#### FIRST GUARANTY BANK v. Thomas WELLS, et al.

Nos. CA 85 1500, CA 85 1501 and CA 87 0319.

Court of Appeal of Louisiana, First Circuit.

May 27, 1987.

Dissenting Opinion June 2, 1987.

*123Kenneth F. Sarama, Hammond, for plaintiff-appellee.

Dickie W. Patterson, Hammond, for defendant-appellant.

Before EDWARDS, WATKINS and LeBLANC, JJ.

LeBLANC, Judge.

This appeal involves a suit for collection on a promissory note. The primary questions presented are: (1) whether the instant suit is one for deficiency judgment; and, (2) whether a debtor who failed to object to a seizure and sale under executory process can file a reconventional demand against the creditor in a separate suit, claiming damages for an alleged wrongful seizure in the creditor’s first suit. Answering no to both questions, we affirm the judgment of the trial court.

FACTS

On August 9, 1979, Thomas and Mary Wells (defendants) purchased certain immovable property from Michael and Patricia Sweeney. As consideration for this sale, the defendants executed a promissory note for $20,623.87, payable to the Swee-neys. This note provided for monthly payments, and was secured by a mortgage on said property. On May 13, 1982, the defendants took out a loan with First Guaranty Bank (the Bank), in exchange for which they executed a promissory note in the amount of $19,853.87, payable in full on September 10, 1982.

In June of 1982, the Sweeneys sold to the Bank the promissory note executed by the defendants on August 9, 1979. The Bank thereafter filed a petition for executory process, alleging that defendants had not made monthly payments on the Sweeney note since March 1, 1982, and praying for the issuance of a writ of seizure and sale with respect to the immovable property securing the note. In this suit, the Bank sought collection of the balance due on the Sweeney note, $17,248.16, plus legal interest, attorney’s fees and costs. Defendants did not raise any objection, in any manner, to these executory proceedings. In due course, the property was appraised for $44,000.00 and purchased at sheriff’s sale by the Bank for $29,334.00. The $6,020.20 remaining after satisfaction of the judgment on the Sweeney note was credited to the note executed by defendants on May 13, 1982.

Subsequently, on March 23, 1983, the present suit was filed seeking collection on the May 13, 1982 note, plus interest, attorney’s fees and costs. Defendants answered this suit and filed a reconventional demand claiming damages for wrongful seizure in the Bank’s first suit. They contend that no payments were actually overdue when the Bank wrongfully filed for exec-utory proceedings on the Sweeney note. Following trial, judgment for $19,853.87, plus interest, attorney’s fees and costs was rendered in favor of the Bank on the principal demand. Judgment was also subsequently rendered dismissing defendants’ reconventional demand. Defendants have now appealed.

DISCUSSION

With respect to the principal demand, defendants argue the Bank consistently treated the Sweeney note and the May 13, 1982, note' as one debt and that, consequently, the present suit should be construed as a suit for deficiency judgment, which is precluded because of defects in the executory proceedings in the first suit. This argument is based on the fact that on one occasion the Bank sent defendants a notice listing the amount due on the two notes as one combined figure. Additionally, a demand letter sent to defendants by the Bank’s attorney also listed only one total as the amount due on these notes. However, we feel that this notice and letter merely reflected a matter of the Bank’s internal bookkeeping. In all legal proceedings for collection, the Bank has treated the notes as two entirely separate debts. The present suit is one for collection on the May 13, 1982 note executed by defendants. The Bank’s previous suit for executory process was based only on the Sweeney note. A deficiency judgment is one that is obtained for a deficiency due on *124a debt after distribution of the proceeds of a judicial sale. La.Code of Civ.Pro. art. 2771. The present proceeding is clearly not one for a deficiency judgment, since there was no deficiency in the proceeds realized from the seizure and sale of defendants’ property, which fully satisfied the Sweeney note. In fact, there was a surplus remaining after full satisfaction of the Sweeney note, which was credited to the balance on the May 13, 1982, note. Defendants’ argument is without merit.

Further, the Bank has established that it is entitled to judgment in its favor on the principal demand. At trial, the promissory note sued upon was introduced into evidence by the Bank. In a suit for collection on a promissory note, the introduction of the note is sufficient to make out the plaintiff’s case. *Citizens Bank & Trust v. Consol. Terminal,*460 So.2d 663, 672 (La.App. 1st Cir.1984). Once the note is introduced, the burden shifts to the defendant to establish the nonexistence or extinguishment of the debt. *Id.*In the instant case, Mr. Wells acknowledged at trial that payment was never made on this note. He raised no valid defenses to its payment, his only excuse for nonpayment being that he thought the sale of the seized property had satisfied both notes. However, he also admitted he did not have the money to pay the note when it came due on September 10, 1982. The Bank, having established the debt’s existence and its nonpayment, and the defendants having raised no valid defense, the trial court was correct in rendering judgment for the Bank.

Defendants also argue the trial court erred in dismissing their reconven-tional demand for damages due to the Bank’s allegedly wrongful seizure and sale of their property. According to defendants, the seizure was wrongful because the Sweeney note was not in arrears as claimed in the Bank’s petition for executory process. Defendants’ position in essence is that, although they raised no objections or defenses at the time, they are now entitled to collect damages for wrongful seizure because they had a valid defense of payment, which they could have asserted in the executory proceedings. They assert no other defects in the executory proceedings.

In the instant case, defendants failed to avail themselves of procedural protections which the law provides to debtors in exec-utory proceedings. See La.Code of Civ. Proc. art. 2642. It is well-settled that all defenses and procedural objections to an executory process proceeding are waived if the debtor permits the seizure and sale to proceed without raising any objection by either a suit for injunction or a suspensive appeal. *Gibsland Bank & Trust Co. v. Boddie,*480 So.2d 906, 909 (La.App. 2d Cir.1985); *Plumbing Supply House v. Century Nat. Bank,*440 So.2d 173, 177 (La.App. 4th Cir.1983), *cert. denied,*444 So.2d 1226 (1984); *also see, Chrysler Credit Corp. v. Brown,*452 So.2d 810, 813-4 (La.App. 3d Cir.1984). Thus, defendants waived any defense of payment which they might have had in the executory proceedings on the Sweeney note. *Plumbing Supply House, supra; Ford Motor Credit Company v. Herron,*234 So.2d 517, 519-20 (La.App. 3d Cir.1970). Accordingly, this alleged defense can not now form the basis of a suit for damages. *Id.*We therefore affirm the dismissal of defendants’ recon-ventional demand.

For the above reasons, the judgment of the trial court is affirmed. All costs of appeal are to be borne by defendants.

AFFIRMED.

WATKINS, J., dissents and assigns reasons.

WATKINS, Judge,

dissenting.

I disagree with both parts of the majority opinion. First, I believe this is, in fact, a suit for deficiency judgment. The Bank, as holder of both mortgages, foreclosed by executory process. The proceeds were applied to satisfy the first mortgage and to partially satisfy the second. The Bank is now suing to impose personal liability on the Wellses for the unpaid balance of the second mortgage debt after foreclosure failed to yield the full amount of the debt. See, e.g., *Cameron Brown South, Inc. v. East Glen Oaks, Inc.,*341 So.2d 450, 456 *125(La.App. 1st Cir.1976); Black’s Law Dictionary 379 (5th ed. 1979).

In a deficiency judgment suit, the debtor may raise the substantive defense that his debt was not due when the creditor foreclosed by executory process. *League Central Credit Union v. Montgomery,*251 La. 971, 207 So.2d 762 (1968). See *Reed v. Meaux,*292 So.2d 557, 574 (La.1974) (on reh’g) (Tate, J., concurring) *{“any*defect in the executory proceedings can be used as a *defense*to a *deficiency*judgment....”)1 This proposition is supported by the strong public policy in favor of protecting the debtor when the creditor employs the harsh remedy of executory process and later seeks a deficiency. H. L’Enfant, 35 La.L.Rev. 442, 456 (1975).

Even if this is *not*a suit for deficiency judgment, the Wellses may bring a action for wrongful seizure against the Bank. LSA-C.C.P. art. 1061 (“The defendant ... may assert in a reconventional demand any action which he may have against the plaintiff ... regardless of the connexity between the principal and reconventional demands.”) I strongly disagree with the majority opinion’s implication that a debtor’s suit for wrongful seizure under executory process is necessarily waived by his failure to seek an injunction or to appeal suspen-sively from the order of seizure and sale. I do not believe that such a holding is supported by LSA-C.C.P. art. 2641, or by the cases cited in the majority opinion.2 The Wellses are entitled to present evidence that they were injured by the wrongful conduct of the Bank.

1

. Other cases from the intermediate appellate courts which support the proposition that substantive defenses may be raised by a debtor in the deficiency judgment action include: *Mellon Fin. Servs. Corp.*v. *Cassreino,*499 So.2d 1160, 1162 (5th Cir.1986) (the lack of authentic evidence to proceed by executory process may be raised in the defense of deficiency judgment action); *Chrysler Credit Corp. v. Walker,*488 So.2d 209, 213 (La.App. 4th Cir.1986) (on reh’g) (Schott, J., joined by Barry, J., concurring) (affirming the dismissal of the creditor’s deficiency judgment action because the "note was not delinquent when plaintiff seized the vehicle by executory process”); *Plumbing Supply House, Inc. v. Century Nat'l Bank,*440 So.2d 173, 177 (La.App. 4th Cir.1983), *writs denied,*444 So.2d 1226 (La.1984) ("the debtor may use any defense, procedural or substantive, which he could have used in the original proceeding_"); *Ingram v. Reliable Fin. Co.,*410 So.2d 768, 772 (La.App. 3d Cir.1981) (the seizure and sale of goods not subject to the mortgage created a fundamental defect in the executory proceedings which barred a deficiency judgment).

2

. LSA-C.C.P. art. 2642 states, in permissive language, that "[djefenses and procedural objections to an executory proceeding *may*be asserted either through an injunction proceeding to arrest the seizure and sale ... or a suspensive appeal from the order directing the issuance of the writ of seizure and sale, or both.” (Emphasis added.) It does not state that injunction and appeal are the *exclusive*remedies available to an aggrieved debtor.

The court’s reasoning in *Ford Motor Credit Co. v. Herron,*234 So.2d 517, 519-20 (La.App. 3d Cir.1970) was dictum because the note involved showed on its face that it was past due and unpaid. The *Plumbing Supply*case, supra at n. 1, involved a situation not present in our case. There, the debtor brought a suit for wrongful seizure *before*the sale. The court found that the seizure was not in fact wrongful, but went on to say that under the circumstances the debt- or had waived any defenses to the seizure and sale. *Plumbing Supply,*440 So.2d at 177-78. A recent case from the same appellate court that decided *Plumbing Supply*is more factually similar to our case. In that case, the court affirmed the dismissal of the creditor’s deficiency judgment action because the note sued on was not delinquent when the creditor seized the property by executory process. The court then affirmed an award of damages on the debtor’s reconventional demand for wrongful seizure. *Chrysler Credit Corp. v. Walker,*supra at n. 1.