FIRST
NAT. BANK OF NEW ORLEANS V.
V.
BOHNE.
115
FIRST NAT. BANK OF NEW ORLEANS
BOHNE and others.
(Gircuit Court, E. D. Louisiana. July 9, 1881.) 1. HEms-REv. CIVIL CODE OF LOUISIANA, A)tT. 1013.
Provided none of tIle rights of the complainant are thereby affected, a court of equity will not hold heirs to the liability, for the debts of the succession as , if they themselves had contracted them, which they incur, under the provisions of article 1013 of the Rev. Civil Code of Louisiana, by neglecting to take the inventory therein required, particularly where a formal inventory of the succession has been made underjudicial authority. 2. STATE AND .IfEDEltAL COURTS-NATIONAL BANK-JURISDICTIQN.
Though a corporation, incorporated under the provisions of an act of congress, may have adequate remedies in the state courts, it has a right to sue in the United States courts, and is not compelled to seek the jurisdiction of the state, . 3. RES AD.)"UOICA'U.
The plea of 1'esadjudieata cannot be successfully intcrposed hy the respondents to a bill brought in a court of equity to enforce a judgment oblamed against the same parties, when defending an action at law.
In Equity. PARDEE, C. J. In 1872 the First National Bank sued A. Bohne, a stockholder, for $2,000 and interest, the same being for 20 shares of the stock. The suit was put at issue. On the thirteenth of August, 1873, A. Bohne died, and in the course of the same month his wife. Their successions were opened in the probate court. The eldest son, George C. Bohne, obtained the dative tutorship of the two minor chUdren, Francis and Bertha, took an inventory of the propand administered the successions. In due course of law the personal property was sold, and the debts paid. The tutor filed an account in 1875, and the same after publication, waB duly homologated. By this account it appears that there were five heirs, to whom was distributed the property of the estate in equal proportions, to-wit: the community pl'operty, one-fifth to each. Pending these proceedings the plaintiffs in this suit, by scire facias, made George C. Bohne, in his capacity as tutor of the minors. and George C. Bohne as an heir, parties to the suit' pending in the United States court. The was subsequently fix:ed for trial, and on February 28, 1876, judgment was rendered against George C. Bol},ne, tutor of the minors Fral)pis T. and Bertha A. Bohne, for the amount claimed, $2,000 and interest, in due course of admipistration, From the date. of said jUdgment to the pre.,ent time plaintiff has taken no action under said decree. . . Jt is- llrope:r. to mention that there belonged to of
116
REPORTER.
husktnd and wife one piece of real estate, the homestead of the family, which was community property, and that said property was valued at the time the inventory was taken in 1873 at $3,000, still remains intact, belonging to the heirs of Bohne, and unsold. It
should also be mentioned that after the judgment was rendered in 1876, in favor of the First National Bank, effort was made on the part -of the tutor to sell the above-described property for the of paying said judgment, or any other liabilities of the succession. After sale was made (due proceedings being taken) the probate court, for reasons given in its judgment, refused to confirm the same. In August, 1880, complainant, to wit, First National Bank of New Orleans, brought the present suit in equity, and to these last proceedings counsel for the 'heira has opposed the objections: (1) That the claim, so far as related to George C. Bohne, Francis T. and Bertha A. Bohne, is res adjudicata; (2) that plaintiff is not entitled to pro-ceed in equity, as there are plain,. adequate, and complete remedies at law; {3) that in no event can a judgment be rendered ag[linst the heirs of A. Bohne for any amount beyond that which came to them by inheritance.
In the first and second hbjections I do not see much merit. This is a suit in equity to subject certain real estate described in the bill to the payment of a judgment, and enforce contribution from heirs, with different liabilities, where the defendants to the bill, in their answer, "admit that a writ of fieri facias cannot issue against said property. on said judgment, and that it cannot be executed against the successions of the said A. Bohne and wife." In such a case it would be strange that an attempt to enforce the judgment by suit would defeat itself on the plea of res adjudicata, and it would be equally strange if a suit to subject equities and compel contribution <lould not be maintained on the equity side of the court. See 1 Story's Equity, 478, 479 j Taylor v. Mechanics' Fire Ins. Co. 9 H. 390 j Gar1'ison v. Jlemphis Fire Ins. Co. 19 H. 313; Gerlich v. Spain, 15 Wall. 211 j Ad. Eq. See La. Rev. Civ. Code, art. 1427. The argument of counsel as to complete and adequate reme· dies the complainant has in the state courts may be perfectly sound, but complainant has a right to sue in the United States courts, and is not compelled to seek the juriSdiction of the state. In this court he has exhausted his remedy on the law side, and if he can now find any remedy on the equity side I think we may give it to him. The third objection seems to me to have force. The two defendants Francis T. Bohne and Bertha A. Bohne, it is conceded, accepted their fatner's succession, with the benefit of inventory, and are not
FIRST NAT. BANK-O]' NEW ORLEANS V. BOHNE.
117
liable beyond the property received by them. The other three heirs were majors, and accepted the shares falling to them some three· years after the successions were opened, and after a full inventory and administration by the tutor of the aforesaid, .who were minors. Neither of them performed any act as heir until after that inventory and administration. And the facts are not w,aterially altered as to George C. Bohne, by showing that he was the tutor administering the Rev. Civ. Code, art. 995. Now, the question for decision is whether such acceptance as is recited above makes these three heirs liable for their respective sinHe shares of complainant's judgment, although in excess of the amount received by tbem respectively by the successions. Article 1427 of the Revised Civil Code fixes the liability of heirs to contribute in proportion to the part each has in the succession. Article 1013 of the Revised Civil Code makes the heir who has simply .accepted, liable for the debts of the suceession, as if he himself had contracted them; unless before acting as heir he make a true and faithful inventory of the effects of the succession, or has accepted with benefit of inventory. The formal inventory required by article 1013 and preceding arti-cles was not taken by these heirs, but one to all intents and purposes was taken at the opening of the succession; and the account and distribution filed by the tutor and homologated by the court and ae-cepted by the heirs is in itself a substantial inventory. In the case of Mumford v. Bowman, 26 Annual Report, 413, which was a case brought to make an heir liable on the ground of accept.ance, as the party had proclaimed herself heir, and it was claimed, besides, that she had taken possession of succession effects, the court .says: "But, if she had taken possession, it may well be questioned whether the formal inventory of the succession made under judicial authority would not protect her from liability beyond its assets according to article (1006) 1013, Hey. Civil Code."
In the case under consideration none of the rights of the complainant have been affected or even jeopardized by the failure to take ihe formal inventory, and in equity I do not think the court should make them liable for a technical omission, injuring nobody, particularly in the light of the dictum in Mumford v. Bowman, quoted above.
FEDERAL REPORTER.
CLAFLIN
and others v.
THE SOUTH CAROLINA
It
CO.
and others.
(Circuit Court, D. South Carolina. 1. MORTGAGORS AND MORTGAGEES.
1880.)
An issue of bonds secured by a first mortgage and issued for the purpose of taking up others of a prior issue, was larger than necessary for that purpose. In a suit brought by holders of a second mortgage to foreclose their mortgage, held, that such surplus bonds, whether actually out and in the hands of bona fide holders when the second mortgage went into effect, or issued afterwards for the first time, as collateral, to secure a debt contracted at the time they were thus pledged,-in eitller case, they were secured hy such first mortgage equally with those applied to the purpose of the issue, even though, in the second case, such pledgee had full knowledge of all the facts.
2.
MANNEIt OF ISSUING BONDS-HE-IsSUE, RE'fIREMENT, AND CANCEI,LATION OF.
Construing the language of the instrument with reference to the surrounding circumstances and the SUbject-matter of ,the contract, held, first mortgage bonds remaining unissued in the hands of the company, and those which afterwardS came into their hands by purchase, without the intention of retiring them, could be issued, sold, and transferreJ by the comfJany, after the date of the secont;! mortgage, so as to carry a lien under the first mortgage.
,3.
SECO::<!D MOR'fGAGE CONSTHUED-ApPLTCATfON OF BONDS-LIENS DETERMINED -PAYMEN'l' OF PRIOR ENcmmRANCEs-DmEC'l'ORS AS CREDITORS-HECOHD OF l!OHTGAGE-LlEN OF SUBSEQUENT ATTACHMEN'l'.
A second mortgage, made to secure the payment of an issue of 6,000 bonds, of $500 each, that the proceeds thereof were" to be applied exclusively to the extinguishment of the floating debt and the retirement of unsr]cured bonds." The man ncr of eJIccting this extinguishment was not provided for, further than by authorizing the president of the company to sell the honds at Dot less than SO per cent., which might be for cash and two-thirds in ullsecured bonds, at not less than 80 per <;'l'!lt. lhid: (1) Ina controversy between bondholders, that bonds of this issue, even if pledged as collateral upon an extension or renewal of the floating de!!t, or to secure notes given i11 payment of unsecured bonds, wel'e regularly issued and properly applied. (2) Directors acting in good faith for the best interests of the company are entitled to the samc rights as other creditors. (3) Outstanding unsdcured bondholders are not entitled to participate in the security of the second mortgage without tirst complying with the tenllS dictll<ed by the company. . . (4) Bonds purchased hy the company with the proceeds of second mortgage bonds should he delivered up and cancclled. (5) An aHa hmcnt wgularly isslled in the state of Georgia is superior to the lien 0: a mortgage defectivcly recorded.
In Equity. Mitchell d; Smith, (of Charleston,) Chambedain, Carter d; Horn. blo/t'er, and:Wiiliam. Stone, (of New York,) for complainants. James COllner, A. G. l"'1-[agrath, Lord J: Inglesby, De Sanssure ,(- Son, Simon/un ,C' }JII'r&cr, II. E. I'onllU, B. II. Uutledge, Rutledge & Young,