Court Opinion

ID: 7160422
Source: CourtListenerOpinion
Date Created: 2022-07-24 16:15:50.701353+00
Date Added: 2024-06-11T16:15:21.302572
License: Public Domain

Simon, J.,
delivered the opinion of the court.
This is a revocatory action of the same nature as the case of Hempkin vs. Bowmar et al., just decided ; but the facts adduced in support of the action, and the situation of the parties are quite different. On the 18th May, 1837, defendant Bowmar, executed a mortgage in favor of Abercrombie, to secure a sum of ten thousand one hundred and thirty-five dollars, and said mortgage was regularly recorded. In July following, an order of seizure and sale of the property mortgaged was issued, and stayed by injunction at the suit of Hempkin. On the 3d October, 1838, a judgment was obtained by plaintiffs against Bowmar, for the sum of five thousand four hundred and ninety-nine dollars and ninety-nine cents, with interest, with a stay of execution until the first Monday in April, 1839, which judgment does not appear to have ever been recorded, and on the 6th of April, 1839, the present suit was instituted to annul and set aside the act of mortgage executed by Bowmar in favor of Abercrombie. Plaintiff propounded interrogatories to both defendants, to which they answered by giving a full statement of all the circumstances relative to their transaction in May, 1837; proof was also adduced, as to the amount of debts Bowmar owed at the time of the mortgage, and the district judge gave judgment in favor of Abercrombie, for the sum of one thousand nine hundred and eighty-three dollars and fifty cents, being the only amount which Bowmar owed him at the time the mortgage was executed ; rejected the balance included in the mortgage as security debts, which were to become due some time afterwards, and annulled the act of mortgage, as to its effect, against plaintiffs, for any other sum but one thousand nine hundred and eighty-three dollars and fifty cents. From this judgment defendant, Abercrombie, appealed.
Where a debt- or is, perhaps, in insolvent circumstances, but ■when there is no proof that the creditor had any knowledge of it, he may give a valid mortgage in favor of such creditor.
A mortgage maybe given to secure endorsements made and to be made, and which are not due at the time of executing it.
- In the present case, the plaintiffs resorted to interrogatories, for the purpose of establishing, from the answers of both defendants, not only the facts of fraud and simulation alleged in the petition, but also the undue preference stated to have been given by Bowmar to Abercrombie, with a knowledge on the part of the latter of Bowmar’sk-state of insolvency ; but we think, he has failed in his attempt. From the answers of both defendants, it results that the act of mortgage attacked was executed for a valuable consideration, in this : That a part of the amount was really due at the time, and the balance was to secure certain endorsements on security debts, which Abercrombie had contracted for Bowmar, and which he was bound to pay one and two years afterwards; the transaction is fully explained in Abercrombie’s answer to the first interrogatory, and no evidence has been adduced to contradict it. It is true that the evidence, found in the record, shows that Bowmar owed a great many debts at the time he executed the mortgage, and was perhaps in insolvent circumstances, but far from there being any proof to bring home a knowledge of the facts to Abercrombie, his answers to interrogatories show that Bowmar concealed the state of his affairs from him, and again no evidence has been adduced to the contrary.
In this state of the case, the district judge thought that Abercrombie was entitled to recover the amount actually due him by Bowmar at the time of the execution of the mortgage, and allowed him a preference over the plaintiffs for said amount, to be satisfied out of the property mortgaged, But, we think, he erred in not allowing him the benefit of the whole. It is perfectly clear, that “a mortgage may be given for an obligation which has not yet risen into existence, as when a man grants a mortgage by way of security, for endorsements which another promises to make for him.” Louisiana Code, article 3259. 8 Martin, N. S., 529. Here, the endorsements had actually been made ; and as we are bound to believe, from the answers of Abercrombie to the interrogatories propounded to him by plaintiffs, which answers stand uncontradicted, that (he contract of mortgage com*375plained, of was in good faith, we see no reason, why- the effect of said mortgage should not be extended to the whole of the debt.
So, a prior mortgage^ to secure endorsements not paid, will have preference over a judgment creditor whose judgment is not recorded, when there is no proof of knowledge of the insolvency of the debtor at the time by the mortgagee.
From the facts and circumstances of the case, and particularly from the state of affairs of Bowmar at the time of the mortgage, there is no doubt that Abercrombie, obtained by said mortgage a right of preference over the plaintiffs, whose judgment was never recorded ; but there is no proof of Bow-mar’s insolvency being known to Abercrombie, at the time the mortgage was executed. Idem., article 1979. 4 Louisiana Reports, p. 256, 261, 141. And even if it had been shown, that he knew that Bowmar was in insolvent circumstances, plaintiffs’ action ought to have been instituted within one year from the date of the contract of mortgage. Idem., article 1982. 3 Louisiana Reports, 28.
It is, therefore, ordered, adjudged and decreed, that the judgment of the District Court be annulled, avoided and reversed ; that plaintiffs’ action be dismissed and rejected, and that the act of mortgage executed by Bowmar, in favor of his co-defendant Abercrombie, do have, as against said plaintiffs, its full and legal effect; said plaintiffs and appellees, paying costs in both courts.