Hamilton Co. v. Hughes

141 So. 398
CourtLouisiana Court of Appeal
DecidedMay 4, 1932
DocketNo. 4036
StatusPublished
Cited by2 cases

This text of 141 So. 398 (Hamilton Co. v. Hughes) 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
Hamilton Co. v. Hughes, 141 So. 398 (La. Ct. App. 1932).

Opinion

TALIAFERRO, J.

• Plaintiff foreclosed upon its mortgage given by Medical Arts Company, Inc., owner, against tbe Medical Arts Building in the City of Shreveport. While the property was under seizure and in the hands of the sheriff, the Medical Arts Drug Store, Inc., one of the tenants in the building, paid rents to the City Savings Bank & Trust Company, bolder of certain rent notes which the tenant had given to the owner and which said owner had sold and assigned to the bank. Plaintiff, contending that it was entitled, as seizing creditor, to this rent, brought this suit against the tenant, the owner, and the sheriff, Thomas R. Hughes, to recover same, aggregating the sum of $1,026, alleged to have been paid while the property was under seizure.

Plaintiff alleges it was and still is entitled to these rentals under the plain provisions of article 466 of the Civil Code, which reads:

“The fruits of an immovable, gathered or produced while it is under seizure, are considered as making part thereof, and inure to tbe benefit of tbe person making tbe seizure.”

It is alleged, in substance, that tbe sheriff is liable because be neglected to collect and preserve for plaintiff tbe rents thus accrued and wbicb .was his mandatory duty to do under article 656 of tbe Code of Practice, wbicb provides that:

“When tbe sheriff seizes bouses or lands, be must take at tbe same time all tbe rents, issues and revenue wbicb this property may yield.”

Tbe Medical Arts Drug Store, Inc., is sought to be held by reason of its obligation as tenant, and tbe bank, it is alleged, should be compelled to pay over to plaintiff the amount of tbe rents illegally received by it from said tenant.

Plaintiff alleges, and tbe testimony sbovfrs, that there was left unpaid on its mortgage claim, after applying thereon tbe proceeds of tbe sale of tbe property, a sum in excess of tbe amount of tbe rents in question, judgment was prayed for against all three defendants in solido for tbe full sum alleged on, with legal interest from March 1, 1930, until paid.

Exceptions of no cause or right of action were filed in limine by each of tbe defendants, but were overruled.

Tbe defendant Medical Arts Drug Store, Inc., filed answer of general denial, and averred that it paid the rents to tbe bank, wbicb it bad a right to do, because of tbe fact that tbe bank held tbe rent notes wbicb it bad executed to its lessor, tbe owner, and wbicb said lessor bad sold, to tbe bank. It is further averred that it, said tenant, was instructed by tbe sheriff, tbe legal custodian of tbe property, to pay tbe rents to said bank, and therefore this defendant pleads payment, under tbe instructions from tbe sheriff, in bar of plaintiff’s right of recovery.

Tbe sheriff and the defendant bank answered denying any liability whatever, and averred, in substance, that tbe rents in question were properly paid to the defendant bank for tbe reason that the contract of [399]*399lease, under which the rents accrued, was executed and recorded prior to the time plaintiff took its mortgage; that the rent notes representing the monthly rentals on the property were executed in connection with the rent contract (although at a later date than that of the contract itself); that said notes were for a valuable consideration, assigned by the lessor, under authentic act, to the said bank prior to the date of said mortgage; that plaintiff therefore accepted the mortgage sub-,iect to the resulting effect of the recorded contract of lease and the rights of the hank as holder of the notes; that the bank thus being the holder and owner of the notes, payment of same was properly made to it.

From a judgment rejecting plaintiff’s demands it has appealed.

The Medical Arts Building Company, Inc., as owner, executed a contract of lease under private act, of date January 3, 1&28, unto Florence & Nossek, a partnership composed of M. E. Florence and S. S. Nossek, represented by the former, wherein they secured a 50-year lease upon a certain part of the Medical Arts Building, at an annual rental of $9,000, payable in monthly installments of $750 in advance, on the 1st of each month. This contract was filed and recorded April 19, 1929. There were no notes executed to represent the rent payments, and none mentioned in the contract. On March 21, 1928, Florence & Nossek, under similar act, and on the same basis as to price per annum and terms of payment, leased the property for a period of ten years to the Medical Arts Drug Store, Inc., a corporation apparently formed by these partners for that particular purpose; so that the occupancy of the premises was continued by the same tenant but under a- different name. This contract was never recorded.

On April 2, 1929, Florence & Nossek executed and delivered to the Medical Arts Building Company, Inc., their lessor, ten promissory notes, each for the sum of $750, bearing 7 per cent, per annum interest from maturity, maturing monthly, beginning April 10, 1929, and reciting “fof valué received, in consideration of lease contract between the maker and payee hereof of date, January 3rd, 1928, duly recorded, I promise to pay subject to the terms and conditions, of said lease, to the order of Medical Arts Building Company, Inc.-.” On April 3d following, the Medical Arts Building Company, Inc., by notarial act assigned, indorsed in blank, and delivered said ten notes to the City Savings Bank & Trust Company, for the recited consideration of $7,509. No record was made of the assignment. The only record made of any of these transactions was that of the original contract of lease of the 3d of January, 1928. This document did not call for or mention the giving of any notes whatever, but merely stipulated the payment' of cash monthly installments. It did, however, stipulate for interest and attorney’s fees in like amounts and tenor as was stipulated in the notes when they were executed some fifteen months later.

On July 26, 1929, some four months after the sale and assignment of the notes to defendant bank, plaintiff accepted from the lessor, owner, a mortgage on the entire Medical Arts Building, upon which it foreclosed by seizure thereof on January 17, 1930, and the property sold March 1st following.

It appears that the note falling due January 10th was paid prior to date of seizure, and the claim for the portion called for by it accruing after the seizure, viz.: $276, has been- abandoned by plaintiff, which leaves the one whole note for $750 paid February 14th alone in contest. Defendants contend that Civ. Code, art. 466 and Code Prac. art. 658 should be construed in connection with other laws, and specially the law of registry as embraced in article 2266 of the Civil Code; that rent stipulated in a contract of lease is a debt due ¡by the lessee, subject to assignment, as any other debt; that a contract of lease and rights arising out of such a contract are incorporeal rights of the nature of which the transfer is regulated by articles 2642 and 2643 of the Civil Code; and that the transfer is fully perfected against third persons from the time ' of notice to the debtor (citing Gottlieb v. Schloss, 5 La. App. 379). Defendants’ counsel in briefs cite numerous decisions on these as well as other laws which it is contended are in support of their position.

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Bluebook (online)
141 So. 398, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hamilton-co-v-hughes-lactapp-1932.