Fleitas v. Richardson

147 U.S. 538 (1893)

FLEITAS
v.
RICHARDSON, (No. 1.)

No. 29.

Supreme Court of United States.

Argued April 14, 1892. Decided March 6, 1893. APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE EASTERN DISTRICT OF LOUISIANA.

Mr. J.R. Beckwith for appellant.

Mr. Thomas J. Semmes for appellee.

MR. JUSTICE GRAY, after stating the case, delivered the opinion of the court.

At October term, 1888, this court denied a motion to dismiss or affirm, submitted on briefs under Rule 6. But on fuller consideration of the case, and in the light of the oral arguments of counsel, we are constrained (although the question is not free from difficulty,) to hold that this court has no jurisdiction, because the order appealed from is not a final judgment or decree.

By the Louisiana Code of Practice, an act of mortgage, passed before a notary public in the presence of two witnesses, with an acknowledgment and identification of the debt thereby secured, imports a confession of judgment, upon which the creditor is entitled to executory process, and to obtain, without previous citation to the debtor, an order for the seizure and sale of the mortgaged property for the payment of the debt. Arts. 63, 98, 732, 733, 734. But the clerk of the court is required to give notice of this order to the debtor three days before the sale, adding a day for every twenty miles between the place of his residence and the place where the court is held. Art. 735. If such notice is not given to the debtor, the proceeding is erroneous. Saillard v. White, 14 Louisiana, 84; Hart v. Pike, 29 La. Ann. 262. The debtor may obtain an injunction to suspend the sale, if before the time of sale he files in the court his opposition in writing, under oath, alleging that the debt has been paid, or remitted, or extinguished, or that the time of payment has been extended, or that the act of mortgage is forged, or obtained by fraud, violence, or other unlawful means, or that he has a liquidated account to plead in compensation, or that the action for the debt is barred by prescription. Arts. 738, 739.

The provisions of that code, making the acknowledgment of the debt and mortgage, in solemn form before a notary public, conclusive evidence, upon which, without previous notice to the debtor, the creditor may obtain an order for the seizure and sale of the mortgaged lands to satisfy his debt, bear some analogy to proceedings, (never denied to be due process of law,) which were well known where the common law prevailed, before the adoption of the Constitution of the United States — such as the recognizances called statute merchant and statute staple in England, and similar recognizances in Massachusetts, taken before a court or magistrate, and upon which, when recorded, execution might issue without previous notice to the debtor, and be levied upon his lands or goods. 2 Bl. Com. 160, 341, 342; Bac. Ab. Execution, B; The King v. Giles, 8 Price, 293, 316, 351; Mass. Stat. 1782, c. 21; Albee v. Ward, 8 Mass. 79, 84; Rev. Stat. c. 118; Gen. Stat. c. 152; Pub. Stat. c. 193.

In Louisiana, however, the act before the notary, as well as the order for seizure and sale, includes no lands but those described in the mortgage; and, although the creditor may obtain that order without previous notice to the debtor, the sale cannot take place until the debtor has had notice and opportunity to interpose objections.

This proceeding, therefore, is a civil suit inter partes, which, where the parties are citizens of different States, is within the jurisdiction conferred by Congress on the Circuit Court of the United States. Act of September 24, 1789, c. 20, § 11, 1 Stat. 79; Rev. Stat. § 739; Acts of March 3, 1875, c. 137, § 1, 18 Stat. 470; March 3, 1887, c. 373, § 1, 24 Stat. 552; August 13, 1888, c. 866, 25 Stat. 434; Toland v. Sprague, 12 Pet. 300; Levy v. Fitzpatrick, 15 Pet. 167; Chaffee v. Hayward, 20 How. 208, 215; Marin v. Lalley, 17 Wall. 14. And the proceeding, though in summary form, is in the nature of a bill in equity for the foreclosure of a mortgage, and clearly belongs on the equity side of that court. Brewster v. Wakefield, 22 How. 118, 128; Walker v. Dreville, 12 Wall. 440; Marin v. Lalley, 17 Wall. 14; Idaho & Oregon Co. v. Bradbury, 132 U.S. 509, 515.

The debtor being entitled to notice and hearing before an actual sale of the property, it would seem, upon principle, that the order for a sale must be considered as interlocutory only, and not the final decree in the case, at least when the debtor does, within the time allowed by the code, come in and contest the validity of the proceedings. McGourkey v. Toledo & Ohio Railway, 146 U.S. 536, 545, 547, 549, and cases there cited.

By the decisions of the Supreme Court of Louisiana, indeed, such an order, "exhausting the power of the court quoad the application," although its execution may be stayed on the opposition of the debtor, is subject to appeal, under the practice in that State. Louisiana Code of Practice, arts. 565, 566; Harrod v. Voorhies, 16 Louisiana, 254; Mitchell v. Logan, 34 La. Ann. 998, 1003; Ralston v. British & American Mortgage Co., 37 La. Ann. 193. But the practice or the decisions of the State in this respect cannot control the appellate jurisdiction of this court from the Circuit Court of the United States, as defined by act of Congress. Rev. Stat. § 691; Luxton v. North River Bridge, ante, 337, 341.

Upon the question whether the order of seizure and sale was a final judgment, the case of Levy v. Fitzpatrick, above cited, is much in point, and was fully discussed in the opinion delivered by Mr. Justice McKinley, who was peculiarly familiar with the law of Louisiana. In that case, a writ of error to reverse the order of seizure and sale, made without previous notice to the debtors, was dismissed, for want of jurisdiction; and Mr. Justice McKinley, speaking for the whole court, said:

"Had this proceeding taken place before a judge of competent authority in Louisiana, the debtors might have appealed from the order of the judge to the Supreme Court of that State; and that court might, according to the laws of Louisiana, have examined and decided upon the errors which have been assigned here. But there is a marked and radical difference between the jurisdiction of the courts of Louisiana, and those of the United States. By the former, no regard is paid to the citizenship of the parties; and in such a case as this, no process is necessary to bring the debtors before the court. They having signed and acknowledged the authentic act, according to the forms of the law of Louisiana, are, for all the purposes of obtaining executory process, presumed to be before the judge. Louisiana Code of Practice, arts. 733, 734. An appeal will lie to the Supreme Court of Louisiana from any interlocutory or incidental order, made in the progress of the cause, which might produce irreparable injury. State v. Lewis, 9 Martin, 301, 302; Broussard v. Fralian, 4 Martin, 489; Gurlie v. Coquet, 3 Martin (N.S.) 498; Seghers v. Antheman, 1 Martin (N.S.) 73; State v. Pitot, 12 Martin, 485."

But, as the judge went on to say, "the jurisdiction of the courts of the United States is limited by law, and can only be exercised in specified cases." He then observed that by the Judiciary Act of 1789, c. 20, § 11, giving the Circuit Court of the United States original jurisdiction of suits at common law or in equity between citizens of different States, no judgment could be rendered by a Circuit Court against any defendant not served with process, unless he waived the necessity of service by entering his appearance in the suit: and that, by section 22 of the same act, only final judgments of the Circuit Court could be reviewed by this court on writ of error; and added: "It is obvious that the debtors were not before the judge, in this case, by the service of process, or by voluntary appearance, when he granted the executory process. In that aspect of the case, then, the order could not be regarded as a final judgment, within the meaning of the twenty-second section of the statute. But was the order a final judgment, according to the laws of Louisiana? The fact of its being subject to appeal does not prove that it was, as has already been shown. Nor could it, per se, give to the execution of the process, ordered by the judge, the dignity of a judicial sale. Unless at least three days' previous notice were given to the debtors, the sale would be utterly void. Grant v. Walden, 6 Louisiana, 623, 631. This proves that some other act was necessary, on the part of the plaintiffs, to entitle them to the fruits of their judgment by confession. And in that act is involved the merits of the whole case; because, upon that notice, the debtors had a right to come into court and file their petition, which is technically called an opposition, and set up, as matter of defence, everything that could be assigned for error here, and pray for an injunction to stay the executory process till the matter of the petition could be heard and determined. And upon an answer to the petition coming in, the whole merits of the case between the parties, including the necessary questions of jurisdiction, might have been tried, and final judgment rendered. Code of Practice, Arts. 738, 739. From this view of the case, we think the order granting executory process cannot be regarded as anything more than a judgment nisi. To such a judgment a writ of error would not lie. The writ of error in this case must therefore be dismissed." 15 Pet. 170-172.

The single ground of that decision, as appears by these extracts from the opinion, was that there had been no final judgment in the Circuit Court. The point that the case, though coming from the State of Louisiana, where the distinction between common law and equity is not preserved, yet, being essentially a suit in equity in the Circuit Court of the United States, should have been brought to this court by appeal, and not by writ of error, was not considered or noticed, and had not then been decided, although it is now well settled. McCollum v. Eager, 2 How. 61; Walker v. Dreville, 12 Wall. 440; Marin v. Lalley, 17 Wall. 14.

In Marin v. Lalley, above cited, the order of seizure and sale was made by the Circuit Court on March 28, 1872; the defendants afterwards came in, filed various objections, oppositions and answers, and prayed that the proceedings might be quashed; the court, on June 3, ordered that "the objections and answers of the defendants to the order of seizure and sale be overruled;" and the defendants, on June 13, appealed (as appears on referring to the record) from "the order for executory process, entered herein on the 28th day of March, 1872, and made final on the 3d day of June, 1872, by judgment of this honorable court." The appeal taken by the defendants in that case, and which this court refused to dismiss on motion, was not an appeal from the original order of March 28, but from that order as made final by the judgment of June 3, and was, therefore, an appeal from that judgment. It was of this final order, made after notice to and opposition by the defendants, that Chief Justice Chase, in delivering judgment, said: "It is in substance a decree of foreclosure and sale, which has repeatedly been held to be a final decree." "If there were any doubt as to the finality of the original order, there can be none that it became final when the answer and objections were overruled. That order seems to have been made contradictorily with the debtors. Their opposition was overruled, and their property decreed to be seized and sold to pay their debts." And he distinguished Levy v. Fitzpatrick, above cited, on the ground that the order there held not to be a final judgment was "the original order, without the three days' notice, and without any act on the part of the debtors." 17 Wall. 17, 18.

The present case appears to us to be governed by Levy v. Fitzpatrick, and to be likewise distinguishable from Marin v. Lalley.

The original order of the Circuit Court for a seizure and sale was made June 29, 1888, and directed the marshal to seize the property, but to stay the sale until the further orders of the court. On June 30, a notice, together with a copy of the bill and order, was issued by the clerk and served on the defendant; and the defendant, appearing specially for the purpose, prayed for an appeal from that order, which was denied. These were all the proceedings which took place at the first term.

At the next term, the defendant, on November 19, again appearing specially, moved to quash the proceedings, and, if that should be refused, renewed his prayer for an appeal from the order of June 29. The writ of seizure and sale was not issued to the marshal until November 22, and directed that the sale should be stayed until the further orders of the court, under its former order. On November 24, the court denied the motion to quash, and granted the appeal, upon the defendant giving bond in an amount to be determined. On December 7, the court, reconsidering the whole matter with reference to the order of June 29, and to the defendant's application of June 30 for an appeal from that order, ordered that so much of that order, as directed the marshal to stay the sale until the further orders of the court, be stricken out; and that an appeal, to operate as a supersedeas, be allowed to the defendant nunc pro tunc as of June 30, 1888, on his giving bond in the sum of $1000. The defendant gave bond accordingly to prosecute his appeal "from the decree rendered on June 29, 1888."

It thus clearly appears that the only appeal claimed by the defendant was from the original order of seizure and sale of June 29, 1888, made before notice to the defendant, and was allowed, as of June 30, upon the application which he had then made, as soon as he had notice of that order; and that no appeal was, in terms or by implication, claimed, applied for, allowed or taken from the order of December 7, which was the final order of the Circuit Court in this case.

It necessarily follows that the order appealed from was not a final decree, and that the appeal must be dismissed for want of jurisdiction.

We are the more ready to accept this conclusion, because we have no doubt that if, upon this record, the appeal could be treated as having been taken from the final decree of December 7, no reason is shown for reversing the judgment of the Circuit Court. The only objections taken below to the order and proceedings, as appears by the motion to quash, were that the Circuit Court had no jurisdiction, and that there was no authentic evidence of the debt to Shattuck & Hoffman, secured by the same mortgage as the notes to the plaintiff. But that the Circuit Court, sitting in equity, had jurisdiction of the case, has been already shown. And there being authentic evidence of the plaintiff's debt, the want of like evidence of the separate and distinct debt to Shattuck & Hoffman, which by the express terms of the mortgage was subordinate to the debt to the plaintiff, is immaterial. Chambliss v. Atchison, 2 La. Ann. 488, 491; Renshaw v. Richards, 30 La. Ann. 398; Dejean v. Hebert, 31 La. Ann. 729; Soniat v. Miles, 32 La. Ann. 164.

Appeal dismissed for want of jurisdiction.

MR. JUSTICE SHIRAS, not having been a member of the court when this case was argued, took no part in its decision.