Avegno v. Schmidt & Ziegler

The opinion of the Court was delivered by Poché, J. A statement of the salient facts which have given rise to this controversy is necessary to a proper understanding of the issues involved therein. On the 20th of January, 1865, proceedings were instituted under the Act of Congress of July 17th, 1862, known as the “ Confiscation Act,” for the condemnation of seven lots of ground in this City, as the property of Bernard Avegno. On the 13th of April of the same year, Charles Morgan, a citizen of New York, holding notes of Avegno amounting together to $36,400, secured by mortgage on four of the lots in question, filed an intervention in the proceedings for confiscation, for the purpose of preventing the condemnation, or in the alternative for the recognition and enforcement of his mortgage rights. [588] On July 14th judgment was rendered, condemning the seven lots, ordering the sale thereof, decreeing that Morgan’s mortgage could “ not be acknowledged,” and dismissing his intervention. On August 1st Morgan’s motion for a new trial was overruled, whereupon he took a suspensive appeal to the Circuit Court, where it was dismissed in March, 1872; from the latter judgment he took an appeal to the Supreme Court of the United States, when the judgment was affirmed. In the meantime the three lots not affected by Morgan’s mortgage were sold by the marshal, but the record shows no further proceedings against the four lots subject to Morgan’s mortgage. The appeal taken by him was apparently construed by all parties concerned to have had the effect of suspending the judgment of condemnation in so far as it affected the four lots in question. In June, 1867, Morgan instituted suit on his notes and mortgage against Bernard Avegno, who accepted service of the petition. In-execution of the judgment rendered in that suit in the U. S. Circuit Court, the four lots in question, which were found in the possession of Avegno, were seized by the marshal and were adjudicated to Charles Morgan in December, 1868, for $50,000. In March, 1869, Morgan sold the lots to Schmidt & Ziegler. This suit is brought by the children and heirs of Bernard Avegno, who died in 1872. They claim the property under the reversion in favor of Avegno’s heirs, under the effect of the condemnation of his property under the Confiscation Act, and they prosecute this appeal from an adverse judgment. The defendants and the succession of Morgan, called in warranty, maintain the legality of Morgan’s proceedings in execution of his mortgage, even if the confiscation proceedings had been regular and final, and had legally divested Avegno of his titles to the property, and they charge nullity in the confiscation proceedings, finally alleging that all proceedings for confiscation then pending were abrogated by the proclamation of j)ardon issued by the President of the United States in December, 1868. The view which we have taken of this case entirely eliminates from discussion the numerous, vexed and complicated questions of the legality of the confiscation proceedings, as well as of the nature and effect of the appeal taken by Morgan from the judgment of condemnation, in which his intervention was dismissed. A correct interpretation of the Act of Congress of July 17, 1862, entitled “An Act to suppress insurrection, to punish treason ahd rebellion, to seize and confiscate the property of rebels and for other [589] purposes,” as explained by a resolution adopted by that body on the same day, explanatory of said Confiscation Act, irresistibly leads to the conclusion that “ all that can be sold by virtue of a decree of condemnation and order of sale under the Act was a right to the property seized, terminating with the life of the person for whose offense it had been seized.” Bigelow vs. Forrest, 9 Wall. 339. Hence, it was held in that case that although the claimant, under his father, was himself liable to confiscation under the Act as an officer of the confederate army, such circumstances were no' bar to Mb' recovery. As a corollary from the main proposition, it follows logically that the rights of other parties in the condemned property could not in the least be affected by the confiscation proceedings against the offender, and that a sale made under such proceedings could not impair rights of mortgage in favor of third persons on the condemned property. In the. case of Day vs. Micou, 18 Wall. 160, this question was directly involved in the controversy, and the Supreme Court of the United States unequivocally adopted this interpretation, and speaking of mortgage rights “ bona fide” acquired by third persons on the offender’s property previously to his offense, the Court said : “ Their interests did not pass to the purchaser at the sale, and they remain unaffected by the decree of condemnation and the sale thereunder.” In the case of Waples vs. Hays, Morrison’s Transcript, vol. 5, No. 2, speaking of the rights of the mortgagee, the Court said : “As his lien was not condemned, his rights under it would have been superior to the title acquired by Waples.” After a careful examination and a patient study of the jurisprudence as established by the decisions of the Supreme Court of the United States, we reach the conclusion that a sale of immovable property under confiscation proceedings, in accordance with the Act of Congress, has no more the effect of impairing the rights of mortgage of third persons than an expropriation by private act, or judicial process would under our laws. Hence, it follows that, admitting the perfect legality and binding force and effect of the confiscation proceedings against Bernard Avegno, and that he had thereby been completely divested of title to the fee, as fully as could have been accomplished by a sheriff’s sale under our practice, the mortgage rights of Morgan were not in the least affected, by this divestiture of title, and continued to attach to the property, either in the hands of the United States or of the purchaser under the proceedings, or in the indefinite ownership of the fee vested, under the Act, in the presumptive heirs of Avegno. [590] While plaintiffs’ counsel.strenuously contends'that the judgment of the District- Court in the confiscation proceedings, disposing of Morgan’s intervention, was a judgment on the merits and final, we do not understand him'to argue therefrom that in such a case Morgan’s mortgage was extinguished or destroyed by that judgment. The argument' would be too bold indeed, the proceeding being in rent, from the very nature of which Avegno was not a party thereto. It is patent that, under such a state of pleadings, no judgment could have been rendered so as to be binding on the mortgagor, and hence, for want of proper parties, the mortgagee himself could not have been bound .by such a judgment. Granting that the judgment rendered under the pleadings was intended by the Judge to be on the merits and final, it must be construed as determining nothing more than the issue involved under the pleadings as they were then composed. The issue presented by Morgan’s intervention was twofold: 1st, the right of condemnation-; 2d, his-mortgage rights under-the proposed sale. On the first issue the decree was that the property should be condemned and subsequently sold. On the second issue the decree' was that Morgan’s mortgage could not be acknowledged,- meaning,evidently, not acknowledged as prayed for Under the pleadings, but nothing more. 1 ' ' We cannot do the injury to the Judge of that court to suppose that he intended by his judgment to pass upon and dispose of issues which were not submitted to him, and whieh were manifestly beyond' his’ jurisdiction. -• ' - 1 Should, however, the necessities of -this case require it, we would have no hesitation in. declaring that, in our opinion, the-'judgment" rendered was merely one of dismissal and was not intended to affect the merits of Morgan’s claim. It decreed that his mortgage could not be acknowledged in the proceedings then pending, and -dismissed his intervention. . - Morgan’s rights having been unaffected by the confiscation proceedings,- and- his act of mortgage containing the clause or pact “ de non alienmido,'l:l he was authorized to proceed in foreclosing his' mortgage against Avegno, his mortgagor, in the same manner as though no divestiture of the latter’s title and ownership had ever occurred. This rule is elementary in our ■ practice, and at this stage of our jurisprudence need not be supported by authority. Avegno’s title' was either divested by the co’nfiscation proceedings, or it was not. If it was, then under plaintiffs’ theory the life estate which had not [591] been- sold was in • the government, but subject to bona fide mortgages, and under the pact “ de non alienando,” subject, with the fee as vested in the presumptive heirs, to seizur^by proceeding against the mortgagor. . , . , If it was not divested, then his possession of the property from 1866, as shown by the record, was the possession of the owner, and he was legally dispossessed and expropriated by the marshal’s' seizure and by his sale in execution of Morgan’s judgment. We conclude that our learned brother of the District Bench has done justice to the parties. Judgment affirmed. Behearing refuséd. Bermudez, C. J., recuses himself, having been of co.unsel.