Court Opinion

ID: 7195529
Source: CourtListenerOpinion
Date Created: 2022-07-24 17:02:17.775306+00
Date Added: 2024-06-11T16:16:19.308357
License: Public Domain

The opinion of the court was delivered by
McEnbry, J.
Charles A. Phillipi made a surrender in the Civil District Oonrt, January 29, 1885.
He was elected syndic without giving bond.
He was discharged from his debts by a vote of the creditors, and a judgment in accordance with the vote of the creditors was rendered. Charles A. Phillipi died.
He never filed any account.
The creditors seem to have been indifferent until the present syndic was appointed.
*677Before the present syndic was appointed Osesar Phillipi, the holder of a note for the sum of $7500, secured by special mortgage on property situated in the parish of Rapides, proceeded by executory process against the surviving widow of Charles A. Phillipi, and tutrix of his minors, to have said mortgaged property seized and sold.
After the institution of proceedings, three of the partnership creditors of O. A. Phillipi & Oo. applied to the court having jurisdiction of the insolvency and procured the appointment of Charles Forman provisional syndic.
He applied to the District Court of Rapides for, and obtained an injunction restraining the sale of the mortgaged property, on the ground that the court had no jurisdiction to issue said writ, as the property constituted part of the property surrendered by the insolvent, and that the mortgage itself was a simulation.
The provisional syndic was afterward elected syndic without security and qualified without giving bond.
The syndic took a rule in the Civil District Court, parish of Orleans, which had jurisdiction of the insolvent proceedings, on Osesar Phillipi, the plaintiff in the executory proceedings, in which he avers that the creditors, at.the meeting at which they elected the syndic, Charles Forman, voted to sell the immovable property for one-third cash, balance on one and two years’ credit; that the mor gage securing plaintiff’s debt was a simulation, and that Phillipi was proceeding in contempt of the court to have the property sold under executory proceedings in the parish of Rapides, and prayed for the cancellation of the mortgage, and that the property be sold on the terms and conditions as voted by the creditors.
There was judgment for the defendant .in rule, cumulating the executory proceedings with the insolvency, recognizing the validity of the note and the mortgage securing the same to the amount of $6000, with 8 per cent, interest per annum from 6th July, 1885, and 5 per cent, attorney’s fees, that the'sheriff of Rapides sell the property for cash if the mortgage creditor requires it, and in default of such demand that it be sold on terms of credit as fixed by the meeting of creditors; reserving to the mortgage creditor the right to bid in the property, and to retain the amount due him less $1000, which was to be paid over to the syndic to meet privileged claims.
From this judgment the syndic and the several creditors appealed.
The order of seizure and sale issued by the District Judge for the *678District Court of Rapides at the instance of the' mortgage creditor was null and void, as the court was without jurisdiction.
The property surrendered and accepted by the creditors vested in them. The syndic elected by the creditors was entitled to take possession of same, and he has the exclusive right under their direction to administer it for their benefit. Revised Statutes 1791; 18 An. 292.
All proceedings against the insolvent are stayed, and must be referred to the court having jurisdiction of the insolvency. Revised Statutes 1790; 9 Robinson, 219.
The mortgaged property situated in Rapides was therefore under the control and administration of the syndic first elected by the creditors. His death made no change ia the condition of the property surrendered. It remained still vested in the creditors, to be taken possession of and administered by another syndic to be elected by them.
The creditors and the syndic before the court having jurisdiction of the insolvency took a rule on the holder of the mortgage note to. have the debt and mortgage declared a simulation and the mortgage canceled. Nothing was done in the executory proceedings after the injunction was issued, and we may, therefore, omit any further reference to the same; and we will also disregard the order of the district judge in cumulating said executory with the insolvent proceedings. We will only notice those matters which were properly before the court.
The proceedings in rule originated with the creditors and the syndic, and the court in which the rule was filed had jurisdiction to inquire into and determine the validity of the mortgaged debt. All persons interested were before the court.
The District Court held that the note and mortgage were genuine obligations and valid to the extent of $6000, with 8 per cent, interest from 6th July, 1885. To recapitulate the evidence upon which he based his judgment will be unnecessary.
It is satisfactory and conclusive.
The question of prescription presented by the syndic qan not pre - vail, as the surrender of the property and the acceptance were made in 1885. McRea vs. Creditors, 16 An. 306.
In this ease the creditors had accepted the surrender made by the insolvent, and had elected a syndic. We do not think the facts *679bring this case under the reasons assigned for the decree in Spears vs. Creditors, 40 An. 654.
It was not premature, therefore, for the creditors at the meeting when the second syndicate was elected to deliberate and vote upon the manner of disposing of the property. But the mortgage and privilege creditors were not bound by the proceedings which ordered the mortgaged property to be sold on terms of credit. They have the right to have the mortgaged property sold for cash for the amount of the debt secured.
Here the creditor has declared that he wishes the mortgaged property to be sold for cash to pay his debt.
This declaration was not made at the meeting of creditors, but before a court of competent jurisdiction contradictorily with the other creditors.
The judgment ordered the sheriff of Rapides to proceed with the sale of the property.
In this we think there was error, as it is the duty of the syndic to cause the property to be sold, and he can employ for this purpose either the sheriff or an auctioneer, or' he may, under the directions of the creditors, sell the property himself.
There is no reason why in selling the property there should be a resort to executory process. The property was surrendered by the mortgagor and placed in possession of the creditors for sale to pay the debt. The syndic can, therefore, sell it without resorting to judicial process.
The conflict, of interests among the creditors is settled when the tableau of distribution is made, the proceeds baking the place of the property.
In this case the validity of the mortgage is fixed in a judgment in proceedings instituted by all creditors contradictorily with the mortgage creditor. It only remains for the syndic to take possession of the property, pay off the mortgage debt out of the proceeds of the sale and such privileged claims in the insolvency that the mortgage debt has to bear.
The syndic has been dispensed from giving bond. He must give bond for the amount of the mortgage debt and privileged claims.
It would be unreasonable to require the creditor to surrender his secured claim into the hands of an administrator or syndic without bond.
*680Under the circumstances of this case we are of the opinion that unless the syndic gives the bond as required by law the mortgage creditor, if he buys the p operty, has the right to retain in his hands the amount of his debt, paying to the syndic only the amount which the mortgage debt has to bear in the payment of the costs of the insolvency.
The creditors have ordered the property to be sold. The mortgage creditor has demanded that it be sold for cash, for the amount of his debt.
It is the duty of the syndic to speedily carry out these instructions.
There is no reason for delay, and the accumulation of unnecessary costs.
It is therefore ordered, adjudged and decreed that the judgment appealed from be affirmed, so far as it recognizes the validity of the mortgaged debt held by Csesar Phillipi, defendant in rule, on the mortgaged property, situated in Rapides parish, and in other respects it be annulled, avoided and reversed; and it is further ordered that this case be remanded to be proceeded with according to law and the views herein expressed.