Pickett v. Foster/Opinion of the Court

Upon the facts disclosed by the pleadings and evidence it is plain that the complainants are not entitled to a reversal of the decree below, dismissing their bill, unless they have sustained their allegations of fraud on the part of George Foster, as public administrator of Carroll parish, and of such knowledge and complicity therein on the part of Mrs. Mary J. Foster as to deprive her of her alleged title as a bona fide purchaser of her husband's interest at a sheriff's sale.

The answer of Foster explicitly denied the charges of fraud contained in the bill, and the answer of Mary J. Foster was, in effect, a plea that she was a bona fide purchaser, for a valuable consideration, without notice. Although answers under oath were waived in the bill, and the defendants' responsive answers cannot, therefore, be treated as evidence in their favor, still, upon the issues thus raised, the burden of proof was upon the complainants.

To sustain their side of the case the complainants put in evidence the promissory notes, and the deed of trust securing them, bearing date January, 1866. Thet proved the death of James C. Pickett on July 10, 1872; that Joseph D. Pickett, one of said complainants, was on the 20th of May, 1873, appointed his administrator; and that said Joseph D. Pickett and Theodore John Pickett, the other complainant, were the sole heirs at law of James C. pickett. Joseph D. Pickett testified that on September 27, 1873, he put the notes and deed of trust into the hands of R. M. Scanlan and J. H. Green, who were then the husbands of the makers of the notes, and entered into a written agreement with them, whereby they were authorized to employ attorneys to collect said notes, and also gave them a letter proposing to give the lawyers who should undertake the collection of the claim two-thirds of whatever they should recover, and that the Pickett estate should not be subjected to any expense whatever. Pickett further testified that he understood that R. M. Scanlan and J. H. Green, in pursuance of this arrangement, employed J. W. Montgomery, a lawyer resident in Carroll parish, to enforce payment of the claim; that Montgomery procured Lanier, as public administrator, to bring a suit in the district court of the parish; that he, Pickett, was not kept advised of the progress of the suit, and that he never knew that said suit was dismissed until he saw the record of the court, showing such dismissal in September, 1885; that he had no personal knowledge of the history of the suit; that, upon learning that the Lanier suit had been dismissed, he sent W. H. Pickett, as his attorney, to Louisiana, who received the notes and mortgage deed from Montgomery, and employed W. G. Wyly to bring the present suit. He further testified that he had never seen or known Foster till the latter called on him, at his office in Frankfort, Kentucky, on the first day of June, 1886.

Theodore John Pickett, the other complainant, testified that he had no personal knowledge of the suit brought by Lanier; that he did not know that such suit had been brought, nor did he know that the suit had been dismissed on December 4, 1875, till he was so informed by Joseph D. Pickett in September, 1885; and that he never saw George Foster.

William H. Pickett testified that he was present at the interview between Joseph D. Pickett and R. M. Scanian and J. H. Green, when the agreement was made about the collection of the notes in September, 1873; that in November, 1885, he went, as attorney for complainants, to Louisiana, and inspected the record of the district court of Carroll parish, showing that a suit had been brought by B. H. Lanier, as public administrator, and that the same had been dismissed in December, 1875; that he procured the notes and mortgage from J. W. Montgomery who had been employed by Scanlan and Green, and employed Mr. Wyly to bring the present suit. He does not profess to have ant personal knowledge whatever of the facts of the case, except what he acquired by examining the record of the Lanier suit.

J. W. Montgomery testified that he had been employed by R. M. Scanlan to bring suit on the Pickett notes and mortgage; that he procured Lanier, as public administrator, to bring the suit; that when Lanier was superseded by the appointment of George Foster to be public administrator he ceased to have anything further to do with the suit; that he was not Foster's attorney, and that the first he knew of Foster's appointment was the dismissal of the suit shown by the judgment rendered by the court; and that the notes were never in the actual possession of George Foster, nor did he have any control of the suit filed on them after he became administrator.

William G. Wyly and Jesse D. Tompkins testified that they knew George Foster, and that he seemed to be and to act for years past as owner of the Morgan plantation.

In addition to this testimony complainants put in evidence the record of the oath taken by George Foster, as public administrator, and his bond, in $10,000, as such. Also the records of the suits of one Goodrich against Mrs. Ricketts and Mrs. Bell, afterwards Scanlan and Green, and in which it appeared that Goodrich, as tutor of the said defendants, had entered judgments confessed by them in his favor, and had levied on their interests in the Morgan plantation, and sales and conveyances by the sheriff to said Goodrich of the interest of Mrs. Ricketts, and to John H. Green of the interest of Mrs. Green. Also proceedings and deeds whereby these interests finally became vested in George Foster.

Upon the facts so shown by the complainants, it is difficult to hold that charges of fraud against George Foster, and of complicity therein on the part of Mary J. Foster, can be said to be made out with sufficient clearness to warrant a court of equity in granting the relief prayed for in the bill.

The long periods of time within which the events disclosed in the evidence took place, and the open and avowed character of the several suits and conveyances whereby at last the title to the property became vested in Mary J. Foster, should be considered. Apart from the legal effects of the lapse of time, which we shall consider hereafter, there seems to have been unaccountable delay in the successive steps taken by the holders of these notes and mortgage.

No effort was made by James C. Pickett in his lifetime to cllect the notes, although the notes were overdue for several years. His administrator apparently took no steps to collect the notes until visited and aroused to action by the husbands of the makers of the notes, with whom he made a contract by which he agreed to give an attorney unknown an unnamed two-thirds of the amount which might be collected. He then-although as he himself states he was not informed of what his agents and attorneys were doing-took no further action, and made no inquiries till September, 1885, a period of 12 years. He even says that he did not know into whose hands his agents, Scanlan and Green, had put the notes for collection.

It is no doubt true that the appointment of George Foster as public administrator of Carroll parish, while there was pending a suit, in the name of Lanier, his predecessor in office, to collect these notes, and in which he had been cited as one of the defendants, and the subsequent dismissal of that suit, are facts which, if unexplained, might warrant a suspicion that he was aiming to defeat the Pickett mortgage and notes. Still, such a suspicion or inference would not, standing alone, justify upsetting the possession of George Foster, which had existed for a period of 12 years before the filing of the bill, much less could the rights of Mary J. Foster be thereby overthrown.

Moreover, the character of complainants' claim, upon their own evidence, does not appeal to a court of equity. The fact that Joseph D. Pickett put the notes and mortgage for collection into the hands of Scanlan and Green, the husbands of the makers of the notes, and agreed to give them, or any attorney they might select, two-thirds of the amount that might be recovered, is remarkable. So, too, the fact that Foster's title to the larger part of the plantation came to him by means of a deed of conveyance, dated February 5, 1873, from Mrs. Scanlan, for an alleged consideration of $36,904.94, and the further fact that Mrs. Scanlan did not, in her answer in the present case, repudiate or deny the genuineness or good faith of such deed, suggest very serious doubts of the fairness of the plaintiffs' claim.

But whether or not the plaintiffs' bill could be regarded as sustained by their evidence, if uncontradicted, the case comes before us with a large body of evidence on behalf of the defendants.

George Foster testified that he was a member of the firm of Foster, Gwyn & Co., doing business as cotton factors and commission merchants in the city of New York, and in the firm name of Foster & Gwyn, in the city of New Orleans; that he became acquainted with Mrs. Scanlan and Mrs. Green in 1868; that the New Orleans house did business with them, and advanced them large sums of money and supplies to maintain their plantation; that these transactions commenced in 1868 and continued until some time in 1871; that at that time the plantation belonged to Mrs. Scanlan and John H. Green; that Mrs. Scanlan was indebted to Foster & Gwyn in the sum of $19,000, for which, in 1870, she gave them her note, secured by a mortgage on her plantation; that John H. Green likewise became indebted to the firm in a sum exceeding $15,000, for which Green gave his notes, secured by a mortgage on his part of the said Morgan plantation; that at the time his firm took these mortgages from Mrs. Scanlan and J. H. Green they knew nothing about plaintiffs' claim, and thought the title to the plantation was good and unincumbered; that his firm in New York borrowed a large sum of money from Ezra Wheeler & Co., of that city, and to secure them Foster & Gwyn transferred to them the notes and mortgages of John H. Green. He further testified that on February 5, 1873, Mrs. Scanlan and her husband conveyed to him the part of the Morgan plantation that belonged to Mrs. Scanlan, for $36,904, composed in part of her indebtedness to Foster & Gwyn; and that, after Ezra Wheeler & Co. had purchased the interest of John H. Green in the Morgan plantation at a United States marshal's sale, he purchased such interest from them, paying about $2,200 in cash, and giving a mortgage on the plantation to secure notes for about $5,000, at one and two years. He further testified that he was never appointed by the court to be administrator of James C. Pickett; that he never knew of such an estate; that he was never asked, as public administrator, to prosecute or institute any suit for the complainants, nor did they, or any one, ever ask any information from him; that he did not know them or where they resided; that he did not consider that he had ever assumed any responsibility for the complainants; and that he was not present when the Lanier suit was called and dismissed, but was in Cincinnati, and did not know that the attorneys intended to call out the suit and have it dismissed. He testified that the first he ever knew of any deed of trust against the Morgan plantation was long after his firm had made the large advances to Mrs. Scanlan and John H. Green, and at that time the deed of trust had been erased or satisfied of record,-to confirm which latter statement he put in evidence a certified copy of such erasure.

The testimony of Mary J. Foster was to the effect that she had loaned money, received by her from her sister's estate, to the firm of Foster, Gwyn & Co., for which she took their note for $2,986.76, two years prior to her marriage to George Foster. This was the debt which was the subject of the suit she brought against George Foster, whereby she became purchaser of his interest in the plantation before the bringing of the present suit.

Edward J. Delony, the judge of the eighth judicial district of Louisiana, testified on behalf of the defendants that when B. H. Lanier resigned his position as public administrator of Carroll parish, he, the witness, interested himself to get a capable man to succeed him, and persuaded George Foster to apply for and receive the appointment. He says that it required much persuasion to induce Foster to take the office, and only upon the witness agreeing to take principal charge of the business. He appeared for Foster when the Lanier case was called, and as no one appeared the suit was dismissed. That he inquired of Lanier about the notes set up in the suit instituted by him as public administrator, and that Lanier informed him that he did not have, nor had he ever seen, them. This witness further testified that he never knew of any such estate as that of Pickett, and knew of no property or credits belonging to it, and that he never could find that Lanier, as public administrator, had ever offered any such succession during his term of office as public administrator.

The evidence of both parties, taken as a whole, leaves the allegations of fraud as against George Foster unproved. It is contended that those proceedings of Goodrich against his wards were part of a scheme to defeat the Pickett claims. If this were so, it is very singular that the husbands of those ladies should afterwards be employed as agents by the complainants to enforce these very notes.

Failing to find satisfactory proof of frand on the part of George Foster, or of participation therein, if fraud there were, by Mary J. Foster, we have then to consider the legal aspects of the case, apart from the allegations of the bill on the subject of fraud.

Sec. 9. The secretary of the treasury may that the instrument given to secure the promissory notes held by James C. Pickett was not a mortgage within the meaning of the laws of Louisiana, but was a deed of trust, and that accordingly it was not properly inscribed or recorded as a mortgage, and constituted no such lien or incumbrance upon the Morgan plantation as to affect third persons.

To sustain this contention the case of Thibodaux v. Anderson, 34 La. Ann. 797, is cited. Our reading of that case inclines us to regard it as authority for the defendants' contention, but, in the view we take of the present case, it is not necessary to so decide.

Even if it be conceded that the instrument in question was a valid mortgage, and was duly inscribed as such on March 12, 1866, yet, in order to keep it alive to affect third parties, the statutory law required that it should be reinscribed within 10 years, but the complainants' evidence shows that it was not reinscrived until November 4, 1885. The supreme court of Louisiana has decided that, under the positive law of that state, as contained in the code and statutes, nothing supplies the place of registry, or dispenses with it, so far as those are concerned who are not parties to it, and that when 10 years nave elapsed from the date of inscription without reinscription the mortgage is without effect as to all persons whomsoever who are not parties to the mortgage. Adams v. Daunis, 29 La. Ann. 315.

The same court has held that a failure to reinscribe a mortgage within the statutory limit is not remedied or supplied by the pendency of a suit to foreclose the same. Watson v. Bondurant, 30 La. Ann. 1.

This court has held that those decisions of the supreme court of Louisiana establish a rule of property binding on the federal courts, and that accordingly the circuit court of the United States for the district of Louisiana did not err in holding that a mortgage of lands has no effect as to third persons, unless it be reinscribed within 10 years from the date of its original inscription, and that the pendency of a suit to foreclose does not dispense with the necessity of so reinscribing it. Bondurant v. Watson, 103 U.S. 281.

As the complainants have failed in making out a case of actual or intentional fraud on the part of George Foster, we cannot hold that, because in 1875 he accepted the office of public administrator, it became his duty to take notice of the Pickett mortgage and to cause it to be reinscribed. He testifies that he knew nothing about it except as the record showed an erased mortgage; and, whether the erasure was or was not a proper one, he was under no official duty to inquire into its validity. The notes which the mortgage had been given to secure were all prescribed by lapse of time 16 months before he was appointed public administrator, and we are unable to see that his acceptance of the office put him in any fiduciary relation to the holders of these notes, even if he had known there were such notes, and who were their holders,-a knowledge which he disclaims. Even if the Goodrich suits and sale and the subsequent erasure of the mortgage could be viewed as a fraudulent contrivance between Goodrich and the makers of the notes, no knowledge or participation therein is brought home to Foster except by mere conjecture. Hence, if he, in good faith, relied on that erasure, and dealt with Mrs. Scanlan and J. H. Green as the owners of an unincumbered plantation, he must be deemed a third party entitled to the protection of the laws requiring reinscription. Mrs. Scanlan and her husband conveyed her portion of the plantation to Foster for a large consideration on February 5, 1873, 12 years before the institution of this suit. Mrs. Green never repudiated her own act in confessing a judgment to Goodrich, on whose sale her husband became the purchaser, and, whether such judgment and sale were in accordance with law or not, the proceedings must, in the circumstances of this case, be deemed as, at all events, equivalent to a conveyance by her through the sheriff, and as a complete estoppel against her. Her vendees, or those who subsequently became owners for a valuable consideration, without notice, of her part of the plantation, are fairly to be deemed third parties, entitled to the protection of the presumptions arising from lapse of time and failure to reinscribe.

Upon the whole, we are of opinion that the decree of the court below dismissing the bill was right, and it is accordingly affirmed.