Court Opinion

ID: 7196355
Source: CourtListenerOpinion
Date Created: 2022-07-24 17:03:04.712112+00
Date Added: 2024-06-11T16:16:21.335513
License: Public Domain

On Rehearing.
Miller, J.
The earnestness of the argument for the rehearing has prompted us to re-examine this case, with the result of confirming our previous conclusions. The judgments of the Oireuit Court and of the Supreme Court of the United States, in the suit of the present plaintiff against Gilbert M. Richardson, is, we think, decisive of the controversy, and, irrespective of these decisions, in our view the plaintiff could not sustain her suit.
Mrs. Fleitas was a creditor of her husband for funds received by him. Subsequent to the creation of the debt he obtained a discharge in bankruptcy under the act of Congress. Her debt was secured by mortgage. But the discharge in bankruptcy discharged debt and mortgage. The discharge extinguished the debt, and the mortgage disappeared with it. We think this conclusion must be accepted or fixed jurisprudence denied. Revised Statutes U. S., See. 5067. As opposed to this view the plaintiff relies on the decision in 27 An 542, in the case of Heard vs. Patton, which holds that though the personal liability of the debtor is discharged by the bankruptcy, the mortgage subsists, and will attach to the property subsequently acquired by the debtor. This decision supports the contention that the mortgage, the mere accessory, survives the principal debt, an impossibility under the text of the Code, Art. 3285. Of course if the debt is not certain, the discharge will not affect it, because the act refers only to the debts provable. Riggin vs. Magwire, 15 Wall. 549. Mrs. Fleilas’ debt was fixed when the discharge was granted. Nor is the discharge less effective because not put on the debtor’s schedule. It is enough it was provable, and not fiduciary in its character or due to the United States. See notes of decisions in Bump on Bankruptcy, under Sec. 5119, originally Sec. 5097. United *238States vs. Herron, 20 Wall. 251; Rogers vs. Insurance Company, 1 An. 161; Fleitas vs. Richardson, 147 U. S. 550.
•After the discharge the debtor acquired the property involved in this suit and mortgaged it to Richardson. The mortgage was given and accepted on the theory that the mortgage of Mrs. Fleitas was extinguished, and that theory, in our view, was manifestly correct. Thereafter Mrs. Fleitas recovered a judgment in the State court against her husband for the debt and mortgage, in her favor existing when the discharge was granted. Her proposition is that her debt and mortgage, notwithstanding the bankruptcy proceedingand discharge, was paramount to the mortgage of Richardson. Under' her judgment she seized, sold and bought at the sheriff’s sale the property mortgaged to Richardson, his mortgage then confronting her on the record. She then brought suit against him, averring her title under her mortgage, treating his mortgage as a cloud, alleging it did not affect the property. She prayed relief accordingly, and that Richardson be enjoined from asserting any right under his. mortgage. The suit was removed to the Circuit Court, and Richardson also issued a writ of seizure and sale from that court. The decision of the Circuit Court was against Mrs. Fleitas in her suit, and on her appeal from that decision, as well as from the order of seizure and sale, the decision of the Supreme Court of the United States was adverse to her. Thereupon Richardson seized and sold the property under his writ maintained by the Circuit and Supreme Court. Richardson, buying under his writ, sold part of the property to Meraux, the present defendant. This suit is against him by Mrs. Fleitas for the property he holds under the process and sale thereunder of the Circuit Court.
It often happens in the petitory action that both parties claim under judicial sales. Plaintiff claims under the judgment and execution sale of the State court, and defendant under the decision and writ of the Federal Court based on his mortgage. Richardson is no' party to plaintiff’s judgment, and it is beyond dispute that judgment does not bind him. As to debt and mortgage it is at best prima facie evidence against Richardson. 1 Hennen’s Digest, 588, No. 2. On the other hand plaintiff is a party to Richardson’s judgment and bound by it. But even if Richardson’s judgment was not conclusive on the plaintiff, the court, to determine the effect of conflicting judgments when each party relies on judgments against the common, *239debtor, must look to the basis on which each rests. That on Mrs. Fleitas we find is on a debt and mortgage extinguished by the discharge in bankruptcy. True, the debtor could revive the debt by waiver of his discharge. Bump on Bankruptcy, Sec. 5067. But no waiver or promise would revive the mortgage, least of all to the prejudice of the mortgage given by the debtor subsequent to the discharge. The creditor taking that mortgage acquired his rights under the faith of the extinction declared by law, of all debts and mortgages against the debtor surrendering his property under the bankrupt act. No waiver or promise of the bankrupt to a creditor whose debt was canceled by the surrender could destroy or affect the right of the subsequent mortgage creditor holding under the protection the law confers on those who, subsequent to the discharge in bankruptcy, acquire mortgages on his property. That protection is the extinguishment by law of all debts and mortgages against the debtor at the date of his discharge. Looking then to the basis of Mrs. Fleitas’ judgment, on which she asserts title in her petitory suit against defendant, we reach the conclusion it is of no avail against Richardson’s title, under which defendant holds, and the protection of which extends to him. Code of Practice, 711, 712, 713; Justice vs. Kerr, 8 An. 462; Delabigarre vs. Municipality, 3 An. 230; Pothier on Sale, 62; 1 Pothier on Obligations, Evans’ Edition, p. 588.
We think, too, the exception of res judicata should have been sustained. The suit of Mrs. Fleitas against Richardson presented the issue of the effect of her mortgage and judgment in sustaining the title assailed by her under the execution sale. Her allegations were the validity of her debt and mortgage against her husband, and of her title based on that judgment; that the Richardson mortgage had no effect against her and should be erased from the record. The relief she asked was commensurate with these allegations. She specifically prayed that Richardson be forever enjoined from asserting any rights under his mortgage. If the suit had been decided by the State court against her on these issues, there can be no doubt she would have been concluded from assailing the Richardson mortgage and title based on it. On his application the suit was remanded to' the Circuit Court, it involved the question of the effect of the Federal Bankrupt Act in respect to the Fleitas debt and mortgage. If extinguished by that act, neither debt or mortgage could affect Richardson, claiming a right under *240that act. On that ground the suit was removable. He was a citizen of another State; that furnished another ground for removal. Acts of Congress, 3d of March, 1875; of 3d of March, 1887; of 13th August, 1888; 18 Statutes at Large, 470; 24 Statutes at Large, 552; 25 Statutes, 434; Starin vs. New York, 115 U. S. 248; Germania Company vs. Wisconsin, 119 U. S. 473. There was also the writ of seizure and sale obtained by Richardson from the United States Circuit Court. Thus that court was clothed by the removed suit, and the seizure and sale it decreed, with jurisdiction of the controversy with respect to Mrs. Fleitas’ rights under her mortgage judgment and title, and as to Richardson’s rights under his mortgage. The jurisdiction was complete as to subject matter and as to the parties. It is supposed the Federal courts could not pass-on any right of Mrs. Fleitas against her husband and his property for restitution of her funds, conferred by the laws of Louisiana. The answer is: The Federal courts are authorized to determine questions of that nature; that is, to determine the question as to any right claimed under the laws of the United States, even where that right is supposed to conflict with State legislation. Next, it is supposed the Federal courts could exert no jurisdiction with respect to Mrs. Fleitas’ judgment, because that of a State court. It is claimed her judgment has been annulled, not within the competency of any court, except that which, pronounced the judgment. Code of Practice, Art. 608; 1 Hennen’s Digest, 746. The judgment has not been annulled. Its effect as to Richardson has been determined. Besides, the jurisdiction to annul judgments conferred by the Oode of Practice has no kind of application to the Federal courts deriving their jurisdiction from the Constitution of the United States. Dupuy vs. Bemiss, 2 An. 509; Stockton vs. Stanbrough, 3 An. 390. The mere fact that Mrs. Fleitas’ judgment was rendered by the State court, therefore, had no influence on the question of jurisdiction. If the judgment was binding on Richardson the Circuit Oould would undoubtedly have so held. But Richardson was no party to it. It was binding on him neither in the Federal or-State court, or in any form of controversy. So, too, the Circuit Court had the power to issue the writ of seizure and sale under the Richardson mortgage, he being a citizen of another State, and from that order, as stated, Mrs. Fleitas appealed to the United States Supreme Court. The decision of the Circuit Court in the removed suit being adverse to Mrs. Fleitas, *241and carried by appeal to the Supreme Court, that court was clothed with jurisdiction to determine the entire controversy between these parties. That adjudication is: That Mrs. Fleitas has no debt or mortgage and that plaintiff’s mortgage exists in full force with the right to enforce it. Fleitas vs. Richardson, 147 U. S. 550-564. The contention that this adjudication is not expressed by the decree dismissing the bill is a mistake. Dismissing the bill is a determination -of the merits unless made “without prejudice.” Story’s Eq. Plead., See. —; Durant vs. Essex Company, 7 Wall. 107; Case vs. Beauregard, 101 U. S. 688; City Bank vs. Walden, 1 An. 47. The defendant in this case, holding under the sale under Richardson’s mortgage and writ, is entitled to invoke this final adjudication adverse to the plaintiff in this case, also plaintiff in the suits in the Federal Court, asserting here in effect the same right she failed to uphold in the Federal Court. There is the identity of the parties and the identity ■of the cause of action the essentials of the res judicata. We hold the .judgment in Fleitas vs. Richardson concludes plaintiff from asserting the demand in this suit. C. C., Art. 2286; 1 Pothier on Obligations, 537, 538; C. P. 711; Judice vs. Kerr, 8 An. 462; Williams vs. Close, 12 An. 873.
The contention that defendant acquired title under writ directed against her husband without notice to Mrs. Fleitas has no merit. The mortgage contained the pact de non alienando. As to Richardson, no conveyance by Fleitas or alienation under execution against him could affect the mortgage creditor with the non-alienation clause in his act. 1 Hennen’s Digest, 955, No. 1.
The rehearing is refused.