Court Opinion

ID: 7993249
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:33:44.547771+00
Date Added: 2024-06-11T16:35:27.069933
License: Public Domain

Smith, C. J.,
delivered the opinion of the court.
On August 20, 1913, the First Natchez Bank became the owner of thirty notes executed by the Tensas River Planting Company for ten thousand dollars each, payable at Natchez, Miss., at which place the Natchez Bank was domiciled, secured by a vendor’s lien on lands situated in the state of Louisiana. The Natchez Bank was indebted to the Canal Louisiana Bank & Trust Company of New Orleans, La., in the sum of one hundred and twenty-five thousand dollars, secured by certain promissory notes which the Natchez Bank had indorsed to the Louisiana Bank as collateral. The Natchez Bank desiring to obtain possession of these collateral notes mailed from Natchez to the Canal Louisiana Bank & Trust Company at. New Orleans three of the Tensas River Planting Company’s notes held by it, with the request that these notes be accepted by the Louisiana Bank in lieu of the eollaterial notes then held by it, and that these collateral notes be returned to the Natchez Bank. This proposition was accepted by the Louisiana Bank, and the collateral notes then held by it were returned to the Natchez Bank by mail. The Tensas River Planting Company’s notes were payable to its order and indorsed by it in blank. They were not indorsed by the Natchez Bank, and. there was no written assignment of them by the Natchez Bank to the Louisiana Bank, other than the letter in which they were transmitted from the first to the latter. The Louisiana Bank requested the Natchez Bank to forward to it the mortgage securing the Tensas River Planting Company’s notes, but the Natchez Bank refused so to do, giving as a reason therefor that the mortgage was held by it as security for all the notes.
Seven other of the Tensas River Planting Company’s notes were hypothecated by the Natchez Bank *388to certain of its creditors other than the Louisiana Bank, three of which were returned to it, and may he here dismissed from further consideration.
On October 30, 1913, the Natchez Bank was placed in the hands of appellees as receivers. The Canal Louisiana Bank & Trust Company consolidated with two other hanks and changed its name to Canal Bank & Trust Company. Part of the assets of the Canal Louisiana Bank & Trust Company, including the note executed to it hy the Natchez Bank, together with the notes of the Tensas Biver Planting Company by which the note of the Natchez was secured, were placed in the hands of the appellants as trustees for the stockholders of the Canal Louisiana Bank & Trust Company, and they now hold the legal title thereto.
The Tensas Biver Planting Company was also placed in the hands of a receiver hy judicial proceedings in Concordia parish, La. This receiver was directed hy the Louisiana court to sell the land owned hy the Planting Company .on which the -Natchez Bank held the' vendor’s lien, and appellees decided to purchase it so they could sell it to one Johnson, whq had agreed to purchase it from them. The miuirrmm price at which the receiver of the planting company could sell the land under the order of the Louisiana court was ten dollars per acre. Appellees desired to use the Tensas Biver Planting Company’s notes in paying the receiver of that company for the land, hut could not do so under the order of the Louisiana court unless they could surrender to him all of the planting company’s notes. Appellees agreed, therefore, with the holders of the four notes upon the value thereof, paid to them the amount so agreed on, and those notes were then delivered hy the holders thereof to appellees. Appellees then delivered the three notes held by them to appellants to he *389used hy them in payment of the land upon a written agreement reciting:
“That the claim of the legal holders of the said three notes and the claim of the other twenty-seven notes of said .issue against certain lands of the Tensas River Planting Company, namely, the La Marque, Hubter, and Rota Quinta plantations, in Concordia, parish, La., shall he a claim against the proceeds derived from the sale of said lands in the hands of the receivers of the First Natchez Bank, and that the sum of thirty-one thousand three hundred and seventy-six dollars and eighty-five cents shall he deposited hy the receivers 'in City Bank & Trust Company of Natchez, Miss., as a special trust fund to be held to await the final decree of the court as to what amount the said trustees as legal holders of said three notes are entitled in the distribution of the proceeds of said sale, said deposit being made only to assure payment to said trustees of such decree of distribution as may be rendered, said deposit to be made upon approval by the chancellor of this agreement.
“Third. It is further agreed that the trustees for stockholders of the Canal-Louisiana Bank & Trust Company shall file or cause to be filed in the chancery court of Adams county, Miss., to the January term, 1917, of said court,, such proceeding as may be necessary to have adjudicated the question' as to the extent of the right of the said holders of all of said notes to participate in the distribution of the proceeds of sale of the said lands.
“Fourth. That if the said lands should at the said sale, or any receivers’ sale thereof, be soid to any other than the receivers of the First Natchez Bank, for a price in excess of $10 per acre, then there shall be deposited by said receivers in the same manner as the above deposit is agreed to be *390made and as a part of the same fund three-sevenths of the said excess subject to the same conditions, and to await the final decree of said court. . . .
“That the said trustees shall not claim any greater proportion of the proceeds which said receivers shall receive from the sale of said land than they could have claimed previous to be purchase of four other of said notes under said order of December 16, 1916.
“Seventh. Subject to the right of said receivers of the First Natchez Bank to use said three notes in the purchase of said property as above stated, it is agreed that said trustees are now the legal holder of said notes and of the indebtedness of the First Natchez Bank to the Oanal-Louisiana Bank & Trust Company.
“Eighth. This agreement is made to facilitate the trial by the chancery court of Adams county, Miss., of the claim of said trustees under said three notes and the claim of the said receivers under the twenty-seven of said notes they now hold to share in the distribution of the proceeds from the sale of said property. ’ ’
Appellees purchased the land pursuant to this agreement at ten dollars per acre, and afterward sold it to Johnson for eight dollars and fifty-one cents per acre. After deducting the fees and expenses of the planting company’s receiver from the amount of appellee’s bid for the land there will be left a balance of about seventy-three thousand two hundred and twelve dollars and. seventy-five cents, a sum not only insufficient to pay all of the planting company’s notes, b.ut insufficient also to pay the three notes held by the appellants and the four notes formerly held by other creditors of the Natchez Bank in the event it should be applied to the payment thereof.
Appellants’ contentions a.re: First, that since the proceeds of the sale of the planting company’s lands *391are insufficient to pay all of the notes secured by the vendor’s lien thereon under which the sale was made, the notes secured by this lien and retained by the Natchez Bank should not participate in the distribution of the proceeds of the sale until all of the notes secured by the lien that have been assigned by the Bank have been paid: second, that the fund to be distributed is the proceeds of the sale of the land by the receiver of the Tensas River Planting Company.
Appellees’ contentions, which were sustained by the court below, are: First, that the proceeds of the sale of the land should be applied to the payment of all of the planting' company’s notes pro rata, and, second, that the fund to be distributed is the proceeds of the sale of the land by appellees to Johnson.
Appellants do not claim that the three notes held by them are entitled to any priority over the four notes which the Natchez Bank had hypothecated to other of its creditors, and which were afterwards released by these creditors as hereinbefore set out, so that any question relative thereto is eliminated herefrom. Appellants’ claim, therefore, is that they should be paid three-sevenths of the proceeds of the sale of the land.
The thirty-one thousand three hundred and seventy-six dollars and eighty-five cents deposited by appellees with the City Bank & Trust Company under their agreement with appellants , is approximately three-sevenths of the amount paid by appellees for the land after deducting therefrom the fees and expenses of the planting company’s receiver.
The contention of appellants that they are entitled to priority over appellees in the distribution of the proceeds of the sale of the land is based upon the theory that the distribution thereof should be made under the laws of Louisiana, according to which, where the holder of a claim secured by lien on *392property assigns a part of it, lie will not be permitted to come in competition with his assignee, if the proceeds of the sale of the property at a foreclosure of the lien is1 insufficient to pay both the assignor and the assignee, and the contention of the appellees is based upon the theory that the distribution should be made under the laws of Mississippi, according to which the holders of the notes should share equally therein. The only question for us to determine, therefore, is whether the rights of the parties hereto growing out of the, assignment of the notes are governed by the laws of Mississippi or Louisiana.
The rights of these parties grow out of the contract by which the three notes in .question were assigned by the Natchez Bank to the Louisiana Bank, and the rule is that a contract, unless it is to be performed elsewhere, must be construed according to the laws of the place where made. Bank of England v. Tarleton, 23 Miss. 173; Brown Bros. v. Freeland, 34 Miss. 181; Partee v. Silliman, 44 Miss. 272; Shacklett v. Polk, 51 Miss. 378; Murdock v. Insurance Co., 59 Miss. 152.
A contract results from the acceptance of an offer, and is made when and not until the offer is accepted, sa that the place where a contract is made is necessarily the place of the acceptance of the offer. 13 C. J. 580; 9 Cyc. 670.
The offer by the Natchez - Bank to assign the notes here in question to the Louisiana Bank as hereinbefore set out was made by letter from the Natchez Bank at Natchez to the Louisiana Bank at New Orleans, and the contract of assignment became complete when the Louisiana Bank deposited its .letter of acceptance to the Natchez Bank in the mail at New Orleans. 1 Elliott on Contracts, section 62; Burton v. United States, 202 U. S. 344, 26 Sup. Ct. 688, 50 L. Ed. 1057, 6 Ann. Cas. 392.
*393The contract by which the notes were assigned to- the Louisiana Bank was made therefore in Louisiana, and is governed by the laws thereof; consequently appellees are entitled to the priority claimed.
The foregoing discussion may have been unnecessary, for the point here under consideration is ruled by Bank of England v. Tarleton, 23 Miss. 173; for, although in that case the facts show that the assignor intended to give the assignee the right of prior satisfication out of the proceeds of the mortgage, the court pointed out at page 181 of 23 Miss, that the assignment of the notes was made in Louisiana, and that consequently the rights of the parties arising under the assignment must be governed by the laws of that state.
That the notes here in controversy were payable in Mississippi is immaterial, for, while the law of the place where a promissory note is payable of course governs as to its nature, validity, interpretation, and effect, no such questions are here presented, for this controversy arises solely out of a contract by which the notes were assigned by a former holder thereof, which contract, as pointed out in Bank of England v. Tarleton, supra, is separate and distinct from that of the notes.
We are also of the opinion that the fund to be distributed under the agreement hereinbefore set out is the net proceeds of the sale of the land by the planting company’s receiver, and not the proceeds of' the sale made by appellees to Johnson.

Reversed and remanded.