No. 45587 | La. | Jun 29, 1961
The plaintiff, Dudley T. Odom, as holder and owner of six certain promissory notes executed by the defendant Cherokee Homes, Inc., filed the instant proceeding to foreclose via executiva six separate mortgages, each securing one of the notes; and pursuant to an order of seizure and sale the Sheriff of Jefferson Parish seized 113 lots in a development known as Cherokee Courts Subdivision in Jefferson Parish. While no single one of the mortgages bears against all of the property seized, collectively they represent liens against either large parcels, or against individual lots, and in some instances there are as many as three mortgages on certain lots. Interventions were filed by owners of other notes secured by mortgages bearing on certain lots among those seized; plaintiff then supplemented his petition for foreclosure so as to include an additional first mortgage held by him on a portion of the seized property. To the interventions, plaintiff in seizure pleaded
Cherokee Courts Subdivision, according to a survey plat — sketch of which is reproduced herewith, showing partial detail for purposes of clarity — was formed by subdividing three major tracts of land designated as Parcel “A”, Parcel “B” and Parcel “C” on the plat, acquired on credit terms by the defendant at various times, into 141 separate building sites. Of the original sites, 28 were sold and the remaining 113 are those seized to satisfy plaintiff’s mortgages.
a. Note for $115,000.00, dated October 31, 1958, secured by-vendor’s lien and mortgage affecting Parcel B; remainder due _$109,000.00
b. Three notes for $17,127.50 each, dated January 5, 1959, secured by vendor’s lien and mortgage affecting Parcel C; remainder due-$ 43,773.98
c. Note for $120,000.00, dated March 24,-1959, amount still due _$120,000.00
Secured by pledge of four mortgage notes given to secure:
(1) $100,000.00 “Collateral Mortgage” dated October 31, 1958 on described lands within Parcels A and B;
(2) $48,000.00 “Collateral Second Mortgage” dated December 1, 1958 on forty specific lots in Parcels A and B;
(3) $4,000.00 “Collateral Mortgage” dated December 1, 1958, affecting a strip 50' x 137', as described;
(4) $70,000.00 “Collateral Second Mortgage” dated January 5, 1959 on Parcel B.
d. Note for $150,000.00 dated March 24, 1959, secured by “Collateral Third Mortgage and Subordination Mortgage” affecting one hundred and one specific lots situated in Parcels B and C; remainder due-$130,750.00
Plaintiff therefore allegedly holds first mortgages in the form of vendor’s liens on Parcel B (“a” above) and Parcel C (“b” above), four collateral mortgages on lands in Parcels A and B securing one debt of $120,000 in principal (“c” above), and a mortgage on certain specific lots which originally totaled 101, in Parcels B and C (“d” above). The 113 lots seized were all the unsold building sites in Parcels A, B and C; the total amount allegedly due plaintiff, including interest and attorneys’ fees, is approximately a half million dollars.
Prior to the advertisement of the property for sale, interventions were filed by James D. Tillman, III, by E. O. Cresap, Sr., by Helmet Sales Agency, Inc. jointly with Claude E. Meyer, and a fourth which was subsequently dismissed as of non-suit without prejudice. Intervenor Tillman, as owner of two notes for $27,000 and $9,000 respectively, identified with acts of mortgage on twenty-four specific lots in Parcel A and Parcel B (indicated on the sketch by outline and cross marks), alleged that only plaintiff’s vendor’s lien on Parcel B is superior to his mortgages for the reasons that (a) the $150,000 mortgage does not cover his lots, (b) plaintiff’s collateral mortgages which do cover his lots (i. e., those for $100,000 and $48,000, pledged to secure payment of the $120,000 debt) are inferior
In summary, the several intervenors in support of their respective claims sought to have plaintiff show cause why the property covered by their mortgages should not be sold separately from and after the remaining property seized by plaintiff; why lots in Parcel A affected by intervenors’ mortgages should not be sold free and clear of the vendor’s lien and mortgage on Parcel B; why Parcel C should not be sold first in order to fix the balance due on the collateral mortgages held by plaintiff on Parcels A and B; why the plaintiff should not be required to make proper application of credits of payments made by defendant; and why the indebtedness to intervenors should not be paid from any excess of proceeds from the separate sale of lots, after sales of other property seized on mortgages superior in rank to theirs, in preference and priority over any other debts owing to plaintiff. Following a hearing on the Rule, the Trial Court maintained plaintiff’s exceptions to the petitions of intervention, reserving to intervenors their right to participate in the surplus, if any, according to the rank of their respective claims, as stated above.
Counsel for intervenors complain that the ruling of the Trial Court has the effect of permitting plaintiff to satisfy his inferior mortgages bearing on other property from proceeds of the sale of the property covered by their mortgages; that the Court below erred in ruling that Article 1092, Code of Civil Procedure,
Plaintiff, on the other hand, denies that the above rule and the cited jurisprudence are applicable in the instant matter; those cases, say counsel, deal with particular claims or privileges which were superior, as to a parcel of the property seized, to the claim of the seizing creditor, whereas in the instant matter the claims of inter-venors are admittedly inferior to those of plaintiff;
We readily agree with counsel for plaintiff in their exposition of the harmonious application of Articles 2643 and 1092, Code of Civil Procedure; we are also in accord with their conclusion that in the simple hypothetical case presented, no separate appraisal and sale of each lot could be demanded by the holders of second mortgages thereon; but that supposed situation finds no parallel in the instant case. The plaintiff here, in one executory proceeding, has gathered an assortment of claims as to which almost the only characteristic in common is that they may be said to affect some part or other of lands formerly composing three separate tracts and now lying within a specific development, and he is attempting to satisfy all of his claims indiscriminately out of the proceeds of the sale. Thus it is seen that he seeks to foreclose a vendor’s lien and mortgage, with remainder due of $109,000, on Parcel B; to foreclose another vendor’s lien and mortgage, with remainder due of $43,773.98, on Parcel C; to collect a note for $120,000, with no credits thereon, payment of which is secured by pledge of four mortgage notes identified with mortgages of undetermined rank, some of which bear on parcels as a whole while others affect specific lots or a strip of land in one or more parcels; and to foreclose a “Collateral Third Mortgage” on which there is a remainder due of $130,750 bearing on 101 specific lots in Parcels B and C; with prayer that, from the proceeds of the sale of the whole property seized, i. e., all unsold lots in the subdivision, he be paid by preference and priority the above amounts, with interest from various dates until paid, plus attorneys’ fees, etc.
It is obvious that the net result would be the impossibility of determining how much was realized on the separate mortgages; the total amount received would be applied to cancellation of the various claims without regard to how much each encumbered unit brought. For example, if the two vendor’s liens were foreclosed in one suit, and Parcel B were to induce a higher bid than the vendor’s lien and mortgage bearing against it, the excess would be applied to liquidation of the indebtedness on Parcel C, in violation of the rights of holders of second mortgages on Parcel B.
In a supplemental brief filed by the plaintiff, reference is made to a duly recorded Act of Dedication dated September 16, 1959, by the owners of the property (Cherokee Homes, Inc.) to the Parish of Jefferson, to which is annexed a plan of the subdivision, showing 141 lots in seven groupings or sections. Counsel represent that all notes affecting the property — not only the vendor’s lien notes and second mortgage notes, but notes held by these identical intervenors as well — were par-aphed to identify them with this Act of Dedication; and counsel contend that as a consequence, Parcels A, B and C have now lost their identity with respect to the subdivision, that some lots now lie partly in two parcels, and it would therefore be highly impracticable to have separate sales for the three parcels involved. With such developments we are not concerned. The plaintiff holds, and seeks to foreclose upon, various mortgages, each covering certain described property, and his rights are necessarily determined by the recitation of the particular instrument on which his claim is based.
For the reasons assigned, the judgment of the District Court maintaining exceptions of no cause and no right of action to the petitions of intervention filed by E. O. Cresap, Sr., Helmet Sales, Inc. and Claude E. Meyer, and J. D. Tillman, III, is reversed and set aside, the exceptions are overruled and the case is remanded to the Trial Court for further proceedings in accordance with law and consistent with the views herein expressed; costs in this Court to be borne by plaintiff, Dudley T. Odom.
. After the seizure by the Sheriff in these proceedings the defendant applied to the U. S. District Court for the Eastern District of Louisiana under provisions of the Federal Bankruptcy Act; the District Judge having concluded that a plan of reorganization could not be had, he referred the matter to the Referee in Bankruptcy; the Referee disclaimed the property and allowed plaintiff to proceed with the foreclosure.
. Article 1092, in a section of the Code treating of intervention in ordinary proceedings, declares: “A third person claiming ownership of, or a mortgage or privilege on, property seized may assert his claim by intervention. If the third person asserts ownership of the "seized property, the intervention may be filed at any time prior to the judicial sale of the seized property, and the court may grant Mm injunctive relief to prevent such sale before adjudication of his claim of ownership.
“If the third person claims a mortgage or privilege on the property seized, the intervention may be filed at any time prior to the distribution by the sheriff of the proceeds of the sale of the seized property, and the court may order the
.Article 2643, under a title of Book V dealing with Executory Proceedings, states: “A third person claiming a mortgage or privilege on the property seized in an executory proceeding, superi- or to that of the plaintiff, may assert a preference in the distribution of the proceeds of the sale of the property by intervening, as provided in Article 1092.
“A third person claiming a mortgage or privilege on the property seized in an executory proceeding, inferior to that of the plaintiff, similarly may assert by intervention a preference in the distribution of the surplus of the proceeds of the sale of the property remaining after the claim of the plaintiff has been paid in full. * * * ”
. Counsel say that besides the vendor’s liens and mortgages on Parcels B and C asserted herein, plaintiff also holds a vendor’s lien and mortgage on the lots of Parcel A on which intervenors hold mortgages, although it was not foreclosed upon in this proceeding.
. See note 3, supra.
. See note 2, supra.
. Of. Succession of Anger, 18S4, 36 La. Ann. 252" court="La." date_filed="1884-03-15" href="https://app.midpage.ai/document/succession-of-anger-7193136?utm_source=webapp" opinion_id="7193136">36 La. Ann. 252. The facts in that case were that the Succession owned two plantations, “Forlorn Hope” and “Hermitage,” which were subject to the same first mortgage, held by one Graves; second mortgages on Forlorn Hope were held by various persons, while a second mortgage on Hermitage was held by opponent, Richard Humble, tutor to certain minors. The executrix obtained an order for the sale of both plantations to pay debts, but because of an adverse claim of half ownership in Forlorn Hope, asserted by suit, its sale was stayed, while Hermitage was sold. Mortgage creditors of Forlorn Hope, including Graves, bound themselves to stay proceedings for its foreclosure until a later date provided the proceeds of the sale of Hermitage, after satisfaction of prior privileges, should be applied to the reduction of the Graves first mortgage, and the executrix, in filing her account, followed that plan. Upon opposition by Humble that Forlorn Hope, which was equally bound, had contributed nothing, yet upon its eventual sale would' bring much more than sufficient to satisfy the small remainder due Graves and was therefore likely to yield a dividend to its second mortgages, it was held that the second mortgagees on the immovable not sold could not be benefited to the prejudice of those holding second mortgages on the immovable sold by the distribution of the entire price of the one sold to the extinguishment of the first mortgage on both plantations — because to do otherwise would be to perpetrate a gross injustice.