Case Name: MODISETTE v. HATHAWAY et al.
Court: Louisiana Supreme Court
Jurisdiction: Louisiana
Decision Date: 1920-04-01
Citations: 147 La. 1035
Docket Number: No. 22665
Parties: MODISETTE v. HATHAWAY et al.
Judges: O’NIELL, J., concurs in the decree.
Reporter: Louisiana Reports
Volume: 147
Pages: 1035–1047

Head Matter:
(86 South. 485)
No. 22665.
MODISETTE v. HATHAWAY et al.
(April 1, 1920.
On the Merits, May 31, 1920.
Rehearing Denied Nov. 3, 1920.)
On Motion to Dismiss Appeal.
(Syllabus by the Court.)
1. Parties entitled to exercise revocatory action.
The revocatory action “cannot be exercised by individual creditors until their debts are liquidated by a judgment, unless the defendant in such action be made party to the suit for liquidating the debt brought against the original debtor in the manner hereinafter directed.” Oiv. Code, art. 3972.
2. Fraudulent conveyances &wkey;>255 (3)— Original debtor held proper party to revocatory action.
Under article 1972, Oiv. Code, the necessity of making the original debtor a party to the revocatory action exists where the debt has not been liquidated by a judgment.
3. Appeal and error <&wkey;323(I) — Nominal parties need not be made parties on appeal.
It is unnecessary to make nominal parties to a suit parties to an appeal.
On the Meritp.
(Syllabus by. Editorial Staff.)
4. Fraudulent conveyances <@=>26 (3), 137(3)— Security sale held valid; continued possession not conclusive showing of fraud.
A debtor may validly convey his real estate to his creditor in the form of a sale to secure an indebtedness, and the continued possession of the property by the debtor in such case does not make the transaction a fraudulent simulation or void.
5. Fraudulent conveyances <&wkey;26(3) — Transaction in form of sale with right to redemption instead of mortgage, held not illegal.
There is nothing illegal or immoral in making a security transaction in the form of a sale with right of redemption, instead of a mortgage, and while such a form of security may be hazardous to the creditor because of the continued possession of the debtor, it is neither fraudulent nor void, and the only case in which the disguising of a mortgage in the form of a sale is fraudulent is where it is done to circumvent a law of public policy, as the homestead exemption.
6. Fraudulent conveyances <&wkey;248 — One-year prescription applicable, where transaction was not a simulation.
The plea of prescription of one year, filed by defendant in a revocatory suit, was applicable, and should have been sustained, when it was found that the transaction, though perhaps a fraud, was not a simulation or sham.
7. Fraudulent conveyances <&wkey;26l — Creditor must allege and prove debtor’s insolvency.
Under Oiv. Code, art. 1971, declaring that the revocatory action can only be exercised when the debtor has no property sufficient to pay the debt of the complaining creditor, the plaintiff, failing to prove that the transactions between debtor and defendant were simulations or shams, could not succeed in his action to set aside the transactions as being a fraud on his rights, because of failure to allege or prove that the debtor was insolvent or had no other property subject to seizure.
Appeal from Fifteenth. Judicial District Court, Parish of Jefferson Davis; Winston Overton, Judge.
Revocatory action by James O. Modisette against George Hathaway and another. Judgment for plaintiff, and defendant Hath away appeals.
Motion to dismiss the appeal denied, judgment reversed, and suit dismissed.
McCoy & Moss, of Lake Charles, for appellant.
Modisette & Adams, of Jennings, for appellee.

Opinion:
On Motion to Dismiss Appeal.
SOMERVILLE, J.
Plaintiff, the assignee of a judgment creditor of U. S. Phillips, instituted this revocatory action against Phillips and George Hathaway, alleging that certain described real estate standing in the name of Hathaway was really the property of Phillips; and was subject to seizure for Phillips' debts, particularly under the judgment held by him against Phillips. Plaintiff made other allegations usual in a petition for a revocatory action.
A default was taken against Phillips. Hathaway, the principal defendant, answered, denying the material allegations made by plaintiff. There was judgment in favor of plaintiff against both defendants. Phillips has not appealed. Hathaway filed a petition for an appeal, without making his codefendant, Phillips, a party thereto.
Plaintiff moves to dismiss the appeal taken by Hathaway, on the ground that all the proper parties are not before the court.
It is well settled that all parties to the record who are interested in maintaining a judgment must be made parties to the appeal from it. But the defendant Phillips was not a necessary party to this suit, and he is not interested in maintaining the judgment appealed from. He is not, therefore, a necessary party to the appeal taken by his codefendant.
Had plaintiff been an ordinary creditor of Phillips, the latter would have been a necessary party in a suit to set aside a sale made by him which was alleged to be simulated. C. C. art. 1972. But plaintiff | has had his claim against Phillips liquidated by a final judgment. The property of Phillips is subject to seizure and sale thereunder without further proceeding on 'the part of plaintiff against Phillips.
Here the plaintiff's claim was already liquidated by a judgment, and there was clearly no necessity for making Phillips a party to the suit, which could have been maintained in his absence against the ostensible owner of the property alone. The ostensible owner of the property which is sought to be restored to the debtor, in order to be applied to the satisfaction of the latter's debts, has a right, notwithstanding the judgment, to controvert the plaintiff's demands' in the same manner as the debtor might have done before said judgment. G. C. art. 1972; Dumas v. Lefebvre, 10 Rob. 399.
In this proceeding, plaintiff alleges that there is certain described property standing in the name of Hathaway which belongs to Phillips, his judgment debtor, and he asks that it, or so much thereof as may be necessary, be declared subject to seizure and sale under his judgment against Phillips.
If the property in question belongs to Hathaway, then Phillips has no interest in the question as to whether or not it shall be seized and sold by plaintiff. If it belongs to Phillips, then it may be seized under the judgment held by plaintiff against him.
If Phillips had been the vendor of the property to Hathaway, he might have been a necessary party to the suit. But he was not. The allegations are to the effect that Hathaway was only an ostensible owner, who had acquired titles from certain named third persons, and that he held the pieces of property for account of Phillips, or as security for debts owed by Phillips to him. Those vendors should have been made parties defendant.
It has long been settled that a judgment debtor is not a necessary party defendant in a revocatory action.
"It is true that, under the authority of article 1970 of the Civil Code, we have often recognized the doctrine that a creditor, who wishes to institute a revocatory action, must either have his debt liquidated by a judgment, or make the purchaser of the property of his debtor a party to the suit for the liquidation of his claim, and, in some instances, that the necessity of making the original debtor a party to the revocatory action, only exists where the debt has not been previously liquidated by a judgment, and that, in this ease, the plaintiffs sue as judgment creditors of J. J. Hall. See TAtwell v. Belden & Co.] 1 La. 503; [Cole v. Bartlett] 4 La. 132; [Regillo & Bryan v. Lorente] 7 La. 142; LLambeth v. McMurray] 15 La. 470; [Potier v. Harman] 1 Robinson, 525. But here the question is not whether it was necessary to make J. J. Hall, the original debtor, a party to this action, for as to him the plaintiffs have done what they were bound to do. Civil Code, art. 1967."
They had had their debt liquidated. Hyde v. Craddick, 10 Rob. 387.
In considering the case of Dumas v. Lefebvre et al., 10 Rob. 399, it was held:
"Now, it is well settled in our jurisprudence that though a creditor, who wishes to institute a revocatory action, must either have his debt liquidated by a judgment, or make the purchaser of the property of his debtor a party to the suit for the liquidation of his claim (Civil Code, art. 1970), the necessity of making the original debtor a party to the suit for annulling his contract, attacked on the ground of fraud and simulation, only exists when the debt has not been previously liquidated by a judgment. [Atwell v. Belden & Co.] 1 La. 504; [Lambert & Thompson v. McMurray] 15 La. 470; [Potier v. Harman] 1 Rob. (La.) 525; and Hyde and another v. Oraddick, lately decided [10 Rob.] 387. Here the plaintiff's claim was already liquidated, and there was clearly no necessity for making the appellant a party to' the suit, which could have been maintained in her absence, and against her son alone, with as much propriety and legality as if the suit had been instituted against both."
See, also, 2 Hennen, 1034; § 2, No. 1; Russell v. Keefe, 28 La. Ann. 928; Block v. Marks, 47 La. Ann. 107, 16 South. 649.
As Phillips was not a necessary party to the suit, and is not interested in maintaining the judgment appealed from, and is not' interested in contesting the seizure and sale of Hathaway's property, if it belongs to Hathaway, he is only a nominal party, without any real interest in the judgment appealed from, and he is not therefore a necessary party to the appeal. Boguille v. Faille, 1 La. Ann. 205; Francis v. Scott, 5 La. Ann. 668; Boykin v. O'Hara, 6 La. Ann. 115; Hobgood v. Brown, 2 La. Ann. 323; Eschert v. Harrison, 29 La. Ann. 860; Brannin v. Womble, 32 La. Ann. 805; Sicard v. New Orleans Railway & Light Co., 137 La. 838, 69 South. 271.
U. S. Phillips not being a necessary party to the suit or to the appeal, the motion to dismiss the appeal is denied.
O'NIELL, J., concurs in the decree.