79 So. 230 | Miss. | 1918
Lead Opinion
delivered the opinion of the court.
On August 20, 1913, the First Natchez Bank became the owner of thirty notes executed by the Tensas River Planting Company for ten thousand dollars each, payable at Natchez, Miss., at which place the Natchez Bank was domiciled, secured by a vendor’s lien on lands situated in the state of Louisiana. The Natchez Bank was indebted to the Canal Louisiana Bank & Trust Company of New Orleans, La., in the sum of one hundred and twenty-five thousand dollars, secured by certain promissory notes which the Natchez Bank had indorsed to the Louisiana Bank as collateral. The Natchez Bank desiring to obtain possession of these collateral notes mailed from Natchez to the Canal Louisiana Bank & Trust Company at. New Orleans three of the Tensas River Planting Company’s notes held by it, with the request that these notes be accepted by the Louisiana Bank in lieu of the eollaterial notes then held by it, and that these collateral notes be returned to the Natchez Bank. This proposition was accepted by the Louisiana Bank, and the collateral notes then held by it were returned to the Natchez Bank by mail. The Tensas River Planting Company’s notes were payable to its order and indorsed by it in blank. They were not indorsed by the Natchez Bank, and. there was no written assignment of them by the Natchez Bank to the Louisiana Bank, other than the letter in which they were transmitted from the first to the latter. The Louisiana Bank requested the Natchez Bank to forward to it the mortgage securing the Tensas River Planting Company’s notes, but the Natchez Bank refused so to do, giving as a reason therefor that the mortgage was held by it as security for all the notes.
Seven other of the Tensas River Planting Company’s notes were hypothecated by the Natchez Bank
On October 30, 1913, the Natchez Bank was placed in the hands of appellees as receivers. The Canal Louisiana Bank & Trust Company consolidated with two other hanks and changed its name to Canal Bank & Trust Company. Part of the assets of the Canal Louisiana Bank & Trust Company, including the note executed to it hy the Natchez Bank, together with the notes of the Tensas Biver Planting Company by which the note of the Natchez was secured, were placed in the hands of the appellants as trustees for the stockholders of the Canal Louisiana Bank & Trust Company, and they now hold the legal title thereto.
The Tensas Biver Planting Company was also placed in the hands of a receiver hy judicial proceedings in Concordia parish, La. This receiver was directed hy the Louisiana court to sell the land owned hy the Planting Company .on which the -Natchez Bank held the' vendor’s lien, and appellees decided to purchase it so they could sell it to one Johnson, whq had agreed to purchase it from them. The miuirrmm price at which the receiver of the planting company could sell the land under the order of the Louisiana court was ten dollars per acre. Appellees desired to use the Tensas Biver Planting Company’s notes in paying the receiver of that company for the land, hut could not do so under the order of the Louisiana court unless they could surrender to him all of the planting company’s notes. Appellees agreed, therefore, with the holders of the four notes upon the value thereof, paid to them the amount so agreed on, and those notes were then delivered hy the holders thereof to appellees. Appellees then delivered the three notes held by them to appellants to he
“That the claim of the legal holders of the said three notes and the claim of the other twenty-seven notes of said .issue against certain lands of the Tensas River Planting Company, namely, the La Marque, Hubter, and Rota Quinta plantations, in Concordia, parish, La., shall he a claim against the proceeds derived from the sale of said lands in the hands of the receivers of the First Natchez Bank, and that the sum of thirty-one thousand three hundred and seventy-six dollars and eighty-five cents shall he deposited hy the receivers 'in City Bank & Trust Company of Natchez, Miss., as a special trust fund to be held to await the final decree of the court as to what amount the said trustees as legal holders of said three notes are entitled in the distribution of the proceeds of said sale, said deposit being made only to assure payment to said trustees of such decree of distribution as may be rendered, said deposit to be made upon approval by the chancellor of this agreement.
“Third. It is further agreed that the trustees for stockholders of the Canal-Louisiana Bank & Trust Company shall file or cause to be filed in the chancery court of Adams county, Miss., to the January term, 1917, of said court,, such proceeding as may be necessary to have adjudicated the question' as to the extent of the right of the said holders of all of said notes to participate in the distribution of the proceeds of sale of the said lands.
“Fourth. That if the said lands should at the said sale, or any receivers’ sale thereof, be soid to any other than the receivers of the First Natchez Bank, for a price in excess of $10 per acre, then there shall be deposited by said receivers in the same manner as the above deposit is agreed to be
“That the said trustees shall not claim any greater proportion of the proceeds which said receivers shall receive from the sale of said land than they could have claimed previous to be purchase of four other of said notes under said order of December 16, 1916.
“Seventh. Subject to the right of said receivers of the First Natchez Bank to use said three notes in the purchase of said property as above stated, it is agreed that said trustees are now the legal holder of said notes and of the indebtedness of the First Natchez Bank to the Oanal-Louisiana Bank & Trust Company.
“Eighth. This agreement is made to facilitate the trial by the chancery court of Adams county, Miss., of the claim of said trustees under said three notes and the claim of the said receivers under the twenty-seven of said notes they now hold to share in the distribution of the proceeds from the sale of said property. ’ ’
Appellees purchased the land pursuant to this agreement at ten dollars per acre, and afterward sold it to Johnson for eight dollars and fifty-one cents per acre. After deducting the fees and expenses of the planting company’s receiver from the amount of appellee’s bid for the land there will be left a balance of about seventy-three thousand two hundred and twelve dollars and. seventy-five cents, a sum not only insufficient to pay all of the planting company’s notes, b.ut insufficient also to pay the three notes held by the appellants and the four notes formerly held by other creditors of the Natchez Bank in the event it should be applied to the payment thereof.
Appellants’ contentions a.re: First, that since the proceeds of the sale of the planting company’s lands
Appellees’ contentions, which were sustained by the court below, are: First, that the proceeds of the sale of the land should be applied to the payment of all of the planting' company’s notes pro rata, and, second, that the fund to be distributed is the proceeds of the sale of the land by appellees to Johnson.
Appellants do not claim that the three notes held by them are entitled to any priority over the four notes which the Natchez Bank had hypothecated to other of its creditors, and which were afterwards released by these creditors as hereinbefore set out, so that any question relative thereto is eliminated herefrom. Appellants’ claim, therefore, is that they should be paid three-sevenths of the proceeds of the sale of the land.
The thirty-one thousand three hundred and seventy-six dollars and eighty-five cents deposited by appellees with the City Bank & Trust Company under their agreement with appellants , is approximately three-sevenths of the amount paid by appellees for the land after deducting therefrom the fees and expenses of the planting company’s receiver.
The contention of appellants that they are entitled to priority over appellees in the distribution of the proceeds of the sale of the land is based upon the theory that the distribution thereof should be made under the laws of Louisiana, according to which, where the holder of a claim secured by lien on
The rights of these parties grow out of the contract by which the three notes in .question were assigned by the Natchez Bank to the Louisiana Bank, and the rule is that a contract, unless it is to be performed elsewhere, must be construed according to the laws of the place where made. Bank of England v. Tarleton, 23 Miss. 173; Brown Bros. v. Freeland, 34 Miss. 181; Partee v. Silliman, 44 Miss. 272; Shacklett v. Polk, 51 Miss. 378; Murdock v. Insurance Co., 59 Miss. 152.
A contract results from the acceptance of an offer, and is made when and not until the offer is accepted, sa that the place where a contract is made is necessarily the place of the acceptance of the offer. 13 C. J. 580; 9 Cyc. 670.
The offer by the Natchez - Bank to assign the notes here in question to the Louisiana Bank as hereinbefore set out was made by letter from the Natchez Bank at Natchez to the Louisiana Bank at New Orleans, and the contract of assignment became complete when the Louisiana Bank deposited its .letter of acceptance to the Natchez Bank in the mail at New Orleans. 1 Elliott on Contracts, section 62; Burton v. United States, 202 U. S. 344, 26 Sup. Ct. 688, 50 L. Ed. 1057, 6 Ann. Cas. 392.
The foregoing discussion may have been unnecessary, for the point here under consideration is ruled by Bank of England v. Tarleton, 23 Miss. 173; for, although in that case the facts show that the assignor intended to give the assignee the right of prior satisfication out of the proceeds of the mortgage, the court pointed out at page 181 of 23 Miss, that the assignment of the notes was made in Louisiana, and that consequently the rights of the parties arising under the assignment must be governed by the laws of that state.
That the notes here in controversy were payable in Mississippi is immaterial, for, while the law of the place where a promissory note is payable of course governs as to its nature, validity, interpretation, and effect, no such questions are here presented, for this controversy arises solely out of a contract by which the notes were assigned by a former holder thereof, which contract, as pointed out in Bank of England v. Tarleton, supra, is separate and distinct from that of the notes.
We are also of the opinion that the fund to be distributed under the agreement hereinbefore set out is the net proceeds of the sale of the land by the planting company’s receiver, and not the proceeds of' the sale made by appellees to Johnson.
Reversed and remanded.
Dissenting Opinion
(dissenting).
I am unable to concur in that part of the' opinion of the majority which holds that 'the appellants were entitled to preference as to the notes held by them as collateral security to secure a debt due the appellants by the First Natchez Bank. It appears that
A corporation was formed for the purpose of taking over these lands and operating them known as the Tensas River Planting Company, which corporation executed the notes involved in this suit to the First Natchez Bank, payable at the First Natchez Bank, Natchez, Miss., and secured by the lands above mentioned. When these notes were executed and delivered to the First Natchez Bank, two of the notes of ten thousand dollars each were sent to the Canal Louisiana Bank & Trust Company to be substituted for the unsecured notes of the Ellen H. Green Company held by such bank as collateral. These notes were acepted, and the Ellen H. Green Company notes were returned to the First Natchez Bank. Later the First Natchez Bank sent another ten thousand dollar note of the said Tensas River Planting Company to be held also as
The other notes of the Tensas River Planting Company were delivered to different banks to secure other debts owed by the First Natchez Bank, Some of these notes were held by a bank'in New York City, some held. by a bank in St. Louis, Mo., and some held by another bank at Natchez, .Miss. In this condition the First Natchez Bank failed, being insolvent, and the appellees were appointed receivers of said bank to liquidate its affairs. A petition was presented to the chancery court by said receivers requesting authority and permission to use funds in their custody as receivers of said bank for the purpose of buying these outstanding notes at a discount in the interest of all the creditors of the bank.
The Canal Louisiana Bank & Trust Company notes were included in this application to the chancellor administering the affairs of the said First Natchez Bank, and an order was made by the chancellor permitting the said receivers to acquire the said notes with the assets of said bank for the, benefit of the creditors of the said bank generally. It seems, however, that a misunderstanding arose between the Louisiana Bank and the receivers of the First Natchez Bank, and the arrangement was not carried out so far as the Louisiana Bank was concerned, but the other outstanding notes were acquired by the receivers by the use of the assets of the First Natchez Bank for the benefit of its creditors. . This presents a different situation from what the case would be if the First Natchez Bank had held these notes at the time of the appointment of the receivers as assets of said bank. All of these notes were secured by a common mortgage, and there was no express agreement between the First Natchez Bank and the Louisiana Bank that said notes would have priority over the other notes secured by said mortgage, and the opinion of the majority is not
The notes involved in this suit are payable in Mississippi, and are governed by the Mississippi law, under a long line of decisions of this court holding that the note is governed by the law of the place of the payment. Miller, Mayhew & Co. v. Mayfield, 37 Miss. 688; Harrison v. Pike Bros., 48 Miss. 46; Johnson County Savings Bank v. Yarbrough, 106 Miss. 79, 63 So. 275; Lienkauf Bank Company v. Haney et al., 93 Miss. 613, 46 So. 626; Fellows v. Harris, 12 Semedes & M. 462; Hart v. Livermore Fdy. & Mach. Co., 72 Miss. 809, 17 So. 769; Emanuel v. White, 34 Miss. 56, 69 Am. Dec. 385; Coffman v. Bank of Ky., 41 Miss. 212, 90 Am. Dec. 371; Bank of La. v. Williams, 46 Miss. 618, 12 Am. Rep. 319; Dalton v. Murphy, 30 Miss. 59; Kendrick v. Kyle, 78 Miss. 278, 28 So. 951; First Nat. Bank of Iowa City v. McGrath & Son, 111 Miss. 872, 72 So. 701; Allen v. Bratton, 47 Miss. 119.
In ease of Lienkauf Banking Company v. Haney et al 93 Miss. 613, 46 So. 626, it was held that a note and the obligation and rights growing out of a .note were governed by the law of the state where the note was payable, although given for purchase money of property within this state and reserving the title to the property until payment.
In the case of Kendrick v. Kyle, 78 Miss. 278, 28 So. 951, it was held that, where notes dated and payable in Tennessee were given for the purchase price of lands in Mississippi, and secured by a deed of trust on such lands, the rights of the parties under such notes were governed by the laws of Tennessee.
In the case of First National Bank of Iowa City v. McGrath & Son, 111 Miss. 872, 72 So. 701, where Mc-Grath & Son gave a note payable to the Purity Manu
In the case of Allen v. Bratton, 47 Miss. 119, one Dobbins sold Bratton a tract of land in Mississippi and took three notes payable in Memphis, Tenn., but secured by vendor’s lien on the lands. Dobbins sold one of the notes to Allen in this state and another in the city of New Orleans, La., to the Crescent City Bank, and this court held that the rights of the parties were governed by the Tennessee law, where the notes were payable, and not by the Mississippi law or the Louisiana law, where the transfers were made.
This court has held in a number of cases that, where several notes were secured by the same déed of trust, or other instrument, all of the notes were entitled to share pro rata in the proceeds of the sale of the security where such proceeds are not sufficient to pay all of the notes, and that the assignment of notes secured carries with it as an incident part of the security pledged for its payment.
In Davidson v. Allen, 36 Miss. 419, this court held that the indorsement by the vendor of a note given for a portion or for all of the purchase money without recourse in law or equity would not' prevent a vendor’s lien passing to assignee in case where the lien is assignable; also that, where in the vendor assigns a portion of the purchase money to which his lien attaches, and retains a balance, the proceeds of the land if insufficient to pay all would be distributed pro rata between the vendor and. his assignee.
In the case of Cage v. Iler, 5 Smedes & M. 410, 43 Am. Dec. 521, this court held that, where several notes maturing at different periods are secured by a deed
In the case of Terry v. Woods, 6 Smedes & M. 139, 45 Am. Dec. 274, this court held that, where the holder of one of the series of mortgage notes indorses a note to the third person before due, and after its maturity and non-payment takes it up and again becomes the holder thereof, he would not thereby lose his recourse upon the mortgaged premises, but will be substituted again to his original rights.
In Pugh v. Holt, 27 Miss. 461, this court held that all debts secured by mortgage and due at the date of foreclosure unless a preference be given to some of them by the terms of the mortgage, or unless the original creditor designed by his contract in assigning them to impart a right of prior satisfaction to the assignee, should be paid pro rata, in case of an insufficiency in the mortgage fund to pay the whole. This rule applied to controversy between the security of the mortgagor and the mortgagee, or between different assignees of the note.
In Wooten v. Buchanan, 49 Miss. 386, this court held that, where there are several notes secured by a mortgage, and all of the notes are due, the money arising from a sale of the mortgaged property should be applied ratably to the several notes secured by the instrument, and this whether there had been a judgment obtained upon one of the notes or not.
In the case of Green v. Morris, 78 So. 550, we held that bona-fide purchasers from the indorsee of a part of a series of notes secured by a deed of trust are not affected by collateral oral agreements between the payee and his indorsee, by which the notes rendered should have a priority of payment over those indorsed in the absence of notes to the purchasers of such agreement, but they are entitled to share pro rata.
The receivers of the bank, while they have the legal titles of the bank to its assets and paper, represent the creditors generally, being more the representatives of the creditors than of the bank.
The decision of the majority puts this court in this attitude: If a note is payable in some other 'state, and transfer is made here, and the security is in Mississippi, then Mississippi law does not govern, but that the law of the state where the note is payable governs, but if the note is payable in Mississippi, and the transfer is in the other state, and the property is in the other state, that the transaction is also governed by the laws of the other state, and not the laws of Mississippi..
The consequences of this decision has been tellingly illustrated in brief of one of the counsel for appellee in-substance as follows: Suppose that the New York law, where one of the notes was assigned, held that the note first due had preference over the balance, and that it held this note, and was therefore entitled to preference under the laws of New York, where the assignment was made. Suppose that the Missouri law held that the notes first assigned had preference, and that its note was assigned prior to the others, and that the Missouri law governed, and that it would take in preference to the New York, Mississippi, and Louisiana holders of these notes, and suppose that the Mississippi law held that, where the notes was assigned in Mississippi, the holder was entitled to- share equally with all the
There is no question in this record affecting the validity of contract of assignment to the Louisiana Bank. Its right to the note and such rights as the ownership or possession of said note gives is concededly the property, for the purpose of this suit, of the Louisiana Bank or its assignee, the, appellants, but when the Louisiana Bank took this note, it took it subject to the law of the place where the contract is to be performed. It could not require the maker of the note to come to Louisiana, to pay it or to consent that it should become payable in Louisiana, but it must present it at the place of payment named in the note, to wit, at the said First Natchez Bank in Natchez,. Miss. It bought, only such rights as the bank, its assignor, had in the note. It could not force other holders of notes to recognize any superior rights. Suppose that, instead of the Tensas River Planting Company assigning all of the notes to the First Natchez Bank, it had itself made the same assignments that the First Natchez Bank made. Is there any reason why the same rule would not prevail? The notes being payable in Mississippi, would they then have been governed by the Mississippi law? To hold that the obligation of the note is changed by each assignment of the note would create the utmost confusion in the business world. Suppose, for instance, that the Louisiana Bank, instead of bringing this suit, had in turn assigned this note to a party in Texas. Would the obligation of the note then by such assignment be
