Court Opinion

ID: 7182682
Source: CourtListenerOpinion
Date Created: 2022-07-24 16:49:43.129169+00
Date Added: 2024-06-11T16:15:58.081071
License: Public Domain

The judgment of the court was pronounced by
Pkeston, J.
Properly to understand this case, it is necessary to state its origin. Henry Hitchcock, late of Mobile, was indebted to the United States Bank of Pennsylvania in a sum exceeding $620,000, to secure which he *186gave a bond and mortgage to the trustees of the bank upon a valuable property situated in the city of Mobile, called Hitchcock’s Cotton Press, and upon other lands. The debt was not paid, and the bond and mortgage were forfeited. The bank filed a bill to foreclose the mortgage, to which Hitchcock plead that the bond and mortgage were not valid because given for a corrupt and usurious loan of money. He shortly afterwards departed this life, having by will bequeathed all his estate to his widow, Anne Hitchcock, with power to pay his debts by a public or private sale of his property.
A bill was filed against her by the trustees of the bank to foreclose the mortgage ; but it appears it was conducted amicably, to enable them to obtain the peaceable and quiet possession of the mortgaged premises; for in 1840, in consideration of the debt and interest, and a further sum of $150,000, paid to her agent, James Erwin, she conveyed to the trustees of the bank all her legal and equitable title to the mortgaged property, and put them into the peaceable possession of the same. Notwithstanding all this, Mrs. Hitchcock was induced subsequently to renounce all her rights under the will of her husband, and to claim such rights as she was entitled to by law, including dower, and to defend the bill for a foreclosure of the mortgage, on the plea of usury filed by her husband. Isaac H. Erwin, a a brother, was appointed administrator of Hitchcock’s estate, with his will annexed. The trustees of the bank alleged under oath that he was appointed at their instance, with a view to carry the amicable arrangement into effect. He denied it under oath, and at all events made the most strenuous efforts to defeat the arrangement. He plead, that the bond and mortgage were void; that Mrs. Hitchcock had no right to convey the mortgaged property; and that her transfer of it was invalid. He claimed the whole property for the creditors and heirs ; and so formidable were his pretensions, that the trustees of the bank offered him a sum of upwards of $60,000 to quiet their title, which he declined to receive.
James Erwin, another brother, who had been her agent, and apparently the principal actor in arranging the conveyance to the trustees of the bank of the quiet and peaceable possession of the mortgaged premises, and into whose hands the sum of $150,000 had been paid as the consideration for quieting the title, immediately after receiving the money became the most active operator in disturbing the title and possession of the bank. By virtue of an old judgment against Hitchcock, a writ of execution was issued, a seizure was made of the Hitchcock Cotton Press, with the extensive property on which it was situated, estimated in the mortgage and conveyance to the trustees of the bank at $163,000, and was sold by the sheriff of Mobile, and James Erwin became the purchaser for $4500. This brings us to the circumstances which gave rise to the present suit, and which must be recited with dates to show their bearing upon it.
On the 10th of October, 1838, Henry Hitchcock had leased the above mentioned property, known as his cotton press, to Henry Hurtil and Charles J. Mansoni for the term of five years, for the sum of one hundred thousand dollars, payable on the terms and conditions particularly set forth in the lease. In 1839, the trustees of the bank filed a bill in equity, as we have stated, to foreclose their mortgage. At the May term of that year of the Chancery Court at Mobile, Hitchcock filed his answer on oath that the bond and mortgage were given upon a corrupt and usurious consideration, and prayed that they should be decreed to be invalid. At the same term of the court, the complainants applied for the appointment of a receiver, which the chancellor refused to order. Hitchcock *187died-before the fall term of the court; and at the j\!ay term, in 1840, the corn» plainants dismissed their bill without prejudice to them.
On the 8th of February, 1840, in pursuance of the powers given by her husband’s will, as already mentioned, Mrs. Hitchcock conveyed to the trustees all the property mortgaged by him to the bank; and Hurtil and Mansoni, the tenants of the cotton press, were notified of the'Co'nveyance, and acknowledged the trustees of the bank as their landlords. As soon as the additional sum of $150,000 was received from the bank, the contest for the property was renewed. On the 30th of October, 1840, Isaac H. Endn was appointed administrator of Henry Hitchcock's estate, with the will annexed; and warned the lessees that he was the only legal representatiye of the estate, and demanded the payment of the rents to him alone. On the 1st of November, 1840, under the execution and seizure we have mentioned, the sheriff of the county sold, after public advertisements, to James Endn the cotton press and premises which were leased to Hurtil and Mansoni for $4500, which he acknowledged to have received. The sheriff also made a deed of the property, which was duly recorded. On this sheriff’s deed James Endn demanded the rent from the tenants. Isaac H. EruAn, the duly appointed and qualified administrator of Hitchcock, their original lessor, claimed the past and directed the future rents to be paid to James Erwin. They refused to pay him; and on the 3d of March, 1841, he brought a suit in the Circuit Court of the United States against them to eject them from the premises.
During the whole of this time, the trustees of the bank took no steps against Mrs. Hitchcock or the Erwins having the effect to protect the tenants against their claims. It is true, a bill to restrain their proceedings was filed on the 28th of November, 1840, but no receiver was appointed until the 5th of June, 1841, and he was not ordered to collect rents from the tenants until in November of that year. In the meantime, the tenants Hurtil and Mansoni, had paid the rents, the amount of which is the subject of this suit, to James Endn, but not until they had exacted from him the following bond of indemnity :
“ State of Alabama, City of Mobile. Know all men, by these presents, that we, the undersigned, James Erwin, first, and Joseph Woods, Robert Woods, and Jane Bell, composing the firm of Yeatman, Woods Co., are held and firmly bound in the penal sum of one hundred thousand dollars unto Furman Hurtil and C. J. Mansoni, of this city, good and lawful money, to be paid unto them, their heirs or assigns, subject to the following conditions, to wit: Whereas the said F. Hurtil and C.J. Mansoni did in the lifetime of Henry Hitchcock, late of this city, lease of him a certain cotton press known as Hitchcock’s Press, the same now occupied by them, for the term of five years, on terms set forth in a contract now in their possession, to which reference is made ; and whereas the said Hitchcock did mortgage the said cotton press to the Bank of the United States, who, by said mortgages and other conveyances or writings, claim to be the owners of said press, now in possession of said Hurtil and Mansoni, held by them as tenants of James EruAn, to whom they they have regularly attorned, he, said Erwin, having purchased said press at sheriff's sale; and the said _ Hurtil and Mansoni having been called on by Isaac H. EruAn, administrator of Henry Hitchcock, deceased, regularly qualified as such to pay all rents due to the estate of H. Hitchcock on said lease, and he having furthermore authorized the said Hurtil and Mansoni to pay the rents accruing after said delivery to James Endn, the purchaser of said property, and the said J. Erwin having called on Hurtil and Mansoni and received the said rents. It is, therefore, *188expressly agreed to, the parties to this bond, viz : James Emin and Yeatman, Woods Sf Co. agree to hold the said Hurtil and Mansoni harmless against all or any responsibility that may attach to them for having improperly settled with J. H. Erwin, or for any monies improperly paid to Janies Erwin, now or here.after, on account of rents of said cotton press and wharf, or by reason of said delivery of possession ; also against all costs or damages in suits for defending or holding possession of said property, as tenants of James Emin, as the intention of James Erwin and Yeatman, Woods Sf Co. is to completely protect and hold F. Hurtil and C. J. Mansoni harmless on account of all responsibility for payments made or to be made for rents, costs or damages in that way. That being done then this bond to be null and void.
“ Witness our hands and seals this 16th of May, 1841, (Signed,) [e. s.] J. Erwin, [e. s.] Jos. Woods, [e. s.] Robert Woods, [e. s.] Jane Bede, [e. s.] A. Erwin, trustee for John and Jane Bell.”
Thus secured by this bond, the tenants made settlements with the administrator, which are abandoned in this suit, but also, on the 18th of May, 1841, paid James Erwin $14,800 rents then due, the amount of which is the subject of the present suit. Notwithstanding the appointment of a receiver, and his demand of the rents, the tenants, secured by the above bond, refused to pay rents to him, and were ruled to show cause why an attachment for contempt of court should not issue against them. In their answer on oath, the truth of which is not disputed, they set out the foregoing facts. They further state, that they were advised by high legal authority that the conveyance by Mrs. Hitchcock to the trustees of the bank was invalid, as well as the bond and mortgage of Hitchcock, and that the sheriff’s deed to James Erwin was a valid conveyance of the property. Nevertheless, that they applied to the trustees of the bank to indemnify them, being willing to pay them if such an indemnity had been given ; but that the trustees refused to give them security, and demanded the rent without indemnity; and their, in consequence of that refusal, they made the settlements with the administrator, and payments to James Erwin on receiving satisfactory security. In April, 1842, they were ordered by the chancellor to pay the rents to a receiver, and that an attachment should issue against them if they failed to do so. They took a'writ of error to the Supreme Court of Alabama; but it was dismissed in March, 1843, as having been improperly sued out.
In the meantime, the trustees of the bank, or rather the present plaintiffs, to whom their rights had been assigned, prosecuted their suit in equity against Mrs. Hitchcock, the Erwins, and indeed against the tenants of the cotton press who had been made parties, and obtained a decree of the chancellor at Mobile in their favor, declaring that the premises and rents belonged to them. A writ of error was taken to the Supreme Court of Alabama; and the most elaborate and able arguments of distinguished counsel were offered against the validity of the bond and mortgage of Henry Hitchcock to the bank, and the conveyance of his widow to its trustees. Their arguments and authorities were not treated lightly; but equal ability and profound research and argument was employed by the trustees of the bank to combat them. And the Supreme Court of Alabama evidently did not regard the controversy as one which Hurtil and Mansoni' might have decided for themselves, and concluded that they were tenants of the bank, on pain of being guilty of a species of treason, as has been contended in this court; but were enabled only by profound research and reflection developed *189in an opinion extending over eighteen pages of their reports to decide that the bond and mortgage of Hitchcock, and the conveyance by his widow to the bank were valid. They so decided in 1845, and affirmed the decree of the chancellor at Mobile.
While this controversy was pending the receiver had sued the tenants Hurlil and Mansoni, and obtained a verdict and judgment for the balance of rent due upon the lease, including the #14,800 they had-qoaid to James Erwin. This is positively proved by a witness; but the counsel of the defendant has endeavored to show, that the court and jury allowed eight per centinterest on the arrearages of rents, and thereby that the witness is in error'on'this subject. We have no evidence that the jury allowed interest; but there is internal evidence in the verdict that they did not, and that they charged the defendants with the rent paid to James Erwin. The whole rent due on the lease was $100,000. There was paid to Hitchcock during his life, and allowed for disbursements and losses under the lease $26,057 63 ; leaving unpaid $73,942- 37, exceeding by #800 the verdict, and showing clearly that'the defendants were charged with the whole time for which they had made payments to the Erwins. Independent of those payments, the defendants owed but #50,000 for the rent of the last two years, and one installment on the third year, $7000"; in the aggregate, $57,000. And yet judgment was rendered for $73,142, being rather less than the foregoing sum added to what they had paid to both the Erwins. It therefore clearly included what the tenants paid to the Erwins.
This being established, there appears to be a little -inconsistency in the argument of defendants’ counsel, in which he fust reproaches the tenants almost, as traitors, for not having paid the $14,800 to the trustees of the bank instead of Erwin; and, next, is equally severe upon them for not having defended themselves successfully against its payment to the receiver for the assignees of the bank.
Be this as it may, the judgment was rendered against the tenants for the rent, including the $14,800 paid to James Erwin ;■ and they gave their bond of indemnity in payment of so much, with which the assignees of the bank, who were finally decreed to be their true landlords, were satisfied. And the assignees, the present plaintiffs, have sued on the bond for the recovery of the same sum from James Erwin, the obligor, and his securities. .
It is alleged, and so the district court has decided, that the bond was given for the illegal and immoral purpose of inducing a tenant to betray his allegiance to his landlord, and cannot be enforced now. Although the feudal terms of landlord and attornment are still retained, we consider that the contract between lessor and lessee is to be interpreted in this country like any other contract; and that tenants may protect themselves against the adverse claims of different persons to the-rent by any fair and reasonable means. There is no treason in a tenant’s violating his contract; but there is bad faith, if without reason he combines with a third person to defeat the claim of his lessor for rent. And even in that case we cannot see why he and those who combined with him and induced him to act in bad faith, should not be condemned, as expressly provided by our code and statutes, in solido to pay the damages to the injured party. Art. 2304. Acts 1844, p. 14. The damages to be paid would be the rent received by Erwin, who seduced the tenants from their allegiance — the very thing which is claimed by the injured party from Erwin and his securities in this suit.
But we forbear further remark on this view of the subject, being perfectly satisfied by the evidence, that the tenants acted in good faith, and only exercised *190a prudent precaution to protect themselves, without the intention to injure any one.
When rented property is seized and sold under execution, and transferred by the sheriff by deed and delivery to a new proprietor, the rent should be paid to him. A sheriff’s seizure, sale and deed should be what it purports to be. He should take corporeal possession of the property, advertise and sell it publicly, and after the sale deliver actual, and not fictitious, possession to the purchaser. All should be done under the authority of the court which issued the execution. And this, as to the tenants, is the eviction of their landlord.
If the property seized does not belong to the defendant in execution, it is the duty of the true proprietor to enjoin the sheriff and plaintiff in execution; and to protect his tenant as well as himself against all doubt as to the ownership of the property. If he permits the public sale to proceed, and himself and tenant to be dispossessed, he cannot complain if the tenant subsequently doubts as to whom to pay the rent, and, when sued for the possession of the property, refuses to pay his lessor without security. And if the landlord neither enjoins the sale nor gives the security, he cannot complain that the tenant should pay his rent to the apparent legal owner of the property, especially on taking a bond of indemnity, which may eventually inure to the landlord’s benefit.
These principles entirely exonerate Hurtil and Mansoni from bad faith in their contract with James Erwin. Moreover, as an administrator, with the will annexed, was appointed to Hitchcock’s estate; as he demanded all arrears of rent; disavowed the conveyance of Mrs. Hitchcock to the trustees of the bank; as she joined him in disavowing its validity; as the parties were litigating the matter before a court of chancery, and no receiver was appointed ; and as able counsel advised the tenants that the conveyance was invalid, nothing was more reasonable than that they should settle with the party that gave them ample indemnification, and refuse to pay the other party who declined to do so, and had not yet caused the rents to be sequestered in the hands of a receiver. Under these circumstances the tenants settled and paid the whole rent then due, to the Erwins ; and, in so doing, we have no reason to believe acted in bad faith, but as prudent and honest men. >
And although the chancellor, in ordering the tenants to pay the receiver, very properly speaks of the general rule of law, resting on sound principles of morality, that tenants are held to the strictest fidelity to their landlords, and that they cannot make a contract with an adversary claimant so as to change their relation to their landlord or affect his interest or possession; yet the basis of his decision mainly rests on the ground that the payment to a receiver would secure the rights of both landlord and tenant until it was ascertained who was landlord.
Now, before the receiver was appointed the bond of indemnity was taken, substantially for the same purpose, to secure whoever should eventually be. decreed to be the true landlord. In suits about a specific thing which is sequestered, our courts always allow the defendant to bond, if he thinks proper, and on failure to do so, the plaintiff. There being a controversy about this cotton press, the tenants in possession did precisely what would have been ordered by a court if the property had been sequestered. And we cannot believe but that the courts in Alabama, if James Erwin and his securities were now before them, would compel them to pay over the money he received from the tenants, and which, it has since been ascertained by a decree in chancery, belonged to the plaintiffs, and not to him.
*191We think that the bond might very properly, under the circumstances, have been delivered to the receiver, and by him to the plaintiffs under this clause in the chancellor’s decree, “that the receiver should deliver over to the complainants all documents and evidences of rent not yet collected or secured, and all contracts in relation to the premises which may be in his possession or power to produce.” And, since Hurtil and Mansoni were willing to transfer the bond, that the decree was, in effect, a transfer and assignment of it to the plaintiffs to the extent of the rent received by James Erwin in.cash.
As the tenants had given notes in part payment of their rent, they could and very properly did reserve an interest in the bond, to defend themselves against recourse on those notes, as they had compromised and settled all the balance of the rent. If unsuccessful in their defence, they reserved a right to recover on the bond what they might be compelled to pay on the notes, and assigned only the right to recover the cash paid by them to Erwin. We see no reason why this qualified assignment may not be made, especially as we have considered it in some degree in execution of the chancellor’s decree.
We do not see the least foundation for the argument, that our courts ought not to take cognizance of the cause, ns it belongs to the courts in Alabama, they having taken cognizance of it. James Erwin and his securities, the defendants in this cause, were not before the courts in Alabama. The decree of the chancellor in Alabama, ordered all the property in controversy, and all contracts and papers in relation to it, to be given to the complainants; evidently terminating all controversies and incidents in that suit, and enabling the complainants to assert their further rights, in the same or other courts in that or other States, as justice and equity might require.
It is therefore ordered, adjudged and decreed, that the judgment of the district court be reversed; and that the plaintiffs recover from the defendants in solido the sum of $14,800 with eight per cent interest from the 22d of March, 1848, the date of the judicial demand, and costs in both courts.