Century Bank v. Melendy

461 So. 2d 328, 1984 La. App. LEXIS 10363
CourtLouisiana Court of Appeal
DecidedNovember 13, 1984
DocketNo. 84-CA-90
StatusPublished

This text of 461 So. 2d 328 (Century Bank v. Melendy) 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
Century Bank v. Melendy, 461 So. 2d 328, 1984 La. App. LEXIS 10363 (La. Ct. App. 1984).

Opinions

KLIEBERT, Judge.

The defendants, Beryl Melendy, wife of/and Edward H. Keiler, bring this devol-utive appeal from a deficiency judgment in favor of the plaintiff, Century Bank, rendered by the Twenty-fourth Judicial District Court, Parish of Jefferson, following a sheriff’s sale of plaintiff’s property in an executory proceeding filed under docket No. 255-444. On appeal, defendants contend the trial court erred in granting a deficiency judgment because of improprieties in the executory process and in using executory process to collect a vendor’s lien, coupled with errors in the distribution of the sale proceeds to Century Bank as an assignee of the person holding an alleged invalid vendor’s lien. For the reasons which follow, we affirm the trial court’s judgment.

At the trial of the deficiency judgment claim, Century Bank introduced numerous documents and court records to support its deficiency claim. Hence, a somewhat detailed examination and discussion of these [330]*330documents is necessary to appreciate the posture of the case before this Court.

Century Bank was the holder of defendant’s promissory note (hand note) in the amount of $95,000.00, dated January 28, 1981, secured by pledge of a demand mortgage note in the amount of $100,000.00 dated January 28, 1981. The demand mortgage note is paraphed “Ne Varietur” with a collateral mortgage, dated January 28, 1981 on the property which was the subject of the foreclosure here. When the defendants defaulted in payment, Century Bank, on July 7, 1981, instituted foreclosure proceedings under Docket No. 255-444 of the Twenty-fourth Judicial District Court. The court granted executory process and as a result a writ of seizure and sale issued. The sheriff of Jefferson Parish seized the property and held a public sale with benefit of appraisal. At the public sale the property was adjudicated to Century Bank for $108,000.00.

According to the sheriffs process verbal of the public sale, the proceeds were disbursed as follows: $3,798.82 to the sheriff of Jefferson Parish as cost and commission; $33,378.03 to Century Bank in payment of the claims it acquired by assignment from Miriam M. Ferris, wife of/and Christopher Ferris, the original vendors of the property, to the defendants herein, and the balance of $70,823.15 to Century Bank to be applied to its outstanding debt due on the January 28, 1981 demand note held by the bank.

The defenses to the deficiency judgments urged by defendants arise out of the application of $33,378.03 of the sale proceeds to Century Bank for the claims obtained under the assignment from the Ferrises rather than to the principal and interest due on the defendants’ January 28, 1981 notes held by the bank.

The vendor’s lien to which the $33,378.03 was applied originated out of a credit sale of the property by Miriam Ferris, wife of/and Christopher Ferris to the defendants here, dated December 30, 1976. For some reason, unexplained by the record, in addition to an act of credit sale and the execution of a $44,000.00 note representing the balance due on the purchase price, the defendants on the same date executed an additional $44,000.00 demand note and a separate $44,000.00 mortgage on the property. One of the $44,000.00 notes was par-aphed to the mortgage; the other had no paraph. Sometime thereafter, the separate mortgage securing the $44,000.00 note was cancelled.

Subsequently a foreclosure by executory process was initiated under Docket No. 254-225 by the Ferrises on the $44,000.00 notes. The Keilers filed a petition seeking to enjoin the executory process for lack of authentic evidence. On July 7, 1981, before the foreclosure action under Docket No. 254-225 was consumated, the Ferrises assigned to Century Bank by notarial act the $44,000.00 note and the vendor’s lien created by the Act of Credit Sale together with the Ferrises rights in the foreclosure proceeding initiated under Docket No. 254-225.

The defendants’ contention of improprieties in the foreclosure here are the same as those he alleged in his initial petition for injunction under Docket No. 254-225. The record, however, shows Century Bank’s foreclosure brought under Docket No. 255-444 was predicated on the $100,000.00 note secured by collateral mortgage, both dated January 28, 1981, held by Century Bank.

In Reed v. Meaux, 292 So.2d 557 (La.1973) our Supreme Court held that where one of three mortgages was sufficient to support the grant of executory process the others were mere surplusage and their deficiency had no effect on the executory proceeding. Hence, any improprieties between the $44,000.00 notes, the act of credit sale and/or the separate $44,-000.00 mortgage are irrelevant to the exec-utory process granted by the bank in its foreclosure initiated by the bank on the defendants’ $100,000.00 note secured by collateral mortgage on the property foreclosed on. Therefore, defendants’ contentions as to the invalidity of the executory process predicated on inconsistency in the [331]*331$44,000.00 notes and/or mortgage are without merit.

We next consider the defendants’ contention there was an unlawful use of executo-ry process to collect a vendor’s lien.

Contrary to the defendants’ contention, the vendor’s lien was not the lien being enforced via executory process, hence, any want of authentication was not fatal to the action for executory process. The vendor’s lien was a mere surplusage to the principal action to enforce the collateral mortgage. Reed v. Meaux, supra. Hence, defendants’ contentions in this regard are without merit.

We now consider the alleged inconsistencies in the $44,000.00 notes, act of credit sale and separate mortgage as it may affect the computation of the deficiency claim.

In its petition for a deficiency judgment the bank alleged an entitlement to a deficiency of $64,318.41 computed as follows:

Principal $ 95,000.00
Interest 13,113.25
Attorney Fees 27,028.31
Total 135,141.56
Less Proceeds from Sale 70,823.15
Balance Due $ 64,318.41

The defendants contend the application of the $33,378.03 to the payment of the vendor’s lien was an impropriety which bars recovery on the deficiency claim because it constituted the unlawful use of executory process to enforce a vendor’s lien. They further contend the vendor's lien was invalid. The exact basis urged by the defendants is not clear; but, the essence of his contentions stems out of the inconsistencies and confusions between the $44,000.00 notes originally executed by the defendants and secured by the vendor’s lien and/or the separate act of mortgage.

In an effort to clarify the inconsistencies, the testimony of the notary who confected the notes, the act of credit sale and the separate mortgage were introduced in evidence. The notary testified that in March 1977 the defendants sought to cancel the separate mortgage securing one of the $44,000.00 notes because there was no consideration for the note. The recorder of mortgages for the parish refused to cancel the mortgage without a notarial release of the mortgage. Consequently, on March 30, 1977, the parties executed a partial release of mortgage which cancelled the $44,000.00 mortgage and which also recognized and reserved the vendor’s lien contained in the act of credit sale.

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Related

Reed v. Meaux
292 So. 2d 557 (Supreme Court of Louisiana, 1974)
State Ex Rel. Landry v. Broussard
177 So. 403 (Louisiana Court of Appeal, 1937)
Lessard v. Lessard Acres, Inc.
340 So. 2d 351 (Louisiana Court of Appeal, 1976)

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461 So. 2d 328, 1984 La. App. LEXIS 10363, Counsel Stack Legal Research, https://law.counselstack.com/opinion/century-bank-v-melendy-lactapp-1984.