Nolan v. Labatut

PROVOSTY, J. This suit is on the bond of a notary who absconded. The defense of the surety is that the acts, out of which the obligation sought to be enforced is allegad to have grown, were committed by the notary in his individual, not in his notarial, capacity, and that as a consequence the surety is not liable. The defense is founded on the decision of this court in the ease of Schmitt v. Drouet, 42 La. Ann. 1065, 8 South. 396, 21 Am. St. Rep. 408, the doctrine of which is expressed by the court as follows: “Before a notary and his surety can be held, it is necessary to determine whether the act done or not done, committed or omitted, was or not authorized by law, was or not incumbent upon him_, was or not required of him, whether he was directed to do it, whether he has failed to discharge the duty, and whether injury has been sustained. It has hence been held that, where a notary does a thing which the law does not authorize him to do, although he does so, eo nomine, in his capacity of a notary public, the surety is not responsible.” That doctrine is inapplicable to the facts of this case, because the delinquencies charged against the notary in this case are with respect to acts done, or omitted to be done, in his official capacity. Plaintiff seeks to recover the amounts of several notes which the absconded notary palmed off upon her as valid mortgage notes [433] identified with acts of mortgage passed before him, but which, with the exception perhaps of one, turned out to be forgeries. The notary 'had simply manufactured them, and, if he ever took the trouble to go through the form -of executing acts of mortgage purporting to secure them, he never recorded the acts, and on absconding left no trace of them in his office.' The one exception is the J. Y. ■Olivieri note for $500. The evidence shows that there is a man by that name living in New Orleans, and that there is an act of mortgage purporting to secure this note duly recorded. As to this note, plaintiff will have ■to be nonsuited. The story of the others is as follows: Plaintiff had some money which she was .in the habit of investing in mortgage notes •of small denominations. Those involved in this suit range from $250 to $675. The notary, H. P. Labatut, would let her know, usually by letter, that he had an investment for her, naming the amount, and request her to send him her cheek. She would either send the check, or take it to him in person. She would call for the mortgage note a day -or two later, and he would hand it to her, laying stress upon his paraph of it as conclusive proof of its regularity, and she, trusting blindly to the efficacy of this paraph as a reliable criterion of genuineness, would accept the note. But, perhaps, it were best to state the matter in some detail. W. Wester house note, $550: The notary offered the investment to plaintiff, told her that he would pass the act of mortgage, and that it was not necessary for her to be ■present. Part of the money was already in the hands of the notary, and plaintiff left her check with him for the balance. When .she called for the note he showed her his notarial paraph on it, as proof conclusive that the mortgage had been duly executed to secure it. J. C. West note, $400: The notary, wrote to plaintiff to send her check. She called at his office, and he told her he would examine the titles and pass the act of mortgage. When the note was delivered to her a few days later, she asked if it was perfectly correct, and he pointed to his paraph on the note as conclusive evidence. D. J. Owens note, $650: The notary wrote to plaintiff he had an investment for her, and that he expected to close it the next day, and to send her check. Plaintiff, at the time appointed, carried her check and gave it in exchánge for the note; the notary assuring her that he himself had passed the act of mortgage. The note was duly paraphed by him. A. Harris note, $650: The notary wrote to plaintiff he had an investment for $650, which he expected to close during the week, and to send her check. When he delivered the note to her a few days later, he told her he had passed the act of mortgage, and called her attention to his notarial paraph on the note. H. Howat note, $675: Plaintiff was unable to recall the circumstances of the acquisition of this note, but her cheek for same bears date May 22d, and the note itself May 24th, and on May 27th the notary, wrote her: “X have your investment of $675 duly executed, and have note for same.” Wm. Andrews note, $250: The notary manufactured this note, authenticating it by his official paraph, and gave it to plaintiff in part settlement for some money he had collected for her. G. W. Kaupp note, $600: The notary wrote to plaintiff that he had a note for $600, secured by mortgage as per act passed by himself, and offered it to her as an investment. As to all the notes, plaintiff testifies that what guided her in determining whether to purchase the notes or not was the notary’s' [435] paraph on them, and his statement that he had passed the acts of mortgage. Thus it appears that, with the exception of the Andrews and Kaupp notes, which were already in existence at the time Labatut offered them to plaintiff, the circumstances were that the notary informed the plaintiff that some one wanted to borrow money, and that, if she would lend it, he would execute a mortgage to secure the loan; and that plaintiff furnished the money on the faith of the mortgage that was thus to be executed, she not appearing to the act of mortgage because the notary had represented to her, and rightly, that her doing so was not necessary. In other words, he was to execute a genuine mortgage to secure her loan, and he executed, instead, a forgery. It seems to us that these facts speak for themselves. If under these circumstances a notary were not to be responsible on his bond it would not be easy to conceive under what circumstances he would be. The Kaupp and Andrews notes were already in existence when the investment was offered to plaintiff, and therefore, as to them, the notary did not undertake to execute an act of mortgage to secure plaintiff, but simply represented that the mortgage was already in existence. The transaction was simply a purchase of the note. But it was in his official capacity that Labatut represented to plaintiff that he himself had passed the act, and it was to his official paraph he pointed, and to which she trusted, and it was by the use of his office that he created the paper in exchange for which plaintiff parted with her money. In the case of the other notes he said: “Give your money, and I will pass an act of mortgage to secure it.” In the case 6f the Kaupp and Andrews notes he said: “Give your money, I have passed an act of mortgage, and here is the note secured by it.” Defendant’s learned counsel argues very plausibly that if Labatut had made no pre^ tense of investing the money, but after receiving it from plaintiff for the purpose of turning it over to the borrower had put it in his pocket and refused to return it, or had flatly told plaintiff that he was going to deliver a forged note to her, the surety on his bond would clearly not have been responsible; because it is no part of the official functions of a notary to receive money for the purpose of investment. True, under those circumstances, the surety would not be responsible, and for the reason stated; but those are not the circumstances of this case. For all we know, until the sham ceremony of the delivery of the note had been gone through with, the money was as safe in the hands of Labatut as it would have been in bank. He would have paid it over on demand as readily as the cashier of the bank would have done. The fact is that the real parting with the money was not the iflacing of it in the hands of Labatut, but it was the accepting of the forged note. Labatut at times had moneys for plaintiff, and plaintiff never considered that the money had gone away from her because it was in his hands. He invested some of this money in good notes for her. This court cannot decide this case on the hypothesis that Labatut refused to return the money, or that he flatly declared that he was delivering a forged note. What would have happened if he had done anything of that kind this court does not need to stop to inquire. The court is satisfied from the circumstances of this case that there was no probability of his doing anything of that kind. Hence the case must stand on the fact that by the use of his office he obtained such a hold on plaintiff’s money as brought about her loss, and the surety must therefore answer for it. Plaintiff parted definitively with her money on the faith of his apparently official acts. The Westerhaus note was on a printed [437] form having in the upper left corner the words: “H. P. Labatut, Notary Public, New Orleans.” It bore on its face the following paraph: “Ne Varietur. Secured by mortgage by act passed before me this day. New Orleans, Oct. 27th, 1900.” On delivering it to plaintiff, Labatut called her attention to the paraph as a proof of regularity and genuineness. But plaintiff, and probably he himself, did not notice that the paraph was not signed. In that respect it was incomplete. Defendant’s learned counsel relies upon the absence of the signature as a fact differentiating this note from the others. We fail to see the difference. The note purported to be a complete note and was delivered by the notary as such. The learned counsel for defendant insists that plaintiff confided her money to the notary as her agent for him to invest it for her, and that his act in investing it in forged notes was the act of a mere agent, not of a notary. But it is perfectly plain, under the facts, that Labatut dealt with plaintiff in the two capacites of agent and notary, and that, whatever he may have done for her as agent, it was clearly and distinctly as notary that he represented that he had executed the acts of mortgage and paraphed the notes. Nothing shows that as agent he was unfaithful to his trust. On the contrary, he seems to have rendered her as agent a full, complete, and satisfactory account. It was as notary, and by means of the paraphernalia of his office — his printed letter heads, his printed forms of notes, his paraph, and his acts of mortgage in buckram — that he swindled her; and, we repeat, the surety on his official bond must answer. Repeatedly Labatut told plaintiff when delivering the notes to her that his bond would stand responsible for their genuineness and regularity, and she acted on that representation. It is therefore ordered, adjudged, and decreed that the judgment appealed from be affirmed in so far as it condemns Henry P. Labatut, and be set aside in so far as it is in favor of the surety company, arid that there now be judgment in favor of the plaintiff, Miss Jennie Nolan, and against the defendant the Fidelity & Deposit Company of Maryland, for the sum of $3,775, with 5 per cent, per annum interest from the 20th day of January, 1903; same being for all the notes sued on except that of J. V. Oliveri, for $500, as to which the suit of plaintiff is dismissed as in case of nonsuit. Defendants to pay the costs of the lower court, and the Fidelity & Deposit Company of Maryland to pay the costs of this appeal. BREAUX, C. J., dissents.