Court Opinion

ID: 3467474
Source: CourtListenerOpinion
Date Created: 2016-07-05 20:33:44.475266+00
Date Added: 2024-06-11T14:07:59.954268
License: Public Domain

In this suit the plaintiffs seek to have a certain instrument declared an antichresis.
On January 9, 1920, Olivanne Acosta acquired by deed from Dominique Harang a certain tract of land on Bayou Lafourche in the Parish of Lafourche. The consideration called for in the deed was $5,250 *Page 1111 
of which amount $1,500 was paid in cash and the balance of $3,750 was represented in five promissory notes bearing 8% per annum interest from date until paid secured by a vendor's lien and mortgage on the property. The notes were made payable to the order of Dominique Harang as follows: The first note calling for $700 was payable one year after date, the second note calling for $750 was payable two years after date, the third note calling for $750 was payable three years after date, the fourth note calling for $750 was payable four years after date, and the fifth note calling for $800 was payable five years after date. There was no payment made on the principal of these notes and the interest was only paid up to January 1, 1921. There was no other payments made either on the principal or interest of these notes after that date. On February 14, 1923, Olivanne Acosta executed a cash deed transferring this same property back to Dominique Harang for the price and consideration of $3,750 cash. The deed was in the form of a regular cash deed except we find a paragraph containing this statement, "Appearers hereby declare by these presents that this sale and transfer is made to secure a debt on said described property, and that no revenue stamps are to be attached hereto." On June 13, 1923, within four months after this last transfer was made, the five notes representing the balance of the purchase price in the first transfer of this property from Dominique Harang to Olivanne Acosta of date January 9, 1920, were cancelled and the mortgage was cancelled from the mortgage records. On October 30, 1936, the widow *Page 1112 
and children of Olivanne Acosta, now deceased, executed an acknowledgment to the effect that the deed from Olivanne Acosta to Dominique Harang of February 14, 1923, was an actual sale and transfer and that at no time was it intended to secure a debt and in the same instrument the widow and heirs of Olivanne Acosta declared that they had no interest in the property and declared that if they have any interest in the property they quit claim such interest. This instrument was filed and recorded on February 12, 1937, in the conveyance records of Lafourche Parish. On January 30, 1937, the widow and children of Olivanne Acosta transferred an undivided one-half interest in this same property to James J. Tracy, an attorney, in consideration of professional services rendered and to be rendered to the end of securing judgment against all adverse claimants to the property and in vindication of the rights of the widow and children of Olivanne Acosta in the property. It was declared in this instrument that this power of attorney being coupled with an interest is irrevocable.
The plaintiffs contended that the deed from Olivanne Acosta to Dominique Harang of February 14, 1923, was an antichresis or the pledge of an immovable and that the fruits and revenues derived from the property was more than sufficient to pay the debt secured by the pledge or antichrises; that James J. Tracy acquired an interest in the property on the faith of the public records; and that the instrument executed by the widow and children of Olivanne Acosta purporting to be an acknowledgment of the sale and quit claim *Page 1113 
was in fraud of their rights and in violation of prohibitory laws. The plaintiffs sought to have the deed from Olivanne Acosta to Dominique Harang to be declared an antichresis; sought the annulment of the instrument purporting to be an acknowledgment of sale and quit claim; sought to be declared the owners of the property free from pledge and antichresis; and sought to be placed into possession of the property. The defendants denied that the deed was executed as a pledge to secure a debt and claimed that it was an act of sale. In the alternative the defendants ask that in event the deed was ambiguous on its face that it be reformed by striking out and deleting the following words, viz.: "Appearers hereby declare by these presents that this sale and transfer is made to secure a debt on said described property, and that no revenue stamps are to be attached hereto." The defendants alleged that this clause in the deed was inserted through ignorance, error, mistake and by accident. It was alleged that the notary placed this clause in the deed after he had advised the parties that he could insert a declaration which would obviate the necessity of payment of revenue stamps but that it would not alter the agreement of sale; that the parties signed the instrument under the firm belief that the clause inserted in no way affected the sale.
The plaintiffs interposed a plea of ten years prescription under the provisions of Article 3544 of the Revised Civil Code against the defendants' alternative claim to have the instrument reformed. The defendants interposed a plea of estoppel *Page 1114 
claiming that the plaintiffs are barred from attacking the deed by their act of acknowledgment of the sale and quit claim. Upon trial the lower court rendered judgment rejecting the plaintiffs' demands. The plaintiffs have appealed.
Upon examination of the written reasons for judgment given by the lower court, we find that the lower court was of the opinion that an antichresis could only be established by written contract and that parol testimony was not admissible to prove an antichresis. The lower court was of the opinion that the instrument on its face did not establish an antichresis. However, there is parol testimony in the record which was taken subject to the objection.
Article 3133, Revised Civil Code, defines pledge as follows: "The pledge is a contract by which one debtor gives something to his creditor as a security for his debt."
Article 3134, R.C.C., provides, "There are two kinds of pledge:
"The pawn.
"The antichresis."
Article 3135, R.C.C., provides, "A thing is said to be pawned when a movable thing is given as security; and the antichresis, when the security given consists in immovables."
Under the general provisions applying to pledge in the Civil Code which applies to both kinds of pledge, the pawn and the antichresis, we find this provision, "Every lawful obligation may be enforced by the auxiliary obligation of pledge." Article 3136. *Page 1115 
Article 3176, R.C.C., provides, "The antichresis shall be reduced to writing. The creditor acquires by this contract the right of reaping the fruits or other revenues of the immovables to him given in pledge, on condition of deducting annually their proceeds from the interest, if any be due him, and afterwards from the principal of his debt."
Article 3152, R.C.C., provides, "It is essential to the contract of pledge that the creditor be put in possession of the thing given to him in pledge, and consequently that actual delivery of it be made to him, unless he has possession of it already by some other right."
It is well settled in this State that an antichresis cannot be proved by parol testimony. The Article of the Code itself provides that the contract must be in writing. The plaintiffs and defendants in this suit concede that the contract of antichresis must be reduced to writing and that we must determine whether or not the instrument is an antichresis from the instrument itself. This is in accordance with the Article of the Civil Code that requires that the contract shall be reduced to writing and the established interpretation of this Article of the Civil Code. There being no dispute on this question there could be no purpose gained in citing the various decisions in support of this doctrine. In order to determine the intent of the parties we will have to ascertain it from the instrument itself. The plaintiffs rely in support of their contention on several cases which we will discuss in order. *Page 1116 
In the case of Calderwood v. Calderwood, 23 La.Ann. 658, wherein suit was instituted to compel the retransfer of property which had been sold and a counter letter given, the Court in determining the act of sale and counter letter construed them together. It is to be noted that the counter letter states that it is to explain the true intent and object of the parties to the act of sale. It also recites the specific debt which it is given to secure and provides that it is made to secure and guarantee the payment of that debt. In other words, the contract of pledge recites the nature and extent of the principal obligation. In the case of Livingston v. Story, 11 Pet. 351, 9 L. Ed. 746, there was also a counter letter explaining the nature and extent of the principal obligation. The counter letter made specific reference to the debt which was intended to be secured and to the sale made with the intent to secure the debt. In both of these cases the auxiliary contract of pledge or antichresis specifically states the nature and extent of the principal obligation and specifically refers to the debt intended to be secured. In fact, the transactions were so tied together that the true intent of the parties was clear and certain.
In the case of Ware  Son v. Morris, 23 La.Ann. 665, where there was an act of sale and a counter letter, it was stated to the effect that as between the parties the counter letter is as operative as if its recitals and stipulations had been expressed in the notarial act. We find no fault with this doctrine but it is of no avail to the plaintiffs. It does not contradict *Page 1117 
the necessity that the nature and extent of the principal obligation must be set out in the antichresis.
In the case of Cater v. Merrell, 14 La.Ann. 375, this Court stated:
"For what is a pledge? It is an auxiliary contract for the enforcement of any lawful obligation. C.C. arts. 3100, 3103. It results from this definition, that there should be no uncertainty or ambiguity as to the nature and extent of the principal obligation, which it is the object of the pledge to aid and enforce.
"Otherwise, it is impossible to ascertain the nature and extent of the rights and obligations of the pledgor and pledgee, reciprocally, from the instrument itself. Recourse would necessarily be had to parol proof, to explain the intention of the parties. And thus the object of the law which requires this contract to be reduced to writing, would be defeated, and the door opened to the perpetration of frauds upon the parties contracting, and upon their creditors."
In a concurring opinion in this case, it is stated:
"Articles 3100, 3102 and 3103 declare, that the pledge is a contract by which one debtor gives something to his creditor as a security for his debt, that a thing is said to be pawned, when a movable thing is given as security, and that every lawful obligation may be enforced by the auxiliary obligation of pledge.
"The meaning then of the declaration in the second section of these Acts, that a pledge may be made by private writing *Page 1118 
is, that the parties may make a written contract in which it shall be specified that the debtor gives a certain thing which must be mentioned to his creditor, as a security for a debt which must also be specified.
"The object of the law in requiring it to be in writing, is that the whole contract should be manifested.
"If this were not the object, then there would have been no necessity of declaring that the contract of pledge should be in writing."
We find in the case of Martin v. His Creditors, 15 La.Ann. 165, that it is stated:
"Privileges are of strict right; and parties claiming them must conform to the requirements of the law. It is required, in order to create a pledge, not only that delivery should accompany the private deed, but that the instrument itself should exhibit the nature and extent of the rights and obligations of the contracting parties reciprocally."
I am not unaware of the fact that these cases involve the pledge of movables. However, the court was discussing the Articles of pledge that apply to both movables and immovables. Article 3176, R.C.C., provides that the contract of antichresis must be in writing. The contract of pledge is an auxiliary contract for the enforcement of a lawful obligation. From a reading of all the Articles it would appear that the auxiliary contract of pledge would follow the terms and conditions of the principal obligation which it is the object of the pledge to aid and enforce. *Page 1119 
The Civil Code provides that if the principal obligation be conditional that the pledge is confirmed or extinguished with it and if the obligation is null the pledge is null. If the nature and extent of the rights and obligation of the pledgor and pledgee is not set forth in the instrument itself it would necessitate parol proof to explain the intention of the parties which would defeat the very purpose requiring the contract to be in writing and the door would be open to fraud.
After carefully examining all the cases cited by the plaintiffs and the other cases decided by this Court touching antichresis I have been unable to find any case that holds to the effect that it is not necessary to state the nature and extent of the principal obligation in the contract of antichresis. We cannot go beyond the instrument and assume that this deed was given to secure any particular debt on the property unless specific reference is made to what debt it was intended to secure or language to that effect. I do not believe that it was ever the intent of the parties to enter into a contract of the nature of an antichresis. In the first place it is an antiquated form of contract and not one used in the ordinary course of affairs. The plaintiffs are seeking to convince us that the parties to this instrument were availing themselves of an antiquated method of securing a debt, an unusual contract and one the average person or average notary knows nothing of and a contract very seldom even in the past resorted to to secure a debt. In the case of Harang v. Ragan, 134 La. 201, 63 So. 875, this Court stated that an antichresis was an antiquated *Page 1120 
contract. It would not be reasonable to suppose or assume in the absence of stipulations showing clearly the certain and specific debt that the parties ever intended the instrument in the light that the plaintiffs contend. In view of the fact that a very short time after the property was retransferred the notes and mortgage were cancelled thereby destroying the evidence of the debt in my opinion shows that it was the intent of the parties to retransfer the property and not their intent to create an antichresis or pledge.
The deed from Acosta to Harang is in the form of a regular cash deed with the exception that it states, "Appearers hereby declare by these presents, that this sale and transfer is made to secure a debt on said described property, and that no revenue stamps are to be attached hereto." It recites that the property is transferred for a cash consideration to Dominique Harang, his heirs and assigns forever. Abel LeBlanc, the husband of one of the plaintiffs, a daughter of Olivanne Acosta, was a witness to this deed. The deed was passed before A.L. Deramee, a notary public. The provision in the deed relied on by the plaintiffs appears to have reference to the revenue stamps and why the revenue stamps are not necessary. A careful reading shows that the appearers are giving a reason why the stamps are not necessary. This provision is general in its nature and does not mention the nature of the debt or what debt was intended to be secured. It would be necessary to go beyond the deed to ascertain what debt it was given to secure. If we go beyond the instrument we find that the *Page 1121 
promissory notes, and mortgage were cancelled within four months after this retransfer was made. In other words, the notes and mortgage being the evidence of the debt was cancelled. This clearly shows that the parties intended to retransfer the property otherwise they would not have cancelled the evidence of the debt. If they had merely intended to pledge the property to secure the debt, they would not have destroyed the evidence of the debt. We would have to assume that this was the debt that was intended to be secured since the instrument itself makes no specific reference to this particular debt. At the time the retransfer was made Olivanne Acosta owed Dominique Harang the five promissory notes amounting to $3,750 and over two years interest that was past due on the notes. In fact, the interest due on the notes amounted to $675. In other words, Acosta owed $3,750 on the principal and $675 interest making in all $4,425. The consideration in the retransfer is of a similar amount to that called for in the notes without the interest past due. It would be seemingly strange if the parties intended to pledge the property to secure this particular debt that they only pledged the property to secure part of the debt and not the entire debt. If the parties had intended this contract to be one of pledge to secure this particular debt, it would only be reasonable to believe that they would have pledged the immovable to secure the entire debt. Furthermore, the construction placed on this instrument by the plaintiffs does not conform to reason and human experience. If we accepted plaintiffs' contention, Harang *Page 1122 
relinquished his vendor's lien, cancelled his mortgage and notes, destroying the evidence of the debt, waived the $675 interest due and accepted in lieu thereof a pledge of the immovable, with the responsibility of managing the immovable, the profits of which would go to the payment of interest and if any excess to the payment of the principal obligation, a security that gave him no priority or preference over the ordinary creditors of Acosta under the provisions of Article 3181, R.C.C., which provides:
"Every provision, which is contained in the present title with respect to the antichresis, can not prejudice the rights which third persons may have on the immovable, given in pledge by way of antichresis, such as a privilege or mortgage.
"The creditor, who is in possession by way of antichresis can not have any right of preference on the other creditors; but if he has by any other title, some privilege or mortgage lawfully established or preserved thereon, he will come in his rank as any other creditor."
Under the provisions of Article 2236 of the Revised Civil Code an authentic act is full proof of the agreement contained in it between the contracting parties and their heirs or assigns. Parol evidence is not admissible to vary or contradict the stipulations of a written contract. This is so well established it is unnecessary to cite the long list of authorities holding to that effect. Article 2238 of the Civil Code provides to the effect that an act either authentic or under private signature is proof between the parties even of what is *Page 1123 
expressed in enunciated terms provided the enunciation has a direct reference to the disposition. Enunciation foreign to the disposition can serve only as a commencement of proof. In this case the disposition is a sale with a provision that does not have direct reference to the sale. The enunciation that appears to be contrary to the sale is foreign to the disposition in which case the door would be open to parol evidence not to vary the terms of the instrument but to render it intelligible. Article1945 of the Civil Code provides as follows:
"Legal agreements having the effects of law upon the parties, none but the parties can abrogate or modify them. Upon this principle are established the following rules:
"First — That no general or special legislative act can be so construed as to avoid or modify a legal contract previously made;
"Second — That courts are bound to give legal effect to all such contracts according to the true intent of all the parties;
"Third — That the intent is to be determined by the words of the contract, when these are clear and explicit and lead to no absurd consequences;
"Fourth — That it is the common intent of the parties — that is, the intention of all — that is to be sought for; if there was a difference in this intent, there was no common consent and, consequently, no contract."
Article 1950, R.C.C., provides: "When there is anything doubtful in agreements, *Page 1124 
we must endeavor to ascertain what was the common intention of the parties, rather than to adhere to the literal sense of the terms."
Article 1953 of the Revised Civil Code provides: "Whatever is ambiguous is determined according to the usage of the country where the contract is made."
Article 1955, R.C.C., provides: "All clauses of agreements are interpreted the one by the other, giving to each the sense that results from the entire act."
Article 1956, R.C.C., provides: "When the intent of the parties is doubtful, the construction put upon it, by the manner in which it has been executed by both, or by one with the express or implied assent of the other, furnishes a rule for its interpretation."
The provision in the deed to the effect that the sale is made to secure a debt on the property would render the instrument ambiguous and resort must necessarily be had to parol evidence, not to contradict the instrument but to render it intelligible. Rester v. Powell, 120 La. 406, 45 So. 372; Interstate Trust 
Banking Co. v. Liquidators, 143 La. 574, 78 So. 968. In the instrument in this case all the provisions except one paragraph show that it is an act of sale. The contradictory paragraph states that the sale is given to secure a debt and no stamps are necessary. If we were to accept the plaintiffs' contention, the instrument would not be a sale but a pledge to secure a debt. In view of the Articles of the Civil Code above cited you could not give effect to every stipulation *Page 1125 
in the agreement as contended by the plaintiffs because they would be contradictory. The instrument is either a pledge or a sale. It would appear that if you give sense to the entire act that the instrument is a sale. The instrument being ambiguous if determined according to the usage of the country where the contract was made it would be a sale for the reason that even though our law provides for the pledge of an immovable to secure a debt yet under the general usage it has only been resorted to in a very limited number of instances. The usual mode of securing a debt with an immovable is by mortgage. If we were to construe this instrument as being doubtful the construction put on it by the parties to the contract and their heirs show that they never recognized it except as an act of sale. All of the plaintiffs except Tracy stated in their testimony that the first information they received that they had any interest in the property was given them by Tracy after they had signed the acknowledgment and quit claim. Abel LeBlanc, the husband of one of the plaintiffs who signed the transfer from Acosta to Harang, the contested instrument, also was present and signed as a witness when his wife signed the acknowledgment and quit claim. The record shows that he was present in court and did not take the stand and testify. The only parties on behalf of the plaintiffs who testified that the acknowledgment and quit claim was obtained by fraud were the plaintiffs themselves, except Tracy. The plaintiffs did not put on the stand the several witnesses to their signing of the acknowledgment and quit claim who were relatives of theirs to prove that *Page 1126 
the instrument was secured by fraud. The plaintiffs testified to the effect that the instrument was not properly explained to them before they signed it but did testify that the instrument was read to them. The evidence shows that the various plaintiffs except Tracy signed this instrument in different places and not at the same place. The evidence shows that the majority of the children of Olivanne Acosta were married women and that they signed in the presence of their husbands. Some of the husbands of plaintiffs signed as witnesses but did not testify in this case. All the plaintiffs except Tracy signed the acknowledgment willingly and without protest or objection. The plaintiffs testified to the effect that they were misled in signing the instrument by the representation that it was to correct a little error wherein the word "security" had been inserted in the deed by the notary while he was under the influence of liquor or had been drinking too much. A.L. Deramee, an attorney who drew up the act testified to the effect that he drew it up at the instance of another firm of attorneys and that he and one of the defendants went to the various plaintiffs except Tracy and read and explained the contents of the act to them. They asked the plaintiffs if it was their understanding that the property was deeded back to Harang or merely transferred to secure a debt. Having received the answer to the effect that it was to settle or cancel the debt and not to secure the debt the instrument was read and explained to each of the plaintiffs after which the plaintiffs signed it. The witness testified that it was explained to each and every one of *Page 1127 
the plaintiffs before they signed it. One of the defendants corroborates this testimony. Under the evidence this would not constitute a fraud that would vitiate the instrument. Furthermore, Abel LeBlanc, who signed the act of retransfer as a witness was present when his wife, one of the plaintiffs, signed the acknowledgment and acquiesced in his wife's signing it and he himself signed it as a witness. This corroborates the defendants' evidence. Edmond L. Deramee testified that at the time that Abel LeBlanc signed the acknowledgment as a witness that LeBlanc stated that he and others had purchased land from Dominique Harang which they also retransferred to Dominique Harang along about the same time for the reason that they were unable to pay for it on account of conditions being so bad. The witness testified that LeBlanc stated to him at that time that he remembered when Acosta retransferred the land back to Harang and that it was retransferred in the same manner which he, LeBlanc, had retransferred his property to cancel the debt. The record shows that Abel LeBlanc was present in court and did not take the stand and contradict this testimony. The plaintiffs having failed to place Abel LeBlanc on the stand to contradict this witness creates the presumption that had LeBlanc testified the testimony would have been against them. Rubenstein v. Files, 146 La. 727, 84 So. 33. The testimony that conditions were so bad that Acosta was unable to pay for the property is corroborated by the notes themselves because no payments either on the principal or interest had been made for more than *Page 1128 
two years at that time. A.L. Deramee, the notary before whom the contested deed was passed, testified that it was his error in placing the word "security" in the deed. He testified to the effect that the parties had signified that they wanted to pass a cash deed retransferring the property back to Dominique Harang for the consideration of the principal of the unpaid purchase price and owing to the fact that there was no cash disbursement the witness told Dominique Harang that he could insert a clause that would relieve them of placing stamps on the deed. The witness testified at that time he was rather inexperienced as a notary and inserted by mistake the words "to secure a debt" instead of "to pay a debt". The evidence shows that there were no transactions between Olivanne Acosta and his heirs on the one side and Dominique Harang and his heirs on the other side after this retransfer was made of an accounting or settlement of any of the revenues produced from this property. If it had been the intention of the parties that the revenues were to be used to pay the interest and the excess applied on the principal of the debt, there certainly would during this long period of time have been some demand made for an accounting or an account kept to that end. The evidence shows that no such account was kept and that no demand for an accounting was ever made. This corroborates the defendants' testimony and also shows that the parties themselves construed the instrument to be a deed and not a contract of pledge. When the widow and all of the heirs of Acosta signed the acknowledgment at different places without *Page 1129 
objection, some of whom having signed in the presence of their husbands who also raised no objection, shows that the plaintiffs themselves by their own acts construed the instrument to be a deed. Furthermore, all the plaintiffs except Tracy testified that the first knowledge that they had any interest in this property was transmitted to them by Tracy after they had signed the acknowledgment and quit claim. This shows that they construed the instrument to be a deed and they had recognized it as such. Moreover, the contract of employment entered into by the widow and heirs of Acosta is one that is usually resorted to where the parties themselves are doubtful of the enterprise. In this contract the widow and heirs transfer one half of whatever interest they might have in this valuable property to Tracy in consideration of services rendered and to be rendered to the effect of regaining the title to the property and Tracy paying whatever cost or expense that might be incurred. The widow and heirs by this contract make no risk yet on the other hand if the title is regained Tracy is to receive one half interest in the property which the plaintiffs allege to be worth more than Two Hundred and Fifty Thousand Dollars.
The case of Rester v. Powell, supra, is similar in principle to this one. There was a stipulation in the act of sale, to wit: "* * * are attached to, and form part of, said realty, by destination, and being a fixture thereon, shall not be removed therefrom during the tenure of this mortgage." The court held to the effect that the instrument was ambiguous and that *Page 1130 
parol evidence was admissible not to vary the terms of the instrument but to render it intelligible. Furthermore, the parol testimony would be admissible under the allegation of error in the defendants' alternative claim. Armstrong v. Armstrong, 36 La.Ann. 549; Adeline Sugar Factory Co. v. Evangeline Oil Co.,121 La. 961, 46 So. 935.
I am of the opinion that the judgment of the lower court was correct in rejecting the demands of the plaintiffs to have the instrument declared a contract of pledge or antichresis.
Having arrived at this conclusion it is unnecessary to pass upon the other issues presented.
For the reasons assigned, I respectfully dissent.