| La. | Jan 15, 1848
The question presented in this case is, Whether the plaintiff as an attaching creditor is entitled to be paid out of the fund in the hands of the garnishees, Martin, Pleasants Sf Co., in preference to two other creditors, to wit: James B. Lake and the Mechanics’ and Traders’ Bank. The fund in the hands of Martin, Pleasants Sf Co. originated from two sources: first, a shipment of fifty two bales of cotton, made in September, 1846, by the defendant to the garnishees; and secondly, shipments of one hundred and four-» teen bales of cotton, which were delivered under an agreement which will be presently noticed, by the defendant to the agents of the garnishees in Mississippi, and were by them forwarded to their principals. The first shipment of fifty-two bales was not covered by the agreement in question. Its proceeds, therefore, being $1,915 53, after paying the advances of $1,000 made upon it by the garnishees, and $20 20, being a former balance, must be considered as a fund unappropriated for the benefit of other parties, and therefore subject to the attachment. It is to be observed that the only other claim of the garnishees besides the sum of $1,020 20 above mentioned, was an amount of $2,000 for an advance to which other property was by the agreement of the parties specially appropriated. The contest then is reduced to so much of the fund in the hands of the garnishees as originated from the proceeds of the cotton delivered in Mississippi to the agents of Martin, Pleasants Sf Co.
Some weeks after the shipment made directly by the defendant to the garnishees a written agreement was made in Mississippi, between the defendant and the garnishees represented by their agents, Bruner, Morgan and Markham, by which, after reciting that Lake is shipping cotton to Martin, Pleasants Sf Co., he declares that he pledges it, first, to the payment of an accommodation acceptance of Martins,- Pleasants Sf Co. for $2,000 then soon to be matured, “ and then to apply the proceeds of cotton as they receive it to the payment of the sum of $1,600 to James B. Lake, of Maryland, and after the payment to James B. Lake then the nett proceeds shall be applied to the payment of $1,400 to the Mechanics’ and Traders’ Bank of New Orleans. Now the said Lake does by this instrument distinctly pledge the cotton hereafter shipped of this crop to the payment of the debts above enumerated,- and the said party of the second part do promise and oblige themselves that, to the extent of the cotton delivered to their agents in Vicksburg, Mississippi, Bruner, Morgan Sf Markham, they will apply and pay the said debts in the order that they are mentioned by the said Lake." One hundred and fourteen bales were delivered to the agents of the garnishees under this agreement, and shipped by them, to Martin, Pleasants Sf Co., who received it prior to the attachment, and have paid the draft of $2,000 mentioned in the agreement. Their right to reimbursement is not disputed.
James B. Lake intervened soon after the attachment was levied, and claimed payment under the written agreement. The Mechanics’ and Traders’ Bank has not intervened. It does not appear that the Bank has ever signified its acceptance of the stipulations of the agreement, nor is it satisfactorily shown that it had notice of them. Lake did not signify his acceptance before the attachment, nor does he appear to have been informed of the agreement until after the garnishment. It is proper also to remark that no fraud is shown in this case, nor is it even proved that the defendant was insolvent.
Although in the instrument above mentioned the term pledge is used inaptly, it is not according to its fair construction and legal intendment a contract of
■ It has become a well settled rule' in the law of attachment that, when the owner of the property-has lost his power over it and cannot change its destination, his creditor cannot attach; the converse of {he rule being that, whenever the proprietor may sell and deliver, the creditor can seize. See Armor v. Cockburn, 4 Mart. N. S. 669. It is necessary therefore to consider the effect of the agreement upon the rights of W. A. Lake, and what duties it imposed upon Martin, Pleasants <§• Co. The two enquiries in a great degree involve each other, tend to the same conclusion, and may be concurrently treated. By this agreement it was clearly understood between the contracting parties that Martin, Pleasants 8f Co', should receive possession of the property, sell it, and apply the money, first, to their own reimbursement for the advance of $2,000, and then to the payment of the two creditors named in the agreement. There was no express reserve by W. A. Lake, of any future control over the property. Upon the face of the agreement, which he- presently executed by delivering possession, he stripped himself of the authority of owner. But it is said that, under the agreement, Martin,Pleasants 8c Co-, were his mere agents, their agency being however coupled, as regards themselves, with an interest for the reimbursement of their advances ; and that at any time, on reimbursing or settling for the advances, he could liavre- withdrawn the property or its proceeds from their control. To test the truth of this proposition it is necessary to enquire what duties and obligations towards others were imposed upon Martin, Pleasants 8f Co.. Such duties and obligations, if they existed, formed part of the contract as between them and. Lake, and he could not be permitted to violate them.
If the question be tested By the laws of Mississippi, where the agreement was made, it appears to us free from difficulty. We understand the rule there to be well settled that, in. such case, the legal title would be vested in Martin, Pleasants Co. for the purposes of the agreement, and an equitable title in the creditors for whose benefit Lake stipulated; qnd that, to prevent other creditors from acquiring an adverse lien by, execution, or attachment, a previous assent of the creditors was not necessary to be shown, the stipulation being purely beneficial to them, and therefore its acceptance presumed. See Brookes v. Marbury, 2 Wheaton, 79. 4 John. Cha. 529. 6 Ves. 662. 4 Mason, 214. The opposite doctrine has been held in repeated decisions in Massachusetts ; but those decisions spring from the defects of the local law. The-courts there domot possess equity powers ; and-the policy of the law providing for attachments, and not providing any remedy in equity against the trustees, was considered as prohibiting the establishment- of a trust estate by an insolvent debtor for the benefit of. creditors not parties to it. It is plain, therefore, that if rights were thus created in favor of the creditors, which the law would recognize ands preserve for them, even before their acceptance, there was created, at the same time, by the agreement, a correspondent duty on the partof Marlin, Pleasants 8f Co. to hold the property, and- apply it to the purposes so stipulated. This duty, created by the- agreement Lake was bound to respect, and as he could not violate it, his attaching creditor can exercise no greater right.
This case was decided by the district judge upon the authority of some of the cases just cited,- and- in applying the law of Mississippi to this contract it
In this connection it is proper to -notice the argument of the plaintiff’s counsel with regard to the ownership of this property, as tested by the maxim Res <perit domino. It is very true that,* if the cotton had been lost on its voyage to New Orleans, or been destroyed by fire here, .or if Marlin, Pleasants 'Sf Co. after selling it and receiving the proceeds, had failed, the loss would have fallen on ,W. A. Lake. But there is no inconsistency in the concurrent existence of a qualified ownership in one party, and a control and dominion over it for certain purposes, in another party. Thus, when property is given in pledge, the pledgor parts with the possession and control of the thing pledged ; but if it perishes without the fault of the pledgee the loss is the pledgor’s, and the debt remains unsatisfied. The payee of a bill of exchange has an order upon the fund in the hands of the acceptor; but if .the acceptor fails, the drawer, if there has been due diligence on the part of-the holder, bears the loss. So a consignee who has made advances is deemed,a qualified owner of the property consigned; but there is also a qualified ownership in the ¡consignor, and its destruction is his loss.
While however, we recognize the equitable -interest creatediby the agreement of the parties in favor of ¡the two creditors, ¡and presume -their acceptance, we have no right to compel their participation in the fund, or withhold it indefinitely from the attaching creditor. James B. Lake has intervened, and claims payment. He is clearly entitled to that relief, although he proves no actual acceptance before the attachment-was levied. But the Mechanics' and Traders’ Bank have not intervened, andithe case, as to them, stands merely upon the implied acceptance. We have said that there is no-satisfactory proof that they have had notice of the provision for their benefit. We think it equitable that they should have notice; but, on the other hand,-if they do not elect, within a reasonable time, to participate in the fund, whether because they have been provided for elsewhere, or from any other cause, ¡it is just that the attaching creditor should take the benefit of their refusal. The judgment of the court below, directed unconditionally that the .funds be applied to the payment of the Mechanics’ and Traders’ Bank. In this respect, we think the judgment should be modified, so that notice be given to the Bank, and a reasonable time allowed for the signification of its acceptance, and for .intervening in the cause ; in default of which this plaintiff should have judgment to be paid after James B. Lake.
It is therefore decreed that the judgment of the court below rendered upon the intervention, be reversed; that the proceeds of sale of fifty-two bales of cotton, shipped by the defendant to Martin, Pleasants Co., to wit: $1915 53, be applied first, to the payment to Martin, Pleasants <$• Co., of $1020 20 ; next to the payment of the costs occasioned by the attachment; and lastly towards the payment of the judgment obtained by said plaintiff against the said defendant; and it is further decreed that the proceeds of one hundred and fourteen