Case ID: la-ann_1/html/0132-02.html
Source: Caselaw Access Project
Author: {"author": "Eustis, C. J,\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Cammack et al. v. Watson et al.
    The action given to a creditor by sect. 7, ch. 3, tit. 4, book 3, {arts. 1963 to 1989), of the Civil Code, to avoid contracts made to his prejudice by a debtor — the Actio Pauliana of the Roman law, is prescribed by one year, to be counted, if brought by a creditor individually, from the time he obtained judgment against his debtor — if by a syndic, or other representative of the creditors collectively, from the day of his appointment. The object of this action is to set aside contracts made with the consent of the parties and having a real existence, but which tho law will not permit to be an impediment to the recovery of the creditor’s debt, unless he shall be presumed, from lapse of time, to have waived his right to have them avoided. There is no similarity between this action and the action to have a simulated sale decreed to be such. The latter is not barred by the prescription established by art. 1989. Sect. 7, ch. 3, tit. 4, .book 3, ofthe Civil Code, does not relate to simulated or pretended agreements
    
      APPEAL from the District Court of Concordia, Owrry, J. Walter, one of ■the defendants, appealed from a judgment, rendered -on the verdict of a jury, in favor of the plaintiffs.
   The judgment of the court wns pronounced hy

Eustis, C. J,

The plaintiffs, at April term, 1839, in the District Court of Concordia, obtained judgment against, one of the defendants, Watson, for $10,000, with interest and damages. It was had on a judicial confession, in a suit which had been instituted against him as drawer of a 'bill of exchange. An execution was issued, and returned nulla bona, on the 20th of May, 1840.

On the 19th of May, 1841, the plaintiffs instituted this suit, in which they charge that Watson, on the 14th day of December, 1837, made a pretended sale of all his property in the parish of Concordia, where he resided, to his son-in-law, Samuel D. Walker, then, and at the time of the suit, residing in Arkansas; that said sale was false, fraudulent and simulated, made for the purpose of defeating the just claims of the plaintiffs and other creditors, without any price or real consideration, and unaccompanied even by a change of possession from Watson to Walker. They pray that the sale be avoided and annulled by the judgment of the court, and the property thus included in this frauduldnt instrument be decreed to be subject to be seized and sold in satisfaction of their debt.

The jury found “ that the sale from J. Watson to Samuel D. Walker was fraudulent and of no avail,” and gave a verdict for the plaintiffs according to the prayer of the petition.

The debt to plaintiffs was contracted in 1835; at that time Watson was the owner of the plantation and slaves, which are the subject of the present suit.

At the October term of 1844, in the Western District, the late Supreme Court reversed the verdict of a jury, and subjected this plantation and slaves to the payment of two judgments of large amounts, obtained by the Planters’ Bank of Mississippi against Watson, on the ground that the sale in question was fraudulent and simulated. Vide 9th Robinson, 267. A rehearing was granted, and during its pendency, the suit was compromised. All the evidence adduced in that case was received in this, and additional evidence was produced which puts the simulation and turpitude of the whole transaction beyond all reasonable doubt.

The defendants contend that this action is prescribed by the lapse of one year from the time the creditor had obtained his judgment against his debtor, under article 1989 of the Civil Code.

It is true that the revocatory action — the Actio Pauliana of the Roman law, is prescribed by one year from the date of the judgment obtained by the creditor, or of the appointment of representatives of all the creditors in case the suit is instituted by them. But this action is given to enable the creditor to avoid contracts made to his prejudice. , Such is the very word of the titles to the sections, paragraphs and articles of the Code which treat on the subject. Vide section 7, § 1 and 2, articles 1963 to 1989. Its object is to set aside contracts upon which the consent of the parties has operated and which have a real existence, but which the law will not permit to be an impediment to the recovery of the creditor’s debt, unless he shall be presumed, from lapse of time, to have waived his right to have them avoided.

Article 1965 gives the right to the creditor to annul any contract made in fraud of his rights. Art. 1972 declares that the judgment shall be that the contract he avoided, ¿Jr. Article 1977 provides for the restitution of the money paid by the party with whom the debtor contracted, in the event of its having inured to the benefit of the creditors. The next article, 1978, makes provision where the consideration is a pre existing debt, and article 1983 where it is a debt not at the time demandable. Article 1984 mentions other classes of contracts which are subject to the revocatory action, viz: the renunciation of a succession or other right of property, the release of a debt without payment, or any other act of this kind when done to the prejudice of creditors — these may be avoided by them, under the rules provided. By article 1985 creditors are authorized to accept a succession, which the debtor neglects, or refuses to accept. Other articles provide for those rights which creditors cnnnot reach, even if the debtor should refuse to avail himself of them — such as the separation of property, donations made to the debtor which he does not accept, .the right which the debtor has to make his eo-heirs collate, and certain other privileges which arc strictly personal. Arts. 1986, 1987.

The sense of the Code is therfore unquestionable. It provides for the avoidance of contracts. It has no reference, or application, to simulated or pretended agreements. On the contrary, the words do not occur throughout the whole section, which treats on the subject of contracts to be avoided by persons not parties to them.

But it is said that article 1975 presumes the gratuitous contract made by the creditor to be fraudulent ab initio, but still the creditor would lose his right to avoid it unless he brought his action within the year. This is true. But a gratuitous contract is not the less a contract on account of its being gratuitous. The consent necessary to a donation is as time and real as to a contract of sale.. One of the divisions of contracts established by our Code is that, of onerous and gratuitous contracts. Arts. 3765, 1766.

We have examined this subject according to the provisions of our Code, which are too clear and .express to leave any doubt as to their legal intendment, There is no necessity of going beyond it. But a reference to the Roman law, from which this whole section was taken, fortifies the conclusions to which we have arrived after a thorough consideration of the subject.

Petenda est preferendaque hsec actio intra.ut em annum, i. e. quadriennium continuum, ex eo scilicet computandum quo venditio facta .est. Qua vero ex parte locupletior quis debitoris fraude factus est, in perpetuum competit actio. Doctrina Pand. by Muhlenbruch, § 174.

There is no similarity between the revocatory action here spoken of, which is the same as that provided for in our Code, and the action to have a simulated sale decreed to be so. As Merlin says : On se pourvoit contre un acte simulé, par Une simple demande á ce qu’il soit declaré tel. Rep. de Jurisprudence, verbo Simulation.

Is this a contract in any rational sense, which has been thrown as a net over the property of this fraudulent debtor, by his son-in-law and accomplice ? Was it a contract of sale? Was there a consent given that the property should cease to belong to Watson, and thenceforth belong to Walker ?. Was there a price paid ? Was there a delivery? There was not one of these; nor is there one word of truth or sincerity in the whole transaction from the beginning to the end. We have no taste for the details of such affairs. Those •who have can gratify themselves, in the report of the case before cited, in 9th Robinson. We have seen enough to satisfy ns that the plantation and slaves never ceased to belong to Watson, who alone received the revenues of them. It is most obvious that, in a case libe this, there is no basis on which prescription, or any other right adverse to the creditor, can rest. There is no possession — no consideration — no reality in it. The whole is a mere fiction, and the instrument, itself is proof of nothing, except the folly and bad faith of those who put their names to it.

Lockett and Micou, for the plaintiffs. Dunbar, Stacy and Sparrow, for the appellant.

The jurisprudence of this State in relation to instruments of this kind is settled. Since the rule laid down in the case of Hiriart v. Roger et al., 13 La. 129, we are not apprized that there are any decisions which controvert it. It was established after much deliberation ; and we believe is correct in principle, and that every reason of policy and public morals require it to be adhered to. See Civil Code, art. 2456. 17 La. 306. Merlin, loco cit.

In a recent case we lately determined that simulation gives neither possession nor title, and that no act of the parties to a simulated sale can be recognized as affecting the rights of creditors to the property of their debtor.

Bernard v. Auguste, ante p. 69. This opinion is in conformity with that of Baldus, Dumoulin, and other distinguished civilians. The subject can hardly be made more clear by further illustration, and we affirm the judgment of the District Court, with costs in both suits. 
      
       By consent of parties the judgment in this case was pronounced in New Orleans. The appeal was returnable at Alexandria, in the Westorn District.
     
      
       In the case of The Planters’ Bank of Mississippi v. Watson et al.