Morrison v. Citizens' Bank

The plaintiff alleges that she is a creditor of her father, Jacob EL Morrison, for sums amounting in the aggregate to $16,275 22, exclusive of interest; that said indebtedness is established by a judgment rendered on the first April, 1868, by the Seventh Judicial District *402Court, parish of Point© Coupee, in favor of petitioner and her sister Camille on their opposition to the account of tutorship rendered by their father; that by said judgment his aggregate indebtedness to herself and sister was fixed at $17,994 20, exclusive of interest, half of which was due to petitioner, and the other half to her said sister; that the latter having died since the rendition of said judgment, petitioner’s share thereof, owing to the portion by her inherited of her sister, amounts as aforesaid to $16,275 22, besides interest. That for the payment of the said sum, in capital and interest, the petitioner has a legal mortgage on all the immovable property of the said J. H. Morrison, dating and taking effect from the third day of May, 1852, as recognized and decreed in the judgment aforesaid, which was duly recorded in the books of the recorder of mortgages for the parish of Pointe Coupee, and stands inscribed thereon since the sixteenth April, 1868.

Subsequent to the year 1852, Morrison purchased several tracts of land in the parish of Pointe Coupee. In February and April, 1860, these lands were mortgaged to the Citizens’ Bank.

One of the tracts of land was purchased from G. P. Ware, on the seventh August, 1856. Part of the purchase price was represented by notes of which Smith & Co. held $24,170 66.

Plaintiff prays that the plantation referred to be decreed subject to her mortgage; that her mortgage be declared to be superior in rank to any and all the mortgages which the Citizens’ Bank and Smith may have, and that she be entitled to enforce her mortgage claims by the seizure and sale of the plantation in preference to, and with priority over, any claims held or set up by the bank and Smith & Co.

The bank answers:

First — That the plaintiff’s judgment against her tutor is null, because it was rendered and signed in vacation.

Second — That if good between the parties, it was rendered by consent, against law and facts, and for the purpose of defeating the respondent’s mortgage claim, and that they are not bound by the same. Further answering, the bank avers the validity of its own mortgage, and denies the tacit mortgage claimed by the plaintiff.

Smith & Co. make- substantially the same defense, alleging further that the mortgage they hold results from the sale of the property by Ware to Morrison, which entitles them to the vendor’s privilege, which, they say, ranks the minors’ mortgage.

Subsequently both defendants filed a peremptory exception to the plaintiff’s demand, on the ground that she has no cause of action, the same having been destroyed by the nonrecording of her mortgage according to law.

First — As to the rendition and signature of the judgment out of term *403time: It was agreed that the judge who tried the case should take it under advisement and render judgment and sign it after the court should have adjourned.. The parties were competent to make the agreement, and the judgment having been rendered in conformity therewith is good. The cases of Simonds v. Leovy, 21 An. 306, and Hernandez v. James, 23 An. 483, are not authority for the defendants. In neither of them had the judgment been rendered and signed in vacation by consent.

Second — As between the parties, whether rendered by consent or not, the judgment was good. Collusion or fraud would destroy its effects as to third parties, but the collusion or fraud must be established by those who allege it. Of this there is no evidence. It is shown op the part of the defendants that the mother of the plaintiff sued her husband (plaintiff’s father) for a separation of property, and that she obtained judgment against him dissolving the community, and condemning him to pay her a sum which would make the plaintiff’s share in her estate a little over $2000. But this judgment was never executed, or sought to be executed. If not executed, or sought tó be executed, it was nothing, and did not affect the community. 23 An. 572; 1 An. 308; 11 La. 533; 1 R. 432; 4 An. 513; 12 An. 193.

Third — The next question is, has the plaintiff a tacit mortgage 1 It is claimed not, by the defendants, because, they say, her father gave a special mortgage in lieu thereof.

On twenty-ninth December, 1859, the plaintiff’s father applied to the court for permission to substitute a special -mortgage for the tacit mortgage which his children had to secure their rights, the property upon which he proposed to place the special mortgage being described in his petition. A family meeting was ordered to be convened for the purpose of advising whether or not the property offered to be specially mortgaged was sufficient to secure the minors’ rights in principal and interest.

On the same day the family meeting convened. They declared that the property offered was sufficient, and that they had no objection that the general mortgage should be changed into a special mortgage upon the property described in the tutor’s petition. These proceedings of the family meeting were duly homologated by the judge, and the tutor, by the judgment of homologation, was allowed to give the special mortgage on the property offered by him. This on the sixteenth January, 1860.

On the seventeenth January, 1860, the mortgage was duly executed, and it was recorded on the same day.

But here it is contended that the special mortgage, after it was drawn up, was never presented to the judge for his acceptance and sanction, *404and that, this is contemplated by the act of 1830 and by article 3309 of the Code of 1825.

The aet of 1830 declares that in all cases where special mortgages shall be given by curators or tutors in lieu of the legal mortgage existing in such cases, as recognized by law, it shall be the duty of the judge receiving such special mortgage to cause the property proposed to be mortgaged to be appraised by experts in the same manner as is provided when adjudications of the property of minors are made to the surviving father or mother,'and the said judge shall in no case accept the said mortgage unless the value of the property so appraised shall ‘exceed, exclusive of all prior liens, privileges or mortgages, the amount of the debts or rights of the minors intended to be secured by the said special mortgage, by at least twenty-five per cent, in addition to the amount of the said matter, and including- all interest which may probably accrue.”

Article 3309 of the Code of 1825 declares that “ the judge shall receive the special mortgage offered if he thinks it sufficient, and with the advice ofthe family meeting in the case of a minor or person under interdiction.”

It remains for us now to determine whether the requirements of the laws which we have quoted have been complied with in the present case. Counsel for appellant contends that they have not, because the special mortgage was never presented to the judge for his acceptance and sanction. His position is, that after the mortgage was given it should have been accepted. In support of his position he cites the case of Lesassier v. Dashiell, 17 La. 204. In that case “ no experts were appointed, no previous liquidation of the vendor’s rights was made, and the act of special mortgage was passed by a simple notarial act, which never was accepted by any one, not even by the under tutor; it was not received by the judge as required by article 3309 of the Louisiana Code, and never obtained the definitive sanction of the court of probates, so as to give it the effect contemplated by the decree of homologation.”

In the present instance the rights of the minors had, as it is recited in the petition of the tutor when he asked leave to grant a special mortgage, been ascertained by a judgment rendered on the thirtieth April, 1845, by the Fifth District Court of New Orleans, the then domicile of the parties. The property which the tutor desired to mortgage was described. A family meeting was convened for the purpose of deciding whether the interests of the minors would be protected. Experts were appointed to determine the value of the land proposed to be mortgaged. The family meeting assembled; the experts reported, and it was determined that the security offered was sufficient to protect *405the minors’ interest, and a mortgage thereon, to take the place of the-general one, was recommended. These proceedings of the family-meeting- were submitted to the judge, who approved them and ordered’ the mortgage to be executed and accepted. It was executed, and it was recorded. In point of fact, therefore, every essential of the law was complied with. The only matter for discussion is, whether after-all the proceedings above related liad taken place, it was still indispensably necessary that the mortgage, after having been executed,should have been presented to the judge, and been by him accepted before the general mortgage was thereby released. We think not. We think that when the judge, under the facts of this case, ordered the mortgage to be executed, he accepted it in the sense of the law, and that all the requirements of the statutes for the protection of minors were complied with. An inspection of the proceedings would, we think, justify any one who proposed to deal with plaintiff’s tutor, in believing that no general mortgage rested upon his property.

This view of the case renders it unnecessary that we should examine the other questions presented.

Judgment affirmed.

On Rehearing.

The issues presented by both plaintiff and defendants are sufficiently set forth in the opinion heretofore prepared by us.

In that opinion we stated that the plaintiff’s father was, on the sixteenth of January, 1860, allowed to give a special mortgage on the property offered by him; that on the seventeenth of January, 1860, the mortgage was executed and was recorded on the same day. In this there was error. The mortgage was executed - in the parish of Pointe Coupee, and was recorded in that parish on the same day. The property subjected to the mortgage was situated in the parish of West Feliciana. It was not registered in that parish until some ten years after its date, and subsequent to the institution of this suit.

The plaintiff’s claim is the result of a judgment which she obtained against her father, which judgment gives to her a legal mortgage on all his immovable property dating from the third of May, 1852. This judgment was inscribed on the sixteenth of April, 1868. Plaintiff contends that this is a recognition of her tacit mortgage; that it dates back to the year 1852, and that it takes precedence over the bank’s mortgage, acquired subsequent thereto. The bank contends that it was only a judicial mortgage, if, in reality, it has any existence at all, “because the recording of her judgment does not cover the default of inscription of her mortgage before the first of January, 1870.”

The question we are called upon, for the first time, to decide is *406whether a judgment which recognizes a minor’s claim and mortgage, and which is duly recorded prior to the year 1870, comes under the one hundred and twenty-third article of the constitution, which declares that “ tacit mortgages and privileges now existing in this State shall cease to have effect against third persons after the first day of January, 1870, unless duly recorded,” and the act No. 95 of the Legislature of 1869, p. 115, which provides for carrying out the provisions of the article of the constitution quoted.

We think not. The object of the framers of the constitution in adopting that article is apparent. It was to do away with the effects of mortgages not recorded — those mortgages which rested upon property and which were out of sight, and against which protection was almost impossible. The convention therefore declared that no tacit mortgage should rest upon any property in the State after the year 1870, unless it had been duly recorded.

Now, when this article was adopted the plaintiff’s rights were perfect. She had a tacit mortgage upon her father’s property, and the evidence thereof was a judgment of a competent court, which judgment was duly recorded. There was no necessity for her to record over again the judgment which she had obtained. The constitution says that tacit mortgages shall have no effect after a certain date unless duly recorded. Here her mortgage was duly recorded, and this is all that it was necessary she should do. The article did not refer to her. She had complied with its requisites. It only applied to mortgages which had not been recorded.

Upon the two first points discussed in our former opinion our mind remains unchanged.

The next point to determine is whether the plaintiff had a tacit mortgage upon her father’s property. Defendants say she had not, because a special mortgage had been substituted therefor. The facts and circumstances under which the special mortgage was given are detailed' in our former opinion, and it is needless to restate them, except to remark that on the twenty-ninth of December, 1859, plaintiff’s father asked leave of the court to grant a special mortgage to take the place of the tacit one; that his petition was submitted to a family meeting, who recommended it; that the property sought to be mortgaged was designated, and that the proceedings of the family meeting which recommended the acceptance of the same and the sufficiency of the security were homologated. The mortgage was executed and it was recorded. It was executed in the parish of Pointe Coupee and recorded on the same day. But the property mortgaged was situate in the parish of West Feliciana, and it was not recorded there, as we have seen, until years after its execution.

*407Plaintiff contends that all the proceedings which resulted in this mortgage were worthless; that her tacit mortgage was never released, because the judge never accepted the same. In other words, she contends that after her father had prayed to be allowed to execute this mortgage; after a family meeting had recommended it; after the proceedings of the family meeting had been approved; after the judge had ordered the execution of the mortgage, it was still necessary that the judge should approve of its execution; and, in default thereof, that, the whole proceedings are null, and that her tacit mortgage remained undisturbed.

This question was discussed in the opinion heretofore delivered, to which we refer. We there came to the conclusion that the law had been complied with. Further examination and reflection has satisfied us that we erred. The proceedings did not become final because the mortgage, after it was executed, was not approved by the judge, and because it was not recorded in the parish where the property mortgaged was situate until after this suit was instituted, some ten years after the mortgage was given.

In so far, then, as the Citizens’ Bank is concerned, our former judgment was erroneous. Up to this point the same reasoning will apply as well to Smith & Co. as to the Bank. But Smith & Co. say they hold, notes due by the plaintiff’s father as part of the purchase price of the property now sought to be subjected to the minor’s mortgage, and that as the property was purchased by the father subsequent to the plaintiff’s mother’s death, the vendor’s privilege attaches, and that it is not affected by the tacit mortgage.

The sale from Ware to Morrison was made on the seventh August, 1856. The sale was made by public act, passed before a notary public in New Orleans. It was sent to the parish of Pointe Coupee, where the property sold is situate. The recorder certifies that it was recorded among the notarial acts of his office, but that he finds no inscription of the same in any of the books of mortgages.

The mere filing of the doeument and recording it among the notarial acts in his office was not the recording required by law in order to give it effect as a mortgage or to preserve the privilege which it carried with it.

The act was properly recorded in the books proper of the recorder of mortgages, on the twelfth of June, 1866.

“Privileges are valid against third persons from the date of the recording of the act or evidence of indebtedness as provided by law.” C. C. 3273 [3240.] At the time of these transactions the law was that privileges were valid against third persons from the date of the act, if it had been duly recorded, that is to say, within six days of the date, *408if the act has been passed in the place where the registry of mortgages is kept, or adding one day more for every two leagues from the place where the act was passed to that where the register’s office is kept. C. C. 3240.

Article 3241 provides that when the act on which the privilege is founded has not been recorded within the time required in the preceding article, it shall have no effect as a privilege,- that is to say, it shall confer no preference on the creditor who holds it, over creditors who have acquired a mortgage in the meantime, which they have recorded before it; it shall, however, still avail as a mortgage, and be good against third persons from the time of its being recorded. And the law now is (C. C. 3274) that no privilege shall have effect against third persons, unless recorded in the manner required by law, in the parish where the property to be affected is situated. It confers no preference on the creditor who holds it, over creditors who have acquired a mortgage, unless the act or other evidence of the debt is recorded on the day that the contract was entered into.

The act of sale was not recorded within the time prescribed by the-law as above quoted. The vendor’s privilege, therefore, does not exist.

But the recording of the act operated as a mortgage from the time it was recorded. It was recorded on the twelfth June, 1866. Plaintiff’s judgment against her father was recorded in 1868. When did her mortgage attach? From the date of the recording of her judgment? or from the date when her father’s indebtedness attached ?'

Plaintiff’s tacit mortgage attached to the property purchased by her father from the day he purchased it. Lombas v. Collet, 20 An. 79. The vendor’s privilege was superior to the tacit mortgage, so long as the privilege existed; but when the privilege ceased to exist, then the tacit mortgage was in force against it, and it had its effect without being recorded. When, therefore, the act of sale was recorded, it operated as a mortgage from the date upon which it was recorded, but at that time thé property was burdened with the plaintiff’s tacit mortgage, and the conventional mortgage was second to it in rank.

It is therefore ordered, adjudged and decreed- that the judgment heretofore pronounced by us be set aside, and it is now ordered, adjudged and decreed that the judgment of the district court be avoided, annulled and reversed.

And it is further ordered, adjudged and decreed that the plaintiff, for the amount of her rights and claims against her father, Jacob H. Morrison, to wit:

Mrst — For the sum of $10,691 55, with five per cent, interest per annum on $4178 85 from the third of February, 1857, until paid! *409on $1350 51 from the eighteenth December, 1861, until paid; on $2138 30 from twenty-second of February, 1863, until paid; and on $3024 14 from the first of April, 1868, until paid ; for which sum of $10,691 55 she is entitled to enforce the payment by execution' upon the prop'erty described in her petition; and

Second — For the eventual payment to her of the sum of $5583 67, amount of which her father has inherited the usufruct, and that for all said sums and interest the legal mortgage of the plaintiff, and which is now recognized and adjudged to exist on the property of Jacob H. Morrison and which affects the property described in the petition, be decreed to be superior in rank to the mortgages which the Citizens’ Bank and Samuel Smith & Co. may have, and to any privilege they pretend to have on said property ; and it is further ordered, adjudged and decreed that plaintiff is entitled to enforce her said mortgage claims by the seizure and sale of said property in preference to and with priority over any claims held or set up by the said Citizens’ Bank and Samuel Smith & Co., and that defendants pay costs in both courts.