Statement of the Case.

FLEITAS v. RICHARDSON, (No. 1.)

APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE EASTERN DISTRICT OF LOUISIANA.

No. 29. Argued April 14, 1892. Decided March 6, 1893.

In executory process, according to the Civil Code of Louisiana, in the Circuit Court of the United States, an order, made without previous notice, for the seizure and sale of mortgaged land to pay the mortgage debt, under which the sale cannot take place until the debtor has had notice and opportunity to interpose objections, is not, at least when he does interpose within the time allowed, a final decree, from which an appeal lies to this court.

THIS was a bill in equity, filed June 29, 1888, in the Circuit Court of the United States for the Eastern District of Louisiana, by Gilbert M. Richardson, a citizen of New York, against Francis B. Fleitas, a citizen of Louisiana, and residing in that district, for a seizure and sale of mortgaged lands in the parish of St. Bernard in that district, under executory process, in accordance with the provisions of the Louisiana Code of Practice, the material parts of which are copied in the margin.1

1 ART. 63. When the hypothecated property is in the hand of the debtor, and when the creditor,. besides his hypothecary right, has against his debtor a title importing a confession of judgment, he shall be entitled to have the hypothecated property seized immediately and sold for the payment of his debt, including the capital, the interest and the costs, pursuant to the rules provided hereafter for executory proceedings.

ART. 98. The proceedings are ordinary, when citation takes place, and all the delays and forms of law are observed. They are executory, when seizure is obtained against the property of the debtor, without previous citation, in virtue of an act or title importing confession of judgment, or in other cases provided by law.

ART. 732. Executory process can only be resorted to in the following

cases:

1st. When the creditor's right arises from an act importing a confession of judgment, and which contains a privilege of mortgage in his favor.

2d. When the creditor demands the execution of a judgment which has been rendered by a tribunal of this State, different from that within whose jurisdiction the execution is sought.

Statement of the Case.

The bill alleged that the defendant, on January 28, 1884, executed and delivered to the plaintiff five promissory notes for $12,600 each, payable to the plaintiff's order on January 1, in 1885, 1886, 1887, 1888 and 1889, respectively, with interest

The proceeding by provisional seizure (attachment) or in rem resembles in some sort the executory process, but should not be confounded with it, as they are subject to different rules.

ART. 733. An act is said to import a confession of judgment in matters of privilege and mortgage, when it is passed before a notary public, or other officer fulfilling the same functions, in the presence of two witnesses, and the debtor has declared or acknowledged the debt for which he gives the privilege or mortgage.

ART. 734. When the creditor is in possession of such an act, he may proceed against the debtor or his heirs, by causing the property subject to the privilege or mortgage to be seized and sold, on a simple petition, and without a previous citation of the debtor.

ART. 735. In obtaining this order of seizure, it shall suffice to give three days' notice to the debtor, counting from that on which the notice is given, if he resides on the spot, adding a day for every twenty miles between the place of his residence and the residence of the judge to whom the petition has been presented.

ART. 738. The debtor, against whom this order of seizure shall have been rendered, may obtain an injunction to suspend the sale, if before the time of sale he files in the court issuing the order his opposition in writing, alleging some of the reasons contained in the following article, and of which he shall swear to the truth.

ART. 739. The debtor can only arrest the sale of the thing thus seized, by alleging some of the following reasons, to wit:

1. That he has paid the debt for which he is sued;

2. That he has been remitted by the creditor;

3. That it has been extinguished by transaction, novation, or some other legal manner;

4. That time has been granted to him for paying the debt, although this circumstance be not mentioned in the contract;

5. That the act containing the privilege or mortgage is forged;

6. That it was obtained by fraud, violence, fear, or some other unlawful means;

7. That he has a liquidated account to plead in compensation to the debt claimed;

8. And finally, that the action for the recovery of the debt is barred by prescription.

ART. 740. When the judge grants an injunction, on the allegation under oath of any of the reasons mentioned in the preceding article, he shall require no surety from the defendant, but he shall pronounce summarily on the merits of his opposition if the plaintiff requires it.

Statement of the Case.

at the yearly rate of eight per cent; and on the same day, by authentic act of mortgage, passed before a notary public in the presence of two witnesses, (a copy of which was annexed. to the bill,) mortgaged the lands in question, to secure the payment of these notes, which were duly paraphed by the notary ne varietur to identify them with the act of mortgage, and that the last two notes (copies of which, with the paraph of the notary thereon, were also annexed to the bill,) and interest since July 1, 1887, had not been paid; that Shattuck & Hoffman, a commercial firm named in the mortgage, had no interest in these notes, and the plaintiff believed they had no interest in the act of mortgage; and that under these notes and the mortgage there was past due and owing to the plaintiff the sums of $27,216, with interest since January 1, 1888, on $25,200 thereof at the rate of eight per cent, and on $2016 thereof at the rate of five per cent.

The copy of the act of mortgage, annexed to the bill, showed that it was made to secure the payment of the notes to the plaintiff, and also to secure the payment to Shattuck & Hoffman of advances made by them to the defendant, under a written agreement between them and him of the same date, not exceeding the amount of his debt to the plaintiff; and authorized the mortgagees, in case any of the debts. thereby secured should not be paid at maturity, to cause the mortgaged property "to be seized and sold under executory process, without appraisement, to the highest bidder for cash, hereby confessing judgment in favor of said mortgagees, and of such person or persons as may be the holder or holders of said promissory notes, and all assigns of said Shattuck & Hoffman, for the full amount thereof, capital and interest, together with all costs, charges, and expenses whatsoever;" and further provided that, in the event of a foreclosure of the mortgage and sale of the premises, "then out of the proceeds of said sale the said indebtedness to said Gilbert M. Richardson, whether held by said G. M. Richardson or his assigns, shall be paid by priority over said indebtedness due or to become due to said Shattuck & Hoffman or their successors and assigns."

Upon the filing of the bill, on June 29, 1888, the court

Statement of the Case.

made the following order: "Let a writ of seizure and sale issue herein, as prayed for, and according to law, to satisfy complainant's demands as set forth in the foregoing bill and petition. Let the marshal seize and take into his possession according to law the property described in the foregoing petition, and then let the sale of this property be stayed till the further orders of this court."

On June 30, 1888, the clerk of the court issued to the defendant, and the marshal served upon him, a notice in these terms: "Take notice that payment is demanded of you, within three days from the service hereof, of the amount specified in the writ of seizure and sale granted on the bill of complaint herein, a copy of which accompanies this notice, with interest and costs; and, in default of payment within that delay, the property referred to in said bill of complaint will be seized and sold according to law, subject to the order on said bill. A further delay of one day for every twenty miles distance from your domicil to this city, at which place this court is held, is allowed you by law."

On the same day, the defendant, appearing for that purpose only, prayed for, and was refused, an appeal or writ of error from that order to this court.

At the next term of the Circuit Court, on November 19, 1888, the defendant, appearing for the purpose of the motion only, moved that all the orders and proceedings in the case be quashed and set aside, for want of jurisdiction, and also because, if the Circuit Court had authority under any circumstances to issue executory process, no case was made in the bill for issuing it, for want of authentic evidence, inasmuch as the mortgage appeared upon its face to have been made to include a private agreement between the defendant and Shattuck & Hoffman, (a copy of which, verified by his oath, was annexed to the motion;) and also, "making known unto the court that he will make no other and further appearance or pleading herein, at all times believing the proceeding void in law and this court without jurisdiction over the same," and praying that, if the court should refuse to quash the proceedings, he might be allowed an appeal to this court from the order of seizure and sale.

Statement of the Case.

On November 22, a writ was issued to the marshal, commanding him to seize and take into his possession, according to law, the property described in the mortgage, and to sell it to satisfy the plaintiff's demands as set forth in the bill, and repeated in the writ; "said sale to be for cash, without appraisement, and said sale to be stayed until the further orders of the court, under its order dated June 29, 1888, on the bill herein;" and to make return of his proceedings to the court.

On November 24, the plaintiff moved to strike the defendant's motion from the files, as not being allowed by the rules of the court, or by the laws of Louisiana; and the court denied the motion to quash, as well as the motion to strike from the files, but granted the appeal, upon the defendant giving bond in an amount to be fixed by the court, and referred the case to a master to report the facts to enable the court to determine that amount.

On the return of the master's report, the court, on December 7, 1888, made the following order: "This cause came on to be heard, and was argued by counsel; whereupon the court, on consideration thereof, and further reconsidering the whole matter with reference to the order or decree awarding executory process herein, and the defendant's applications for appeal therefrom, doth now order that so much of the order of June 29, 1888, awarding executory process herein, as directs the marshal to stay the sale of the property directed to be seized till the further orders of the court, be stricken out; and that all orders made subsequently to the date of the defendant's application for an appeal on June 30, 1888, except the order of reference to the master to report the facts upon which the amount of bond could be determined and fixed, be revoked; and that an appeal, to operate as a supersedeas, be allowed to said defendant nunc pro tunc as of said 30th day of June, 1888, according to his petition then presented, on his giving bond as required by law, with good and solvent surety, in the sum of one thousand dollars. And it is further ordered that the marshal, on the filing of such bond, release from seizure the property he has seized herein, and that the exceptions to the order of reference be overruled."