New Orleans Nat Banking Ass v. Adams

• Decision Date: 12 November 1883
• Citation: 27 L.Ed. 910,109 U.S. 211,3 S.Ct. 161
• Parties: NEW ORLEANS NAT. BANKING ASS'N and others v. ADAMS and others
• Court: U.S. Supreme Court

109 U.S. 211

3 S.Ct. 161

27 L.Ed. 910

NEW ORLEANS NAT. BANKING ASS'N and others v. ADAMS and others.

November 12, 1883.

In equity. The facts, as they appear from the pleadings and evidence, were as follows: A firm doing business in Louisiana, under the name of Tucker Brothers, on February 24, 1860, made and delivered their promissory note of that date for $5,000, payable February 15, 1860, to the Bank of New Orleans, which afterwards, by virtue of the provisions of the 'act to provide a national currency,' etc., passed June 3, 1864, became a national bank under the name of the New Orleans National Banking Association. Tucker Brothers, on the same day, executed three other notes for $5,000, one of them, payable to Godfrey Barnsley, falling due January 21, 1861. To secure these four notes the makers executed a mortgage on a certain plantation in La Fourche parish, Louisiana. Two of the notes were paid, but those given to the Bank of New Orleans and Barnsley were not paid at maturity. Thereupon the bank, having instituted a suit on the mortgage and the note held by it on June 11, 1867, obtained a decree of foreclosure against Tucker Brothers, by virtue of which, on September 7, 1867, the mortgaged property was sold by the sheriff to one Albert N. Cummings for the price of $13,025, to satisfy said unpaid notes. Cummings being unable to pay the purchase money, it was agreed between him and the parties entitled to the proceeds of the sale that he should have time; whereupon Cummings, on September 7, 1867, executed an agreement in writing, before J. K. Gourdain, a notary of the parish of La Fourche, in which he recited that he had not paid the purchase money of the plantation, and declared as follows: 'That he corresponded and compromised with the mortgage creditors hereinafter named, who agreed to give him time, without, however, impairing or novating the original claims, the right to enforce which they expressly reserved.' Cummings, then, by this same agreement stipulated that out of the price of the plantation he would pay to one Gaubert the sum of $1,851.10, on or before March 1, 1861, he holding the first privilege on a part of the plantation for that amount; to Barnsley the sum of $4,904.40, on or before May 15, 1870; and to the Bank of New Orleans $6,269.50, on or before May 1, 1870,—and that all these sums should bear interest at the rate of 8 per cent. per annum after maturity till paid. The agreement then further declared as follows:

'It is understood, as above stated, that the parties hereto do not by these presents impair, affect, or novate their existing claims, and that in case of non-payment they will be entitled to enforce the judgments which may be held by them; and furthermore, that the original mortgages and privileges remain in full force and effect, and are not hereby novated, and if need be, for the purpose of avoiding all doubts, the said privileges and mortgages are hereby recognized as operating on the said property in the proportions aforesaid, and to secure the debts stated as aforesaid with the rank above stated.'

This agreement was duly recorded in the office of the recorder of mortgages for the parish of La Fourche, on September 12, 1867.

After the making of this agreement, Cummings, without having paid the sums the payment of which was promised, thereby sold the property to a Mrs. Tucker, who conveyed an undivided half interest to one Thomas J. Daunis, and Mrs. Tucker and Daunis then executed a mortgage on the same to John I. Adams & Co., to secure certain notes made by Daunis to said firm, after which Mrs. Tucker conveyed her undivided half of the property to Daunis. Subsequently the Bank of New Orleans, now become the New Orleans National Banking Association, assuming that the agreement entered into by Cummings before Gourdain, the notary, on September 7, 1867...