Court Opinion

ID: 7173879
Source: CourtListenerOpinion
Date Created: 2022-07-24 16:32:24.261625+00
Date Added: 2024-06-11T16:15:49.417202
License: Public Domain

On Rehearing..
ODOM, J.
We granted a rehearing in this case in order that we might further consider the opposition of the Southern Iron & Equipment Company, Inc.
The pertinent facts relating to the transactions which tools place between opponent and the Morgan & Bird Gravel Company prior to and during the receivership proceedings were stated in our former opinion, and we shall not repeat them here.
The first question to be considered is whether the contract between this opponent and the Morgan & Bird Gravel Company, Inc., was a sale of the equipment or whether opponent remained, the owner thereof with right to repossess it without legal process; second, if the transaction amounted to a sale vesting immediate title in the Morgan & Bird Gravel Company, has the receiver of that concern parted with title thereto; and, third, if the transaction amounted to a sale, in which event opponent has a vendor’s privilege on the equipment for the unpaid balance of the price, then does its vendor’s privilege rank the privilege of the holders of the receiver’s certificates?
1. The contract between the Southern Iron & Equipment Company, Inc., opponent, is in the record and speaks for itself. It shows on its face that it was entered into in the state of-Louisiana, parish of Caddo, on March 7, 1924, by and between “Southern Iron & Equipment Company of Atlanta, Georgia, * * * hereinafter called the vendor, and the Morgan & Bird Gravel Co. of Shreveport, Louisiana, hereinafter called the vendee.” (Italics ours.) It provides:'
“That the vendor has this day delivered to and hereby agrees to sell to the vendee for the consideration of Thirteen Thousand Two Hundred Fifty Dollars upon the terms and conditions hereinafter set forth the following personal property to wit.” Then follows a description of the property. It further recites: “The vendee agrees to and does receive the property and to pay the vendor therefor at vendor’s place of business in Atlanta, Georgia, the said purchase price on the following terms.” It recites that $2,500 was paid in cash, “the balance being evidenced by 12 notes given contemporaneously herewith.” Then follows a statement of the notes, each for $916, the first maturing on June 7, 1924, and one on the 7th day of eaclj consecutive month thereafter down to May 7, 1925., The' notes were to bear interest at 6 per cent, from the date of sale, provided for all costs of collection including 10 per cent, attorneys’ fees if placed in the hands of an attorney for collection, and further provide that, if any one of the notes should become due and remain unpaid for thirty days, “then the vendor or holder shall have the right to declare them all due.”
Then follows the following stipulation:
“It is agreed that title to said described personal property shall remain in and be vested in said Southern Iron & Equipment Company, the vendor, and said vendor shall have the complete rights and liens to and on said
*677property as above described, legally established and recognized by law as belonging to a vendor under contract of purchase and sale such as this. Said title to said property is to be and remain vested in said vendor as hereinabove agreed, until all of said purchase * money notes, with stipulated interest, are paid in full.”
This contract was entered into in this state and was to take effect here. It is therefore governed by the laws of this state. Code Prac., art. 13, Civ. Code art. 10.
It has all the earmarks of a complete sale. There was a thing, a price in current money and consent of the parties. Civ. Code., art. 2439.
All through, the contract refers to the Southern Iron & Equipment Company as the vendor, and the Morgan- & Bird Gravel Company as the vendee or purchaser. It provides that the “vendor shall have the complete rights and lien to and on said property legally established and recognized by law, as belonging to a vendor under contract of purchase and sale, such as this.”
Construing the contract as a whole, the stipulation that title to said property should remain vested in the vendor may as well have been left out. Such a stipulation in a Louisiana contract has no effect, as there is no such thing as a conditional sale under our laws. It is legally impossible under our laws for the title to a thing to remain vested in the vendor.
The contract provides that the vendor shall have a lien on the property. If the title to this property remained vested in the Southern Iron & Equipment Company, .it could have no lien thereon, for one cannot have a lien on his own property.
The Morgan & Bird Gravel Co., Inc., paid $2,500 cash as part of the purchase price of this property and unconditionally bound itself to pay the balance.
In Barber Asphalt Co. v. St. Louis Cypress Co., 121 La. 152, 4© So. 193, this court held: “A so-called conditional sale, or sale by which the vendee is to become at once unconditionally bound for the price, and the vendor is to continue to be the owner of the property until the price is paid, is not possible under the laws of this state.” To the same effect, see State ex rel. Bulkley v. Whited & Wheless, 104 La. 125, 28 So. 922; Adams Machine Co. v. Newman, 107 La. 702, 32 So. 38; Overland Texarkana Co. v. Bickley, 152 La. 622, 94 So. 138; Byrd v. Cooper, 166 La. 402, 117 So. 441; Grapieo Bottling Works v. Liquid Carbonic Co., 163 La. 1057, 113 So. 454.
This contract was a sale under our laws, and opponent had a vendor’s lien on the property for the balance of the purchase price amounting to $6,812.
2. A receiver was appointed for the Morgan & Bird Gravel Co., Inc., and he operated it as a going concern for a considerable period of time. He took over and held possession of all its property, including the equipment under consideration. The second, question is whether he ever legally parted with title to this particular property.
The property was offered for sale -at public auction twice by the receiver by order of court and was bid in by the opponent at the first offering, but the sale was never consummated. T. G. Roberts bid it in at the second offering and assigned his bid to opponent. The court refused to permit the first sale to be consummated on account of bankruptcy
*679proceedings, then pending against the corporation, nor did it approve the sale to Roberts. The title to the property therefore did not pass from the receiver by virtue of these attempted public sales;
But later on, the receiver with Roberts’ consent entered into a private agreement which was reduced to writing, with this opponent reciting that opponent held a claim for ¡?5¡812, with interest and attorney’s fees ágainSt the Morgan & Bird Gravel Company, Inc.: that, by order of the court, the receiver offered this property for sale at public auction, and that opponent bid the amount of its claim thereon (this bid was never confirmed), but the receiver was ordered by the court “to withhold the consummation of the sale pending the outcome of the bankruptcy proceedings”; and that:
“Whereas the bankruptcy proceedings have been pending for a number of months with no decision thereon, and during that time the property upon which the Southern Iron & Equipment Company has its claim is depreciating and deteriorating in value.”
“Now therefore it is agreed between the Receiver, J. P. Wilkinson, and the Southern Iron & Equipment Company that the said Southern Iron & Equipment Company may repossess itself of the above described property, such repossession to be in satisfaction of the amount of its claim against the corporation, and may dispose of the said property as it sees fit, it being understood that in so repossessing the said property the Southern Iron & Equipment Company binds and obligates itself to indemnify the said Receiver against any liability or loss whatsoever, by reason of his action herein.
“Thus done and signed in the presence of the undersigned competent witnesses on this the 19 day of July 1926.
“Wilkinson, Lewis & Wilkinson,
Receiver
“Southern Iron & Equipment Co., by Cook & Cook, Attorneys.”
This arrangement was concurred in by the attorneys for petitioners in bankruptcy. This was a private sale by the receiver, not authorized or sanctioned by the court. We said in our former opinion:
“This contract, in our view, is not entitled to be afforded effect. A contract, of such nature as the present, executed without an order of court, sanctioning its execution, is null and void.”
Section 6, Act No. 159 of 1898, which is the general receivetship act, provides that the receiver shall “hold, administer, manage and dispose of the property * * * of such corporation in such manner as the Court may decide to be for the best interest of all parties.” (Italics ours). Section 10 of the same act provides that the court may order the sale of the property, and points out the method of making the sales.
A receiver may sell the property of the corporation at private sale upon order of the court by complying with the provisions of Act No. 43 of 1924. The provisions of these acts were not-complied with by the receiver in this case before he permitted opponent to repossess the property. Therefore the property now belongs to the receiver and is subject to opponent’s vendor’s privilege and all the rights, which it originally had.
3. The third and last question is whether the vendor’s privilege on this prop*681erty primes that accorded holders of the receiver’s certificates by section 5, Act No. 159 of 1S98, as amended by Act No. 199 of 1914, which latter act was in force at the time these proceedings were had.
In our former opinion we said, after quoting the pertinent portion of the 1914 act (No. 199):
“While the expression, ‘the vendor’s lien and privilege,’ appearing in the exception in the foregoing quotation, is sufficiently broad to include the privilege on both movable and immovable property, yet an analysis of the provision, in which it appears, shows that it has reference only to the vendor’s privilege on immovable property.”
On further consideration, we have reached the conclusion that our former holding on this point is erroneous.
The act, in plain and unambiguous language, says that the sum obtained on certificates of indebtedness issued by the receiver shall “bear a privilege on all of the property real or personal and the income of the corporation to be paid by preference and priority over all other creditors of the corporation,— save the vendor’s Men and privilege which may be outstanding due and owing at the time the certificates are issued, which vendor’s lien and privilege shall remain unimpaired and retain its present status as provided for Vy existing laws." (Italics ours.)
Article 13 of the Oivil Code provides that: “When a law is clear and free from all ambiguity, the letter of it is not to be disregarded, under the pretext of pursuing its spirit.”
The letter of this law is plain and without the slightest ambiguity. It says that the sum obtained on receivership certificates shall bear a privilege on the property real or personal of the corporation, and shall be paid by preference over all other creditors, “save the vendor’s privilege.” The vendor’s privilege on what property? Necessarily the property affected by the other privilege.
This law as originally enacted, section 5, Act No. 159 of 1898, provides that-: “The sum so obtained [on certificates issued by the receiver] shall bear a first privilege on the property and income of the corporation.” This act was amended by Act No. 212 of 1910, p. 349, so as to provide:
“The sum so obtained shall bear a first privilege on all the property real or personal and the income of the corporation.” (Italics ours).
The -only change made in this part of the act was to add the words “real or personal” after the word “property” in the last sentence. The act was again amended by Act No. 199 of 1914, p. 381, and again by Act No. 7 of 1926, p. 9. In each of the latter acts the words “real or personal” were added after the word “property,” as in the act of 1910. The evident purpose of the lawmaker in adding the words “real or personal” in these later acts was to remove all doubt, if any ever existed, as to what kind of property of the corporation was to be affected by the lien created in favor of the holders of the certificates.
The act of 1914 is written in' two sentences, the second of which does two things: It creates a privilege in favor of the certificate holders and ranks that privilege second to the vendor’s privilege. The first clause of the *683sentence creates the privilege and describes the property affected by it, all the property real or personal, of the corporation, and then says that this privilege on the property of the corporation, real and personal, is to he “paid by preference and priority over all other creditors of the corporation, — save the vendor’s * * * privilege.”
Tho sole purpose of the latter clause, or the exception, is to rank the vendor’s privilege above the other, which rests, by specific terms, upon both real and personal property. It is therefore perfectly clear from the letter of the act that the vendor’s privilege mentioned was intended to be that which rests upon both the real and personal property of the corporation just as the other affects both.
If the Legislature had intended to mate any distinction, we must assume that it would have done so. There is none indicated.
Act No. 7 of 1926, which amends the act of 1914, has no application because adopted subsequent to these receivership proceedings. But as indicating the legislative intent, it is pertinent to note that it made no change in the 1914 act, except to add to the exception “the mortgage on lands and improvements thereon securing any indebtedness, or obligation.” So that a mortgage on the lands of the corporation was also ranked above the privilege created in favor of the holders of receivership certificates, but not a chattel mortgage on its personal property.
The original act has been amended three times, and, in each of the amending acts, the law is specific in its recitals that the sum obtained on receivership certificates shall bear a privilege on the real and personal property of the corporation, and in the act of 1926, which includes an exception in favor of mortgages as well as vendor’s liens, it is specific in stating that the mortgage referred to is that upon “lands and improvements thereon.” In view of these specific recitals, it can hardly be doubted that, if the Legislature had intended that the vendor’s privilege mentioned was one affecting real estate alone, it would have said so in specific terms.
For the reasons assigned, it is ordered that the judgment appealed from, in so far as it affects this opponent, the Southern Iron & Equipment Company, be set aside, and that, as to it, the case be remanded in order that this opponent may assert whatever rights it originally had against the property involved, no part of the costs of this proceeding to be paid by this opponent. In all other respects, the judgment appealed from is affirmed. Right of the receiver to apply for rehearing is granted.