Court Opinion

ID: 7207826
Source: CourtListenerOpinion
Date Created: 2022-07-24 17:17:24.767803+00
Date Added: 2024-06-11T16:16:43.987354
License: Public Domain

Garland, J.
In May, 1836, the plaintiffs loaned the defendant $15,000, secured by a mortgage on a half square of ground in the faubourg Annunciation. He paid $3000* the amount of the first instalment. In the act of mortgage, it was stipulated that Walton should not alienate the property, to the prejudice of the plaintiffs’ mortgage. On the 1st of March, 1839, Walton sold the property to Samuel C. Ogden, for $17,000* of which $7000 were to be paid in three years* from the '9th of February* 1839, and $10,000 in four years from that date. In this act the-petitioners intervened, and agreed* that they would receive the notes of said Samuel C. Ogden, endorsed by George B. Ogden* discount them, and apply the proceeds to the payment of Walton’s debt; but his bond and mortgage were to be kept in full force and effect, until the notes were paid. On the 9th of June, 1842, Samuel C. Ogden sold the piece of ground to George B. Ogden, who engaged to pay his notes ; but to this act, the City Bank was not a parly. In February, 1841, George B. Ogden wrote a letter to the President and Directors of the City Bank, informing them that S. C. Ogden’s note became due that day, and that he wished to give his own note for $4000, in part payment,'permitting the mortgage note of $7000 to remain as security. This arrange*160ment was acceded to, and the note of Geo. B. Ogden was renewed from time to time, until it was reduced to $2500¡ The two notes of Samuel C. Ogden, of $6000 Catíb, düe in Febfuaiy; 1843, were protested for .non-payment. In the'course of the year 1842, both Walton and Samuel C. Ogden were declared bankrupts, and have been regularly discharged. George B. Ogden died, and no one has been appointed to administer his succession. In this state of affairs, the City Bank presented their petition, claiming a judgment against Walton on the original contract, and a sale of the property mortgaged, to satisfy the same, without making the assignee of Walton a party, or giving any notice to tire heirs or legal representatives of George B. Ogden, deceased, or to the assignee of Samuel C. Ogden.
To the petition presented as aforesaid, Walton pleaded his discharge, as a bankrupt, and prayed to be dismissed. It was admitted, that he was discharged, but the court said as there was a clause, de non alienando, in the mortgage, a judgment should be given, ordering the property to be sold, and a sufficiency applied to the payment of the debt owing to the plaintiffs ; the excess, if any, reserved by the purchaser to be paid to whomsoever might own the ground at the time. From this judgment Walton has appealed.
There are various reasons why this proceeding cannot, in out-opinion, be maintained :
First. Because, it being admitted that Walton is a bankrupt, regularly discharged in the United States Court, no action, executory or ordinary, can be maintained against him, for a debt contracted previous to his bankruptcy, when the creditor has been placed on the list of creditors, filed in compliance with the act of Congress. Laying out of view entirely the question of jurisdiction in the court, we are satisfied, that if any action can be maintained at all, it must be against the assignee, and not against the discharged debtor.
Secondly. The Bank having intervened in the act of sale from Walton to Samuel C. Ogden, and consented lo the transfer of the property mortgaged, we think the clause, de non alienando, in the mortgage, is modified in its effects, if not entirely destroyed, and that, the proceedings should be against the third possessors of the *161property. The Bank also knew of the sale from Samuel C. Ogden to George B. Ogden, and treated the latter as the real debtor for a considerable time previous to the institution of these proceedings ; it is, therefore, not a proper course to pursue now, to disregard all their acts of recognition, and to fall back upon the direct action, which the insertion of the clause, de non alienando, in the original mortgage gave. The consent of the Bank to ,the sale from Walton to Samuel C. Ogden, was a waiver of the right of the direct action ; and the plaintiff cannot resume it, without notice to those who have subsequently acquired rights.
The judgment of the Commercial Court is, therefore, annulled and reversed, and the case dismissed at the costs of the plaintiff in both courts,