Planters Bank v. Bass

The judgment of the court was pronounced by Slidell, J. In the year 1836, the plaintiffs brought suit upon a note for' $20,-000, against Elias Bass, as endoi-ser, who died pending, the action ; his-widow was made party in his stead, and, in 1842, a judgment was rendered in-favor of the plaintiffs. In 1843', an appeal was taken by the defendant. After the case came to the Supreme Court it was set for argument, heard, and taken-under advisement of ou-r predecessors; but not having been decided, it was again setfor argument before this court. When called for argument the appellant placed on record a suggestion and plea, t-o the following effect :■ That since the appeal was taken, the charter of the plaintiffs had been adjudged by tile High Court of Errors and Appeals of the State of Mississippi to be forfeited';' that the said corporation was declared dissolved, and was perpetually enjoined-from further exercising any of the franchises, liberties and privileges conferred by said charter, in proof of which was exhibited a duly certified copy of the-suit and judgment of forfeiture, Which was pleaded as a perpetual bar to the-further prosecution of this suit : That the trustees appointed to liquidate the affairs of said dissolved corporation by the Circuit Court of Adams county, upon pronouncing said decree of forfeiture, are deprived and divested of all legal1 authority to sue for or collect any debt due to the said Planter's Bank. That the only power they possess is to sell, under an order of court, all the properly — 433 — and evidences of debt heretofore belonging to said bank, and which have come into their possession. In proof of which they exhibit to the court an act of the legislature of the State of Mississippi, approved Feb. 28th, 1846, entitled “ An act to amend an act entitled an act to prescribe the mode of proceeding against incorporated banks for a violation of their corporate franchises, &c., approved July 26, 1843,” which act so amended is also exhibited. That the appellant pleads the above statutes in bar of any prosecution of this suit by the trustees so appointed. It was further pleaded that any authority conferred upon the trustees, either by the acts of the legislature or by the court of that State, is strictly territorial, and cannot be extended or recognised without the limits of the jurisdiction of that State. Thereupon the trustees, Galbraith Sf Cooper, appointed by the court in Mississippi, entered their appearance in this cause, and filed a petition praying to be permitted to become parties to the suit. At the same time and by the same counsel, an appearance was also entered for Walworth, Montgomery, and Mandeville, who claimed to be owners of the debt due by the defendant by virtue of a deed of assignment and trust, said to have been executed by the Planters Panic to them, in trust for creditors, prior to the decree of forfeiture. These last named trustees we shall at present leave out of view. The petition of Galbraith Sf Cooper having been filed, the appellant filed an answer, in which he reiterates the matters pleaded in the suggestion and plea above stated, and asks that the cause be remanded to the District Court for the trial and decision of the issues thus presented. He contends that this court has no right to consider them originally. There is no doubt that this suit belongs to that class of cases in which our jurisdiction is appellate only. Constitution, art. 63. It is also true, that all the matters presented by the suggestion and plea of the appellant, and by the petition of the trustees and the answer made to it, are new matters, and which have never been submitted to the consideration of the inferior court. The controversy in question has originated in the appellate tribunal, and the principle is undoubted that, by virtue of our constitutional powers as an appellate court we cannot create a cause. There are, however, some subjects which an appellate court can take cognizance of, and act upon, originally. They are those which are indispensable to the exercise of its appellate jurisdiction. Of these the one of most frequent occurrence is that of making new parties, on an appeal pending, in case of the death of a litigant. AVithout proper parties a case perhaps cannot, or at least ought not to, be heard; and were there no means of making them, the appellate functions of the court would be airested on the one hand, while on the other hand the cause Would remain withdrawn by the appeal from the jurisdiction of the inferior tribunal. Our legislation on this subject is very meagre; but what we have is inconsistent with the idea that an appeal abates by the death either of the appellant orthe-appellee. Although but a single case is expressly stated in the Code of Practice in which the authority to revive is granted, our predecessors appear to have considered the authority as existing inherently in the Supreme Court, by virtue of its constitutional organization and the purposes of its creation. From the earliest existence of a Supreme Court in Louisiana down to the present time, and under both constitutions, the Supreme Court has constantly exercised this power of making parties. It has not been considered as limited to the case of natural death. Syndics, assignees in bankruptcy, com — 434 — missioners of banks of this State whose charters have been forfeited, have been ordered to be made parties, or permitted by the court on their own motion to come in. In every such case the court has acted on a new matter, and originally ; yet its authority to do so has not been doubted, where the fact was undisputed that the party proposed to be made, or offering to come in, possessed the quality of heir, executor, syndic, &c. This view of the inherent power of an appellate court, as springing from the Dature of its functions and the purposes of its creation, is not peculiar to ourselves or our predecessors. The Supreme Court of the United States, we think, acted under that view of its appellate powers, in the case of Green v. Watkins, 6 Wheaton, 263, and in the rules which it then took occasion to frame to save the dismissal or abatement of writs of error. But when, in the exercise of this power, there arises a contest as to facts, the ascertainment of which is indispensable for the action of the court, then it is the duty of the court to remand an issue to be tried by the inferior court, to the end that the necessary facts may be there ascertained. In the present case, which is to all intents and purposes a question of revival, there is no such contest as to facts. The facts are clear and undisputed; they are those which the appellant himself, who asks the remanding to the inferior court, has placed before us, and which he cannot and does not gainsay. They are, the record of proceedings for forfeiture, the j.udicial appointment of the trustees, and the Mississippi statutes of 2Gth July, 1843, and 28th February, 1846. Upon these we are to determimine whether the trusteees are competent to stand in judgment here, as the legal owners of the claim against Buss, in the place and stead of an extinct corporation, to whose rights of property they claim to have succeeded. It would be an unnecessary and idle form to remand the cause to the court below, for its opinion on a pure question of law.. As well might it be said,, when an executor appears in this court and offers himself as a party to an appeal taken by or against the deceased, and his quality is not disputed, that we should remand the cause to the district judge, to enquire whether an executor duly appointed is capable of representing the succession of his testator. It does not form an objection to our examination of this subject originally, when presented under such circumstances, that in reality it involves and practically determines the future right of the trustees to execute such judgment as we may render. It is true the right of executing the judgment is involved, but it is an unavoidable incident of the question of revival; for it would be a vain thing for this court to render a final decree, if that decree, when rendered, could not be executed. Are these trustees then competent to have this suit revived in their names, and to stand in judgment as the successors of the bank ? For the proper consideration of this subject, it is necessary to notice briefly the circumstances of their appointment. In July, 1843, the State of Mississippi passed an act entitled, “ An act to prescribe the mode of proceeding against incorporate banks for a violation of their corporate franchises, and against persons pretending to exercise corporate privileges under acts of incorporation, and for other purposes.” The constitutionality of this law has not been questioned in argument, and we have only to consider its meaning and effect. Under this statute proceedings were instituted against the Planters Bank, which resulted in a decree of forfeiture and the appointment of trustees. These trustees, in obedience to the provisions of the statute, were authorised by — 435 — the decree to take charge of the assets of the. company wherever the same may be found, either in the hands of the officers of the bank or .its agents, trustees or attorneys, to sue for and collect all debts due to the company, and the proceeds' of the debts when collected and the property when sold to apply, as thereafter might be directed by law, to the payment of the debts of the company. Under this statute and the decree of the court adjudging the forfeiture and appointing the trustees, we consider the trustees as clothed with the legal ownership of the assets of the bank — as the successors of the -bank for the benefit of creditors. Being clothed with the power to sue, they must be considered as authorised to have suits revived in their names; and so the courts of Mississippi have.eonsidered their title and authority, and have repeatedly recognised their right to revive ns may be seen in the very able and unanswerable opinion of Chief Justice Sharkey, in the recent case of the Commercial Bank v. Chambers. But it is said in argument that, the authority oí the trustees .to prosecute suits, and by consequence to revive for their benefit suits instituted by the bank before their appointment, has been taken from them by the statute of Mississippi of 28th February, 1846 ; that this act applies, by its express terms, to trustees theretofore appointed, and is a positive and inflexible command to the trustees to sell all the assets of the extinct corporation; that the .prosecution of .suits and their collection, in the usual course of law, is inconsistent with this imperative command. When this argument was presented, there seemed to us in the legislation of 1846, much of the hardship and injustice asserted by the .opposite counsel; and we feared that the delicate and disagreeable duty would be unavoidable, of .comparing these two statutes of a sister State, and determinging whether that of 1846, by its conflicting legislation, repealed .certain por-tions of the act of 1843, material to our present enquiry, or whether the act of 1846 was, pro tanto, unconstitutional and void. We have been relieved, since .this cause was taken under advisement, from a duty so delicate and a responsibility so grave, by the decision on the very point, by the highest tribunal of the State whose legislation we were required to interpret. That court, upon an elaborate examination, in the case already cited, and with a logic which seems to us unanswerable, has declared the act of 1846 unconstitutional and void, .so far as it attempted to curtail or impair the rights of the trustees, appointed before its passage under the act of 1843, to prosecute and collect claims due to the bank; and permitted the trustee of the Commercial Bank, on suggestion of the dissolution of the corporation, to revive in his name, as trustee, a suit brought originally by the bank, in which their was judgment for the defendant in the court below, and from which a writ of error had been sued out by the hank, pending which the forfeiture of its charter was decreed. The trustee .then offered in support of his motion, the judgment of forfeiture and his own .appointment, and admitted that he had been ordered to sell under the act of 1846. Having referred to the decision in that cause, it is not necessary that we should recapitulate at length the reasoning of the High Court of Errors and Appeals of the State of Mississippi; but the following is a brief summary of the opinion: That by the statute of 1843, and the judicial appointment of the trustees under that statute, the debts due to the bank were preserved in full vigor. That the legal ownership of those debts vested in the trustees, but that the property thus placed in their hands was a trust fund in favor of the creditors of the bank, who had a vested beneficial interest in it. That these creditors, — 436 — having nn equitable interest, had also a remedy in chancery, to compel the trustees to discharge their duty by collecting the debts. That subsequent legislation could not produce a total change in the rights thus acquired by the parties, by taking away entirely the remedy of the creditor, and compelling the trustees to sell their legal title. That by thejact of 1846, these rights were attempted to be swept away. That such attempt was unconstitutional. That therefore that portion of the act of 1846, relating to the sale of the property and assets of banks, cannot operate as to the banks whose charters had been forfeited and trustees appointed under the act of 1843, prior to the passage of the last act. That the motion to revive must consequently be sustained. But it is contended that whatever rights of revival the trustees might have in Mississippi, they have none here ; that an extra territorial operation of the laws of Mississippi cannot be recognized. The rule adopted by many of the tribunals of this country, that the laws of a foreign country, such as bankrupt laws, &c., whose action is in invitum, cannot operate a legal transfer of property in our country, is a rule which, if its correctness be conceded, is not apposite to the present enquiry, When a contest arises in our forum between one of our citizens, a creditor of the bank, and these trustees claiming title by the operation of the statute of 1843, the decree of forfeiture and their judicial appointment, it will be time enough to consider the rule invoked. Here is no such contest. The parties litigant are the trustees and the debtor. So far as these parties are concerned, the title of the bank has passed to the trustees; and whether it be the legal or equitable title, is unimportant in our forum. In most of the cases in which assignments under foreign bankrupt laws have been denied to give title against attaching creditors, it has been distinctly admitted that the assignees might maintain suits in our courts under such assignments for the property of the bankrupt. See Story’s Conflict of Laws. See also Holmes v. Remsen, 20 Johnson, 267. Milne v. Moreton, 6 Bin. 369. Will anyone say that the rule of comity should be more gracious towards a foreign country, than towards a sister State ? If there be any difference it should be more favorable to the latter, when we consider the fraternal ties which bind the States of this Union together as members of one great political family, and the deep interest which each has in the welfare of the others. When this subject of comity between the States was before the Supreme Court of the United States, in Earle's case, Chief Justice Taney said: “The history of the past, and the events which are daily occuring, furnish the strongest evidence that they have adopted towards each other the laws of comity in their fullest extent.” We 'have always permitted the corporations of other States, who are creatures of the laws of those States, to suo in tho courts of Louisiana ; with what reason can we refuse our jurisdiction to those trustees, who derive from the same source thoir authority to sue? If there were a struggle for priority and preference by a creditor of the bank against these trustees, there might be some plausibility in asking for the application of the doctrine invoked by the appellant : but as this case stands, we are virtually solicited to disgrace the administration of justice in this State, by permitting one of our own citizens, upon a barren fallacy, to repudiate his just obligation. We are therefore clearly of the opinion that the trustees have the right to be made parties in this cause, and to prosecute it in the place and stead of the ex-itinct corporation ; and shall now proceed to the consideration of the alleged er« i?pi'S j» the judgment of the court below, — 437 — It is said that the note on which this suit was brought, was endorsed to, and came into the hands of, the makers, and that this extinguished it as to all the parties but themselves. The allegation in Bass’s answer is a sufficient reply to this defence. He admits that it was discounted by the plaintiffs, and that he endorsed it for the accommodation of the makers, and for the purpose of enabling them to oblain a loan of money from the bank, by way of discount of the note. It is said the bank discounted the note at an usurious rate, having calculated the interest according to Rowlett’s tables, which gave a small excess to the bank. The Supreme .Court of Mississippi overruled this defence, in the case of this same plaintiff against Snodgrass. 4 Howard, 573. It is unnecessary to do more than to refer to the opinion in that case. The note was payable at the bank’s office at Port Gibson. To prove presentment and demand at the place of payment, a notarial protest was offered. The instrument purported to be signed by one Pope, who styles himself therein a notary public, dwelling in Port Gibson, duly commissioned. This person was examined as a witness under commission some years previously to the trial of the cause, and then deposed that he was a duly commissioned notary at .the date of the protest, and .that he protested the note, as notary, on the day .of its maturity; but he did not state in his deposition the particulars of the de- xnand. Another witness, examined at the trial of the cause, proves the death of Pope, the genuineness of his signature to the protest, and that he acted during the year 1836, as .a notary ptiblic in Mississippi; that Pope was the person usually employed by the bank to make demands of payment of its notes and bills of exchange, and notify .endorsers; and that he believed him to be regular and correct in his business habits. By the law of Mississippi it appears that the protest by a notary of a bill or note is available as evidence, per se, there, to prove presentment, demand and refusal, as is the like instrument signed by a notary of this State in our courts. The defendant objected to this evidence to prove Pope’s official capacity, and also to the admission of the protest; both which objections the .court below overruled. From the strong presumption arising from the undisturbed exercise of a public office that the appointment to .it is valid, it is not in general necessary to prove the written appointment of public officers. All who .are proved to have acted as such, are presumed to have been duly appointed to office until the contrary appears. There is an exception .to this rule where the officer, being plaintiff, avers his title to the office or the mode of his appointment. See Greenleaf on Evidence, § 92, Las Caygas v. Larionda’s syndic, 4 Martin, 287. In that case a power of attorney executed before a notary in Cuba was offered in evidence, and a witness was offered to prove the signature and capacity of the notary. The court there said, that if the controversy had any relation to his right to fulfil the duties of the office claimed by him, a certificate under the national seal would be the proper evidence, but, for all other purposes, proof of his being a notary de facto would suffice. Upon these authorities we are of opinion that the court below properly admitted the testimony of witnesses to show that, at the date of the protest, Pope was a notaiy public in Mississippi. Whether after this evidence, and proof also that in the courts of Mississippi the instrument would, per se, have made proof of the presentmentand non-payment, the protest was admissible with the like effect in our courts, is a question not now necessary to be decided. Assisted by proof that the notaiy had died before the trial of the cause, and that 'he held towards the bank the rela — 438 — tion of an agent usually employed by the bank to make demands and give notices, wo think the paper was duly received after his death as a memorandum of acts so done, and forms evidence of them. Memoranda of a notary, in a shape less formal than the document in question, were recognised as admissible evidence, in the case of Nichols v. Webb, 8 Wheaton, 326. In that case it would seem from the language of the court that, under the laws of Tennessee, the protest was not an official act, which would have constituted evidence, per se, in a court of Tennessee; yet it was deemed good evidence of the demand, as were the memoranda in the notary’s .hook of notice. See also Chitty on Bills, 642. Bass lived in the parish of Concordia at the time of the protest, and the notice was seasonably mailed at Port Gibson, addressed to him at Rodney, which was the nearest post office to his residence. It was aJ)out eleven miles from his residence; the Natchez post office was about twenty-three miles from his residence. It does not appear that, at the time, there was any post office in Concordia. There was a memorandum on the note, which the judge below says he ascertained, by comparison of hand-writing with Bass’s endorsement, to be, as to the name, in his hand-writing, in which it was said that “ Bass will acknowledge notice at Rodney post-office ;” this fact of hand-writing does not, however, appear to have been proved at the trial. Aside from this, however, and in the absence of proof that the bank had been notified that Bass usually received his letters at the more distant post office at Natchez, we think the notice was properly addressed. We find no error in the judgment of the court below. As to the assignees Walworth, Montgomery and Mand.eville, we have not before us the assignment under which they claim, nor the means of expressing any opinion as to its validity. If they have any rights they can be presented by third-opposition, in the court below. It is therefore decreed that the judgment of the court below be affirmed, with costs, in the names of the said trustees, James D. Galbraith and William Cooper, as plaintiffs : the said Galbraith and Cooper, trustees, being hereby recognized as the successors of the president, directors and company of the Planters’ Bank of the State of Mississippi, the original plaintiffs in this cause, and, as such trustees, the judgment creditors of the said appellant Sarah Morris, in the place and stead of the said original plaintiffs.