Zeigler v. His Creditors

21 So. 666, 49 La. Ann. 144, 1896 La. LEXIS 719
CourtSupreme Court of Louisiana
DecidedJune 22, 1896
DocketNo. 12,171
StatusPublished
Cited by32 cases

This text of 21 So. 666 (Zeigler v. His Creditors) 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
Zeigler v. His Creditors, 21 So. 666, 49 La. Ann. 144, 1896 La. LEXIS 719 (La. 1896).

Opinions

[158]*158On the Opposition op Mrs. M. F. Smith.

The opinion of the court was delivered by

Nioholls, O. J.

The judgment of the District Court, allowing Mrs. M. F. Smith attorney’s fees, is correct. Her claim was not paid as it should have been, and the result of its non-payment was to bx’ing about a condition of affairs which made the employment of counsel necessary for the protection of the creditors’ rights. (See Mullen vs. His Creditors, 39 An. 397. Succession of Duhe, 41 An. 209.

The court erred in arresting interest ixx favor of Mrs. Smith from the dale of the sale of the property on which her mortgage rested. Caldwell vs. His Creditors, 9 La. 265; Brownson vs. Baker’s Creditors, 1 La. 409; Smalley vs. His Creditors, 3 An. 386; Blouin vs. Liquidators of Hart & Hebert, 30 An. 716.

In Brownson vs. Baker the court held that the promise to pay interest- on a note entered into the obligation of a contract and constituted as much a part of the debt as any portion of the principal sum and continued to run until payment; that payment into the hands of an administrator of the proceeds of the property of a succession would not stop interest until the money is paid over to the creditor.

In Collier vs. Creditors, 12 Rob. 398, the court held, as we understand, that Collier was under no contractual obligation to pay interest on the Byrnes notes; that Byrnes himself was not bound to pay interest on them, as they had not been protested as was then necessary; that the liability of Collier to pay interest rested, if liability existed at all, on the fact that he had become the possessor of fraitproducing property. The court evidently held that the moment the property passed out of Collier and the insolvent estate into the hands of others, the fact on which the liability to pay interest rested, no longer existing interest should cease to run against the insolvent. We understand interest to have been claimed in that case generally — that is to say, dehors the fund produced by the sale of the property. We think the condition of affairs hex’e is entirely differ-eut, and that Mrs. Smith was entitled to interest until she is paid.

On the Opposition op the First National Bank op Shreveport.

The First National Bank of Shreveport, claiming to be the holder and owner of two notes, secured originally by mortgage on [159]*159the Alston Warehouse property, in the city of Shreveport, asked to be recognized as such and to be held entitled to have a decree in its favor -, that payment of such notes was still secured by special mortgage. Its claim to that effect having been rejected, it appealed. It is claimed by the syndics and Levy, a creditor holding a second mortgage on that property, that the notes were paid by1 the bank, and the mortgage securing the same fell with the payment; that the bank recognized the fact of such payment by consenting, afterward, to hold the same notes as collateral for subsequent new notes, made by Zeigler, representing an indebtedness due by Zeigler to the bank, at the time of the execution of the new notes; the new notes being payable a considerable time in the future, and including interest, and that included in these notes was the indebtedness which the mortgage notes represented and secured, and that the First National Bank is estopped from claiming to hold notes otherwise than as collateral. That the original claim was not valid. The notes in question were forwarded, at different times, in the early part of 1892 to the First National Bank of Shreveport for collection, by Hollins & Co., of New York, who were the holders of the same. Zeigler, the maker, was not able to pay them. The bank advanced the money, remitting the same to Hollins & Co. The bank placed the notes, when paid by it, in.the cash drawer as so much cash, not charging Zeigler with it.

On the 9th of April, 1892, the amount of the note first sent forward by Hollins & Co. was, together with the amount of an open account then due by Zeigler to the bank (together with interest) , embodied in the three notes we have spoken of, amounting to fourteen thousand eight hundred and ninety-six dollars, and delivered to the bank. Simultaneously with the making of these notes the bank executed and delivered to Zeigler a certificate, certifying that they held as security for the payment of all indebtedness then due, or might become due by him, the notes described in said certificate, among which figured the first noce in question, which is thus referred to: “S, J. Zeigler’s mortgage note dated May 14, 1890, payable twelve months after date from Mrs. E. E. Griffin for three thousand three hundred and thirty-three dollars and .thirty-three and one-third cents, with credit endorsed on same May 27, 1891, for one thousand five hundred dollars, leaving the balance of the note extended to January 26, 1892, for one thousand eight hundred and [160]*160thirty-three dollars and thirty-three cents, with eight per cent, interest from that date.”

The second note was dealt with separately, but in the same way; that is to say, Zeigler executed a new note for the amount of the second note, payable ahead, with interest included, but the bank retained possession and control of the second note as it had retained possession (as we omitted to say) of the first note when the three notes were executed on the 7th of April, 1892. Both notes are still in the possession of the bank. It has never surrendered them or lost control over them. We think the evidence establishes that when these notes reached Shreveport for collection Zeigler told the bank that he was unable to pay, and that when the bank did remit the amounts to Hollins & Co., it was the understanding between the bank and Zeigler that in doing so “ they were to have the same rights as Mrs. Griffin had, and to hold the notes against him ” — that “ the bank was to take up the notes and hold them with the same rights that the other parties had.” We do not understand that the bank ever intended to act in such manner as te either absolutely extinguish the note or the mortgage, or that Zeigler expected or intended it to do so. The object of the parties was, that whilst operating a payment of the notes, so far as Hollins & Co. were concerned, the remittance to them should operate as a transfer of the notes to the bank. It is not claimed that there was, as between the bank and Hollins & Co., any agreement to sell the notes to the former.

A consideration of the facts connected with those remittances to Hollins & Co. has brought us to the conclusion that as between the bank and Zeigler the bank was entitled to hold the position of a purchaser of the notes.

The notes had been forwarded to the bank for collection, and it was its duty to collect. If it thought proper, instead of collecting, to make concessions to the maker, it would become bound to Hollins & Co. for so doing. The very fact of consenting to grant time to the maker, which was what was substantially consented to by the bank imposed upon the latter the obligation of paying Hollins & Co. This it did, and when it did so we are of the opinion it was entitled to hold tlpe notes with its accessory rights (Pritchard vs. Bank, 2 La. 416), as owners with subrogation (see Marcadé, under Art. 1236, C. N.).

[161]*161We find if; announced in Randolph on Commercial Paper, Sec.

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Bluebook (online)
21 So. 666, 49 La. Ann. 144, 1896 La. LEXIS 719, Counsel Stack Legal Research, https://law.counselstack.com/opinion/zeigler-v-his-creditors-la-1896.