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150; Ellis v. Essex Merrimack Bridge, 2 Pick. 243. That his motive in sell ing it was to avoid its being confiscated by the United States, does not ap pear to us to have any bearing on the rights of these parties. And no statute under which it could have been confiscated has been brought to our notice. The act of July 17, 1862, c. 195, § 6, cited by the appellant, is limited to property of persons engaged in or abetting armed rebellion, which could hardly be predicated of two girls under 13 years of age. 12 St. 591. Whatever liability, criminal or civil, Lamar may have incurred or avoided as towards the United States, there was nothing in his selling this stock, and turning it into money, of which his wards had any right to complain.
As to the sum received from the sale of the stock in the Bank of the Republic, we find nothing in the facts agreed by the parties, upon which the case was heard, to support the argument that Lamar, under color of protecting his wards' interests, allowed the funds to be lent to cities and other corporations which were aiding in the rebellion. On the contrary, it is agreed that that sum was applied to the purchase in New York of guarantied bonds of the cities of New Orleans, Memphis, and Mobile, and of the East Tennessee & Georgia Railroad Company; and the description of those bonds, in the receipt afterwards given by Micou to Lamar, shows that the bonds of that railroad company, and of the cities of New Orleans and Memphis, at least, were issued some years before the breaking out of the rebellion, and that the bonds of the city of Memphis and of the railroad company were, at the time of their issue, indorsed by the state of Tennessee. The company had its charter from that state, and its road was partly in Tennessee and partly in Georgia. Tenn. St. 1848, c. 169. Under the discretion allowed to a guardian or trustee by the law of Georgia and of Alabama, he was not precluded from investing the funds in his hands in bonds of a railroad corporation, indorsed by the state by which it was chartered, or in bonds of a city. As Lamar, in making these investments, appears to have used due care and prudence, having regard to the best pecuniary interests of his wards, the sum so invested should be credited to him in this case, unless, as suggested at the argument, the requisite allowance has already been made in the final decree of the circuit court in the suit brought by the representative of the other ward, an appeal from which was dismissed by this court for want of jurisdiction in 104 U. S. 465.
2. Other moneys of the wards in Lamar's hands, arising either from dividends which he had received on their behalf, or from interest with which he charged himself upon sums not invested, were used in the purchase of bonds of the Confederate states, and of the state of Alabama. The investment in bonds of the Confederate states was clearly unlawful, and no legislative act or judicial decree or decision of any state could justify it. The so-called Confederate government was in no sense a lawful government, but was a mere government of force, having its origin and foundation in rebellion against the United States. The notes and bonds issued in its name and for its support had no legal value as money or property, except by agreement or acceptance of parties capable of contracting with each other, and can never be regarded by a court sitting under the authority of the United States as securities in which trust funds might be lawfully invested. Thorington v. Smith, 8 Wall. 1; Head v. Starke, Chase, 312; Horn v. Lockhart, 17 Wall. 570; Confederate Note Case, 19 Wall. 548; Sprott v. United States, 20 Wall. 459; Fretz v. Stover, 22 Wall. 198; Alexander v. Bryan, 110 U. S. 414; S. C. 4 SUP. CT. REP. 107. An infant has no capacity, by contract with his guardian, or by assent to his unlawful acts, to affect his own rights. The case is governed in this particular by the decision in Horn v. Lockhart, in which it was held that an executor was not discharged from his liability to legatees by having invested funds, pursuant to a statute of the state, and with the approval of the probate court by which he had been appointed, in bonds of the Confederate states, which
became worthless in his hands. Neither the date nor the purpose of the issue of the bonds of the state of Alabama is shown, and it is unnecessary to consider the lawfulness of the investment in those bonds, because Lamar appears to have sold them for as much as he had paid for them, and to have invested the proceeds in additional Confederate states bonds, and for the amount thereby lost to the estate he was accountable.
3. The stock in the Mechanics' Bank of Georgia, which had belonged to William W. Sims in his life-time, and stood on the books of the bank in the name of his administratrix, and of which one-third belonged to her, as his widow, and one third to each of the infants, never came into Lamar's possession; and upon a request made by him, the very next month after his appointment, the bank refused to transfer to him any part of it. He did receive and account for the dividends; and he could not, under the law of Georgia concerning foreign guardians, have obtained possession of property of his wards within that state without the consent of the ordinary. Code 1861, §§ 18341839. The attempt to charge him for the value of the principal of the stock must fail for two reasons: First. This very stock had not only belonged to the father of the wards in his life-time, but it was such stock as a guardian or trustee might properly invest in by the law of Georgia. Second. No reason is shown why this stock, being in Georgia, the domicile of the wards, should have been transferred to a guardian who had been appointed in New York during their temporary residence there. The same reasons are conclusive against charging him with the value of the bank stock in Georgia, which was owned by Mrs. Abercrombie in her own right, and to which Mr. Abercrombie became entitled upon her death. It is therefore unnecessary to consider whether there is sufficient evidence of an immediate surrender by him of her interest to her children.
The result is that both the decrees of the circuit court in this case must be reversed, and the case remanded for further proceedings in conformity with this opinion.
(112 U. S. 439)
FORTIER. NEW ORLEANS NAT. BANK.
Where a suit is brought by B. in the United States court against F., in his individual name, as president of a national bank, and it appears, upon an inspection of the whole record, that the suit was treated by both parties as the suit of the bank, and not of B. in his individual character, F. will not be allowed, on final hearing, in order to defeat the jurisdiction, to assert for the first time that B., and not the bank, was the complainant in the cause.
2. SAME-MARRIED WOMAN-SEPARATE PROPERTY-MORTGAGE.
Where a married woman, with the authorization of the husband, and the sanction and certificate of the judge, borrows money, the creditor is not bound to show that the money was used for her separate benefit and advantage; but the debt may be enforced against her, and her separate property mortgaged to secure it, unless she shows that, with the knowledge or connivance of the lender, the money was borrowed and used, not for her separate benefit, but for that of her husband.
3. SAME-LOAN-MORTGAGE-NATIONAL BANKING ACT.
A loan of money made by a national bank on the security of a mortgage is not in violation of the national banking act, and may be enforced.
4. SAME-UNITED STATES-MORTGAGE LIEN-OBJECTION.
An objection to the taking by the bank of a mortgage lien as security for future advances can only be made by the United States.
Appeal from the Circuit Court of the United States for the Eastern District of Louisiana.
Henry C. Miller and B. F. Jonas, for Fortier. Thomas J. Semmes and John A. Campbell, for New Orleans Nat. Bank.
WOOD, J. These are cross-appeals from a decree in equity in a cause brought by "Albert Baldwin, in his capacity of president of the New Orleans National Bank, a corporation organized under the national banking law, against Celestine Louise Fortier," who was a married woman, the wife of Polycarpe Fortier. The purpose of the suit was to enforce the collection of a note "drawn," as the bill avers, "by the said Celestine Louise Fortier to her own order, and by her indorsed with the authorization of her said husband, dated at New Orleans, March 16, 1877, payable one year after date, bearing interest at eight per cent. per annum from maturity until paid, for ten thousand dollars." Leon Godchaux was the payee of the note, who, after its maturity, and but a short time before the suit was brought, transferred it to the New Orleans National Bank. The note was secured by a mortgage, executed by Mrs. Fortier, on three squares and six lots of ground in the city of New Orleans, which were her separate property. The bill by which the suit was commenced prayed for an order of seizure and sale of the mortgaged premises, as provided by the Code of Practice of Louisiana. The mortgage was in the ordinary form of mortgages in Louisiana, and was executed in the usual manher before a notary public and competent witnesses. Appended to it was he following certificate:
"The State of Louisiana, Parish of Orleans, City of New Orleans-Fourth District Court for the Parish of Orleans.
"I, W. T. Houston, judge of the Fourth district court for the parish of Orleans, do hereby certify that on this fourteenth day of March, 1877, personally came and appeared before me, at chambers, in the city of New Orleans, Mrs. Celestine Louise Labranche, of lawful age, the wife of Polycarpe Fortier, of this city, and by virtue of article 127 of the Revised Civil Code of Louisiana, I did then and there examine the said Mrs. P. Fortier, separate and apart from her said husband, and she stated that she appeared before me for
the purpose of obtaining the certificate specified in said article to borrow the sum of ten thousand dollars for her separate benefit and advantage by mortgaging her separate property.
"I do further certify that then and there I examined her touching the object for which the said sum of money was to be borrowed, and that I have by her declaration, made on oath, ascertained to my satisfaction that the sum of ten thousand dollars, which the said Mrs. P. Fortier desires to borrow, is not for her husband's debts nor for his separate advantage or the benefit of his separate estate or for the community, but that the same is solely for her separate advantage, and I therefore give and sign this certificate in pursuance of said article, giving my sanction and authority to said Mrs. P. Fortier, with the authorization of her husband, to hypothecate or mortgage her separate property for the purpose of borrowing the said sum of ten thousand dollars.
"Witness my hand and the seal of said court, this fourteenth day of March, 1877. W. T. HOUSTON, Judge."
A writ of seizure and sale having issued as prayed for in the bill, Mrs. Fortier filed her plea and a cross-bill. In the latter she prayed for an injunction to restrain the seizure and sale of the mortgaged premises. The grounds upon which she based her defense to the original bill, and the relief prayed by her cross-bill, were as follows: Admitting that at and before the date of the note and mortgage she was separated in property from her husband, Tolycarpe Fortier, she averred that she was possessed in her own right, as of a separate estate, of the property described in the mortgage; that the consideration of the note sued on and secured by the mortgage was in part money lent to her husband by Godchaux, the payee, and in part the payment and satisfaction of a debt due from her husband to Godchaux. To show that Godchaux knew that the money was not borrowed for the separate benefit of Mrs. Fortier, the cross-bill further averred that, before the execution of the mortgage by her, it was agreed between her husband and Godchaux that the loan should be secured by a mortgage on her husband's property; but the titles not proving satisfactory to Godchaux, it was agreed between him and her husband that the mortgage to secure the loan should be placed on her separate property, and that it should be transferred to the property of her husband when his titles were perfected. For the reasons stated, it was averred that the note and mortgage sued on were not binding on her property.
There was an answer and demurrer to the cross-bill. The answer denied that the note sued on was given for any other purpose than that expressed in the certificate of the judge appended to the mortgage, and averred that the money raised on the note was all paid to Mrs. Fortier, except the discount, amounting to $1,025, and the sum of $1,200, which was, by her direction, handed to the notary to pay taxes due on the mortgaged premises. The demurrer applied to all those averments of the cross-bill "tending to show that the said note, and mortgage granted by her," Mrs. Fortier, "to secure the same, were not executed for her own use and benefit, in opposition to her sworn declarations made on her examination by the judge of the Fourth district court, and the certificate of the said judge to that effect, and to all those averments in regard to the application made of the money lent by said Godchaux on the faith of said mortgage." It was shown by the evidence that the mortgage and note were executed in the office of the notary; that Mr. and Mrs. Fortier and Godchaux, the payee of the note and the mortgagee, were present; that upon the execution and delivery of the papers, Godchaux retained from the $10,000, for which the note was given,-First, the discount of 10 per cent. on the face. of the note, amounting to $1,025; and, second, the amount of a debt due from Mr. Fortier to him, being the sum of $1,800; that he gave his check to the notary for $1,200, to be applied to the discharge of taxes, etc., which were a
lien on the mortgaged premises, and that he paid the residue of the $10,000 by handing to Mrs. Fortier his check on the Union National Bank for $5,975, payable to her order. It was further shown that after Mrs. Fortier received the check, it was deposited by Mr. Fortier, with her indorsement, to his own credit in the Louisiana National Bank, and the deposit was drawn out from time to time thereafter on his checks. The proceeds of the check for $1,200 handed to the notary were applied, after deducting the fees of the notary, to the payment of the taxes, interest, and costs, which were a lien on the mortgaged premises.
Robert Duque, a witness for the defendant, who appeared to be the friend and legal adviser of Mr. Fortier, the husband, testified that the latter, before the execution of the note and mortgage in suit, proposed to Godchaux to borrow of him $10,000, and to secure the same by a mortgage on the Fort Leon plantation, of which he was the owner; that Godchaux declined to make the loan on the security offered on account of some defect in the title, and that the loan was afterwards made on the security of the mortgage in suit, with the agreement between Mr. Fortier and Godchaux that when the former perfected his title to the Fort Leon plantation, the mortgage should be transferred to it, and the property of Mrs. Fortier released therefrom. The testimony of Duque on these points was directly and unequivocally contradicted by the deposition of Godchaux. Godchaux also testified that, before the loan was made to Mrs. Fortier, he went to see the property which was afterwards mortgaged; that he was shown over it by Mrs. Fortier, who told him she wanted to borrow the money to improve the property and pay off the taxes due upon it. This testimony of Godchaux in reference to his inspection of the property and the statements of Mrs. Fortier was not directly contradicted by her, although she was examined as a witness in the case, nor was she questioned by her counsel in reference thereto. She testified that she received no money from Godchaux on the loan made by him, and that she did not receive any money on his check, which she admitted was indorsed by her, and that none of the money loaned was used for her separate benefit. Upon final hearing, the circuit court rendered a decree for the complainant in the original bill for $7,860, with interest thereon from March 16, 1878, and 5 per cent. attorney's fees, having deducted from the amount appearing to be due upon the note of Mrs. Fortier the sum of $2,140, that sum being the amount retained by Godchaux out of the proceeds of the note of Mrs. Fortier for the debt due him by Mr. Fortier, with the interest, etc. The court dismissed the cross-bill with costs. Both parties appealed.
It is first assigned for error by Mrs. Fortier, the original defendant, that, as the bill was filed in the name of "Albert Baldwin, in his capacity of president of the New Orleans National Bank," against the defendant, who is alleged to be a citizen of Louisiana, it does not appear that the parties were citizens of different states, and, as no other ground of jurisdiction is averred, the circuit court does not appear to have had jurisdiction of the case. If Baldwin was, in fact, the complainant, there was no ground stated in the petition upon which the jurisdiction of the circuit court could rest, and the objection to the jurisdiction could be made at any time. But the counsel for the bank insists that the bank, and not Baldwin, was the complainant. The question is, therefore, how is the bill to be construed?
It is clear, upon an inspection of the whole record, that the suit was treated by both parties and by the circuit court as the suit of the New Orleans National Bank and not of Albert Baldwin. Every pleading in the case, including the answer and cross-bill filed by the defendant, and every order and decree made by the court, was entitled “The New Orleans National Bank v.C. L. Fortier." In the appeal bond given by the defendant the case was described in the same manner. The cause of action set out in the petition was the cause of action of the bank. The plea of the defendant to the original