Black v. J. W. Zacharie & Company/Opinion of the Court

THIS case was brought up by writ of error from the Circuit Court of the United States for East Louisiana.

It was an attachment issued originally by the Commercial Court of New Orleans, (a state court,) against the goods and chattels, lands and tenements, rights and moneys, effects and credits, of Black, at the instance of Zacharie & Co., and removed, on the petition of Black, into the Circuit Court of the United States.

Black resided in Charleston, South Carolina, and Zacharie & Co. in New Orleans.

In 1837, Black was the owner of five hundred shares of the capital stock of the New Orleans Gas Light and Banking Company, and six hundred shares of the Carrollton Bank of New Orleans. On the 31st of May, in that year, he assigned to the Bank of South Carolina, as security for a loan, his shares in the Gas Light and Banking Company, with power to sell, if necessary.

The shares in the Carrollton Bank were mortgaged to that bank.

Zacharie & Co. and Black were in commercial correspondence from 1835 to 1840, and a number of letters were inserted in the record. The point of law, however, which was based upon those letters, having been decided by the court below, and the decision not excepted to, it is unnecessary to recite their contents.

In the early part of 1841, Zacharie & Co. shipped to Black a cargo of sugar and molasses, which was sold from time to time, beginning with January the 25th, and ending with April 9th, partly for cash and partly on time.

The following bills of exchange were drawn by Zacharie & Co., on Black:

February 17th, at sixty days after sight, $1,500

February 18th, at sixty days after sight, 1,500

February 24th, at sixty days after sight, 2,000

March 1st, at sixty days after sight, 2,000

April 1st, at sixty days after sight, 1,088

They were all drawn in favor of Alexander McDonald, and accepted by Black. The two first fell due on the same day, viz.: on the 30th April, 1841, and were protested.

On the 15th April, 1841, Black executed a power of attorney, appointing the cashier of the Gas Light and Banking Company his agent, to transfer the five hundred shares of stock standing in his name to the Bank of South Carolina.

On the 16th of April, 1841, this power was forwarded by the Bank of South Carolina to the cashier of the Gas Light and Banking Company, with a request that the transfer might be immediately made, and a new certificate issued.

On the 28th of April, 1841, Black made a general assignment of all his property to James Chapman, for the benefit of all his creditors, mentioning particularly the five hundred shares of stock in the Gas Light and Banking Company, subject to the mortgage before-mentioned to the Bank of South Carolina, and the six hundred shares in the Carrollton Bank, subject to a mortgage to the Carrollton Bank. These mortgages the trustees were directed to pay off, and divide the surplus amongst the creditors named in a schedule annexed to the deed, including Zacharie & Co.

On the same day Black addressed a letter to Zacharie & Co., informing them of what he had done, and that he had sent the assignment to Messrs. J. H. Leverich & Co. He said also--

Your two drafts, $1,500 each, fall due on the 30th inst.

Your one draft, $2,000, falls due on the 7th May.

Your one draft, $2,000, falls due on the 3d June.

Your one draft, $1,088, falls due on the 14th June.

On the 4th of May, 1841, Zacharie & Co. filed an affidavit for the the purpose of obtaining from the Commercial Court of New Orleans, as before stated, an attachment against the goods and credits of Black. The necessary bond was given, and the attachment laid in the hands of the Carrolton Bank, and of the Gas Light and Banking Company.

On the 5th of May, 1841, Zacharie & Co. addressed to Black a letter, from which the following is an extract:

'FRANCIS C. BLACK, Esq.

'DEAR SIR:-Yours of the 28th ultimo came to hand yesterday morning at the opening of the post-office, and immediately after the shock the writer experienced, he called on our attorney, and in less than ten minutes we had an attachment levied on your stocks, both of the Carrollton and Gas Banks, and am happy to say that our attorney assures us that we have succeeded it in spite of our assignment, which is worthless in our state, particularly as no transfer had taken place on the books of the bank; this course we feel satisfied you must approve of, as it certainly will relieve you from the very unhappy and truly inevitable dilemma of throwing upon your friend, who to serve you has, without compensation, accepted for your accommodation upwards of $3,000, a loss to that amount. A neglect to provide for this sacred and confidential debt, you could not be sustained in by your best friend; and indeed we cannot but believe you will be happy to learn the course we have pursued, and we now hope that your assignee will urge a decision as soon as practicable, as it is useless to procrastinate the matter longer than necessary.'

On the 5th of May, 1841, J. H. Leverich addressed letters to the cashier of the Carrollton Bank, and of the Gas Light and Banking Company, requesting them to transfer the stock in their respective institutions, standing in the name of Black, to Chapman, his assignee; to which the following answers were returned:

'Gas Light and Banking Company,

'New Orleans, May 5th, 1841.

'Messrs. JAMES H. LEVERICH & CO.

'GENTLEMEN:-In answer to your note of this date, I have to say, that on the 22d ult. I received a letter from J. Chapman, cashier of the Bank of South Carolina, covering a certificate of five hundred shares of the stock of this institution, in favor of Francis C. Black, together with a power from said Black to me to transfer the stock to the Bank of South Carolina; that said power being not considered sufficiently formal, (although it might be thought so by persons less rigid than myself in matters of the kind,) was returned to the Bank of South Carolina, with the remark, that upon another being furnished in conformity with corrections which were stated on the face of the one returned, the desired certificate would be transmitted.

'On the 4th inst., a notice of seizure, of all effects or property of said Black, in this bank, under an attachment was served; consequently, under all these circumstances, we cannot consent to the transfer requested in your note, but must hold the stock, subject to the decision of the courts.

'Respectfully, your obedient servant,

(Signed) 'J. W. HOUSTON, Cashier.'

'Carrollton Bank,

'New Orleans, 7th May, 1841.

'GENTLEMEN:-Your application, of date 5th inst., to transfer six hundred shares and stock, standing in the name of F. C. Black, by virtue of a power from James Chapman, as his assignee, is noted. The transfer cannot be allowed, because that said stock has been attached at the suit of J. W. Zacharie & Co., served on the 4th inst., and also for the reason that said stock is pledged to this bank for a stock loan.

'Very respectfully,

(Signed) 'JOHN NICHOLSON, Cashier.

'Messrs. J. H. LEVERICH & Co., New Orleans.'

On the day when the attachment was issued, the court appointed counsel to represent the absent defendant, and on the 12th June, 1841, that counsel filed an answer on behalf of Black, but without instructions from him.

On the 19th of November, 1841, Black filed a petition praying that the cause might be removed into the Circuit Court of the United States, and it was accordingly removed.

On the 7th of December, 1841, Black prayed oyer of the bills of exchange, and Chapman filed a petition of intervention, in which he set forth the assignment to him by Black on the 28th of April, claimed the shares of stock in consequence thereof, and prayed that the attachment might be dissolved Zacharie & Co. appeared to the intervention, and denied all the allegations in the petition except that the stock had been attached and the case removed.

The notes were filed in conformity with the prayer for oyer.

On the 28th of December, 1841, Black filed the following exceptions and answer:

'And now into the ninth Circuit Court of the United States, for the eastern district of Louisiana, comes Francis C. Black, the defendant in said suit, by his attorneys, and excepts to the order and writ of attachment granted therein, to the petition and the demand therein made, and for cause of exception, avers that at the institution of said suit the plaintiffs therein had no cause of action whatever against this defendant, and that no debt was at the date of said suit due by defendant to said plaintiff, all of which is apparent by the petition of said plaintiff, and the account and bills of exchange annexed and referred to; wherefore defendant prays that said writ of attachment be set aside and dismissed, and that said suit be dismissed.

'But if the said exception be overruled, then this defendant answers to said suit, and denies all and singular the allegations in plaintiff's petition contained, and denies specially being indebted to said plaintiffs as alleged in said petition; and defendant further pleads that the bank-stock attached in this case was not, at the date of said attachment, the property of defendant, or liable to be attached for any debt by him owing, and that the said stock was then the property of James Chapman of South Carolina, who became the owner thereof under a trust-deed for the benefit of all the creditors of defendant without distinction, executed in Charleston, South Carolina, on the 28th April, 1841, and that said stock was delivered to said Chapman before the issuing of the attachment in this case. Defendant further shows that the said trust-deed was executed in due form of law in South Carolina, where defendant resides, and that the same is effectual to pass the said stocks both in said state where it was executed and in this state; and that before the attachment in this case, the plaintiffs were notified of said assignment, and that the Gas Bank and the Carrollton Bank were also notified of said assignment immediately after the execution thereof. Wherefore defendant prays that plaintiffs' demand be dismissed.'

On the 13th of January, 1842, the court overruled these exceptions.

In March, 1842, the cause came on for trial, when the jury on the 5th of March found a verdict for the plaintiffs Zacharie & Co. against the defendant, Black, for the sum of $8000.

A motion for a new trial was made, but overruled.

Before stating the bills of exception which were taken on the trial, it is proper to mention that the depositions of three members of the bar of South Carolina were read in evidence to show what the law was in that state. The following is an extract from that of J. L. Pettigru:

'That he, the witness, knows that the said Francis C. Black immediately advised the plaintiffs in this cause of his assignment, and that, in consequence thereof, they laid their attachment, for he, the witness, has seen the letter of the said Francis C. Black to the said J. W. Zacharie, and the answer to it, and he advised the assignee, as well as Mr. Black, to inform all the creditors immediately of what has been done. But by the law and usage of South Carolina, no act of the cestui que trust, or creditor in whose favor an assignment is made, is necessary either to entitle them to the benefit of its provisions, or give validity to the deed; and that the assignor and assignee were advised by the witness to give the creditors notice, because, in a business point of view, it is right and proper always to inform a correspondent or creditor of that which concerns his interest; and because, by an act of Assembly of this state, (Statutes of South Carolina, vol. 6, p. 365,) it is made the duty of an assignee to call the creditors together within ten days after the execution of the assignment, to appoint agents on their part, equal in number to the assignee, with equal authority in the execution of the trust; but if the assignee neglects his duty, the deed is not thereby invalidated, but the creditors may appoint their agents, and take the whole property out of the hands of the assignee, and apply the same according to the provisions of the deed.

'And the witness says that he has practised in the courts of South Carolina for nearly twenty-nine years as a solicitor and counsellor, and he deems himself qualified to express an opinion on the law of South Carolina. That, by the common law, as known and administrated in South Carolina, an assignment completely diverts the property from the execution of the deed, so that it cannot be questioned by the assignee himself, and, if free from fraud, cannot be questioned by his creditors or anybody else, and that though such assignment be made abroad, it passes the property of the debtor in South Carolina from the instant of its Topham v. Chapman, 1 Constitutional, attachment can disturb the right of the assignee. That this principle was denied as long ago as the year 1816, in the case of Prime v. Yates, Treadw. (S.C..), 770. That the distinction between an assignment of the party and one by operation of law, was taken and recognized in Topham v. Chapman, 1 Constitutional Report, 283, decided in the year 1817. That this decision was followed in Brown v. Minis, 1 McCord (S.C..), 106, though the point there was not considered one of any difficulty, the controversy in that case turning on other questions involved. But the very question between an assignment of property in South Carolina, executed in New York, in trust for creditors, and an attachment laid on the property of the assignor in South Carolina after the date of the assignment, was raised in West v. Tapper, in the year 1829, and was decided in favor of the assignment, in which case his honor, Judge Gilchrist, of the United States Court, then at the bar, was of counsel for West, the assignee: see 1 Bail. (S.C..), 193. That the question was made again in Green v. Maury, decided in the year 1831, and again decided that a bona fide assignment in trust for creditors (though made out of the state, and of the property within the state,) takes precedence of a subsequent attachment. That since that time the point has not, as far as witness knows, been questioned, although property to an immense amount has been passed by such assignments, and so well settled is the law on the subject, that if the situation of these parties were reversed, and the plaintiffs, by a bona fide assignment in Louisiana, had conveyed their property in South Carolina, whether consisting of real or personal estate, or choses in action for the payment of debts, no lawyer of reputation could be found to advise a creditor in this state to attempt to take the property by a subsequent execution or attachment. That in the case of the assignment of stocks, though they can only be transferred on the books of the bank itself, yet the assignee would be entitled to call for a transfer, and no creditor by any attachment subsequent to the deed of assignment could prevent the assignee from taking the stocks, and disposing of them according to the trusts of the deed, and that in the decision of the question, it is perfectly immaterial whether the assignee be in actual possession of the property assigned when such property is capable of manual delivery, or whether the transfer be completed on the books of the bank when the property is of such a nature as to require such transfer, for in all cases the right of property is in the assignee from the date of the deed, and there is nothing for the attachment to act upon.

Mr. McCrady says, 'that he has read the deposition of Mr. Pettigru, and concurs fully in the opinion expressed by him.'

Mr. Henry Bailey also concurs, and adds, 'that no assent or other act on the part of the assignee, or cestui que trust, is necessary to give validity to an assignment for the benefit of creditors, unless such assent or act is made a condition precedent by the express provisions of the deed of assignment, in which case the conventional law of the parties supersedes the general law of the land; that the assignment takes effect from its execution, and although executed in a foreign country, prevails over a subsequent attachment or assignment in South Carolina; that this principle applies only to voluntary assignments by the debtor, and not to assignments by operation of the foreign laws of a country, such as the bankrupt law of England; that the cases cited by Mr. Pettigru in his foregoing deposition are of unquestionable authority in South Carolina, two of which were reported by this witness when he held the office of State Reporter; that the same principles have been recognized in various adjudications since, and are universally regarded by the bar of this state as settled and familiar law.'

The following are the bills of exceptions to the ruling of the Court upon the trial:

'Be it know, that on the trial of this case the plaintiffs offered in evidence the following bills of exchange, to wit:

One of 17th February, protested 30th April, 1841, $1500

One of 18th February, protested 30th April, 1841, 1500

One of 24th February, protested 7th May, 1841, 2000

One of 24th March, protested 3d June, 1841, 2000

One of 1st April, protested 14th June, 1841, 1088

'And before said drafts were offered in evidence, it was proved by the testimony of a witness, that each of said drafts had been negotiated by the plaintiffs; that the two drafts of $1500 each were returned under protest, and taken up by the plaintiffs on the 7th May, 1841; the draft of $2000, protested on the 7th May, was returned and taken up on the 17th May, 1841; the draft for $2000, protested on the 3d June, 1841, was returned and taken up on the 10th June, 1841; and the draft for $1088.25 was returned and taken up by the plaintiffs on the 30th June, 1841. And before the said drafts were offered in evidence, the said plaintiff also introduced the account sales, marked 'A;' the letter of the defendant on file, of date the 28th April, 1841; and the deed of assignment executed in Charleston on 28th April, 1841. All of which, to wit, the said bills of exchange, the account sales market 'A,' the said letter, and the said assignment, are prayed to be taken as a part of the bill of exceptions; and the counsel for the defendant thereupon objected to the said bills of exchange as evidence in this case, and denied the plaintiffs the right to present them to the jury, on the ground that by said bills of exchange, and said testimony connected therewith, it fully appeared that the indebtedness of defendant to plaintiff, thus attempted to be proved, arose after the institution of this suit, and said bills were, consequently, no evidence in this cause; but the said objection was overruled, and the plaintiffs were permitted to present the said drafts and protests to the jury as evidence, and the defendant's counsel thereupon took this bill of exceptions. The plaintiff's petition and the account current annexed thereto had, before the said bills were offered, been read to the jury as pleadings, but not as evidence.

'THEO. H. McCALEB, [SEAL.]'

A great number of letters were then given in evidence, and made a part of the exception. Some of them have been already quoted; those which have not, were intended to show an agreement between Zacharie & Co. and Black, that the former should hold the stock as security for advances which they alleged themselves to have made to Black. But the court, by granting the ninth prayer asked by the intervenor, decided this point against Zacharie & Co., whose counsel did not except to the opinion of the court. The papers, therefore, need not be further noticed.

The defendant, Black, and the intervenor, Chapman, offered separate prayers to the court, viz.:

The defendant prays the following instructions to the jury:

'1. That the drawing, negotiations, and acceptance of bills of exchange operate a complete transfer of the funds of the drawer in the hands of the acceptor, up to the amount of the bills so drawn and accepted.

'2. That after the negotiation and acceptance of such bills, the drawer ceases to be a creditor of the acceptor for the amount thereof, and has no right of action against the acceptor for said amount.

'3. That the plaintiff's account annexed to this petition, in which the proceeds of sugar and certain advances are charged on one side, and certain bills of exchange are credited on the other, is an admission that said proceeds and advances constituted the final against which said bills were drawn.

'4. That if the jury believe, from the evidence before them, that such bills have been drawn, negotiated, and accepted, the said drawing, negotiation, and acceptance transferred to the payee of said bills so much of the said fund against which they were drawn as is represented by said bills.

'5. That if the jury believe, from the evidence before them, that at the date of the institution of this suit the plaintiffs had drawn and negotiated such bills, and were not then the holders thereof, then the jury must reject from the plaintiff's demand the amount of said bills, although it should have been proved that subsequently to the institution of this suit, to wit, upon the return of said bills under protest, the plaintiffs took up the same, and became the owners thereof.

'6. That a suit upon an account, the items of which consist of the amounts of certain bills of exchange, and that a suit upon such bills, cannot be maintained, unless the plaintiff in the suit is the holder of the bill at the date of the institution of his suit.'

The intervenor prays the following instructions:

'1. That a bona fide assignment of property by a debtor for the equal benefit of all his creditors is not unlawful, but is highly favored by the law.

'2. That the law presumes an assent of creditors to such an assignment, unless their dissent is proved, and that the creditors who assent acquire, from the date of the assignment, an interest in the property which cannot be destroyed by a subsequent attachment of any single creditor.

'3. That from the date of the assignment the title of the assignor is divested, and the property assigned and delivered is not liable to attachment for his debts, and that bank stocks are incorporeal rights, the deriving of which passes by the delivery of the title or act of transfer.

'4. That if the certificates of the stocks are not in the possession of the owner, but in the possession of other persons, to whom he has pledged them, said owner may make a valid transfer, and an effectual and complete delivery of such stock, by delivering to the vendee or assignee a written title to the same, and that such title passes all the interest of the assignor.

'5. That the provisions in the charters of the Carrollton and Gas Banks, to the purport that the transfer of stocks in those banks shall not be effectual or valid, until entered upon the books of the banks, are introduced solely for the protection of the interests of said corporations, and for purposes connected with the elections thereof; but that said provisions do not in any wise alter or affect the general laws touching the delivery of incorporeal rights or stocks in said banks.

'6. That a sale or assignment of stocks in said banks, and the delivering of the title to the same, makes the assignee or vendee the owner of the same, although the transfer should not have been entered upon the books of the bank, subject only to such rights or equities as said banks themselves may have or possess upon said stocks, and that the vendee or assignee may force the bank to enter such transfer upon their books.

'7. That if the jury believe, from the evidence before them, and especially from the act of assignment, and the depositions of witnesses taken in Charleston, South Carolina, on file and offered in evidence, that on the 28th day of April, 1841, the defendant, being domiciliated in the state of South Carolina, and being indebted to sundry persons in the amount stated in said depositions, and being the owner of the six hundred and sixty shares of the stock of the Carrollton Bank, and five hundred shares of the stock of the Gas Bank, executed and delivered to the intervenor a deed of assignment of said stocks bona fide, and for the benefit of all his creditors; that said stock was, after said date, attached by the plaintiffs; that no creditor is shown to have objected to said transfer, except the plaintiffs; that other creditors are proved to have excepted; that the certificates of said stock were not, on the date aforesaid, in possession of said defendant, by reason of his having pledged them respectively to the Bank of South Carolina and the Carrollton Bank; that then the delivery of said deed of assignment constituted a complete and legal delivery of said stocks to the intervenor for the benefit aforesaid; and the jury must find for the said intervenor.

'8. That if the jury believe, from the evidence, and especially from the letter of the plaintiffs of date the 5th May, 1841, on file, that the plaintiff had been notified of the assignment made as aforesaid, and thereupon and afterwards levied an attachment, then that such attachment was invalid, and cannot be sustained.

'9. That the letters of F. C. Black, dated at Charleston, South Carolina, on the 11th January, 1837, and at Macon, Georgia, on the 13th May, 1837, on file and in evidence, do not in law amount to a contract, agreement, or understanding that the stock of the Carrollton Bank should be held by plaintiffs as a security or pledge for the debt claimed by the plaintiffs in this suit, and that no such agreement between the defendant and plaintiff (if the jury believe that any such agreement existed) can avail in law against the intervenor in this case, representing the other creditors, unless the jury find from the evidence that such agreement was made in the form of a pledge, as prescribed in act 3125 of the Civil Code of Louisiana.'

And afterwards, to wit, on the 5th March, 1842, the following bill of exceptions was filed:

'Be it known, that on the trial of this case, and after the argument, the counsel of defendant and the intervenor prayed the instructions of the court to the jury, to the purport of the written request on file, numbered from 1 to 6 for the defendant, and from Nos. 1 to 9 for the intervenor; and the court having granted and given to the jury all the instructions prayed for, except those designated as Nos. 3, 4, 5, 6, and 7, prayed by the intervenor; and the court refused to give the said charges as demanded, but gave them with the qualification, as to all said instructions, that the delivery of the stock was not complete, and did not pass to the assignee, unless the transfer was entered upon the books of the bank; and that the laws of Louisiana alone, and not the laws of South Carolina, or the general commercial law of the United States, were to be regarded in the decision of this suit; to which qualification the counsel of the intervenor takes this bill of exceptions, and prays that said instructions, as prayed for, be taken as a part thereof.'

On the 24th of March, 1842, Black prayed that a writ of error be allowed; and tendered a bond, with James H. Leverich & Co. as securities, in the penal sum of $500, with a condition that he should prosecute his writ of error to effect, and answer all costs. Whereupon the judge issued the following order:

'Be it so, on the petitioner's giving bond, with J. H. Leverich & Co. as security, as the law directs, in the sum of five hundred dollars.'

Chapman also prayed for a writ of error, 'and that the said writ operate supersedeas of any further proceedings of J. W. Zacharie & Co. against the bank stock attached in said cause, and claimed by your petitioner as plaintiff in said intervention, until the final decision of the said cause in the Supreme Court of the United States.' Whereupon the judge issued the following order:

'A writ of error is allowed as a supersedeas, on petitioner's giving bond, conditioned according to law, with J. H. Leverich & Co. on the same, of five hundred dollars.

(Signed) 'THEO. H. McCALEB, U.S. Judge.

'March 28th, 1842.'

On the next day, viz., the 29th of March, the following order was passed:

'On motion of George Strawbridge, Esq., for plaintiffs, ordered, that so much of the order of this court as grants a supersedeas to the intervenor, Chapman, on his giving bond in the sum of five hundred dollars, be annulled; the court being of opinion that the stocks attached are not sufficient security for said writ of supersedeas.'

The court afterwards re-opened this matter, upon motion of Chapman's counsel, but, after hearing an argument, declined to change the last quoted order, and refused to restore the supersedeas, upon the ground that the 'bond was considered as insufficient.'

Wilde, for plaintiffs in error.

Coxe, for defendants in error.

But before the case was reached in order,

Wilde, on behalf of the plaintiffs in error, moved that this court do issue a writ of supersedeas upon the judgment, upon two grounds:

1. Because, within the time allowed by law, the writ of error had been prayed for, citation issued, and bond given, with adequate security.

2. Because, before the sale of the stocks by the marshal, Black applied for the benefit of the bankrupt act, to the District Court of South Carolina.

That the court erred in refusing a supersedeas, we regard it as settled by Stockton & Moore v. Bishop, 2 How., 74.

Nor is it a matter of indifference that the execution should be superseded. It may be that the stocks have been sold at a most unfavorable period, and bought in by the plaintiffs in attachment themselves. It may be that they would now satisfy the attaching creditor's demand, and leave a large surplus. Such considerations can weigh nothing with this court. It is quite enough that we were entitled to a supersedeas, and the court below refused it.

Your honors will remark the stocks were in the custody of the law.

The fund, therefore, was secure. It was competent for the court to order a sale of the property, on proof that it was perishable, or deteriorating in value.

Against the intervenor no judgment could be given, except for costs; and a bond for $500, with unquestioned and unquestionable surety, was undoubtedly sufficient.

That the intervenor is a plaintiff, see 2 Dorret, 676; the proposition asserted in argument, and not denied in this court, in Livingston v. D'Orgenois, 7 Cranch, 581.

Our Supreme Court have determined that plaintiffs are bound to give security only for costs, to entitle them to a suspensive appeal. Heath & Co. v. Vaught et al., Dougherty & Co. intervenors, 16 L. R., 520, 1.

Even if the execution has been levied and the stocks sold, the party is still entitled to restitution. Tidd P., 1033, 1186, 1187; 2 Salk., 588; 2 Bac. Abr., 232; Cro. Jac., 246, 698.

Upon this preliminary point, Mr. Justice STORY delivered the opinion of the court.

This is a case coming by writ of error to this court, from the Circuit Court of the eastern district of Louisiana. The case has not as yet been heard upon the merits, but a motion has been made in behalf of the plaintiffs in error, (the original defendant and the intervenor,) for a writ of supersedeas to the execution issued upon the judgment against Black, upon two grounds; first, that the execution issued improvidently, because within the ten days allowed by law, the writ of error had been prayed for, citation issued, and bond given, with adequate security; secondly, that after the execution issued, and certain stocks had been seized thereon, and before the sale thereof by the marshal, Black (who is a citizen of South Carolina) applied for the benefit of the Bankrupt Act to the District Court of South Carolina district, and was afterwards declared a bankrupt, and an assignee appointed; and that, in the intermediate period, the marshal sold the stocks.

Upon examining the record, we find that, although the writ of error had been allowed by the Circuit Court, and a citation issued, and bond given for prosecution of the writ of error and payment of costs, and a supersedeas had afterwards been awarded to stay execution, yet that the court upon the succeeding day revoked that order, upon the ground that the stocks attached were not a sufficient security for the said writ of supersedeas, and that the bond was insufficient; so that the case does not fall within the predicament provided for in the 22d and 23d sections of the Judiciary Act of 1789, chap. 20, which entitles the party to a supersedeas and stay of execution, since that can only be where, within the ten days allowed by law, a sufficient bond is given to prosecute the writ of error to effect, and also to answer all damages and costs. The judges of the Circuit Court were the sole and exclusive judges what security should be taken for that purpose; and they have decided that the security offered was insufficient.

In respect to the other ground, that of the bankruptcy of Black, that of itself constitutes no ground why this court should interfere to stay proceedings on the execution, or to award a supersedeas. It is a matter, if at all cognisable, properly cognisable in the Circuit Court, upon an application and petition, by the assignee, to that court, upon a case showing an equitable title to relief; or for an application to the proper District Court, sitting in bankruptcy for that purpose. It is in no respect a matter within the appellate jurisdiction of this court, upon the present writ of error.

The motion is therefore overruled.

This preliminary motion having been disposed of, the cause came on, soon afterwards, for argument upon its main points.

Wilde, for Black and Chapman, the plaintiffs in error, said:

Two questions are presented by this record.

1st. Had the attaching creditor a legal cause of action at the commencement of his suit?

2d. Had there been a sufficient tradition or delivery of the effects assigned, to divest the assignor of all interest therein before attachment levied?

The last, being decisive of the rights of the parties and merits of the case, will be first considered.

From the statement of the plaintiffs in error, the court will perceive that this is a controversy between an assignee under an assignment made for the equal benefit of all the creditors, and an attaching creditor who seeks to obtain priority of payment by legal diligence.

The assignment was made in South Carolina. The assignor and assignee are resident citizens of that state. The subject of assignment is an interest in the stocks of certain banks incorporated by the state of Louisiana. The attaching creditor is a domiciled merchant of New Orleans, where the attachment issued. He had express notice of the assignment before issuing his attachment. Indeed, he issued it in consequence of receiving that notice. The assignment was made on the 28th of April, 1841. The attachment levied on the 4th of May.

The evidence of Pettigru, and the letters of F. C. Black, and Zacharie & Co., show the notice.

At the date of the assignment, the scrip or certificates of property in the stocks referred to were in the hands of third persons, to whom they had been pledged. Their delivery to the assignee was therefore impossible. Before the attachment, application was made by the pledgee to obtain a transfer. It was refused, on the ground of some informality in the power of attorney, though the cashier of the Gas Light and Banking Company, so refusing, admits it might have satisfied persons less rigid than himself, and before a transfer could be effected, the attachment was levied.

It is obvious, at the first glance, that in any other state than Louisiana the question thus presented would not bear a moment's argument. Personal property, having no locality, but adhering to the person of the owner, passes according to the law of his domicil; and when it is shown that the assignment by the law of South Carolina would transfer the interest of Black in the stocks assigned, simply by the execution and delivery of the deed, all doubt is at an end. See the evidence of Pettigru, McCrady, and Bailey, as to the effect of this assignment, according to the laws of Carolina.

Even assignments preferring some creditors to others have been repeatedly held good. Brooks v. Marbury, 11 Wheat., 78, 98; Tomkins v. Wheeler, 16 Pet., 106, and the cases there cited. Such preferences are not fraudulent unless under a bankrupt law. Conard v. Nicoll, 4 Pet., 297.

With respect to the general principle the authorities are superabundant. Story's Conflict of Laws, 312, 315, 317, 330, 332; Angell on Assignments, 57; Milne v. Moreton, 6 Binn. (Pa.), 361; Hunter v. Potts, 4 T. R., 192; Lewis v. Wallis, 7 Jones, 223; Sill v. Worswick, 1 H. Bl., 691; West v. Tupper, 1 Bail. (S.C..), 193; Greene v. Monsey, 2 Id., 163; Robinson v. Rapelye, 2 Stew. (Ala.), 86; Holmes v. Remsen, 4 Johns. (N. Y.) Ch., 460; Means v. Hapgood, 19 Pick. (Mass.), 105; Meeker et al. v. Wilson, 1 Gall., 419.

His honor, the district judge, seems, indeed, to admit the general law as we state it, by saying in his charge that 'the laws of Louisiana alone, and not the law of South Carolina, or the general commercial law of the United States, were to be regarded in the decision of this suit; and that, according to the law of Louisiana, the delivery of the stocks was not complete, unless the transfer was entered on the books of the bank.'

The rule thus broadly laid down we humbly contend is erroneous, and we shall attempt to show--

First, that the law of South Carolina, where the contract was made, is to be regarded. Next, that the delivery of the effects assigned was complete, even according to the law of Louisiana.

That the lex loci contractus is adopted as the rule of decision by the courts of most civilized nations is incontrovertible. Story's Conflict of Laws, Bank U.S. v. Donally, 8 Pet., 372. The charge of his honor, the district judge, however, evidently proceeds upon the assumption either that it is not the rule of the courts of Louisiana, or at least is so only under such restrictions and qualifications as render it inapplicable to a case like the present.

At a very early period in the history of those courts, we find them laying down the law thus: 'The nature, validity, and effects of this contract, must be inquired into according to the laws of the country in which it was celebrated, even when the delivery of the thing, or the fact stipulated for, is to take place abroad.' Lynch v. Postlethwaite, 7 Mart. (La.), 69, citing 1 Gall., 375.

Ten years later, the Supreme Court, after carefully reconsidering their opinion, reaffirm it, in a decision justly characterized as most learned and masterly. 'Upon the whole,' say they, 'we must conclude, as we did in Morris v. Eves, and Vidal v. Thompson, that contracts are governed by the law of the country in which they were made, in everything which relates to the mode of construing them, the meaning to be attached to the expressions by which the parties bound themselves, and the nature and validity of the engagement.' Depau v. Humphreys, 8 Mart. (La.), N. S., 1. And accordingly they determine, 'that in a note executed here, on a loan of money made here, the creditor may stipulate for the legal rate of conventional interest authorized by our law, although such a rate be disallowed in the place at which payment is to be made.' Id. Vide Morris v. Eves, 11 Mart., (La.), 730; Shiff v. Louisiana State Insurance Co., 6 Mart. (La.), N. S., 629; Brown v. Richardson, 1 Id., 202; Orry v. Winter, 4 Id., 277.

In Thatcher v. Walden, 5 Mart. (La.) N. S., 495, 3 Cond., 633, the court held that a verbal power of attorney, if given in a state where slaves pass by parol, is legal proof of the authority under which a written sale was made in this state. In delivering this decision, they employ the strongest language:

'There is no difference,' say they, 'between the right of a stranger to have the aid of the laws of the country where his debtor resides, to compel him to do justice in relation to a contract made under another government, and that of one citizen of a state to enforce his claim against another.

This principle, which is founded on the comity of nations, and makes a part of international law, would be a mere illusion, if other evidence was required for the validity of the agreement, than that of the laws of the country where it was made.'

The same doctrine has since been repeatedly affirmed, liable only to the limitations given to it in the case of Saul v. His creditors, 5 Mart. (La.), N. S., 569, 569, which will be considered hereafter. Vide Miles v. Oden et al., 8 Id., 214; Chartres v. Cairnes et al., 4 Id., 1; Bell v. James, 6 Id., 74; King v. Herman's heirs, 6 La., 616; Andrews v. his creditors, 11 Id., 476; Ohio Insurance Co. v. Edmondson et al., 5 Id., 299.

It will scarcely be denied, indeed, that the lex loci contractus is adopted by the courts of Louisiana as their rule of decision, although it may be contended that this adoption is subject to such restrictions and qualifications as deprive the intervenor of all benefit from it, in a case like the present.

These restrictions are supposed to have been defined and established in a number of cases, some of them turning on the question of delivery.

(Mr. Wilde then examined with great minuteness the Louisiana decisions.)

In considering this branch of our subject, it will be remarked by the court, that we have thus far confined our citations to the decisions of Louisiana only.

We have studiously abstained from all others, because, as we alleged in the outset, except as to Louisiana, this cannot be considered an open question; and the court are so well aware of the English and American authorities on the subject, that it would be a waste of time to quote them.

Nothing but the deference which this court habitually and uniformly exhibits for the adjudications of the local tribunals, in its anxiety to administer justice between citizens of different states, precisely as it is administered between citizens of the same state, could have induced us to restrain our argument within such narrow boundaries.

We think it is apparent, from the local decisions, that we are protected by the private law of nations, even as adopted in its most limited sense by the courts of Louisiana.

But if we are not, surely there never was a more fit and proper occasion, nay, never a more palpable and pressing necessity, for this court to assert its own unquestionable right of judgment, in opposition, if it must be so, to the state tribunals.

The question is one of international law; of the greatest practical consequence to us, as part of the family of nations, and of infinitely more importance, considering our country as a confederacy of states. It is one regarding the application of the lex loci contractus, on which all Europe and America have spoken with one common voice; and Louisiana, if indeed her decisions are adverse, is the only recusant.

How far those decisions, supposing them to trench upon received principles, are satisfactory to the common sense and justice of mankind, may be readily ascertained by a cursory reference to the treatises of learned and accomplished jurists.

The only respectable authority opposed to the doctrines we have advocated, is the case of Ingraham v. Geyer, 13 Mass, 146, 148, much relied on by our adversaries in the court below.

That case, however, was never generally satisfactory to the profession, has often been questioned, and was finally overruled by the recent case of Means v. Hapgood, 19 Pick. (Mass.), 105. In the latter case it was decided, that where a citizen of Maine executed an assignment in that state, to certain of his creditors, of a debt due to him from a citizen of that commonwealth, and the creditors having claims to an amount exceeding such debt, became parties to the assignment, it was held that the assignment was valid against a subsequent attachment of the debt here, by a citizen of Massachusetts, notwithstanding the courts of Maine had decided that a similar assignment made in this commonwealth was invalid against a subsequent attachment of the assigned property in Maine, by a citizen of that state.

It may be that we deceive ourselves as to the force of these arguments. It may be that they are unsound.

We turn then to the second point, and shall endeavor to maintain that, even according to the municipal law of Louisiana, there had been a sufficient tradition or delivery of the stocks assigned, to divest the assignor of all interest therein, before the attachment of Zacharie & Co. was levied.

It is cheerfully admitted, at the outset, that, in relation to movables, things personal and tangible, the maxim traditionibus non pactis has been adopted by the courts of Louisiana, and adhered to in a variety of cases in its full extent and rigor. Durnford v. Syndics of Brooks, 3 Mart. (La.), 222; Norris v. Mumford, 4 Id., 20; Ramsey v. Stevenson, 5 Id., 23; La. Code, art. 1917.

If the property assigned and attached in this case had been goods and chattels, movables, capable of actual manual possession and delivery, assuredly we should not venture to argue that, according to the municipal law of Louisiana, tradition was not necessary. That point has been settled by too long a series of judicial decisions to be now contested. But the effects conveyed by this assignment are altogether of a different nature. They are mere incorporeal rights, invisible, intangible, unsubstantial, and incapable, from their very nature, of any other than a symbolical delivery.

This distinction is recognized by several articles of the Louisiana Code. Thus:

Art. 462. Incorporeal things, consisting only in a right, are not of themselves strictly susceptible of the quality of movables or immovables: nevertheless, they are placed in one or other of these classes, according to the object to which they relate, and the rules hereinbefore established.

Art. 3395. Possession applies properly only to corporeal things, movable or immovable. The possession of incorporeal rights, such as servitudes and other rights of that nature, is only quasi possession, and is exercised by the species of possession of which these rights are susceptible.

Art. 2612. In the transfer of debts, rights, or claims, to a third person, the delivery takes place between the transferer and the transferee by the giving of the title.

Art. 2613. The transferee is only possessed as it regards third persons, after notice has been given to the debtor of the transfer having taken place.

Art. 2457. The tradition of incorporeal rights is to be made by the delivery of the titles, and of the act of transfer, or by the use made by the purchaser with the consent of the seller.

Art. 466 expressly classes bank shares as movables. They are, therefore, incorporeal things, movable. Vide, also, art. 467.

We contend, then, that these articles of the code allow the symbolical delivery of incorporeal rights, giving to it the same validity that attaches to the actual manual tradition of things tangible. Indeed, if this were not so, it would seem to follow, that incorporeal rights were insusceptible of any delivery at all.

In the execution of our task, it will be requisite to consider a number of judicial decisions, touching the subject of tradition, and, by a brief but critical examination of each, we hope to show that, in relation to incorporeal rights, nothing more has been required to vest them in the assignee than what the assignee in the present case has fully performed.

The earliest case decided is that of Durnford v. Brooks's Syndics, 3 Mart. (La.), 222, 269, 1 Cond., 112.

(Mr. Wilde then examined the Louisiana cases upon this point.)

The argument has hitherto been conducted according to the assumption of the district judge, that this is to be regarded as an assignment of stocks. But such assumption is surely mistaken. The stocks themselves had in both instances been already assigned as security for other debts, and the certificates at the time were actually in possession of the pledgees. The Carrollton scrip was in pledge to that bank, as security for what is technically termed a stock note, and the Gas Light Company's scrip was in pledge to the Bank of South Carolina. In both instances, therefore, nothing remained to be assigned, nothing was subject to assignment, but an equitable right in an incorporeal thing-a right to redeem the thing by paying the sum due on it-an equity of redemption in the stock, not the stock itself. This view of the subject makes it clear to us that the district judge erred, and his error consisted in applying to a mere equity, a law regulating nothing but the actual transfer of the incorporeal thing.

If we are correct in holding that the only interest assigned, or susceptible of assignment, was an equitable right in an incorporeal thing-a right to redeem the stock by paying the sum for which it was pledged-it follows as a necessary consequence, that the subject matter of this assignment no longer belongs to the category of public stocks, transferable only in a peculiar mode, but falls into the general class of debts and credits which the common law terms choses in action, or more properly, as we contend, into that of incorporeal rights, which pass by the delivery of the titles, and of the act of transfer. [Vide art. 2457 and 2612, 2613, ante.] With respect to the former, we have seen that no tradition or delivery is possible: none is required. Notice to the debtor stands in the place of delivery. The debt is liable to be attached so long as the debtor has not had notice of its assignment. After such notice, it is no longer subject to attachment. Gray v. Trafton, 12 Mart. (La.), 702; Armor v. Cockburn et al., 4 Id., 667; Bainbridge v. Clay, Id., 56; Carlin v. Dumatrait, Id., 20; Randal v. Moore et al., 9 Id., 403; Cox v. White, 2 La., 425.

But here is certainly in strictness no debt due from the bank. The corporation, to be sure, at the end of its charter, is to return the stock to its stockholders or, more properly speaking, to divide its assets, whatever they may be. But until dissolution the amount of these cannot be ascertained; and if there should be no assets there is no debt.

The only class, therefore, into which the subject-matter of this assignment can fall, is that of 'incorporeal things, consisting only in a right,' 'the tradition of which is complete by the mere delivery of the titles, and of the act of transfer.' Articles 462 and 2457, ante; and also art. 1918, which is as follows:

'What shall be considered a delivery of possession is determined by the rules of law applicable to the situation and nature of the property.'

Now, we have seen that incorporeal things, though not strictly susceptible of the quality of movables or immovables, fall into one or the other class, according to the object to which they relate. Vide ante, art. 462, La. Code.

The effects here assigned belong clearly to the class of rights, claims, incorporeal things personal.

The tradition of incorporeal rights personal, is held to be complete by art. 2457, when there is a delivery of the titles and of the act of transfer. Vide ante, art. 2457, La. Code.

Here the delivery of the titles was complete, if that means the complete divesture of the original owner's title; if it means, as we suppose, the title papers, the scrip was in the hands of third persons, and incapable of delivery; and the right actually conveyed, not being the stock itself, but an equity of redemption in the stock, there were no other titles to be delivered but the act of transfer.

An examination of two or three cases, which are supposed to press most strongly against the plaintiffs in error, is incumbent on us.

Graves et al. v. Roy, 13 La., 454, 457, was decided on the ground that the assignment imposing the condition of a release, and inuring to the benefit of such creditors only as should comply with this condition, was oppressive and void, even on common law principles, as well because it did not appear to be a conveyance of all the debtor's property, as because certain claims, not alleged to be fraudulent, were excluded.

Townsend v. The Louisiana State Marine and Fire Insurance Company, 13 La., 551, 554, turned upon the fact that the assignment was made in Louisiana, and gave a preference to some creditors over others.

Kimball v. Plant et al., 14 Id., 10, 13, was decided upon the express provisions of the Louisiana Code, that in the transfer of debts, the transferee is possessed as it regards third persons only, after notice has been given to the debtor of the transfer having taken place.

In the case of Beirne & Barnside v. Patton et al., 17 Id., 589, 591, the court do undoubtedly lay down, broadly, that, as relates to the rights and remedies of creditors, personal property has a situs or locality, and is to be governed by the law of the country where it is situated, when there arises a conflict between the latter and the former.

The wisdom of determining only what is necessary to decide the rights of the parties, and the danger of proceeding arguendo to settle points neither cardinal nor fully discussed, was never more apparent than in this case, and your honors in considering it will take care to separate the judgment of the court from the dicta that accompany it.

There were at least three points on which the judgment there rendered might be placed, without at all invoking the very doubtful canon above quoted.

1st. The assignment was one giving a preference to some creditors over others.

2dly. It did not appear that it was valid, even by the laws of Tennessee, where it was made.

3dly. It distinctly appeared that the debtor reserved a part of his property.

The decision moreover seems, to some extent at least, to be based on the authority of Ingraham v. Geyer, 13 Mass., 146, since overruled by Means v. Hapgood, 19 Pick. (Mass.), 105; and is apparently in conflict with Depon v. Humphreys, 8 Mart. (La.), N. S., 1, already cited-a case of the highest authority.

If, therefore, we apply to the case at bar the rule either of McNeil of Armor v. Cockburn, 4 Id., 667, it will appear that Black had so completely divested himself of title as to satisfy the exigency of the first decision, and so entirely lost all power over the property as to be incapable of changing its destination, and therefore within the principle of the second. In other words, 'the original owner of the property could no longer sell and deliver, so as to pass a good title.' 'He had lost all power over it, and could no longer change its destination;' and consequently, 'the creditor could no longer seize.' Vide ante, the quotations from the cases of McNeil v. Glass, and ''Armor v. Cockburn. Vide also, Babcock v. Maltbie'', 7 Mart. (La.), N. S., 137; and Urie v. Stevens, 2 Rob. (La.), 253.

Nor is there any thing contrary to this in the United States Bank v. Laird, decided by this court, 2 Wheat., 393, for in that case the court recognize the possibility of acquiring an equitable title without transfer on the books of the bank-subject, of course, to any lien which the bank itself may possess.

As the distinction between equitable and legal titles does not prevail in Louisiana, where any just title is sufficient, and as no attachment can be sustained if the equitable title has passed out of the defendant in attachment before it was levied, it follows that an assignment of the equity, such as is contemplated by the court in the United States Bank v. Laird, is sufficient to defeat a subsequent attaching creditor.

Courts of common law even protect in certain cases the assignment of choses in action. Welch v. Mandeville, 1 Wheat., 233; S.C.. 5 Id., 283; Corser v. Craig, 1 Wash. C. C., 424, 427.

The second point, viz.: 'Had the attaching creditor a legal cause of action at the commencement of his suit?' need not detain us long.

We contend that the drawing, negotiation, and acceptance of the bills amounted to an assignment of the fund against which they were drawn. Chit. Bills, 1, 2; 3 Kent Com., 75; 2 Black., 466; Mandeville v. Welsh, 5 Wheat., 286.

Zacharie & Co. ceased to be creditors of Black from the moment of the acceptance of the bills. There remained a contingent liability to pay them, if they should be regularly protested for non-payment and due notice given; but this did not make them creditors of Black, nor even his sureties. Then, at the institution of the suit, there was no debt due by the defendant to the plaintiff. Taylor v. Drane, 13 La., 64; Pothier on Obligations, 235, and note.

An endorser who has not paid his endorsee is not a creditor. Planters' Bank v. Lanusse, 10 Mart. (La.), 690.

Credit given in an account current for a note extinguishes the account and produces a novation. Cox v. Williams, 7 Mart. (La.), N. S., 301; Barron v. Horr, 2 Id., 144; Gordon et al. v. McCarty, 9 Mart. (La.), 288.

Here the bills were credited in the account.

The mode of ascertaining whether there was any existing debt at the time of attachment is to inquire whether, considering it a case of bankruptcy, Zacharie & Co. could have proved against the bankrupt's estate, before payment of the bills.

There cannot be two creditors for the same debt, entitled both to prove at the same time.

Now, the holder of the bills would clearly have been entitled to prove; and, consequently, Zacharie & Co. would not.

Their debt revived when they paid the amount of the bills, not before.

These principles have become proverbial: 'Qui a terme ne doit rien.' Loysel, Evans's Pothier on Obligations. 'Quod in diem stipulamur, peti prius quam dies venerit non potest.' Justin. Inst., by Cooper, p. 249.

If, by any interpretation, Zacharie & Co. can be considered creditors at the time of commencing their action, this debt was not due, and their suit was premature. La. Code, art. 2047; Code of Pr., art. 158; Groning v. Krumbhaur, 13 La., 64; Atwell v. Belden, 1 Id., 504; Williamson v. Foucher, 8 Id., 585.

Coxe, for the defendants in error, recapitulated the facts in the case, and then said--

1. Whether, on the 4th May, 1841, any debt was in fact due by Black to plaintiffs.

2. Whether the deed of assignment, per se, operated a transfer of the stock.

3. Whether, if such debt actually existed on which suit could be sustained, the attachment laid on the 4th May, or the assignment of 28th April is to prevail.

1. Whether, on the 4th May, 1841, Black was indebted to plaintiffs.

By the account sales of sugar and molasses, it appears that such sales were made of a cargo, consigned by Zacharie & Co. (to Black,) net proceeds subject to their order for account of whom it may concern.

This account rendered by Black on the 12th April, 1841, shows a balance due plaintiffs of $9366.68.

The account shows that the proceeds were the property of plaintiffs; the average time of payment 27th to 30th April; and, consequently, the notes given by purchasers were the property of plaintiffs held by Black as their agent.

In this position of affairs, plaintiffs drew several bills on Black, in February, March, and April, and what became of them is shown by the record. None of these bills appear on their face to have been accepted by Black; but, in the protests of some, three of the five, he is called the acceptor. All were returned under protest for non-payment, and taken up by plaintiffs after the institution of the suit.

It is insisted that the drawing of these bills operated a transfer of the debt, and as between these parties, extinguished the original liability.

The drawing of bills by a consignor and his consignee, is a matter of daily occurrence in the immense business of New Orleans; advances are thus made by the purchasers of such bills, and they are of infinite convenience. To regard them as operating an extinguishment of the debt of the consignee, before payment, is a novel doctrine, replete with the most serious consequences.

This extinguishment of the old debt by the substitution of a new one, is called, in the Louisiana law, a novation.

Wherever this doctrine of novation exists, under whatever name, the application of it depends upon the intention of the parties as exhibited in their acts. Nap. Code Civil, lib. iii., tit. iii., sect. 2, § 1273. It is never to be presumed-it is essential that the intention to operate it result clearly from the act. Peter v. Beverley, 10 Pet., 568.

It is a settled doctrine that the acceptance of a negotiable note for an antecedent debt will not extinguish such debt, unless it is expressly agreed that it is received as payment. The evidence must be clear and satisfactory that such was the intention of the parties.

This is a much stronger case than the acceptance of a negotiable note; the drawer of the bill does not disconnect himself from the debtor. His responsibility remains to the holder. See the three cases of novation, Nap. Code, N. S.

The acts of the parties show that they had no such intention.

1st. Plaintiffs do not assign their claim for a valuable consideration and exonerate themselves from it.

So far from such a bill dissolving the connection between the parties, it presumes its existence and continuance. If drawee refuses to accept, drawer may sue and recover for such act. If he refuses to pay, he has a full remedy growing out of the original indebtment.

2d. Black never so regarded or treated it.

1. In his account dated 12th April, 1841, no entry is made of these bills and acceptances; no credit claimed; but the balance growing out of the sale of sugars, &c., distinctly stated and admitted.

2. In his schedule of creditors, annexed to the assignment to Chapman, Zacharie is put down as one, and McDonald, the payee and holder of bills, is not.

3. His letter of 28th April so treats plaintiff, and particularly mentioned the drafts about to fall due.

4. Black's books, as proved by Pettigru, show the same thing.

Throughout, such appears to be the understanding of the parties. Such, then, being the mercantile usage, such the particular understanding of these parties, what does the law say? Civil Code, art. 2181.

Novation is a contract, consisting of two stipulations, one to extinguish an existing obligation, the other to substitute a new one in its place. Pothier on Oblig., 341, (550,) 344, (559,) Civil Code, art. 2183, 2185, 2190. The mere indication by the creditor of a person who is to receive for him does not operate a novation. Pothier, Traite de Vente, No. 600, 603. Touiller, Le Droit Civil, (5me. edit.) vol. 7, lib. iii. tit. iii. c. 5, p. 243, 4. Ibid., 66, No. 46. 19 Sircy Recueil General, 55, 56, 57.

In Louisiana the law is well settled by adjudications. Cox v. Rabaud's Syndic, 4 Mart. (La.), 11; Hobson v. Davidson's Syndic, 8 Id., 428; Gordon v. McCarty, 9 Id., 268; Bonnmere v. Negretti, 16 La., 474; Plique v. Perret, 19 Id., 318.

2. Does the assignment operate, per se, as transfer of the stock.

1st. The assignment, &c., does not act, per se, as a transfer of stock in Louisiana banks.

2d. Black executes two powers of attorney, one 15th April, 1841, to transfer to the Bank of South Carolina; the other-April, acknowledged on 30th.

3d. These powers indicate no person by name, but merely give the power to 'the cashier, &c.' This is invalid of itself.

The charters of the Louisiana banks are not imbodied in the record, but the substance of them is imbodied in the instructions prayed.

If such instruction was not warranted by the evidence, it was rightly refused. The modern charters of banks have copied substantially the provisions on this subject, in that of the Bank of England. An abstract of that charter may be found, 3 Petersd. Abr., 276, 285, 286, Amer. edit.; Bank of the United States, 3 Story Laws U.S., 1547, 1552; Rex v. Bank of England, Doug., 523.

It clearly appears that the transfer on the books is necessary to pass title. 2 Bing., 393; 3 Petersd. Abr., 268, (410.)

It is incumbent on banks not to permit a transfer until satisfied of authority to transfer. If they err, they are bound to make good the loss. Sutton v. Bank of England, 1 Car. & P., 193; S.C.. 1 Ry. & M., 52.

Action will lie against the bank for unreasonable delay in permitting transfer. Hartga v. Bank of England, 3 Ves., 55; Bank of England v. Parsons, 5 Id., 665. See this last case particularly.

If this stock stood upon the common footing of other personal property, in the hands of third persons, it would not pass until he was notified. Here no notice was given until the 5th May; the attachment had been laid on the 4th.

The power of attorney to transfer mentions no party by name. They designate 'the cashier, &c.' This is a void authority.

3. The attachment issued and levied on the 4th May, 1841, takes precedence of the assignment.

The question is one of deep interest to the commercial part of Louisiana, and settled by her courts.

Whatever may be the general commercial law, Louisiana has her own law.

In this case the question is between an attaching creditor and a voluntary assignee. An attaching creditor is a purchaser for a valuable consideration. Langran v. Simmons, 17 Mass., 110.

It is then a case of a purchaser of such a character, with all the equity, now possessed of legal title.

The legal title does not pass without a transfer on the books of the corporation. 22 Wend. (N. Y.); 2 Wheat.

It is said this point would not admit of argument out of Louisiana. There seems a singular misapprehension on this point.

By the common law, delivery is a general essential to the passing of title to personal property. Statutes of Elizabeth, 1 Gall., 428; 17 Mass., 110.

Here the Louisiana property is to be carried to a foreign state for distribution, and Louisiana creditors to follow it there. This is against the policy of the state, and required by no comity.

In regard to intestates. Confl. of Laws, 523.

The law in regard to stocks is peculiar. Confl. of Laws, 383, note. Emphatically the law of Louisiana and of France. Pothier, Traite de Vente, 186, part 5, art. 2, sect. 318, &c.; 5 Mart. (La.), 43, 75, 57; 4 Id., 20; 2 La., 422; 14 Id., 10; 12 Id., 395; Story, Confl. of Laws, 386-390.

Wilde, in reply, examined, in the first place, whether there was an existing debt due from Black, at the time of laying the attachment. If the proof of such a debt did not rest upon the bills of exchange, because (as had been argued by Mr. Coxe) they were not accepted, then we must look elsewhere for it, because merely drawing upon a person does not make him a debtor. The proof of an existing debt can only be discovered (leaving out the bills) in-1. The account sales. 2. The letter of Black. 3. The evidence of Pettigru.

(Each head of which was separately examined by Mr. Wilde.)

If, on the other hand, the bills were accepted, then there was a novation of the debt, and not a mere delegation.

Zacharie & Co. had notice of the assignment, as appears from Black's letter to them. The Gas Light Bank had notice also of the claim of the Bank of South Carolina; and the Carrollton Bank could not be injured by the want of notice, because they held the scrip in pledge.

The whole object of notice is to prevent injury to the debtor, holder of the property, or depositary; to prevent an innocent person from two recoveries against him for the same cause.

But here the one bank had express notice from the pledgee, (Bank of South Carolina.) The other held the scrip in pledge for its own debt. Neither could be prejudiced.

So far as the reason of the case goes, the maxim applies, 'cessante ratione, cessat et ipsa lex.'

It was distinctly admitted at the outset, that by the law of Louisiana, absolute tradition of personal property was necessary to protect it from attachment.

It was equally admitted that, as to debts assigned, they remained liable to attachment, until notice of the assignment had been given to the debtor. After such notice, they cannot be attached.

But it was contended, and is still insisted, that the equity of redemption in certain stocks in pledge is neither a personal thing, tangible and susceptible of tradition or delivery, nor is it a debt which requires notice to be given to the debtor. It belongs to the category of incorporeal things movable.

The learned counsel errs, in supposing the articles of the Code, quoted in the opening, refer to what are called, by the common law, incorporeal hereditaments.

On the contrary, incorporeal things, by the Louisiana law, are classed into movable and immovable. Art. 462, L. C.

And article 466 expressly declares bank stocks to be movables.

The equity of redemption assigned in this case, then, is neither a thing movable, susceptible of manual tradition, nor is it a debt, which, in order to perfect the assignee's title, requires notice to be given to the debtor.

There is no article of the Code, not decision of the courts of Louisiana, which requires manual tradition, which is impossible, or notice to the bank, which is unnecessary, as the bank is not a debtor.

But the court are asked to extend the principle by analogy.

There is no room for such analogy.

On the contrary, the analogy and the reason of the thing are the other way.

Art. 3395, Louisiana Code, says possession applies properly only to corporeal things movable or immovable.

Art. 2612, as to debts, makes notice equivalent to tradition; but

Art. 2457 declares that the tradition of incorporeal rights is to be made by the delivery of the titles, and of the act of transfer.

No distinction is made between incorporeal rights to things movable and things immovable. All incorporeal rights may be so transferred. See Martinez v. Perez, 8 Mart. (La.) N. S., 668.

Here every thing was done that could be done. The scrip was in the hands of the pledgees. That could not be delivered to the assignee, because the assignee had neither possession of it nor control over it.

Immediate notice was given to the creditor, Zacharie & Co., and in consequence of that notice he issued the attachment.

Notice was given to the banks as early as possible, and the Gas Bank had notice of the lien of the Bank of South Carolina before the attachment issued.

Neither the Louisiana Code nor the decisions of the courts sustain the attempt to declare this assignment void, for want of delivery of the effects assigned.

Nor is it supposed the judge rested his charge on the public or general law.

The argument of the learned counsel certainly reposes mainly on the clauses of the charters.

(Mr. Wilde here referred to the charters, and cited the following cases: Bank of Utica v. Smalley & Barnard, 2 Cow. (N. Y.), 777, 778; Sergeant v. Franklin, 8 Pick. (Mass.), 96, 97; Gilbert v. Manchester Iron Co., 11 Wend. (N. Y.), 628; Commercial Bank v. Kortwright, 22 Id., 362.)

The case of the United States Bank v. Laird, 2 Wheat., 393, shows that the court recognize the possibility of acquiring an equitable title, without a transfer on the books of the bank.

Mr. Justice STORY delivered the opinion of the court.

This is a writ of error to the Circuit Court of the United States for the eastern district of Louisiana. The original suit was brought in the state court, against Black alone, upon an attachment issued by Zacharie & Company against him, he being a citizen of South Carolina, and not resident in Louisiana; and upon this attachment certain shares of Black, in the Carrollton Bank, and the Gas Light and Banking Company, in Louisiana, were attached, to answer the exigency of the writ. Black appeared in the suit, and caused it to be removed into the Circuit Court. Black, upon his appearance, pleaded that prior to the attachment he had assigned the attached stock to James Chapman, of South Carolina, by a trust-deed, for the benefit of all his creditors. After the removal of the suit into the Circuit Court, Chapman filed an intervention, according to the Louisiana practice, and became a party to the suit to protect his interest under the trust-deed. In his petition of intervention he asserted his title, and that he had given due notice thereof to the Carrollton Bank, and the Gas Light and Banking Company; and that Zacharie & Co. had due notice thereof before their attachment.

The cause was tried by a jury upon the pleadings in the case; and upon the trial it was proved that the assignment was made by the trust-deed in South Carolina, by Black to Chapman, on the 28th of April, 1841. The attachment of Zacharie & Co. was made on the 4th of May, 1841, with a full knowledge of the assignment. Long before the attachment, the stock in the Carrollton Bank had been transferred and pledged to the Carrollton Bank, for a stock loan, and was then held by that bank, under that transfer, the equity of redeeming the same only remaining in Black. On the 15th of April, 1841, Black had executed a letter of attorney to the cashier of the Gas Light and Banking Company, to transfer the same to the Bank of South Carolina, of which notice was sent on the next day to the Gas Light and Banking Company, and notice was received by the latter on the 22d of April; but owing to some informality in the letter of attorney, the transfer was not then made, but the paper was sent back to be corrected, the company then agreeing to transfer it when the informality was corrected. The Bank of South Carolina was a holder of the stock, under this power, for value; and of this transaction also Zacharie & Co. had notice before their attachment.

At the trial, the jury found a verdict for the original plaintiffs, and judgment thereupon passed for them. Two bills of exceptions were taken to the ruling of the court at the trial, and upon these exceptions the cause has been brought before this court.

It does not seem necessary to recite at large the matters contained in these exceptions. They give rise to two questions, which have been fully argued at the bar, although very inartifically presented in the record: First, whether at the time of the commencement of the suit of Zacharie & Co. there was any debt due to them, upon which the attachment could, under the circumstances, be maintained? Secondly, whether the assignment to Chapman, being made in South Carolina, and known to Zacharie & Co. at the time of their attachment, and being, by the laws of South Carolina, a good and valid assignment, is entitled to a priority over the attachment. The latter question, so far as it respected the notice to Zacharie & Co., and the equity of the assignee, is not so precisely put as it is obvious it was intended to be, in the instructions asked by the intervenor. But it is plain, from the qualifications of those instructions suggested by the court, that the court held that the delivery of the stock was not complete, and that the assignment did not pass the right to the stock to the assignee, unless the transfer was entered upon the books of the bank, notwithstanding the notice; and that the law of Louisiana upon the point was different from that of South Carolina. In this way only is the verdict at all reconciable with the admitted state of facts.

In respect to the first question, it is plain to us that there was no debt due to Zacharie & Co., at the time when the attachment was made. The supposed debt was for the proceeds of a cargo of sugar and molasses, sold by Black on account of Zacharie & Co. Assuming those proceeds to be due and payable, Zacharie & Co. had drawn certain bills of exchange upon Black, which had been accepted by the latter, for the full amount of those proceeds; and all of these bills had been negotiated to third persons, and were then outstanding, and three of them were not yet due. It is clear, upon principles of law, that this was a suspension of all right of action in Zacharie & Co., until after those bills had become due and dishonored, and were taken up by Zacharie & Co. It amounted to a new credit to Black for the amount of those acceptances, during the runningof the bills, and gave Black a complete lien upon those proceeds, for his indemnity against those acceptances, until they were no longer outstanding after they had been dishonored.

Whether the transactions by the drawing and acceptance of these bills amounted to a novation of the debt, which might otherwise be due under the account current for the sales of the sugar and molasses, it is not necessary to decide; for, assuming that these transactions might be treated as a conditional novation only and not as an absolute novation, it would make no difference in the conclusion to which we should arrive under the circumstances of this case.

It is true that the statute law of Louisiana allows, in certain cases, an attachment to be maintained upon debts not yet due. But it is only under very special circumstances; and the present case does not fall within any predicament prescribed by that law. The statute does not apply to debts resting in mere contingency, whether they will ever become due to the attaching creditor or not; nor to any case except of absconding debtors; and this, therefore, is a case not governed by it. We think, then, that there was error in the ruling of the court in admitting that there was a sufficient debt established by the evidence to maintain the attachment.

The other point is one of much greater importance, although in our judgment not attended with any intrinsic difficulty. We admit, that the validity of this assignment to pass the right to Black in the stock attached depends upon the law of Louisiana and not upon that of South Carolina. From the nature of the stock of a corporation, which is created by and under the authority of a state, it is necessarily, like every other attribute of the corporation, to be governed by the local law of that state, and not by the local law of any foreign state. And in the present case, if the local law of Louisiana had prohibited (as we think it had not) any assignment of an equitable interest in the stock attached, we should not have scrupled to have followed that law. The question is not here, whether the legal interest in the stock passed by the assignment before a transfer of the stock upon the books of the corporations; but whether the equitable interest therein, as contradistinguished from the legal interest, did not pass to and vest in the assignee by the law of Louisiana, so as to oust the right of any creditor with full notice of the assignment from divesting the title of the assignee by a subsequent attachment thereof as the property of the debtor. In respect to the Carrollton Bank it is clear that nothing but an equitable interest could be conveyed or was intended to be conveyed by the assignment; for the bank already held the legal title as a pledge for a stock loan. In respect to the Gas Light and Banking Company, the interest in the stock had been transferred to the Bank of South Carolina as a pledge, and the letter of attorney was given to perfect the equitable title into a legal title by an actual transfer on the books of the corporation. But, subject to that pledge, the equity was with the consent of the Bank of South Carolina vested in the assignee under the assignment. So that each case presented the same general question as to the validity of the equitable title by the law of Louisiana against attaching creditors, having full knowledge of that equity. Out of Louisiana, we believe that no such question could possibly arise; for courts of law, as well as courts of equity, are constantly, in all states where the common law prevails, in the habit of holding a prior assignment of the equitable interest in stock as superseding the rights of attaching creditors, who attach the same with a full knowledge of the assignment.

Upon full examination of the laws of Louisiana and the decisions of its courts, we see no reason to believe that a different doctrine on this subject prevails in that state. It is true that the same distinctions between legal and equitable rights may not as to the mode of remedy exist in that state, which are recognized in states governed by the common law; but the same purposes of substantial justice are attained there under similar circumstances as the courts in other states are accustomed to administer in a different form.

There is a marked distinction in the Louisiana law between the transfer of corporeal things movable, and things incorporeal. In the former a manual tradition of the thing is ordinarily but not universally required to perfect the title. In the case of incorporeal things no such tradition can take place, and therefore such a delivery as the thing admits of-a sort of symbolical delivery-is admitted by the law as a substitute. There are several articles of the Civil Code of Louisiana bearing directly on this point; but it will be sufficient only to cite a few of those which have been relied on by counsel. Art. 2612 declares, 'In the transfer of debts, rights, or claims, to a third person, the delivery takes place between the transferrer and transferree by the giving of the title.' Art. 2613 declares, 'The transferree is only possessed, as it regards third persons, after notice has been given to the debtor of the transfer having taken place.' Art. 2456 declares, 'The tradition of the incorporeal rights is to be made either by the delivery of the titles and of the act of transfer, or by the use made by the purchaser with the consent of the seller.' In Bainbridge v. Clay, 16 Mart. (La.), 56, the Supreme Court of Louisiana said, 'A debt due [by] the defendant on a fieri facias cannot as to third persons completely pass to the assignee unless there be what in sales of tangible property is called a tradition or delivery; and this is effected as to choses in action by notice of the assignment to the debtor.' Again, in Babcock v. Maltbie, 19 Mart. (La.), 137, the same learned court said that the true test, in cases of assignment, is, 'That where the owner of the property has lost all power over it and cannot change its destination, the creditors cannot attach.' The same doctrine was directly affirmed in the recent case of Urie v. Stevens, 2 Rob. (La.), 251. The principles announced in these decisions seem completely to cover the present suit. In the case of the Carrollton Bank the shares had actually passed to the bank itself as a pledge, and nothing but an equity remained in Black, capable of being transferred, and that was assigned by the deed of assignment to the assignee before the attachment, and was known to Zacharie & Co. at the time when they made their attachment; and at least as early as the next day it was made known to the bank. So that the creditors had full notice and the bank had full notice; and the creditors could not make a valid attachment when to their knowledge the property no longer belonged to their debtor. The case as to the Carrollton Bank falls, then, directly within the principles just stated. The owner had parted with all his property in the stock; he had lost all power over it; and he could not change its destination. The same principles apply, a fortiori, to the Gas Light and Banking Company; for there, not only had the creditors notice of the assignment before their attachment, but the company also had notice thereof before that period.

It is true that the charters of the Carrollton Bank and of the Gas Light and Banking Company provide that no transfer of the stock of these corporations shall be valid or effectual until such transfers shall be entered or registered in a book or books to be kept for that purpose by the corporation. But this is manifestly a regulation designed for the security of the bank itself, and of third persons taking transfers of the stock without notice of any prior equitable transfer. It relates to the transfer of the legal title, and not of any equitable interest in the stock subordinate to that title. In the case of the Union Bank of Georgetown v. Laird, 2 Wheat., 390, this court took notice of the distinction between the legal and equitable title in cases of bank-stock, where the charter of the bank had provided for the mode of transfer. The general construction which has been put upon the charters of other banks containing similar provisions as to the transfer of their stock, is, that the provisions are designed solely for the safety and security of the bank itself, and of purchasers without notice; and that as between vendor and vendee a transfer, not in conformity to such provisions, is good to pass the equitable title and divest the vendor of all interest in the stock. Such are the decisions in the cases of the Bank of Utica v. Smalley, 2 Cow. (N. Y.), 777, 778; Gilbert v. Manchester Iron Co., 11 Wend. (N. Y.), 628; Commercial Bank of Buffalo v. Kortwright, 22 Id., 362; Quiner v. The Marblehead Insurance Co., 10 Mass., 476; and Sergeant v. Franklin Insurance Co., 8 Pick. (Mass.), 90.

We see no reason to doubt that the jurisprudence of Louisiana adopts a similar interpretation for the purpose of protecting equitable title against the claims of creditors of the transferrer, who have notice of such equitable titles. If it will protect an assignment of a chose in action against attaching creditors after notice of the assignment given to the debtor, because no title remains in the transferrer, (as we have seen it will,) a fortiori, it ought to protect it where the attaching creditor himself has notice, since, in justice, he is entitled only to take under his attachment what rightfully remains in the transferrer. In the absence of any positive controlling statute or direct adjudication of the courts of Louisiana upon the very point, in contradiction to the doctrine maintained in other states, as one founded ex aequo et bono in general justice, we may well presume, that a state deriving its jurisprudence from the Roman Law, has not failed to act upon it.

There is another ground, auxiliary to this last view, which is entitled to great consideration. It is well settled as a doctrine of international jurisprudence, that personal property has no locality, and that the law of the owner's domicil is to determine the validity of the transfer or alienation thereof, unless there is some positive or customary law of the country where it is found to the contrary. This doctrine has, in the very late case of the United States v. The United States Bank, (in June, 1844,) been fully and directly recognized and affirmed by the Supreme Court of Louisiana, as a part of its own international jurisprudence; and it was applied in that very case to support an assignment made in Pennsylvania, by the Bank of the United States, to certain assignees, who were intervenors of goods, debts, credits and effects in Louisiana. The court held that the assignment, being proved to be valid and effectual by the law of Pennsylvania, was to be deemed equally valid and effectual to pass the goods, debts, credits, and effects of the bank, to the assignees in Louisiana, against the attaching creditors, who had notice of the assignment at the time of their attachment. The decision turned upon the very doctrine of international jurisprudence just referred to. So that here we have the high authority of the state court in this very matter, that there is nothing in the jurisprudence of Louisiana, which forbids giving full effect and validity to an assignment of debts, credits and equities, situate in that state, where the assignment is valid and effectual by the law of the state where it is made, so as to oust the rights of attaching creditors who have due notice thereof. Now, in the case before us, there is plenary evidence that the assignment was valid and effectual by the laws of South Carolina, when and where it was made, to pass the right to the property in controversy; and that the attaching creditors had notice thereof before their attachment was made; so that its validity and effect are the same in Louisiana as in South Carolina. It is true that the legal title could not pass without a regular transfer of the stocks upon the books of the corporation; but it is equally true, that the title to the property, subject to the pledge thereof, was complete in the assignee, so as to bind the banks as well as the attaching creditors, after due notice to them respectively. We are, therefore, of opinion, that the district judge erred in directing the jury that the delivery of the stock was not complete unless the transfer was entered upon the books of the banks. That was true as to the absolute legal title, but it did not prevent the equitable title from passing to and becoming completely vested in the assignee under and in virtue of the assignment, so as to bind the attaching creditors, as soon as they had notice thereof, and in like manner the banks, as soon as they had notice thereof.

Upon both grounds, therefore, stated in the exceptions, the judgment of the Circuit Court is reversed, and the cause remanded to that court with directions to award a venire facias de novo.