Source: https://en.wikisource.org/wiki/Brabston_v._Gibson/Opinion_of_the_Court
Timestamp: 2019-05-19 22:54:08
Document Index: 718012474

Matched Legal Cases: ['§ 2031', '§ 2545', '§ 2566', '§ 165', '§ 12', '§ 227']

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Brabston v. Gibson/Opinion of the Court
< Brabston v. Gibson
695617Brabston v. Gibson — Opinion of the Court
On the 24th of December, 1839, Harris and wife resold to Tobias Gibson the undivided moiety of the plantation and slaves (subject to these two mortgages), for the sum of $70,000, which was to be thus paid by Gibson. He was to pay off the two mortgage debts in the following manner:-The two notes held by the Agricultural Bank of Mississippi in four annual instalments during the years 1840, 1841, 1842, and 1843; the debt to the heirs of Epheus Gibson in three annual instalments during the years 1844, 1845, and 1846 (which arrangement and postponement of payments by the bank and the heirs of Epheus Gibson Harris became responsible for); and for the balance of the $70,000 of purchase-money, viz. $29,510.79, he Gibson, gave Harris (then being a citizen and resident of Mississippi) four promissory notes, all dated at the parish of Concordia, on the 24th of December, 1839, and payable at the Agricultural Bank of Mississippi, viz.:--
But he, Gibson, was to have the liberty of extending the time of the payment of each note one year more, on payment of eight per cent. interest. The said four notes were each respectively marked Ne varietur by the parish judge, at the the time of the act of sale, to identify the same therewith.
Those provisions are the following (Civil Code of Louisiana, § 2031, § 2545 to § 2566):--
On the 18th of September, 1841, Harris calimed his right of redemption, and thereupon Gibson and wife reconveyed to him, by an authentic act, dated that day, all the property conveyed to him by Harris on the 24th of December, 1839, for the consideration of $70,000, which he acknowledges to have received in the manner following, viz.:-It was recited in the said act of reconveyance, that the two mortgage debts to the Agricultural Bank of Mississippi, and to the heirs of Epheus Gibson, still remain unpaid; and Harris covenanted to assume the payment thereof himself, and to guarantee Gibson against any personal liability therefor; as to the remaining part of the said $70,000, viz. the $29,510.79, for which Gibson had given his four promissory notes to Harris, the first and last of them, those for $2,000 and $14,510.79, were actually surrendered and returned, and as to the remaining two, for $6,000 and $7,000, it was stipulated that 'they are not returned to the said Gibson at the passing of this act, but the said Harris hereby stipulates and guarantees the return and cancelling of said notes; and, to secure the same, hereby specially mortgages in favor of said Gibson all the property' then conveyed, with the growing crops.
On the-of March, 1843, Harris was declared a bankrupt by a decree of the District Court of the United States for the Louisiana District, under the bankrupt law of the United States; and, by further proceedings in that court, obtained a final discharge and certificate.
'6th. The payee of the said two notes, William Harris, was, on the-day of March, 1843, declared a bankrupt by a decree of the District Court of the United States for the Louisiana District, under the bankrupt law of the United States, and by the further proceedings in bankruptcy before said court has obtained his final discharge and certificate.
For the plaintiff in error, it was contended that judgment ought to have been rendered for the plaintiff in error. Because,--
For the defendant in error it was contended,--
Besides, it was to be executed in Mississippi,-the notes were to be paid there. The law of Mississippi, therefore, regulated in every respect the mode and circumstances of payment,-the rights of the parties paying or to be paid. Story's Promissory Notes, § 165; 2 Kent's Com. 461; Robinson v. Bland, 2 Burr. 1078; Bank of Washington v. Triplett, 1 Peters, 34; Boyce v. Edwards, 4 Peters, 123; Musson v. Lake, 4 Howard, 278; Thompson v. Ketchum, 4 Johns. 288; Fanning v. Consequa, 17 Johns. 518; Shewell v. Hopkins, 1 Cowen, 108; Prentiss v. Savage, 13 Mass. 23; Vidal v. Thompson, 11 Martin, 23; Andrews v. Herriot, 4 Cowen, 508, 510; Cox v. United States, 6 Peters, 172, 203.
Howard and Hutchinson's Miss. Digest, p. 373, §§ 12, 13:-'All bonds, obligations, single bills, promissory notes, and all other writings, for the payment of money or any other thing, shall and may be assigned by indorsement, whether the same be made payable to the order of the assigns of the obligee or payee or not; and the assignee or indorsee may sue in his own name, and maintain any action which the obligee or payee might or could have sued or maintained thereon previous to assignment; and in all actions commenced or sued upon any such assigned bond, obligation, bill single, or promissory note, or other writing as aforesaid, the defendant shall be allowed the benefit of all want of lawful consideration, failure of consideration, payments, discounts, and set-offs, made, had, or possessed against the same, previous to notice of the assignment, any law, usage, or custom in anywise to the contrary notwithstanding, in the same manner as if the same had been sued and prosecuted by the obligee or payee therein; and the person or persons to whom such instruments so payable are assigned may maintain an action against the person or persons who shall have indorsed or assigned the same, as in cases of inland bills of exchange; provided, that where any debt shall be lost by the negligence or default of the assignee, the assignor or assignors shall not be liable, any such assignment notwithstanding.'
In the case of Parham v. Randolph, 4 How. Miss. 453, Randolph sold land in Louisiana and received in payment certain notes 'made payable at the Agricultural Bank of Mississippi,' on which Parham was indorser. The notes were assigned by Randolph to the Planters' Bank, who recovered judgment against the indorser. The title of Randolph to the land proved bad, and his vendee was evicted. The indorser, Parham, prayed for an injunction and rescission of the contract, which was refused by the inferior court, and this appeal taken. It was contended that the assignee, the Planters' Bank, being an innocent holder, could not be affected by failure of title; but the Court of Errors (Sharkey, C. J.) said,-'This position is untenable. The statute (of Mississippi) gives the maker the same defence against the holder that he had against the payee of the note. These notes were made payable at the Agricultural Bank.'
There is nothing in the form or substance of the notes in question which exempts the party who commences an action upon them from the provisions of the statute of Mississippi. The indorsement of Ne varietur' did not give, as is alleged, 'increased confidence and additional value' to their negotiable character; on the contrary, it gave notice to the assignee that they were connected, when made, with other transactions, into which, receiving them as she did, not 'in the usual course of business,' but as collateral security, she was bound to inquire. The cases of Fusilier v. Bonin, 12 Martin, 235, Canfield v. Gibson, 1 New Series, 145, and Abat v. Gormley, 3 Louis. 241, are decisions, not of the law of Mississippi, but of Louisiana, nor do they go further than to hold that the mere indorsement of Ne varietur,' unaccompanied with other circumstances, does not destroy in Louisiana the negotiable character of bills or notes, taken 'in the usual course of business.' Indeed, Fusilier v. Bonin goes to show that, if the notarial act accompanying the note marked Ne varietur exhibits a right existing in the maker to cancel the note, the holder could not recover. In State Bank v. Orleans Navigation Co., 3 Louis. 294, 304, a third party was held bound to notice a defect disclosed by an instrument referred to in the bill.
Because it is neither proved by the record, admitted, nor agreed, that the notes on which this action is brought were presented for payment, or that payment thereof was demanded, either at the Agricultural Bank of the State of Mississippi, or on the day of the maturity thereof, or that any notice of presentation, or of non-payment thereof, was given to the said Gibson or Harris. Story on Promissory Notes, §§ 227-230; 3 Kent's Com. 97, 99; Rowe v. Young, 2 Brod. & Bingh. 165; U.S. Bank v. Smith, 11 Wheat. 171; Wallace v. McConnell, 13 Pet. 136; Mellon v. Croghan, 3 New Series, 423, 431; Smith v. Robinson, 2 Louis, 405; Morton v. Pollard, 10 Louis. 552; Warren v. Allnut, 12 Louis. 454.
The action was founded on two promissory notes given by Tobias Gibson, and dated the 24th of December, 1839, in which he promised to pay to William Harris, for value received, at the 'Agricultural Bank of the State of Mississippi,' in one note, six thousand dollars, the 1st of February, 1845, and in the other, seven thousand dollars, the 1st of February, 1846. These notes were given in part consideration for a plantation and slaves in Louisiana, sold by William Harris to Gibson, to secure the payment of which and other notes a mortgage was executed on the property. The words Ne varietur were indorsed on the notes to identify them with the sale of the estate.
From the fact that the notes were not given up, and an indemnity against him having been taken, a jury might well presume that Gibson had notice of the assignment. But this was not important to the right of the assignee. She stands unaffected by the reconveyance. The indorsement of the words Ne varietur could have no effect on the notes which were payable in Mississippi, and which were indorsed to the plaintiff in that State. Nor could they have affected the negotiable character of the notes, had they been assigned in the usual course of business in Louisiana. Abat v. Gormley, 3 Louis. 241.
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