Fidelity & Deposit Co. v. Johnston, 42 So. 357

42 So. 357 | La. | 1906

Lead Opinion

BREAUX, C. J.

Plaintiff, the Fidelity & Deposit Company of Maryland, as pledgee of a promissory note pledged by J. Dugue, secured by a mortgage and vendor’s privilege for $3,000, brought suit against the maker of the note to recover the amount of the note, interest, and fee of attorney. Plaintiff at the same time petitioned for a writ of attachment in which it charged that the defendant was disposing of her property to place it beyond the reach of her creditors. Defendant had insured the property mortgaged, with which the note referred to above was identified. The property insured was destroyed by fire.

The policies taken by defendant on the property which was destroyed amounted to about $3,700.

The insurance companies whose policies had been issued to defendant were made garnishees under the attachment, and, in answer to the interrogatories propounded to them as garnishees, admitted their indebtedness.

The defendant moved to dissolve the attachment, and in her motion alleged a number of grounds, notably, prematurity; that the plaintiff was not the owner; that the note pledged was without consideration; that the grounds of the attachment were false.

There is no necessity for specially noting here the grounds upon which the defendant moved to set aside the attachment.

These grounds and other grounds will be stated by us just before deciding the ease on the merits.

The holder of a note for $2,000 intervened in the. suit, and claimed a portion of the fund seized at the instance of plaintiff, on the ground that the property covered by the policies was insured for his benefit. Plaintiff placed this intervention at issue by pleading a general denial, and by specially averring that defendant had never assumed to pay this note for $2,000; and, further, plaintiff pleaded, in substance, that defendant was a third party in so far as related to this note.

Plaintiff further denied that defendant had ever promised to take out insurance to secure the whole of the note in question, and, further, that the holder of the note had no lien or mortgage on the property.

The defendant, on the other hand, filed an answer to the intervention, and, though in the first, part of the answer she denied the intervener’s right, she subsequently, in the answer, admitted all he claimed.

Judgment was rendered for defendant for $160 damages.

It dissolved the writ of attachment, and dismissed plaintiff’s suit, and reserved to plaintiff its right of the note for $3,000, it holds in pledge.

And, as to the intervener, judgment was rendered for plaintiff, the Fidelity & Deposit Company, and against the intervener, dismissing his intervention.

All the parties, plaintiff and intervener, appeal.

The defendant virtually appeals by asking-on appeal that the judgment be amended by dismissing plaintiff’s suit, and by granting the-amount asked by her in her reconventional demand. The foregoing is a résumé of the-pleadings.

Statement of Facts.

Touching the statement of facts and the-grounds in that connection upon which plaintiff based its attachment, it appears that a small portion of defendant’s property was-sold in 1902 for the taxes of 1901. It further appears that she had directed that the proceeds of two of her policies be paid to theintervener, holder of the note before mentioned. The proceeds of the other policies-were to be expended (defendant and her-witnesses testify) to improve the property upon which were the improvements destroyed, by fire.

The evidence also disclosed that the pledgee had made ill-natured remarks regarding plaintiff’s claim; also, that the defendant under-some pretext had not met the agents of plaintiff at her home when they called to-see her in. regard to plaintiff’s claim.

The foregoing summary is of facts upon which plaintiff relies to sustain'its writ of attachment, and of facts briefly stated upon, which defendant relies.

Now, in regard to the pledge and the facts-in that connection: The act was drawn up in regular form. The note pledged was negotiable, and, -on the face of the papers, the-holder in pledge had all the rights of a pledgee.

Plaintiff, the pledgee, was represented by a member of the bar of this city, who is the-attorney and local director of the plaintiff company, and who attended to everything in-connection with this pledge. It also appears that the pledgor, some time before he executed the pledge, had a suit in which he was-represented by this attorney.

. The pledgor who was indebted for different amounts, it seems, proposed to pledge the note for $3,000 to secure these amounts. The attorney effected the loan, and, on his advice,' this loan was afterward taken up by the plaintiff company, which had become interested in defendant’s business, because of the bonds it had signed for him. The plaintiff availed itself of the opportunity to have inserted in the act of pledge, that it, the pledge, would serve to secure it, plaintiff, against possible liability under the bonds and builders’ contracts which plaintiff had. signed as security for pledgor personally.

The want of consideration of the noté pledged is one of the main issues of the case. The facts relating to the mortgages and their rank are that the pledgor of the note in question to plaintiff, years before he became pledg- or; that is, in August, 1897, being owner of the property before mentioned, mortgaged it to secure the note for $2,000, and subsequently that note passed into the hands of the person who is now the intervener in this suit.

In December, 1901, plaintiff’s pledgee, Dugue, sold the property which he had mortgaged, as before mentioned, to the defendant ’ for $3,000, taking as representing the price the said note payable in three years from date of sale, secured by mortgage and vendor’s privilege. This sale by- pledgor, Dugue, to defendant, Ruth Johnston, was made in accordance with a scheme between them to raise money on the note which was very soon thereafter, pledged.

The property thereafter was kept insured by defendant, Ruth Johnston, and the policy- was made payable to the holder of the mortgage notes “as interest may appear”; and two of the policies were deposited with the holder of the note for $2,000 (intervener, as just above mentioned).

When the last renewal of the policy was made, the policies insured were placed in the hands of the pledgor’s mortgagee, Dugue, to take the place of those of the prior year which had expired.

The issue urged by plaintiff against the intervener, Jaubert, was that the intervener was not entitled to the proceeds of the policy by reason of the fact that defendant, the insured, bought the property, and had never assumed payment of this note for $2,000. In other words, that Miss Johnston was a third possessor, as relates to this note, as it had never been assumed by her, and that in addition the act of sale imported the warranty of her vendor. This is shown by the deed of sale.

A mass of testimony was taken to prove that the iDlaintiff, pledgee of Dugue (i. e., the deposit company of Maryland), knew that said note for $3,000 was executed without consideration to the knowledge of its agents, through whom all the negotiations had been conducted, as before mentioned, and it follows to the knowledge of plaintiff itself.

It is a very long story, and takes up many pages of a voluminous record.

The pledgor, to sustain the averment that the note was without consideration, states under oath, in substance, that during the time that the attorney was his attorney in other business than that involved here, that he became cognizant of all the facts, whilst the attorney is equally as positive in denying the knowledge charged. There is direct contradiction between the two. We do not propose to narrate all the facts in that connection. Our conclusion stated later after having read the facts will suffice.

Some of the statements made have a particular meaning, such as, for instance, defendant’s testimony that she found, referring to the note for $2,000, that there was a mortgage on the place some time after she had bought it in 1901, as before stated;- and that the pledgor, who by the way is her brother-in-law, and who was her factotum in all her troubles, told her that the holder of the $2,000 note was threatening to foreclose, if she did not pay the interest, taxes, and insurance. He said to her that she should let him have the $3,000 note (which he says he had returned to her) ; he would thereon raise money to pay the taxes, insurance, and interest. She delivered this note to him to be pledged.

The specific charge of defendant was, as •shown by the testimony, that her brother-in-law, whom she seems to have at one time implicitly trusted, and plaintiff’s agent, the attorney before mentioned, combined and put her note in pledge with plaintiff, although it was to their knowledge that this note had no consideration.

We will here state that the pledgee was not made a party to the suit.

Opinion.

We take up in the first place for decision the question whether the attachment issued upon sufficient evidence.

It was dissolved by the decree appealed from. The grounds upon which it issued have heretofore been stated.

In accordance with the court’s order, the amounts garnished were deposited in the registry of the court. There was no objection made to the order. The plaintiff, having acquiesced in the disposition of the funds pending litigation, is scarcely in a position to urge objection to the decree dissolving the writ of attachment.

Moreover, the ground of attachment Is susceptible of two interpretations: One that fraud was, perhaps, intended; and the other that it, the property mortgaged, as .before mentioned, went to sale for taxes against all wish on defendant’s part, and that she had agreed with the adjudicatee at tax sale that she would redeem it in the near future.

The second ground, delivery of policies to a creditor, the intervener here, under the circumstances, cannot be construed as anything else than an act in good faith.

The utterances of the pledgor, another ground urged by plaintiff, cannot be considered as binding upon the defendant. It was his own threat to defeat the company, plaintiff, in its attempt to collect that which we construe was its own, and not a threat of defendant to attach new proceedings.

Another ground for the attachment was the answer sent or given at defendant’s home to plaintiff’s agents when they called to see her about plaintiff’s claim, viz., “not at home.” Their answer receives frequent sanction. It is an untruth, an inexcusable fault; but it is 'not ground for an attachment, although it will always be protested against by a person accustomed to the habitual observance of the truth.

The intention to defraud creditors by out of the way and unusual acts is not made evident. The articles authorizing the writ of attachment for cause alleged were not intended to afford a conservatory remedy in all cases in which a creditor has suspicions which are not afterwards sustained by sufficient affirmative evidence of intention to defraud.

The fraudulent intent must be shown. Abney v. Whitted, 28 La. Ann. 818; Moulor v. Rosengarden, 22 La. Ann. 531; Hoy v. Weiss, 24 La. Ann. 269; Current Law (note) vol. 1, p. 242, and note; Abel & Bach Co. v. Duffy, 106 La. 260; 30 South. 833.

The damages claimed for tying up the funds in the depository of the court is an item of damage, which, under the circumstainees, defendant has no right to recover.

We pass, from the question touching the attachment and damages claimed to the question of prematurity.

Upon this branch of the case we find that the note for $3,000 held in pledge was due. The contention of defendant is that, in accordance with the act of pledge, the note in question was extended until the date of a final judgment in a suit which the pledgor had at the time on hand.

The testimony shows that the note meant was another note referred to in the act of pledge for $470.35, and not the $3,000 note.

There is therefore no merit in this plea.

This brings us to the objection of the defendant that the pledgee had no right to sue in his own name as owner and holder.

The Civil Code treats the rights of the pledgee in the property pledged as being in the nature of ownership to the amount of the pledge. It may have to yield to superior claims against it; the right, none the less, is very similar to the rights of an owner. Civ. Code arts. 3157, 3170, 3171.

From the point of view, this court has repeatedly held that the holder of the pledge has the right to sue in his name.

The right of the pledgee to sue in his name was recognized in Building Association v. Ferguson, 29 La. Ann. 548. It was recognized in the case of Lafayette v. Bruff, 33 La. Ann. 624, and reaffirmed in Chaffe v. Dubose, 36 La. Ann. 257.

The defendant had no ground to complain of on that score. She knew of the pledge. It was not concealed from her, and, on her motion for oyer, it was timely produced into court. The precedent cited has great force. It is not in any respect weakened. It in no way worked to the prejudice of defendant. There was nothing concealed, and nothing done on this score to the prejudice of the defendant.

We pass to a consideration of the defense that the note deposited in pledge was to plaintiff’s knowledge without consideration.

The whole question narrows itself down to whether the pledgee had knowledge of the asserted want of consideration.

The testimony of defendant, her allegations in court in the Cusach v. Dugue suit, and the trend of facts in the different transactions, tend to show that it was not without consideration; that it was not a simulation.

Moreover, the defendant cannot be heard to-plead her own wrongs. Even if there was-want of consideration, knowledge must be traced to plaintiff, through knowledge of its-agents.

The testimony, lengthy as it is on the subject of knowledge, is not by any means conclusive. It seeks to fasten upon plaintiffs a knowledge that would amount to bad faith, and intentional disregard -of all of defendant’s rights in the matter. The seriousness of the charge would have to be sustained by clear, positive, and direct testimony. Instead, the testimony of defendant and her witnesses-is frequently inconsistent and contradictory. It is assumed that the -agent and the attorney, who had been the attorney of defendant’s agent in other suits, not connected with this suit, must have gained knowledge of the consideration that passed, or did not pass in the sale made by defendant to her brother-in-law, in whom, at one time, at least, she seems-to have had great confidence.

Plaintiff’s agent and attorney emphatically,, as a witness, denies all such knowledge. He owns that he suspected that the sale was simulated, but he had no evidence of the-fact; and, for that reason,, he had accepted in the light it was presented to him by the-holder of the note, the brother-in-law before-referred to, by whom it was subsequently pledged.

He denies that he had knowledge of the-fact that the note had been returned by the vendor of the property to the defendant, and by her again placed in circulation by returning it to her vendor, or that he knew anything of the transactions, save those apparent on the face of the papers.

We have read, the testimony with attention, and have arrived at the conclusion that the-knowledge alleged has -not been shown by the weight of the testimony.

Alternatively defendant urges that the-pledge was given to secure three items. The-first was to become due on tbe date of tbe first judgment in the Dugue-Levy suit.

There is a receipt in the transcript showing payment in full of all indebtedness of tbe latter to tbe former.

Defendant seeks to involve the second item with an asserted account between the agent personally. The claim which defendant seeks to bring into this suit has nothing to do with this suit.

These items represent amounts which plaintiffs .hold as security. If any of the claims for which plaintiff was security are prescribed, plaintiff cannot recover.

But this will have to be settled hereafter, contradictorily, between pledgee and pledgor.

The pledgor, we have already stated, is not a party here.

Intervener’s Claim.

The intervener, Jaubert, as owner of the note for $2,000 claims the amount of two of the insurance policies, deposited in the registry of the court. These policies were issued to defendant, Miss Johnston, and, through some one acting for her, were handed to the intervener, who received them in place of the old policies which had been issued on the property, and which were in possession of the intervener.

The delivery of these policies manually to the intervener did not have the effect of assigning the policy.

Policies must be assigned in writing, and are not transferable by mere delivery. That is the jurisprudence of this court, and we have found no decisions in other jurisdictions to the contrary.

Reference is made by us to this manual delivery only as evidence of the intention of the parties concerned, as going to show that it was intended by the owner to take out the policies in an amount sufficient to secure the intervener. It was understood that he was to be secured by policies of insurance.

They had been originally issued to the vendor of the property, Dugue, to. defendant. After the sale made to the defendant, at the instance of the intervener, Jaubert, the old policies that had been issued in the name of the one who sold to the defendant were canceled, new policies were issued to the defendant as the assured, and turned over — handed over — to the intervener, and the clause was added: “Payment to the holder of the mortgage notes as before mentioned.” The clause substantially reads that the amount shall be paid to the two mortgagees. The defendant, it is true, was not the mortgagor of each mortgage, only one. But it remains that there were two mortgages on the property, and that the policies were made payable to mortgagees ' with the usual clause as their interest may appear.

The insurance money, we take it, was destined to the mortgages. In case of foreclosure, she would have to pay the mortgage of the intervener or abandon the property.

But, even if the policies had been transferred to the intervener, Jaubert, as defendant urged, as they were payable to the mortgagees, plaintiff, being a mortgagee, was entitled to a proportion of the policies corresponding with his interest.

In our attempt to make this clear, we have thought on the following lines: The first

policies were issued containing the clause, “loss, if any, to be paid to holder of mortgage note.”

After C., who afterward became pledgor of the $3,000 note (second note), sold the property mortgaged to meet amount to B., the defendant A., the intervener, said to- B., the defendant, some time after her purchase: “My

mortgagor, O. [the pledgor of the subsequent note] has sold you the property. The insurance should be in your name, as you are the owner. Take the policies.issued in the name of C., have them canceled, and have other issued in your name.” This was done, and the -policies were issued; and, in compliance with the last act of sale, they contained the clause: “Loss, if any, payable to holders of mortgage -notes.”

When there was one mortgage note, the ■policies were issued to protect its holders. When there were two, then they contained, 'the clause in favor of holders of mortgage motes.

From the foregoing, it follows that the -amount collected on these policies is due to ■ each of the mortgage creditors in proportion -to their respective claims ; that is, in proporción of two-fifths to three-fifths.

Intervener claims to be entitled to an •amount for attorney’s fee. We must, in our view of the law, decline to allow such an ; amount as damages. Plaintiff in intervention, under the circumstances, here presents no such demand as can be allowed for at-torney’s fee.

It is therefore ordered, adjudged, and de•■creed that the judgment of the district court, rendered in favor of defendant Ruth John-ston against plaintiff, dissolving the writ of attachment herein, is affirmed, except as to •damages allowed.

It is further ordered, adjudged, and decreed that plaintiff’s right, as pledgee of the $3,000 note, is recognized to the extent of the amount ■due it as creditor, which will hereafter be -fixed contradictorily with parties in interest.

It is further ordered, adjudged, and de•creed that the judgment in favor of defendant, and against plaintiff, in the sum of $160, -or so much as may be due from August 4, 1901, at 7 per cent, interest on $2,000 is disallowed.

It is further ordered, adjudged, and decreed that the judgment of the district court be .amended, by allowing to plaintiff judgment for the amount of its claim out of the proceeds of the policies issued to defendant other than those which were placed, at one time, in the possession of intervener, except in case there is not enough in these policies to pay plaintiff. If there is not enough, then, plaintiff and intervener shall divide the amount of policies deposited, viz., policies 1,726,762 and 1,725,761, issued by the Royal Exchange Assurance of London, England, to pay the deficiency, proportionately, to the respective claims of plaintiff and intervener.

As amended, the judgment is affirmed. Costs of appeal to be paid by 'appellees; intervener Jaubert, to recover costs of intervention in the district court.

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Rehearing

On Rehearing.

PROVOSTY, J.

The plaintiff, who is merely the pledgee, not the owner, of a mortgage note, has sued upon it as “holder and owner.” The buildings on the property mortgaged to secure the note have burned, and plaintiff has accompanied his suit by an attachment of the insurance money in the hands of the insurance companies. The holder of another mortgage note on the same property has intervened, claiming a part of the insurance money. Defendant sought to have the attachment dissolved in limine, but on grounds pertaining to the merits, and the motion to dissolve was ordered to stand as an answer. We find that this ruling was proper; in fact, defendant’s counsel have not referred to it in their arguments, and, therefore, we assume, have acquiesced in its correctness.

The first matter to be considered is whether plaintiff had grounds for attachment; and this involves the story of the case. Defendant lived in the same house with her sister, and her sister’s huband, Joseph Dugue. The latter is a building contractor, and the plaintiff company was surety on two of his contractor’s bonds. Being indebted to his sister-in-law, the defendant, he made a dation en pa'iement to her of two lots with buildings thereon. For some unexplained reason, the dation en paiement was given the form of a credit sale, the defendant executing for the price her $3;000 note, to her own order, and by herself indorsed in blank and secured by mortgage and vendor’s privilege on the property, and furthermore obligating herself to insure the property in favor of the holders of the note. This is the note now sued on. The certificate of mortgages incorporated in the act of sale showed that there rested on the property a mortgage for $2,000, represented by a note. This is ■ the note now held by the intervener. A creditor of Dugue’s, named Gusachs, attacked the sale as a fraud and simulation. Pending this Cusachs suit, the defendant, finding herself in need of money with which to meet the interest on the $2,000 mortgage note and taxes and other charges, confided the $3,000 mortgage and vendor’s privilege note to her brother-in-law Dugue for him to obtain money for her on the pledge of it. Dugue applied for it in his own name to the plaintiff’s agent, Mr. Milner, and obtained the money, $470.35, executing his note for it, and pledging the $3,000 note as collateral. He, furthermore, at the same time, and in the same instrument, pledged the note to plaintiff for the following purposes: First, to secure a debt of his to plaintiff of $843.98, for payments made for him by plaintiff as surety on a building contract bond in favor of one Wm. Dieehman; and, second, to hold plaintiff harmless as his surety on a building contract bond for $7,500 in favor of one Samuel Levy, on which bond suit was (and still is) pending. The $3,000 mortgage note was thus pledged before its maturity. Whether plaintiff’s agent, Mr. Milner, knew that it did not belong to Dugue, and was without consideration, is one of the questions in the case. Defendant, it seems, did not know that Dugue had pledged her note for any other debt than that for the money borrowed for her. Pending the Cusachs suit attacking her title as fraudulent and simulated, the buildings on the property burned, and 'the insurance companies resisted payment, on the ground that her title was simulated; and she brought suit against them. The intervener also, to whom two of the policies had been transferred, brought suit against the insurance company that had issued the policies. Inasmuch as these suits-against the insurance companies involved the same issue of simulation, vel non, as the Gusachs suit, they were suffered to remain in-abeyance until the Gusachs suit should be decided. In July, 1004, this court maintained the defendant’s title. Meantime, on 29th of October, 1903, the note pledged to plaintiff had matured. In due course, after the maintenance of defendant’s title, the insurance companies were about to make payment to defendant and to intervener when plaintiff’s two agents, Mr. Milner and Mr. Block, called at the house of the defendant to see her about having the insurance money paid to plaintiff on the $3,000 note, instead of to intervener and to herself. A little boy answered the door bell, and, to the inquiry of the callers as to whether Miss Johnston was in, answered “Yes,” or nodded. Instead of Miss Johnston appearing, however, Mrs. Dugue presented herself. The agents of plaintiff asked to see Miss Johnston, and were told that she was not in, but that Mr. Dugue was in the back yard. As a matter of fact, Miss Johnston was in, and Mrs. Dugue knew it. Miss Johnston testifies, however, that she herself was sick in bed at the time, and did not know of the visit until after the visitors had left. In place of Miss Johnston, Dugue came out, and Mr. Milner asked him to have the insurance money paid to plaintiff under the pledge. He answered he did not have anything to do with Miss Johnston. Mr. Milner then said he believed Miss Johnston was in, and that they would not let him see her. A heated discussion followed, in the course of which Milner said he was going to take out proceedings, and Dugue said: “If you take any proceeding against Miss Johnston, I will do-your company dirt.” Basing liimself on the occurrence here related, and on the fact that defendant had suffered one of the lots to be sold at tax sale, and to be bought in by her lawyer, and on the further fact which he had ascertained that defendant was willing that the claim of intervener herein should be paid, Mr. Milner, on the .same afternoon of his attempt to see Miss Johnston, sued out the writ' of attachment. The naked lots have greatly risen in value, but at the time of the attachment might not have been worth enough to satisfy the obligations secured by the pledge, and Miss Johnston and Dugue had no other property. The record abundantly shows that Miss Johnston had no idea whatever of defrauding her creditors. She knew nothing of the pledge of the $3,000 note to plaintiff except as security for the money borrowed for her, and she had no other debt, and she had at one time called upon plaintiff’s agent, Mr. Milner, to pay a part of this debt and had been told to wait until after the termination of the LevyDugue suit, when everything would doubtless be all right. The $2,000 mortgage note was not her debt, but it bore mortgage on- her property, and she recognized her obligation to pay it, and had consented to its payment by the insurance company.

Under the foregoing circumstances, we have no trouble in reaching the same conclusion as on the former hearing of this ease, namely, that the attachment was taken out in good faith, on grounds which plaintiff was justified in believing to be good, but which were not so in fact; and that, in consequence, the attachment must be dissolved.

In our former decision, we refused even actual damages, but we now think they should be allowed. Defendant has been kept out of her money, and in that way has suffered a loss which she ought to recover. This loss consists in the interest she has had to pay Jaubert, the intervener, from the date of the attachment, August 5, 1904, and, further, in the interest on the rest of the money at the legal rate from the same date. Attorney’s fees for dissolving the attachment cannot be allowed, the attachment not having been dissolved on motion or rule and by trial separate from the merits.

Passing to the merits, the first contention is that plaintiff, having sued as holder and owner, cannot recover as pledgee.

It is hornbook láw that the holder of a note, such as the one here sued on, passing by delivery, may sue on it as owner though not owner. Hennen’s Dig. p. 180; Louque’s Dig. p. 98.' Of course, the equities of the maker cannot be cut off by the adoption of that form of proceeding; but there is no question in this case of cutting off equities. The case has been left wide open for the defendant to set up and make good any equities she may have. As a matter of fact, the judgment in the case is so framed as to allow these equities in full.

It is argued that, by suing as owner instead of as pledgee, the plaintiff has prejudiced defendant in her defense, because the obligations secured by the pledge are immature and contingent, and therefore could not have served as the basis for an attachment, and hence the attachments would have had to be dissolved on that ground if plaintiff had sued as pledgee. It might be enough to say that this objection addresses iteself to the attachment, and is therefore not to the purpose, since the attachment has already been dissolved ; but, apart from this, another obvious answer is, that this suit is not brought on the obligations secured by the pledge, but on the pledged note.

Defendant next contests the validity of the pledge. The grounds are, first, that a pledge cannot be given to hold harmless the surety on a bond; second, that the note was not indorsed by the pledgor; and, third, that the pledgee knew it did not belong to Dugue, and was without consideration.

The counsel for plaintiff have not taken s.eriously the grounds first and second, and counsel for defendant seem not overpleased at this. But what else could they expect, when this first ground is in the teeth of article 3140 of the Code, which expressly authorizes the giving of a pledge for holding a surety harmless; and the second is in the teeth of article 3158 of the Code, as amended by Act No. 287, p. 348, of 1855, and by Act No. 157, p. 239, of 1900, which expressly does away with all formalities in the pledging of negotiable notes except the delivery thereof to the pledgee. Carter v. Merril, 14 La. Ann. 376; Clark v. Whitaker, 117 La. 298, 41 South. 580.

The third ground, as to whether plaintiff accepted the note in ignorance of its want of consideration, depends upon whether Mr. Milner, the agent who accepted the pledge for plaintiff, is to be believed, or Dugue. The lower court, and this court on the former hearing, believed Milner; and, after going over the case once more, we see no reason for adopting a different conclusion. Plaintiff having accepted the note in good faith before its maturity from one who had possession of it with the consent of the maker, its title as pledgee is as good as its title as purchaser would have been, if, instead of taking the note in pledge, it had purchased it. This is well settled. Chaffe & Sons v. Du Bose, 36 La. Ann. 257; Bank of Lafayette v. Bruff, 33 La. Ann. 624; Insurance Co. v. Lozano, 39 La. Ann. 322, 1 South. 608.

Finally defendant contends that plaintiff can recover nothing because the obligations secured by the pledge are not enforceable. The first, the $470.35 note, because not yet due; the second, the Deichman bond, because settled; the third, the Levy-Dugue bond, because all the debts which the bond was given to secure are prescribed.

As to the third of these defenses, the facts upon which the prescription of the debts in question would depend are not in the record, hence the court cannot pass on it. As to the second, all that is proved is that Dugue turned over to plaintiff a claim against one Diechman sufficient in amount to satisfy the debt, and that Deichman had no defense to make to the claim, but that plaintiff, nevertheless, compromised with him, without consulting Dugue. Evidently,- plaintiff had no right tó make this compromise, and must stand the loss, if Deichman had property out of which payment of the debt could have been enforced; but that fact is not shown, and hence this matter must be left open for future adjustment between the parties. As to the first of these grounds, the immaturity of the $470.35 is immaterial, since the note is not being sued on. This ground, and in fact all three grounds, confound between the note sued on and the note for the security of the payment of which it stands pledged. The pledgee of a note is expressly authorized by " the Code to bring suit on it. Article 3170, Civ. Code. That a pledgee may thus bring suit has been often decided. Chaffe & Sons v. Du Bose, 36 La. Ann. 257; Bank of Lafayette v. Bruff, 33 La Ann. 624; Insurance Co. v. Lozano, 39 La. Ann. 322, 1 South. 608; and many other cases.

Defendant has pleaded, but has not pressed, a plea of estoppel in pais. Nothing shows that either defendant or intervener were led to change their position by anything done by plaintiff, and hence the plea is not supported.

The debt secured by the pledge, including the contingent part of it, largely exceeds the amount of the pledged note. Therefore plaintiff is entitled to judgment for the full amount of the note, with a recognition of the mortgage and vendor’s privilege.

This mortgage, however, bears only on the real estate. It does not bear on the insurance money. A mortgage cannot exist on money, and, moreover, this money cannot be assimilated to the proceeds of the mortgaged property, but is the fruit of a contract entered into by the defendant independently of the mortgage. Besides, the plaintiff has never pretended to have a mortgage upon this money. Plaintiff has urged no such claim in the petition nor in the brief. On the contrary, since attachment is a harsh remedy, available only in the absence of other remedy, plaintiff, by asking for an attachment, has ■ in effect represented to the court that it had no special right to, or hold or tie on, this money. For instance, a mortgage creditor cannot be entitled to an attachment, for the reason that the mortgage should be enforced by some other remedy.

Whether plaintiff might not, after the example of the intervener, have claimed the right to demand this money from the insurance companies in quality of beneficiary under the policies, which were made payable ■“to holders of mortgage notes as interest might appear,” is a question needless to be •considered, since no such demand is presented. Indeed, very far from suing upon such ground, plaintiff has expressly alleged that •defendant has violated her contract to insure the property in its favor. The only demand directed against the money in the petition is the attachment, with the concomitant prayer that the attaching creditor’s lien be recognized and enforced. That demand failing, no demand is left addressed to the possession •of the money or to any right upon it.

The judgment in favor of plaintiff will not be absolute. The fact is recognized by everybody in the case, including Dugue on the witness stand, that the pledged note was without consideration, hence, it has any validity only in so far as may be necessary for the protection of plaintiff as the bona fide pledgee of it before maturity. This phase •of the case will have to be reflected in the judgment; that is to say, the judgment will be executory only for the purpose of making good any judgment plaintiff may obtain against Dugue, the obligor on the debt secured by the pledge, with leave to defendant to intervene and defend any suit that may be brought for that purpose.

Having thus disposed of the case as between plaintiff and defendant, we proceed to consider the intervention. Before the suing out of the attachment, the situation was that intervener, Clement Jaubert, was claiming to be the beneficiary under two of the policies; and, as such, to be the owner of the sum thus due, up to the amount of his mortgage; and defendant was consenting that intervener should be so considered. The insurance company owing the money thus claimed by the intervener, the Royal Exchange Assurance of London, was garnished along with the other companies; but, for some unexplained reason, plaintiff consented that the amount garnished in the hands of this company, $2,326.75, instead of being paid to the sheriff under the attachment, as in the case of the other three policies, should be deposited with the clerk subject to the result of this suit — thereby consenting that said money should go from under the attachment. The situation, then, was that this money was in the hands of the clerk with no one claiming any right to the possession of it, except Jaubert for the amount of his mortgage, and the defendant for any residuum. The plaintiff, as herein-above explained, was not claiming to be the owner of it, or to have any mortgage rights upon it, but had simply attached it as defendant’s property, and then voluntarily released the attachment by consenting that the fund should be deposited with the clerk, instead of being paid to the sheriff under the attachment. In this state of things, it would seem that the proper course of Jaubert would have been to take a rule on the clerk (possibly making plaintiff and defendant parties to said rule) to show cause why the money should not be paid to him, as being the only person pretending to any right to it. Instead of taking such a rule, Jaubert intervened in the suit, thereby adopting a form of proceeding as effective as the rule for bringing matters to an issue, but less direct and summary, and which has given rise to a question as between him and defendant, namely, whether interest on his mortgage should not be stopped at such time, as, by the more expeditious process of a rule, he could have secured the possession of this money in the hands of the clerk, to which no one was laying any claim but he. Inasmuch, however, as all parties have consented that the litigation should be settled in the present form of proceeding, we think that the rights of the intervener must be determined accordingly.

Intervener, however, cannot claim damages for the dissolution of the attachment, when it was consensually released before the filing of his intervention. And he cannot claim attorney’s fees, for the further reason that the attachment was not set aside by means of a separate trial on rule or motion to dissolve.

It is not over certain that, in consenting that this fund should go to the intervener up to the amount of his mortgage, defendant intended that attorney’s fees should be included; but intervener having had to “institute legal proceedings for the recovery of the mortgage debt,” under the express terms of the mortgage act, he is entitled to 5 per cent, attorney’s fees, and these fees form part of the mortgage debt.

It is therefore ordered, adjudged, and decreed that the judgment appealed from be set aside, and that the plaintiff, the Fidelity & Deposit Company of Maryland, have judgment against the defendant Ruth Johnston, for the sum of $3,000 with 8 per cent, per annum interest thereon from the 29th day of October, 1900, with recognition of mortgage and vendor’s privilege seeming the payment of this judgment on the following described property, to wit:

“Two certain lots of ground, with all the buildings and improvements thereon and all the rights, ways, privileges, and appurtenances thereunto belonging or in any wise appertaining, situated in the second district of this city, in square No. 503, bounded by Bienville, Cartez, Telemachus, and Customhouse streets, designated by Nos. 12 and 13, on a sketch made by P. A. d’Hemeeourt, deputy city surveyor, dated November 28, 1892, and annexed to - an act of sale by Albert Paul to Louis Berge, passed before Jos. D. Taylor, notary, on the 25th of December, 1892, which said lots adjoin each other and measure as follows: Lot No. 12 forms the corner of Bienville and Cortez streets, and measures 34 ft. 1 in. 1 line front on Bienville street by a depth and front on Cortez of 120 feet, between parallel lines. Lot 13 measures 27 ft. front on Bienville street by a depth-of 120 feet between parallel lines.”

This judgment, however, is to be executed only in so far as may become necessary for making good any judgment obtained by said judgment creditor against Joseph Dugue on the obligations for the security of which the note upon which this judgment has been obtained was pledged, with reserve of right to the said Ruth Johnston to intervene and defend any suit that may be brought against the said Dugue for that purpose.

It is further ordered, adjudged, and decreed that the defendant Ruth Johnston have judgment against the plaintiff, the Fidelity & Deposit Company of Maryland, for an amount equal to 7 per cent, on $2,000 and 5-per cent, on the rest of the funds in the hands of the clerk and sheriff from the 5th day of August, 1904, until the date of the filing of the present judgment in the lower court. The present judgment in favor of Ruth Johnston not to be offset by the judgment herein rendered against her in favor of the plaintiff.

It is further ordered, adjudged, and decreed that the fund deposited in the hands of the clerk of court herein by Royal Exchange Assurance of London, England, subject to the event of this suit, be paid to the intervener herein, Clement Jaubert, up to the amount of the mortgage note held by him in capital and interest, plus attorney’s fees to the amount of 5 per cent, on said capital and interest.

It is further ordered, adjudged, and decreed that the attachment herein be dissolved and that the plaintiff, the Fidelity & Deposit Company of Maryland, pay the costs of the same, and also of the intervention of Clement Jaubert.

It is further ordered, adjudged, and decreed that after paying to Clement Jaubert the amount due on his mortgage and attorney’s fees, as hereinabove ordered, the clerk of court pay over to defendant Ruths Johnston the balance, if any, of the fund deposited in his hands by the Royal Exchange Assurance, of London, and that the sheriff pay to Ruth Johnston the money attached in this suit.

It is further ordered, adjudged, and decreed that plaintiff pay the costs of the intervention herein, and that the defendant pay the costs of the main suit, and the costs of appeal.

See dissenting opinion of BREAUX, C. J., 42 South. 366.