De Blanc v. Dumartrait

The judgment of the court was pronounced by Slidell, J. This is an action of mortgage, against a third possessor of a town lot and a house erected npon it. The mortgage held by the plaintiff was executed in 1840, by two persons, then the lawful owners of interests, amounting, collectively, to one undivided third of the property; and was duly recorded. Subsequently they sold their interests, and Derbés, Delahoussaye Co. became the owners of the entire estate. A creditor obtained a judgment against Derbés, Delahoussaye Co., in 1841; and, upon execution, seized and sold the entire property for a price less than the plaintiff’s mortgage-claim upon the undivided third. The purchaser, the present defendant, paid the money into the hands of the sheriff, who paid it to the judgment creditor. De Blanc was not a party to these proceedings, and was a stranger to them. It is now urged by the defendant that, he holds under a judicial sale provoked by a judgment creditor, whose mortgage covered the entire property, and was the first in rank as to two-thirds of it; that the judicial mortgage was indivisible; that, by the effect of the judicial sale of the entire estate, the plaintiff’s mortgage was transferred from the thing to its proceeds, in the hands of the sheriff; that he should have enforced his rights upon the proceeds, by a third opposition in the suit in which the judicial sale was provoked, and has no hypothecary action against the defendant. It may be conceded that, the position of a mortgagee of an entitre esate, indivisible by its nature, an undivided interest in which has been already encumbered by a valid mortgage, may be inconvenient. Whether, in such a case, the' aid of a court of justice might not be invoked to bring in all the mortgage creditors, decree a sale of the ¡entire land, and make an equitable distribution of the proceeds according to the relative rank and interests of the mortgage creditors, is a question which we do not now attempt to consider or decide. VÍ6 shall confine our inquiry to the case before us, in which the purchaser hold's under a forced sale, upon proceedings to which the first mortgagee wTas not a party. • The plaintiff claims under a lawful mortgage, antecedent in point of time hr tire rights of the judicial mortgagee, and prior in rank to the extent of the interest mortgaged to him. Having such prior right, he was protected by the 683d and 684th articles of the Code of Practice. “ If there exist on the property any privileges or special mortgage in favor of other persons than the judgment creditors, and which are preferred to him, the sheriff shall announce that the purchaser shall be entitled to retain in his hands, out of the price for which the property was adjudicated, the amount required to satisfy the privileged debts and special hypothecations to which the property sold was subject, &c.” “ Consequently if the price offered in this case, by the highest and last bidder, is not sufficient to discharge the privileges apd mortgages existing on the property, and which have a privilege over the judgment creditor, there shall be no adjudication, and the sheriff shall proceed to seize other property of the debtor, if there be any.” Article 70Ó provides the remedy for the prior mortgagee ; “ The hypothecary 'action lies against the purchaser of property seized which is subject to privileges or mortgages in favor of such creditors as have said privileges and mortgages, in the same manner, and under the same rules and restrictions as are applicable to a third possessor of a mortgaged property.” Although, in the present case, tho first mortgagee was not the mortgagee of [546] tile entire estate seized" and sold, yet iteimnotbe' said' that He is not Withiii tlio' let;ter of the Code. If the judicial mortgagee had confined his seizure and sale' to the two-thirds not covered By the plaintiff’s mortgage, the' plaintiff could not' have complained ; but when he seized the whole, he seized the portion encumbered by a prior mortgage; That theplaintiff’s case is within the spirit of the Code is too plain to require discussion. The intent of the lawgiver was to protect the prior encumbrancer. We are not prepared to say that; the plaintiff might not have treated the sale, quoad the one-third mortgaged to him, as an utter nullity. But it is quite clear that, as the defendant chose to take the property, pay the price, and enter into possession, he may be treated as a third possessor who’has taken subject to the mortgage; and,-as he refuses to pay the debt, the plaintiff has a right to have it sold. ' If there be hardship; it oould have been obviated by greater diligence on the part of the defendant, in ascertaining from-the public records the condition of the estate- We may remark that, the case of Figneguy, cited by counsel (12 Rob. 450,) differs essentially from the present. There an heir mortgaged his undivided fourth interest in am immovable belonging to a succession, then under administration, and unliquidated. The property was sold under an order of the Court of Probates, for the purpose of liquidating the succession, and effecting a partition-; and the- contest was between the mortgagee and a subsequent purchaser of the heirs’ rights. The proceeds of the sale were considered as standing in the place'of the mortgage. The property, at the time of the mortgage, was the property of the succession, subject as such to its liquidation and partition ; the mortgage was of the heir’s share, and the Code expressly declares that such mortgages are dissolved of right upon partition, except upon the property which falls to the heirs who have given the mortgage. Here the mortgagors were the direct and absolute-owners of the undivided third of the property mortgaged. Judgment affirmed.