Pavey v. Stauffer
| Citation | 45 La.Ann. 353,12 So. 512 |
| Decision Date | 01 March 1893 |
| Docket Number | 11,029 |
| Court | Supreme Court of Louisiana |
| Parties | FRANCIS M. PAVEY v. I. H. STAUFFER |
Rehearing Considered.
APPEAL from the Civil District Court for the Parish of Orleans. Monroe, J.
Henry L. Lazarus, for Plaintiff and Appellant.
Walter D. Denegre, for Dependant and Appellee.
The object of this action is the recovery of possession of two promissory notes, in capital aggregating about $ 6000, which were executed by the petitioner to the order of J. B Lallande, payable at a future date, and presently in the possession of the defendant.
Petitioner's averment is that J. B. Lallande was, at the time of their execution, his factor and commission merchant, and they were furnished to him as collateral security for his current and running account.
That they were discounted and the proceeds thereof placed to his credit. That from time to time during the cotton season he made shipments of cotton to Lallande, and when some was sold the proceeds were placed to his credit on open account, just as the proceeds of the notes had been previously. That against these assets in the hands of Lallande, he drew drafts and orders from time to time as suited his convenience and the wants of his business as planter and country merchant.
His further claim is that subsequently Lallande failed in business and made a cession and surrender to his creditors and that at the time there was upon his commercial books credit in his favor to the amount of $ 4992.28, and that consequently the notes were only bound to him for the difference between that sum and their face value, to-wit, $ 1492.47; and that upon the payment of that sum he is entitled to the restitution and surrender thereof.
He further alleges that the defendant received said notes from Lallande as a pledge, or collateral security for his indebtedness, but without right or authority so to do, and without petitioner's knowledge or consent. That by virtue of said pretended pledge defendant acquired no right or title whatever to said notes, they being petitioner's property, and that he was entitled to possession of the same upon payment of the balance due, which sum he tendered and offered to pay upon the surrender thereof to him. That the defendant's pretended acquisition of said notes was mala fide, and that this appears by a simple inspection of the notes and endorsements thereon.
The salient facts of this case are in accord with the foregoing averments, except in one or two important particulars. The exceptions are: (1) That on the notes and their endorsement there is no evidence of mala fides on the part of the defendant, and no proof of it furnished by the record; and (2) defendant's title is evidenced by a written act of pledge signed by Lallande, on the 25th of March, 1889, the maturity of the notes having been previously extended by the plaintiff to the 25th of February, and they are consequently not due at the time.
The proof discloses that Lallande accidentally omitted to endorse his name upon the notes at date of their being pledged to the defendant, but that he, subsequently to his cession and surrender, placed his name upon them, with the knowledge and consent of the defendant, but without that of the plaintiff, who remained uninformed of the transaction throughout.
The pertinent recital of the act of pledge is as follows, viz.:
"Having executed a promissory note, dated New Orleans, March 25, 1889, for $ 9000, payable * * * to the order of I. H. Stauffer, on the 16th of February next, 1890, * * * I do hereby pledge, pawn and deliver to said I. H. Stauffer and his assigns, as collateral security for said note, * * * the following," that is to say the two notes in controversy. The act then proceeds as follows, viz.: "In default of payment of my said note, principal and interest, at maturity, I do hereby authorize said I. H. Stauffer, or his assigns, to sell or cause to be sold said collaterals, at public or private sale, * * * and to apply the proceeds * * * to the payment in part or whole of my before mentioned note."
It is in proof, further, that at the time of the execution of the act of pledge it was within the contemplation of the parties that Lallande should formally endorse the notes, and that he subsequently placed his endorsement upon the notes for the purpose and with the expectation of thereby remedying the defect. The evidence satisfies us, as it satisfied the district judge, that there was neither fraud nor bad faith in the transaction in so far as the defendant, Stauffer, is concerned.
Lallande is not a party to this suit, nor is his syndic a party; yet it is manifest that he had a real and actual interest in the notes to the extent of $ 1492.47, and his creditors have at this time. This is the plaintiff's admission.
Under this state of fact, has plaintiff a case entitling him to relief at the defendant's hands? From the foregoing statement, it is apparent that either the plaintiff must lose $ 4992.28, or the defendant very nearly that sum, inasmuch as other collaterals enumerated in the act of pledge have comparatively little value.
We have, therefore, a case in which one of two innocent parties must suffer; and equity requires that the one whose voluntary act put it in the power of another to inflict the injury must sustain the loss, unless there is some precept of positive law to the contrary.
It is certainly true that, upon plaintiff's own statement Lallande had the legal possession of the notes, and the right to discount them and convert them into proceeds. It is equally true that when thus discounted, plaintiff had the right to draw, and did draw, against the same. By so doing he evidently placed the notes,...
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