US SUPREME COURT DECISIONS

Louisiana. A bill of complaint was filed in the District Court of the United States for the Eastern District of Louisiana to set aside a conveyance made by the complainant of certain lots of ground in the City of New Orleans, and to be restored to the possession of the same, alleging that the deed by which he, conveyed them was given on a contract for the loan of money, and that although in the form of a sale, it was given only as a pledge for the repayment of the money, and calling for an account of the rents and profits of the

property. The defendant demurred to the bill, and assigned for cause that the complainant, in the bill, had not made such a case as entitled him, in a court of the State of Louisiana, to any discovery touching the matters contained in the bill, nor to any relief in the district court. The ground of this demurrer was that the District Court of the United States of Louisiana, had no power to entertain proceedings and give relief in chancery.

The district court sustained the demurrer, and dismissed the bill. The decree of the district court was reversed.

Provisions of the laws of the United States establishing the courts of the United States in the District of Louisiana, and regulating the practice in those courts.

By the provisions of the acts of Congress, Louisiana, when she came into the union, had organized therein a district court of the United States, having the same jurisdiction, except as to appeal and writs of error, as the circuit courts of the United States in other states, and the modes of proceeding in that court were required to be according to the principles, rules, and usages which belong to courts of equity, as contradistinguished from courts of common law.

And whether there were or not, in the several states, courts of equity proceeding according to such principles and usages made no difference according to the construction uniformly given by this Court.

Congress has the power to establish circuit and district courts in any and all the states of the union and to confer on them equitable jurisdiction in cases coming within the Constitution. It falls within the express words of the Constitution.

The provisions of the act of Congress of 1824, relative to the practice of the courts of the United States in Louisiana, contain the descriptive term "civil actions," which embraces cases at law and in equity, and may be fairly construed as used in contradistinction to criminal causes. They apply equally to cases in equity, and if there are any laws in Louisiana directing the mode of proceeding in equity causes, they are adopted by that act and will govern the practice in the courts of the United States.

If there are no equitable claims or rights cognizable in the courts of the State of Louisiana, nor any courts of equity, and no state laws regulating the practice in equity causes, the law of 1824 does not apply to a case of chancery jurisdiction, and the District Court of Louisiana was bound to adopt the antecedent modes of proceeding, authorized under the former acts of Congress. chanrobles.com-red

Page 34 U. S. 633

If any part of a bill in chancery is good, and entitles the complainant to relief or discovery, a demurrer to the whole bill cannot be sustained.

It is an established and universal rule of pleading in chancery that a defendant may meet a complainant's bill by several modes of defense. He may demur, answer, and plead to different parts of the bill, so that if a bill for a discovery contain proper matter for the one, and not for the other, the defendant should answer the proper and demur to the improper matter, and if he demurs to the whole bill, the demurrer must be overruled.

On 25 July, 1832, the appellant, Edward Livingston, filed a bill of complaint in the district court by his solicitors, stating that on or about 25 July, 1822, being in want of money, he applied to Benjamin Story and John A. Fort, of the City of New Orleans, who agreed to lend to him the sum of $22,936, of which a part only was paid in cash, part in a note of John A. Fort, and $8,000, parcel of the said sum, was agreed to be afterwards paid to one John Rust for the purpose and in the manner afterwards stated. To secure the repayment of the money and interest at the rate of eighteen percent per annum, he conveyed to Fort and Story certain property, with the improvements on the same, situated on the Batture in New Orleans, owned by him. When this property was so conveyed, Fort and Story delivered to him a counterletter by which they agreed to reconvey the property to him on the payment of $25,000 (being the sum advanced and the interest) on 1 February then next, but if the same was not paid on that day, the property should be sold, and after paying the sum of $25,000 and the costs of sale, the residue should be repaid to him. At the time of the sale, the whole property was covered with an unfinished brick building, intended for fifteen stores, and a contract had been made with John Rust to finish the buildings for $8,000. Story agreed to pay the $8,000 to Rust, and this was with the interest at eighteen percent on it, a part of the $25,000 to be repaid on 1 February, 1823. The property was, at the time of the loan, worth $60,000, and is now worth double the sum.

Story and Fort took possession of the property, and the complainant went to New York on a visit, expecting the stores to chanrobles.com-red

Page 34 U. S. 634

be finished by his return, or that at least three of them would be in a condition to let, he having received an offer of rent for each of the three, which would have given a rate of interest equal to a principal of $10,000 each for the three smallest stores.

The complainant states that, on his return to New Orleans, he found little or nothing had been done to the stores; the $8,000 had been paid to John Rust, and if the property had been sold in February, it would not have produced anything like its value. He therefore applied to Fort and Story for a further time to pay the money borrowed, which they would not consent to, but on the following conditions: that the property should be advertised for sale on 2 June then next; that the sum due to them should be increased from $25,000 to $27,500, which sum was composed first of the said $25,000, secondly, of $1,500 for interest for the delay of four months, at eighteen percent, thirdly, $800 for auctioneer's commissions, of $50 for advertising, and of $200 arbitrarily added, without any designation; of which a memorandum was given by the said Fort and Story and is now ready to be produced, and that the counterletter so executed, as aforesaid, to him by the said Fort and Story should be annulled.

Being entirely at the mercy of Fort and Story, he was obliged to consent to these terms in hope of relief when money should become plenty; but on the contrary, the pressure became greater, and on 2 June, in order to obtain a delay of sixty days, he was forced to consent to sign a paper by which it was agreed that the debt should be augmented to the sum of $27,830.76, and that if the same was not paid on 5 August, then the property should belong to the said Fort and Story without any sale; but there was no clause by which he should be discharged from the payment of the sum so borrowed; as aforesaid, whereby he would have been liable to the payment of the sum so advanced in case the property had fallen in value.

On 5 August above mentioned, the said Fort and Story demanded, by a notary, the full sum of $27,830.76, which included the said charge of $800 for auctioneer's fees for selling, although no sale had been made, chanrobles.com-red

Page 34 U. S. 635

and all the other illegal charges above stated, and on nonpayment they protested for damages and interest on the sum, thereby showing their intent to hold the complainant responsible for the sum demanded, if the premises should, by any accident, become insufficient in value to pay the same.

Fort and Story remained in possession of the said premises until the death of the said John A. Fort, which took place some time in the year 1828, and after his death, the said Benjamin Story took the whole of the said property by some arrangement with the heirs of John A. Fort, and is now and ever since has been in the sole possession thereof, and the said John and Benjamin in the lifetime of the said John, and the said Benjamin, after the death of the said John, have received the rents and profits of the said property to the amount at least of $60,000.

The bill states that the complainant is advised and believes he has a right to ask and recover from the said Benjamin Story the possession of the said property, and an account of the rents and profits thereof, the conveyance of the same having been made on a contract for the loan of money, and although in the form of a sale, was in reality only a pledge for the repayment of the same; the act by which the complainant agreed to dispense with the sale being void and of no effect in law.

The bill concludes as follows:

"And your orator prays that if on said account it shall appear that there is a balance due to him, as he hopes to be able to show will be the case, that the said Benjamin Story may be decreed to pay the same to him and to surrender the said property to him, and that if any balance be found due from your orator, that the said Benjamin Story may be decreed to deliver the said property to your orator on his paying or tendering to him the said balance, and that your orator may have such other relief as the nature of his case may require, and that the said Benjamin Story in his own right, and also as executor of the last will and testament of the said John A. Fort, or in any other manner representing the estate of the said John A. Fort, may be summoned to answer this bill, your orator averring that he is a citizen of the State of New York and that the said Benjamin Story is a citizen of the State of Louisiana, now residing in New Orleans. "

Page 34 U. S. 636

Upon this bill a subpoena was issued directed to the marshal, commanding him to summon Benjamin Story to appear at the district court on the 3d Monday in February, 1834, "to answer a bill exhibited against him in the said court, together with certain interrogatories therewith filed by the complainants."

A subpoena was also issued in the same terms, directed to Benjamin Story executor of John A. Fort.

On 17 February, 1834, Benjamin Story came into court and by his solicitor, L. Pierce, Esq. filed the following demurrer.

"The defendant by protestation not confessing all or any of the matters and things in the complainant's bill to be true in such manner and form as the same are therein set forth and alleged, does demur to the said bill, and for cause of demurrer shows that the complainant has not by his said bill, made such a case as entitles him, in a court of equity in this state, to any discovery from this defendant, touching the matters contained in the said bill, or any or either of such matters, nor entitles the said complainant to any relief in this court, touching any of the matters therein complained of. And for further cause of demurrer to said bill, he shows that by complainant's own showing, in the said bill, that the heir of John A. Fort, who is therein named, is a necessary party to the said bill, as much as it is therein stated that all the matters of which he complains, were transacted with this defendant, and John A. Fort, whose widow, the present Mrs. Luzenbourg, is the sole heir and residuary legatee, but yet the said complainant hath not made her party to the said bill, wherefore as before, and for all the above causes, and for divers other good causes of demurrer appearing in the said bill, this defendant does demur thereto, and he prays the judgment of this honorable court whether he shall be compelled to make any further and other answer to the said bill, and he humbly prays to be dismissed from hence, with his reasonable costs in this behalf sustained."

On 20 May, 1834, the district court, by a decree, sustained the demurrer, and ordered the bill of the complainant to be dismissed.

The complainant prosecuted this appeal. chanrobles.com-red

Page 34 U. S. 652