
    No. 4975.
    John M. Carr vs. Louisiana National Bank.
    A contract ol pledge invalid, as to one ot its clauses, at. tlie moment of its formation, may bo mado valid by jisnbsounont act ol the Legislature, enacted tor that purpose; and a renewal ol the contract, alter the passage ol such an act, makes it legal.
    REPEAL from the Sixth District Court, parish of Orleans. Saucier,
    
    
      Alex. T. Sle.de, for plaintiff and appellant.
    
      Zea, Finney & Miller, for defendant.
   The opinion of the court was delivered by

DeBlanc, J.

Plaintiff claims from defendant, in cash, §5543 76, and, in legislative warrants, §8822 48, for this; On or about the fifteenth of August, 1871, he effected with said defendant a loan of §14,366 24. That loan is evidenced by a note dated fifteenth of August, 1871, payable one year after date, drawn'by plaintiff and indorsed by J. Pinckney Smith. To secure said loan, plaintiff pledged with said bank, as collaterals, §28,732 48 worth of legislative warrants, issued to pay the per diem and mileage of members during the session of 1871. The note thus given became due on the eighteenth of August, 1872,’ but was renewed and extended for one year.

Plaintiff alleges that on Friday, the twenty-first of March, 1873, at about two o’clock, p. m., J. H. Oglesby, President of the Louisiana Rational Bank, and acting for it, met him at the corner of Gravier and Baronno streets, and asked him to sign a paper which he, Oglesby, then hold in his hand, the purport of which was an agreement to allow the sale of the pledged warrants at thirty-five cents on the dollar; that it was all they were worth, and that lie would credit the amount in extinguishment of plaintiff’s .note; that, upon the representations and at the urgent request of said Oglesby, he signed said agreement; that at the time he made these representations the said Oglesby had already obtained from the. Auditor of Public Accounts a warrant on the State Treasurer for §19,910, in exchange for an equal amount of tho pledged warrants; that,;to the knowledge of Oglesby, an appropriation of twenty thousand dollars had been made to pay such warrants, which wore worth their face value, and that, on his part, it was a fraud and a deception to have induced plaintiff to consent to a sale at thirty-five cents on tho dollar.

In its. answer, the Louisiana National Bank, after the general issue, sets up the pledge made by plaintiff, admits tho receipt of new warrants to the amount of twenty thousand dollars in lieu of those first delivered, and avers tho insuffioienejr of what remains of those collaterals to pay tho pledged debt. It also acknowledges that, since the date of its answer, the now warrants woro sold for seven thousand one hundred dollars, credited on plaintiffs note.

What are the terms of the pledge referred to ? “I, .John M. Carr, do hereby consent and agree that, in case my note shall not bo punctually paid at maturity, the Louisiana National Bank shall have the right to sell and transfer the warrants so pledged, for cash, at public or private sale, without notice, at the option of said company, and the proceeds of said sale shall be appropriated to the payment of my said note, and all costs and charges attending the sale.”

Tho pledge made on tho fifteenth of August, 1871, was renewed by •plaintiff on tho thirteenth of February, and thirteenth of April, 1872. On the twenty-third of February, 1872,. the Legislature adopted an act amending article 3193 of the Civil Code, and “ authorizing the sale or other disposition of the property pledged, in such manner ns may be agreed upon by the parties, without the intervention of courts of justice, and providing that all pledges then existing shall remain in force and be •subject to the provisions of this act.”

Admitting the nullity — at its date — of the clause in the act of pledge of 1871 which authorized the private salí', and without notice, of the pledged warrants, was not its renewal on the thirteenth of April, 1872, •a now contract, or, if less than that, tho revival of a once prohibited and then authorized contract ? On this point the argument of plaintiff’s counsel is ingenious, but certainly not reasonable, for it is difficult to realizo how tho nullity pronounced by a repealed law can survive the repeal of that law, to wit: a contract or acknowledgment posterior to that repeal, aiid destroy tho effect of an agreement authorized by a special act of tho Legislature, one adopted expressly to legalize and sanction such contacts.

Had the Legislature in 1873 passed an act avoiding tho condition to sell without intervention of courts in every contract of pledge entered into after tlio adoption of the act of 1872 the pledgers could have justly complained that such a provision liad impaired and defeated an acquired right, but plaintiff can not seriously complain of an act which validates his invalid contract, and imparts to its last renewal a validity which, perhaps, it had not at its origin.

Tho legislative warrants were not exchanged for but converted into Auditor’s warrants. Tlioir form was improved, their substance was not altered. They wore, after as before that indispensable conversion, the property of Carr, tho pledge of tho bank, a debt of the State. They were dressed as required by law to gain admittance in the treasury, and in their new form increased in value. Their undressed twins at tho date of tho trial were still in tho coffers of the bank, and, according to the evidence, absolutely worthless.

If, as charged by plaintiff,' there really was an exchange of tho warrants, was it not like an exchange of copper for gold, and is this not the occasion to apply the rule “ that the mandatary is not considered as having exceeded his authority, when ho has fulfilled the trust confided to him in a manner more advantageous to tho principal than that expressed in his appointment.” R. C. C. 3011.

Tho additional grounds raised by plaintiff are :

First — That the hank was without authority to part with the, pledged warrants, except for cash. That is exactly, what it did; they were sold for sevon thousand one hundred dollars in cash. '

Second — That tho authority to soli legislative warrants was no authority to sell the Auditor’s warrants. This is a distinction in form, not in substance. The bank sold what it hold as a pledge, a claim of plaintiff against the State, tho identical claim pledged by the latter, then indorsed by the Auditor’s warrants.

Third — That defendant has sacrificed said warrants, and is liable for their value. They were sold on tho twenty-fifth of April, 1873, for one cent more on tho dollar than tho lowest price fixed by plaintiff, and, wo presume, for one cent less than might have been obtained at that dcite.. On tho thirtieth of Juno, 1873, tho hank, through its counsel, allowed J. M. Carr, tho plaintiff, a credit of two hundred dollars on a judgment rendered in its favor and against said Carr. That credit covers the difference between tho price received from the sale of tho warrants and that which Newman said “ho wras inclined to believe he offered for them.” Considering the date of tho sale and their value at that date, tho warrants were not sacrificed.

Plaintiff contends that theie never was but one act of pledge between him and the bank, that of 1871, and that said pledge being tho only one in existence in 1872, the law when adopted could not, without impairing tho obligation of that contract, authorize tho private sale previously prohibited. That said law impaired the rights of John M. Carr on the property ho had pledged. If so, all ho had to do, instead of renewing liis contract, instead of authorizing as he did, the sale at thirty-five cents on the dollar, would have been to plead the nullity of the pledge, or rather of one of its clauses, that which he himself had cither proposed or accepted. He did the very reverse, and of his own accord, over his own signature, far from repudiating the provision of.th,o act of 1872, which legalized the one illegal clause of Ms contract, he renewed Ms obligation and the pledge by which it was secured.

Of what right can plaintiff claim that he has been divested ? Is it of the right- to disregard an .agreement which he sought to withdraw, a consent which he gave to cancel a condition which ho fixed, to contest a ■privilege which ho granted? In this instance, ho could have been divested I mt of the right of violating one of the most important conditions of his contract, and that right has been swept away by his own act and the statute of 1872.

There is no error in the judgment appealed from.

It is therefore ordered, adjudged, and decreed that said judgment be and it is hereby affirmed at appellant’s costs.  