Court Opinion

ID: 7191125
Source: CourtListenerOpinion
Date Created: 2022-07-24 16:56:51.02056+00
Date Added: 2024-06-11T16:16:11.410736
License: Public Domain

The opinion of the court was delivered by
Spencer, J.
Drauzin Triclie died leaving a considerable estate, consisting of movables and several tracts of land. Tho estate appears to be largely insolvent — no less than forty mortgages and privileges being certified against it.
On an undivided fourth of one of these tracts of land Pierre Rousseau holds a special mortgage and vendor’s privilege for several thousand dollars, imposed and granted, not by Triche, but by his vendor.
Sundry legal and judicial mortgages are inscribed against Triche, and subsequent to some of these there is inscribed a special mortgage on the whole of the above-mentioned Rousseau tract in favor of Lapéne & Ferré for oyer six thousand dollars. Tho correctness of this debt to Lapéne & Ferró is not contested, but admitted and recognized by the administrator of Triche.
Certain other parties, mortgage creditors, took a rule on the administrator of Triche and obtained an order to sell all tho property of the estate to pay debts. Lapéne & Ferré also obtained an order for a meeting of creditors of the estate as insolvent, but the administrator enjoined the proceeding, and nothing'further seems to have boon done under the order. In tho mean time the property of the estate was sold in lots, and Lapéne bid off lots to an amount exceeding ton thousand dollars. Most of tho lots bought by him wore subject to the mortgages of Rousseau and of Lapéne & Ferre; but some of them were outside of the lands subject to said mortgages, as were also certain movables bought by him. The sheriff demanded of Lapéne the amount in full of his bid, in cash, bub tho latter refused to pay, alleging —
First — That ho had tho right to retain in his hands the amount of the Rousseau mortgage, so far as it operated on the lots bought by him; and,
*385Second — To retain the amount oí the mortgage oí his firm, Lapene & Ferré, until final settlement oí the estate, upon giving security ior restitution of such portion thereof as might bo declared not applicable to said mortgage.
The sheriff and administrator thereupon took a rule upon Lapene to show cause why tho property bid in by him should not be resold, a la folleenchera; and Lapene in his turn took a rule on the sheriff and administrator to show cause why ho should not be put into possession and title be made to him of tho same property.
Those rules were tried together, and the probate court made the former absolute and discharged the latter. Lapene prosecutes this1 appeal from the decision of both cases.
The questions presented are, did Lapene have the right to withhold—
First — Tho amount of the Rousseau mortgage and vendor’s lien so far as operating, up on the lots bought by him ?
Second — The amount of the mortgage due his firm of Lapene & Ferré, upon giving security for restitution ?
So far as relates to tho personal property and lots bought, not embraced in his or Rousseau’s mortgage, wo see no possible right in Lapene to retain the price.
As regards the first question above put there is no doubt that the projicrty passed subject to and incumbered by the Bousseau mortgage. A probate sale divests only such mortgages as were imposed by the deceased. 9 L. 13; 11 An. 383; 3 R. 5; 8 R. 99.
A purchaser is bound for nothing beyond the amount of liis bid. The administrator of Triche had no right to receive, and therefore no right to demand, payment of the amount due to Bousseau, who was not a creditor of Triche, and whose mortgage antedated tho latter’s title. The amount due to Bousseau on the lots bid off by Lapene must therefore of necessity bo loft in the hands of the latter, who by his purchase assumed its payment, and in whose hands said lots continued to be incumbered by it.
We see no reason for distinguishing this case from that provided for in articles 679 and 683, Code of Practice. These articles provide in substance that when there exist antecedent mortgages and privileges which the sale does not divest, the sheriff shall give notice that the property is sold subject to them and on “ condition that the purchaser shall pay into his hands-whatever portion of tho price of adjudication may exceed the amount of the privileges and special mortgages to which such property is (sold) subject;” “ that the purchaser shall be entitled to retain in his hands, out of the price of adjudication, tho amount required to satisfy the privileged debts and special hypothecations to which the property was (sold) subject.”
*386True, these articles relate to sales of real estate under writs of fieri facias, but we apprehend that they are equally applicable to sales under orders of seizure and to other judicial sales where the sale will not have the effect of divesting the property of such preferred mortgages and privileges. In point of fact the administrator of Triclie certainly ei mid not sell and deliver a greater right in the property than Triclie himself had; and his right in that property was subject to the Rousseau mortgage.
The property was only worth what it would bring, and the price bid must be taken as its absolute value, and this pre-existing and continuing mortgage must be considered as embraced in that price. The amount of said mortgage therefore, so far as it operated upon the lots bought, must be deducted from the bid and left in the hands of the purchaser. There would bo no justice in permitting .the estate of Triclie to enrich itself to the extent of the Rousseau mortgage by imposing its payment on Lapéne over and above the value of the property. The article 2535, Civil Code, has no application to this case.
The second question relates to Lapéne’s right to retain in his hands the amount of the mortgage due his firm.
The estate of Triche is clearly shown to be insolvent by the administrator’s provisional account, and should, perhaps, have been administered as such under the direction of its creditors. But that course seems to have been defeated, and the property sold at ordinary succession sale to pay debts.
As, however, the estate is insolvent and to lie distributed in concurso, the rules applicable to insolvent estates may very properly be applied here.
In Goodale vs. His Creditors, 8 L. 302, the court held that at a sale of the property of an insolvent, provoked by the first-mortgage creditor, he may, if he purchases the mortgaged property, retain the price on giving security to refund such portion thereof as may'on final settlement be found not applicable to payment of his mortgage; but if there bo superior or concurrent mortgages, he can not so retain tlio price.
In 11 An. 594, Justice Buchanan as the organ of the court says it seems as well settled that a mortgage creditor purchasing at probate sale may retain the price upon giving security. Justices Slidell and Spofford dissented on the ground that in that case the mortgage was tacit and the debt disputed and in litigation. On rehearing, Merrick, Chief Justice, delivering the opinion (Buchanan and Voorhies dissenting), held that, whatever may be the law as to purchases by holders of special mortgages, the holder of a tacit mortgage can not retain tlio price until his claim is liquidated.
We think the better opinion is that a special mortgage creditor first in *387rank may, if he purchase the mortgaged property at probate sale, retain the price upon giving security as stated; but if there exist mortgages superior or concurrent, he must pay over the amount of his bid.
An examination of the record in this case does not enable the court to decide definitively upon the rights of the parties. The provisional account and tableau filed by the administrator (and which it seems is contested) and the mortgage certificate in evidence show certain judicial and legal mortgages on the property subject to Lapéne & Ferre’s mortgage older than and therefore superior in rank to theirs. But as there may be other property which must be first applied to these general mortgages, and as their amounts are perhaps in dispute, we think it safer to remand this case in order that the existence, amounts, and rank of these general mortgages may be ascertained and fixed contradictorily. If it shall be ascertained that said legal and judicial mortgages are preferred and must bo paid in preference to Lapéne & Ferre’s mortgage out of the property embraced in the latter, then the rule should be made •absolute requiring Lapéne to pay over the surplus, after deducting the Boussoau mortgage, and in default, within a time to be fixed, ordering--the property to be resold á la folie enohere. If said mortgages are found not to exist, or not to be preferred to Lapéne & Ferre’s mortgage on ¡said property, then the rule taken by Lapéne on the sheriff should be made absolute, and the sheriff ordered to make the title upon said Lapéne giving satisfactory security'to refund such sum as may be necessary on final settlement of the estate. So far as relates to lots and personal property bought by Lapéne, not embraced in the Boussoau and Lapéne & Ferré mortgages, of course he can not pretend to hold the price, and to that extent the judgments appealed from must be affirmed.
It is therefore ordered, adjudged, and decreed by the court that the judgments appealed from be avoided and reversed, except so far as relates to the lots and personal property bought by Lapéne not subject to the Bousseau and Lapéne & Ferré mortgages; and it is further ordered that this case be remanded to be proceeded with according to law and in conformity to the views herein expressed, and that appellee pay the costs of this appeal.