Francis Black and James Chapman, Plaintiffs In Error v. Zacharie Co Defendants

• Decision Date: 01 January 1845
• Citation: 44 U.S. 483,11 L.Ed. 690,3 How. 483
• Parties: FRANCIS C. BLACK AND JAMES CHAPMAN, PLAINTIFFS IN ERROR, v. J. W. ZACHARIE & CO., DEFENDANTS
• Court: U.S. Supreme Court

44 U.S. 483

3 How. 483

11 L.Ed. 690

FRANCIS C. BLACK AND JAMES CHAPMAN, PLAINTIFFS IN ERROR, v. J. W. ZACHARIE & CO., DEFENDANTS.

January Term, 1845

THIS case was brought up by writ of error from the Circuit Court of the United States for East Louisiana.

It was an attachment issued originally by the Commercial Court of New Orleans, (a state court,) against the goods and chattels, lands and tenements, rights and moneys, effects and credits, of Black, at the instance of Zacharie & Co., and removed, on the petition of Black, into the Circuit Court of the United States.

Black resided in Charleston, South Carolina, and Zacharie & Co. in New Orleans.

In 1837, Black was the owner of five hundred shares of the capital stock of the New Orleans Gas Light and Banking Company, and six hundred shares of the Carrollton Bank of New Orleans. On the 31st of May, in that year, he assigned to the Bank of South Carolina, as security for a loan, his shares in the Gas Light and Banking Company, with power to sell, if necessary.

The shares in the Carrollton Bank were mortgaged to that bank.

Zacharie & Co. and Black were in commercial correspondence from 1835 to 1840, and a number of letters were inserted in the record. The point of law, however, which was based upon those letters, having been decided by the court below, and the decision not excepted to, it is unnecessary to recite their contents.

In the early part of 1841, Zacharie & Co. shipped to Black a cargo of sugar and molasses, which was sold from time to time, beginning with January the 25th, and ending with April 9th, partly for cash and partly on time.

The following bills of exchange were drawn by Zacharie & Co., on Black:

February 17th, at sixty days after sight, $1,500 00

February 18th, at sixty days after sight, 1,500 00

February 24th, at sixty days after sight, 2,000 00

March 1st, at sixty days after sight, 2,000 00

April 1st, at sixty days after sight, 1,088 25

They were all drawn in favor of Alexander McDonald, and accepted by Black. The two first fell due on the same day, viz.: on the 30th April, 1841, and were protested.

On the 15th April, 1841, Black executed a power of attorney, appointing the cashier of the Gas Light and Banking Company his agent, to transfer the five hundred shares of stock standing in his name to the Bank of South Carolina.

On the 16th of April, 1841, this power was forwarded by the Bank of South Carolina to the cashier of the Gas Light and Banking Company, with a request that the transfer might be immediately made, and a new certificate issued.

On the 28th of April, 1841, Black made a general assignment of all his property to James Chapman, for the benefit of all his creditors, mentioning particularly the five hundred shares of stock in the Gas Light and Banking Company, subject to the mortgage before-mentioned to the Bank of South Carolina, and the six hundred shares in the Carrollton Bank, subject to a mortgage to the Carrollton Bank. These mortgages the trustees were directed to pay off, and divide the surplus amongst the creditors named in a schedule annexed to the deed, including Zacharie & Co.

On the same day Black addressed a letter to Zacharie & Co., informing them of what he had done, and that he had sent the assignment to Messrs. J. H. Leverich & Co. He said also——

Your two drafts, $1,500 each, fall due on the 30th inst.

Your one draft, $2,000, falls due on the 7th May.

Your one draft, $2,000, falls due on the 3d June.

Your one draft, $1,088, falls due on the 14th June.

On the 4th of May, 1841, Zacharie & Co. filed an affidavit for the the purpose of obtaining from the Commercial Court of New Orleans, as before stated, an attachment against the goods and credits of Black. The necessary bond was given, and the attachment laid in the hands of the Carrolton Bank, and of the Gas Light and Banking Company.

On the 5th of May, 1841, Zacharie & Co. addressed to Black a letter, from which the following is an extract:

'FRANCIS C. BLACK, Esq.

'DEAR SIR:—Yours of the 28th ultimo came to hand yesterday morning at the opening of the post-office, and immediately after the shock the writer experienced, he called on our attorney, and in less than ten minutes we had an attachment levied on your stocks, both of the Carrollton and Gas Banks, and am happy to say that our attorney assures us that we have succeeded it in spite of our assignment, which is worthless in our state, particularly as no transfer had taken place on the books of the bank; this course we feel satisfied you must approve of, as it certainly will relieve you from the very unhappy and truly inevitable dilemma of throwing upon your friend, who to serve you has, without compensation, accepted for your accommodation upwards of $3,000, a loss to that amount. A neglect to provide for this sacred and confidential debt, you could not be sustained in by your best friend; and indeed we cannot but believe you will be happy to learn the course we have pursued, and we now hope that your assignee will urge a decision as soon as practicable, as it is useless to procrastinate the matter longer than necessary.'

On the 5th of May, 1841, J. H. Leverich addressed letters to the cashier of the Carrollton Bank, and of the Gas Light and Banking Company, requesting them to transfer the stock in their respective institutions, standing in the name of Black, to Chapman, his assignee; to which the following answers were returned:

'Gas Light and Banking Company,

'New Orleans, May 5th, 1841.

'Messrs. JAMES H. LEVERICH & CO.

'GENTLEMEN:—In answer to your note of this date, I have to say, that on the 22d ult. I received a letter from J. Chapman, cashier of the Bank of South Carolina, covering a certificate of five hundred shares of the stock of this institution, in favor of Francis C. Black, together with a power from said Black to me to transfer the stock to the Bank of South Carolina; that said power being not considered sufficiently formal, (although it might be thought so by persons less rigid than myself in matters of the kind,) was returned to the Bank of South Carolina, with the remark, that upon another being furnished in conformity with corrections which were stated on the face of the one returned, the desired certificate would be transmitted.

'On the 4th inst., a notice of seizure, of all effects or property of said Black, in this bank, under an attachment was served; consequently under all these circumstances, we cannot consent to the transfer requested in your note, but must hold the stock, subject to the decision of the courts.

'Respectfully, your obedient servant,

(Signed) 'J. W. HOUSTON, Cashier.'

'Carrollton Bank,

'New Orleans, 7th May, 1841.

'GENTLEMEN:—Your application, of date 5th inst., to transfer six hundred shares and stock, standing in the name of F. C. Black, by virtue of a power from James Chapman, as his assignee, is noted. The transfer cannot be allowed, because that said stock has been attached at the suit of J. W. Zacharie & Co., served on the 4th inst., and also for the reason that said stock is pledged to this bank for a stock loan.

'Very respectfully,

(Signed) 'JOHN NICHOLSON, Cashier.

'Messrs. J. H. LEVERICH & Co., New Orleans.'

On the day when the attachment was issued, the court appointed counsel to represent the absent defendant, and on the 12th June, 1841, that counsel filed an answer on behalf of Black, but without instructions from him.

On the 19th of November, 1841, Black filed a petition praying that the cause might be removed into the Circuit Court of the United States, and it was accordingly removed.

On the 7th of December, 1841, Black prayed oyer of the bills of exchange, and Chapman filed a petition of intervention, in which he set forth the assignment to him by Black on the 28th of April, claimed the shares of stock in consequence thereof, and prayed that the attachment might be dissolved Zacharie & Co. appeared to the intervention, and denied all the allegations in the petition except that the stock had been attached and the case removed.

The notes were filed in conformity with the prayer for oyer.

On the 28th of December, 1841, Black filed the following exceptions and answer:

'And now into the ninth Circuit Court of the United States, for the eastern district of Louisiana, comes Francis C. Black, the defendant in said suit, by his attorneys, and excepts to the order and writ of attachment granted therein, to the petition and the demand therein made, and for cause of exception, avers that at the institution of said suit the plaintiffs therein had no cause of action whatever against this defendant, and that no debt was at the date of said suit due by defendant to said plaintiff, all of which is apparent by the petition of said plaintiff, and the account and bills of exchange annexed and referred to; wherefore defendant prays that said writ of attachment be set aside and dismissed, and that said suit be dismissed.

'But if the said exception be overruled, then this defendant answers to said suit, and denies all and singular the allegations in plaintiff's petition contained, and denies specially being indebted to said plaintiffs as alleged in said petition; and defendant further pleads that the bank-stock attached in this case was not, at the date of said attachment, the property of defendant, or liable to be attached for any debt by him owing, and that the said stock was then the property of James Chapman of South Carolina, who became the owner thereof under a trust-deed for the benefit of all the creditors of defendant without distinction, executed in Charleston, South Carolina, on the 28th April, 1841, and that said stock was delivered to said Chapman before the issuing of the attachment in this case. Defendant further shows that the said trust-deed was executed in due form of law in South Carolina, where defendant resides, and that the same is effectual to pass the said stocks both in said state where it was...