Court Opinion

ID: 7196450
Source: CourtListenerOpinion
Date Created: 2022-07-24 17:03:10.181901+00
Date Added: 2024-06-11T16:16:21.603267
License: Public Domain

*753Dissenting Opinion on Application eor Rehearing.
Watkins, J.
The application for relief is by the intervenor alone. She puts her claim to relief on the ground that plaintiff’s privilege as the furnisher of necessary plantation supplies can not be enforced against crops produced on the defendant’s plantation after sale and delivery thereof to her — the averment of her petition being that his seizure of same under a writ of sequestration is illegal and void.
That plaintiff had a privilege on the crops of the defendant, which was enforceable against them so long as they continued to be his property, there is no doubt. R. C. C. 32,171.
That they had been sold and delivered to the intervenor prior to plaintiff’s seizure is a fact that is recognized by our opinion, and plaintiff has not complained; and it is now final and irrevocable in , this - respect.
Hence the legal principle that plaintiff asks this court to affirm is, that the privilege for plantation supplies may be judicially enforced against crops stricken thereby, after bona fide sale and actual delivery thereof to the purchaser.
In my judgment this can not be done for the reason that the law does not so provide.
Privilege is a right which springs from the nature of the debt (R. C. C. 3186) ; but there are quite a variety of different kinds of privileges which are governed by different precepts of law.
Let me take for an illustration the lessor’s privilege, which, under the law (Act 89 of 1886), enjoys a preference over all other privileges, and see what are the provisions of law governing same and how they have been construed in respect to the sale of objects affected thereby.
On examination we find that the Oode in terms declares that the lessor’s privilege is lost by reason of a conventional sale of the thing which is subject to it. Thus:
“In the exercise of this right the lessor may seize the objects which are subject to it before the lessor takes them away, or within fifteen days after they are taken away, if they continue to be the property of the lessee and can be identified.” R. C. C. 2709; C. P.288.
The right to provisionally seize property affected by a lessor’s privilege, in the hands of third persons, has ever been regarded as exceptionally favorable to lessors — it being a benefit not enjoyed by *754any other class of privileged creditors. But it must not escape attention that even this highly favored privilege can not be enforced after the property affected by it has been sold and delivered to a third person, for the law is that the lessor may seize it within fifteen days after it has been taken off the leased premises only on the condition that it “ continue to be the property of the lessee.'1'1
Then let us suppose that the lessee had disposed of the property which is subject to the lessor’s privilege, what is his recourse?
A provisional seizure in disregard of the third possessor’s rights? Not at all.
We find an answer to the question in the case of Dennistoun vs. Piste, 2 An. 14, where a lessor gave his stock of goods in payment of the claim of a creditor holding a vendor’s lien; which giving in payment was annulled at the suit of the lessor, on a charge of collusion and fraud between the creditor and his vendor to deprive him of his lien and" privilege.
•The court held that the transaction was “ a fraudulent preference by an insolvent debtor; and a-breach of good faith toward the landlord, and a violation of his rights in the removal of the goods.”
The sale was annulled, and the goods were brought back under the subjection of the lessor’s privilege again.
What is striking in that case is that suit had to be brought for the revocation of the sale, to which both the recalcitrant tenant and his fraudulent vendee were necessary parties, in order to bring the property back under the dominion of the lessor’s privilege again.
The provisions of the Oode with respect to the privilege for necessary supplies are that “ debts due for necessary supplies furnished to any farm or plantation ” bear a privilege upon the crops “ of the year and the proceeds thereof;” and they further specially provide that such privilege “ shall not be divested by any prior mortgage, whether conventional, legal or judicial, or by any seizure and sale of the land while the crop is on it.” R. C. C. 3217, Pars. 1 and 9.
If a sale of the crop did not divest the property of pre-existing privilege, that provision would be meaningless altogether.
■ And there is no distinction in principle between a judicial and conventional sale.
Sequestration is the writ provided by law for the enforcement of the supply lien. C. P. 275. If it were the intention of the law-maker that it could be exercised against crops after their *755sale and actual delivery to a third person, why is it that nothing is said in the Code with regard to the notice to be given to such purchaser prior to seizure?
It provides that the creditor must, as a condition precedent to the granting of an order for the issuance of the writ, execute bond “in favor of the defendant,” with good security, .“ to be responsible for such damages as the defendant may sustain, in case the sequestration should have been wrongfully obtained.” C. P. 276.
It further provides that “ a defendant against whom a mandate of sequestration has been obtained * * * may have same set aside ” on furnishing bond and security (C. P. 279, 280), but there is no provision of the Code requiring any citation or notice to a third person or purchaser of movable property thus affected.
The seizing creditor is not primarily required to give bond in his favor.
These provisions of the Code necessarily lead to one of two conclusions, (1) that the privilege of the supply creditor can not be enforced against crops after they have ueen sold and delivered to a third person, or (2) that a third person buying crops affected thereby may be proceeded against, without bond, citation or notice of any kind, and without affording him any protection whatever— notwithstanding the fact that notice, bond and security are accorded the fraudulent debtor who has thus disposed of his property to the prejudice of his creditors.
The instant case is an illustration of the harshness of such a rule; for the plaintiff sent his writ into an adjoining parish and caused property of the intervenor to be sequestered by the sheriff and taken out of her possession in plain disregard of her authentic title, and without any citation and notice of seizure.
There is no case in which such proceeding is warranted, except that of executory process in the foreclosure of a duly recorded conventional mortgage, containing the non-alienation clause.
Plaintiff’s privilege was not recorded, and there is no law requiring the registry of privileges on movable property.
We have been cited to the case of Bres & O’Brien vs. Cowan 22 An. 438, as sustaining the right of sequestration of a crop out of the possession of a third person. That is the case of a supply creditor’s sequestration of crops being met by the demand of an intervenor, claiming ownership in virtue of a surrender of same to him as the assignee of the claims of laborers for wages due.
*756The -court in speaking of this transaction say:
“We doubt if the rights of the plaintiff could be thus extinguished; but we are not satisfied that there was any claim by (the intervenor) on the defendant;” and held, that in the absence of proof to that effect “ he appears in the case as a party interposed to rescue nine bales of cotton, for the benefit of defendant, from the just grasp of the plaintiff’s privilege.”
It is evident that the opinion in that case proceeded on the theory that the sale was a fraudulent simulation; and having found that to be a fact, nothing further could be decided.
The case of Cory vs. Eddins, 13 An. 443, is also cited by the plaintiff’s counsel. In that case the court say:
“Both parties were aware of each others’privileges upon the cotton raised by the common debtor, Tiffee, which was shipped by the defendant, and there was no such bona fide sale of that lot, to either of. them, as to defeat the privilege of either. The net proceeds of this cotton in defendant’s hands * * * must, therefore, be treated as subject to the privileges of both.”
It is quite evident that that opinion does not support the plaintiff’s contention. Quite the contrary; because it states “a negative pregnant with an affirmative.” That is to say, if, as the court declares, “ there was no such bona fide sale * * as to defeat the privilege;” do they not at the same time affirm that the privilege would have been defeated if there had been a bona fide sale.
But plaintiff’s counsel in his brief, in repH to intervenor’s application for rehearing, calls attention to the fact that she acquired the property of the defendant by a dation en paiement; and charges tha^ same was illegal aDd with full notice of his privilege.
It is true that the plaintiff, in his answer to the intervention, charges that the dation was unsupported by evidence, gave an unjust preference to intervenor over other creditors of her husband, and, if maintained, will result to their prejudice — he being insolvent.
He further charges that it was unaccompanied by an actual delivery.
But all these charges were met and answered at the trial; and her dation was affirmed by our decree, and the plaintiff has not made any complaint of our judgment.
Amongst other things the evidence shows that the dation was *757completed by an actual delivery of the property — delivery being the essential thing in effectuating a giving in payment. R. C. C. 2656.
There is nothing in the facts to destroy the validity or the bona Jides of the intervenor’s title.
Let us now examine other provisions of the Civil Code, treating of similar privileges, for the purpose of ascertaining by analogy what effect is to be given to the provisions which are applicable to the privilege for supplies.
For instance, Article 3223 provides:
“If the depositary abuses his trust by alienating the thing confided to his care, or if the heirs sell it, not knowing that it had been given in deposit, the depositor retains his privilege on thepriee which shall be due.” R. C. C 3223.
That article affirms the validity of the title of the purchaser and only recognizes the depositor’s lien upon the unpaid price of the thing sold.
Article 3227 declares that the vendor of movable effects has a privilege on the thing sold “if the property still remains in the possession of the purchaser.” R. C. C. 3227.
That article contains the special provision that “ any person who may sell agricultural products of the United States shall be entitled to a special lien and privilege thereon, to secure the payment of the purchase money, for and during the space of five days only, after the day of delivery; within which time the vendor shall be entitled to seize the same, in whatsoever hands or place they may be found,” etc.
Article 3239 provides:
“ Creditors having privileges on ships or other vessels may pursue the vessel in the possession of any person who has obtained it by virtue of a sale,” etc. R. C. C. 3239.
Article 3242 provides:
“ Where a sale has been made, the vessel being in port, the creditors of the vendor, who enjoy the privilege for some cause anterior to the act of sale, may demand payment and enforce their rights over the ship until a voyage has been made in the name and at the risk of the purchaser, without any claim interposed by them.” R. C. C. 3242.
Article 3246 provides that—
“ The captain has a privilege for the freight during fifteen days *758after the delivery of the merchandise, if they have not passed into third hands.” R. C. C. 3248.
Article 3247 provides:
“ Every consignee, or commission merchant or factor, shall have a privilege preferred to any attaching creditor on the goods consigned to him * * * provided, the privilege established by this article shall not have preference over a privilege pre-existing on the goods aforesaid in behalf of resident creditors of this State.” R. C. C. 3247.
Considering these various different precepts of the Code establishing and particularly defining various privileges on different movables, without providing that either can be enforced aftersale of the thing affected by it, it seems difficult to understand why the supply privilege should be paramount to them all without any precept of law to justify it.
The plaintiff’s reliance in argument — and that of the opinion of the court — seems to be upon our opinion in Flower & King vs. Skipwith, 45 An. 895, as sustaining plaintiff’s seizure of crops the intervenor had purchased. But that was not the case of a sale but of a pledge.
The court say:
“ But to spy that a privilege legally existent and valid as to all the world could be destroyed or impaired by a subsequent pledge, shocks all sense of justice, and wopld open the door for fraud, under which every merchant, after advancing to the near completion of the crop, might find his privilege destroyed by the recordation, at the last moment, of a pledge to some third person for future supplies.”
The contest in that ease was one of relative rank of privilege on the defendant’s crop between the supply creditor and a pledgee under the Planters’ Act of 1874.
No sale of the crop was involved at all. The defendant, Skipwith, was owner in possession of the crops. They were sequestered by plaintiffs on the defendant’s plantation. The latter had not in any manner attempted to dispose of same.
It is therefore with perfect confidence affirmed that the Skipwith case does not decide the question, we have under consideration.
But our attention has been attracted to the foilowing cases as fully establishing the principle that is insisted upon by plaintiff, viz.: Welsh vs. Barrow, 3 An. 133; Succession of Johnson, 3 R. 216; Garcia vs. Garcia, 7 An. 525.
*759In the first ease the question was in reference to the privilege of the overseer for his wages “ on the proceeds oí the crop of sugar received by the defendant, the owner of the plantation, from which the crop was sold” — the standing erop being on the plantation un-gathered at time of its sale to the defendant.
In that case the defendant’s contention was, that the privilege of the overseer was extinguished by the sale of the land with the crop ungathered on it (R. C. C. 3277, 3244) ; and of this contention the court say:
“By Article 3184 (R. C. C. 3217) the salary of the overseer for the last year is privileged on the product of the last crop, thus presupposing that the planter would not keep his crop, but sell it; and the privilege is affixed specially on the proceeds. Such is the construction given to it by this court in the eases cited,” etc. Welch vs. Shields, 6 R. 484; Welch vs. Barrow, 9 R. 520.
“ And in the Succession of Johnson, 3 R. 216, the court held that this privilege on last year’s crop may be exercised upon the proceeds after the crop has been sent to the market and sold.
“ If the proceeds were in a court of justice, or in the hands of the defendant’s factor, the plaintiff would have his privileges over other creditors, and we do not understand on what principle he canbe deprived of it when the proceeds are in the defendant’s pockets.”
It is worthy of notice that the, defendant sold the crop after his purchase of the plantation and the growing crop, and had thepro-ceeds in his possession.
That ease was the supplement of those preceding cases.
In the first the plaintiff, overseer, brought suit against his employer, Shields, and his vendee, Barrow, while the crop in kind was in the latter’s possession, causing same to be sequestered.
In the lower court there was judgment in Barrow’s favor, but it was reversed in this court, the opinion holding “ that the plaintiff did not lose his privilege by the transfer of the plantation to another person, (and) that the defendant, Barrow, purchased the crop subject to the right previously acquired by the plaintiff.” Welch vs. Shields et al., 6 R. 484.
At the date that decision was rendered there was no privilege in favor of the furnisher of supplies. It was for the first time granted by the Legislature in 1843. Vide Act 23 of March, 1843.
Since that decision was rendered the old Art. 3184 was so amended *760by statute as to make it conform to the principle announced in that decision, to the effect that the privileges conferred by that article should “ not be divested by any prior mortgage, whether conventional, legal or judicial, or by any seizure and sale of the land with the crop on it.”
That amendment was carried into the revision of the Code of 1870. Vide R. C. C. 3217, par. 2 of No. 9.
The suit of Welch vs. Barrow was founded on the forthcoming bond defendant gave to obtain the release of the crops, which were sequestered in the previous suit; and this court, holding the same to have been premature for want of compliance with conditions prece - dent, reversed and remanded it.
The litigation terminated with Welch vs. Barrow, 3 An. 133, first cited supra.
The case of Johnson’s Succession, 3 R. 216, presents a question of the rank of an overseer’s claim for wages on the proceeds of crops which were in the hands of the legal representative of the deceased, and which were marshaled for distribution on his account.
The question in Garcia vs. Garcia, 7 An. 525, was of the rank of an overseer’s privilege, as compared with that of a pledgee — the crop being on the premises of the debtor.
This last case presents the same question as that occurring in the Skipwith case supra.
It will be observed that in those cases the overseer’s privilege was treated as one exceptionally strong, because it affected not only the crops, but their proceeds after sale. But in the revision of the Code all privileges were alike extended to “ the crops of the year and the proceeds thereof.” R. C. C. 3217, No. 1.
But taking this into the account, what is the result? It seems to be perfectly evident that as the privilege is made to extend to and affect alike the crops while in the debtor’s possession, and “ thepro-ceeds thereof” after sale, that the thing subject to the privilege passes into a purchaser’s hand free from its grasp. If such were not the case,'how could the lien be transferred from the crop to “ the proceeds thereof?”
Is this not the usual and universal result of judicial sales? If the sale did not have the effect of divesting the thing of its encumbrances and of transferring them “to the proceeds thereof,” who would or could afford to buy at such a sale? No one.
*761The inference is quite clear that it was the purpose of the Legislature, in adopting this revisory legislation, to put a private sale of agricultural products upon the same plane as judicial sales, by transferring the privilege of the creditor “to the products thereof” after sale; and to liberate the product, so that it could pass in open market without any embarrassment.
In Phelps vs. Howell Jacobs, Intervenor, 35 An. 87, the pledge of defendant, under the planter’s act of 1874, was held paramount to a sale of cotton in transit to the intervenor — the court holding “that under the statute the delivery of the bill of lading to the carrier for transmission to the consignee * * * created a perfect pledge of the same in favor of the factor and consignee” and protected the cargo from sale.
To the same effect is Florsheim vs. Howell, 33 An. 1184.
The court further say:
“We are not concerned under the issue presented in this case “with the question of ownership of the cotton under the sale made by Howell to Jacobs. The purchaser of property, under such circumstances, must take it subject to the incumbrances existing on the same,” etc.
The reason is plain, and it is because, on board of a vessel in transit, the cotton was not susceptible of the actual delivery which was necessary to make a sale of movables effectual.
That opinion does not present the case of a privilege of the supply creditor, as did the case of Flower & King vs. Shipwith, 45 An. 895, but the case of a pledge under Sec. 2 of Act 66 of 1874.
• The French law and jurisprudence is in accord with this principle. The civil law has ever maintained and sanctioned it in the interest of public convenience and of a free commerce.
Domat, in his Commentaries on the Oivil Law, states the rule to be that the “pawn upon a movable thing lasts no longer than whilst the thing is in the custody of the person who is bound * * * But if the debtor makes it to pass into other hands, either by alienating or pawning it, the creditor can not any longer lay claim to it.” Sec. 1655.
“And when the movable thing is neither in the custody of the creditor, nor of the debtor, nor of any other in his name, the debtor having alienated it, the creditor has no longer any right to it.” Sec. 1656.
*762Troplong, in treating of this question, says that a privilege on movables “gives no right of pursuit to the creditor against it.” 2 Troplong’s Com. on Priv. and Hyp., Sec. 394; 1 Troplong’s Com. on Priv. and Hyp., Sec. 101.
But the correctness of this rule can not be better exhibited than by referring to the one applicable to privileges on immovables — the Code declaring that “the creditor who has a privilege on immovables may pursue their claims on them into whatever hands they may happen to pass, to be paid out of tbeir proceeds according to their rank,” etc. R. C. C. 3399.
This kind of privilege is required to be recorded; the relative rank of different privileges being fixed by the order in which same have been recorded. R. C. C. 3273, 3274.
Privileges on movable property take the rank which is established by statute (Act 89 of 1886), and they require no registry; and, therefrom, the further inference may be drawn that pursuit of the property, after sale, was not contemplated by the Legislature, the purchaser in good faith acquiring a title free from the grasp of the creditor’s privilege.
Thus it appears, from all the comparative and analogous provisions of the codes, as well as from our jurisprudence, that privileges on movables are extinguished by private sale of the thing affected by them. If this were not so, there would be no safety in dealing in agricultural products of this State at home or abroad, because of there being no secure guaranty of title to’ the purchaser for cash paid in market overt. If a contrary principle be maintained, what merchant in the country or broker in the city of New Orleans could with safety deal in them?
For, if either should deal in them, he would run the risk of having the cotton, sugar or rice seized in his hands by some overseer or supply creditor, as the property of the intervenor was.
Nothing is of greater importance to a great city like New Orlean than the freedom of commerce, and any restraint upon trade strikes a blow at her prosperity.
It is a matter of general notoriety, as well as of public concern, that the masses of our people are in debt, and that the agriculturist can not possibly produce a crop without assistance and credit. And, to obtain credit, he must inspire confidence and possess the *763means of securing repayment of the money or advances that have ' been made to him.
An interesting and instructive article on this subject recently appeared in the Daily Picayune, from which I take the liberty of making the following extract, viz.:
“In any system of business which is largely based on Credit, one of the most necessary ingredients is confidence.
“No man can borrow money, or secure supplies on credit at a grocery, unless he can inspire the person from whom the credit is asked with the belief that the loan will be duly met, and that the supplies will be paid for at the time contracted.
“ Credit, it will be seen, is the very foundation of business, and it is to-day impossible to oarry on the business of the world without it. The wisdom of conducting one’s private household expenses wholly for cash is a good thing to din into the ears cf people who live on salaries, and get their money at frequent and regular intervals; but, all the same, the great business of the world can not be done for cash. Credit is an element absolutely necessary to it.
“ The reason for this will be plainly seen when it is considered that America is pre-eminently an agricultural country, and the greater part of its wealth begins with the plow. From six to nine months of work on the plantation is required to make the average staple crop, from the planting of the seed to the gathering of the harvest. Until the harvest is gathered, and the product is ready for market, the agriculturist can not, by any cash transaction, realize a dollar out of his long period of labor; but he must live, he must support his family and pay all the expenses of making a crop, without the hope of realizing a dollar until his stuff is placed on sale.
“Necessarily, the agriculturist must have credit and a liberal allowance of it, and he gets it, provided somebody who can help him with advances of money or supplies has a proper amount of confidence in his ability and willingness to pay.
“The man 'who is mining or manufacturing has something to sell as soon as he begins to turn out products; but the farmer has to wait until his crop shall be made in every part, from seed-planting to harvesting. All the vast products of wheat, corn, cotton, sugar, tobacco, rice and other staples are made in this way and are dependent on credit.
“ This being essentially a credit country, it will be seen what an *764enormous business is based on confidence. This commercial and financial confidence is a fabric which pervades the entire business of the country, from that of the humblest individual up to that of the nation itself.”
That credit is the foundation of American thrift and enterprise, every one must admit. And confidence is the basis of credit. Upon this subject Mr. J. H. Eckels, comptroller of the currency, has contributed to The Forum for March an invaluable article, in which a similar lesson is taught, and from which I make the subjoined extract, viz. :
“ The present conditions of the business world ought not to exist. That they do exist is evidence that either in our methods of doing business, in ur extravagance of expenditure and in our speculation, in the Government’s financial system, or in the tone which has characterized our monetary legislation proposed or enacted, there is something radically wrong and harmful. In the midst of great plenty the American people to-day feel poor. With no tariff agitation going on, and the manufacturer in possession of a complete knowledge of the basis upon which he must operate, industry languishes and the laborer in many places is without employment. In every financial institution there is an abundance of money or the representative of money seeking investments, and yet few investments are made or desired. Upon the one side credit is little sought, and upon the other reluctantly given. A stagnation long •continued is yet upon us and will remain until our own people impart activity to trade, and other peoples who are dealing with and •extending credit to us feel confidence that they can do so with per-ifect safety.”
It is of the greatest importance that the decisions of this court should protect credit and inspire confidence.
Entertaining this view of the law and public policy, I feel constrained to dissent from the views and opinions of the majority.