Wakefield State Bank v. Baker Wakefield Cypress Co.

LECHE, J. The Baker Wakefield Cypress Co., Ltd., owned a tract of land, situated in the Parish of Assumption, together with buildings and improvements thereon, consisting mainly of a sawmill and other machinery to manufacture lumber from cypress logs. In 1920 and in 1922, it mortgaged all of this property in favor of plaintiff as security for two debts aggregating some $26,000.00. It owed besides this mortgage indebtedness, various creditors, some fourteen of whom later obtained judgments against it. The present litigation involves a contest between plaintiff as a prior mortgage creditor, and the intervenors, subsequent judgment creditors of defendant. The judgment creditors or some of them, obtained writs of fieri facias under their judgments and seized a lot of machinery, tools, building material, etc., which had been used in the operation of the lumber mill, an.d on March 7, 1925, plaintiff alleging that the property seized by the intervenors formed part of the realty and was subject to its mortgage, ruled these seizing creditors into' court to show cause why they should not be enjoined. The district judge tried this riile and refused to issue the injunction. The Supreme Court was then resorted to by plaintiff and that court refused to interfere with the action of the district judge. (See 158 La. 838, 104 South. 734, Fitzwilliams vs. Baker Wakefield.) The court held that where the property seized had been detached from the Soil, it had lost its condition of immobility and had become movable and therefore was not affected by plaintiff’s mortgage. While the application of plaintiff for injunction was pending, viz: on March 23, 1925, plaintiff obtained executory process on its mortgage, caused to be seized the whole property of defendant, including the alleged movables seized by the intervenors. Under the writ of seizure and sale thus obtained, the sheriff advertised the sale of 'defendant’s property to take place on May 4, 1925. On May 1, 1925, the present intervenors applied to have the property which they had previously seized, appraised and sold separately with a view of being paid out of the proceeds of same by privilege and preference over plaintiff. On the trial of these interventions, intervenors set up pleas of res adjudicata and estoppel against plaintiff and when plaintiff attempted to question the classification of the property as made by an agreement entered into on May 2, 1925, and the district court having maintained these pleas, rendered judgment in favor of intervenors, recognizing the validity of the seizures made under their judgments and ordering that intervenors and third opponents be paid by privilege and preference over plaintiff, out of the proceeds of the property which they had seized under their judgments. The plea of res adjudicata is based upon the refusal of the district judge to grant the injunction prayed for by plaintiff in its rule of March 7, 1925, and the subsequent ruling of the Supreme Court holding [678] that the property seized was movable and affirming the judgment of refusal of the district judge. The plea of estoppel is based upon a written agreement signed by the plaintiff and all the intervenors on May 1, 1925. The trial judge upheld both of these pleas and the plaintiff has appealed. In this court plaintiff contends in argument, against the claims of third opponents and intervenors, that even if the property seized by the intervenors by virtue of their judgments, has become mobilized, its prior mortgage is good upon these movables as a chattel mortgage, as all the requirements of the law in giving a chattel mortgage were complied with in the execution of the mortgages given to it by the Baker Wakefield Cypress Co., in 1920 and 1922. In other words plaintiff contends that if its two mortgages are not good on the property in .dispute as mortgages on immovable property, they are good as chattel mortgages on movables. These mortgages are conventional agreements drawn up in conformity with the requirements of the Civil Code and being conventional agreements they must be construed as intended by the parties. It is too plain for argument that the Baker Wakefield Cypress Co. did not intend to give plaintiff a chattel mortgage and that plaintiff did not intend to accept a chattel mortgage from Baker Wakefield Cypress Co., as security for its indebtedness, when, the mortgages of 1920 and 1922 were drawn up . and signed by these parties. The ordinary conventional mortgage and ttíe chattel mortgage are two separate and distinct contracts and the only quality in common between them is -that they are each designed as a security or as an accessory to another contract. The plea of res adjudicata and estoppei are so intimately connected that they may be discussed at the same time, and a ruling upon them will dispose of the case. To re-state the facts and circumstances as we gather them from the record, it appears that third opponent first seized a lot of machinery, fixtures, attachments, etc., situated on the property of the Baker Wakefield Company. Their right to seize these things separately from the soil was attacked by the Wakefield State. Bank, holder of mortgages on the realty and that question was partly settled by the decision of the Supreme Court in the matter of Wakefield vs. Fitzwilliams, 158 La. 838, 104 South. 734. The Wakefield State Bank then foreclosed on its mortgage and also seized the same property that had previously been seized by the intervenors, as part of the realty on which bore its mortgage. The machinery, fixtures, attachments, etc., being held by the sheriff under two separate seizures, one by the intervenors and the other by the. plaintiff, were then likely to become the subject of further controversy between the intervenors and the plaintiff. The decree of the Supreme Court merely decided that a “mortgage on land and buildings and all machinery located thereon, which was immovable by nature or destinaiton, held not to cover dismantled machinery, tools, implements and junk, which were shown to be movable, though formerly attached to realty, having lost immovable character on detachment”. It thus appears that this decree only settled the law of the case but did not kettle the question of fact, as to what part of the property, if any or all, seized by the intervenors, had beep .dismantled and detached from the realty. That question of fact was still open and subject to controversy. Such was the situation on May 2, 1925, the day before the sale was advertised to [679] take place, when the agreement in the record was entered into and signed by all the parties in interest. The pertinent part of the agreement reads as follows: “* * * it is agreed * * that the property which is still attached to the realty, to-wit: (here follows a list of articles) * * * is hereby released from the seizure of the third opponents * * * It is further agreed that the remaining property * * (seized by third opponents) * * being such property as has been detached from the realty to be sold on the day of sale, separately and under separate appraisement, from the remainder of the property, and the proceeds of said sale he held by the sheriff * * * awaiting the final determination of the issue as to whom said proceeds belong. “It is further agreed that the said third opponents shall not be held by the fact of their having filed a third opposition in this matter, to have in any way admitted the right of plaintiff in executory process to sell the said property together with the real estate on which it has a mortgage, nor to prejudice third opponents’ rights and privileges .under their writs of fi. fa. This agreement being made for the convenience of the parties and to save costs * The plaintiff contends that the foregoing agreement was drawn up as stated, for the sole purpose of “the convenience of the parties and to save costs”. Intervenors on the other hand, contend that the purpose of the agreement was to fix the status of the property which they had seized, and to definitely settle the question as to what property was. movable and liable for their prior seizure and what property was still part of the realty. They further contend that they would not have consented to the release of their seizure on the property first enumerated in the agreement, if the plaintiff had not consented to the separate appraisement and sale of the remainder of the. property seized by them; that to permit plaintiff to recall its consent to the classification of the remainder of the property, admitted by it as being detached from the realty, would deprive them of the consideration which induced them to consent to the classification of the property listed as being attached to. the realty, for the. reason that said property has now been sold and can no longer be appraised and sold separately. Upon this ground they base their plea of estoppel. It is apparent, then, that the question of estoppel depends upon the construction of the written agreement between the parties. The record further shows that when the agreement was signed, on May 2, the district judge had already, on April 28th, ordered on the petition of some of the third opponents, that all the property seized by third opponents be appraised and sold separately. So that if the agreement had not been, entered into, the property which third opponents therein released from their writs of fi. fa,, would also have been appraised and sold separately. There is then no doubt that the agreement to that extent was a concession by third opponents, in favor of plaintiff. Considering therefore that the sole difference between the parties at the time the agreement was signed, only involved the status of the property seized by the intervenors and third opponents as to its character, whether movable or immovable, that the only reasonable and effective meaning that can be attributed to the clause in the agreement “for the convenience of the parties and to save costs” was to avoid further litigation as to what part of the' property was movable and what part was immovable and to settle that question definitely, and considering further that if plaintiff be allowed to recall anything which it had conceded in the agree [680] ment, it would be impossible to restore the situation that .existed on May 2nd and to re-invest in third opponents the right to exercise the remedy to which they had then already resorted, we believe the plea of estoppel which they now urge should be sustained. It is true that the agreement is not worded clearly as to the purpose for which we believe and hold that it was entered into, but nevertheless we see no other reasonable purpose that it could have sub-served- For these reasons, the judgment appealed from is affirmed at the costs of plaintiff and appellee.