Livingston's v. Story

Mr. Justice Wayne

delivered the opinion of the Court.

The legal question to be decided in this case, depends altogether upon the facts disclosed in the bill, answers, and documentary evidence on the record.

The complainant charges, that some time previous to the 25th July, 1822, being in want of money, he applied to the defendant, and John A. Fortj for a loan, offering as security, a lot on the batture of the suburb St. Mary, between Common and Gravier streets, in New Orleans, on which a building intended for stores, had been *378 begun; that the defendant and Fort, had agreed to lend him twenty-two thousand nine hundred and thirty-six dollars, of which a part only, was paid in cash, part in a note of John A. Fort, and eight thousand dollars of which, was, afterwards, agreed between himself, the defendant, and Fort, to be paid by Story and Fort, to one John Rust, a mechanic; who had contracted with complainant, to complete the stores; that to secure the payment of the money borrowed, complainant- conveyed to Fort and Story the lot of ground mentioned; and that contemporaneously with the' deed of sale, they executed on their part, an instrument in writing, called a counter-letter, by which they promised, on the payment of twenty-five thousand dol-' lars, on or before the 1st day of February, 1823, to.reconvey to the complainant the property which he had conveyed to them. The complainant further charges, that of the sum of twenty-five thousand dollars, to be paid by him on the 1st of February a part of it was made up by a charge of interest, at 18 per cent, per annum upon the amount of twenty-two thousand nine hundred and thirty-six dollars, actually advanced to him, and on his account to Rust, by Fort and Story. The complainant also'transferred his written contract with Rust, to the defendant and Fort, rendering himself responsible for the proper employment of the eight thousand dollars by Rust, and which was to be paid Rust in weekly payments, by the defendant" and Fort. Rust, on his part, consented to the transfer of his contract, and accelpts Fort and Story in the place of complainant. The stores were to be completed by Rust, by the first of November, 1822, in a workmanlike manner, and all the materials, except those already provided, were to be found by Rust; and "in his contract, he renounces all claim or privilege upon the building, beyond the eight thousand dollars which was to be paid him by Fort and Story, for the complainant. For the deed of sale from Livingston to Fort and Story— the counter-letter t'o Livingston — Rust’s contract, and the transfer of it — all of the same' date, see documents, A B, C, ante, page 354. The complainant further charges, that soon after the transaction,' he left New Orleans, and that when he returned to it, he found that Fort and Story had paid to Rust eight thousand .dollars on his account; but that little or nothing had been done towards the completion of the stores; so that if the property had been sold on the 1st of February, according to the terms of the mounter-letter, it would, not haVe produced any'thing like its full value. That under these circumstances, be applied to Fort and Story for further time to make the *379 payment of the sum loaned, which' they would not consent to, but on the following conditions: that the property should.be advertised for sale on the 2d of June, 1823; that the sum due them should be increased from twenty-five thousand dollars to twenty-seven thousand five hundred; dollars; which was so increased,, by the addition of fifteen hundred dollars as interest, at eighteen per cent..for four months, eight hundred dollars for auctioneers’ commissions, fifty dollars for advertising, and one hundred and fifty dollars, arbitrarily - added by the said Fort and Story. The complainant states, that being entirely at the mercy of Fort and Story, he consented to those terms, and executed a paper accordingly; ante, page 356. On the 2d June, the complainant being still unable to repay the actual sum advanced to him, and the additions made by the charge of interest at eighteen percent. &c. &c., he applied to Fort and Story for a further extension of the time of sale, which they consented to for twp months longer, to the 5th of August, by which, his debt to them was augmented to twenty-seven thousand eight hundred and thirty dollars seventy-six cents; he agreeing in writing, that if, on the last mentioned day, he should fail to pay twenty-seven thousand eight hundred dollars, seventy-six cents, then the lot and all the buildings thereon were to becóme the full and absolute property of Fort and Story; ante, page 356. The day came, and the complainant did not pay. The defendant had him protested, as he- had before done on the 4th of February, for his noncompliance with hi.s agreement to pay the'sum of twenty-five thousand dollars: and on that of the 5th of August, for his noncompliance with his agreement to pay twenty-seven thousand eight'hundred and thirty, dollars, seventy-six cents; and for all damages, costs and charges, and interest, suffered or to be suffered by the said Fort and Story. The defendant and Fort after this, continued in possession of the lot and buildings, until the death of Fort, which took place in 1828; and after the death of'Fort, the defendant Story retained or took possession of the property by an arrangement with the heirs of Fort. It is to be remembered that" the possession of the property was' given by Livingston to Fort and Story, on the 22d of July, 1822, when the deed of sale and counter-; letter were executed.

Here it is proper, for a full understanding of the transaction between these parties, to set out, what were the rights of Livingston, and obligations of Fort and Story to Livingston, growing out of the counter-letter, and continued by them on the subsequent agreement, *380 until that of the 2d of June; when it was stipulated by Livingston, that if he failed to pay on the 5th of August, the property was to become absolute in them.

The counter-letter, after reciting that Livingston had sold and conveyed to them the lot, buildings and improvements, for the sum of twenty-five thousand dollars in cash, .declares it to be the true intent and meaning of the parties to said deed of sale, that if Livingston shall pay and reimburse to Fort and Story, twenty-five thousand dollars, on or before the 1st of. February, 18-23, then Fort and Story stipulate and bind themselves to reconvey the property to Livingston. And in case of nonpayment, at the stipulated time, than Fort and Story “covenant and agree to cause the said property to be sold at public auction, by one of the licensed auctioneers of this city, after twenty days’ public, notice, on the following terms, to' wit, twenty-five thousand dollars in cash, and the residue in equal payments, at one and two years; the purchasers giving satisfactory endorsed notes, and special mortgage on the property until final payment. The residue, after deducting the costs attending the sale, to be delivered over to the said Edward Livingston.

When the first extension of the time of payment was given, we find, substantially, the clause .of the kind just recited. It will be well to give it in terms.

Agreement between Edward Livingston and .John A. Fort and Benjamin Story:

1st. The sale of lot No. l,.on the batture, with the buildings thereon, to be postponed until the 2d of June next

2d. On that.day it shall be sold by M£Coy & Co., unless sooner redeemed, after being advertised in the Courier de la Louisiane, in .French, and the Orleans Gazette, in English, from the 1st day of May previous to sale.

3d. The -conditions of the sale shall be 27,350 dollars cash, and ' the residue at one and two years, with special mortgage: but in this sum is included 850 dollars, at which the auctioneers’ commission and charges of advertisement are calculated, which are to be deducted or reduced to what they shall really amount to, if payment be made before the 1 st of June.

4th. The overplus, after deducting the cash payment, is to be delivered to Edward Livingston.

5th. The counter-letter, executed by Messrs. Fort and Story, *381 shall he delivered up, and the registry thereof annulled immediately after the signature of this agreement, made by duplicate, &e.

The defendant begins his answer by denying the right of the complainant to sue in the district court of the United States for the eastern district of Louisiana, on áccount of both being citizens of the same state; equivalent to a denial of the jurisdiction of the court over the case.

He then denies, positively and repeatedly, that Fort and himself, either jointly or separately, ever agreed to lend the complainant 22,036 dollars. So far. from any loan having been intended by the parties, he says, the negotiation for the sale of the lots began between Fort and Nathan. Morse, (the latter of whom he states as having acted for the complainant;) and that one of them informed him that the complainant wished to raise money on mortgage; that he peremptorily refused to advance any money to the complainant on mortgage. ' That this refusal was afterwards made by him to the defendant himself; and for a confirmation of . his refusal and understanding of the parties, he. refers to two notes of Morse, as a part of his answer, both of them addressed to Fort; the first dáted the 13th of July, and the other on the day the conveyance of the lot was made tó himself and Fort, by Livingston., Ante* page 360. He then states' the sale of the lot to himself and Fort; refers io the deed of sale; and, genérally, declares himself and Fort ha\te paid more than the price agreed on for the property so purchased. He then admits the execution, by himself 'and Fort, on the day qf the sale, of an instrument in writing; giving to Livingston the powetto redeem;. whereby, upon the payment of 25,000 dollars, on or before the 1st of February, they were to reconvey the property to Livingston; and if he faibd tA-pay, that Fort and Story were to sell the property so acquired and purchased, and if it brought more than 25,000 dollars, that they would give the surplus to the complainant; The answer then contains the failure of Livingston to pay; .the extension of time to him by another agreement, to the 2d of June, on which they agreed to postpone the sale; and that Livingston was. to give them a compensation for the additional chance which the tiirie allowed gave him to repurchase the lot. Upon this' agreement the defendant relies to prove an absolute bill'of sale Of the property to himself and Fort at the time of its execution; because the fifth and last clause of it annulle'd the counter-letter. The defendant recites the second failure of Livingston-to pay; the fur *382 ther extension of time to him to the 5th of August, and Livingston’s stipulation, ante, page 356, by which, on Livingston’s failure to pay 27,830 dollars 76 cents, and any further sum that Fort and Story may be udder the necessity of paying for the care and preservation of the property; the lot and buildings were to become the full and absolute property’ of Fort and Story; and Livingston’s obligation to surrender and cancel all and every writing or other document in relation to the property, that may give him any equity of redemption, or other right in the premises; it being the true intent and meaning of the parties, that in case of failure of payment, that the lot and buildings, and appurtenances, are to vest in Fort and Story a full title in fee simple, forever. The defendant insists that Livingston was the guarantee of Rust, for the application of the 8000 dollars to the completion of the buildings. He then relies upon the ninety-third and ninety-fourth articles of 'the Civil Code of Louisiana, then in force in the state; to give himself and Fort an absolute and irrevocable title to the property, on Livingston’s failure to pay on the 5th of August. The articles relied on are: “ The time fixed for redemption must be rigorously adhered to, it cannot be prolonged by the judge;” and “if that right has not been exercised within the time agreed on by the vendor, he cannot exercise it afterwards; and the purchaser becomes irrevocably possessor of the- thing sold.” He reiterates his denial of any loan, or that time was given to Livingston to repay a. loan: but that the extension of time was to enable Livingston to repurchase, or to effect th.e sale of the property; and that the increase of the sum from' 25,000 dollars to 27,830 dollars 76'cents, was the sum demanded by them as the consideration of their waiver of their right to have the sale made at the time the money was payable. The defendant denies the deduction of interest at eighteen per cent, per annum, or any other.

To the second interrogatory in th&. bill, he answers, that; at the time of the purchase, he paid Livingston in a check on the United States Bank, twelve thousand and six dollars fifty-sevén cents, in a note of John A. Fort, in favour of defendant, due and paid November 25th¿ 1822, two thousand seven hundred and sixty-four dollars eighty-three cents; and to Nathan Morse, Esquire, the attorney of ,Edward Livingston, one thousand .dollars; which sum, Morse stated to Story, he considered ought to have been paid him by Livingston, for effecting a sale of the property. To the fourth interroga *383 tory; which is, if Fort and- Story did not consent to postpone the sale of the property to the second of June, and did not exact, as a condition of such postponement, that the counter-letter should be cancelled,.and that the complainant should pay the sum of two thousand five hundred dollars, in addition to the twenty-five thousand dollars: and whether the sum of two thousand five hundred dollars was not made up of interest, charged for four months, at 18 per cent, per annum, of eight hundred dollars auctioneers’ commission, fifty dollars for advertising, and an arbitrary sum of one hundred and fifty dollars, the defendant answers, that Fort and himself did consent to postpone the sale: but that he does not know, except from the act, how the additional sum stipulated to be paid by them was composed; nor does he recollect any memorandum containing the -items of the additional sum.

In an exhibit by the defendant, we, however, have a more precise statement of the sum paid to Livingston.

July 26th, 1822, cash paid E. L. - - #12,006 57

27th “ J. A. Fort’s note, payable 25th Nov. - - - 2,764 83

Sept. 10th, cash paid John Rust at sundry times - 8,000 00

Interest...... 2,228 60 — #25,000

Thus, substantially confirming the allegation of the complainant, that the sum of twenty-five thousand dollars expressed on the deed of sale, as the consideration for the purchase, was made up in part of an amount of interest upon that sum, deducted by Fort and Story, contemporaneously with the execiition of the deed of sale, and counter-letter. There is this difference too between the answer of the defendant and the exhibit, that it appears, from the latter, the sum of one thousand dollars paid to Morse, which the defendant, in his answer, alleges tó have been paid by him as a part of the consideration for the lot, or on account of Livingston; was not paid to Morse until the 12th of February, 1824; more than six months after the time when the defendant considered himself and Fort, to have acquired' a full and absolute title- to the property, from the failure of Livingston to pay on the 5th of August preceding. Upon this item of money paid to Morse, we remark, that the letters- of Morse, ante, page 360, do not prove Morse to have been the agent of Livingston in negotiating the transaction between the parties; but rather that he was, if not altogether the agent of Fort and Story, the agent of both *384 the parties: and that the defendant, without consulting Livingston, graduated the compensation of Morse by his own ideas of the service rendered by him; and chose to pay Morse one thousand dollars,, after he considered Livingston had forfeited -his right to redeem the property: The answer and exhibit are contradictory upon -this point; but the latter being more detailed and certain, it forces• the conclusion to which we have come as regards that item. We.must remark, too, that the' answer and exhibit are also contradictory in a more essential particular, as regards the interest alleged to have been deducted from the twenty-five thousand dollars,'at the time the deed of sale was executed; the exhibit stating the fact of interest being then deducted, and the answer denying that 18 per cent, interest was deducted, or any other.

Soon after the transaction of the 25th of. July, 1822, the complainant left New Orleans, and did not return to it until after the time within which Rust was to have had the buildings completed. They were not finished, however; and this incident deserves a. passing notice. The defendant and Fort had required- an assignment, of Rust’s contract to them; indeed it is of the same date with the. deed of sale and counter-letter, and seems to hav > been made-by Livingston and Rust for them. It was transferred with Rust’s consent, they undertaking to make weekly payments to him of 666 dollars during the progress of the work, to the amount of 8000 dollars; and Livingston rendering himself responsible for the proper employment of the money by Rust. In a short time, however, the defendant admits that he discovered Rust misapplying the money to some,other contract; and that, upon remonstrating with him against such conduct, Rust persisted in a. declaration of his intention to expend the money otherwise than in the execution of his contract. Under these circumstances, what should the defendant and Fort have done? We , think, good faith with Livingston, as they had msde themselves his agent to disburse 8000'dollars for a particular object, to which: they had become parties by the transfer of the contract, required from them in Livingstanfs absence, to have stopped further payments to Rust, notwithstanding Livingston’s responsibility for the proper employment of the money: for Rust’s obligation to them under the transferred contract, was. to have the stores finished by. the 1st of November; and as they held the funds- to be applied to that object, they should have withheld .them from Rust, when' he declared his intention not to do so, and had ceased to work upon the *385 buildings. Rust’s conduct was as much a breach of his contract with them as it was with Livingston; and they should have protected themselves and Livingston, which they could easily have done. Instead of this being done, the defendant admits he continued the weekly payments to Rust after he'had discovered the. misapplication of the money; .and that but one thousand dollars of the eight thousand dollars were applied to the buildings.' They neither protected themselves, nor Livingston: and it cannot be disguised that the misapplication of the money was much more fatal to Livingston'than themselves; for the buildings being unfinished in November, Livingston was deprived of any further resources from them to aid him in redeeming the property on the 1st of February, by paying the money advanced by-them. This incident gave Livingston a strong claim upon the defendant for an extension of time; and we cannot but remark, that it has a bearing in favour of the allegation of the complainant, that by the contract of July, 1825, an absolute sale was not intended. Is it reasonable to suppose that the defendant and Fort, if an absolute sale had been ' intended, would have calmly seen the misapplication of eight thousand dollars from what they-deem their property, and taken Livingston as a'security, upon his general responsibility for-Rust; when the defendant himself declares he would not have loaned Livingston-money on any account? The consequence of this misapplication of seven thousand dollars by Rust, was to take so much from Livingston’s ability to redeem the property. The complainant, however, does not pray to be discharged from this sum, on a settlement of the transaction with the defendant; and, therefore, the payment to Rust, of eight thousand dollars, must be allowed to be a charge against Livingston.

We do not deem it necessary to make a further synopsis of the bill and answer.

They are contradictory in several points: but a careful examination' of them, and of the, documents and exhibits attached to the answer, has enabled us to fix the legal character of the transaction, throughout,, under the laws of Louisiana; whatever-may have been the designs of the parties upon each other, or their individual intentions, when the contract was made, on the 25th of July, 1822. The law of Louisiana, controls the controversy between these..parties: and the first, indeed, only question, to be determined, is, what was the legal character of the contract between them, from the execution of the first, papers to the last, on the 2d of June, 1823?

*386 The defendant’s counsel do not contend that it was an absolute sale. ' The ’defendant’s answer shows it was not. He admits Livingston’s power to redeem, and their obligation to reconvey, as expressed in the counter-letter. For although the conveyance, of the 25th of July, 1822, is, in form, a positive sale, yet, the counter-letter explains .its nature as fully as if it were inserted in that conveyance.. Executed, as it was at the same time, it is a part of the contract; a separate clause, modifying and explaining the other clause, states the deed of sale. The two must be construed together. .The Civil Code of Louisiana says, ^all clauses of-agreements are interpreted the one by the other, giving to each the sense which results from the entire act;” Civil Code, 1808, p. 270, sec. 5, art 61. It can make no difference whether these clauses be on one piece of paper, or on two pieces; whether there be two separate instruments, or one instrument containing the substance of the two. The Civil. Code of Louisiana does not require that the stipulation of parties, relative to a sale of property; should be in one instrument. They are to be reduced to .writing, and the parts necessarily make up the entire contract; in this regard, corresponding with the sale in equity, which makes a defeasance attach itself to a conveyance, absolute in the first instance, converting the. latter into a mortgage, as it is expressed by chancellor Kent, in Com. 4 Vol. p. 135, treating of mortgages. “ The condition upon which the land is conveyed is usually inserted in the deed of conveyance, but the defeasance may be contained in a separate-instrument; and if the deed be absolute in the first instance, and the defeasance be executed subsequently, it will relate back to the date-of the principal deed, and connect itself with it, so as to render it a security, in the nature of a mortgage.”

We do not mean to be understood as applying this rule to make, under the laws of Louisiana, a constructive mortgage out of an absolute conveyance or deed of sale, on account of some other paper explaining or controlling the first; but have used it. only as an illustration, that by the law of Louisiana, a contract of sale, and a power fredeem, need not be in one instrument.

The contract of the 25th of July, 1822, not being an absolute salé then, what is it? It is either a conditional sale, vente a réméré, (sale with the right of redemption,) a mortgage, or a pledge. Thé defendant’s counsel say it is the first, a conditional sale, vente a.réméré. We will use their language. They say it is a contract of sale, not a *387 pure and simple sale, but a sale with conditions, and á right or power of redemption annexed, vente a réméré; that the right and power of redemption stipulated for in this case, is in exact conformity with the provisions of the same code of 1808? in form and substahce, and identifies it still further as a sale, vente a réméré. That is defined to be' “an agreement or paction, by which the vendor reserves to himself the power of taking back the thing sold, by returning the price paid for it;” Civil Code, 345; and the provision of the code regulating the right of redemption, or that “ the time fixed for redemption must-be rigorously adhered to, it cannot be prolonged by the judge;” and “if that right has not been exercised within the time agreed on by the vendor, he cannot exercise it afterwards, and the purchaser becomes irrevocably possessed of the thing sold;” just as at common law and in equity, in the case of an absolute sale with an agreement- for a repurchase, the time limited for the repurchase must be precisely observed; or the vendor’s right to reclaim his property will be lost. 1 Poth. on Sale, 183; 1 Vesey, 405.

But in this instance there was no sale corresponding to the vente a réméré, unless other provisions in the counter-letter than Livingston’s right to redeem, shall be altogether disregarded. By the counter-letter, Fort and Story covenant with- Livingston upon his failure to pay, that the property shall be sold at auction, and that the residue of what it might bring over the sum which they claimed, should be paid to Livingston. Upon failure to pay, the land and buildings did not become the property of Fort and Story. The failure to pay only gave to them the right to have it sold; according to the terms prescribed, for their ow,n reimbursement. Had the contract been a vente a réméré, the land would have become- their absolute property; for the code is, “ if the right to redeem has not been exercised within the time agreed on by the vendor, he cannot .exercise it afterwards, and the purchaser becomes irrevocably possessed of the thing sold.”

The exclusion of that irrevocable, possession by Fort and Story in the counter-letter, upon Livingston’s failure to pay, destroys so principal and effective a provision of the vente a réméré, that the law will not permit us to consider the contract to have been one bf that kind.

The question then recurs, what was the nature of the contract of the 25th July, 1822? It is not a mortgage, because no property on the soil, nor right of posséssion, is given by the. contract of mort *388 gage by the law of Louisiana. By that law, a mortgage is defined to be “a contract, by which a person affects the whole of his property, or only some part of it, in favour of another, for security of an engagement; but withou.t divesting himself of- the possession thereof.” In this instance possession accompanied the execution of the deed, and has continued in the defendant. It was a part of the contract, and a feature of it'entirely inconsistent. with a mortgage under the laws of Louisiana. The contract then, being neither a sale upon condition with a power to redeem annexed, a vente a réméré; we must seek further in the laws of Louisiana, to establish its legal character. After much inquiry and deliberation, and a comparison of the Civil Code of Louisiana with the civil law from which the former derives its origin, and with which it is still in close connection; we have come to the conclusion, that the original contract and counter-letter constituted a pledge of real property; a kind of contract, especially provided for by the laws of Louisiana, denominated “an antichresis.” By this kind of contract, the possession of the property is transferred to the person advancing the money. That was done in this case. . In case of failure to pay, the property is to be sold by judicial sentence; and the sum which it may bring over the amount for which it was pledged, is to be paid to the person making the pledge. In this case, a provision was made for a sale by the parties upon the failure of payment; but this feature, of. the contract is rather confirmatory of the contract and counter-letter, being an antichresis, than otherwise; for it is, at most, only a substitution by the parties of what the laws of Louisiana requires; and what we think the law requires to be done by itself, through the functionaries who are appointed to administer the law. But upon this point, let the law apeale for itself. The Civil Code of Louisiana says, “the pledge is.a contract,by-which the debtor gives something to his creditor as a security for his debt.” Tit. 20, art. 3100.

“There are two kinds of pledges; the pawn, and antichresis.”

“ A thing is said to be pawned, when a movable thing is given as security. The antichresis is, when the security given consists in immovables.” Tit. 20, art. 3102.

“The antichresis shall be reduced to writing. The creditor acquires by this contract, the right of reaping the fruits or other revenues of the immovables to him given in pledge, on condition of deducting annually their- proceeds from the interest, if any be due to him, and afterwards from the principal of his debt.” Art. 3143.

*389 “The creditor is bound, unless the contrary is agreed on, to pay the'taxes as well as the annual charges of the property given to him in pledge. He is likewise bound under the penalty of damages to provide for the keeping, and useful, and necessary repairs of the pledged estate, and maydevy out of the revenues of the estate sufficient for such expense.” Art. 3144.

“The creditor does not become proprietor of the pledged immovables by failure of the payment at the stated time: any clause to the contrary is null: and in this case it is only lawful for him to sue his debtor before the court, in order to obtain a sentence against him, and to cause the objects which have been put in his hands to ibe sezed and sold.” Art. 3146:

“The debtor cannot, before the full payment of the debt, claim the enjoyment of the immovables which he has given in pledge. But the creditor, who wishes to free himself from the obligations mentioned in the preceding articles, may always, unless he has renounced this right, compel,the debtor to retake the enjoyment of his immovables. Art. 3145. These appear to us to be equitable provisions, affording ample security to the creditor, and fully protecting therights of the debtor. ’ Especially protecting the latter from a rapacious creditor, who might otherwise push his debtor’s necessities into a relinquishment of all his rights in such a contract^.to make himself the proprietor of the thing pledged, upon the failure of the debtor to pay. This is a high species of security, over which the law watches benignantly; because., though one of choice and convenience, very frequently; it is commonly the resort of distress in the last alternative, when all other means of raising money have failed. It was this high species of security, that Fort and Story received from Livingston; or their contract cannot be comprehended within any of the provisions of the Civil Code of Louisiana. If any thing else, it is a1 contract unknown to the laws of that state. We class it with .the antichresis: not because the instrument between the parties provides specifically in every particular for the rights and obligations of parties to the antichresis; but because it does so, in the main and substantial requisites.of such a contract, and from those main and sub-, stantial particulars in this contract, being irreducible to any other kind of- contract provided for by the laws of Louisiana. The property was put into the possession of Fort and Story; they looked to it to reimburse them upon the failure of Livingston to pay;, -upon that failure it did not, from the terms of the counter-letter, become *390 theirs absolutely; as we see would have been,the case if it had been a vente a réméré. It was to be sold at public auction; and if a sale should be made for more than they had advanced, the residue was to be paid to Livingston. But no such sale could be made without a judicial sentence; suqh a decree was not obtained; no sale was made; so the parties stood under the contract on the 1st of February, when Livingston first failed to pay, as they did when it was first entered into. It is therefore plain, that Fort and Story acquired no absolute property in the lot and buildings, under the contract of the 25th of July, 1822; and if they did not, it was only a pledge or antichresis for their ultimate reimbursement.

We now proceed to inquire whether the antichresis was converted into a sale, by the annulment of the counter-letter after the 1st of February, 1823, under the agreement of the 4th of March. It appears by the document, ante, page 356, that the complainant did, on the last mentioned day, execute a paper annulling the counter-letter of the 25th July. But supposing the first to have been so annulled; was not the second in effect and in terms,.another instrument of the same kind, only extending the time for redemption upon consideration of Livingston’s paying á larger sum than, the twenty-five thousand ’dollars originally expressed in the first deed of sale; and providing still for a sale in the event of Livingston failing to pay a second time, and giving to him the residue, if any should remain, after they were reimbursed. Consequently, until the 2d of Juñe, the pledge continued. Livingston^ under the agreement of the 4th March, could, by paying the money at any time on or before the 2d of June, have prevented the sale; and if a sale was made, he was entitled to the overplus.

The defendant, in his answer, says, that he and Fort agreed with Livingston to postpone the sale until the 2d of June, for which Livingston agreed to pay them, a compensation, &c. &c.; that he had until the 2d of June to redeem, but did not do so;- that then the property was to have been sold, &c. &c. Thus showing, that the property in his possession continued to be a pledge; and in case of Livingston’s not paying, that a sale was to be made, notwithstanding the annulment of the counter-letter. But for what purpose was the counter-fetter annulled? Clearly, because an increased sum was to be paid to Fort and Story by the second agreement; and not because it was the intention .of the parties to alter, substantially, their respective rights in the property. The counter-letter, the agreement to sell at *391 a fixed day, and after reimbursing the defendant and Fort, to deliver the surplus proceeds of the sale to Livingston; the prolbngen agreement to sell after annulling the first counter-letter, without any renunciation of Livingston’s right to the overplus, as set forth in defendant’s answer; prove conclusively, to us, that Story regarded the contract to be, what is really made by the law of Louisiana, a contact of pledge; a security for money advanced upon property. We think it was in its inception an antichresis; and that it continued so until the 2d of June, 1823. Did it after that time retain its original character?

The agreement of the 2d of June recites, “ that it being the day fixed upon by the contract between Livingston, and Fort and Story, for the sale a't auction of the lot, &c. &e.; and Livingston having requested that the sale .might not take place for his own accommodation; on condition that Fort and Story would assent to that request, Livingston agreed to increase the sum due to them to twenty-seven thousand eight hundred and thirty dollars, (which they deem the-whole of the consideration money paid by them for said lot,) and to pay the same on the 5th of August, then- next, and any further sum that they may be under the necessity of paying for the care or preservation of the property; in which case.the property should revert to Livingston. But if he should fail to make such payment on the 5th of August, the said lot should become the absolute property of Fort and Story; it being declared-to be the true intent of the parties, in case of failure of payment, that the said lot-, with all the buildings thereon, are to vest in Fort and Story, a full, free and absolute,title, in fee simple, for ever.”

Such an instrument as this would have the effect to vest in Fort and Story an absolute title in tne property, if it were not positively controlled by the law of Louisiana. We must administer the law as it is; and having established that the original transaction was an antichresis, and continued so up to the 2d ot June, it was not in the power of the parties to give to it such a character, as to vest Dy the act of Livingston an absolute title in Fort and Story. “ In the language of the Code, 1808, tit. Pledge, art. 28, already cited, the creditor does not become proprietor of the pledged immovables, by failure of payment at the statéd time, any clause to the .contrary is ¿null:” “and in this case it is only lawful for him to sue his debtor, before the court, in order to obtain a sentence against him, and to cause the objects which have been put laTottte bands, in pledge, to be seized *392 and sold.” If such a clause had been inserted in the original agreement, it would have been void. Can it be more valid, because subsequently introduced in a paper having a direct relation to the first contract; and which was intended to alter its character into something which the law prohibits, when it determines the original contract to be one of pledge? We think not. Such an allowance to a creditor would be a precedent, giving to all creditors in cases of pledges the power to defeat the benevolent vigilance of. the law, preventing them from becoming proprietors of the debtor’s property, unless by a decree of the court. We think it immaterial whether such covenant be in the'original agreement, or in a subsequent instrument. In either case the law is express; the creditor does not become the proprietor by the failure of the debtor to pay; any clause io the contrary is null.

It would be difficult to find a case-more clctrly illustrating the wisdom of this rule, than that under our consideration. Story and Fort advanced to Livingston twenty-two thousand nine hundred and thirty-six dollars, and took possession of the lot; looking to Livingston, in the first instance, for reimbursement, and, on his failure to pay, to a sale of the lot. Livingston being unable to pay at the time fixed, applied for an extension of time; it is granted, but only upon condition of an addition of twenty-five hundred dollars to his debt, for a delay of four months: thus creating a debt of twenty-seven thousand five hundred dollars, in ten months, upon an advance of twenty-two thousand seven hundred and seventy-one dollars, forty cents. This increase, the exhibit attached to the defendant’s answer proves was not on account of expenditures upon,' or in the care, of the property; for that account shows the disbursements of the defendant, in the care of the property, up to the 5lh of August, 1823, did not amount to four hundred dollars. When the 2d of June came, Livingston was still unable to pay, and asked for a further extension of time; it was granted; but by another-addition to the debt, or to the amount for which the property was already encumbered; and only upon condition that upon a third failure, the property was to vest absolute in Fort and Sto.ry. 1 This final -result is what the law of Louisiana intended to prevent in cases of pledge; and we know not a case to which it can be more fairly applied.

In the enforcement of the law, in this case, we are pleased to find authorities for doing so in the courts of Louisiana. We refer to the cases of Williams et al. v. Schooner St. Stephens, 1 Mart. Rep. N. S. *393 417; to the case of Syndics of Bermudez v. Hanez & Milne, 3 Mart. Rep. 17, and 168.

In regard to the plea of prescription urged in the defendant’s answer, we think it inapplicable to a case of pledge; and if it be so, then that plea cannot prevail in this case, because the time had not elapsed, which the law of Louisiana gives to a person to sue for immovable property.

It now only remains for us to dispose of the defendant’s protest, in the beginning of his answer, against the jurisdiction of the Court in this case. The 23d rule of this Court, for the regulation of equity practice in the circuit courts, has been relied on to show that it is competent for the defendant, instead of filing a formal demurrer, or plea, to insist on any special matter in his answer; and have the same benefit thereof as if he had pleaded the same matter, or had demurred to the bill. This rule is understood by us to apply to matters applicable to the merits, and not to mere pleas to the jurisdiction, and especially to those founded on any personal disability, or personal character of the party suing, or to any pleas merely, in abatement. In this respect, it is merely affirmative of the general rule of the court of chancery; in which'matters in abatement and to the jurisdiction, being preliminary in their nature, must be taken advantage of by plea; and cannot be taken advantage of in a general answer, which necessarily admits the right and capacity of the party to sue. 1 Sumner’s Rep. 506, Wood v. Mann.

In this case, the judgment of the court below is reversed,, and a decree will be entered accordingly.