Case Name: William E. Leverich v. Clemence Toby
Court: Louisiana Supreme Court
Jurisdiction: Louisiana
Decision Date: 1851-05
Citations: 6 La. Ann. 462
Docket Number: 
Parties: William E. Leverich v. Clemence Toby.
Judges: 
Reporter: Louisiana Annual Reports
Volume: 6
Pages: 462–464

Head Matter:
William E. Leverich v. Clemence Toby.
Where the real owner of property suffered one who held a simulated title thereto to mortgage it,'the property is bound for the mortgage ; and a purchaser at a sale of the property under an order of seizure and sale issued on the mortgage, will be protected in his purchase, although the real owner had established, in a suit commenced after the date of the mortgage against the mortgagor, that his title was simulated.
APPEAL from the District Court of Jefferson, Clark, J.
Benjamin and Micou, for plaintiff.
Ogden and Duncan, for defendant.

Opinion:
The judgment of the court was pronounced by
Prestoh, J.
The plaintiff brings this suit for a square of ground in the city of Lafayette, in the possession of the defendant, with the buildings and improvements.
A deed of sale to the square was made to Henry Locket, by William McCawley, by act passed before F. Grima, Esq., notary, on 2d of November, 1838, for the price of $9000, payable at one, two and three years' credit.
Locket mortgaged the property to the Merchants' Insurance Company of New Orleans, by an act passed before the same notary, dated 2d of March, 1842, for a loan of five thousand dollars.
There was a balance of $3500 due by him on the loan, and on the 30th of March, 1847, the company issued an order of seizure and sale against the property. The property, however, was not sold in consequence of William T. Hepp becoming security for the debt, if not paid in six months. The debt was not paid by Locket, and on the 10th of October, 1849, Hepp paid the debt, and took a notarial subrogation of the rights of the company to the mortgage against Locket.
On the 30th of January, 1850, Hepp issued a pluries writ of seizure and sale; and on the 30th of March, 1850, the sheriff, after advertising and appraising the property, adjudicated it at a public sale to the plaintiff, who, finding the property in the possession of the defendant, on the 9th of May, 1850, brought this suit to recover it.
The defendant answered that the sale was a nullity, because Locket never had the ownership or possession of the property. She alleges that one Thomas McKinney, out of strong obligations of gratitude to her late husband, and motives of friendship for herself and family, placed in the hands of Locket a large sum of money to purchase and establish a home for her and her children ; and that Locket purchased the property with those means and that money which was through him donated to her; that she has been notoriously in possession of the property as owner for more than ten years, and had expended twelve thousand dollars in its improvement.
She alleges further, that, on the 12th of January, 1850, Locket brought a petitory action against her for the property, to which she answered, pleading the same matters; and that the sheriff's sale took place after issue joined in that suit; thatLeverich therefore purchased a litigious right, had paid only a small part of the price, and that she was entitled to the property on paying that sum : further, she claimed, if these pleas failed, the twelve thousand dollars she had expended in improving the property, the improvements being worth that sum.
On the day the suit was about to be tried by the jury, the defendant filed an exception, that the plaintiff, by the sheriff's sale, had acquired' only the rights of Locket to the property; that at the date of the sale the suit between her and Locket was pending; that the plaintiff's rights could pnly extend to have himself subrogated to Locket's rights, and substituted for him in the suit between them ; and that his suit should be dismissed on account of the Us pendens. She moreover excepted that the suit between her and Locket had been terminated by a judgment in her favor, which she pleaded as res judicata against the plaintiff's elaim. The court sustained these exceptions, and dismissed the suit. The plaintiff has appealed.
To sustain the plea of lis pendens, or res judicata, not only the subject but the parties in the pending or adjudged suit must be the same, or privies to the parties in the pending or adjudged case. 1 .
The subject matter of the present suit is the same square of ground which was in controversy between Locket and Mrs. Toby, and which has been adjudged to the latter: and Mrs. Toby, in reality, is defendant in both suits. But is Lenerich a privy to Locket, and has he no rights which Locket could not exercise ? He holds Locket's title to the laud, which, if it was not a better title than Locket could convey to him after the suit brought for the land, undoubtedly the suit ponding a judgment in favor of Mrs. Toby would avail her.
But he holds that title under a mortgage granted by Locket upon the land in 1842. At that period Locket was, by the consent of Mrs. Toby, or those who acted for her, the owner of the land by the recorded title. Neither purchasers nor mortgagees were obliged to look beyond the recorded title, because no suit was then pending, or judicial claim on behalf of Mrs. Toby for the title; nor was there on record anything to show that Locket held the land for her, ns she has since established by suit and judgment. The mortgage created an absolute right in the mortgagee to sell the land for the satisfaction of his debt, if not paid by Locket or those interested. The right to sell implies the correlative right in another to buy. If the mortgage was fraudulent as to Mrs. Toby, third persons could not be affected by the fraud, as she had brought no suit to make it known; as she permitted the title to remain in Locket, third persons, even if they knew it was her property, had a right to believe that he was making the mortgage for her benefit. Whom she trusted others might well trust, so far as to apprehend no disturbance by her.
Now, under these circumstances, Locket mortgaged the land, and even with the pact de ñon alienando. He bound himself not to alienate it to the prejudice of the mortgage. He, of course, bound himself to warrant the title to the property, lie cannot be permitted to violate these obligations to the prejudice of innocent third persons, and defeat their rights by not defending'a suit for the land ; and they cannot be defeated by Mrs. Toby, because she permitted the land to remain in Locket's name, and by so doing enabled him to injure innocent third persons, if she can repudiate his mortgages.
Mortgages would be truly unprotected, if secret but real owners of the mortgaged premises might defeat their rights by showing that the title of the mortgagor was held by simulation for them. The simulation, if thus used, would become a fraud which our laws could never tolerate.
If any matter is better settled in our jurisprudence' than another, it is that the simulation of acts cannot affect the rights of third persons acquired against the apparent owner of the property.
Bondfide titles and mortgages, if not recorded in the proper conveyance or mortgage offices, have always been postponed to subsequent titles or mortgages duly recorded, How little reason, therefore, is there for pretending a different principle as to secret'and unknown titles.
The defendant is entitled to the trial by jury on the merits of the case, which she asks, and possibly may establish such knowledge of herrights on behalf of the plaintiff, and combination with Locket to injure her, as may defeat his claim.
The sheriff, as alleged, did not, under the order of seizure and sale, take actual possession of the property, so as on its adjudication to deliver actual possession to the purchaser, unless prevented by legal opposition or injunction. It was a great irregularity. The executory process does not issue against a mere right, but against property. The necessity of a suit for the property indicates that this irregularity existed. Still it is doubtful whether the defendant can take advantage of the irregularity, having caused it by her own opposition. It is for the parties and the court to settle all these matters legally and equitably on the trial of the case on its merits ; for which it must be remanded.
The judgment of the district court is therefore reversed, the exceptions of lites pendentes and rei judicata overruled, and the case remanded for a new trial on its merits; the appellee to pay costs of the appeal.