Case Name: NOTT & CO. vs. PAPET ET AL.
Court: Louisiana Supreme Court
Jurisdiction: Louisiana
Decision Date: 1840-05
Citations: 15 La. 306
Docket Number: 
Parties: NOTT & CO. vs. PAPET ET AL.
Judges: 
Reporter: Louisiana Reports
Volume: 15
Pages: 306–310

Head Matter:
NOTT & CO. vs. PAPET ET AL.
Eastern Dist.
May, 1840.
APPEAL FROM THE COURT OF THE FIRST JUDICIAL DISTRICT.
Brokers are not licensed in this state, and as such are unknown to our law.
A party to a contract who denies that he acted as principal must show that he made this known at the time of the contract, or allege and prove his agency at the trial.
Brokers in this state buy and sell paper on their own account, and that of others ; and must be responsible as all other individuals.
And where a broker failed to disclose his principal at the time of sale of a promissory note, or show who he was at the trial, he was considered as having sold the note on his own account, and held responsible for its genuineness.
There is no usury in the sale of a note, although more than the highest rate of conventional interest was deducted, if the vendor does not endorse it, or is not a party to it.
It is of the essence of the contract of loan, that he who receives money is bound to return it, and to which alone usury attaches.
This is an action first instituted against the maker and endorser of a promissory note. They both expressly denied that they signed and endorsed said note, and charged that their names were forged or counterfeited, and prayed to be dismissed.
The plaintiffs, in an amended petition, alleged that they purchased the note sued on, from Charles Papet, for a valuable consideration, and prayed that he be made a party, and cited to defend this suit against the charge of forgery; and that in case the defendants succeeded in establishing their defence, the plaintiffs have judgment against Papet for the amount of said note and protest, and for damages.
Papet pleaded a general denial. He denied specially having sold the note, because he never was the owner of it; averred that he was a duly licensed broker, and paid taxes as such ; and that if he delivered the note in question to the plaintiff, it was as an exchange broker; and he was not apprised that it, or any other note he may have negotiated, was not genuine. He pleads usury, and the want of amicable demand.
Upon these pleadings and issues, the cause was tried' before the court and a jury.
The defendants proved that their signatures were not genuine, to the satisfaction of the jury.
It was also shown that the plaintiffs purchased the note in question of Papet. The latter admitted to a witness that he sold it to the plaintiffs. The note was for four thousand dollars, and the plaintiffs gave a check for three thousand eight hundred and fifty-three dollars and thirty-two cents, deducting from the note one hundred and forty-six dollars and sixty-eight cents, for eighty-eight days interest.
After hearing the evidence and receiving a charge from the judge, the jury returned a verdict “for the defendants.”
There were several bills of exception taken to the charge of the judge, and other of the proceedings, which it is unnecessary to notice. The facts of the case are nearly all shown by the pleadings.
From judgment confirming the verdict, the plaintiffs appealed.
Curry, for the plaintiffs, submitted the following points in writing:
1. The evidence does not warrant a verdict in favor of the maker and endorser, on the ground that their names are forged or counterfeited. The witnesses speak doubtfully and hesitatingly of the signatures. The principal witness, himself a broker, says he has taken notes with similar signatures, as genuine.
2. The instructions of the district judge to the jury are erroneous and improper, on the grounds set forth in the exceptions taken.
3. If the endorsers are not liable, Papet is, as the vendor of the note sued on. He cannot escape on the plea that he was a broker, for he disclosed no principal. He either acted as agent or principal, and if he disclosed no principal, he must be liable individually.
4. The vendor guarantees the genuineness of the note, though not the solvency of the makers. The vendor is always bound in warranty, unless expressly excepted. The maxim of the civil law is caveat vendor.
Denis, Preston and Pichot, appeared for the defendants, in the court below.
Eustis and Benjamin, for the plaintiffs.

Opinion:
Martin, J.,
delivered the opinion of the court.
This is an action against A. Foucher as maker, and F. Saulet as endorser, of a promissory note.
The defendants severed in their answers, but both expressly averred that they did not sign and endorse their names to the note sued on, and that their signatures are counterfeited or forged.
On the filing of these answers, the plaintiffs presented a supplemental petition, alleging that they purchased and held said note as the vendees of one Charles Papet, for a valuable consideration ; and as the defendants, by their answers, deny their signatures, and allege them to be forgeries, they pray that Papet be made a party defendant, and in case the defendants are not liable, that they have judgment against him for the amount of said note.
Papet pleaded a general denial, and averred that if he sold and delivered the note sued on to the plaintiffs, it was as an exchange broker, and that he was a duly licensed broker, and acted in that capacity alone. He also avers, that he never knew of any note he may have passed or negotiated, as broker, was ever false or forged. Lastly, he pleads the want of amicable demand, and usury.
Brokers are not licensed in this state, and as such are unknown to our law.
A party to a contract who denies that he acted as principal must show that he made this known at the time of the contract, or allege and prove his agency at the trial.
There was a verdict and judgment for the defendants, and the plaintiffs appealed.
The jury, in our opinion, correctly found for the maker and endorser of the note, as the evidence satisfied the jury that their signatures were forged, and we are unable to say that they erred. The case is, therefore, to be considered with regard to Papet alone.
Our attention is drawn to a bill of exceptions taken to the charge of the court.. The jury were instructed, "that if they considered it proved that this defendant sold the note, he must show for whom he acted as broker; which may be shown when called on, although not done at the time of the sale. That the defendant being proved to be a licensed broker, is presumed, in making the sale of the note, to have acted as such, although he named no principal, for whom he acted at the time. But, when called on in a case like the present, it is incumbent on him to disclose his principal; and if he does not, he will be presumed, in law, to be the owner." "If the jury, however, believe that the defendant passed the note as a mere agent, or broker, although he was unable to prove his agency as to any particular individual, and was guilty of no fraud, the jury ought to find in his favor."
If the plaintiffs and appellants have a right to complain of any part of this charge, it must be the last part of it. We have not inquired into its correctness, because it has not appeared to us to have any bearing on the case.
We are ignorant of any law of this state, authorizing, or relating to licensed brokers. They are not known to us. Parties to a contract, who deny that they acted as principals, must show that they made this known at the time of the contract, or allege and prove it at the trial. The term agent is a relative one; and it is of its essence that it have its correlative, to wit: a principal. Brokers in this state buy , , . 1 , . . and sell paper on their own account, and on that of others, When they sell on their own account, they must certainly be responsible, as all other individuals. This responsibility would vanish, if they could escape from it by alleging, without proving it, that they acted for another. If the responr ° 7 J . Ubility does not rest on the agent, it must lie on the pnncipal- and he must be made known, otherwise, the responsiJ ' buity would be removed from the agent, without being fixed on any one else. Papet, not having disclosed his principal ¡n this case, at the time of the sale, nor shown who he was 7 7 , at the trial, must be considered as having sold the note on bis own account, and be held responsible for its genuineness, yye ¿0 not mean, however, to say, that at the time of the sale, the broker must name the owner of the paper, but it is his duty to make known to the purchaser that he does not ge|[ his OWn acCOUDt.
Brokers in this state buy and sell paper on their own account, and that of others ; and must be responsible as all other individuals.
broker failed6to disclosehispnnof sale of a pro™iow°wlohe was at the trial, he was considered as having sold own account,and fordit7 genuineness.
There is no usury in the sale of a note, although more than the highest rate of conventional interest was deducted, if the vendor does not endorse it, or is not a party to it.
It is of the essence of the contract of loan, that he who receives money is bound to return it, and to which alone usury attaches.
_ There was no usury in this transaction, although more than the highest rate of conventional interest was deducted *n lhe sale of the note; for the vendor, not having endorsed jt would nbt have been bound to repay what he received, if . . . T . . . - . it had been genuine, it is of the essence of the contract °f l°arb that he who receives the money, should incur the obligation to return it. The contract which intervened , . . , . , , between the parties in this case, was one or sale; so that the plea of usury is unavailable.
jt therefore, ordered, adjudged and decreed, that the judgment of the District Court, so far as it relates to the defendants, Foucher and Saulet, be affirmed, with costs. It *s further ordered, adjudged and decreed, that the judgment, as far as it relates to the defendant, Papet, be annulled and reversed; and t.hat the plaintiffs recover from the heir of Papet, made a party to this appeal, the sum of four thousand dollars, with three dollars costs of protest; no amicable demand being necessary in a call in warranty; and it is ordered that the defendant pay costs in both courts.