American Freehold Land Mortgage Co. of London, Ltd. v. Peirce
American Freehold Land Mortgage Co. of London, Ltd. v. Peirce
Opinion of the Court
The opinion of the court was delivered by
The attack upon the mortgages executed by J. Caldwell Peirce to the plaintiff company, in so far as it is based upon the claim that plainiiff was doing business in Louisiana in violation of Art. 236 of the Constitution, must fail. The facts of this case bring it under the principles laid down in Reeves vs. Harper, 43 An. 516, and Scottish American Mortgage Co., Limited, vs. W. F Ogden, ante, p. 8.
Intervenors claim that the loan to Mrs. Peirce, though apparently made by Richardson, was in point of fact made to her by Shattuck & Hoffman, and that in the taking of the notes and mortgage and in the proceedings which resulted in the sale of the Delhi plantation, Richardson’s name was simply used in order to interpose a third person between Shattuck & Hoffman and Mrs. Peirce and her heirs. We find under the evidence no foundation for that charge. There is no reason assigned why at the time of the loan to Mrs. Peirce there should have been any concealment of the actual facts of the case. The property belonged to her; she had a legal right to contract the debt she incurred and to grant the mortgage she did, and even up to the present time there has been no contention as to her not having been legally bound both as to the debt and as to the mortgage. The loan in question made to Mrs. Peirce was really made to her by the British and American Mortgage Company, through Richardson, and the notes and mortgage given were held by that corporation and not by Shattuck & Hoffman. It is charged that the sale made under the Richardson mortgage was the result of an agreement or combination between Shattuck & Hoffman and J. Caldwell Peirce, the father of the intervenors, to bring about for the benefit of the latter, and to the injury of the chil
It can not be pretended here that the English and American Mortgage Company were not legally authorized, holding a valid mortgage to force the property to sale as they did, nor that Hoffman was not at full liberty to buy as he did. It would be a strange result if, notwithstanding the concurrence of those two facts, the exercise of both rights should be followed by the consequence that the property should remain the property of the heirs, of the debtor, not only without having themselves paid the debt for which it stood mortgaged, but freed from that debt directly and indirectly. It is not asserted that the English and American Mortgage Company in foreclosing had any other object in view than to safeguard and protect their own interests. When Hoffman bought at the sale he became bound for the price; when he paid this price he became entitled to protection defensively, and, within certain limits, as against the seized debtor and her heirs through the rights of the seizing creditor. There existed at once such a privity between the seizing creditor and the purchaser as to authorize him to call on the latter and appear and defend the title, or directly avail himself of any legal or equitable defence by which the creditor might oppose the action. Judice vs. Kerr, 8 An. 462; Upsher vs. Briscoe, 37 An. 154; Seawell vs. Payne & Harrison, 5 An. 255; Scott vs. Featherston, 5 An. 314; Wolf vs. Lowry, 10 An. 274; Coiron vs. Millaudon, 3 An. 664.
Whether this right of protection springs from defensive equitable subrogation or the application of the principle that the debtor should not be permitted to enrich himself at the expense of another (Childress vs. Allen, 3 La. 480), we need not here consider.
The intervenors have succeeded in this suit, as between themselves and their father, in reinstating in themselves the title of which they were divested by the suit of the English and American Mortgage Company. Their father acquiesces in that judgment. The plaintiffs in this suit have no further interest in the question of title than to see that their mortgage rights, which they acquired on the strength of the title of J. Caldwell Peirce, as it appeared of record under judicial proceedings, should be fully recognized and enforced.
It would not follow, as the necessary consequence of the intervenors being decreed to be the owners of the property, that plaintiff’s mortgage rights should fall. Chaffe vs. Farmer, 34 An. 1021.
We will have, therefore, to examine into and decide whether the adjudication made to Hoffman divested the heirs of Mrs. Peirce of their interest in the property.
We have already said that Hoffman’s title was beyond attack on the ground of any bargain or arrangement between himself or Shat-tuck & Hoffman and J..Caldwell Peirce; that a judicial sale should be resorted to for the purpose of transferring the property over from the succession of the wife to the husband. The proceedings which resulted in the sale, therefore, have alone to be considered.
The only attack made upon the judicial proceedings is, that in foreclosing their mortgrge the English and American Mortgage Company did so contradictorily with J. Caldwell Peirce as being tutor of his children when, as they contend, he was not such under the law.
If, at that time, Peirce was not their tutor, the company would have been entitled to call for the appointment of a tutor ad hoe to represent their interests under the proceedings then about to be taken. Art. 313 of the Civil Code declares that, “ when the minor is without a tutor, any person who has a claim against him may apply to the competent judge to request that a tutor ad hoe be appointed to him, which tutor shall not be bound to give any security, but shall take an oath before the court who has appointed him to defend the interests of the minor according to the best of his knowledge.” It will be seen from this article that in cases where parties have claims adverse to minors, their enforcement is not subordinated to the fact that at that time the general interests of the minors in the administration of their affairs should be protected by a tutor who had given bond, and otherwise complied with the law as to tutorship generally. The rights of creditors, as well as those of minors, was matter for consideration. The lawmaker, in dealing with that subject, deemed it perfectly consistent with proper protection of the minors that they should be represented defensively in litigation by parties whose fidelity was guaranteed simply by an oath to perform their duty. J. Caldwell Peirce would unquestionably have been the proper person to have
We think it would be subordinating substance to mere form to have required that the father should have been appointed as a tutor ad hoc in that particular case, and to take therein a second oath. We are of the opinion that the proceedings carried on contradictorily with him as tutor were legal, and carried with them the legality of the sale to Hoffman.
Even had there been a secret understanding between Hoffman and J. Caldwell Peirce, the intent and object of which was to transfer the ownership of property from the heirs of Mrs. Peirce to the father, we do not think that fact could be made by the children to turn fo the injury of the plaintiffs. The record disclosed that their mother had executed a valid mortgage to the English and American Mortgage Company — that that company had validly enforced their mortgage rights on the property; that it had been purchased by Hoffman, against whose legal right to purchase nothing appeared; that it had been sold by Hoffman to Peirce, as between whom there was no reason to suppose that a legal disability existed either to sell or to buy. On the hypothesis that there was in fact some defect or vice in the title as between Hoffman, Peirce and Peirce’s children, plaintiffs were no party to the proceedings or facts from which such defect arose. They knew nothing of such defect or vice. There was nothing to indicate such vice in the records. We can apply to them the language used in Chaffe vs. Farmer, 34 An. 1021, in respect to the intervenors in that case: “ They acted in taking the mortgage upon the faith of a judicial sale translative of the property.: They were therefore in good faith and entitled to protection.”
For the reasons herein assigned, it is hereby ordered, adjudged and
It is further ordered, adjudged and decreed that the injunction which issued herein on the petition of J. Caldwell Peirce be and the same is hereby set aside and the plaintiff, the American Freehold Land Mortgage Company of London, Limited, be and they are hereby authorized to proceed to seize and sell the property covered by their mortgage and referred to in their petition in accordance with the order of sale granted to them on their prayer. It is further ordered and decreed that J. Caldwell Peirce pay costs in both courts.
Reference
- Full Case Name
- American Freehold Land Mortgage Company of London, Limited v. J. Caldwell Peirce Intervention of Philip B. Peirces. and Philip B. Peirces. v. J. Caldwell Peirces. (Consolidated)
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