Loucks v. Union Bank

The opinion of the' court was pronounced by Ring,- J.* In 1816; Francis D. Newcomb Was confirmed in'the' tutorship1 of his minor children, the issue of his first marriage,- of who nr the plaintift',Mary W. Newcomb, was one. The'estate of the minors, of which he acquired the administration in- virtue of the tutorship, was ascertained and- fixed by a decree of the Probate Court. Previous to his confirmation he' purchased at the' probate sale of Guy Ditplarelicr’s succession, a plantation,-with two hundred and twenty-five shares of the capital'stock of the Union Bank of Louisiana,secured by a mortgage on the property purchased. The' plantation and stock-were subject to a further mortgage in favor of the bank to secure’ the sum of $10',-125s, the residue of a stock loan made to Duplmlier. The adjudication- toNewcomb' was for the' price of $14,950''; and, by the' terms of the' snle he as-^ sumed these mortgages, and the payment of the stock loan.- For the residue of the' price, $4,825, a mortgage was retained in favor of the succession.- In Í839,-Newcomb obtained a loan from-the Union Bank, and, to seeure its- repayment,mortgaged- this plantation, and pledged the two hundred and twen-ty-five shares-of slock.- The widow of Guy Dssplantier intervened in the' act, as administratrix-of her husband’s succession, and tutrix of her minor children,- and postponed the-mortgage'retained in favor of the estate, giving'precedence and priority overit to that granted by Newcomb to the bank, to secu-rb'the loan-' on that day made1 to hiur. In- 1846Í the Union Bank obtained an order for the" seizure' and sale of the plantation and two hundred and twenty-five’ shares of stock,under the mortgage granted in-1839, to secure the loan made to- Newcomb, in’ vii’tae'of which the property seized was adjudicated to the bank, at the second' exposure, for $7,G70!, and two twelve-months’ bonds, amounting collectively to1 that sum, were given by the purchaser. In the sheriffs deed the special mortgages with which theproperty was encumbered are recited, in the order of [618] their dates. The tWo first Were'to secure the stock. These, it is conceded on both sides, inay be left out of view, the stock being at a premium. The third was a mortgage in favor of the Union Bank to secure the payment of $7,825, to which sum the stock loan had been reduced ; and the fourth, the mortgage under which the seizure' and sale were made. The sheriff proceeds in his deed to say : “ and having frequently cried said property to the highest bidder, the Union Bank of Louisiana, by her agent, Arthur Denis, Esq., became the purchaser for the price of $7,670, on the terms and conditions- above mentioned, and subject to the mortgages above specified'.” Immediately after executory proceedings were commenced b’y the’bank, the plaintiff, Mary W. Newcomb,.instituted this suit, the object of which was to regulate the effects of- the seizure. After stating the foundation of-her claim, she’ averred that the mortgage granted to secure‘the original stock Iban was the only mortgage entitled to preference over that existing in her favor; that the effect of the act of 1839; in which Mrs: Duplantier intervened, Was to raiser the v'Un dor’s mortgage retained by the estate which she administered, Whereupon that in favor of the minor children of Neuxomb instantly attached, and acquired precedence over all other mortgages upon the land. She prayed that the proceeds of the sale should be applied in satisfaction of her- demand, after paying the bank the sum remaining due upon the original stock loan, The under-tutor and tutor of the plaintiff’s minor co-heirs-also intervened in the proceedings; adopting the allegations of the pláintiífs petition, and uniting in a similar prayer.'. There was a judgment for the defendants in-the court below, and the plaintiff and intervenors have appealed! A number of serious questions have been presented in the pleadings, and in: the printed arguments submitted by counsel, but th'e most important to the decision of the cause is, to determine the true amount for which the property was* adjudicated-tb the bank at the sheriff’s sale. The plaintiff contends that, having' been sold subj.ect to the previous mortgage in favor of the bank for $7,875, that' sum is to be added to the defendants’ bid, and that the price of adjudication was thus $15,546, instead of $7,670. When a mortgage or privifege-exists-on- the property offered for sale un'de'! execution, the sheriffis required to give notice thafthe property is sold subject to all'privileges and hypothecations with which it" may be bu'rthened, and the purchaser is required to pay to the sheriff only the excess of the price over the privileges and special'mortgages. Art. 679. The recital then by the sheriff-' in his deed, that the property was sold, “ subject to the mortgages specified,” added nothing to the consequences which the- law attaches to adjudications', made by sheriff^, nor to the obligations which it imposed upon the purchaser.' If the clause had been omitted altogether, the'law would have supplied it, and' the obligations and rights of the purchaser would stilt have remained the same;. A sale under execution may no doubt be made for a' sum fixed, and for the additional amount of previous mortgages ; but unless' such appears distinctly to. be the terms upon'which the property was offered,, the purchaser will not be presumed to have given more'than the-precise sum bid. There is no statement in the sheriff’s deed that the adjudication was for- a sum- over and above the special mortgages, nor does' the return refer to any other price than the sums for which the twelve-months’ bonds were" given. In the- case of Rowly v. Rowly, 19 La. 576, relied on by the appellants, the property was adjudicated subject to the payment of the mortgages specified.. The court held, under the619 .evidence in that case, that a certain special mortgage had been assumed :by the purchaser, and that its amount was to be added to the price bid. In the ¡present instance, we find no terms used in the sheriff’s deed or return, which ¡indicate ¡that the property was offered upon any other conditions than those ¡required by law, and which are usual at sheriff’s sales; nor is any fact disclosed by the evidence ¡tending to the conclusion that the purchaser would'be required to assume, or that he did assume, the mortgage,;in addition to the sum bid. See case of Balfour v. Chew, 4 Mart. N. S. pp. 154 and 162 to 165. We consider that the adjudication was for a fixed sum, and that the purchaser ,is .bound for nothing beyond the sum'bid. It is next urged that, if the amount of the first mortgage be not added to the bid, then the sum for which the property was adjudicated falls short of the previous special encumbrances, and that there was no sale. This does not follow as a necessary consequence, when the previous special mortgage exists in favor of the judgment creditor-. An adjudication .for a sum less than the amount of the privileges and previous special mortgages is only prohibited, whemthose encumbrancesare owned by other persons than the judgment creditor. C. P. arts. 682, 684. This provision of law is established in the ¡interest and forthe protection o.f the claims entitled to these preferences, and when the judgmenfrcreditor is himself the owner of the previous incumbrances, as is the case in the present instance, and appears at the sale and assents ,to the adjudication, no other party can complain of the insufficiency of the price. The evidence shows that, although there appeared by the mortgage certificate to be a special mortgage inscribed in favor of .the bank for $7,875, the debt had been reduced by payments, and that there actually remained due, at the date of the sale, only $5,062 '50. There was thus in reality an excess of price over the .amount .of the previous mortgage- We conclude that the sale is valid, ft remains-to determine how the proceeds are to be applied. As regards the precedence to which .the mortgage for .the original stock-loan is entitled, there is no contest. This elaim, with interest up to the date of the sale, is to be first .paid. After its extinction there still remains a surplus. This residue, it is urged, should be -applied to the claim of the plaintiff and intervenors, whose mortgage, it is .contended, attached and acquired precedence over the second mortgage granted by Newcomb to the bank, in consequence.of the postponement made-by Mrs. Buplantier. This claim is based upon the hypothesis that Mrs. Buplantier released her mortgage, an assumption that is not supported by the terms cf the ¡act. Mrs. Buplantier did not cancel .her mortgage, .but merely .gave precedence and priority to that of the bank. The mortgage in favor of Buplantier's succession has never ceased for .a moment to be in full force, but the advantages of its rank, as far as relates to the parties to the present controversy., enure to the bank. The validity of that act cannot be contested by the plaintiff. The only parties by whom it could be .questioned are not before the court. The surplus of the price after paying the original stock-loan is lessthan the amount -of the postponed mortgage, and the entire sums must be applied to the second mortgage of the defendants. The conclusions at which we have arrived upon these points, render it unnecessary .to consider others which have been urged by the counsel on both ¡sides. Judgment affirmed,. Footnotes [*] Eustis, fh J., boing interested, did not sit in this case.