Court Opinion

ID: 7196016
Source: CourtListenerOpinion
Date Created: 2022-07-24 17:02:43.204871+00
Date Added: 2024-06-11T16:16:20.533009
License: Public Domain

The opinion of the court was delivered by
Parlance, J.
The plaintiff, holding five promissory notes signed by the defendant, aggregating $25,000, and secured by mortgage on a plantation situated in the parish of St; Landry, obtained an order of seizure and sale from the Civil District Court for the parish of Orleans. Before the sale three creditors of the defendant, holding judgments against him for sums aggregating $16,985.63 and interest, filed their separate petitions of intervention and third opposition in the executory proceedings. They alleged substantially that the plaintiff had no interest in the mortgage notes or in the mortgage, which they charged to be a pure simulation to the knowledge of plaintiff for the purpose of screening defendant’s property and its proceeds from the pursuit of his creditors; they further averred that the mortgage, if not simulated, is fraudulent and was resorted to by the defendant while he was in insolvent circumstances to screen his property as stated, to the knowledge of the plaintiff and of the original mortgagee, neither of whom gave any consideration for said notes, and that the opponents had only discovered the facts alleged within two months from the time when they filed their interventions and third oppositions.
The opponents further averred that, if the mortgage was not simulated or fraudulent, or both, and if the notes were ever issued or issued in good faith, which they deny, the notes afterward went back into the possession of the defendant, and that the mortgage has been extinguished by payment, compromise or otherwise. That the property is worth $25,000 and that the defendant is still insolvent, and that any other property he may own is subject to mortgages far in excess of its value, and that opponents will be remediless if the *189mortgage on which the executory process issued is not decreed null or to have been extinguished. Each of the opponents prayed that the sheriff of the parish of St. Landry be ordered to hold in his hands, out of the proceeds of the sale, a sufficient sum to pay their judgments, and that “judgment may be rendered decreeing the mortgage * * * to be simulated, null and void, and if not simulated or fraudulent, or both, to have been extinguished by payment, compensation, confusion or otherwise; * * * directing the amount of petitioner’s said judgment to be paid in full by privilege and with mortgage * * * out of the proceeds of the sale to be made herein.”
To these interventions and third oppositions the plaintiff excepted that no intervention or third opposition could be filed in said matter; that the intervenors can not be heard to question plaintiff’s interest or right to institute the suit; that the oppositions set forth inconsistent matters, and are vague and indefinite.
After the sale, the exceptions came on to be tried before the lower • judge, and he then allowed the opponents to file supplemental and amended petitions of intervention and third opposition, in which they averred that since filing their original pleadings, they have discovered that the plaintiff disclaims all interest in the notes and mortgage, and that he asserts that he never had anyinterest therein, and that the only person having any right in the same at the time the executory process issued and- since, is the adjudicatee at the sale, who admits the assertion. That a pretended adjudication has been made and the adjudicatee claims ownership thereunder, although he did not pay the price of the adjudication; but that the adjudication is null because he did not pay the price, and, for the reasons stated in the amended petition, the mortgage under which the sale purports to have been made is null and void, or has been extinguished, as the adjudicatee always knew. The opponents further averred that if the mortgage was not originally simulated or fraudulent, the same was paid or extinguished in some way unknown to them, but well known to the adjudicatee, who was thoroughly cognizant of the defendant’s insolvency; that the adjudicatee knew at the time he claims to have received the notes and mortgage that the same, if originally good, had been extinguished and could not be revived, and that if the adjudicatee was a creditor of defendant as he claims, he well knew that the defendant could not give him a mortgage, as *190he was then, and had been for a long time before, totally insolvent, to the direct knowledge of the adjudicatee. They alleged thatthese new facts had come to their knowledge since the filing of their original pleadings. They prayed for citation to all the parties, including the adjudicatee, and that the mortgage be declared to be simulated or fraudulent, or both, or extinguished as alleged, and that the sale and adjudication be annulled.
The judge a quo, after trial of the exceptions, maintained the same and dismissed the interventions and oppositions, reserving to the opponents “ all their rights, if any they have, to be prosecuted according to law.” The opponents have appealed.
The property was adjudicated for the sum of $8500. The adjudicatee, notwithstanding the order of the court directing the sheriff to retain sufficient of the proceeds to meet the claim of the opponents, did not pay the price, claiming the right, as holder of the notes, to attribute the price to his mortgage.
If the opponents had taken the risk of the purchase of the plantation by an innocent third person and had awaited the sale without instituting any proceeding, and if, after the sale to one whom they claim to be cognizant of the simulation, they had brought directly such an action as is set forth in the amended petitions, charging the mortgage and the sale to be simulations to the knowledge of all the parties to the proceedings and sale, and asking for the annulment of the mortgage and sale, it is perfectly clear that the opponents would have had their action. This being so, we are to inquire why the amended petitions should not stand. We see but two grounds upon which the dismissal of the amended petitions could be contended for: first, because opponents are estopped from attacking the validity of the sale, for the reason that in their original petitions they ask to be paid out of the proceeds of the sale; and secondly, because opponents, even if not estopped, can not assert their demand in the form which they have adopted.
The plaintiff has cited decisions of this court to show that a party claiming the proceeds of a judicial sale thereby affirms the validity of the sale and is estopped from thereafter contesting it. We have examined those authorities and others, and we do not consider them as in conflict with the views entertained by us in deciding the instant case.
That an innocent purchaser at a judicial sale should be protected *191against disturbance by one who has claimed the proceeds of the sale, seems just and equitable. It may well be in such a case that the intending purchaser considered the claim for the proceeds, even when inconsistently joined with a demand for the nullity of the sale, as a virtual assent to the sale and relied upon that assent when he bought.
But estoppels are'not favored; and no principle of natural justice or of law has been invoked by which the fact that a third opponent, has, prior to the sale, inconsistently claimed the proceeds and also, asked for the annulment of the sale, should operate an estoppel for-the protection of a purchaser of the property who was cognizant, that the sale and the proceedings under which it was had, were, simulations.
In a case such as the instant one, where, under a mortgage alleged to be a simulation, a sale is made to one who discloses himself at the-sale as the holder of the notes and who bids in the property for apart of his mortgage and does not pay the price, it seems clear that, an action charging the adjndieatee with knowledge of the simulation, can be maintained against him to have the sale declared null, even, though the parties bringing the action may, prior to the sale, have inconsistently claimed at the same time the proceeds of the sale and asked for the annulment of the sale. The claim for the proceeds-could not in any manner injure an adjudicates who would know that the sale is simulated and he could not be permitted to derive any benefit from the fact that such a claim had been made.
On the question whether the opponents can maintain their action in the form in which it is now embodied in their amended petitions, we were at first inclined to the opinion that the amended petitions should be dismissed, reserving to the opponents the right to bring again, as a separate and independent suit, the same action-set out in the amended petitions. But the law does not require the doing of vain and puerile things. The amended petitions contain all the elements and essentials of a separate and direct suit for the annulment of the mortgage and sale. Citation of all the parties concerned is prayed for. These parties will have all the delays and all the opportunities for exceptions and answer, and the same mode of trial to which they would be entitled' in a separate action. Besides, under the rules of the Civil District Court, if the suit were filed anew as a separate action it would again be docketed in this very cause, and *192assigned to the very judge who tried this cause below. We passed upon a similar point in Morris vs. Cain, 35 An. 759.
We are not to be understood as overruling herein the former decisions of this court holding, in cases of purchases by innocent buyers at judicial sales, that one who has previously claimed the proceeds of the sale is estopped from contesting the validity of the sale. Nor are we unmindful of the decisions of this court holding that one can not by third opposition claim the proceeds of a judicial sale on the ground that the execution is based upon a fraudulent, simulated or extinguished claim. We have no need in this case to pass upon those questions. The only requisites for a decision in this case are the conclusions reached by us that the opponents are not estopped from bringing an action for the annulment of the sale, which they claim has been made to a person cognizant of the fact that the sale is a simulation; and that the action set forth in the amended petitions contains all the elements of a distinct and direct action, and that under the circumstances of this case the amended petitions are to be considered and held as setting forth a direct action.
In the instant case we do not deal in any manner with the merits which were not reached in the court below, and we pass only on the questions presented by the pleadings and record.
It may well be that the allegations of the opponents are entirely unfounded in fact, and that they will fail in their proof. It is not impossible that the action is merely tentative. But with the verity or untruth of the cause of action we are not concerned at the present stage of the case.
It is therefore ordered that this cause be remanded to the lower court to be proceeded with according to law on the demands set forth in the amended and supplemental petitions herein, and that appellees pay the costs of appeal.