Bank of Winnfield v. Olla State Bank

124 So. 621, 11 La. App. 640, 1929 La. App. LEXIS 294
CourtLouisiana Court of Appeal
DecidedNovember 18, 1929
DocketNo. 3482
StatusPublished
Cited by2 cases

This text of 124 So. 621 (Bank of Winnfield v. Olla State Bank) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bank of Winnfield v. Olla State Bank, 124 So. 621, 11 La. App. 640, 1929 La. App. LEXIS 294 (La. Ct. App. 1929).

Opinion

ODOM, J.

E. C. Paulette owned an oil and gas lease, known as the “Holmes Lease,” covering the SW^ of SW^ of Section 17, Township 9 North, Range 1 East, in Grant Parish, on which he drilled two wells, both being producers. On July 1, 1927, he borrowed $13,000.00 from the Bank of Winnfield, plaintiff herein, and gave his note for said amount, secured by mortgage on said lease. This mortgage was duly inscribed in the mortgage records of Grant Parish on July 5th, following. On July 2nd, one day subsequent to the date of the mortgage and prior to the date of its inscription in the mortgage records, Paulette purchased “one standard rig” from D. J. Critchet for $1600, on which he paid $1200 cash and for the balance of the purchase price gave Critchet his note, secured by vendor’s lien and chattel mortgage on the rig. The rig, when ¡purchased, was in La Salle Parish where Critchet lived, and the chattel mortgage and the note were executed before a notary in that parish. Critchet transferred the note and chattel mortgage to the Bank of Olla, defendant herein. The chattel mortgage was sent to the recorder of mortgages in Grant Parish and there recorded on July 16th, following.

Immediately after purchasing the rig, Paulette moved it to Grant Parish and set it up on the Holmes lease, ■ which he had previously mortgaged to the plaintiff bank, the rig being installed on the lease prior to the date on which plaintiff’s mortgage was recorded.

Paulette failed to pay the plaintiff bank, whereupon it foreclosed its mortgage and caused to be seized, advertised and sold the said Holmes lease, together with all the improvements situated thereon. Several months after this foreclosure and sale, the Bank of Olla sought to foreclose its chattel mortgage via executiva on the rig and had it seized where it was then installed on the Holmes lease in Grant Parish. The plaintiff bank enjoined the foreclosure proceedings of defendant on the ground that it was then the owner of the rig, the property in controversy, having purchased it at foreclosure sale, along with the lease to which it was attached.

Defendant contended in the lower court, and contends here, that the rig in question which was ¡purchased by Paulette and placed by him on the lease subsequent to the date of plaintiff’s mortgage, never [642]*642became subject to that mortgage and was not part of the lease, and therefore, was not and could not be sold along with the lease under plaintiff’s foreclosure, and that therefore, Paulette, and not the plaintiff bank, was the owner of the property at the time it attempted to foreclose its chattel mortgage. The district judge held with defendant and rejected plaintiff’s demands.

Our examination of the record and a consideration of the law which we think applicable have led us . to a different conclusion.

The rig in controversy was a pumping outfit which was placed on the lease after the well was completed; it was placed on the lease for its service and improvement, and became a part of it by destination. It was not on the Holmes lease at the time Paulette mortgaged it to the plaintiff bank, nor was it specifically described in the act of mortgage, nor did the mortgage specifically state that it should cover all improvements subsequently placed on the land. For these reasons, the defendant, Olla State Bank, contends — and the district judge held — that plaintiff’s mortgage never became operative against it. Therefore, when the “Holmes Lease” and all the improvements thereon were sold under plaintiff’s execution, the pumping rig did not go with it.

A mineral lease, under Act 232 of 1910, is a species of real property (Choate Oil Corporation vs. Glassell, 153 La. 715, 96 So. 543). The pumping rig was placed upon the lease by Paulette, the owner, to develop it, for its service and improvement. The rig was necessary to the operation and development of the lease; having been placed there for its service and improvement, it became immobilized and immovable by destination. (Civil Code, art. 468; Choate Oil Corporation vs. Glassell, supra.) Paulette mortgaged the lease to the plaintiff bank and whether the rig was on the property at the time or was placed there later, the mortgage, attached to and covered it the moment it was put there, under the precise language of the Civil Code, which reads as follows:

“Article 3310 — A conventional mortgage when once established on an immovable, includes all improvements which it may afterwards receive.”

New Orleans Nat. Bank vs. Raymond, 29 La. Ann. 355, 29 Am. Rep. 335; Louisiana Land & Pecan Co. vs. Gulf Lumber Co., 134 La. 784, 64 So. 713.

It has been specifically held that such mortgage covers all property immovable by destination.

Rochereau vs. Bobb, 27 La. Ann. 657;

Williamson vs. Richardson, Sheriff, et al., 31 La. Ann. 685;

Weil vs. Lapeyre et al., 38 La. Ann. 303.

An additional reason, if any be needed, for holding that plaintiff’s mortgage attached to the rig is that Act 232 of 1910, page 393, specifically provides that owners of mineral leases may mortgage the same “together with all buildings, constructions and improvements placed and erected on such lands, or to be placed and erected thereon.” Sec. 1. It was held in Choate Oil Corp. vs. Glassell, supra, that under this act improvements placed upon a mineral lease became part of it by destination and that a mortgage on the lease covered such accessories without any mention of them in the act and covered, not only accessories then on the lease, but those about to be placed thereon. The testimony shows that it was intended by Paulette and the plaintiff bank, when the [643]*643money was loaned, that a part of it should be used in the purchase of a pumping rig to be placed on this particular lease.

According to the recitals of the act plaintiff’s mortgage covered the Holmes lease “with all wells and improvements on said described land.” Our conclusion is, and we hold, that the pumping rig in controversy, though not on the lease when plaintiff’s mortgage was granted, but having later been placed and attached thereto by Paulette, the owner, as an improvement, became subject to the mortgage as much so as the improvements already thereon.

The documentary evidence found in the record shows that in plaintiff’s foreclosure proceedings the sheriff seized, advertised and sold to the plaintiff bank “one oil, gas and mineral lease acquired from J. L. Holmes on the SW% of SW% of Section 17, Township 9 North, Range 1 East, together with all wells and equipment on said lands.”

This particular pumping rig was on the Holmes lease at that time and, while neither the seizure, advertisement nor the deed make any. specific mention of it, the sale unquestionably included it and title passed to the plaintiff bank, which took immediate possession of it.

The sale made to the plaintiff bank was of the lease, together with all wells and equipment situated on the land covered by the lease, all of which property was sold confusedly together — that is, the property in controversy was sold confusedly with a mass of other things belonging to Paulette. The defendant did not intervene and demand a separate appraisement and sale of the property on which its chattel mortgage rested. Then, what became of its rights under its chattel mortgage? They were divested, lost. The case of Baton Rouge Rice Mill, Inc., vs. Fairbanks, Morse & Co., Inc., 164 La. 789, 114 So. 633-634, is exactly in point.

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Bluebook (online)
124 So. 621, 11 La. App. 640, 1929 La. App. LEXIS 294, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bank-of-winnfield-v-olla-state-bank-lactapp-1929.