City Bank & Trust Co. v. Caneco Const., Inc.

341 So. 2d 1331, 1976 La. App. LEXIS 4806
CourtLouisiana Court of Appeal
DecidedJanuary 31, 1976
Docket5704
StatusPublished
Cited by11 cases

This text of 341 So. 2d 1331 (City Bank & Trust Co. v. Caneco Const., Inc.) 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
City Bank & Trust Co. v. Caneco Const., Inc., 341 So. 2d 1331, 1976 La. App. LEXIS 4806 (La. Ct. App. 1976).

Opinion

341 So.2d 1331 (1976)

CITY BANK & TRUST COMPANY, Plaintiff and Appellant,
v.
CANECO CONSTRUCTION, INC., Defendant and Appellee.

No. 5704.

Court of Appeal of Louisiana, Third Circuit.

January 31, 1976.
Rehearing Denied March 2, 1977.

Gahagan & Gahagan, by Henry C. Gahagan, Jr., Natchitoches, for plaintiff and appellant.

Kelly, Seaman & Ware, by Richard N. Ware, Natchitoches, for intervenor-appellee.

Watson, Murchison, Crews & Arthur, by Daniel T. Murchison, Natchitoches, for intervenor and appellee.

Before CULPEPPER, WATSON and GUIDRY, JJ.

CULPEPPER, Judge.

This is a companion case to Franklin v. Caneco Construction, Inc., 341 So.2d 1339, in which a separate decision is being rendered *1332 by us this date. In the present case, City Bank & Trust Company sued to foreclose by executory process on a mortgage from defendant Caneco covering a newly constructed residence. Several labor and material lien claimants intervened. W. H. Franklin also intervened, claiming a vendor's lien on the lot on which the house was built and, in the alternative, seeking dissolution of the sale to Caneco for its failure to pay the purchase price. In the companion suit also, Franklin sought to dissolve the sale to Caneco for failure to pay the purchase price, and the Bank intervened.

The property was sold at sheriff's sale to City Bank & Trust Company on March 24, 1976. After a trial of the consolidated cases was completed on April 1, 1976, the trial judge held the Bank's mortgage was not recorded until after construction of the residence had commenced, and judgment was rendered on the various labor and material liens accordingly. As to Franklin's vendor's lien and his suit to dissolve the sale, the judge rejected both demands on the grounds that Franklin could not introduce parol evidence to vary the statement in the deed to Caneco that Franklin had received the cash price of $5,000. The plaintiff Bank and the plaintiff Franklin appealed.

Franklin's intervention in the present suit and his separate suit to dissolve the sale present factual and legal issues different from those presented by the labor and material liens. Accordingly, our discussion of this case will be divided into (1) Franklin's intervention and his suit to dissolve the sale, followed by (2) a discussion of the labor and material liens.

FRANKLIN'S INTERVENTION AND HIS SEPARATE SUIT TO DISSOLVE

The evidence shows that by a cash sale deed dated August ____, 1975, Franklin sold the residential lot in question to Caneco. The printed act of sale, in authentic form, contains this recitation:

"This sale is made for a consideration of the sum of ($5,000)— Five Thousand and No/100 ... Dollars cash in hand paid, the receipt of which is hereby acknowledged."

In addition to other necessary signatures, the signature of plaintiff, W. H. Franklin, appears on the act of sale.

To finance construction of the house, Caneco executed a promissory note for $36,000 in favor of City Bank secured by a collateral mortgage affecting the subject property, the note and mortgage being dated August 4, 1975. The cash sale deed was properly recorded at 1:32 p.m. and the mortgage at 1:33 p.m. on August 12, 1975.

Subject to City Bank's timely objection at trial, Franklin was allowed to introduce evidence for the purpose of proving the nonpayment of the purchase price. This evidence included testimony by Franklin to the effect that at the time he signed the deed he received only $500 in cash and the remainder of the purchase price, $4,500, was in the form of a check drawn on Caneco's account in City Bank. Franklin testified he presented this check to City Bank for payment on two occasions, August 5 and August 7 of 1975, but on both occasions the check was returned to Franklin for lack of sufficient funds in Caneco's account. The check is filed in evidence and corroborates Franklin.

In his written reasons for judgment, the trial court sustained City Bank's objection to the admission of evidence seeking to vary the recital that the entire purchase price was paid in cash. The court then rendered judgment rejecting Franklin's demands in both suits.

Article 2236 of our Civil Code provides:

"The authentic act is full proof of the agreement contained in it, against the contracting parties and their heirs or assigns, unless it be declared and proved a forgery."

Article 2276 of the Civil Code states:

"Neither shall parol evidence be admitted against or beyond what is contained in the acts, nor on what may have been said before, or at the time of making them, or since."

*1333 These two articles are the basis of the parol evidence rule as it relates to authentic acts. The rule, of course, is subject to many exceptions. See Writing Requirements and the Parol Evidence Rule, a Student Symposium, 36 La.L.Rev. 745 (1975); A. Rubin, Parol Evidence to Vary a Recital of Consideration, 3 La.L.Rev. 427 (1941).

Also germane to our discussion is LSA-R.S. 9:2721, et seq., our Registry Law, which states:

No sale, contract, counter letter, lien, mortgage, judgment, surface lease, oil, gas or mineral lease or other instrument of writing relating to or affecting immovable property shall be binding on or affect third persons or third parties unless and until filed for registry in the office of the parish recorder of the parish where the land or immovable is situated; and neither secret claims or equities nor other matters outside the public records shall be binding on or affect such third parties. Acts 1950, 2nd Ex.Sess., No. 7, § 1.

LSA-R.S. 9:2722 provides:

Third persons or third parties so protected by and entitled to rely upon the registry laws of Louisiana now in force and effect and as set forth in this Chapter are hereby redefined to be and to include any third person or third party dealing with any such immovable or immovable property or acquiring a real or personal right therein as purchaser, mortgagee, grantee or vendee of servitude or royalty rights, or as lessee in any surface lease or leases or as lessee in any oil, gas or mineral lease and all other third persons or third parties acquiring any real or personal right, privilege or permit relating to or affecting immovable property. Acts 1950, 2nd Ex.Sess., No. 7, § 2.

These statutory provisions and the jurisprudence preceding and following their enactment constitute our public records doctrine. Both the parol evidence rule and the public records doctrine are operative in the present case. See Redmann, The Louisiana Law of Recordation: Some Principles and Some Problems, 34 Tul.L.Rev. 490, 499-502 (1965).

Franklin, a party to the authentic act, seeks to vary his recited acknowledgment that the full purchase price was paid in cash. A third party relying on the public records, City Bank, opposes introduction of parol evidence to vary this authentic recital of payment and receipt in cash. As previously stated, the deed was recorded before the mortgage. At the time City Bank recorded its mortgage there was nothing in the public records to give notice of the fact that any portion of the price remained unpaid. To the contrary, the record showed an authentic act of sale reciting that the full amount of the purchase price was paid in cash. Under these circumstances, the trial court did not err in excluding parol evidence varying the recital that the full amount of the purchase price was paid in cash to Franklin. The above quoted statutes and the following cases support our conclusion.

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Bluebook (online)
341 So. 2d 1331, 1976 La. App. LEXIS 4806, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-bank-trust-co-v-caneco-const-inc-lactapp-1976.