Phillips v. Kathman-Landry, Inc.

154 So. 2d 363, 244 La. 686, 1963 La. LEXIS 2457
CourtSupreme Court of Louisiana
DecidedJune 4, 1963
DocketNo. 46432
StatusPublished

This text of 154 So. 2d 363 (Phillips v. Kathman-Landry, Inc.) is published on Counsel Stack Legal Research, covering Supreme Court of Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Phillips v. Kathman-Landry, Inc., 154 So. 2d 363, 244 La. 686, 1963 La. LEXIS 2457 (La. 1963).

Opinions

HAMLIN, Justice.

The issue herein involved concerns the party against whom an adjudicatee at a foreclosure sale by executory process must proceed in order to recover payment of an undisclosed and unknown sewerage lien discovered by said adjudicatee and the seizing mortgage lien creditor after Sheriff’s Sale.

The facts of record are undisputed and comparatively simple.

On November 4, 1959, a certain portion of ground together with the improvements thereon located in the Parish of Jefferson was adjudicated to Nathan Phillips for $1,300.00, in response to a writ of seizure and sale issued in executory proceedings entitled “Kathman-Landry, Inc. v. Beulah Lee Jones Butters, Surviving Spouse of Edward M. Butters,” No. 52,201 of the Docket of the Twenty-Fourth Judicial District Court for the Parish of Jefferson, September 2, 1959. The Sheriff’s Proces Verbal Deed recited that the certificate of the Clerk of Court and Ex-Officio Recorder of Mortgages showed that other than a vendor’s lien in the amount of $1,390.00 in [365]*365favor of Kathman-Landry, Inc., there were no mortgages and liens existing against the described property in the name of Beulah Lee Jones Butters, Surviving Spouse of Edward M. Butters; it also stated that Nathan Phillips was the last and highest bidder for the property for the price and sum of $1,300.00.

At the time of the adjudication, as well as at the time of recordation of the deed on December 3, 1959, there existed against the propei'ty a sewerage lien filed and recorded on October 17, 1956 in the name of Lillian T. Lewis, ancestor in title to Edward M. Butters.

On April 13, 1960, Nathan Phillips filed suit against Kathman-Landry, Inc., alleging discovery of the sewerage lien and praying for judgment in the amount of $715.52. The Jefferson Parish Department of Sanitation had previously notified Phillips’s attorney, by letter dated April 4, 1960, that if the figure of $715.52, representing the outstanding sewerage lien together with interest and penalties, was not paid by April 15, 1960 the account would be turned over to the Parish Attorney for collection. It is stipulated herein that Phillips paid the lien and that by such payment it was cancelled on December 13, 1960.

On February 8, 1961, Phillips amended his original petition.

The matter then proceeded to trial on the merits.

The trial court found that no error had been committed by the Sheriff of Jefferson Parish in procuring the mortgage certificate in the name of the judgment debtor only (State ex rel. Flournoy v. Simmons, 197 La. 299, 1 So.2d 525, La.App., 1 So.2d 850), that the defendant lacked essential information to protect its right to a competitive bid, and that the purchaser was ignorant of the preferential sewerage lien. It was of the opinion that the undisclosed existence of the sewerage lien in the sum of $715.52 was an essential fact in connection with the sale to such an extent that in fact it vitiated the consent of the foreclosing creditor in permitting the property to be sold for $1,300.00, and, likewise, it vitiated the consent of the purchaser in bidding and paying in full $1,300.00 for the property in question. The court further stated:

“This lack of information is so vital to the consummation of the adjudication that the Court is of the opinion that it voids the sale in question and that the plaintiff should therefore seek to have the sale set aside and the purchase price returned. Judgment is rendered in favor of the defendant, for to hold for the plaintiff would in effect be using the Court as an instrumentality for the plaintiff to unjustly enrich himself at the expense of the defendant.”

Plaintiff’s demands were rejected; he did not invoke the proceedings suggested by the trial judge; he appealed.

The Court of Appeal (144 So.2d 889) was of the opinion that the issue presented should be determined upon the basis of the provisions of Articles 2379 and 2381 of the Code of Civil Procedure.1 In reversing the judgment of the trial court, it concluded :

“Upon the basis of the provisions of the articles above quoted, we think it is clear that the effect thereof was intended by the redactors of the Code [366]*366of Practice to vest the purchaser at a sheriffs sale with the right to reimbursement for amounts expended in the discharge of undisclosed superior liens, which reimbursement he could seek against either the judgment creditor or the judgment debtor, or both. We find no prohibition of the action which * * * was taken in the instant case against the judgment creditor alone, since the latter’s right and entitlement to reimbursement from his judgment debtor is specificalty preserved under Article 2381, supra.”

In the exercise of our supervisory jurisdiction, we directed Certiorari to the Court of Appeal, Fourth Circuit, in order that we might review its judgment in favor of Nathan Phillips and against Kath-man-Landry, Inc., in the amount of $715.-52 with legal interest. Herein, relator assigns the following specification of errors:

1.
“The Court of Appeal, Fourth Circuit, has failed to consider the question of unjust enrichment to the plaintiff at the expense of defendant, thereby disregarding the principles expressed in Article 508 of the Revised Civil Code.” 2
2.
“The Court of Appeal, Fourth Circuit, has failed to properly interpret Article 2621 of the Louisiana Revised Civil Code, by not talcing into consideration both parties’ lack of knowledge of the sewerage lien.” 3
3.
“The Court of Appeal, Fourth Circuit, has failed to properly interpret Article 2379 of the Code of Civil Procedure by not requiring the plaintiff to bring this action against the judgment debtor as well as the seizing creditor.”

Respondent Phillips contends that an ad-judicatee at a foreclosure sale is entitled to receive title free from liens and incum-brances. He argues that an undisclosed preferred lien discovered after the sale is an obligation of the plaintiff in foreclosure; that where same is paid by the adjudicatee, on demand and threatened suit, he is entitled to reimbursement from the seizing creditor. Respondent cites West’s LSA-[367]*367C.C.P. Articles 2371, 2372, 2373, 2374, 2375, 2376 and 2378.

It is to be initially observed that when Nathan Phillips filed his original petition and did not name Kathman-Landry, Inc.’s debtor (Mrs. Butters) as a party defendant, Kathman-Landry, Inc. had the right to file an exception of non-joinder of proper parties defendant; 4 this it did not do. It filed an exception of no cause or right of action, which, on February 7, 1961, was argued and submitted and plaintiff was given fifteen days by the trial court to amend his petition; this he did on February 8, 1961. Defendant answered on April 14, 1961, denying the allegations of plaintiff’s original and amended petitions; it went to trial on the matter as presented.

When plaintiff filed his original petition on April 13, 1960, defendant also had available to it the provisions of Act 433 of 1954, LSA-R.S. 13:3381-13:3386, “Third Party

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Related

State Ex Rel. Flournoy v. Simmons
1 So. 2d 525 (Supreme Court of Louisiana, 1941)
State v. Simmons
1 So. 2d 850 (Louisiana Court of Appeal, 1941)
Moore v. Blount
160 So. 319 (Louisiana Court of Appeal, 1935)
Phillips v. Kathman-Landry, Inc.
144 So. 2d 889 (Louisiana Court of Appeal, 1962)
Gaines v. Merchants Bank
2 La. Ann. 479 (Supreme Court of Louisiana, 1847)
Gaines v. Merchants' Bank
4 La. Ann. 369 (Supreme Court of Louisiana, 1849)
Haynes v. Courtney
15 La. Ann. 630 (Supreme Court of Louisiana, 1860)

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Bluebook (online)
154 So. 2d 363, 244 La. 686, 1963 La. LEXIS 2457, Counsel Stack Legal Research, https://law.counselstack.com/opinion/phillips-v-kathman-landry-inc-la-1963.