Mendenhall v. Hall

By a deed executed December 24, 1875, John H. Mendenhall and wife, citizens of Ohio, conveyed to Clark N. Hall, a resident of Louisiana, an undivided one-fourth of certain lands in Carroll parish, in that state, known as the 'Concord Plantation.' The price agreed to be paid was $5,123, for which the vendee executed to the grantor his three promissory notes, the first one for $2,000, payable January 1, 1877; the second for a like sum, payable January 1, 1878; and the third for $1,123, payable January 1, 1879,-each note bearing interest at the rate of 8 per cent. per annum from date until paid. In order to secure the payment of the principal and interest of those notes, the grantee, by the same instrument, mortgaged and hypothecated the property for the benefit of the vendor, or any future holder or holders of h e notes, 'binding and obligating himself not to sell, mortgage, or in any wise incumber said property to the prejudice of this act of mortgage.'

The deed was duly filed for record in the proper office on the day of its date.

By an indenture executed February 10, 1876, the owners of the Concord plantation, William C. White, James Andrews, and Clark N. Hall, made a partition thereof among themselves.

On the 5th of March, 1882,-no part of the principal sum having been paid, and the interest only having been paid up to January 1, 1879,-Clark N. Hall wrote to Mendenhall, giving the reasons why he had not for some time made a payment. After stating that he and his brother had tried together to make arrangements to meet his notes, and that they had been compelled, in order to run the plantation, to deposit what money they had as security for aid supplied by others, he said: 'So we deposited the money we had, and are going ahead, and I can assure you it has given me a heap more pain than it has you; and one more thing I can assure you, I am going to attend strictly to business, and am going to get as little as possible, and work to best advantage, and I know this fall will be able to make you a payment that will satisfy you. My aim is to pay you the $2,500 this fall without a doubt; with what I have left out of the place, and what Charley will be able to raise then, we can do it like a flash, and to do it now will be a stop to all things. * * * So, under the circumstances, I am not going to pay one dollar now, and if it don't suit you I cannot, for the life of me, help it. If you had rather resort to law, all right. If not, wait until fall with patience, and I am sure everything will be made O. K. * * * Everybody predicts a good crop year. Has Mrs. M. received my package of photos? I mailed them and wrote her a letter some months ago. Hoping you will have compassion upon a poor soul, I will close, by subscribing myself,' etc. By way of further assurance that the representations as to his financial condition were true, and that his request for time was made in good faith, he adds, by way of postscript, these words: 'I want you to bear in mind that if W. B. Keene had not failed to comply with his contract I would surely have remitted the money. You may believe me or not; nevertheless it is the candid truth.'

On the same day of the above letter, Charles F. Hall, a brother of Clark N. Hall, and the person described in that letter as 'Charley,' wrote to Mendenhall, saying: 'I take the liberty to pen you a few lines in regard to Concord, and the business pertaining thereto. Some time ago Clark took the trouble and expense upon himself to go up and see you to try and effect a settlement. At that time you could just as well as not have had $2,500 in cash; but it appears you would not take that. Well, since then things have changed here, so that it is agoing to be impossible for us to do anything until, say, January 1, 1883, for the following reasons, viz.: W. B. Keene, a merchant doing business close to Concord, had arranged to supply Clark this year, but about two weeks ago failed in a manner; anyway, his commission merchants in N. O. say they will not advance him supplies for more than enough to run his own place. Therefore it will be necessarily compel us to take our money to run the place. I presume Clark has written you about this ere now, and also that he had rented Andrews' portion of the place. You can certainly see that it whould be of no use to pay you the amount agreed to, and then have no way or means of running the place, for we could make no other payments, as the place would lay idle, and would therefore bring in no revenue. The way everything is now fixed, the place will bring it in rent. I am here working for $1,000 a year, and all may expenses paid, and by January 1, 1883, we can and will pay you $2,500. I have been here for two years, and have saved nearly all my salary,-that for what? To try and help Clark pay you for the place. I am anxious to settle this matter up, and you have been very kind in waitig as long as you have, and you have my word and honor that you shall be paid this fall the $2,500, if the levee does not break at or near Concord. You can satisfy yourself by writing to Mr. Benjamin Keene, or any one that knows anything about our affairs here, whether I have written how things are here or not. And I feel safe in here saying that you will look at this matter just as I have, and think we have done just the best that could have been done under the existing circumstances. Please let me hear from you on this subject, and I shall take pleasure in keeping you posted about things here, and you can depend on my doing all I can to help pay up. Please remember me kindly to Mrs. M., and with best wishes, and trusting to hear from you ere long, I remain yours, resp.'

On the 17th of January, 1883, the land was sold for state and parish taxes due from Clark N. Hall for the years 1877 and 1878, and was purchased at the sum of $211.47 by Charles F. Hall, who took a deed from the sheriff.

The present suit was brought on the 4th of September, 1883, by Mendenhall against Clark N. Hall and Charles F. Hall. After setting out the above facts in relation to the purchase by Clark N. Hall, the execution of the notes for the price, the partition of the plantation among the owners, and the payment of the interest up to January 1, 1879, the bill alleges that Clark N. Hall had indulgence from the plaintiff from year to year, and visited the latter at his home in Ohio about the first of the year 1882, promising, while there, that upon his return home he would make a payment of $1,500 on the notes; that after his return he and his brother Charles entered into a scheme to defraud the plaintiff; that, with knowledge that the sheriff would be compelled by the statute of the state (Act No. 98 of 1882) to sell the property for unpaid taxes within four months after the promulgation of that act, Clark N. Hall fraudulently failed to pay the taxes for 1877 and 1878, although he had agreed not to incumber the property to the prejudice of the plaintiff or the said act of mortgage, and although he represented to the plaintiff that he had paid the taxes on the land; that Clark N. Hall and Charles F. Hall agreed between themselves that, in order to defeat the plaintiff's rights, the latter would become the purchaser at the tax-sale, and take the title in his own name, intending thereby to procure the release of the property from the plaintiff's mortgage and privilege; and that although Charles F. Hall pretends to have bought the property, and claims to be the owner thereof, his brother was living on the plantation and cultivating it as before the tax-sale. The bill stated various grounds upon which the tax-sale should be declared null and void, and prayed that the sale be set aside; that the plaintiff's mortgage and vendor's privilege to secure the balance due on the notes, together with the accruing interest, be recognized and rendered executory; that the land be sold, by due process of law, to pay and satisfy that balance; and that he might have such relief as was proper.

Charles F. Hall demurred to the bill for multifariousness, and filed a special plea to the effect that, by article 210 of the constitution of Louisiana, tax-titles are declared to be prima facie valid, and cannot be set aside without a previous tender to the purchaser of the price, and 10 per cent. per annum interest thereon, having been made, which has not been done.

Clark N. Hall pleaded to so much of the bill as sought judgment against him for the amount of the notes; that equity was without jurisdiction ratione materiae to try the issues presented on said obligations.

The court below sustained both the demurrer and the plea of Charles F. Hall, and, by a decree entered May 12, 1885, dismissed the bill as to him, without prejudice to the plaintiff's right to file a new bill. It overruled the demurrer of Clark N. Hall, and the latter filed an answer, averring that he was no longer the owner of the premises, nor in possession thereo. He also averred that he was the lawful owner of two judgments against the plaintiff, one for $300, and $4.15 costs taxed, and one for $240, with interest from April 4, 1876, and $4.70 costs taxed, both rendered May 12, 1876, by a justice of the peace in Delaware county, Ohio, in favor of the Elkart Wood Pulp Company against John H. Mendenhall and others, partenrs doing business under the firm name of the Delaware Paper Company. He also averred that he was the legal holder and owner of a note for $1,733.61 executed by the said Delaware Paper Company, through their secretary, J. L. Klein, and made payable to the order of Jacob A. Sharer, who indorsed it to James Andrews, the latter indorsing it in blank to the defendant in due course of trade and for a valuable consideration. He pleaded the said demands 'in compensation of the notes sued upon.'

To this answer a replication was filed, in which the plaintiff denied that he was bound for the payment of the obligations set up in the answer; denied that they were owned by the defendant; and averred, in respect to the note for $1,733.61, that it was executed and obtained by fraud, was without consideration, was never negotiated or placed on the market until after its maturity, and was not a just debt against the Delaware Paper Company. A replication of this special character was not in accordance with correct chancery practice. But no objection was made on that ground, and it was treated as a proper replication.

Upon final hearing, on the 14th of April, 1886, the court gave judgment in favor of the plaintiff against Clark N. Hall for $5,123, with interest at the rate of 8 per cent. per annum from December 24, 1875, until paid, and the costs, that amount to be credited with $1,340.52 to date, January 1, 1879, and also with $544.15, with 8 per cent. interest from April 4, 1876, to date, and take effect from May 9, 1879. It also adjudged that the plaintiff's demand for recognition of the mortgage and vendor's privilege claimed in the bill be rejected as in case of nonsuit, without prejudice to his right to assert the same in a subsequent action.

John Johns and D. A. McKnight, for appellant.

John T. Ludeling, for appellees.

[Argument of Counsel from pages 565-567 intentionally omitted]

Mr. Justice HARLAN, after stating the facts in the foregoing language, delivered the opinion of the court.