Case Name: Mrs. Cordella R. REED, Natural Tutrix of the minors, Helen Reed, et al., Plaintiffs-Appellants-Relators, v. John H. MEAUX, Defendant-Appellee-Respondent
Court: Louisiana Supreme Court
Jurisdiction: Louisiana
Decision Date: 1973-09-24
Citations: 292 So. 2d 557
Docket Number: No. 52661
Parties: Mrs. Cordella R. REED, Natural Tutrix of the minors, Helen Reed, et al., Plaintiffs-Appellants-Relators, v. John H. MEAUX, Defendant-Appellee-Respondent.
Judges: BARHAM, J., concurs and assigns reasons.
Reporter: Southern Reporter, Second Series
Volume: 292
Pages: 557–575

Head Matter:
Mrs. Cordella R. REED, Natural Tutrix of the minors, Helen Reed, et al., Plaintiffs-Appellants-Relators, v. John H. MEAUX, Defendant-Appellee-Respondent.
No. 52661.
Supreme Court of Louisiana.
Sept. 24, 1973.
On Rehearing March 25, 1974.
Rehearing Denied April 26, 1974.
Charles D. Viccellio, Emmett C. Sole, Stockwell, St. Dizier, Sievert & Viccellio, Lake Charles, for plaintiffs-applicants.
Jerry G. Jones, Jones & Jones, Cameron, for defendant-respondent.

Opinion:
TATE, Justice.
The plaintiffs sue to annul the seizure and judicial sale of immovable property-under executory proceedings. La.C.Civ.P. Arts. 2631-2644. The court of appeal affirmed the trial court's dismissal of their suit. 262 So.2d S70 (La.App.3d Cir. 1972).
We granted certiorari, 262 La. 1085,- 266 So.2d 219 (1972), primarily to resolve an issue about which there are conflicting expressions and decisions in the jurisprudence: Where a mortgagee procures an order of seizure and sale via executory proceedings without strict compliance with the statutory requirements therefor, and where the mortgagor-defendant does not enjoin or appeal the sale, may the latter nevertheless subsequently annul the sale because of such procedural defects, at least when the property sold remains in the hands of the mortgagee-adjudicatee and no good faith third person's rights intervene?
I.
Before discussing the present facts and issue, we deem it advisable to describe the legal context in which they arise.
An executory proceeding in Louisiana is an in rem action derived from the civil law; it provides a simple, expeditious, and inexpensive procedure by which creditors may seize and sell property upon which they enjoy a mortgage or privilege. Buckner v. Carmack, 272 So.2d 328 (La. Sup.Ct.1973); McMahon, The Historical Development of Executory Procedure in Louisiana, 32 Tul.L.Rev. 555 (1958). By an executory proceeding, a creditor may effect ex parte "the seizure and sale of property, without previous citation and judgment, to enforce a mortgage or privilege thereon evidenced by an authentic act importing a confession of judgment". La.C.Civ.P. Art. 2631.
To exercise his right to obtain this ex parte order from the Court, La.C.Civ.P. Art. 2638, the creditor must submit with his petition authentic evidence or its statutory equivalent "necessary to prove his right to use executory process". La.C. Civ.P. Art. 2635. This requirement includes not only the instruments evidencing (1) the obligation secured by the mortgage or privilege and (2) the mortgage or privilege importing a confession of judgment, but also (3) evidence "necessary to complete the proof of plaintiff's right to use executory process." La.C.Civ.P. Art. 2635.
Article 2635 concludes: "This requirement of authentic evidence is relaxed only in those cases, and to the extent, provided by law." The succeeding two articles list some of the instances where the authentic proof requirement is relaxed and a statutory equivalent is permitted. Article 2636 lists certain documentary evidence "deemed to be authentic", such as certified copies. Article 2637 then lists the evidence which need not be authentic, but which may be proved by a verified petition or by affidavit instead of by authentic acts.
Article 2637's listing of affidavit requirements includes "evidence as to the proper party defendant" and evidence "as to the necessity for appointing an attorney at law to represent an unrepresented defendant." Both of these requirements were breached in the instant case, as will be noted.
The defendant may raise defenses and procedural objections to an executory proceeding either by suspensive appeal or by injunction. La.C.Civ.P. Art. 2642. He may enjoin the sale, "if the procedure required by law for an executory proceeding has not been followed", La.C.Civ.P. Art. 2751, among other reasons.
Executory process, entitling a creditor to seize the debtor's property without citation or the usual delays or formal judgment, is regarded as a harsh remedy requiring, for its use, a strict compliance by the creditor with the letter of the law. Myrtle Grove Packing Co. v. Mones, 226 La. 287, 76 So.2d 305 (1954) and the many decisions cited therein. It has long been settled that every muniment of title to the note and mortgage, and every link of evidence necessary to permit the creditor to exercise this remedy against the debtor, must be in authentic evidence or its statutory equivalent. Miller, Lyon & Co. v. Cappel, 36 La.Ann. 264 (1884) and succeeding jurisprudence. See, e. g., Margolis v. Allen Mortgage & Loan Corp., 268 So. 2d 714 (La.App.4th Cir. 1972).
Thus, where the technical requirements for the use of executory process are not met, the debtor defendant may by injunction or appeal annul the seizure and prevent the sale.
II.
However, and this brings us to our present issue: what if despite procedural irregularity the creditor does sell the property via executory proceedings? Under what circumstances, if any, may the debtor complain of such irregularities after the sale if he has failed to prevent it by injunction or suspensive appeal?
The defendant does not contest that, if the property is in the hands of an innocent third person, the debtor is es-topped or has no cause of action to annul the sale. Under long-settled jurisprudence, in such circumstances the general rule is that, once the property has been sold to one other than the mortgagee, the mortgagor cannot annul the sale and recover the property because of defects which he might have urged prior to the sale. Continental Securities Corp. v. Wetherbee, 187 La. 773, 175 So. 571 (1937); Cullotta v. Grosz, 173 La. 83, 136 So. 95 (1931); Huber v. Jennings-Heywood Oil Syndicate, 111 La. 747, 35 So. 889 (1904)
Thus, as between them, the mortgagor-defendant must bear the consequences of his failure to prevent the sale, despite irregularities in proof, rather than an innocent purchaser.
Nevertheless, the jurisprudence recognizes that, even if he fails to appeal or enjoin the sale, the mortgagor-defendant in an executory proceeding may by a subsequent direct action annul the sale, if the mortgagee is the adjudicatee at the sale and is still in possession of the property sold at it. Reid v. Federal Land Bank of New Orleans, 193 La. 1017, 192 So. 688 (1939); Viley v. Wall, 154 La. 221, 97 So. 409 (1923); Cross on Pleading, Sections 305-310 (esp. 310) (1885); Note, 24 La.L. Rev. 894, 897 (1964). Since an order of sale is not a judgment in the strict legal sense, Harrod v. Voorhies' Administratrix, 16 La. 254 (1840), an action to annul it is not governed by the procedure or prescription applicable to actions of nullity of judgments, now La.C.Civ.P. Arts. 2001-2006. Pons v. Yazoo & M. V. R. R., 122 La. 156, 47 So. 449 (1908); Stapleton v. Butterfield, 34 La.Ann. 822 (1882); as well as implicitly by the decisions previously cited in this paragraph and footnote 6 above.
Most of the decisions cited in the previous paragraph concerned either fraud or failure to serve proper notice on the debt- or, in permitting the mortgagor to annul for procedural defect a sale under executo-ry process. They could thus possibly be rationalized as affording the remedy only when the debtor had no knowledge of the irregularities complained of and thus no reasonable opportunity to raise them prior to the sale.
Nevertheless, based on dicta in Viley v. Wall, 154 La. 221, 97 So. 409 (1923) (to be discussed more fully below), a line of intermediate court decisions has held that the mortgagee may, even though he neither appealed nor enjoined the sale under executo-ry process, by his subsequent direct action annul it for procedural defects, if the property is still in the hands of the mortgagee as adjudicatee at the sale:
Powell v. Carter, 233 So.2d 369 (La. App.lst Cir. 1970), cert. denied ("no error of law"), 256 La. 269, 236 So.2d 37 (1970) (the seizing creditor did not produce authentic evidence of the transfer of the notes seized upon); Tapp v. Guaranty Fi nance Co., 158 So.2d 228 (La.App.lst Cir. 1963), cert, denied ("the result is correct"), 245 La. 641, 160 So.2d 228 (1964), Noted, 24 La.L.Rev. 894 (1964) (lack of authentic evidence of endorsement) ; and Doherty v. Randazzo, 128 So.2d 669 (La. App.4th Cir. 1961), Noted 22, La.L.Rev. 845 (1962) (insufficient authentic evidence). See also: White Motor Co. v. Piggy Bak Cartage Corp., 202 So.2d 294 (La.App.4th Cir. 1967) ; Mack Trucks, Inc. v. Dixon, 142 So.2d 605 (La.App.4th Cir. 1962).
In conflict with these decisions, at least in rationale, are Jambois O. & M. Machine Shop, Inc. v. Dixie Mill Supply Co., 218 So.2d 672 (La.App.4th Cir. 1969), discussed 30 La.L.Rev. 307-08 (1969) and Ford Motor Credit Co. v. Herron, 234 So.2d 517 (La.App.1970). Broadly stated, these cases may be construed as holding that, where authentic evidence proves a debt is due, the debtor may not after the sale attack it for procedural defect if he did not enjoin or suspend the sale. For instance, in the absence of fraud or lack of notice, Jambois refused to annul the sale as to the property still in the mortgagee-adjudicatee's possession, although the executory proceedings leading to the sale were defective in that the chattel mortgage was not proven to have been authorized by resolution of the debtor corporation.
Neither of the latter two intermediate decisions discussed this court's opinions in League Central v. Montgomery, 251 La. 971, 207 So.2d 762 (1968), Noted, 29 La.L. Rev. 405 (1969) and Viley v. Wall, 154 La. 221, 97 So. 409 (1923). We conclude that, in the respect noted, these intermediate decisions are in conflict with the rationale of the League Central and Viley decisions of this court and that the cited Powell, Tapp, and Doherty cases are in accord and were correctly decided by the intermediate courts.
Viley v. Wall primarily held that a sale under executory process could be annulled for fraud where the property was still in the hands of an adjudicatee who had participated in the fraud. However, in overruling the contention that the sale could not be attacked because the defendant had neither appealed nor enjoined the sale, the court stated, 154 La. at 229, 97 So. at 411: "We have carefully examined the jurisprudence and have been unable to find any decision sustaining this view; nor have defendants cited any case so holding where the property had not passed out of the hands of the purchaser at such sale, and who was charged with knowledge of and participation in the . . . nullities or illegalities upon which the same was attacked." Cf. also Graham v. Eagan, 15 La.Ann. 97 (1860).
In League Central v. Montgomery, this court held that the seizing creditor who provoked the sale under executory process could not obtain a deficiency judgment. It so held on the basis of technical insufficiency (the creditor's employee rather than a witness signed the acknowledgment) in the authentic proof used to obtain the order of seizure and sale. The court then stated; " if improper authentic evidence was filed so as to render the ex-ecutory proceedings null, then any action based upon the executory proceedings is likewise null" (except as "to an innocent third party" purchasing at the sale), even though the debtor had failed to oppose the sale after proper notice. 251 La. 971, 207 So.2d at 765. The court reiterated that, even where the sale is to the third person who is afforded protection, nevertheless "the executory process is still null." 207 So.2d at 765, though the third person's rights are protected.
In Powell v. Carter, cited above, the intermediate court fully discussed the applicable jurisprudence. In annulling a sale for lack of authentic proof, the decision reiterated, 233 So.2d at 376, the holding in similar effect in Doherty, cited above, at 128 So.2d at 672-673: "Defendant herein was both the mortgage creditor who initiated the executory proceedings and the ad-judicatee at the sale of the property. Not only is the purchaser charged with the knowledge of the nullity upon which the order was improvidently issued, but he was also responsible for the fatal defect, i. e., failure to produce authentic evidence.
Under the holdings of these cases, the mortgagor-defendant in an executory proceeding may prevent a deficiency judgment, or may annul a sale if the property is still in the hands of the mortgagee-adju-dicatee, on any ground for which he could have enjoined or appealed from the sale, even though he failed to take any such step to prevent it. (If, however, he does attempt to enjoin the sale, he cannot later collaterally attack the adverse judgment ordering the sale by subsequent direct action. Allen v. Commercial National Bank of Shreveport, 243 La. 840, 147 So.2d 865 (1962).)
III.
This conclusion is determinative of the present issue. One of the notes secured by mortgage was executed by the father of the children who were defendants in the executory proceedings. His death and the children's heirship, i. e., "evidence as to the proper party defendant", was not proved by affidavit or verified petition, as required by Article 2637. As to all notes sued upon, all of the children and the mother-tutrix of the minors were non-residents, so that an attorney was required to be appointed to represent them, Article 2674; this circumstance, i. e., "evidence . as to the necessity for appointing an attorney at law to represent an unrepresented defendant", was likewise not proved by affidavit or verified petition, as required by Article 2637.
Thus, had the defendants in the executo-ry proceeding sought to, they could have enjoined the sale for non-compliance with "the procedure required by law for an executory proceeding." Article 2751. Likewise, under League Central, Viley v. Wall, and their progeny cited above, although the debtors failed to enjoin it, the executory process and the sale by reason thereof is nevertheless vitiated as against them because of the creditor's failure to comply with the strict procedural requirements upon which was founded his right to proceed ex parte against the debtors in this exceptional manner. The property improperly seized and sold under executory process and still in the creditor's possession must be returned to the debtors.
Decree
For the foregoing reasons, we reverse the judgment of the previous courts, which had dismissed the plaintiffs' suit; and it is now ordered, adjudged, and decreed that there be judgment in favor of the plaintiffs, Cordelia R. Reed, Tutrix of the minors Helen Reed, Hazel Reed, and Doris Reed, and of the major children, Patricia Reed Batiste, Betty Reed Young, Robert Reed, and Paul Reed, annulling the sheriff's sale of March 4th, 1970 and vacating the order authorizing it and cancelling the inscription of the sale upon the conveyance records, insofar as these plaintiffs are concerned, and thus restoring to them record title and possession of the property described as:
Lot 8 of the Partition of the Frank Reed Estate as per plat recorded in Book 133 at page 292 of the records of Cameron Parish, Louisiana, situated in the Northeast Quarter (NE/4) of Section 1, Township 15 South, Range 7 West.
The defendant-appellee is to pay all costs of these proceedings.
Reversed and rendered.
BARHAM, J., concurs and assigns reasons.
MARCUS, J., dissents with assigned reasons.
SUMMERS, J., dissents and assigns reasons.
SANDERS, C. J., dissents and assigns written reasons.
. An authentic act is one executed before a notary in the presence of two witnesses. La. Civ.C. Art. 2234.
. A confession of judgment by authentic act is imported when the obligor acknowledges the obligation secured by mortgage or privilege and confesses judgment whether before or after its maturity, La.C.Civ.P. Art. 2632.
.In Louisiana, the appointment of the attorney in the latter instance, La.C.Civ.P. Arts. 2674, 5091, has important procedural consequence; the defendant receives his only notice of the action through such an appointed attorney, La.C.Civ.P. Art. 5094, and the unrepresented defendant is bound by the proceedings conducted against him by virtue of the appointment of this attorney, La.C.Civ.P. Art. 5098.
. In accordance with this admission, the defendants do not contest the validity of a mineral lease executed by seizing creditor immediately after the sale. See Footnote 9 below. They do not waive their right for an accounting of the proceeds of the lease and to be substituted as owners-lessors if they prevail in this action.
. There are exceptions, however, relating to the adjudicatee at the sale purchasing with notice of a patent substantial defect, see Note, 22 La.L.Rev. 845, 847 (footnote 7), (1962), or by participating in a conspiracy to defraud the mortgagor, Viley v. Wall, 154 La. 221, 97 So. 409 (1923).
.The cited note at 24 La.L.Rev. 897, footnote 17, summarizes as follows the cases permitting the mortgagor to annul the sale when the property was sold to the mortgagee and was still in the latter's possession:
"Reid v. Federal Land Bank, 193 La. 1017, 192 So. 688 (1939) (proceedings brought against mortgagor's succession though she was alive; no notice to mortgagor) ; McDonald v. Shreveport Mut. Bldg. Ass'n, 178 La. 645, 152 So. 318 (1933) (improper advertisement of sale) ; Rinfg v. Schilkoffsky, 158 La. 361, 104 So. 115 (1925) (notice improperly served on wife instead of husband who was living separately) ; Killelea v. Barrett, 37 La.Ann. 865 (1885) (tutor ad hoc appointed to represent minors did not take oath; absolute nullity) ; Stapleton v. Butterfield, 34 La.Ann. 822 (1882) (mortgage absolutely null; fraud; note enforced by holder with notice of nullity) ; Birch v. Bates, 22 La. Ann. 198 (1870) (no notice to mortgagor who was out of state at time of sale) ; Farrell v. Klumpp, 13 La.Ann. 311 (1858) (no notice to mortgagor) ; cf. Acadian Prod. Corp. v. Savanna Oorp., 222 La. 617, 63 So.2d 141 (1953) (sale under writ of fieri facias; no notice to debtor; fraud)."
. The action in nullity regulated by these code articles relate to the "nullity of a final judgment," Article 2001. Executory proceedings by definition do not concern such a judgment, since they are used "to effect the seizure and sale of property, without previous citation and judgment." La.C.Civ.P. Art. 2631.
. These two decisions held that the one-year prescription actions of nullity of judgments, now La.C.Civ.P. Art. 2004, did not apply and that the appropriate prescription for informalities with regard to sales under executory process was provided by Civil Code Article 3543 applicable to judicial sales.
. In the instant case, it is conceded that the defendant tutrix of minor children and the major children heirs had no actual knowledge of the institution of executory proceedings on January 27, 1970 or of the sale on March 4, 1970. The petition alleged that they were non-residents, living in Texas, with present location unknown. The attorney appointed to represent them sent notice at the Texas addresses supplied to them by the attorney for the plaintiff creditor; but these five letters were returned, since the addresses were not correct. The tutrix had been living at a different address in Houston for at least five years before the suit. Although she had corresponded with the creditor shortly before the seizure to see if he wished to buy the land, it is not positively shown that he knew her actual address. When the letters were returned, no effort was made to ascertain a more correct address, such as through the children's uncle, who lived in the small town and paid the taxes on the property. The present suit to annul the sale was brought within three months, as soon as the tutrix learned of it. The 15 acres were bought without appraisement for $300 by the mortgagee. A mineral lease was executed by him on the property on March 5, the day after the sale, for an unshown bonus plus $625 delay rentals each year thereafter. The record further shows that, some five months before the executory proceedings, the Reed heirs had agreed to sell the property for $6,250. The total mortgage debt they owed on the property was $2,301.20. We do not ground our reversal on these facts but simply cite them to illustrate the reasons why the jurisprudence has so strictly held the seizing creditor to literal compliance with the strict requirements for use of executory proceedings.
. The Tapp opinion does not make clear that the mortgagee was the adjudicatee. See 24 La.L.Rev. 894. However, while its essential holding is correct that the deficiency judgment should be defeated for such procedural defects whether or not the property was sold to an innocent third person, League Central Credit Union v. Montgomery, 251 La. 971, 207 So.2d 762, 764r-765 (1968), its further holding that the sale itself was annulled insofar as a third person could not under League Central or other decisions be sustained if indeed the property had been sold to such third person. Since the only defendant in Tapp was the seizing creditor (and no third person purchaser was made party to this annulment suit), the decision can be deemed to mean only that the sale was annulled insofar as the mortgagee was concerned, not as to any innocent third person.
. White Motor Co. recognizes the rule cited, but, because the property was adjudicated to a third person, held that a deficiency judgment must be allowed against the mortgagor-defendant because the sale could not be annulled. This court specifically overruled the holding of the case that a deficiency judgment could be permitted despite procedural defect in obtaining the sale under execu-tory process, pointing out that no interest of the innocent third person purchaser was jeopardized by refusing to allow the mortgagee a deficiency judgment. League Central v. Montgomery, cited above in footnote 10, at 251 La. 971, 207 So.2d 764-765.
. The organ of this court, as judge, acknowledges and is persuaded by the criticism of his approval of Jambois, as professor, in the cited law review discussion, by Judge Paul Landry, as organ of the court in Powell v. Carter, 233 So.2d 369, 373 (La.App.lst Cir. 1970). Judge Landry points out that a pro-unusual manner. It is so fundamental that lates to the basis or foundation of a creditor's right to proceed against a debtor in an unusual manner. It is so foundamental that non-compliance vitiates the creditor's right to proceed." 233 So.2d at 373. In view of this fundamental nature of the defect, the Powell court held it would be inconsistent with this court's decision in League Central to deny the debtor the right to annul the sale as to property improperly seized and sold and still in the creditor's possession.
. The trial court had held the debtor in Jambois estopped from attacking the judicial sale by its unconditional acceptance of the proceeds in excess of the amount required to pay the seizing creditor. Ultimately, the appellate court additionally relied upon this principle in denying annulment.
. The plaintiffs had also prayed for ten thousand dollars damages caused them by the wrongful seizure and dispossession. This relief was denied by both intermediate courts. The plaintiffs' specifications of error, upon which this writ was granted, did not complain of this denial of the damage claim. It is therefore final, since we ordinarily limit our review to the issues raised by granted application for writs of certiorari. Jordan v. Travelers Ins. Co., 257 La. 995, 245 So.2d 151 (1971).