First Nat. Bank v. Lagrone
First Nat. Bank v. Lagrone
Opinion of the Court
The First National Bank of Ruston had three judgments against J. M. Lagrone, for a balance exceeding $10,-
Answering the petitions of the two banks, Mrs. Edenborn insisted that the pledge of the 250 shares of stock to guarantee the performance of Lagrone’s obligations under the contract was a valid pledge, and that the stock was not subject to seizure and sale so long as the contract remained unfulfilled, and,
Mrs. Lagrone excepted to the jurisdiction of the court, ratione personae, and, with reservation of the exception, pleaded that the banks’ proceeding was a collateral attack upon the authentic act of dation en paiement, transferring the stock to her, and that the banks had no just cause or right or action; and, answering the rule, with reservation of her exceptions, she relied upon the act of dation en paiement as the evidence of her ownership of the 50 shares 'of stock.
J. M. Dowden did not answer the rule, or make any appearance in the case.
The proceedings of the two banks were consolidated, by agreement to try one of the cases, with the understanding that the judgment to be rendered should control both. The court gave judgment in favor of the banks, ordering the 250 shares represented by the two stock certificates delivered to the sheriff of Caddo parish, to be by him sold to satisfy the banks’ judgments, but subject to the pledge in favor of Mrs. Edenborn to secure the performance of the obligations of J. M. Lagrone under his contract dated May 20, 1923. It was therefore further ordered that the sheriff should, after transferring the stock to the purchaser at public sale, by indorsement on the stock certificates, return them to Mrs. Edenborn to be retained by her in pledge to secure the obligations of Lagrone under his contract of May 20, 1923.
Mrs, Lagrone appealed from the decision. J. M. Lagrone also asked for an appeal, although he was not theretofore a party to the proceedings making Mrs. Edenborn garnishee and seizing the stock certificates. The district judge refused to grant Lagrone an order of appeal, but, on his application to this court for mandamus, he was granted a right of appeal. Eirst National Bank v. Lagrone, 164 La. 907, 114 So. 832. Thereupon the two banks took a devolutive appeal. Mrs. Eden-born did not appeal, but, after filing a brief in this court in which she argued and prayed that the judgment should be affirmed, she filed an answer to the appeal, contending that the stock seized by the banks was not subject to sale while held by her in pledge to secure the obligations of Lagrone under his contract with Edenborn, dated May 20, 1923. J. M. Lagrone also filed an answer to the appeal taken by the banks, in which he joined in the contention and prayer of Mrs. Eden-born that the stock should not be sold — even subject to the pledge in favor of Mrs. Eden-born.
.It is conceded that the 200 shares of stock standing in the name of J. M. Dowden belong to Lagrone, and that Dowden has no interest in them; and the record leaves no doubt that the dation en paiement by which Lagrone undertook to transfer the 50 shares of stock to his wife is null, not only because it appears to have been made without any lawful consideration, but because there was no delivery of the stock to the pretended transferee. Lagrone simply took the stock certificates for the 250 shares, which had been issued originally in his name, and which were already pledged to Edenborn to secure Lagrone’s obligations under the contract dated May 20, 1923, and had the certificates canceled, and had a new certificate issued in Dowden’s name for 200 shares and another certificate issued in Mrs. Lagrone’s name for 50 shares, and returned both certificates to Edenborn to be retained in pledge to secure Lagrone’s obligations under his contract of May 20, 1923. Neither Dowden nor Mrs. Lagrone was present or had anything to do with the canceling of the old or the issuing of the new stock certificates. The dation en paiement was made only three days before the first of the judgments against Lagrone was signed, and while Lagrone’s attorneys were appealing to. the attorneys for the bank to delay the signing of the judgment because of the'dis
There is no merit in the contention, made in Mrs. Edenbom’s belated answer to the banks' appeal, that the stock was not subject to seizure and sale while it was held in pledge by Mrs. Edenborn. It is well settled that property of any kind held in pledge by a creditor may be seized at the instance of another creditor of the pledgor, and sold subject to, the claim of the pledgee. Williams v. Schooner St. Stephens, 2 Mart. (N. S.) 22; Flournoy & Co. v. Milling, 15 La. Ann. 473; Auge v. Variol, 31 La. Ann. 865; Pickins v. Webster, 31 La. Ann. 875; Horner v. Dennis, 34 La. Ann. 390; Bourg v. Lopez, 36 La. Ann. 440; Kirkpatrick v. Oldham, 38 La. Ann. 553; Renshaw v. His Creditors, 40 La. Ann. 41, 3 So. 403; Succession of Lanaux, 46 La. Ann. 1036, 15 So. 708, 25 L. R. A. 577.
The contention made by the banks, as appellants, is that the stock should be sold by the sheriff without regard for the pledge in favor of Mrs. Edenborn; the argument being that there is no obligation on the part of Lagrone, under the contract dated May 20,1923, which could support a contract of pledge. The contract between Lagrone and Edenborn was an agreement to organize the corporation called Colfax Lumber & Creosoting Co., Inc., with an authorized capital of $100,000, to begin business when $60,000 should be paid in, of which Edenborn was to put up $40,000 and Lagrone $20,000. The purpose of organizing the corporation was to work up the timber ■ on ■ a large tract of cut-over land belonging to- Edenborn, and to furnish lumber to two railroads in which Edenborn owned the controlling stock. It was agreed that Lagrone. should be employed as manager of the Colfax Lumber & Creosoting Company, Inc., at an annual salary of $5,000, payable monthly, as long as such employment should be satisfactory to both parties, and that, in the event of a disagreement in that respect, or in the event Edenborn should desire to discharge Lagrone, or in the event of the death of Lagrone, Eden-born should take over Lagrone’s stock in the company at its book value, to be ascertained by an audit of the books. Mrs. Edenborn therefore has the right to take over Lagrone’s stock at its book value whenever his employment as manager of the mill shall cease, either at the instance of either of them or at his death, and her right to take over Lagrone’s stock at its book value, eventually, ought to be preserved, as it is, by .the judgment appealed from.
The only complaints urged seriously by Mrs. Lagrone are, first, that the district court in Caddo parish was without jurisdiction, ratione personae, to render judgment against her, declaring the dation en paiement void; and, second, that the dation en paiement was not subject to.collateral attack, particularly in a ’summary proceeding. The stock certificates were in Caddo p'arish, in the possession of Mrs. Edenborn, whose domicile was in that parish. That was the only parish in which the stock could be seized, and the district court of that parish had jurisdiction to compel Mrs. Edenborn to surrender the certificates if in fact they belonged to the debtor, Lagrone. The court therefore must have had jurisdiction also to cite Mrs. Lagrone to make good her claim upon the stock. Being in possession of the pledgee of Lagrone, for his account, the stock was virtually in his possession and was subject to seizure as his property. As to the complaint that the pro
The judgments appealed from are affirmed.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.