Source: https://supreme.justia.com/cases/federal/us/160/624/
Timestamp: 2019-04-25 14:47:39+00:00

Document:
Y., and the inscription of Mrs. Y.'s mortgage was then renewed. In 1883, N. & Co. commenced proceedings to foreclose their mortgage (Mrs. Y. not being made a party to the suit) and obtained a decree of foreclosure in 1886. The property was duly appraised according to the law of Louisiana, and at the sale, no sufficient bid was made. It was then advertised for sale on a credit of twelve months. In 1887, Y. notified the marshal that Mrs. Y. had an encumbrance on the property prior to the mortgage to N. & Co. (stating the amount of it), and that a sale for less than that amount would be invalid. Notwithstanding this notice, a sale was made for a less sum. This sale was attacked by Y. and Mrs. Y. by various proceedings set forth in the opinion of the Court, which resulted in a decree setting aside the sale, and adjudging that the attempted renunciation by Mrs. Y. of her special mortgage was invalid, and that that mortgage should be recognized as the first mortgage on the property, superior in rank to the mortgage of N. & Co.
(1) That Mrs. Y. must stand upon her legal mortgage, resulting from the receipt of her paraphernal property and recognized by the judgment of 1881, decreeing a separation of property, or upon a judicial mortgage arising from that judgment, or on the contract between herself and the residuary legatee of E. H.
(2) That if her mortgage be held to be legal or judicial, its existence was not a bar to the confirmation of a sale for an amount insufficient to satisfy it, and that it could not rank the special conventional mortgage of N. & Co.
(3) That by the transaction between the residuary legatee of E. H. and Mrs. Y., the respective debts were discharged by agreement and compensated each other, and when the principal obligation was thus discharged, the mortgage fell with it, and would not be revived, although the indebtedness were reacknowledged.
(4) That the decree below should be reversed.
for $1,632.61, payable December 1, 1882, on his interest in certain real estate in that parish known as the "St. Peter Plantation." The petition alleged "That said Wade R. Young resides permanently out of the State of Louisiana, and is not represented in this state," and prayed for the appointment of a curator ad hoc. The appointment of a curator was made, and citation served upon him. On June 25, 1883, Wade R. Young filed his answer to the petition, wherein he described himself as "a resident and citizen of the State of Mississippi," and on the same day filed his petition for the removal of the cause, accompanied by a removal bond, and June 28th, the district court entered an order transferring the case to the United States Circuit Court for the Western District of Louisiana, which was done accordingly. Plaintiffs thereupon prayed in that court that their petition be allowed to stand as a bill in equity, and, October 12, 1883, the defendant Young filed his answer thereto, admitting the execution of the note and mortgage, but alleging in substance that he had been compelled to pay usurious interest; that the account current between the parties was composed of excessive and objectionable charges; that plaintiffs failed to carry out their agreement and understanding with him, and that, upon a proper taking of accounts, there was nothing or but little due.
In addition to his answer, to which a replication was filed, defendant made a reconventional demand on which, upon a trial thereof, judgment passed against him. November 11, 1884, the cause was revived as to the heirs of Edward Nalle, who had deceased, and they entered their appearance March 24, 1885.
John Johnson, surveyor, on the 15th of March, 1879, be, and the same is, hereby, recognized, and ordered to be enforced to satisfy the sum of one thousand six hundred and thirty-two 61/100 dollars, with 8 percent per annum interest thereon from the 1st day of December, 1892, until paid, subject to the credit aforesaid, and also for the payment of the attorney's fees stipulated by said act of mortgage, being 5 percent on said amount, and the costs of this suit, to be taxed."
October 12, 1887, Mrs. B. F. Young, wife of Wade R. Young, on motion of her husband as her solicitor, was allowed to file "her bill and intervening petition, by her husband and next friend," against Nalle & Co., in which she averred that she was married to Wade R. Young in October, 1865, and resided with him continually in the State of Louisiana until the month of February, 1876; that in the year 1870, her father died in the Parish of Catahoula, Louisiana, and left her a policy of insurance on his life for the sum of $5,000, which was collected by her husband for her, and by him converted to his own use, and to the use of the community existing between them; that her father also left a large estate, consisting of property, real and personal, which was sold at probate sale in 1881, and her interest therein, amounting to $2,500, adjudicated to her husband for his own sole use, benefit, and advantage, and for that of the community existing between them, and that her husband had so received the paraphernal moneys and property of complainant in the sum of $7,500, which had been converted by him to his own use, and that of the community, and was now legally due complainant by her husband.
renunciation of complainant was invalid, as charged, no valid sale could be made for a price not exceeding the amount of the prior mortgage, and the attempted sale would be null and void; that if the renunciation, for any reason not known to the complainant, was valid and binding, complainant was entitled to redeem by paying the amount of the prior encumbrances, if any such there might be, and that, for the purpose of securing equitable protection, it had become necessary for complainant to intervene in the foreclosure suit and to oppose the confirmation of the sale, in order that a reference might be made to determine the priority of liens and adjust all conflicting claims.
Petitioner therefore prayed to be allowed to file this intervention pro interesse suo, and that Nalle & Co. (that is, Flower and the heirs of Nalle) be summoned to answer by writ of subpoena served on their solicitor; that the sale of the mortgaged premises by the marshal on July 30, 1887, be not confirmed, but be set aside; that a reference be made to have the priority of liens determined, and all conflicting claims adjusted; that a valid title be assured to the purchaser, and a sale made for the best interests of all concerned; that the attempted renunciation of her mortgage in favor of Nalle & Co. be declared null and void, and her mortgage recognized as the first and superior encumbrance on the property; that the revenue acts of Louisiana for 1880, 1882, 1884, and 1886 be declared unconstitutional, null and void; that the taxes levied in pursuance thereof be declared of no effect, and for general relief. This intervention was not sworn to, and was signed "Wade R. Young, Solicitor." On the 24th of October, 1887, Mrs. Young and her husband prayed to amend their original petition by alleging that although Young removed, with his family, from Louisiana to Mississippi in 1876, he did not at that time establish a residence in Mississippi, and that it was not until January, 1883, that he abandoned finally his intention to return to Louisiana, renounced his residence and citizenship there, and declared himself a citizen of Mississippi, with the intention of remaining permanently.
act of mortgage, March 18, 1868, by Wade R. Young, William C. Young, and Margaret A. Young, of the Parish of Tensas, to Miss Eliza H. Young, to secure their certain promissory note for $11,250, payable, with interest at eight percent, one year after date, on the property in question, being part of Lake St. Peter's plantation, with a confession of judgment, Mrs. B. F. Liddell, wife of Wade R. Young, and Mrs. Willie T. Evans, wife of William C. Young, ratifying said act of mortgage and renouncing all their rights in the property therein mortgaged, upon due examination, separate and apart from their husbands, and an acceptance by Eliza H. Young. Upon the record of this mortgage in the Parish of Tensas appeared the cancellation of five-ninths thereof, being the indebtedness of W. C. Young, one of the mortgagors, and special legatee for M. A. Young, deceased, leaving four-ninths of the indebtedness of Wade R. Young, for himself, and as special legatee for M. A. Young, deceased, still unpaid; also, the cancellation and erasure of the mortgage, to the extent of the remaining four-ninths, on the 5th of June, 1882, under a power of attorney signed by Wade R. Young and his wife, Mrs. B. F. Young, whereby Charles Young, of the Parish of Tensas, was constituted and appointed attorney in fact with full and complete power, in the name of Mrs. Young, to cause the act of mortgage to be cancelled and erased. This power of attorney was executed June 1, 1882, in the presence of two witnesses, who signed the act with the parties, as did also the notary. The cancellation and power of attorney were duly certified as correct copies of the original, as the same appeared on file and of record in the office of the clerk of the Ninth District Court of Tensas Parish.
"insofar as the mortgage accorded to her by law to secure the repayment of her paraphernal funds may bear upon the interest of her said husband in the succession of his deceased father, in giving to the said Mrs. S. J. Metcalfe an acquittance and release pro tanto of the sum due by her."
"9th District Court, Parish of Tensas"
"Wade R. Young, Her Husband"
"In this case, a regular trial was had after issue joined, and the law and the evidence being in favor of the plaintiff, and against the defendant, it is ordered, adjudged, and decreed that there be judgment of separation, dissolving the community of acquets and gains between the plaintiff, Mrs. Bethia F. Liddell, and the defendant, Wade R. Young, and that the said plaintiff do have and recover judgment against the defendant for the sum of ($7,500) seven thousand five hundred dollars, with a recognition of her mortgage on the property described in the petition, and that the same be sold to satisfy said judgment and costs."
"Thus, done, read, and signed in open court this 9th day of July, 1881."
"a true and correct copy of original judgment rendered in suit of 'Bethia F. Liddell vs. Wade R. Young, Her Husband,' as the same appears on file and of record, in my office, in Mortgage Book O, page 649 et seq., on June 5, 1882."
first lien on the property, and prior in rank to Nalle & Co.; that the revenue acts of Louisiana for the years 1880, 1882, 1884, and 1886 be decreed unconstitutional, null, and void, and the inscription of the mortgage to secure the taxes be erased, as a cloud, and for general relief. And he further prayed that if it be determined that the sale was a valid sale, he might be allowed to redeem by paying to complainants the amount of the debt, interest, and costs, and such other sums as might be found to be legally due.
Defendant also filed what he styled a "cross-bill" against the marshal, Mrs. Mary Nalle, and her husband, Golson, and Nalle & Co., alleging the sale of the property by the marshal, and the acceptance of the bid of Mrs. Mary Nalle, notwithstanding a written protest by defendant against the acceptance of any bid not exceeding $7,500, the amount of the prior encumbrance; that the marshal attempted to transfer the possession of the property to Nalle & Co., or Mrs. Mary Nalle for them, by giving complainants' solicitor an order to take such possession, and that the marshal and Mrs. Mary Nalle were now seeking to evict defendant from the possession of his property, and were trespassing thereon, all of which was without color of right; that the marshal had no power to pass the title to Mrs. Nalle until the oppositions to the sale had been tried and determined, and the sale confirmed, and that, even if he had, the sale was absolutely null and void, because the amount of the bid did not exceed the amount of the prior special mortgage, and prayed for an injunction, whereupon a restraining order was issued, and, subsequently, a writ of injunction.
whatever; denying that Wade R. Young moved his family to the State of Mississippi in 1876 with the intention of retaining, or that he did retain, either an actual or constructive domicile in the State of Louisiana; averring that the alleged agreement between Mrs. B. F. Young and Mrs. Metcalfe and Wade R. Young, under date of December. 1876, was null and void, for reasons given, and that Mrs. Young and Wade R. Young, were, in equity and good conscience, estopped from setting up her alleged mortgage. Wade R. Young and his wife filed a replication to the answer of Nalle & Co. and others "to the cross-bill and intervening petition."
"ordered, adjudged, and decreed that the sale of the mortgaged property made by the marshal, in pursuance and execution of the foreclosure decree be set aside, cancelled, and avoided. And it is further ordered, adjudged, and decreed that the attempted renunciation by the intervening petitioner, Mrs. Bethia F. Young, of her special mortgage on the property, was and is invalid and of no effect, and that said mortgage be recognized as the first mortgage on the property, superior in rank to the mortgage of the plaintiffs, E. Nalle & Co., and entitled to be paid by preference. And it is further ordered that the plaintiffs, E. Nalle & Co., pay the costs of the sale and of these proceedings."
The proceedings in the state court were ordinary and not executory, and in the circuit court the petition stood as a bill in equity to foreclose a mortgage. The decree of November 6, 1886, was a final decree, and the execution may be regarded as the equivalent of a direction to a master or commissioner to make sale in the enforcement thereof. Under the Civil Code and Code of Practice of Louisiana, judicial sales are conducted by the sheriff or other public officer in the manner minutely described, and adjudicated to the purchaser, who thereupon becomes the owner of the article adjudged. Rev.Civ.Code, Art. 2601 to 2621; Code Prac. 663 et seq. But in an equity foreclosure in a circuit court, while the requirements of the state law should be complied with, and the forms of proceeding pursued as nearly as practicable, it is proper for the officer who makes the sale to make a report or return to the court for confirmation. Resistance to such confirmation may be made, under circumstances, and this sometimes results in the setting aside of the sale and an order for a resale. But the scope of these pleadings was much wider. To the confirmation of the sale the defendant indeed interposed objections, waiving any formal report for confirmation, but they were not passed upon by the circuit court independently of defendant's alleged cross-bill and the petition of Mrs. Young in intervention, and these papers may all be considered together, as they were by the circuit court, and, so treated, they constituted in effect an independent suit, brought by Young and his wife, to set aside the sale and have the alleged mortgage of the wife declared the prior encumbrance and enforced, or for redemption.
The objections in respect of alleged irregularities in the conduct of the sale, or the invalidity of certain taxes, and the requirement of their payment, need not be considered, as they are not sustained by the record, and mere informalities or irregularities in a judicial sale in Louisiana do not constitute a sufficient ground for setting it aside. Stockmeyer v. Tobin, 139 U. S. 176.
The principal objection to the sale was the insufficiency of the bid at which the property was disposed of, and that objection will be first examined.
Under Articles 679, 683, and 684 of the Code of Practice of Louisiana, when there exists a special conventional mortgage or privilege on the property put up for sale, the property is sold subject thereto, and the purchaser pays to the officer so much of the price as exceeds "the amount of the privileges and special mortgages to which such property is subject," and, in case of sale on twelve months' credit, if there exist on the property any privileges or special mortgage, in favor of other persons than the judgment creditor, and who are preferred to him, the purchaser is entitled to retain in his hands, out of the price, the amount required to satisfy the privileged debts and special hypothecations to which the property sold was subject, but is bound to give his obligation for the surplus of the purchase money, if there by any, and subscribe his obligation at twelve months' credit, with security. But, if the price offered is not sufficient to discharge the privileges and mortgages existing on the property, having a preference over the judgment creditor, there shall be no adjudication, and other property, if there be any, shall be seized.
If, therefore, the mortgage claimed by Mrs. Young was conventional or special, and had been properly recorded, and not legally renounced, and it was prior to that of Nalle & Co., no sale of the mortgaged property could be made under the junior encumbrance of the latter unless the price bid was sufficient to discharge the prior lien. But if the prior mortgage was legal or judicial, this requirement did not apply, and the property passed to the purchaser subject to the payment of the prior lien. Alford v. Montejo, 28 La.Ann. 593; Godchaux v. Dicharry's Succession, 34 La.Ann. 579.
"is divided into dotal and extradotal. Dotal property is that which the wife brings to the husband to assist him in bearing the expenses of the marriage establishment. Extradotal property, otherwise called paraphernal property, is that which forms no part of the dowry."
Fleitas v. Richardson, No. 2, 147 U. S. 550, 147 U. S. 553; Arts. 2332, 2399, 2334, 2335.
By Article 2337, "By dowry is meant the effects which the wife brings to the husband to support the expenses of the marriage."
"All property, which is not declared to be brought in marriage by the wife, or to be given to her in consideration of the marriage or to belong to her at the time of the marriage, is paraphernal."
Mrs. Young claimed an indebtedness on the part of her husband to her, arising from his having received the proceeds of a life insurance policy on the life of her father in her favor for $5,000, and the additional sum of $2,500, being an amount which came to her from her father's estate, and was received by him. This was paraphernal property. The wife has a legal mortgage on the property of her husband "for the restitution or reimbursement of her paraphernal property." Article 3319.
"Conventional mortgage is that which depends on covenants. Legal mortgage is that which is created by operation of law. Judicial mortgage is that which results from judgments."
Article 3287. A legal mortgage results by operation of law, and "no legal mortgage shall exist except in the cases determined by the present Code." Articles 3311, 3312.
for the preservation of his wife's rights, the immovables which he shall designate, and then, the surplus of his property shall be free from any legal mortgage in favor of his wife,"
"The wife may alienate her paraphernal property with the authorization of her husband, or in case of refusal or absence of the husband, with the authorization of the judge; but should it be proved that the husband has received the amount of the paraphernal property thus alienated by his wife, or otherwise disposed of the same for his individual interest, the wife shall have a legal mortgage on all the property of her husband for the reimbursing of the same. The husband may release the mass of his property from this legal mortgage by executing a special mortgage in the manner required in the preceding section, for dotal effects."
Thus, it appears that a legal mortgage on all the husband's property exists until a special mortgage is executed according to the foregoing provisions, and the law does not contemplate a legal and a special mortgage existing at the same time. And the legal mortgage of the wife, to affect third persons, must be recorded in the office of mortgages for the parish where the property lies. Articles 3342-3349.
It is indeed insisted that it was altogether invalid under Art. 2428.
by an authentic act, as far as the estate of the husband can meet them, or at least by a bona fide noninterrupted suit to obtain payment."
Chaffee v. Sheen, 34 La.Ann. 690; Nachman v. Le Blanc, 28 La.Ann. 345, 346; Bertie v. Walker, 1 Rob. (La.) 431, 432. But this becomes immaterial, as whatever rights, if any, might be claimed under it, it could have no effect as against Nalle & Co. for want of record.
"a written statement, under oath, made by the married woman, or her husband, or any other person having knowledge of the facts, setting forth the amount due to the wife, and detailing all the facts and circumstances on which her claim is based."
There was no such evidence as last named here, and no such inscription until after the mortgage to Nalle & Co. had been given and registered. Lovell v. Cragin, 136 U. S. 130, 136 U. S. 149.
The transaction between Mrs. Metcalfe, Young, and Mrs. Young appears to have been that, Mrs. Metcalfe being indebted to Young, and Young indebted to Mrs. Metcalfe, the respective debts were discharged by agreement, and compensated each other, but that it was agreed that Young's indebtedness to Mrs. Metcalfe should be kept alive for the benefit of Mrs. Young, upon the consideration, on Mrs. Young's part, of the release of her paraphernal claims against her husband. Compensation had, however, taken place, and the two debts were reciprocally extinguished. Arts. 2130, 2207, 2208.
This was the necessary effect by operation of law, and when the principal obligation was discharged, the mortgage fell with it, and would not be revived though the indebtedness were reacknowledged in favor of another. Smith v. McWaters, 22 La.Ann. 432; Davidson v. Carroll, 20 La.Ann.199; Schinkel v. Hanewinkel, 19 La.Ann. 260.
"can take place only in the three following cases: (1) when one of the spouses makes a transfer of property to the other, who is judicially separated from him or her, in payment of his or her rights; (2) when the transfer made by the husband to his wife, even though not separated, as a legitimate cause, as the replacing of her dotal or other effects alienated; (3) when the wife makes a transfer of property to her husband, in payment of a sum promised to him as a dowry."
Arts. 1790, 2446; Carroll v. Cockerham, 38 La.Ann. 813, 824.
This transaction was an attempt to extinguish the wife's general mortgage by the transfer of the special mortgage of a third party, satisfied by the act as between the immediate parties thereto, and if it could be done at all, it could only be when taking place in accordance with Articles 2379 and 2390, and recorded, as required by Article 3345, and, as already seen, these articles were not complied with.
The rendition of judgment for all her paraphernal claims, without any recognition of a special conventional mortgage to secure them, would seem to have concluded the fact that none such then existed, or at least furnishes such persuasive proof thereof as must be controlling on this record. Nicolson v. Bank, 27 La.Ann. 369.
did, the mortgagee therein need not be made a party, but must take notice of the proceedings to enforce the prior mortgage at his peril. He may, however, apply to set aside the sale on proper grounds. Dupasseur v. Rochereau, 21 Wall. 130; Watson v. Bondurant, 21 Wall. 123 123; Carite v. Trotrot, 105 U. S. 751.
As heretofore noticed, Mrs. Young and her husband prayed for redemption, which is not, in any foreclosure case, allowable as such, while, so far as their pleadings are regarded as seeking the setting aside of the sale and for a resale, we find no adequate grounds for according that relief.
The decree of June 9, 1890, is reversed with costs, and the cause remanded to the circuit court with instructions to enter a decree overruling the objections to the sale of July 30, 1887, dissolving the injunction, adjudicating the property to Mrs. Mary Nalle, wife of Eustis F. Golson, and ordering the delivery of possession to her.

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