Case Name: CANAL BANK & TRUST CO. v. GRECO et al. In re GRECO et al.
Court: Louisiana Supreme Court
Jurisdiction: Louisiana
Decision Date: 1933-01-30
Citations: 148 So. 693
Docket Number: No. 32180
Parties: CANAL BANK & TRUST CO. v. GRECO et al. In re GRECO et al.
Judges: 
Reporter: Southern Reporter
Volume: 148
Pages: 693–698

Head Matter:
177 La. 507
CANAL BANK & TRUST CO. v. GRECO et al. In re GRECO et al.
No. 32180.
Supreme Court of Louisiana.
Jan. 30, 1933.
On Rehearing May 29, 1933.
Eugene S. Hayford, of New Orleans, for applicants.
Dart & Dart and Leo L. Dubourg, all of New Orleans, for respondent.

Opinion:
LAND, Justice.
Canal Bank & Trust Company instituted the present suit in the civil district court for the parish of Orleans against Constant Greco, a resident of the parish of St. Tammany, for an indebtedness alleged to be due by him to petitioner, amounting in principal to $70,000, represented by two promissory notes as follows:
(1) A certain promissory note dated New Orleans, La., February 29, 1928, for the sum of $60,000, signed by Constant Groco, bearing 6½ per cent, per annum interest from February 29, 1928, to March 1, 1929, and 7 per cent, per annum interest from March 1, 1929, until paid, interest payable semiannually to order of petitioner on demand.
(2) A certain promissory note dated New Orleans, La., March 9, 1928, for the sum of $20,000, signed by Constant Greco, bearing 6½ per cent, interest from March 9, 1928, to March 1, 1929, and 7 per cent, per annum interest from March 1, 1929, until paid, payable to order of petitioner on demand.
The interest on both of these notes was paid to February 28, 1931, and the note of March 9, 1928, is subject to a credit on the principal amount thereof of $10,000, leaving a balance due of $10,000.
These two notes are also subject to a further credit of $1,699, the amount of four rent notes of $424.75 each, collected by petitioner for account of the defendant Greco.
Both of the above notes provide that, should payment not be made when due, they shall be placed in the hands of an attorney for Collection, the attorney's fees therein being fixed at 10 per cent, of the amount due.
. The Canal Bank & Trust Company also alleges that it is the holder of a certain promissory note, dated New Orleans, La., February 29, 1928, for the sum of $80,000, bearing 6½ per cent, per annum interest from date until paid, interest payable semiannually, drawn and signed by- Constant Greco to his own order and by him indorsed; that this note is secured by act of mortgage, importing confession of judgment, waiving benefit of appraisement, and containing pact de non alienando, in favor of any future holder; and that the payment of this note at maturity in principal, interest, attorney's fees, etc., is secured by mortgage on certain described, real estate and improvements, situated in the city of New Orleans, parish of Orleans.
The Canal Bank & Trust Company further alleges that this mortgage note was pledged to it for the indebtedness evidenced by the two promissory notes sued upon in this case by the bank, which also claims in the present suit the amount of certain state and city taxes paid by the bank, up'on the alleged failure of Greco to pay same.
The bank has also made the Lux Realty Company, Inc., a Louisiana corporation, a party defendant to this suit, on the allegation that this company had purchased the property in the city of New Orleans, parish of Orleans, covered by the bank's $80,000 mortgage, and had assumed payment of the same as a part of the purchase price. This as-sumpsit placed the Lux Realty Company in the same position, relative to the bank, as that occupied by the original debtor, Greco. The act of mortgage made by the original mortgagor imported a confession of judgment. Executory process could have issued against the property while it remained in his possession. It may issue against it when held by a party who has assumed the obligation of the mortgage, as the Lux Realty Company has done in this case. Henry v. Goldman, 27 La. Ann. 670; Woodward v. Dashiell, 15 La. 184, 185. Consequently, the enforcement of the special mortgage herein can be made against that company via ordinaria as well as against Greco.
The defendant, Greco, claiming to have his domicile in the parish of St. Tammany, and the Lux Realty Company, Inc., claiming to have its domicile in St. Bernard parish, excepted ratione persona* to the jurisdiction of the civil distriec court for the parish of Orleans, where the mortgaged property is situated. These exceptions were overruled, and, upon refusal of the trial judge to grant to re-lators suspensive appeals, they applied to this court for writs of prohibition.
The bank prays "that Constant Greco and Lux Realty Company, Inc., through its proper officer, be duly cited to appear and answer this petition and, after due proceedings had, (that) there be judgment in favor of petitioner and against said Constant Greco and Lux Realty Company, Inc., in solido as follows: that there be judgment against said two defendants in the sum of seventy thousand dollars ($70,000) with 7% per annum interest there'on from February 28, 1931, until paid, and 10% additional on the total amount as attorneys' fees, subject to a credit of $1,699; that there he judgment against said two defendants in the further sum of $266.27, with 8% per ánnum interest thereon from August 23, 1932, until paid; and that there be judgment in favor of petitioner and against said Constant Greco and said Lux Realty Company, Inc., recognizing petitioner's said mortgage on the property hereinabove described to secure the payment of the said amount in principal, interest, attorneys' fees and costs, the said amount to be paid by preference and priority over all other claims whatsoever out of the sale of the mortgaged property; that there also be judgment in favor of petitioner and against defendant, Constant Greco, in the further sum of $275.00, with 8% interest from April 4, 1932, until paid, together with 10% additional on the amount of said principal and interest as attorneys' fees."
The general rule is that a debtor must be sued before the judge having jurisdiction over the place where he has his domicile or residence. C. P. art. 162. However, it is provided in article 163 of the Code of Practice, as amended by Act No. 64 of 1876, that: "In action of revendication of real property, or where proceedings are instituted, in order to obtain the seizure and the sale of real property, in virtue of an act of hypothecation importing confession of judgment, and in actions brought to enforce a legal or judicial mortgage against a third possessor, and in actions against a third possessor to enforce a special mortgage, ⅜ the defendant may be cited, whether in the first instance or in appeal, either within the jurisdiction where the property revendicated, hypothecated or provisionally seized or sequestered is situated or found, though he has his domicile or residence out of that jurisdiction, or in that where the defendant has his domicile, as the plaintiff chooses; provided, that all judgments rendered in such cases shall only be operative up to the value of the property proceeded against, and not binding for any excess 'over the value of the property in per-sonam against the defendant."
The action of the bank in this case is via ordinaria against Greco, the original mortgagor, and against the 'Lux Realty Company, Inc., which assumed, as part of the purchase price, the mortgage of §SO,000 granted to the bank by Greco. This action is brought in the parish of Orleans where the property hypoth-ecated is situated.
The prayer of the bank is for judgment on the two hand notes of Greco, the principal obligations, and for recognition of the mortgage, or collateral security, held by the bank.
Greco executed the principal notes for §80,-000, and the mortgage, or collateral note, for the same amount.
It is not contended that Greco owes the bank §160,000, because the bank owns both the principal notes and the collateral note, the only effect of the latter being to give to the bank a preference or priority over the other creditors of Greco.
There is but one indebtedness in this ease due the bank, secured by one and the same mortgage, evidenced by authentic act importing confession of judgment. Evidently, the bank could have issued executory process by direct suit on the mortgage note in the civil district court for the parish of Orleans, had the bank so desired.
We fail to see, therefore, any good reason why the civil district court should have lost its jurisdiction over the hypothecated property within the parish of Orleans, merely because the bank saw fit to enforce its mortgage via ordinaria instead of via executiva.
As the property mortgaged is located in the parish of Orleans, the civil district court for that parish has jurisdiction of the present suit.
Under this view of the case, it is unimportant whether the Lux Realty Company, Inc., originally domiciled in the parish of Orleans, had changed its domicile to St. Bernard parish, in the manner required by section 37, par. 1, of Act No. 260 of 1928, prior to the institution of the present suit.
Nor, as touching the question of jurisdiction, do we find it necessary to pass upon the issue as to whether the defendants are joint or solidary obligors.. C. P. art. 166, par. 6.
It is also immaterial that the prayer of the bank is for judgment in personam, since, under the mandatory provisions of article 163 of the Code of Practice, as amended by Act No. 64 of 1876, whatever judgment 'is rendered in this case can be operative only up to the value of the property proceeded against.
It is therefore ordered that the rule nisi issued herein be recalled, and that relators' application for writs of prohibition be dismissed at their cost.