Destrehan v. Scudder

Napton, J., delivered the opinion of the Court.

In January, 1843, Scudder filed his bill in chancery against Destrehan,, in the Circuit Court of Cape Girardeau county.

The bill stated, that in October, 1840, the complainant rented of, Cornelius Paulding, of New Orleans, a hotel in that city, called the Planters’ Hotel, for one year from the 1st Nov. 1840, at the price of $7,500, payable in monthly instalments of $625 each; that the lease embraced the house, furniture and fixtures, and all the appurtenances and privileges appertaining to the same, and among others, the use of the gas tubes and pipes attached to the building; that it was also understood and agreed, that the building was to be kept in tenantable repair, and that said Destrehan became complainant’s security on said lease. The complainant, to secure Destrehan for this liability, executed a mortgage of certain lands in the counties of Perry and Cape Girardeau. The bill alledges, that in consequence of Paulding’s indebtedness to the Gas Light Company, the complainant was refused gas to supply the hotel, and that the upper rooms of the hotel were injured by leaks in the roof which let in the water, so that they were unfit for habitation; that in consequence of these injuries, he declined paying any rent to Paulding, but deposited *487 with Destrehan, as collateral security, the sum of $1,875, (three months rent,) and commenced a suit for damages against Paulding, which suit is averred to be still depending in the Supreme Court of Louisiana.— This conduct, it is averred in the bill, met with the decided approbation of Destrehan. In the month of April, 1840, the complainant gave Paulding notice, that his house was untenantable, and accordingly he left New Orleans for Perry county, in this State, where he has ever since resided, and on the 1st May, Paulding took possession. The bill then charges that Destrehan and Paulding combined against the complainant, and that Destrehan commenced a suit against him in the Parish Court of New Orleans for $3,750, in the progress of which the complainant’s property was sacrificed, and that Paulding became Destrahan’s security on the attachment bond in said suit. The bill further charges, that Destrehan afterwards, in Sept. ’43, commenced another suit against complainant in St. Louis; and that still further to harrass him, he has given notice that he will sell at a time specified, the lands in Perry and Cape'Girardeau, conveyed in the mortgage ©r deed of trust — and that he has advertised lands expressly excepted in the mortgage. The bill therefore prays a perpetual injunction upon this last proceeding.

Destrahan, in his answer, admits most of the facts as stated by Scudder. He admits, that his impression had been, that Paulding’s conduct in relation to the gas and the repairs of the Hotel, had been such as to authorize Scudder to abandon the premises, but the decision of the Parish Court of New Orleans, afterwards affirmed by the Supreme Court of the State, he supposes was conclusive evidence against Scudder on these points, and made him liable for the whole years rent. The respondent admits that after Scudder left New Orleans, he notified Paulding that he desired a settlement, and proposed to pay him the six months rent, (during which time complainant had occupied,) but Paulding declined, on the ground that Scudder’s occupancy had been during the business season in New Orleans, and he could not expect a proportionate rent for the summer months. Paulding was willing to compromise, by giving up three months rent and taking immediate possession, and this proposition Destrehan acceded to, believing, as he states, that he was liable for the whole year. The answer then avers, that Destrehan paid Paulding $5,625, being the rent for nine months, and deducting the $1,875 which Scudder had left with him, that Scudder was still indebted to him in the sum of $3,750. Destrehan admits that he commenced a suit in attachment against Scudder’s effects in New Orleans, for this amount, but he only realized from this suit about $120 00. The answer *488 states, that this suit in New Orleans, and the one in St. Louis, were both terminated before he directed proceedings on the mortgage. The answer disclaims all combination, &c.

The deed from Scudder to Destrehan was made an exhibit. This deed was expressed to be given “to warrant said Destrehan against any loss, damage, costs or trouble, that he might be exposed to by our want of punctuality to fulfill our above mentioned engagements with Mr. Paulding, of New Orleans, he, said Destrehan, being our security for said monthly rent. Now if the said Scudder should fail to pay the whole or any part of said rent, which he may stipulate to pay monthly to said Paulding, then the said Destrehan shall have power to put up six notices by six advertisements, severally to be put up at public places in said counties, of the time and place of sale of said lands, hereby transferred to him, and in accordance with said notices, shall sell at public auction to the highest bidder for cash, and after having executed a deed of transfer to the purchasers thereof, and having received the consideration thereof, he the said D. &c., after deducting the sum of money he may have had to pay in consequence of any failure that Scudder should make in the payment of the rent as above stipulated, and the interest of the same at the rate of ten per cent, from the time will have been paid by him, said D., will refund the balance to said S., or his heirs and assigns.”

The decision of the Supreme Court of Louisiana, made the 15th May, 1843, affirming the judgment of the Parish Court of New Orleans in the suit of Scudder against Paulding, for annulling the lease and for damages to the amount of $6000, was made an exhibit by defendant in his answer.

The papers exhibited by defendant show, that on the 27th April, 1841, Destrehan and Paulding compromised, by Paulding’s aecepting Destrehan’s obligation to pay nine months rent, and Destrehan’s giving possession on the 1st May.

Sundry depositions were filed in the cause by the complainant, which had been originally filed in the suit instituted by Destrehan against Scudder, in the St. Louis Court of Common Pleas. Objections were made to these depositions, but the objections were overruled. The depositions related entirely to the supposed breach of covenants in the lease from Paulding to Scudder; in the failure of gas, and in the injury to the attic rooms of the Planters’ Hotel by the insufficiency of the roof. It appeared that Scudder had applied to the Gas Light Company for a supply of gas for the Hotel, and offered to pay the price, but was refused, on the ground of a previous indebtedness to the company by Paulding. This *489 withdrawal of the gas lights, usual in the -hotels of that city, the witnesses agreed, was a serious drawback upon Scudder’s profits. The injury to some of the rooms, by the rain, was also proved to have been considerable. (5

Upon the hearing, the bill, answer and exhibits, and these depositions, were read. The plaintiff also gave in evidence the record of the attachment case in New Orleans, of Destrehan vs. Scudder, and the record of the proceedings of the Common Pleas of St. Louis, in the case of Destrehan vs. Scudder. The defendant gave in evidence the record of the'proceedings in the Parish Court of New Orleans, of the case of Scudder vs. Paulding. This was a petition to the Parish Court of New Orleans by Scudder, toannulthe lease from Paulding to himself, on account of the injuries to the upper rooms of the Hotel, and the failure to procure gas, and for $6000 damages. The decision of the court w.as against Scudder onboth grounds. The court held, that Paulding had not bound himself in the lease that the Gas Light Company should furnish the Hotel with gas, and that apart from the lease, there was no principle of law by which Paulding could be held responsible for the conduct of the Gas Light Company, there being, in fact, a suit pending between the company and him in relation to the alledged indebtedness of Paulding to the company. The court further held, that inasmuch as the Louisiana code contained a provision authorizing a lessee to repair the leased premises, and charge the cost of repair to the lessor, the want of repair was no ground for damages, much less for rescinding the contract. The judgment of the Parish Court was therefore for the defendant.

The court dissolved the injunction-as to $1,750 43, with ten per cent, interest thereon from the 1st May, 1841, and made the injunction perpetual as to the residue.

The defendant moved to set aside this decree, and for a rehearing, but the motion was overruled, and a bill of exceptions was taken, preserving all the testimony.

There are several questions in this case, which we think have already been definitively settled by the courts of Louisiana. The right of Scudder to abandon his lease, because of the difficulties he encountered in procuring gas for his Hotel, and the injury he believed himself to have sustained, by reason of defects in the roof of that building, is a matter which has once been litigated by the complainant in a form of his own selection, and cannot be again investigated. The Constitution of the United States has provided, that full faith and credit shall be given in each State, to the public acts, records affid judicial proceedings of every *490 ■other State, and has authorized Congress to prescribe the manner in which this object shall be attained. Under the act of 1790, in which Congress designed to carry out this constitutional provision, it has been settled, that a judgment of one of the State courts, where the subject matter and the parties are within its jurisdiction, cannot be questioned in the court of another State, upon any other grounds than such as would affect its validity in the State where the judgment is pronounced. With this principle engrafted into our federal jurisprudence, having already taken strong root in the international law of most civilized countries, it could not be doubted, that a judgment in a sister State would be a complete bar to the plaintiff seeking to litigate the same cause of action before one of our tribunals. Apart from any constitutional or legislative provision on the subject, I apprehend the question is equally well settled by the law of nations, as understood and enforced in countries where the common law prevails. Differences of opinion have prevailed as to the mode and extent to which the courts of one country would enforce the judgments pronounced in those of another and foreign jurisdiction; but where a defendant sets up a foreign judgment as a bar — it having been pronounced by a competent tribunal and carried into effect — it has never been doubted that the losing party cannot institute a suit elsewhere, and thus bring the matter again into controversy. It is res adjudicóla, and is conclusive. Phillips vs. Hunter, 2 H. Black, 410; Story’s Conflict of Laws, § 598.

The question, then, in relation to the admissibility of the depositions, which had been taken in the action brought by Destrehan in the St. Louis Court of Common Pleas, is unimportant — for all the depositions were exclusively upon the matters which had been settled in the action brought by Scudder in the Parish Court of New Orleans against Paulding.

The complaints of the bill on the ground of the failure of Paulding to have the roof of the Planters’ Hotel secured, and because of the refusal of the Gas Light Company to furnish that Hotel with gas, can furnish no •grounds to this Court for declaring the lease vacated or forfeited, or any justification to Scudder for acting upon the idea that he was released from its covenants. No other grounds are alledged in the bill, and we must therefore conclude, that Scudder was responsible for the whole years rent, unless Paulding’s taking possession on the first of May released him from that liability.

The principal, I may say, the only difficulty in the case, arises out of the compromise between Destrehan and Spaulding. Had no compromise *491 been effected, and no possession taken under it by Paulding, it is clear that Scudder would have been liable, under his lease, for the years’ rent. At least nothing appears to the contrary.

That this compromise was not binding on Scudder, is manifest. It was-made without his consent, either express or implied. But the court are not asked to enforce it. Destrehan is not seeking the interposition of a court of equity, but relies upon his rights under the mortgage. Scud-der is the party complaining, and'in order to justify an interposition in> his behalf, the Court must be satisfied that it would be productive of injustice to allow Destrehanto proceed in enforcing his legal rights. The question is not simply as to the authority of Destrehan in making the compromise, but the situation and character of Destrehan, and the circumstances under which the compromise was made, are certainly to be-regarded.

It is alledged in the bill, that the compromise was fraudulent — but. •there is no shadow of proof either direct or circumstantial on the subject. The answer is unequivocal in denying the fraud.

Was it an unfair or disadvantageous compromise ? It would seem not. If Scudder was responsible for the whole year’s rent, amounting to $7,~ ®00, having actually occupied the premises for six months, is it probable that the lessor would suffer him to quit the premises in May, when the business season in New Orleans was nearly over, paying only the six months rent ? Was it unreasonable for the security, under the circumstances, believing himself and his principal responsible for the whole year’s rent, to compromise by paying the rent for nine months ? If the rent were to be apportioned by a court, would this apportionment seem unreasonable cr unfair ? Surely not. Let it be recollected that Scudder had taken the house for a year, although the installments were due monthly — that Scudder had occupied the hotel, which must have been a large one, from the first of Novemberto the first of May — that the remaining six months, from May to October inclusive, would cover the sickly season in New Orleans — and it must be obvious that the house could not rent for the last six months for anything near the sum it had rented for during the winter and spring months. There is certainly nothing in the terms of the compromise to indicate anything like fraud or unfairness. On the contrary, it seems to be decidedly beneficial to Scudder.

Paulding’s taking possession of tlie hotel on the first of May was in consequence and by virtue of this compromise with Destrehan. Had Paulding taken possession under other circumstances, it would doubtless have released Scudder’s liability for subsequent rent; but Paulding re *492 fused to take possession until he was secured in the payment of nine months’ rent. If there was any reason to believe that this compromise was a collusive one, a court of equity Would not hesitate to disregard it. But we have nothing to indicate such collusion, except in the charges of the bill. Destrehan may have acted hastily and without the greatest prudence. The parish court of New Orleans had determined Scudder’s liability for the whole year’s rent. As Scudder had taken the case up to the appellate court, and thereby evinced an intention of adhering to the prosecution, Destrehan was certainly not warranted in undertaking a compromise without first consulting Scudder. But the compromise was made; without it, Scudder would have been ultimately liable for the year’s rent; — as it was, Paulding took possession at the end of six months, but not until he had secured the payment for nine months. Paulding is therefore safe, and the loss of the three months’ rent must fall on Scudder, or his security, Destrehan. Where shall it fall: on Scudder, who, without the compromise, would have had to pay the rent for the entire year, or upon Destrehan, who made the compromise without authority, but, so far as appears, in good faith and with the best intentions ?

Assuming that the compromise between Paulding and Destrehan was without authority and not binding upon Scudder, how would the liability of Scudder stand? His responsibility for the whole year’s rent is fixed, unless he can avail himself of the possession taken by Paulding under the compromise as a discharge. Would a court of equity permit him to do this where the compromise appeared fair and without collusion and advantageous to him? Shall he be permitted to repudiate so much of the compromise as he pleases, but avail himself of that part of the arrangement which may favor his interests ? Can Scudder, in a court of equity, avail himself of this act of Paulding, without, at the same time, taking the burden of Destrehan’s liability for the three additional months rent, without which there is no reason to suppose the possession would have been taken ? It would be hard for a mere security to be a loser in a transaction where his conduct had been untainted with Iraud and obviously advantageous to his principal. It must be recollected that Scudder had left New Orleans in April, without-leaving any funds in Destrehan’s possession to pay the three months’ rent which was clearly due, and that Destrehan had every reason to expect that nine months’ rent would fall upon him. It is true that Scudder had given him a mortgage upon lands in Missouri to indemnify him against loss, but the value of such an indemnity depends on circumstances. Destrehan may not have been informed of the value of these lands, and, at all events, the ultimate suffi *493 eiency of the indemnity might have proved.a very inadequate compensation for an immediate payment or sacrifice of property. His solicitude to compromise with Paulding was therefore very natural, and when the court can now see that the compromise was really a beneficial one to his principal, the security should not suffer by it.

The appellant complains that the court made no decree for the amount of the rent not enjoined, but no such decree was asked for. The defendant did not file any cross bill.

The fact that it does not appear that Destrehan has ever been compelled to pay any money for Scudder, might be very material, if Destrehan were seeking the interposition of the court. Destrehan is merely pursuing his legal remedies. The deed from Scudder to him provides, that “if the said Scudder should fail to pay the whole or any part of said rent, which he may stipulate to pay monthly' to said Paulding, then he, said D., shall have power to sell,” &c. This contingency, according to the statements of the bill itself, has occurred. Besides, the bill does not seek any relief on this ground. Undoubtedly, if Destrehan is not compelled to pay anything, Scudder would be entitled to relief — but the question is not presented by the present state of the pleadings.

In relation to the question concerning the validity of mortgages containing a power of sale in the mortgagee, there is no disposition on the part of the court now to disturb the former adjudications of this court.

The decree of the Circuit Court is reversed, and it is ordered, adjudged and decreed that the bill of complainant be dismissed.