Court Opinion

ID: 7182254
Source: CourtListenerOpinion
Date Created: 2022-07-24 16:49:14.260118+00
Date Added: 2024-06-11T16:15:57.241715
License: Public Domain

The judgment of the court was pronounced by
Edstis, C. J.
The defendants, together with several other merchants of ’the city, had claimed a large quantity of cotton, which had been purchased by Vincent Nolté, in 1839. Their claims wer.e contested by the plaintiffs, who asserted a superior right on the same cotton, which was then .held under judicial process. After ineffectual attempts to release the cotton from the custody .o,f the law the parties entered into a compromise. This compromise is in writing, and was concluded and signed on the,8th.of May, 1839.
By its -conditions the suits were lo be .discontinued at the costs of the parties; all ulterior claims resulting from the transactions which were the subject ■of the arrangement were waived ; the rights of the bank to all advances m;ide ■on the cotton w.ete recognized.; .the bank was to discount the drafts of Nolle for the amount due by him to each of the parties, which drafts were to be en■dorsed .by the party with a waiver of ¡protest and notice; the cotton was to be .delivered to the bank to be forwarded to its destination; the debt thus contra-et,ed to the bank was to be paid out of .the .proceeds of the cotton ; and the .parties bound themselves to make good any deficiency, each in his due proportion. The,cotton was delivered to the bank accordingly; ,the drafts were taken,.and .the money paid.
The present action, which was instituted in J842, is to recover from the .defendants the sum of $121,512 53, alleged to be the balance, including interest, .due .on advances .under this arrangement, after crediting them wilh the proceeds of the cotton, less the advances made by the bank to NoltL The cause was tried before a special jury of merchants on two occasions .without the jury in either case agreeing in a verdict, and was finally determined under an ¡agreement, of counsel submitting it to .the judge .of the Fifth District .Court ,of New Orleans, .who had presided at the jury trials. He rendered judgment .against the defendants for $65,004 45, with interest; and from this judgment .the present.appeal is taken by the defendants. The bank in its answer on .the appeal asks for a change in the judgment, giving the whole amount claimed in .the petition.
The defendants admit the advance to them of $92,000 on Nolffs drafts. •They allege that they were .induced to sign 'the.compromise and relinquish their .claim upon the cotton by fraudulent representations made to them, that the cotton upon which they had alien was-pledged to the bank, when in fact the cotton was .no.t pledged to the bank. They claim credit for the proceeds of one thousand bales of cotton, being a part .of two thousand four hundred and ¡seventy-one bales bought by Nolté from Yeatman & Co., and designated as the ¡isotton per John Randolph.
The truth or .falsity of the representations .undor which the defendants en*45iered into the compromise by which their claims on the cotton were relinquished, rests upon the fact of the acts of pledge in the books of the bank having been executed at the time they bear date, or afterwards, and antedated. The ■district judge did not decide the case upon this .contested question of fact, but settled the accounts between the parties independent of the compromise, allowing the defendants credit for the amount of their advance on the one thousand bales of cotton, on the ground that the bank had no legal possession of that parcel, which-was essential to the validity of the pledge.
The facts in relation to these one thousand bales appear to be as follows: On the 14th of April, 1839, Nolle bought of Yeatman & Co., two thousand four hundred and seventy-one bales of cotton. The purchase was to be considered as for cash, but no money was paid, and the payments were fixed at six different terms, from the 20th of April to the 15th of May, both inclusive. 'The cotton was not delivered. Nolté’s 'broker procured from the cotton press into which the cotton was taken from the landing, three receipts bearing date ■severally the 16, 17, and 18th of April. These receipts, two of which signed by the pressman, and one by his clerk with his authority, acknowledged to have ■received, on the days of the date, from Nolté, the number of bales specified .and marked,.-and to hold them subject to the order of the cashier of the Citizens’ Bank. At all of these dates there is no evidence that the quantity of cotton specified in the receipts was in the press, nor was it weighed or marked. 'The receipts were all false; and were procured by Nolté’s broker, and furnished by the pressman, without any privity or consent on the part of Yeatman Sf Co., to whom the cotton belonged exclusively, to the knowledge of both broker and pressman.
The account sales, giving the weight and total price of the cotton, furnished to Yeatman on the 21st, bears date the 20th, and of the same date is a receipt of the pressman acknowledging to have received the cotton for account of Yealman, which puts this fact beyond all question.
On the 20th, Yealman 8f Co. gave an order on the press for one thousand bales of the cotton, and called the same day to receive the first payment, $25,000. There appears to have been soriie difficulty or delay on the part of Nolté, but the defendants gave Yeatman a check for $25,000 in favo.r of Nolté, ■which was endorsed by him and paid on the 22d. This sum was advanced on the order given by Yeatman cf* Co., was in favor of Nolle or his order, and 'bore the .endorsement of Nolté. On the 25th the suit of the defendants against Nolté was commenced, for the sequestration of the cotton on which they had made advances. It is not proved that the order was notified to the pressman ■before monday, the 22d,¿wd the plaintiffs contend that it was not notified until after this -sequestration. Yeatman had, on the 23d, commenced proceedings against the whole lot of cotton, and was made defendant, with Nolté, in the suit of the Dennislouns. In both of these suits the bank intervened, and claimed the cotton. The intervention in the Dennistoun suit had for its object the setting aside of the sequestration as to two thousand and thirty-seven bales, the sequestrations having covered the whole lot per John Randolph. The petition based the rights of the parties upon advances made to Nolté on the cotton, and its being in their possession, under certain acts of pledge executed by Nolté.
This statement places before us the antagonist pretensions of the plaintiffs and defendants on this cotton, which was delivered to the former under the compromise of which we have spoken; and_we .purpose first to examine the *46correctness of the decision of the district judge as to the.respective rights of ^le Psrties previous to the compromise.
The petition of the bank charges the advances to have been made tfo Nolté on his two drafts, dated the 17th of April on Baring, Brothers Co., forming an aggregate of ¿C16.80G, to secure the acceptance of which Nolté delivered the cotton, and pledged the same to the bank, as will appear by the deeds of pledge themselves subscribed by said Nolle, and that the advance made by the Dennistouns on the 2Gth, was three days after the cotton was delivered and pledged as aforesaid to the bank.
It can hardly be urged that the possession of Yeatman & Co., who were the owners of the cotton, could be affected by the acts of Nolté, or of his agents. The rights of the bank are derived from Nolté, and he having no claims on the cotton until it was paid for or until the vendors chose to give Mm the control of it by delivery, it follows, as a matter of course, that, by virtue of the receipts above mentioned, the bank had in no sense possession of the cotton.
The argument of the counsel for the plaintiffs is, that Nolté acquired the possession under the order of the 2Qth from Yeatman & Co., and that this possession inured to the benefit of the plaintiffs, in as much as the defendants never gave notice of the order to the pressman until after the sequestration, which took place on the 25th and the receipts in terms asknowledge the possession of the bank. The order is to this effect:
“Messrs. Tilghman & Barnes; Deliver Vincent Nolté, or order, one thousand bales of cotton out of the lot of two thousand four hundred and seventy-one bales, received per steamboat John Randolph, and oblige.
(Signed) “Yeatman & Co.”
(Endorsed) “Vincent Nolte.”
“New Orleans, 20 April, 1848.”
But if notice to the pressman of the order was necessary to give the Dennistouns possession of the cotton, it was equally necessary for Nolté to give notice in order to give him possession of it. No such notice was given by Nolté, and, according to the argument, the possession remained in Yeatman 8f Co. up to the time of the sequestration by the Dennistouns, in which the pressman were made defendants. The possession of the original owner was uninterrupted and not changed until that event, and the bank never had possession until the cotton was given up under the compromise.
The right of the Dennistouns to hold the cotton adversely to the bank under article 3214 of the Civil Code being thus established by the advance and the possession, we find that this right was abandoned in favor of the bank under the compromise. The questions raised as to the validity of the compromise must necessarily be determined; for, if it be valid, the bank retains its paramount claims secured by it; and if the compromise be set aside, the parties must be restored to their original rights as they existed previous to and independent of it.
The article of our Code just quoted, which provides for the security of the commission agent or consignee for Ms advances on goods consigned to him, requires that the goods should be delivered to him, or, in a case of this kind, to use the words of the article, that they be at Iiis disposal in his stores or in a public warehouse.
Questions concerning the symbolical delivery of merchandize are so important in their consequences upon (he operations of commerce that, inasmuch as there is no necessity for it, we must not be understood as deciding that under *47the evidence in this case the delivery was perfect ts> either of the parties. The bank hold under the possession of the Dennistouns, and have no rights under Yeatman adverse to the defendants. They took the cotton, without any subrogation, under the compromise, to the claims of Yeatman against the defendants;- and they cannot now contest the possession under'which they hold,- without showing a superior right to it anterior 'to the compromise. It, therefore, does-not become necessary to determine on the perfectness of the possession by the defendants, under the order for the one thousand bales, previous to the sequestration, under which the whole lot was taken and delivered to the bank.
It will be seen by tbe petition of intervention of the bank in the sequestration suit of the Dennistouns that, its claims to the cotton was based upon the' delivery and pledge of the two thousand and thirty-seven bales, “ as will appear by the deeds of pledge themselves, subscribed by said Nolle,'” to use the language of the petition. These acts of pledge, which are before us in the originals, purport to have been executed, on the 15th, IG&h and 17th April, respectively.
Nolté, who- was examined as- a witness under a commission in tire city of Trieste, states that these acts of pledge were altogether an afterthought, and were all signed together at his rooms, on Sunday, the 21st, the day intervening, between the advance of the $¡2,500, on the 20th, by the Dennistouns, and the notice to the pressman on monday, the 22d. As to this fac£- of the- antedating, of these acts, counter testimony has been offered. We have stated- that this cause had been tried before two- special juries without any result, and from the complexion, of the whole evidence, we take it that this point was the obstacle. The district judge so considered it, and, under the view of all the difficulties which it presented, has given his opinion fully upon it, though he did not decide the case upon the point. Having presided at the two contested trials, and having heard the witnesses, some of whom were twice examined in open court, his opinion upon the issue of fact, whether the acts were antedated or executed at the time they purport to be, is entitled to great weight, and we should not be justified in overlooking it and acting on our own, unless that opinion was evidently erroneous.
The principal argument presented by the.plaintiffs against the effect of Nolte’s evidence is that, he is unworthy of belief, in consequence of the frauds he-committed in these transactions, and the levity and discreditable manner in which his testimony is delivered. Indeed the district judge states expressly that this evidence, taken by itself, would be unworthy of the slightest attention. An extract from his opinion will give his reasons not so much for believing Nolté, as for believing the fact of the pledges having been antedated to be as stated by the witness.
“In various other particulars, moreover, the evidence given by Nolté is directly contradicted by respectable witnesses. But it so happens that the portion of Nolté’s deposition which gives a date to the pledges of the cotton in question, different from the dates upon theirface, is very remarkably corroborated by tbe appearance of the pledges themselves. They are not in the regular pledge book of the bank in the order of their dates, but are upon loose sheets of paper,, wafered into another pledge book, which was not regularly opened until many months after the date which the pledges purport to bear. All the other pledges given to the bank by its customers are filled up in printed blank forms, bound up together in a book, and follow each other in regular rotation. The series of (hose printed pledges filled up and signed by the customers of the bank, is tin-*48interrupted in this volume, before, at, and after the dates given to the pledges-*n question. Why, then, were those pledges- not in their proper place in the volume? A plausible, and apparently the only plausible, answer is that furnished by Nolté's evidence, to wit, that the pledges in question were not executed at the bank where the book was kept, nor'on a day when the bank was open for business, but were in reality executed at Nolté’s lodgings, and on a Sunday. Besides this singular appearance of the instruments themselves, I cannot shut my eyes to the fact that Nolté did not alone sign them. They were signed by Perrault, the cashier, and by two witnesses, clerks of the bank. Why was not Perrault examined as a witness in this cause, to rebut NoUé’ff evidence on this point? One of the clerks has been examined, and his evidence does not contradict that of Nolté upon this point. He recollects signing papers at Nolté's rooms, but cannot say whether they were pledges or not. The witness recognizes his signature, but cannot say from his recollection at present, precisely where or when he signed. All is doubt and uncertainty. This uncertainty may very easily exist in the mind of a person who has had no other connection with an instrument than to attest the signature of a contracting party, especially after a lapse of many years; but I again must ask, why was not Perrault examined ? Ilis connection with the affair was too intimate to permit us to doubt that he has a recollection of it, and that he can' give Nollé’s story the most emphatic contradiction, if false. I do not, however, consider it necessary to decide this very difficult question' of fact, upon which no less than two juries have hung already in the cause.”
The force of this statement, it must be conceded, it is difficult to resist, and of its truth and accuracy we think there can- be no doubt. In scrutinizing the conclusions which the district judge felt himself bound to adopt, we have carefully examine^ every well ascertained fact connected with this transaction in all itsbearings and consequences, without having found any which are in conflict with that testified to by Nolté, of the antedating of the acts of pledge. No explanation is attempted to be given of the fact of the pledges not being i'n the' regular books of the bank in the order in whieh the several dates would place-them, and without such explanation upon what hypothesis can their being outr of their proper place be accounted for, except on that which this testimony and the attending circumstances concur in establishing?
There are two additional facts which, in reference to' this' enquiry, may not be unimportant. On the trial of the rule in Dennistoun’s case, taken by the' bank in order to bond the cotton, Perrault, the cashier, was examined as a witness for the bank, and makes no allusion to the acts of pledge although the-petition of intervention, as we have seen, was- based upon the acts of pledge. He says, “on being shown the two drafts marked G and H, they were paid' to Mr. Nolté as an advance on the cotton pledged to the bank ; previous to the money being, advanced as above stated, the policies and receipts were transferred to the bank; in making the- advance the bales were averaged as weighing four-hundred and twenty pounds, without making any estimation of the actual-weight; and to arrive at the amount the bank advanced, it was valued at ten cents; part of the cotton was shipped on the Diadem; witness cannot recollect whether the bank issued orders for the shipment of the cotton or not; but that he generally issues orders for such shipments.”
A close examination of the aets of pledge in the book of the bank, has satisfied us that three at least, and- iu all probability four, of them were signed a$ *49the same time. Ink of the same consistency and the same pen were evidently made use of by the person signing them, and his handwriting bears intrinsic signs of their being written at the same time and without interruption.
The law on the subject of compromises has been properly stated by the counsel for the defendants. The provision of our Code that a compromise entered into on documents which have been since found to be false, is null in loto, applied to the facts disclosed and the judicial proceedings which the compromise was entered into in order to terminate, is fatal to its validity. To what extent these pledges may have been a moving or determining cause of the compromise, we do not think it material to inquire. The defendants, it is not proved, knew that the pledges were false and antedated. The law gives no effect- to compromises on false documents, and hence the formal' and positive enactment on the subject.
The counsel for the defendants contend that if the compromise be declared void, the defendants are entitled to the nett proceeds of the one thousand bales of cotton which the bank has received, instead of their advance of ¡$25,000-allowed by the district judge, and also to a credit for the commissions1 in Liverpool, which now stand in the account of the bank as a charge against them.
We must restore the defendants to the rights they had under their sequestration. If the bank took the cotton and sold it, it is but just' that the proceeds received should be for account of those who had a superior right to it. The defendants have not asked to be credited with its value here, but are satisfied with the nett proceeds of the sale in Liverpool. The allowance of the nett proceeds of the one thousand bales appears to be a necessary result of the statu quo, to which our decision on the compromise restored both parties.
The evidence authorizes the allowance of the commissions, on the same principle. Had the cotton been left to its original destination under the consignment on which the advance was made, it would have gone to the defendants’ house in Liverpool, and the commissions would thus have been saved to them.
The compromise fixed the rate of interest at seven per cent. Had it not been for the compromise there is no reason to believe that the defendants would have made the ioan from the bank, and there is no ground on which a rate of interest higher than the legal rate can be allowed.
As the defendants have shown no legal ground on which the balance of the advance by the bank, after deducting the proceeds of the one thousand bales of cotton and the commissions on the sale, was retained, they must pay interest ex mora from the judicial demand. The proceeds of the cotton and commissions are to be calculated at the value of the pound sterling by the act of Congress of 1842.
It is, therefore, decreed that the judgment of the District Court be reversed? and it is ordered, that the plaintiffs recover from the defendants, in solido, the-sum of $44,133 43, With interest from judicial demand; the plaintiffs paying the costs of this appeal, and the defendants those of the District Court.*

 The counsel for the appellants prayed for a re-hearing, urging: That tho source of the 3049th article of our Code is found in the. law 42, title 4, of the 2d book of the Justitian Code, and reads as follows : “ Si ex falsis instrumentis transactiones vel pachones inito fuerint, quamvis jusjurandum de his interpositum sit, etiam eiviliter falso revelato, eas retractan prseeipimus : ita demum, ut, si de pluribus causis vel capitulis eredem pachones sen transactiones inito fuerint, illa tantummodo causa vel pars retractetur, qute ex falso instrumento composito convicta fuerit: aliis capitulis firmis manentibus : nisi forte etiam de eo, quod falsum dicitur, controversia orta decisa sopiatur.”
Brunnemann, in his commentary on this law, uses the following language ; “ Si quan*50do ex falsis instrumentis judicatura sententia lata retractatur, utique etiara transactio, quando scilicet falsis instrumentis persuasus quis transegit, retractan potest etiamsi sit jurata. Sed id de iis capitibus tantum intelligendum, in quibus alter falsa instrumenta produxit, nisi sint connoxa.” Yol. 2,. p. 130.
Duaren, commenting on the title in the roman digest, De Transactionibus, says, at page 83 of his works: “ Dolus etiam probandus est, quemadmodum metum probandum esse* diximus. Non enim sufíicit protestan, aut dicere coram magistrate se dolo adversarii inductum esse ad trausigendum nt ipsa rescindatur transactio, sed eum probari oportet dolum. Et hoc generaliter verum est.”
• Godfred, in his noto on the 42d law of the Code; remarks: Ce Jurata transactio eatenus rescinditur, quatenus prsetextu falsorum instrumentorum facta est.”
The modern writers are equally clear and unanimous on the subject. Article 3049* has been litorally transcribed from the 2055th article of the Napoleon Code. Toullier states the rule thus: <c Du reste, les transactions suivent la loi commune relativement a-l’erreur de fait, q‘ui les annulle ainsi que les autres conventions, lorsqu’ello a 6té la cause principal© du contrat. Les articles 2055 et 2056 en offrent des exemples.” Yol, 6, no: 72.
It may, perhaps, be said, that the rule of the roman law has not been adopted in the modern Codes, without considerable modifications; and that the Louisiana Code formally and distinctly declares thatu a compromise entered into on documents which have since been found false, is null in toto” Now in what does this rule differ from that of the romon law? Simply in this, that instead of annulling the compromise only so far as it was produced by documents which have since been discovered to have been forged, and maintaining itso far as it is unconnected with themrit is annulled in toto. The article of our Codo has not subverted'the wholo doctrine on this subject, by providing that it is altogether immaterial whether the compromise was mad© in consequence of the forged instruments or not. The law does not deal in mere abstractions, and, therefore, it is of no importance whatever whether the acts of pledge in the present case were antedated or not, unless the defendants were induced thereby to propose and execute the compromise.The provision of the Code lays down the familiar rule that fraud taints and vitiates all contracts. What is the evident meaning and import of the words of the Code “ on documents, &c.” ? No other than this, that the compromiso must have been made in consequence of, and with reference to, documents which have since been discovered to be false or forged ; in other words, that these must have been the principal, if not the sole, motive or inducement for making the compromise. Inordorto invalidate a compromise on the ground of fraud or error, the same rules of law apply which would govern with reference to any ether contract. One of theso rules is, thatli fraud as applied to contvacts, is the cause of an error bearing on a material part of the contract created or continued by artifico, with a design to obtain some unjust advantage to the one party, or to cause an inconvenience or loss to the other.” C. C. art 1841. The rule with regard to error is similar. C. C. art. 1835-6. We do not contend that, under art. 3049 of the Code,, it is necessary to show that one of the parties was conusant of the falsity or forgery of the documents; for, even if both parties were ignorant of the fact, and acted in good faith, the compromise would nevertheless be null in toto. But on different grounds ; if one of the parties was aware of the forgery, the contract would be annulled on the score of fraud ; if not, on that of error.
Such was the view of the subject presented to tbe Council of State, by Bigot-Préameneu, when the 2055th article of the Napoléon Code was under discussion: “ Il a toujours été de régle qu’une transaction faite sur le fondement de piéces alors regard des comme. vraies, et qui ont ensuite été reconnues fausses, est nulle.. Celui qui voudrait en profiler, serait coupable d’un délit, lors méme que dans le temps du contrat il aurait ignoré que la piece était fausse, s’il voulait encore en tirer avantage lorsque sa fausseté serait constaté©.
Mais on avait, dans la loi romaine, tiré ,de ce principo une conséquence qu’il serait difficile d’accorder avec la nature des transactions et avec l’équité. On suppose dans cette loi que dans- une transaction il peut se trouver plusieurs chefs qui soient indépendans, et auxquels la piece fausse ne soit pas commune. On y décide quo la transaction conserve sa force pour les chefs auxquels la piéce fausse ne s’applique pas.
Cette décision n’est point admise dans le projet de loi. On ne doit voir dans une transaction que. des parties eorrélatives; et lors memo quo les divers points sur lasquéis on a traite sont indépendans quant á lour objet, il n’en est pas moins inceitain, s’ils ont été indépendans quant á la volonté de contractor, et si les parties eussent traité séparément sur tous les points.
On efit moins risque de s’écarter de l’équitc, en décidant que celui contre lequel on se serait serví de la piéce fausse aurait l’option, ou de demander la nullité du contrat en en-tier, ou d’exiger qu’il fút maintenu quant aux objets étrangers á la piéce fausse ; mais la régle générale que tout est corrélatif dans une transaction, est cello qui résulte de la nature de ce contrat; et ce qni n’y serait pas conforme ne peut étro exigé par celui méme contro lequel on s’est serví de la piéce fausse.
And in the report made by the tribune Albisson, on the same occasion, we read:
“ Mais il est d’autres cas oti ello est cnticrement nulle, ou tout au moins snjettc u rc*51scision; et co sont ceux qui peuvent faire ancantir un jugement en dernier ressort, auquel l’artiele 2052 assimile la transaction.
Telle est, d’apres la disposition do Particle 2055, la transaction faite sur pieces qui out été depuis reconnues fausrss. Dol d’une part, erreur de I’autre: un accord qui n’ aurait pas d’autres elements no saurait subsister; aussi le projet lo déclare-t-il entibrement nul.”
Again the tribune Gillet said :
“ Ainsi les jugcmants définitifs sont annnlés lorsqu’il y a ou falsification des pieces, ou retention malicieuse de cellos qui pouvaient éclairer la decision : les mémes eireonstances dolvent done faire annuler la transaction.”
We contend that, it is very material to inquire to what extent the pledges have-been the moving or determining cause of the compromise. If the pledges exercised no material influence on the minds of the defendants in making the -compromise, they cannot now-claim its nullity because the pledges were antedated.
■It is shown-by the evidence introduced by the defendants themselves, before the-Commercial Court, several days before the compromise was proposed by them, that they knew perfectly well that the cotton had not been delivered to the bank, and that, therefore, the acts of pledge were not worth the paper on which they wore written. Possession is of the essence of the contract. C. C. art. 3119. As the pledges, then, were absolutely and radically null and void, for the want of delivery and possession of the cotton attempted to be covered ‘by them, how can it be pretended that they could be rendered still more so .by being antedated % No degree of nullity of a pledge is imaginable beyond that resulting from the absence of possession. The parties so understood it, for the compromise was not made on the pledges ; no mention of, or allusion to them, is made either in the propositions for a-compromise, or in the contract itself. Re-hearing refused.