Gustine v. Union Bank

10 Rob. 412
CourtSupreme Court of Louisiana
DecidedApril 15, 1845
StatusPublished
Cited by11 cases

This text of 10 Rob. 412 (Gustine v. Union Bank) is published on Counsel Stack Legal Research, covering Supreme Court of Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gustine v. Union Bank, 10 Rob. 412 (La. 1845).

Opinion

Morphy, J.

This action was instituted to obtain the erazure of a mortgage resulting from a judgment rendered in favor of the Union Bank of Louisiana against the petitioner, as endorser of a note for $20,699 22, dated the 12th day of April, 1839, and payable to his order, twelve months after date, by Bullitt, Ship & Co. in liquidation, John Routh, Austin Williams, Joseph C. Ferriday, and Robert Ferriday, as joint and several drawers thereof. The petition alleges that, subsequently to the rendition of this judgment, to wit, on the 12th of May, 1841, the Union Bank entered into an arrangement with John Routh, one of the drawers in solido, whereby he acknowledged himself indebted to them, in the sum of $99,202 41, which indebtedness, it was stated in the notarial act passed between the parties, arose out of six several promissory notes, among which was the note on [414]*414which a judgment had been obtained against the petitioner ; that Routh executed his bond, or obligation in favor of the bank for the aggregate amount of all these notes, and secured its payment by a mortgage on certain property and slaves, described in the act; and that it was stipulated that Routh should have the right to pay, and curtail his bond by yearly payments, each payment to be of one-eighth part of the whole amount of it, and interest on the remaining balance at the rate of seven per cent per annum, during the space of eight years from the date of the act of mortgage. The petitioner further avers that the bank, having incorporated the notes on which the plaintiff was endorser with other debts due to them, with which he had no connection, and having granted an extension of time by giving Routh eight years to pay the whole amount, have lost all recourse upon him (plaintiff), who was only a surety on the note he endorsed, because such extension of time was granted without his consent, and he has a right to demand a release of the judicial mortgage recorded against him. The defendants aver that the'plaintiff cannot maintain the present action unless he first satisfies the judgment in their favor; that they have done no act which authorizes a release of said judgment; and that as soon as the plaintiff shall have paid the amount of it, the note endorsed by him will be delivered to him, and he will be subrogated, to the rights of the bank against the drawers thereof. Assuming the character of plaintiffs, in i’econvention, the defendants pray for a judgment against Samuel Gustine, as the endorser of another protested note for $24,436 67, drawn to his order by Bullitt, Ship & Co., in liquidation, John Routh, Austin Williams, Joseph C. Ferriday, and Robert Ferriday, dated the 12th of April, 1839, and payable thirty-six months after date. To this reconventional demand, the plaintiff answered, by averring that the note upon which it was based, is one of the notes endorsed by him, which are described in the act of mortgage executed by Routh in favor of the bank, and for the payment of which they granted him an extension of time of eight years, thereby discharging the plaintiff’s liability as an endorser thereon. There was a judgment of non-suit below in the principal suit, and upon the reconventional demand, the judge be[415]*415ing of opinion that a clause in the mortgage, whereby Routh bound himself to procure, within the shortest possible delay, the renunciation of his wife of all her rights upon the property mortgaged, formed a suspensive condition of the agreement to give time, and that, until its performance, the rights of the parties to the contract, remained in abeyance. The plaintiff appealed.

From the act of mortgage executed on the 12th of May, 1841, it appears that the two notes above described, and a third one for $22,413 15, drawn by the same parties, and endorsed by the plaintiff, formed, with other notes, and a draft due to the bank by Routh, the sum of $93,508 51, to which was added, the further sum $5,693 90, for costs of protest and interest at the rate of seven per cent per annum, calculated on the notes due, up to the 1.0th of February, 1842. To secure the aggregate amount of principal and interest, Routh executed to the bank his bond, with a mortgage on a plantation in the parish of Concordia, and on seventy-five slaves, and was allowed a credit of eight years to pay the same, with the privilege of deferring the payment of the first instalment until the 10th day of February, 1843, by paying interest on the whole amount of the obligation at the rate of seven per cent per annum, for one year. The contract thus entered into between the bank and Routh, might well be considered as a novation of the former debt; but whether it be so considered, or whether it be viewed only as a prolongation of the term for payment, its legal effect on the obligation of the plaintiff, as an accommodation endorser, was the same. It completely discharged him. Civil Code, arts. 2194, 3032. He cannot consider the clause in relation to the renunciation of Routh’s wife, as forming a suspensive condition of the agreement to give time. It does not appear either from the words of the instrument, nor from the acts of the parties, that they intended to make the existence of the agreement depend upon the fulfilment of the obligation to procure the renunciation. The act was perfected, and a few days after recorded in the parish of Concordia, where the mortgaged property was situated. It took effect immediately in favor of the bank, and protected them from the operation of other mortgages and liens subse[416]*416quently recorded against their debtor. Kouth’s failure to comply with his undertaking in this respect, may entitle the bank to demand the rescission of the contract, after putting him in default; but it will be the rescission of an existing agreement by virtue of the resolutory condition which is implied in all synallagmatic contracts. If the legal effect of the new agreement was to release the surety, its rescission may well revive the original obligation of Routh, but could not restore that of the surety, who was no party to such agreement. Civil Code, arts. 2038, 2040, 2041. 7 Toullier, Nos. 300, 315.

The counsel for the defence has made two points in this court:

1st. That the bank, in their contract with Routh, reserved their rights against the plaintiff, and that, therefore, the latter was not discharged by the extension of time they granted to their debtor.

2d. That after judgment against a surety, he becomes an absolute debtor, and can no longer be viewed in the light of a surety, and claim be benefit of the rules which govern the contract of suretiship.

I. The clause relied on by the bank, as containing a reservation of their rights against the plaintiff, is in the following words, to wit:

“ Whereas the said John Routh has offered to grant the foregoing mortgage and security, for his individual liability resulting from the said notes and drafts, without prejudice to the rights which the bank may choose to exercise against the other parties thereto, for the purpose of obtaining a more prompt settlement of the said notes and draft; and whereas the said Union Bank of Louisiana, and the said John Routh have agreed, in the event of the said notes and draft failing to be paid in part, or in toto, by the other parties, then and in that case the said notes and draft shall belong to the said Routh, after he shall have paid the whole amount of the said obligation.

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Cite This Page — Counsel Stack

Bluebook (online)
10 Rob. 412, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gustine-v-union-bank-la-1845.