Case ID: mart-ns_4/html/0029-01.html
Source: Caselaw Access Project
Author: {"author": "Mathews, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

MOULON vs. HIS CREDITORS.
    
    Appeal from the court of the parish and city of New-Orleans.
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   Mathews, J.

delivered the opinion of the court. In this case Jumonville, the appellant, opposes the homologation of a tableau of distribution of the insolvent’s estate, on the ground of not being placed thereon, to the full amount of his claim, as one of the creditors.

The facts of the case appear to be these:

The appellant became a creditor of the insolvent to the amount of about $24,000, in consequence of endorsing the notes of the latter, which the endorser was compelled to pay on the failure of the maker. During the time of his responsibility, as endorser, he owed to the insolvent $6000, which he alleges, he retained in his possession, as a security or pledge against his liability on the endorsements.

His counsel insists, that he has not only a right to withhold that amount from the estate of the insolvent in compensation of his claim against said estate; but also to recover a dividend from the remainder, proportioned by the full amount of his demand of $24,000; because it is shown that the syndics will not have funds of the bankrupt to pay more than about 50 percent, of the w hole amount of debts.

|n sUpp0rt of this doctrine, the appellant ⅛ dec]arec3[ to be privileged, on the pledge, which he has a right to retain until the whole of his claim be paid. To establish the truth of this proposition, we are referred to the principles which prevail in the commercial law of the United States, as recognized in the different states of the union. The principal authority cited is Chiity on bills of exchange, wherein at page 56, in the notes, references are found to the adjudged cases on which the author founds his dicta. These do authorise a person who has accepted bills for the accommodation of another, to retain the foods of the latter, or withhold debts due to him, under certain circumstances, asan indemnity against his liability, as acceptor. The same rule ought to govern in case of endorsement to accommodate a maker of a promissory note. But, it does not follow, as a necessary consequence, that in the event of the bankruptcy of persons thus accommodated, acceptors and endorsers, should be at liberty to hold the funds in their possession or withhold payment of sups due to the bank-rp||? in compensation of their claims .against. iiim, and still receive a dividend of his estate in proportion to the full amount of such claims-

Such a conclusion is evidently absurd, for it would be to make the effect greater than the cause. Let us analyze the present case. The insolvent owes to the appellant $24,000, the latter owes to the former$6000, this last sum is only capable of effecting a payment of the first, pro tanto, in the ordinary course of trading, but if the doctrine contended for, by the counsel for the appellant be adopted, it will effect a much larger payment; for,by compensating the $600 ), due from the appellant to the bankrupt, the debt due to the former will be only $ 18,000, of this it is agreed, that the estate of the insolvent will pay only $9,000; but, if the creditor be placed on the bilan for the entire amount oí $24,000,then these $6000 will have paid $9000, which is absurd.

In this view of the case, we have considered that the right to retain a pledge, can have no more extensive effect given to it, than the privilege to compensate its value against claims of the pledgee. The privilege, allowed by the judgment of the court below to the appellant, to benefit by compensation to the whole amount of the debt he owes the estate, is as great as can be authorised bv sound principles of law* , . r equity and justice.

Moreau for the plaintiff, Dennis for the defendants.

It is therefore ordered, adjudged and decreed. that the judgment of the parish court be affirmed with costs to be paid by the appellant, in his individual capacity.