W. G. Wilmot & Co. v. Belle

The opinion of the Court was delivered by Fenner, J. On October 12th, 1876, E. A. Blanks, by private agreement, sold to McElroy & Melangon the steamboat “ Ouachita Belle,” for ihe agreed price of $34,000, of which $15,000 was paid in cash, and the balance was to be paid by stated installments. The vendor subsequently received, ou account of the price, $1750, making in all $16,750 paid toy the vendees. McElroy & Melangon received possession of the boat •as owners and ran her as such, McElroy acting as captain and Mel-iingon as agent and financial manager. While so running her, they became indebted to plaintiffs in the sum of $5700 for supplies of coal Surnished to, and actually used by, the boat. In May, 1877, Wilmot & Co., plaintiffs, brought this suit, for above debts, against McElroy as captain, and McElroy & Melangon, as owners of the boat; and McElroy acting for himself as captain and for both the owners, appeared and made a confession of judgment as prayed for, «pon which judgment for the amount claimed, and with special privilege «pon the boat, was rendered. The testimony makes it clear that this action of McElroy was taken ■with the knowledge of Melangon, and was approved and ratified by him, and he urges nothing against it. Subsequently, Plaintiffs issued execution on this judgment, and on the 2ith of August, 1877, the boat was actually seized thereunder. On the 25th of August the following act of retrocession was executed : “We purchased from Captain F. A. Blanks the Steamer Ouachita Belie, on the 12th of October, 1876, for the price of $14,000, and we paid •cash on account of the price about fifteen thousand dollars ($15,000), and "have had possession of the said boat ever since the day we purchased. We are absolutely unable to pay the balance of the purchase-price, or any part thereof, and we hereby cancel and annul the sale, and return ■the boat to Captain E. A. Blanks. We, the purchasers, make no claim [610] for the cash paid by us on account of the price, and Captain Blanks.; makes no claim for the use of the boat, one to offset the other. "New Orleans, August 25,1877, “ (Signed) “ JAMES P. McELROY... “E. O. MELANgON,. “F. A. BLANKS.” Blanks thereafter filed his opposition claiming’the dissolution ol' the seizure and that he be decreed the owner of the boat and that she-is, in no manner, liable to be seized under plaintiffs’ judgment. He bases his demand upon the ground that the foregoing retrocession was simply a voluntary enforcement of the resolutory condition,, the effect of which was to operate a complete revocation of the original: sale and to cause the property to revert- to him, free from any charge; or encumbrance created by the purchaser. The doctrine, that the rights of bona fide encumbrances, upon the-property in the hands of purchasers who have not paid the price canbe-cut off by any thing but a judicial rescission of the sale for non-compliance under the resolutory condition, was'not adopted by this Court, without grave consideration of the injustice likely to result therefrom.< in particular cases, and without a recognition of the nicely balanced-conflict of authority which existed on the subject; and, at last, it received only the diffident assent of Judge Slidell and encountered the.positive dissent of Chief Justice Eustis — all of which appears from the.opinions in the case of Chretien vs. Richardson, 6 An. 2, upon which authority alone the principle rests. While recognizing the authority of this case, we are not disposed; to extend its application one whit beyond the terms which it prescribes^ Those terms are tersely expressed in the following extract, viz.: “ Whenever a necessary cause of resolution exists, the purchaser may do voluntarily what he can be compelled to do by suit.” It is perfectly clear that McElroy & Melangon could not have been: compelled, by suit, to do that which they have done by this act of re-trocession. Nothing is better settfed than that the party who demands.. the rescission of his contract must restore his adversary to the situation, in which he was before the contract, and, in cases of sale, must restore-whatever portion of the price he may have received. 23 A. 355, 28 A. 739, 2 Rob. 166, etc. It follows that Blanks could not have compelled McElroy & Mel— angón to rescind this sale without first returning to them the $16,750.. which, as heretofore shown, had been paid by them on account of the-price. If he had done this, it would have furnished them a fund out of.' which the -debt of plaintiffs might have been, and should have been.., paid. If the parties desired to substitute the voluntary for the judi— [611] cial rescission, and to give to the former the extraordinary effect of revoking the contract ab initio and of obliterating all claims and privileges of third persons against the property which may have been acquired during the possession of the purchasers, we are satisfied they were bound to comply, in their voluntary act, with all the requirements which the law would have imposed in the judicial proceeding. The purchasers had no authority to abandon, or even to compromise, the rights secured to them by law, to the prejudice of a creditor who, by seizure or otherwise, had acquired a privilege on the property. Civil Code arts. 11, 1989. George vs. Knox, 23 A. 354. For these reasons, we agree with the learned judge of the District Court that the retrocession did not have the effect sought to be attributed to it. It operated merely as a conventional reconveyance of the property, binding the parties thereto according to the terms of their stipulations, but not obliterating the antecedent ownership of the purchasers during the interval between the sale and retrocession, nor affecting privileges acquired under said' ownership. Taking this view, we consider it as disposing of the case. We cannot recognize the right of Blanks to dispute the validity of the judgment against McElroy & Melangon, in absence of any imputation of fraud or any question as to the reality and justice of the debt, upon grounds affecting merely the modus procedendi not raised or desired to be raised by defendants. Melangon does not dispute the authority of his partner to confess judgment for them both ; but, on the contrary, admits his authority and confirms and ratifies his act. But we think, at all events, the judgment was valid. It is not denied that, after the purchase of this vessel, McElroy & Melangon were associated together for the purpose of carrying personal property for hire, and were actually so engaged with this very vessel at the time when this debt was incurred. They were therefore commercial partners. Kimball vs. Blanc, 8 N. S. 390. Black vs. Savory, 17 La. 85. David vs. Eloi, 4 La. 110. 2 Bob. 182,129. 1st. A. 147. There is no evidence of any express dissolution of this partnership, nor is such dissolution to be implied from the mere fact of a temporary laying up of their vessel. The suit was brought against the “ Commercial firm of McElroy & Melanjon,' composed of James P. McElroy & E. O. Melangon.” The judgment is confessed by McElroy in behalf of said firm, and is ren [612] -dered against “McElroy & Melancon & E. O. Melangon & J. P. Mc-Elroy:” Unless it be shown that the partnership had been dissolved prior to the judgment, he had a right to confess judgment for the firm. It is not so shown. The ease of Hefferman vs. Brenham, 1. A. 147, relie.d on by counsel for opponent, has no application. That case only holds that in suits against a partnership which has no social name or title a cita-fon addressed to one partner will not bring the firm into Court, under Art. 198 of the Code of Practice. But here it appears the partnership had a firm name ; and, besides, it is not a 'question of citation. The power of a member of a commercial partnership to confess judgment against the partnership is not impaired by the want of a social name. 'The judgment was perfectly valid; and the seizure thereunder con-ferred an unquestionable privilege antedating the retrocession to Blanks. Under the doctrine of Balance vs. Wolff, 28th A. 942, even a judicial proceeding to enforce the resolutory condition could not be maintained to the prejudice of such a seizure of movable property, which is assimilated to a sale of movables ; and the Court there held that “the rights to and upon movable property are subject to rules different from those relating to immovables,” and, substantially, that a vendor could not dissolve the sale of movables “found in the hands of a second and third vendee.” We prefer, however, not to place this decision upon the ■doctrine of that case, because it is unsupported, and the questions involved are so important that we do not wish to follow it hastily, where it has not been discussed by counsel. The rights of plaintiffs here are sufficiently supported by the position first taken. It is therefore ordered, adjudged, and decreed that the judgment •appealed from be affirmed at appellant’s costs. Behearing refused.