Heirs of Gallaugher v. Hebrew Congregation

The opinion of the Court was delivered by Bermudez, C. J. This is an hypothecary action based on a judicial mortgage. From a judgment against them, the defendants have appealed. On the 18th of July, 1872, Gallaugher recorded a judgment which he had against Delacroix. On the 1st of October, 1875, Delacroix acquired [830] real estate at the place of registry. His title to it was filed with the Recorder on the 12th of September, and recorded on the 15th following, in 1876. On the day of its filing he sold the property to the defendants, the act being recorded on the 16th of the same month and year, so that when Delacroix sold, G-allaugher’s judgment was recorded against him and his act of purchase had not been recorded. The legal question presented is simply: whether a judicial mortgage reaches and affects real estate situate at the place of registry, to which the judgment debtor has only an unrecorded title. The defendants claim that as Delacroix’ act of purchase was not recorded in the Conveyance Book at the time he sold them the property , sought to be reached, the judgment of plaintiffs did not encumber the real estate. In support of that theory, they invoke Article 2266 R. C. C., which is a reproduction of the Act of 1855. It provides that “ all sales, contracts and judgments affecting immovable property, which shall not be recorded, shall be utterly null and void except between the parties.” The paragraph does not stop there. It continues and declares, that “ the recording may be made at anytime, but shall only affect third persons from the time of the recording.” A preceding Article, 2264, directs that “ no notarial act concerning immovable property shall have any effect against third persons, until the same shall have been deposited in the office of the parish recorder or register of conveyances of the parish where such immovable property is situated.” On reading those provisions of law, the legal mind remains satisfied that the object of the legislature in requiring registry of sales, contracts, notarial acts and judgments concerning and affecting immovable property, was to protect third parties against the effect which such acts would otherwise produce. They never were designed to prevent such property from passing from vendor to purchaser, or prevent general mortgages from reaching and encumbering real estate acquired under an unrecorded title. The law simply means, that sales, contracts, acts and judgments, touching or susceptible of encumbering immovable property, shall not affect third parties, that is, operate to their prejudice, but shall be valid between the parties. It can have no other rational meaning. Otherwise, the unavoidable consequence would be that the legislature, instead of promoting public justice, deliberately proposed to become the handmaid of fraud, deception and spoliation. Real estate, by whatever mode acquired, whether by purchase, ex [831] change, giving in payment or any other contract, passes absolutely and is binding against the world, be the act recorded or not, subject to qualifications as to the creditors of the vendor and bona fide purchasers from him without notice. Where the act is recorded, those creditors cannot roach and seize the property, unless by the hypothecary action, if it was subject to a privilege or mortgage in their favor at the time of registry, or by the revocatory action, on proper averments and proof. Where the act is unrecorded, those creditors are not presumed to know of its existence, or if they know of it, they are not bound to respect the transfer. . They are authorized to ignore it, and to proceed directly against the property as though the transfer had never taken place and the property unquestionably belonged to their debtor. This was expressly decided in the case of Lyons vs. Cenas, 22 An. 113, in which execution had been levied on real property inherited by the defendant, and which, it was claimed, had been acquired from the succession by the party in possession, whose title had however not been recorded previous to seizure. As to the creditor there had been no mutation. The Court said substantially : According to the law and the well established jurisprudence, the act of sale set up as conveying title to the plaintiff could have no effect against third persons, until duly recorded in the parish where the property is located, and consequently as to them the plaintiff was not the legal owner thereof at the date of the seizure. The injunction was dissolved, and the seizure was allowed to proceed. Where a vendor sells the same property to different purchasers who are in good faith and without notice, the property passes legally however to him whose title of purchase is first recorded. While the creditors of the vendor cannot be prejudiced by an unrecorded transfer, those of the purchaser may be benefitted by it, subject however to the superior rights of the former. The registry of the transfer is no condition precedent essentially required to subject the real estate to judicial or legal mortgages inscribed against purchaser and vendor, and which it is admitted would, beyond doubt, reach the property in case of a registry of the title in the proper Conveyance Book. The law is, that judicial and legal mortgages registered against the purchaser affect and encumber the property from the very instant of purchase, whether the deed be recorded or not, but rank subordinate to the encumbrances existing on the property against the vendor at [832] the moment of the transfer. 4 R. 71; 11 R. 154; 10 L. 301; 2 An. 775; 4 An. 411, 569; 14 An. 701; 20 An. 80; 22 An. 113; 24 An. 81; 30 An. 727. Purchasers from one whose title is unrecorded and against whom mortgages are registered, affecting the real estate bought by them, have no one to blame but themselves for failing to procure seasonably from the recorder a certificate establishing the status of the property, in point of alienation and encumbrance. Had the defendants in this-case required such certificate instead of formally waiving it, they would not have found themselves in the difficulties in which they have since been involved. The defendants have no right to the property in question, Which-they did not acquire from Delacroix. Such as the property was when Delacroix sold it to them, it passed to them. At that time it was clearly burdened with the judicial mortgage in favor of G-allaugher or his heirs. As he could not have disputed it, so are they not to be heard to contest it. What operated against it then, has continued to burden it. It is therefore in their hands subject to the judicial mortgage in favor of Gallaugher’s heirs. We take notice of the judgment of this Court, this day rendered in the case of Givanovich against these same defendants, but are not to be considered as intimating in the least as to which of the plaintiffs here' and the plaintiff there, in case of a conflict, will be entitled to a priority; It will be time enough to solve the difficulty when it shall be' presented. -The ruling invoked in 27 An. 337, in so far as -it may be at variance with the views expressed in this opinion, must be considered aS overruled. There being no error in the judgment appealed from; it is affirmed with costs. Todd, J., dissents.