Ash v. Southern Chemical & Fertilizing Co.

Provosty, J. Under a writ of seizure and sale issued in this case, to satisfy one of a series of one hundred and fifty bonds of one thousand dollars and interest, each, a piece of Teal estate in the City of New Orleans, specially mortgaged to secure the payment of said bonds, was adjudicated to Joseph Q. Gowland, for cash. Gowland offered to pay the amount of the writ and costs, claiming the right to [312] retain in his hands the remainder of the purchase price, because of the aforesaid special mortgage securing the said other 149 bonds; which mortgage appeared by the certificate of mortgages read at the sale to 'be outstanding against the property. The sheriff insisted upon the payment of the price of the adjudication; and, together with the two other plaintiffs, the Metropolitan Bank and the Germania Savings Bank, the two banks • alleging themselves to be creditors, holders of some of the said 149 outstanding bonds, has instituted the present proceeding by rule to set aside the said adjudication. The only ground alleged for setting aside the adjudication is the failure of the said purchaser to pay the price. Gowland, the purchaser, excepted, that the motion for the rule shows no cause of action; and that the proceeding should have been by ordinary suit and could not be by rule. Further, and with reserve of said exceptions, he pleaded the general denial. There is in the record no proof of the allegation that the banks, plaintiffs in rule, are holders of bonds, as alleged, or are creditors at all; hence the case on this appeal must be considered as if the sheriff were sole plaintiff. The proceeding to set aside an adjudication is a mere incident to the suit, and may, therefore, be by rule. The sheriff has a standing to set aside the adjudication on the ground alleged, namely, the refusal of the adjudicatee to comply with his bid. Where the adjudicatee fails to comply with his bid, the sheriff may disregard the adjudication, and proceed to another crying of the property. Lehman vs. Ranson, 27 Ann. 279. All the more has he a standing to have the court pass on the question, whether the adjudication should be set aside or not. But the property sold being burdened with a special mortgage concurrent with that to satisfy which the sale was made, the purchaser was well founded in his claim of the right to retain the remainder of the price after satisfying the writ and the costs. In the case of Johnson vs. Duncan, 24 Ann. 381, this court said: “The defendant was bound to retain in his hands, for the benefit of the plaintiff’s note, the pro rate of the price coming thereto by law, and to pay the same with interest when demanded.” In the case of Morris vs. Cain’s Executor, 34 Ann. 663, this court said: [313] “It is another well settled principle that a purchaser at a judicial sale made to satisfy a writ is not bound to pay to the sheriff, whatever the price of the adjudication may be, an amount exceeding that called for by the writ; that if he assume to do so, creditors entitled to a mortgage or privilege, cannot be thereby deprived of their security; that he constitutes the sheriff individually his agent, and would have no recourse against his surety in case of a diversion of funds.” Because the sheriff did not announce that the purchaser should have the right to retain the price is no reason why the right should not exist. The right is given by the Code in all cases where there are special mortgages. True the sheriff is required to make the announcement in question, and this under pain of the nullity of the sale; but the nullity is relative only, not absolute (2 Ann. 617, 861; 9 Ann. 21-1, 218; Southern Mutual Ins. Oo. vs. Pike, 33 Ann. 823); and surely the sheriff is not the proper party to invoke it. Besides the present proceeding is grounded on the failure of Gowland to pay the price, not on the nullity of the sale. The theory of the proceeding is in affirmance of the sale, whereas this contention of the sale having been null, is in denial of a sale. The contention is inconsistent with the theory of the proceeding and savors of afterthought. The contention 'that the sale was made for cash, and that therefore the purchaser must pay cash, is met in express terms by Article 706 of the Code of Practice, which reads as follows: “But when the property sold is subject to privileges or special mortgage in favor of other persons besides the suing creditor, the sheriff shall require from the purchaser, and he shall be compelled to deliver to the creditor, whether the sale he made for ready money or on credit, only the surplus of price beyond the amount of the privileges or special mortgage, if there be any surplus.” It is, therefore, ordered, adjudged and decreed, that the judgment of the lower court be annulled and reversed and that the rule herein be dismissed at the cost of the plaintiff in both courts.