Relf & Zacharie v. M'Donogh

The judges being divided in opinion, the majority pronounced the following judgment: Simon, J. delivered the opinion of a majority of the court, In the first of these consolidated causes, the plaintiffs claim the reimbursement of the sum of eight thousand nine hundred and eighty-seven dollars, which is the amount of a promissory note of hand by them paid to the defendant, which, together with five other notes, amounting altogether to ninety thousand three hundred and ninety-three dollars and twenty-eight cents, are alleged to have been executed without a cause, the petitioners not having received any consideration for the same ; they also pray that the said five notes be cancelled and returned to them. In the second, the plaintiff seeks to enforce the payment of the balance due on the said five notes, which, as he states, after allowing all past credits and payments, amounts to thirty-six thousand seven hundred and ninety-six dollars and twenty-two cents, for principal and interest on the same, according to an account filed with his petition. The issues between the parties are: on the one hand, a general denial of the allegations contained in R. Relf and James W. Zacharie’s petition; and on the other hand, an averment that [133] the debt for which the notes sued on were subscribed, has been settled and liquidated by a judgment of this court, rendered on the appeal of a judgment of the court of the fo.urth judicial district, in the suit of M‘Donogh vs. P. F. Theodore Zacharie; that the amount awarded by the said judgment of this court to John M‘Donogh was afterwards paid to him by James W. Za-charie, whereby the debt was extinguished; and that consequently the notes sued on are without consideration. There was judgment in the inferior court in favor of Relf and Zacharie, cancelling the five notes sued on by M'Donogh ; from which judgment, the latter appealed. This case grows out of a transaction which took place on the 1st of July, 1829, between the parties to this suit in relation to the debt due to John M‘Donoghby the succession of Madame Zacharie, deceased, which debt originated in the sale of a plantation and slaves from the said M'Donogh to John T. Pember-ton in the year 1818. The principal facts relative to the origin of the said debt, and to the liability assumed by Madame Za-charie, after whose death the property mortgaged was sold to Theodore Zacharie, who also assumed the payment of said debt, are fully stated in the case of M‘Donogh vs. Theodore Zacharie, 5 La. Rep., 247. The additional facts of the case, as shown by the record, are these : The defendants, Relf and Zacharie, were testamentary executors of Madame Zacharie; Relf having married two of her daughters, represented two portions' of her succession, and James W. Zacharie, one portion. On the 1st of July,'1829, M'Donogh communicated to them a detailed statement of the amount due him on the original Pemberton debt and mortgage, which after allowing several credits, left a balance in his favor of seventy-four thousand seven hundred and seventy-nine dollars and eighty-four cents; for this sum, he received the six joint and severalnotes of Relf andJ.W. Zacharie, including interest at six per cent, up to the expiration of the instalments, and forming the aggregate amount of $90,363 28, and gave them the following receipt: “ Received of Messrs. Richard Relf and [134] J. W. Zacharie, their six promissory notes as per annexed statement signed by me, for the above amount ($74,779 84) including- interest at the rate of six per cent, per annum, until due, which six notes, as above set forth, if regularly paid, when they respectively fall due and are payable, will be in full payment to me of the balance due me on seven promissory notes, held by and owing me (as above stated) by John T. Pemberton, and which are secured by mortgage on a plantation and slaves, situated in the parish of Iberville ; said notes of John T. Pemberton being still in my possession, and to beheld by me until those notes of Richard Relf and James W.Zacha-rie are first paid, at which time I promise and engage to deliver them up to said Richard Relf and James W. Zacharie ; but in the event that said notes of R. Relf and J. W. Zacharie, or either of said notes, are not regularly paid on the day they shall fall due, then I shall be at liberty to seek payment of John T. Pemberton, of the whole amount of his notes and the interest due thereon, in money, by foreclosing the mortgage given for the securing the payment of the said notes of John T. Pember-ton, or in any other manner which I may see fit and proper, the same as if this arrangement (the receiving by me the notes of R. Relf and J. W. Zacharie) had never taken place. New Orleans, July 1st, 1829. (Signed,) John M'Donogh.” The first of these notes ($8987) was regularly paid at maturity, and its amount was imputed by M'Donogh as a credit on one of the notes of Pemberton. In May, 1831, the first of these consolidated causes was instituted by Relf and Zacharie against M'Donogh, and in June, 1832, the latter instituted an action of mortgage against Theodore Zacharie to recover the amount of the Pemberton debt in principal and interest; the assumption on the part of- Theodore Zacharie to pay said debt is recited in the petition, and this is the same case reported in 5 La. Rep., 247, in which M'Donogh’s claim was reduced to $52,028 63; this court rejecting a large portion of the interest claimed by the plaintiff. This judgment was subsequently executed, and James W. Zacharie, having become the .pur [135] chaser of the property mortgaged, at sheriff’s sale, on the 2d of September,' 1833, furnished his twelve months bond, which was regularly paid on its becoming due, and on the 5th of September, 1834, John M'Donqgh gave him a full acquittance of the debt and released all the mortgages existing on the property, by a notarial act, in which we find the following declaration : “ Whereas true and faithful payment has been made by James W. Zacharie of a certain bond of $52,028 63, &c., &c., now, therefore, in consideration of the full payment and satisfaction of the said bond as aforesaid, the said M‘Donogh further declared, that he does by these presents cancel and annul the general mortgage, resulting in his favor from the said bond, and as the amount of said bond, formed agreeably to the judgment of the Supreme Court, rendered in the above suit, THE BALANCE DUE ON THE SUM OE ONE HUNDRED AND THIRTEEN thousand dollars, secured by a special mortgage in his favor, executed before Michel de Armas, late a notary public in this city, on the 23d of January, 1818, he, the saidMfDonogh, further declared, that he also hereby cancels and annuls the said special mortgage existing on said plantation and slaves, as aforesaid, as well as all the reversions thereof, assumed first by Joseph Erwin, by an act passed before the said De_A.rmas, on the 27th of March, 1821; second, by the late Mrs. widow Za-charie, by an act passed before the same notary on the 10th of October, 1821; and third, by the said P. F. T. Zacharie, in his act of purchase of the said plantation and slaves, from the succession of the said widow Zacharie. He, the said M‘Do-nogh, authorizing and requiring the recorder ofmortgages in and for the said parish of Iberville, to erase the said general mortgage, as well as the said special mortgage and all the reversions thereof, as aforesaid, from his boohs, as fully as need or can be by virtue of these presents.” In March, 1836, the second of these consolidated causes was instituted to recover the ba-* lance due on the notes of Relf and Zacharie, after imputation of the amount received from James W. Zacharie, which balance forms the difference between the sum awarded-by the [136] Supreme Court to John M‘Donogh as being the balance of the pr^ce 0f the property sold. an¿ the amount in principal and interest of the notes furnished by the defendants in conformity with the statement made by M'Donogh on the 1st of July, 1829. This case has been ably and elaborately argued onboth sides; the oral and written arguments of the counsel, have afforded us all the light which could be thrown on the important questions submitted to our consideration; they are not free from difficulty, and in coming to the conclusion which I have adopted, I apprehend that we have been in some measure prompted by a strong sense of legal and moral equity, and that I have perhaps given more effect to the views which I entertain on the true intentions of the parties, than to a strict application of the rules of law that may govern the form of their contract. Under the circumstances of the case, it does not appear to me that the notes sued on were the result of a compromise, and that the defendants were under any moral obligation to pay to the plaintiff, a sum of money which he had no right to claim against the estate of Madame Zacharie ; nay, such questions are not even presented by the pleadings, and no evidence has been adduced to sustain them. It is true that being interested in the succession, and having the management of the affairs thereof, as executors, their reasons and motives, in signing the notes, may have been derived from a strong desire to bring the estate to a fair and amicable settlement with the creditors, but they did not obligate themselves as executors or as the agents of the heirs, and I cannot presume that they ever intended to bind themselves for more than the succession really owed, and contract a debt which would be disavowed by the other heirs, and for which they could not exercise any recourse against the succession or against the property mortgaged to secure it. What was the nature of the obligation contracted by Relf and Zacharie towards John M'Donogh ? Pemberton was the [137] principal debtor of the notes which he had given for the pnr-chase of the plantation and slaves, and the amount of said notes, or the balance due thereon, was secured by a special mortgage on the property. Madame Zacharie subsequently assumed the payment of the original Pemberton debt, as a part of the price of her purchase from Erwin; M'Donogh without discharging Pemberton, accepted her said assumption, and she became thereby personally liable to pay the same debt; after her death, the mortgaged property was to be disposed of to satisfy the debts of the estate, and it became necessary to liquidate the amount due to M'Donogh, and perhaps to give him an additional security for the whole of the debt, in order to be able to sell the property on credit; this object was to be attained not only for the benefit of the estate, but also for the advantage of M‘Donogh, who thereby obtained the liquidation of his claim, and the personal obligations of two solvent persons as an additional security ; in this state of things, he consented to taire the notes of Pelf and Zacharie, but he took good care to stipulate that his rights should be preserved against the original and principal debtor. Now, ban it be believed that Relf and Zacharie ever intended to get M'Donogh’s consent to their selling the | property on a credit, at the enormous sacrifice of a sum amounting nearly to forty thousand dollars'? The advantage which the plaintiff was to derive from the arrangement, was at least commensurate with the benefit which was expected from a sale on credit. The receipt spealrs for itself; itshows clearly that the defendants were under the impression that M‘Donogh was entitled to the whole amount of the interest by him claim-1 ed; since, far from giving any direct and positive consent to the terms of credit on which the property had been or was to be sold, he' expressly reserved his right, in the event of the notes not being regularly paid, to proceed against Pemberton and the property, for the recovery of the whole amount of his notes and the interest due thereon, as if the arrangement (the receiving by him of Relf and Zacharie’s notes) had never taken place. His object was to lose no part of the debt which [138] was really and legally due him by Pemberton ; but nothing shows that it was'to be increased beyond its legal operation, and surely, if Relf and Zacharie had intended to give him what he had no legal right to claim, this would have been shown by the receipt itself. As it is, I cannot presume they did, and I feel morally convinced that the account furnished by M‘Do-nogh, showing the balance which he pretended to be owing to him by Pemberton and by the succession, was taken as the basis of the settlement, and that the notes were made accordingly. Where persons representing a succession, executed their notes to the creditor for the original debt due by it and securedby mortgage, their obligation is in the nature of thq pactum constitute pecunie, engaging their personal liability, that the debt should be paid •within a certain time, or the creditor be at liberty to seek payment according to his original' right, on his mortgage. If the new obligation be for more than the original one, the mistake being discovered the pact or nexo ^obligation is void, pro tanto, fo'r want of a debt which was the foundation of it. [138] The obligation of the defendants is, in my opinion, in the nature of the pactum constitute pecunias of the Roman law, which Pothier on obligations, vol. lst,p. 363, du pacte constitute pecunias, sec.-1, defines to be, une convention par laquelle quelqu'un assignoit a un créancier un certain jour ou un certain temps dans lequel il promettoit de le payer ; and which promise sec. 2,peut etrefaite a son propre créancier ou an créancier d'un autre. Indeed, it would he difficult, if not impossible, to bring this contract under any other denomination and from the features of the arrangement, it cannot be doubted that the parties never intended to bind themselves in any other way, that is to say, that the object of Relf and Zacharie was merely to engage their personal liability that the debt due to M‘Donogh should be paid at certain times fixed by their notes, with the condition, that if the promise was not punctually complied with, he should be at liberty to seek his payment according to his original rights, and to enforce it against Pemberton and the mortgaged property before the expiration of the last instalment. It seems to me perfectly clear that this is the whole extent of the defendants’ obligation, and that the manner in which it was contracted excludes the idea that any novation was intended, or that said defendants ever understood that they were to become personally bound as M‘Donogh’s sole debtors for more than the amount actually due him by th.e succession. “ II résulte, gays Pothier, loco citato, sec. 6’, de la déñnition que nous ' . . avons aonnee du pacte constituías pecunias, qu it suppose la d’une dette qu’on pr'omet de payer a. celui qui en [139] est le créancier. C’est pourquoi, si par erreurje suis conve-nu avecvous de vous payer une certaine somme queje croyois vous étre due par moi ou par un autre; Verreur ay ant été depuis découverte, vous ne pouvez pas en éxiger le payement, le pacte étant nul, faute d'une dette qui en ait été le fondement. And in No. 21, he proceeds to say : II nous reste a observer que dans les litres nouveaux que passent des héri-tiers, et.par lesquels Us s’obligent au payement de ce qui étoit dupar te défunt, ils peuvent bien, a la vérité, selon les prin-cipes que nous venons de rapporter apposer pour ce payement des claicses différentes que cellesportées par le titre primordial; mais il faut pour cela qu’ils déclarent qu'ils entenclent en cela innover au titre primordial; autrement tout cequi dans les actes se trouve different de ce qui est porté par le titre primor* dial, est présumé s'y étre glissé par erreur ; etrCestpas voluble, la présomption étant que Vintention de ceux qui passent ces actes, est de reconnoitre et de confirmer ce qui est porté par le titre primordial, et non d’y rien innover.” See also Pothier on obligations, No. 744, in which he establishes the doctrine that the recognition of a 'debt is always to he "understood as relative to a primordial title, and that if the recognition admits that the party making it, is obliged further or otherwise than as the primary title imports, by producing the primary title, and showing the error which has slipped into the recognition, he will be relieved. The recognition of a debt is always to be understood with reference to a primordial title! and if the party is obliged further, or otherwise than as the primary title imports, on showing the error he will be relieved. These principles are fully applicable to the present case, and when I consider that the plaintiff had three debtors, each owing the Pemberton debt, viz : lo. the succession of Madame Za-charie. 2o. Pelf and J. W. Zacharie ; and 3o. Theodore Zacharie : who were all obligated and bound to pay the same debt, and who, according to Pothier, No. 33 ; loco citato, en sont tenues chacune solidairement,en quoi elles ressemblent aux fidéjusseurs, No. 415. That there is no evidence that the parties ever had in view any other debt but that proceeding from the sale to Pemberton; that nothing was said as to the interest which was supposed to be rightfully due to M‘Donogh; [140] and that the extent of the obligation of Theodore Zacharie, under his general assumption, has been determined contradictorily with the creditor, by a judgment of this court: 5 La. Rep., 247; in which the sum of $53,038 63, was declared to be the balance due on the price of the property sold. I may fairly infer that if Relf and J. W. Zacharie had been aware that M'Donogh had no right to claim more than the amount awarded to him by the Supreme Court, they would not have consented to give him their notes in accordance with the detailed account by him produced atthétime of the arrangement. It is true that they paid the first note, but this only shows the continuation of the error, and the circumstance of their having protested against the payment of the other notes, by instituting their suit to have them cancelled in May, 1831, (the case in 5 La. Rep., was only decided in 1833,) indicates sufficiently that they discovered the error a short time after the .payment of the said first note, and that they took immediate steps to have ^ corrected, long before said error was recognized by the de-cisión of this court, & !°beingheirs of a succession and administering it as executors, gave their ditorbyorigin-mortgage, who reserved the right to go upon his mortgage if not punctually nftet’ athÍdlpay-m®nt of the first which the debt was ascertained by^a judgment than the amount *rw ins ,. §‘Ien: Meld, that there was error for and the new oh-hlx^noWect^11 According to the art. 1818 of the La. Code, “ the reality of the cause is a kind of precedent condition to the contract with- > 0llt which consent would not have been given, because the motive being that which determines the will, if there be no ° such cause where one was supposed to exist, or if it be fully represented, there can he no valid consent.” Here the representations made by the creditor, by the production of his ac-ac-C0llnt, were that he had a right to claim the interest; he tually claimed them, and both parties may have believed at the . , , time that they were justly and rightfully due ; but those re-pf^sentations turned out afterwards to be unfounded, and there was n0 valid consent on the part of the defendants to the con-h’act. By the cause of a contract is meant the consideration or . motive for making it ; La. Code, arts. 1890, 1893. Thus, if Belf and Zacharie were induced to sign the notes, because they Relieved th.at the interest carried in the account was due, there [141] was no cause or consideration, they were in error, and their obligation can have no effect. From the judgment of this court against Theodore Zacharie, it is clear that he was made personally liable to pay the debt of the estate, although the action was originally hypothecary ; he was condemned to pay the whole amount- which the succession ozved to the plaintiff, and the reduction took place, not as the result of any personal right vested in Theodore Zacha-rie to have the debt reduced, hut because in liquidating said debt, as against the estate, contradictorily with the creditor, it was found that Madame Zacharie did not owe him more than the'amount awarded by the judgment. It is not necessary for me to inquire into the grounds and reasons which may have led this court to disallow the interest claimed by M'Donogh. It suffices to say that the decision has had its effect, and that Theodore Zacharie has been discharged from paying the amount of the interest, which, if due by the succession, he was bound to pay under his positive contract and assumption. He stood exactly in the place of the estate; he exercised the same means of defence which Madame Zacharie herself was entitled to oppose to M‘Do-nogh’s claim, and he succeeded. Suppose M‘Donogh was to apply to the succession for the deficiency between the amount of the judgment and what he considered in July, 18:29, to be the debt owing to him ; could the succession set up the same claim against Theodore Zacharie who was hound to pay and hold it harmless against the debt? Surely not. If so, would not M‘Donogh’s rights, if transferred to Relf and Zacharie he affected and even destroyed by the judgment ? Could he validly and effectually subrogate them to his rights ? Could they enforce them against Theodore Zacharie? I think not; and it seems to me that, without attempting to decide that the judgment in question ought to have the force of res judicata in this case, it must be considered as sufficient to put M‘Do-nogh in the actual impossibility of subrogating the defendants to the rights and securities which they would' be entitled to, [142] on paying the amount in controversy ; and this is the result or consequence of his own omission and neglect. The judgment would undoubtedly he a bar to a recovery against Theodore Zacharie who had obligated himself to pay the whole debt; as against any claim set up under M‘Donogh’s rights, he would successfully oppose the plea of payment under the decision of this court in his favor. It is clear that said judgment, rendered contradictorily with the creditor, would protect Theodore Zacharie against any action brought against him for the same cause, and would be considered as a judicial declaration that the debt by him assumed did not amount beyond the sum awarded ; and this sum has been satisfied. Touillier, vol. 10, Nos. 202, 203, 204, 209 and 210. But the defendant himself has recognized that the sum oí fifty two thousand and twenty-eight dollars and sixty-three cents, constituted the whole amount of his claim. His notarial receipt given to James W. Zacharie on the 5lh of September, 1834, (about two years before the institution of this suit,) declares positively that the amount of the bond formed the balance due Mm on the sum of one hundred and thirteen thousand dollars, secured by a special mortgage, &c., &c. Can he now gainsay the contents of his receipt? Is he not forever precluded from claiming any sum beyond the said balance ? Was not the interest, if due, secured also by the mortgage which he released ? And again, could Relf and Zacharie, on payment of this interest, be now subrogated with any effect to the creditor’s said right of mortgage ? Undoubtedly not. His receipt contains no reservation; it is absolute; he discharges all the mortgages which he had on the property, as also all the reversions thereof, that is to say: the assumptions successively made by Joseph Erwin, Madame Zacharie and Theodore Zacharie, to pay the Pemberton debt. The principal debtors are all thereby released, and the debt and mortgages are all extinguished. This, it seems to me, is the stronghold of the defence ; it grows out of the very issue, set up by the defendants; and it is, in my opinion, so conclusive that, alone, [143] it would be sufficient to defeat the plaintiff’s pretensions. I therefore think that the judgment appealed from ought not to he disturbed. With regard to the claim of Relf and James W. Zacharie to the reimbursement of the sum of eight thousand nine hundred and eighty-seven dollars, as being the amount of the first note and which was paid, it has been shown that that sum had been credited on the principal debt previous to the institution of the suit against Theodore Zacharie. It is endorsed on one of the notes originally given by Pemberton, at the date of the 4th of April, 1830, and we must presume that it was accounted for in the liquidation of the balance due by Theodore Zacharie. There is no evidence that said sum was not included in the general settlement, and the defendants must have had a perfect knowledge of its application. This being the opinion of the majority of the court; it is therefore ordered, adjudged and decreed that the judgment of the District Court be affirmed with costs.