Offutt v. Hendsley

Marlin J. delivered the opinion of the court. This suit commenced by an injunction to stay certain executory proceedings against a mortgaged slave in the possession of the plaintiffs in injunction. They are appellants from the judgment of the District, Court, dissolving their injunction, staying the execution of the order of seizure and sale of the slave in question, and which the present defendants had obtained and were proceeding to execute; The latter, in their answer to the appeal, pray that tlie judgment appealed from, may be amended in their favor so as to allow them full damages for the detention and hire of the slave in question,, which they have a right to claim. [10] Tlie facts, as exhibited in the record, so far as they are material to the case, are briefly as follow : the slave Randal,' under seizure, made part of the estate of the late Wm. Thompson, deceased, former husband of the present widow Hendsley, and father of several of her minor children, all of whom are made defendants to the present injunction suit. At the probate sale of Thompson’s succession, this slave was sold and purchased by Wm. Haslett, for the sum of one thousand five hundred and ten dollars; and a mortgage retained to secure payment of the purchase money. Haslett failing to pay the price, judgment was obtained, upon which execution issued; the slave in question was seized and sold, and bid in by Haslett, the judgment debtor, for one thousand two hundred and sixty-two dollars, on a twelve months’ bond. Haslett subsequently sold and conveyed Randal to one Davis, who died, and this same slave was again sold at the probate sale of his succession, and purchased by Irwin; and at the sale of Irwin’s succession, was purchased by Boardman, who sold toN. Offutt & brother, the present plaintiffs in the injunction. The widow Hendsley and her children, who are the surviving widow and heirs of Wm. Thompson, deceased, obtained an order of seizure and sale, grounded on the vendor’s privilege and special mortgage arising out of the first sale of the slave at the probate sale of Thompson’s succession; and also, resulting from the sheriff’s sale; and on the general mortgage arising from the recording of the judgment against Haslett. It is deemed sufficient to a proper decision of this case, to confine-the inquiry and direct the attention of the court to the right of the seizing creditors on the general mortgage, which their counsel contends, still remains in force and unex-tinguished. The different modes by which mortgages expire or are extinguished, are detailed in the 3374th article of the Louisiana Code. The fourth mode pointed out in that article, is the extinction of the obligation of which the mortgage is the accessory. In this case, in order that the sheriff’s sale might be said to have extinguished the general mortgage [11] resulting from Hendsley’s judgment against Haslett, duly recorded, it should be shown that the sale under it has operated the extinction of the obligation flowing from the judgment itself. Gold and silver only can be legally tendered in payment of debts. So, a twelve months’ bond, taken for the price of the adjudication of property of a debtor, seized and sold by a creditor, is nothing more than a bond and security with mortgage on the property sold, and which does not discharge the original obligation or judgment. A judicial sale made to effect the payment of mortgage debts, has also the effect of transferring the thing sold, free and unincumber-ed of the mortgage previously existing on it, even when sold for a less sum than that for which it was mortgaged. ✓ When mortgaged property passes by a judicial sale into otherhands, than those of the judgment debtor and mortgagor, the mortgage attaches to the price, and the purchaser takes the property free and unincumbered. But where a slave is seized and sold by a judgment creditor and purchased in by the debtor, on liis twelve months’ bond, it becomes immediately affected by the general mortgage resulting from the judgment, as well as by the special mortgage given in the twelve months’ bond to the sheriff. [11] The manner in which obligations are extinguished, is also treated of and detailed in the 2126th article of the Louisiana Code. Payment is first mentioned, and is the mode by which the obligation in question can only be supposed to be extinguished, if at all. As gold and silver only can be legally tendered in the payment of debts, it follows that a twelve months’ bond, taken for the price of the adjudication of property seized and sold by a creditor, produces nothing more than a bond with security and a mortgage immediately on the property sold, and it cannot, therefore, have the immediate effect of discharging or extinguishing the original obligation. It is, however, contended, that although the sale of the slave may not have the effect of extinguishing the general mortgage under which the seizure took place, it had that of disincumbering the thing sold from the general mortgage; this court having often held that a judicial sale made to effect the payment of mortgage debts, has also the effect of transferring the property or thing sold, free and unincumbered of the mortgage with which it was burdened, in the hands of the mortgage debtor; even, when it was sold for a price, which left part of the mortgage debt unpaid. This is certainly true when the property passes by a judicial sale into the hands of any otherperson except the mortgage debtor. In the hands of the purchaser, the purchase becomes instantly liable to all the judicial or legal mortgages with which all the rest of his property is burdened. So in the present case, when Haslett bought the slave the second time, it was immediately affected by the general mortgage resulting from the judgment, as well as by the special mortgage given in the twelve months’ bond to the sheriff. We, therefore, conclude this part of the case, by saying, that the sheriff’s sale and twelve months’ bond taken, did not [12] release, free or disincumber the slave Randal from the original mortgage resulting from the judgment. So, where a debtor buys in his own property, on a twelve months’ bond, it is not released from the original mortgage resulting from the judgment under which it was .sold. There is a privity of coil-tract between debtor^'and °the creditor, which compels the latter to preserve forniei'.ltS fol th° It is further contended, that if this sale did not extinguish the general mortgage, nor disincumber the slave from its burden, it had at least the effect of suspending the exercise of the creditor’s right, under the judgment, until he had exhausted all the means which the debtor had at the time of sale, in order to obtain payment; and that the vendee of the slave may resist the attempt to have the slave sold under the general mortgage, until all these means are fairly exhausted. It is clear, Haslett, the vendor of the plaintiffs in the injunction, could not have stayed a sale on the special mortgage he gave to the sheriff in the twelve months’ bond, but his vendee can. If the slave cannot be sold in the hands of the vendee, he cannot complain that this means of obtaining payment has not been exhausted. It is urged in the next place, that the appellants, the plaintiffs in injunction as vendees of Haslett, have the right of paying his debt, and in doing so, to be subrogated to all the rights which the creditor had to compel payment from his sureties, &c.; that these rights have been impaired by an extension of credit to the principal debtor by the creditors consenting to the sale of the property surrendered by Haslett to all his creditors; and the neglect of the seizing creditors, to record the sheriff’s sale, from which a special mortgage resulted, This leads to an inquiry into the obligations of a creditor, (the subrogation of whose rights may be claimed) to preserve those rights unimpaired. It being of the nature of the contract of suretyship, that the surety who pays, whether willing or compulsively, has a ng-ftt to demand the subrogation of all the creditor’s rights on , , . . . . . . . . . ° his debtor, his property and his sureties, 1 his right of sub-rogation is the consideration (or part of it) of the obligation which the surety contracts. There is a privity of contract , , , between the surety and creditor, which compels the latter to preserve his rights for the former. If the preservation of [13] these rights be not burdensome to the creditor, they put an end to all trouble when the day of payment arrives, by insisting on payment from the surety. No one can become surety against the creditors will, though hémay against that of the debtor. The assent of the creditor is of the essence of surety-ship; and no one can complain of the natural consequences of any contract into which he may enter. ■ & subsequent original mortga-fnterest!VmSmay férior^mortga-ges> and as a matter of right, be subrogated to Ctodlt<the mortgaged property. There is no tralfLtweeiTa sendee of amort-creditor of the gorf™'1 mortga“ T{ie orJg>nal ditor may in-with^deiay^or m aiiy NÍ1®1' tate the payment out violating fee °fmortga-Scc> between no privity of creditor having the vendor’s pri- , vilege,andmort-^elurityfami an additional mortgage by a judgment and gagepropertyon bond1 with°secu> rity, may pursue medies, byVe!" ^property it the hands of a third possessor, 1 or proceed against the sureties. [13] A subsequent mortgagor, the vendee of a mortgagor, having an interest to discharge anterior mortgages, has the right of doing so; and in availing himself of this right to claim a , . ,, , ° v ,/ . , , subrogation of all the mortgage creditors rights whatever, to the mortgaged property. But between these two, there is no privity of contract: they are mere volunteers: he becomes, r , -i a posterior mortgagor or vendee of the mortgagor, without the assent or knowledge of the creditor, and may have done so against his will. He is under no obligation to pay the creditor, and when he does pay, he must be satisfied with a subrogation to these rights as they exist. By indulging his debtor with a delay, or in any other manner, the creditor may facilitate the payment of his debt. We cannot see that the law forbids him to do so; and to obtain some advantage for the interest of others between whom and him there is no privity of contract, and who’do not incur any obligation. We cannot see how the rights of a mortgagee may be affected or put in duriori casu, by the circumstance of there being a second mortgagor, or the’sale of the mortgaged premises; though the latter may make some difference in practice, when the mortgagor seeks to exercise his right of mortgage. •r-rrT ° i . T .-, 7. . , 7 _ . What has just been said, applies with equal force to the objection which has been taken, that the seizing creditor did not effectually pursue Haslett’s sureties in the original pur-1 , , -re, , or chase, and at the sheriff’s sale. ' Davis, one of the intermediate vendees between Haslett and the present plaintiffs in injunction died, and at the probate sale of his succession this same slave was sold, and purchased by Irwin. It is contended tbat the slave passed to the purchaser at this sale, free and unincumbered as to all anterior [14] mortgages, and consequently as to all those under which he was seized in the present case. , The obje’ct of a probate sale of a succession, is to procure money with which to pay off and discharge all the debts due by the estate, on hypothecary and chirographary claims against it. The proceeds of the sale, or price- of the property sold, takes the place of the thing sold, and the mortgage or chirographary creditors exercise their rights and enforce their claims on the ¿proceeds, which before the salej they had ón the things themselves. But the rights of creditors of other persons than the deceased, which follow the thing or property into his hands, remain unaffected by the sale. So the rights of the present defendants and appellees in the injunction, (who were creditors of - Haslett and not of Davis) were not affected by the sale of the slave in question, at the probate sale of Davis’s succession. The privileges and mortgages of creditors to property sold at the .probate sale of a succession, ' attach lo the price, and the purcha- ‘ ser takes the thing sold free of incumbrance, when these creditors were creditors of the deceased ; but if not, then their mortgages follow the property into whosoever hands it may come. The act of 1833, relative to injunctions, disallows the principle established by the Supreme Court, (5 La. Jlep., 87,)“that a privity must exist between the party enjoining and the judgment enjoined,1” to entitle the party to damages. ,To entitle a party to an increase of damages, for the wrongful suing out an injunction, suit must be instituted on the bond. It appears to this court, from the view taken of the case on its merits, that the injunction was properly dissolved,'but that the District Court erred, in our opinion, in allowing to the defendants any damages, except their costs. The practice of courts in giving damages on the dissolution of an injunction, against the party obtaining it and his sureties, was unauthorised by any law, until the year 1831, (see Session Acts, page 102.) The statute which was then enacted, has been held and decided to be applicable only to persons who were privy to the judgment, the execution of which is enjoined. The law contemplates a privity to exist between the party enjoining, and the judgment-which is enjoined. See Borie vs. Borie, f. m. c. et al. 5 Louisiana Reports, 87. The legislature, however, was pleased in 1833, to disallow in future the distinction which formed the basis of the decision of this court in that case.. The present defendants, cannot, therefore, avail themselves of the act of 1833, because the plaintiffs obtained their injunction before the passage of that law. The conclusion at which the court has arrived on this point, renders an examination of the claim of the defendants to have the judgment appealed from, amended by increasing [15] the damages allowed to them in the first instance. This remedy must be sought on the injunction bond. It is, therefore, ordered, adjudged and decreed, that the judgment of the District Court be annulled, avoided and reversed; and proceeding to give such a judgment as in our opinion ought to have been rendered in the court of the first instance, it is ordered, adjudged and decreed, that the injunction be dissolved, so as to allow, the defendants to proceed with their order of seizure and sale of the slave Randal, until a sufficient sum is raised to pay the balance due to them on the original price, to wit, the sum of seven hundred and fifty-four dollars, with interest at the rate of ten per cent, per annum, from July 19th, 1829, and costs of the seizure and sale. And it is further ordered, that the costs of the court below be borne by the plaintiffs in injunction; and those of the appeal, to be paid by the defendants and appellants.