Court Opinion

ID: 7195530
Source: CourtListenerOpinion
Date Created: 2022-07-24 17:02:17.77724+00
Date Added: 2024-06-11T16:16:19.310557
License: Public Domain

On Application por Rehearing.
Watkins, J.
From the record it appears that O. A. Phillipi & Co., residing in New Orleans, made a surrender under the State insolvent law, in the Civil Court of the Parish of Orleans, and procured the usual order staying proceedings against their persons and property.
Charles A. Phillipi was elected definitive syndic, and died without disposing of the property of the insolvents, paying their creditors or rendering an account of his gestión.
Subsequent to his death his father, Caesar Phillipi, acquired his note of $7500 with mortgage on property situated in Rapides parish, which he proceeded to foreclose in executory proceedings inaugurated in that parish, which were arrested by an injunction obtained by a subsequently elected syndic, on the ground that the Rapides court had no jurisdiction to grant the order of seizure and sale.
At the meeting of creditors, whereat the syndic was chosen, he was dispensed from giving bond, and the property was ordered sold, notwithstanding the mortgage creditor was Dot given notice and did not consent to the syndic’s dispensation from bond.
*681Subsequently the syndic took a rule on Csesar Phillipi to show cause why his mortgage should not be held and decreed to be a simu - lation, wholly without consideration and void, and the record thereof canceled and erased; and, further, to show cause why the property should not be sold on the terms fixed by the meeting of creditors, that is to b v, one-third cash, and the remainder on one and two years’ credit.
This rule was served on Phillipi.
A trial was had, evidence pro et con adduced, and judgment rendered maintaining the reality of the debt and mortgage, annulling the decision of the meeting of creditors fixing the terms of sale, cumulating the executory proceedings with those of the insolvency, and directing sale to be made by the sheriff of Rapides for cash, if the mortgage creditor should require it, saving to him the right to retain the proceeds of sale to the amount of his debt, less his pro rata share of costs.
Our opinion and decree maintains the authority of the syndic and the jurisdiction of the court of the insolvency to order sale, and the want of jurisdiction in the court of Rapides parish over the property of the insolvent. They annul the judgment so far as it empowers the sheriff of Rapides parish to proceed with the sale, but they affirm .the judgment in so far as it maintains the debt and mortgage of Casar Phillipi and recognizes his right to require a sale for cash. They supplement the relief accorded hi n by requiring the syndic to furnish bond, or, in the alternative, by permitting the mortgage creditor to buy in the mortgage property and retain the proceeds up to the amount of his debt, less his proportionate share of costs.
The theory on which the opinion proceeds is, that the simulation •ml non of the mortgage can be legally determined on rule, contradictorily, between the syndic and the apparent mortgage creditor, though the conflicting interests of creditors must be subsequently adjusted when the assets of the insolvents are marshaled for distribution upon a tableau of classification in concur su.
The complaint made of our opinion is, chiefly, that the court erred in passing on the question of simulation “ in a rule taken by the syndic to sell property and erase the inscription of a mortgage;” but the record shows that the rule-of the syndic distinctly and especially attacks the mortgage as being simulated and without consideration; and on that ground it demands its cancellation from the mortgage *682records of Rapides parish, as interfering with the sale proposed, and authority to make which the syndic asks.
That was the principal issue tried and decided in the court below. It is the principal issue on this appeal, which is prosecuted by the syndic in behalf of all, joined by certain creditors of the insolvent.
At this stage of the proceedings it would be rather an easy-going-way of getting rid of the mortgage to have this court retrace its steps and say it has no power to render such a judgment.
But we are of the opinion that the court has the power, and properly exercised it on the syndic’s own invitation.
Standing as he was in the presence of a mortgage, apparently 'securing a large indebtedness of one of the insolvents, resting upon his sole available asset, how could he hope to have realized anything from the proceeds thereof, for account of ordinary creditors, without first procuring its erasure?
How could he have reasonably expected to carry out the direction of the meeting of creditors to sell the property on terms of credit the mortgage creditor receiving no notice and having taken no part therein — without first having the mortgage declared a simulation?
The fact of the syndic having raised such an issue is a conclusive admission of its necessity.
The syndic represented all creditors, and several have joined in the appeal, and are concluded quoad hoc by the judgment rendered
In Chapoton vs. Her Creditors, 44 An. 350, one of the principal questions was the capacity of a syndic to prosecute the revocatory action for the annulment of a mortgage, and stand in judgment for the mass of creditors, some of the creditors and the mortgagee excepting and resisting his right and capacity; but we maintained the syndic’s power and authority. In the course of our opinion in that case, the question presented here was considered as settled adversely to the syndic’s present contention.
The proces verbal of the meeting of creditors, whereat the present syndic was elected, is in the record and was formally offered in evidence by the plaintiff in rule, and it shows no notice to Oaesar Phillipi and no appearance by him. Tt also shows that the aggregate amount of the claims of all creditors present and voting for syndic was only'$4318.68, whereas the claim of Oassar Phillipi is $6000 in capital alone, and was, manifestly, not taken into consideration. Notwithstanding this fact the proces verbal states that the syndic was *683dispensed from giving bond, while the law is that “the syndic shalii always be bound to give security for the amount [of the mortgage- and privileged claims.” Revised Statutes, Sec. 1796.
We are called upon by the rule to consider the directions of tbemeeting of creditors in respect to a sale being made for cash, in connection with his prayer for the cancellation of Caesar Phillipi:s mortgage as simulated and void; and finding the mortgage to be real and valid, we do not feel at liberty to approve the finding of the meeting of creditors, or to make an order for the sale of the property mortgaged except upon the condition that the syndic furnish security, which shall take the place of the security of the hypothecated property. Such relief is the necessary incident of our decree directing sale for cash to be made.
A careful consideration of the record has confirmed ns in the correctness of our original conclusions. Rehearing refused.