Dunlap v. Whitmer

62 So. 938, 133 La. 317, 1913 La. LEXIS 2279
Supreme Court of Louisiana·Decided March 17, 1913·No. No. 18,998·Published·Cited by 11 cases

Opinion

[319] Statement of the Case.

MONROE, J.

The defendant Whitmer, being the holder of a first mortgage and largely-interested in a second mortgage upon a body of land containing some 18,000 acres in the parish of St. Landry, caused the same to be seized under executory process and offered for sale at Opelousas, and, he (through his counsel) and the plaintiff herein (who owned or represented an interest in the second mortgage) being the only competitive bidders, the land was adjudicated to plaintiff for $80,000. The sheriff, acting under the advice of his counsel, given in. consequence of the demand of the counsel for the plaintiff in the writ (defendant herein), called for payment of $50,000 of the amount bid in cash; the adjudicatee failed to produce that amount of cash but tendered “exchange,” drawn by an Opelousas bank upon different banks in New Orleans, which the sheriff, still acting under advice, declined to receive, and thereafter he reoffered the property and adjudicated it to defendant, as the only bidder, for $45,000; plaintiff, through his attorney, giving notice that he stood upon the first adjudication and that the purchaser would buy a lawsuit. Plaintiff then brought this suit against the last adjudicatee and the sheriff to confirm the first and annul the last adjudication, or, in the alternative, to recover $103,358.40, the difference between the alleged value of the property ($183,358.-40) and the $80,000 bid by him; the grounds relied on being that the demand for cash and the refusal to accept the exchange were illegal and. were the results of a fraudulent conspiracy between said two defendants. Defendants denied the alleged conspiracy and affirmed the legality of the course pursued by them; and the sheriff, by way of reconventional demand, set up a claim for damages for libel, which was dismissed upon an exception of no cause of action. On the merits there was judgment in the district court in favor of plaintiff, sustaining the adjudication to him and annulling that under which the defendant claims title. Both defendants have appealed. The facts disclosed by the evidence are as follows:

In 1902 O. W. Krotz, a resident of Ohio, bought the land in question for a re.cited consideration of $25,000, of which $6,000 is said to have been paid in cash, and for the balance of which he gave four notes of $4,-750 each, secured by first mortgage and vendor’s lien and bearing interest at 8 per cent, from January 1, 1902. In May, 1902, he transferred the land to the Latannier Land Improvement Company, a Delaware corporation, of which he was president, for the stated consideration of $250,000, to be represented by that company’s “first mortgage gold bonds,” which were to be issued and delivered to him; and shortly afterwards a common-law mortgage was imposed upon the land to secure said bonds, which were delivered to Krotz, with the exception of $50,-000 of them, which are said to have been deposited with some institution in Ohio as security against the first mortgage. Krotz and the Latannier Company seem then to have kept the title to the land and the $200,-

000 of bonds, which were left on hand, moving about rather actively. In February, 1904, the land appears to have been sold to the Krotz Manufacturing Company, F. E. Creel-man Lumber Company, and F. E. Creelman; and the bonds, as we infer, were disposed of by Krotz whenever and wherever he could find a market. Defendant tells of his connection with the business as follows;-

“To begin with, we bought or' loaned some money to a lumberman, $50,000, on what we supposed to be first mortgage 'bonds on some land in Louisiana; that was the first step. We were to be paid back as soon as another issue of bonds was put on this property. The next thing I knew this concern went broke. 1 came down here to look at the property, and when I got here I found these bonds were not first mortgage bonds; that there was an underlying mortgage on it. I saw I had to buy this to protect what bonds I did have. I also [321] bought some bonds of Krotz from the Melyille bank; I did that to protect myself. Then I came down and would have started to foreclose on the mortgage, and one injunction was had, then another, and I could not do anything.”

In the meanwhile (i. e., before the attempt to foreclose) it appears that the Creelman Company, whilst holding the title to the land, had gone into bankruptcy in Danville, 111., and defendant was drawn into that litigation, at least to the extent that the counsel whom he had employed here was obliged to go up there several times in order to protect his interest. In the meanwhile, also, the defendant and his counsel appear to have busied themselves in an effort to get all the holders of the Krotz bonds to unite with defendant for their mutual protection, defendant offering to share his interest in the first mortgage with any of them, who were willing to put up a proportionate share of the money that had been expended; and as a result it appears that, at the time of the trial, the first mortgage was owned in equal proportions by defendant and Mr. Lamar, a banker from Pensacola, and that they also either own or control 75 per cent, of the Krotz second mortgage bonds. The writ of seizure and sale, under which the adjudications here in question were made, was issued in June, 1907, and was enjoined by Krotz in October of that year. A similar injunction was issued at the same time at the instance of Daniel D. Healy, appearing as the receiver of an Illinois bank, which owned some of the bonds. Those injunctions, for various reasons, could not be brought to trial until November, 1909, and during the interval defendant and his home counsel came down here from Philadelphia several times on account of them and brought witnesses.

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Dunlap v. Whitmer, 62 So. 938, 133 La. 317, 1913 La. LEXIS 2279 (La. 1913).

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