Brady v. Creditors

The opinion of the court was delivered by Watkins, J. This appeal presents the sequel of a prolonged judicial controversy among certain mortgage creditors of Brady, the insolvent, whereby a simple question has been involved in a maze of difficulties. It will suffice to state that one William P. Smith, in ex-ecutory proceedings forclosed a certain alleged special mortgage of Brady on two improved lots in the city of New Orleans, and which were adjudicated to one MeAdam for about $4'700. These proceedings and sale gave rise to various third oppositions, injunctions and seizures on the part of the Hibernia Insurance Company, J. H. Massie and Mrs. May Hughes — all claiming to be judicial mortgage creditors of Brady, and entitled to preference in receiving payment. The agitation of these controversies brought them before this court several different times, without any practical solution thereof having been reached. Eventually Brady made a cession of his property to his creditors, under the insolvent law of the State, and a definitive syndic was elected and qualified. At this crisis of his affairs he and the public administrator put in an appearance. The sole asset which was surrendered by the insolvent, and which figures at his credit in his concursus and mortuoria, is the sum of $4323.42, alleged to be the net balance of the proceeds of sheriff’s sale in Smith vs. Brady, after the deduction of certain taxes, costs and charges. The syndic filed an account and placed this sum thereon, as the sole amount ior distribution among privileged, mortgaged and ordinary creditors; and the then judicial mortgage creditors renewed their contest, by making opposition to the. various items appearing on said account in favor of notary, attorneys of the syndic, commissions of the syndic, and a sum alleged to be in reimbursement of an [169] amount which was expended by W. P. Smith in payment of Brady’s taxes while the property was under mortgage. They also contest the amount and relative rank of each other’s mortgages. From a judgment overruling the opposition, and opposing the distribution of the fund injquestion as proposed, the Hibernia Insurance ■Company and Massie have appealed. I. The item of notary’s fees of $50 in favor of Omer Villere is opposed, but no proof was administered in reference to it. The record ■shows that the meeting of creditors was held in his presence and that he conducted' the proceedings. Such fees are properly chargeable against the mass of creditors of the insolvent, and we are disposed to think the allowance a reasonable one. II. The item of attorney’s fees o'f $400 is also opposed, though it is ■conceded that $200 would be a reasonable and proper charge for the services rendered. On this question no proof was adduced by either party, and we have no other means of judging of the value of the services rendered than what is shown on the record. The judge who tried the cause in the lower court was personally cognizant of them, and is a better judge of their value than we are, and we are not disposed to arbitrarily disturb his judgment. III. The item of $216.17, charged in favor of the definitive syndic as commissions, is an allowance of 5 per cent, upon the total amount of the assets administered. The law provides that “in no case shall the syndic be entitled to receive greater commissions than at the rate of 5 per centum, upon the net amount of money received.” R. S. 1818. The creditors, in their deliberations at the time of electing a syndic, had the right “to determine the rate and amount of the commissions to be received by him” (Ibid.) ; but they failed to do it. The amount allowed is legal. IV. The item of $400.36 allowed W. P. Smith in reimbursement of taxes paid by him, with legal subrogation, is not established by proof [170] sufficient t,o justify its allowance. We have carefully examined all three of the records of this court, constituting the consolidated transcript of appeal, without finding anything more than casual statements and inferences of some taxes having been paid by Smith for Brady during the time he held the latter’s mortgage note, and prior to its foreclosure. But the tax bills and receipts which are annexed to the petition for the order of seizure and sale rather indicate that Brady had paid the taxes himself; and Smith, as a witness, does not specify the taxes he paid, the amounts annually, or the years in which same became exigible against the property. We think his claim should have been rejected. Y. The only two mortgages which figure on the syndic’s account are (1) one in favor of Mrs. Mary Hughes for $2012.73, with interest, and (2) one in favor of J. H. MaSsie for $2100, with interest. No mention is made on the account of a judicial mortgage in favor of the Hibernia Insurance Company; but Mrs. Hughes levels at its opposition to the syndic’s account a plea of ten years’ prescription against its judgment, and the presumption of its judicial mortgage, because of its failure to reinscribe the same, and counsel’s brief s discloses that it was on that theory that same was omitted from the account. An examination of the certificate of mortgages shows that Mrs. Mary Hughes recovered a judgment against Brady for $2500 upon the 27th of November, 1874, and had a copy of same recorded in the proper book of mortgages on the 11th of December, 1874. This, judgment was seasonably revived by proper judgment, and rein-scribed on the 24th of November, 1884. Subsequently, Mrs. Hughes caused a fi. fa. to be issued thereunder, and some small properties of Brady to be seized and sold, and the net amount of $487.27 was realized and applied to her credit on the writ. In this manner her judgment was reduced from $2500 to $2012.73, the amount of the balance for which she is placed on the syndic’s account. It appears that J. H. Massie obtained a judgment against Brady for $3400 on the 19th of December, 1877, and recorded same as a. mortgage on the 11th of January, 1879; but it was finally reduced, in amount to $2100 by a decree of this court in 1882. [171] The Hibernia Insurance Company obtained a judgment against Brady on the 12th of June, 1875, and caused the same to be recorded as a mortgage on the 14th of July, 1875. That judgment was never recorded. It is manifest from this statement that the judgment in favor of the Hibernia Insurance Company run to prescription during Brady’s lifetime and prior to his insolvency, and it is unnecessary to inquire whether it was duly and properly reinscribed or not, as a reinscrip - tion alone would not preserve it. The judgment in favor of Massie not becoming final until 1882, is not prescribed; and as it is the only competing mortgage in the record, a reinscription was unnecessary. But at all events there was no occasion for its reinscription after Brady’s cession and subsequent death, whereby the rights of all parties were fixed. While it is contended by the Hibernia Insurance Company alone (and it being without interest) that the 5 per cent, interest allowed in the judgment in favor of Mrs. Mary Hughes is good but for one year, it may be well to premise that such a pretension lacks all foundation. The language employed is “without interest at 5 per cent, from May 19, 1877..” That phrase is an exact equivalent for per annum during that period of time. The law fixes the rate of legal interest at 5 per cent, per annum. R. O. C. 1938; 33 An. 582. The judgment must be amended. It is therefore ordered and decreed that the judgment and account be so amended as to disallow the item of taxes paid by W. P. Smith, $400.36, and that as thus amended the same be affirmed at the cost of W. P. Smith and opponents.