr. Stockton was, at the time of the purchase, the holder
Page 52 U. S. 236
of a note drawn by said William B. Pryor, payable to the
appellant's order, five days after date, and dated January 2, 1841,
for $800.
On 22 October, 1842, Stockton, the appellant, instituted in the
District Court of Louisiana for the Parish of Carroll an
hypothecary action against the respondent James C. Ford and said
Nicholas W. Ford, setting forth his purchase of said judgment, the
recording thereof on 2 January, 1841, and that on 12 May, 1841,
Nicholas W. Ford, one of said defendants, owned and had possession
of a large tract of land and negroes in said parish, and that he
had sold them to the respondent, and praying judgment against James
C. Ford as the owner and possessor of said property, and that he
pay the amount of said judgment and interest, or deliver up said
mortgaged property to be sold to satisfy it.
On 12 December, 1842, James C. Ford appeared, and obtained an
order to remove the cause into the Circuit Court of the United
States for the Eastern District of Louisiana. Nicholas W. Ford
resided out of the State of Louisiana, and did not appear.
On 12 February, 1844, the circuit court ordered the case to be
put upon the chancery docket, and to be proceeded in as a chancery
suit.
It is not necessary to trace the progress of the suit through an
amended bill and second amended bill and answer and supplemental
and then an amended answer, and changing the pleadings and motions
for rehearings.
Numerous depositions were taken, and the cause came on for
argument, when, on 24 January, 1848, the circuit court passed the
following decree:
"
R. C. STOCKTON v. J. C. FORD"
"This cause came on to be heard upon the bill, answers,
replications, and exhibits; the evidence being adduced, and
argument of counsel heard, and the court having maturely considered
the same, it is ordered, adjudged, and decreed that the
complainant's bill be dismissed, and the same is hereby dismissed,
with costs."
Some further proceedings took place, but at last the decree was
made absolute.
The complainant appealed to this Court.
Page 52 U. S. 242
MR. JUSTICE NELSON delivered the opinion of the Court.
This action was commenced in a district court of the state, and
was removed by the defendant to the circuit court of the United
States under the twelfth section of the Judiciary Act of 1789.
James C. Ford, the defendant, being the owner of a plantation
and slaves in the Parish of Carroll, State of Louisiana, on 11
March, 1835, sold and transferred the same to Nicholas W. Ford, of
Louisville, Kentucky, for the consideration of $80,000 the payment
of which was secured by a mortgage upon the property sold. A
subsequent mortgage was also given by N. W. Ford and wife, dated 10
June, 1837, to the defendant, to secure him against several heavy
liabilities he was under for him, and in which mortgage was
included some $32,000 of the original purchase money then remaining
unpaid.
Page 52 U. S. 243
On 26 November, 1839, N. W. Ford sold and transferred all his
interest and estate in the plantation and slaves to William Ford,
Jr., for the consideration of $116,207.41, to secure the payment of
which, the property sold was mortgaged by the vendee.
On 12 May, 1841, William Ford, Jr., resold and conveyed back to
Nicholas W. Ford the plantation and slaves for the same
consideration which he had agreed to pay for them, and which was
paid by delivering up and canceling the securities given at the
original purchase.
And on the same 12 May, 1841, Nicholas sold and transferred the
plantation and slaves back to the defendant, from whom he had
originally purchased them, for a large consideration, made up of a
balance remaining due upon the first mortgage and liabilities he
was under of Nicholas, and the payment of which he had assumed.
The interest and estate of the defendant in this plantation and
slaves, under the title thus derived, are involved in the result of
this suit. I have not gone into the particular facts and
circumstances attending these several sales and transfers of the
property, as the view we have taken of the case, and upon which we
shall place our decision, renders it unnecessary to a proper
understanding of the question.
The claim of Stockton, the plaintiff, is as follows.
On 3 December, 1839, one William B. Pryor recovered a judgment
in the Commercial Court of New Orleans against N. & E. Ford
& Co., of which Nicholas W. Ford was a member, for $7,442.74,
with interest at five percent from 4 December, 1837, and costs.
On 2 January, 1841, this judgment was filed and recorded in the
office of the registry of mortgages and became a lien on the real
estate and other immovable property of Nicholas W. Ford. And on 7
February, 1842, the firm of Way & Bainbridge recovered a
judgment against William B. Pryor for $718.12, with five percent
interest from 22 April, 1837, and costs. An execution upon this
judgment against Pryor was issued to the sheriff on 26 February,
1842, who seized all his interest in the judgment he had recovered
against N. W. Ford; and, on 17 March following, in pursuance of
such seizure, and after public notice according to law, sold the
said judgment to Stockton, the plaintiff in this suit, for $300, he
being the highest bidder; and on 19 April conveyed the same to him
by deed.
The suit before us was instituted by the plaintiff under a title
thus derived to this judicial mortgage for the purpose of
foreclosing the same and calling upon James C. Ford, the
Page 52 U. S. 244
defendant, to pay the amount of the judgment, principal and
interest, or that a sale of the mortgaged premises be ordered.
It will be seen from the foregoing statement that the sale and
transfer of the plantation and slaves in question by N. W. Ford to
William Ford, Jr. took place on 26 November, 1839, and the judgment
of Prior against him was filed with the recorder of mortgages on 2
January, 1841, although recovered on 3 December, 1839, some seven
days after the above conveyance.
It further appears also that on 12 May, 1841, William Ford, Jr.
resold and transferred the property to N. W. Ford, who on the same
day conveyed it to the defendant.
The plaintiff insists, therefore, that this judicial mortgage of
Pryor against N. W. Ford, to which he had derived title under the
sheriff's sale, became a lien upon the property, 1st, on the ground
that the conveyance of 26 November, 1839, was made in fraud of the
rights of judgment creditors, but, if not, 2d, that it became a
lien from the time of the reconveyance to N. W. Ford, on 12 May,
1841, as he then became reinvested with the title.
The view we have taken of the case renders it unimportant to
enter upon an examination of either of these questions, and we
shall assume that the judgment was a lien upon the interest of N.
W. Ford upon one or the other of the grounds above stated.
On 12 March, 1840, William B. Pryor assigned this judgment
against N. W. Ford to Dr. Jones, to secure him for responsibilities
he had assumed for the former, he agreeing to pay over the balance,
if any remained after satisfying them. Dr. Jones is a witness in
the case, and testifies that the judgment was assigned to him by
Pryor as an indemnity for large sums of money which he had paid and
was liable to pay for him as surety, and that he had paid for him
demands exceeding the amount of the said judgment for which he had
no other satisfaction or security. That Pryor took the benefit of
the Bankrupt Act of 1841. That soon after the assignment of the
judgment to him, he placed on file in the office where the judgment
was entered notice of the said assignment, and that the plaintiff
had full knowledge of the fact.
These facts are confirmed by the testimony of Pryor, who is also
a witness in the case.
The suit was not commenced by Way & Bainbridge against Pryor
until 15 January, 1842, nearly two years after this assignment of
judgment of Pryor against N. W. Ford to Jones. The assignment, as
we have seen, was made upon full consideration, without any
concealment, or, for aught that appears,
Page 52 U. S. 245
intent to hinder or delay creditors; and was well known to the
plaintiff long before he became the purchaser at the sheriff's
sale. It passed the legal interest in the judicial mortgage out of
Pryor, and vested it in Jones, as early as 12 March, 1840, and we
are wholly unable to perceive any ground of equity in the
plaintiff, or those under whom he holds, for disturbing it through
a judgment against the assignor rendered nearly two years
afterwards.
The sheriff's sale therefore could not operate to pass any
interest in it to the plaintiff.
After the parties had proceeded to issue upon the pleadings, the
plaintiff applied and obtained leave to withdraw the replication
and amend his bill, and in that amendment he set forth, that on 17
February, 1842, the recorder of mortgages had entered on the
mortgage book in his office a satisfaction and discharge of the
judicial mortgage, which at that date was the property of Pryor;
that afterwards it had become the property of the plaintiff by
virtue of the sheriff's sale and conveyance, and charges that the
entry of satisfaction was illegal and void, as the judgment was
then under seizure by the process of attachment in the suit of Way
& Bainbridge against Pryor; that Pryor had no right to release
the judgment; that he never received payment or satisfaction of the
same, and that the discharge of record was fraudulently procured by
Jones at the request of James C. Ford, the defendant, and that
Jones had no interest or property in the same.
No answer was put in to this amendment, and the allegations were
taken as confessed by the defendant.
This branch of the case has occasioned some embarrassment, and
it is not readily perceived why the solicitor for the defendant
should have omitted to put in the proper answer to the allegations,
or have allowed them to be entered as confessed.
It will be seen, however, that the object of the amendment was
to get rid of the entry of satisfaction of the judicial mortgage of
record, which had been entered by the recorder of mortgages in due
from, and which, while it remained, afforded a complete answer to
the title set up by the plaintiff under the sheriff's sale, but
which, of itself, was not essential, as it respected the ground of
defense set up by the defendant. That rested upon the assignment
from Pryor to Jones of 12 March, 1840. There is no charge made in
the amendment of fraud in this assignment, nor any impeachment of
its validity, except as may be inferred from the allegation that
Jones was not the owner of the judgment, which is stated by way of
showing that he possessed no authority at the time to cause the
satisfaction to be entered.
Page 52 U. S. 246
The defendant had set up in his first and supplemental answers,
expressly, as one of the grounds of his defense, this assignment of
the judgment from Pryor to Jones, and from Jones to himself; and
that the plaintiff had full knowledge of the same. The fact,
therefore, was at issue on the bill, answers, and replication, and
unless it had been directly impeached in the amended bill, no
further answer was necessary to enable the defendant to maintain it
by the proofs.
This being the state of the pleadings at the time of the
amendment of the bill, the admission that the entry of satisfaction
of the judgment by the recorder of record was made without
authority and void did not materially affect the ground and posture
of the defense. For while the pleadings were such as enabled the
defendant to maintain the force and validity of the assignment by
the proofs, he was in a situation to defend himself against the
claim of the plaintiff, independently of the question in respect to
the entry of satisfaction.
If the amended bill had charged that the assignment had been
made in fraud of the rights of creditors, and the charge had been
taken as confessed for want of an answer, the question would have
been very different. But there is no such allegation.
Indeed it is somewhat remarkable that neither in the original
bill, nor in the amendments for there were two amendments, is there
to be found a charge impeaching the good faith or validity of this
assignment, although its existence was well known to the plaintiff,
and while it remained, it was fatal to his deduction of title under
the sheriff's sale.
In any view, therefore, that can be properly taken of the case,
the plaintiff has shown no right or interest in the judicial
mortgage which he seeks to enforce against the plantation and
slaves in question. The whole interest had passed to the
defendant.
There is another ground of defense set up in the pleadings, and
supported by the proofs, which has not been satisfactorily
answered. And that is that the plaintiff was the attorney of Pryor
in the judgment against N. W. Ford, employed to enforce its
collection, and while holding this relation to him, and after the
assignment of Jones to the latter, he became the purchaser in his
own name, without communicating the fact to his client, and
obtaining his consent. Holding this relation to Jones at the time
of the purchase, it was his duty to have advised him of the seizure
and sale, so as to have enabled him to prevent a sacrifice of the
judgment on the sale, and having not only neglected to do this, but
having purchased the judgment
Page 52 U. S. 247
himself, a court of equity will fasten upon the purchase a trust
for the benefit of the client.
The defendant therefore, standing in the place of Jones, would,
upon clear principles of equity, have a right to demand of the
plaintiff the title acquired at the sheriff's sale to the judicial
mortgage, on paying the purchase money. And if the purchase was
made in bad faith, and with the intent to speculate at the expense
of the rights and interests of the client, using the knowledge
derived from that relation for this purpose, the remedy might not
be too strong even to set aside the sale, and relieve the property
from the encumbrance without the terms mentioned.
It is true, this is not the case of an attorney purchasing
property under an execution which he has issued on a judgment, the
usual case in which a court of equity has interfered, and declared
the purchase to have been made in trust for the client. But the
principle is the same. He had the charge of the judgment, and was
entrusted with the management of it for the purpose of collection,
and can be allowed to do no act in the absence of the client, and
without his consent concerning it, by which he may derive an
advantage at the expense of the client.
Instead of the judgment, suppose the plaintiff had the charge
and management of a plantation and slaves for his client, and an
execution should come against them under which they were seized and
sold; can it be doubted, if purchased in by the attorney in the
absence of the client, and without his consent, that he could not
hold the property discharged of the trust growing out of the
relation existing between the parties? We suppose not. A court of
equity, from the mere fact of such relation, would fasten upon the
purchase a trust, without any inquiry into the motives or
intentions of the attorney in making the purchase, and compel him
to give up its benefits and advantages on the reimbursement of the
purchase money. Neither fraud nor imposition need be shown. The
client may, at his election, treat the act of done for his
benefit.
There are few of the business relations of life involving a
higher trust and confidence than that of attorney and client, or,
generally speaking, one more honorably and faithfully discharged;
few more anxiously guarded by the law, or governed by sterner
principles of morality and justice; and it is the duty of the court
to administer them in a corresponding spirit, and to be watchful
and industrious, to see that confidence thus reposed shall not be
used to the detriment or prejudice of the rights of the party
bestowing it.
But it is unnecessary to pursue this branch of the case, or
to
Page 52 U. S. 248
place our decision upon it, as the ground already taken, and
stated more at large, affords a full and conclusive answer to the
claim set up by the plaintiff.
The decree of the court below is
Affirmed.
Order
This cause came on to be heard on the transcript of the record
from the Circuit Court of the United States for the District of
Louisiana, and was argued by counsel. On consideration whereof, it
is now here ordered, adjudged, and decreed by this Court that the
decree of the said circuit court in this cause be and the same is
hereby affirmed, with costs.
