Rawlins v. Pratt

45 La. Ann. 58

• Court: Supreme Court of Louisiana
• Decided: January 15, 1893
• Docket: No. 11,082
• Status: Published

Opinions

The opinion of the court was delivered by

Nicholls, C. J.

On the 24th of April, 1891, Chaffe, Powell&West, a commercial firm in New Orleans, instituted in the District Court for Webster parish a personal action (No. 1098 of the docket of that court) against one M.' M. S. Mackenzie for a large amount of money, accompanying their demand by an application for a writ of attachment on charges of fraud, insolvency, etc.

The writ was granted and property of the defendant seized.

On trial in the District Court judgment was rendered in favor of the plaintiffs for the amount of their claim, but the attachment was dissolved and plaintiffs condemned to pay defendant $30,000 damages for a wrongful attachment. The plaintiffs appealed, and this court in a judgment rendered in the matter at Shreveport on the 23d October, 1891, amended the judgment so as to allow the defendant only $5150 damages and affirmed it in all other respects. On the 24th of October, 1891, S. W. Rawlins, the Mutual National Bank and Smith & Boulemet, creditors of the defendant, each brought suit against him on moneyed claims, accompanying their demands with applications for writs of attachment, which being granted, the sheriff seized under them the same property which had been attached by Chaffe, Powell & West. These three eases went to judgment on the 10th of November, 1891; judgment being rendered in each in favor of the plaintiff therein against the defendant for the amount claimed with recognition of the rights, of privilege resulting from the attachment. In the meantime Chaffe, Powell & West caused execution to issue under their judgment, and the property which had been held under their attachment was again seized on the 26th day of October, 1891, under their writ of fi. fa.

On the 11th day of November, 1891, S. W. Rawlins, the Mutual National Bank and Smith & Boulemet filed third oppositions in the case of Chaffe, Powell & West vs. M. M. S. Mackenzie, No. 1098, in which, alleging their judgments and their attachments and their priority by reason thereof over the plaintiffs in that suit, prayed that they be paid by preference out of the proceeds of the property seized. The defendants — the seizing creditors — met these attacks by answers, in each case substantially alike, in which they first pleaded the general issue and then averred that the attachments and judgments confirming same, on which third opponents rely, were fraudulently and collusively obtained and sustained by consent of defendant. Mackenzie, he being insolvent, with intent to defraud respondent, and confer an illegal preference on third opponents on the property of Mackenzie — wherefore they prayed that their demand be rejected! at their cost and for general relief.

Thinking that as defendants in these third oppositions they were occupying a more restricted position than they were entitled to hold,, Chaffe, Powell & West then brought a direct action against Rawlins„ the Mutual National Bank and Smith & Boulemet.

In their petition, after alleging themselves to be creditors of Mackenzie under the judgment already referred to as having been passed on by the Supreme Court, and that under a writ of fi. fa. issued thereunder at their instance a large amount of defendant’s prbperty had been seized, they refer to the suits and attachments sued out by Rawlins, the Mutual National Bank and Smith & Boulemet, and say that on the 10th of November, 1891, the day on which the aforesaid cases were ripe for default, the defendant appeared in person and pleaded answers of general issue and praying that the attachment be set aside.

That the several eases were at once taken up for trial, and defendant making no appearance, offering no evidence and interposing; no objections, judgments were entered pro forma for plaintiffs, sustaining the attachments on the aforesaid property and ordering the same sold in satisfaction thereof.

That the aforesaid proceedings were fraudulent and collusive and gotten up for the purpose of conferring an unjust and illegal preference for said creditors of defendant over them and to defeat the execution of their judgment on his property, then not executory, but which they knew would become executory, and upon which a writ of fi. fa. would be issued on the 26th of the same month.

That the institution of said suits and issuance of said attachments was by a preconcerted scheme between the said creditors and Mackenzie to defeat petitioner’s rights and confer a preference upon them. That Mackenzie is insolvent, and if the aforesaid attachments are maintained as valid liens on the property aforesaid there will be no other property upon which they could recover, and that the said property is insufficient to pay the writ which they have levied upon it. That they have acquired a lien and privilege upon the said property by the levy of the writ of fi. fa. aforesaid. That in order to protect their rights and avail themselves of the benefit of their seizure it is necessary that the said fraudulent and collusive judgments, so far as they recognize and sustain said attachments and liens on said property, should be set aside and annulled.

’They, therefore (describing each of said judgments), prayed that •the judgment in favor of S. W. Rawlins against Mackenzie — that of the Mutual National Bank against him (one of the notes on which the latter judgment was obtained not being due until May, 1892), and that of Smith and Boulemet against him be amended and avoided in so far as they maintain the attachments therein issued and levied upon the property seized under petitioner’s writ of fi. fa. against Mackenzie. Mackenzie was made a party defendant to this action.

The three judgment creditors thus made defendants answered by first pleading the general issue; they next averred that Chaffe, Powell & West by their judicial admissions, judicial allegations, proof adduced and sworn testimony of themselves in their case, No. 1098, in the Second District Court for Webster parish vs. M. M. S. Mackenzie, have estopped themselves from bringing the action herein. They alleged that the petition of plaintiff in this case disclosed no cause of action. They further alleged that the attachments herein attacked were levied and sued out in good faith by the plaintiffs therein severally on just legal grounds for attachment without any collusion, without privity of interest, without fraud and without any understanding or concert of action between themselves severally or with Mackenzie, and that by virtue of said attachments in the suits alleged and the judgments therein they have severally obtained the rights and privileges of attaching creditors allowed by law, and the judgments granted against the property and its proceeds alleged by the plaintiff and fully ' shown by the judgments and records in the suits herein sought to be annulled by reference hereto annexed, are higher in rank than plaintiffs’ herein and said judgments are res judicata. They further alleged that the plaintiff has no privilege on the property and proceeds attached as alleged. That their judgment was an ordinary judgment, conferring no privilege against the property of Mackenzie, and the writ of fi. fa. was not issued and not in the hands of the sheriff when defendants’ writs of attachment were severally issued and levied on said property. They therefore prayed that the suit and action to annul brought by plaintiff be rejected.

This direct action — the suit No. 1098 and the third oppositions were consolidated and tried together.

Chaffe, Powell & West (who for purposes of designation we will style the plaintiffs) do not directly attack the correctness of the claims of the third opponents against Mackenzie, nor dispute the verity of the facts upon which the attachments are based. They contend that the proceedings themselves and the judgments therein rendered were collusive and fraudulent — the result of a preconcerted scheme between those creditors and MacKenzie, gotten up for the purpose of conferring an unjust and illegal preference on them and of defeating them of their rights under the execution of their judgment. They claim that Messrs. Watkins & Watkins, who were iliackenzie’s attorneys in his suit, were, shortly after being retained by Mackenzie, employed by Rawlins, who placed in their hands the claim upon which they subsequently sued out the attachment on behalf of Rawlins mentioned in the pleadings; that the defence made in the original attachment suit (No. 1098) was made by those attorneys as part of the preconcerted plan; that one of the members of the law firm was present at Shreveport watching the issues of the case on appeal, and that he early on the morning of the 24th November, 1891, telegraphed his brother and partner the conclusions reached the night before by this court; that thereupon the latter caused attachments at once to issue on behalf of the three third opponents upon pleadings prepared by anticipation to meet the precise contingency; that Mackenzie, both before and after the judgment of this court on the said appeal, had warned a number of his creditors (notably the three opponents) to be on the alert for quick action, and had urged upon them to place their respective claims in the hands of Watkins & Watkins; that the three opponents had acted on this suggestion ; that on the day the suits brought by them were ripe for judgments for default, Mackenzie, instead of actively contesting or delaying them, had gone forward and advanced the cases by placing them at issue by a simple geneial denial, thus enabling the plaintiffs to take them up and dispose of them at once; that all these parties knew that plaintiffs’ judgment would not be executory until after the legal delays for a rehearing had expired, and that execution would issue thereon on the 26th of November, and they thought to forestall -this action by these collusive attachments; that in the original suit of plaintiffs against Mackenzie an intervention was filed in the name of Rawlins, in which it was charged that plaintiffs’ attachment of Mackenzie’s property was a collusive attachment taken out in fraud of Rawlins; that although the petition of intervention was signed by A. J. Murff as intervenors’ counsel, the latter had no communication with Rawlins, but had been employed by Messrs. Watkins & Watkins, and that the defence of the suit and the intervention were part and parcel of the general plan which had been devised to defeat plaintiffs of their rights.

A great deal of testimony was adduced on the trial and an immense record has been brought up.

The judgment of the court below was against Chaffe, Powell & West and in favor of the defendants in the direct action for nullity of judgments and dissolution of attachment, and in favor of the third opponents on their oppositions, recognizing their priority over the seizing creditor upon the proceeds of the property and ordering them to be paid accordingly. The seizing creditors (Ohaffe, Powell & West) have appealed.

We have examined very carefully the evidence in the record, and we find no act done which made it necessary to have the concurrence of either Mackenzie or the Messrs. Watkins in order to bring about the precise condition of affairs presently existing.

The attachment suit of the plaintiffs against Mackenzie was public, and the proceedings taken in it were open to inspection by every one. The amount of the seizure therein was so large as to necessarily carry with it, if maintained, as the plaintiffs themselves say, the loss of any claim other than their own. The attention of every creditor of Mackenzie was drawn to that seizure, and its progress was watched beyond question with great interest. Rawlins, one of the third opponents, who it appears was a director of the Mutual National Bank, was one of those creditors. He was at Minden just after the attachment, and was not only fully advised but alive to the necessity of protecting his interests. To that end he called upon Messrs. Watkins & Watkins, his regular attorneys, and sought to retain them, but was answered that they were McKenzie’s attorneys in the pending suit and could take no employment inconsistent with their duty to him in that suit. They finally consented to represent Rawlins when their relations with Mackenzie should have terminated. We have no reason to believe that they by reason of that fact failed in any way in their duty to Mackenzie.

On the contrary the very vigorous defence made in his suit resulting in a dissolution of the attachment and a judgment in the District Oourt for $30,000 against the plaintiffs on defendant’s reconventional demand for damages, and which judgment necessitated an appeal to this court, proves conclusively that Mackenzie’s interests were not neglected. On the morning after this court had rendered its decree in that case, Rawlins, who was in the city of New Orleans, saw an announcement of the result in the morning papers. He at once advised the officers of the bank, of which he was a director (which bank was also a creditor), and dispatches were at once sent out by both to the Messrs. Watkins to take steps to protect their interests. Steps were immediately taken in the shape of attachments against Mackenzie, under which the same property which had been attached by plaintiffs was placed under seizure. These attachments were issued on the 24th of October, 1891, the day after the decison of the Supreme Oourt in the plaintiffs’ suit. The petitions in those cases and in a similar proceeding brought on the same day by the firm of Smith & Boulemet, one of the three third opponents, were personally served on the same day on Mackenzie.

The District Oourt for Webster parish convened on the 9th of November at its regular session. At that time the delays for answering in the last attachment suits had expired, but no default under the law could be taken on the first day of the term. The next day Mackenzie filed his answers pleading a general denial. The cases were at once taken up and disposed of and judgments rendered in favor of the plaintiffs in those suits, as has already been mentioned.

The plaintiffs in their brief, comment very severely upon the course taken by those plaintiffs and their attorneys. If (say they) those parties had just reason to issue attachments against Mackenzie, how comes it they delayed moving until after the decision of this court; why did they not move before? The answer to this is very obvious. It would have been exceedingly unwise on the part of those creditors, who owed no duty to the plaintiffs, to take any action in the face of plaintiffs’ attachment covering nearly the whole of Mackenzie’s property. Their only hope was to take advantage, as they had a perfectly legal right to do, of any opportunity which might present itself to throw forward their claims. The opportunity did present itself and they availed themselves of it legally.

The plaintiffs complain of the fact that one of the Messrs. Watkins should have been at Shreveport whilst the other remained at Minden, and that pleadings for attachment should have been prepared ready to be served at once on advices from Shreveport, and they further complain of those proceedings having been taken whilst their case was held up by reason of the fact that the delays for rehearing had not expired. Plaintiffs’ rights were not at all affected by the fact that the Messrs. Watkins were attorneys in the case. Any other vigilant attorneys would have followed the identical course without the possibility of legal objection from the plaintiffs, and as we have seen as a matter of fact the firm of Watkins & Watkins at Minden were directed by dispatches from New Orleans on the 24th of October, to proceed.

The plaintiffs themselves could have anticipated the possible result of their suit and prepared accordingly, just as the third opponents did. They were not forced to wait the issuing of a fi. fa.; They could themselves have had issued new writs of attachment based upon facts which occurred subsequently to their original attachment.

We see nothing in plaintiffs’ complaint that Mackenzie filed answers in the attachment suits, and by placing them at issue they enabled judgments to be taken at that term of court. The judgments were taken on the second day of a regular term of court, and if court adjourned on the third day, as it did, there is no reason to believe it would have adjourned so quickly had there been any suits before it requiring a delay of a few days to terminate them. It would have been the duty of the judge to have held the court open a reasonable time, but the answer to this objection is found in the fact that the rights of these parties are not dependent upon the judgments, but upon the attachments. The right of priority of payment, which is the matter with which plaintiffs are alone concerned, springs from their attachments, which take rank from their date, and the suits themselves might have been left open for months without affecting the legal situation. 43 An. 856, Tatum vs. Colvin. We may assume for the purposes of this suit that Mackenzie, both ' before and after the decision of this court, may have written to his creditors, and among them to the third opponents, advising them of the situation and urging them to protect themselves and suggesting to them to send their claims to Messrs. Watkins & Watkins, and that on the strength of the information so derived the third opponents acted. If they had legal claims against Mackenzie, and the condition of facts justified attachments, they were entitled to proceed and were not prejudiced by the mere circumstance that their information came from their debtor. If they could have legally proceeded on information derived from a third person, the mere fact that Mackenzie, over whose actions they had no control, seeing ruin before him under any and all circumstances, and doubtless embittered against the plaintiffs whom he regarded as the cause of his ruin, should have written them, can not diminish their legal rights.

But the assumption we have made is not true, for, as we have seen, Rawlins acted on the strength of what he saw in the newspapers, the bank acted at the instance of Rawlins, and though Smith & Boullemet were put on their guard by Mackenzie, they say they intended acting anyhow, and intended sending their ciaim to Messrs. Watkins & Watkins, their regular attorneys for Webster parish.

We are not called upon to express any opinion upon the relations between Messrs. Watkins & Watkins and Mackenzie as resulting from the fact that they acted adversely to him immediately upon the termination of their relations in plaintiffs’ suit.

In view of the condition of his affairs, we think it quite likely he was indifferent as to who the attorney in the case might be.

The three opponents, and Mackenzie and the Messrs. Watkins, deny positively, under oath, any combination, collusion or fraud. The plaintiffs have had ample opportunity to test all the facts in the case in a direct action; the judgment of the lower court was against them, and we see no reason to reach a conclusion different from that reached by the district judge. It is therefore ordered, adjudged and decreed that the judgment of the District Court be and the same is hereby affirmed.