First Nat. Bank of Arcadia v. Johnson

• Decision Date: 12 February 1912
• Docket Number: 18,722
• Citation: 57 So. 930,130 La. 288
• Court: Louisiana Supreme Court
• Parties: FIRST NAT. BANK OF ARCADIA v. JOHNSON et al

57 So. 930

130 La. 288

FIRST NAT. BANK OF ARCADIA v. JOHNSON et al

No. 18,722

Supreme Court of Louisiana

February 12, 1912

Rehearing Denied March 11, 1912.

Appeal from Third Judicial District Court, Parish of Bienville; B P. Edwards, Judge.

Action by the First National Bank of Arcadia against Charles F Johnson and others. Judgment for plaintiff, and defendants appeal. Affirmed.

Blanchard & Barret & Smith and Barnette, Roberts & Goff, for appellants.

Stubbs Russell & Theus and Wimberly & Reeves, for appellee.

OPINION

PROVOSTY, J.

In these two consolidated suits, plaintiff seeks to hold the Arcadia Planing Mill Company responsible on a note made to its order and bearing its indorsement. The maker of the note is J. A. Cleaton, who is also made defendant, and does not deny his liability. The note was accepted and indorsed for the company by W. F. Nelson, who also indorsed it individually, and is a defendant in the suit, and does not deny his liability. Judgment is asked also in solido against the members of said company, namely, C. F. Johnson, A. B. Bolinger, and Dait Young. Their defense, like that of the company, is that the said company never had any connection whatever with said note, which was improperly made payable to it, and was indorsed for it by Nelson without authority.

The said company and its members are nonresidents, and were proceeded against through a curator ad hoc and by attachment. They bonded the attachment; and the first question which arises in the case is as to whether they thereby accepted the jurisdiction of the court and made themselves parties to the suit. The affirmative has been several times decided. Hollingsworth v. Atkins, 46 La.Ann. 520, 15 So. 77; Williams v. Gilkeson-Sloss Co., 45 La.Ann. 1013, 13 So. 394; Succession of Baumgarden, 35 La.Ann. 130; Rathbone v. Ship London, 6 La.Ann. 439; C. P. 259. In their petition for the bonding of the attachment, the defendants expressly reserved their right to except to the jurisdiction of the court and to the citation, and declared that they appeared in no way, except for the sole purpose of bonding the attachment; and they now contend that this special reservation differentiates this case from the foregoing decisions. The rule is that an appearance to the suit, except for the purpose of objecting to the jurisdiction, or to the process or citation, subjects defendant to the jurisdiction of the court. A defendant may, without subjecting himself to the jurisdiction of the court, come in and ask to be dispensed from answering the suit, or, in other words, decline to appear, either because the court has no jurisdiction, or because the process for bringing him into court has been faulty, and therefore insufficient; and he may also ask for the removal of the suit from the state to the federal court; but he cannot, without subjecting himself to the jurisdiction of the court, apply for any other relief than this. The property stands in the court as his representative in his absence; if he comes in and withdraws the property and puts himself in its place, he must be considered as being in court for all the purposes of the suit.

The note sued on was executed under the following circumstances: A sawmill and planing plant and appurtenant timber lands were advertised to be sold at judicial sale at Arcadia in this state. The Union Mill & Lumber Company of St. Louis, Mo., composed of the same Johnson, Bolinger, and Young above named as composing the Arcadia Planing Mill Company, directed W. F. Nelson, its Louisiana agent at Shreveport (the same who indorsed the note sued on), to go to Arcadia and see about purchasing at the sale, and making arrangements for procuring locally the necessary funds. Nelson testified that his instructions included a special instruction to make the purchase jointly with J. A. Cleaton. Johnson, who gave the instructions, testified that they were to get "some one who was in close touch with the interest in this section" to take a one-third interest. He makes no mention of Cleaton. The sale was advertised to take place on Saturday, December 12, 1908. On the preceding day, Nelson had an interview with L. M. Tooke, cashier of the plaintiff bank, which is the local bank. As to what was said at this interview, Nelson and Tooke disagree. Nelson says that Tooke agreed to let the Union Mill & Lumber Company have two-thirds of whatever amount might be necessary for buying the property, and to accept its unsecured note for the loan, and also to let Cleaton have the money necessary to buy one-third, and to accept his unsecured note for the amount; that Tooke's identical words were that --

"he would let Cleaton have the money and not be hard on him; he could arrange for it there."

Tooke testifies that he agreed to let the Union Lumber Company, which he knew to be a large, strong concern, have on its note whatever amount it might need for purchasing the plant; and that nothing whatever was said about Cleaton. In a letter addressed to Tooke, under date of December 19, 1908, seven days after the sale, Nelson says:

"The St. Louis office instructed me not to take in any partners that could not arrange for their own funds."

In this same letter, he says:

"You will recall that the writer had an understanding with you about Mr. Cleaton's paper that day I was in Arcadia to bid on this property, which was December 12th, and you stated that you would let him have this money and would not be hard on him about the indorsement."

Tooke does not deny that on the day of the sale he agreed with Nelson to let Cleaton have the money, but says that what he told him was that he would not be too hard on Cleaton about securing the loan --

"That he guessed that Cleaton had some good collateral that he could secure the paper with, or give good indorsement."

Nelson and Cleaton both bid at the auction, whether in concert or in opposition to each other is not ascertainable from the record. The property was adjudicated to one Merritt; and both Nelson and Cleaton boarded the train to leave. As the train was moving off, they were informed that Merritt was unable to comply with the bid, and that the property would be again auctioned on the same day. At Gibbsland, which was, we understand, the first stop of the train, Nelson got off, and telephoned to Tooke with regard to bidding at this second crying. He testifies that his instructions were to bid in the property in the proportion of two-thirds to the Union Mill &amp Lumber Company and one-third to Cleaton. Cleaton testifies that he also telephoned to the same effect. Tooke testifies that Nelson alone telephoned him, and that the instructions were to buy for the Union Mill & Lumber Company. Several witnesses testified that he announced at the sale that he was buying for that company, under instructions from Nelson over the telephone, and that he himself incurred no responsibility whatever in the matter. The adjudication was made to the Union Mill & Lumber Company for $ 5,520. On the following Wednesday, Nelson returned to Arcadia and caused the deed of sale to be made in favor of the Arcadia Planing Mill Company. The Arcadia Planing Mill Company was a new partnership, entered into for the purpose of taking and operating the sawmill and planing plant, and was composed of Cleaton and of the same three persons composing the Union Mill & Lumber Company, namely, Johnson, Bolinger, and Young. Nelson went to the plaintiff bank and executed in its favor the note of the Union Mill & Lumber company for $ 3,680, being two-thirds of the price of the sale. It was agreed that this note should be exchanged later for another, signed by the St. Louis office. The bank paid the $ 3,680 to the officer who had made the sale, and Nelson returned to Shreveport. Two days later, the bank having refused to accept Cleaton's note for the remainder of the purchase price, $ 1,840, without security of some kind, the note was forwarded to Nelson at Shreveport for him to indorse for the Union Mill & Lumber Company. This Nelson refused to do, and returned the note in a letter, in which he said that he had already told Tooke that he had no instructions from the St. Louis office to indorse for Cleaton, and that he (Tooke) had promised not to be hard on Cleaton about indorsements. Tooke mailed the note back to Nelson, saying that he could not let Cleaton have the money without security, and that the note had been sent to him for indorsement, because Cleaton...