Sullivan v. Springer

1 Pelt. 24

• Court: Louisiana Court of Appeal
• Decided: February 25, 1918
• Docket: NO. 7245
• Status: Published

Opinion

This is a contest over the proceeds of a Sheriff's Sale between twoAlessprs, one claiming priority by virtue of the law and the other by virtue of an agreement. The case turns upon the interpretation of the agreement.

The facts are -as follows:

In August 1914 the Gauche Realty Co., as owner, leased to the plaintiff herein^John P. Sullivan^the ground floor of the property No. 130 Royal Street for a term of 24 months expiring September 30th. 1916 for the price of $250.00 a month.

On the same day, Sullivan subleased the same property to the defendant herein Geo. W. Springer, for the same term and for the same price.

Springer defaulted in the payment of his rent for the months of June, July and August 1916 and under the terms of "the lease the rent for the month of September became exigible.

In the first days of September^Sullivan notified the Gauche Co., that he would not renew the lease and that he Intended to sue Springer for the rent he owed him and seize the contents of the premises. But Springer desired to continue as lessee of said premises.

The Gauche Company; however, was unwilling to lease to him as long as he had not paid his rent and as long as it was in .the power of Sullivan to seize him. Thereupon the following agreements were made?

Sullivan drew up a petition in which he alleged the lndebtness of Springer to him and prayed for Judgment against him for $1000.00. On September ¿2nd. 1916 Springer confessed .Judgment as prayed for; but neither the petition nor the confMalón of Judgment wars filed in Court at that time.

Upon the same day Sullivan addressed the following letter to. Springer:

ÍNéw Orleans, September 22nd. 1916.

George W. Springer, Esq., City.

Dear Sir:-

In consideration of your granting the confession of judgment hereto attached for #1000.00 balance due on rent of premises Ho. 130 Royal Street, I hereby agree not to file aald suit' or execute said Judgment for one year from date, provided you will pay #90.90 on the first of.each month for eleven months aald payments to begin on November 1st. 1916.

"It Is understood that If you fail to make payment on the first of any month, I will at once file the suit and execute the Judgment for any balance that may be due on this rant claim.

fours truly,

John P. Sullivan."

On the Same day the Gauche Co., wrote the following letter to Sullivan:

'Hew Orleans, September 22nd. 1916.

John P. Sullivan, Esq,, City,

Dear Sir:-

“In consideration of the fact that you have granted an extension to our prospective lessee of the premises Ho. 130 Royal Street, and have not exercised your right as lessor to provisionally seise the contents of said premises for the balance of rent due you by lessee, Springer, namely: #1000.00 we do hereby waive our lessor's lien and privilege on the contents of said premises In your favor up to the amount due you on above rent claim, should It become necessary for you to seize the premises at Ho. 130 Royal Street and Ho. 131 Exchange Alley, at any time between October 1st. 1916 and October 1st. 1917.

Yours truly,

Gauche Realty Co,"

On April 25th. 1917 the American Brewing Co., filed a suit against Springer and sequestered his City and State licenses for the year 1917.

At that time Springer had paid Sullivan only three months at #90.90, making #272.70, leaving a balance due of #727.30. He was therefore three months In arrears for the payments due on February, Kerch and April 1st. 1917.

Thereupon Sullivan, on Kay 2nd. 1917, filed his pe%l%Mn and confession Of Judgment in the Civil District court, obtained Judgment against Springer for #727.30 Issued a fieri facias, and seized the contents of the leased premises 130 Royal Street^as well ae Springer's City and State licenses for 1917 already sequestered by the' Sheriff at the suit of the American Brewing Company, and advertised the whole for sale.

She Gauche Company intervened to claim a preference over Sullivan On the proceeds of sale and alleged that it was the owner of the premises 130 Royal Street; that it had leased said premises to Springer from October 1st. 1916 to September SOth. 1917, at a rental of $175.00 a month and that it .had a lessor's privilege on all the contents of the leased premises for the payment of the rent due; that Springer wa3 Indebted to It in' the sum of $75.00 balance due for the month of December 1916 and for the whole of the months Of January, February, March and April 1917 making a total of $775.00; that during the month of September 1916 it had agreed with the said John P. Sullivan that, should it become necessary for him to seise the premises 130 Royal Street and 131 Exchange Alley to pay an amount of $1000.00 which was then due the said John P. Sullivan, it would waive its lessor's lien and privilege on the property then contained in the aáid premises which might still be contained therein at the time the said Sullivan should issue any seizure herein, up to the extent of the amount that would be due the slad Sullivan at the time OwRlivan at-the th— of said seizure; that the amount due Sullivan Was only $727.00, and that bis privilege in sofar as it was superior to the privilege of the Gauche Company rested "only upon such of the property now seized as was ■ in the premises on September 22nd. 1916, and that upon all property contained in the sAid premises your petitioner, (the Gauche Company) has a lessor's lien and privilege superior to any claim by the said Sullivan under his confession of judgment herein*; *that among the property seized by the said Sullivan are two State and City licenses for the year 1917 amounting to $705.00; that upon the said two State and City licenses the said Sullivan has no lien and privilege thereon, or upon the proceeds thereof, for his rent as aforesaid and it claims the same*; "that upon all of said property that has been placed there since Séptenber 22nd. 1916 your petitioner has a superior lien and privilege, as lessor, ranking that of the said John P. Sullivan plaintiff herein, and It desires to assert t>S same;" It prayed for a separate appraisement of the property as follows) Asv. All the property that was in the premises on Septerrher 22nd. 1916^ 2nd. All the property which was placed in Said premises ainch September 22nd. 1916 including the two State and City lleenses; and it prayed that its privilege be recognized as superior to that of Sullivan upon the proceeds of sals of the two lleenses and of the contents of the premises that were placed therein after September 22nd. 1916.

An order of court was rendered accordingly, but It does not aPPZ by the record that the property seised was appraised ln^two classes created by the petition and prayer of the Qauche Company. All that the Sheriff's return indicates is that the contents of the premises were sold for $ 418.45 and the two licenses for $ 285.00 Making a total of - $ 703.45

There was Judgment ordering the Sheriff to pay to the Qauche Company the proceeds of Sale of the two State and City licenses amounting to $285.00, and to J^pt P. Sullivan all the other proceeds of Sale.

The proceeds of sale of the*contents of the premises were not given to the Gauche Company by that Judgment probably because it did not prove that they had been put upon the premises after September 22nd. 1916, and that the presumption was that they were there prior to that date.

Prom this Judgment plaintiff, John P. Sullivan, has appealed.

It is suggested in plaintiff's brief that independently of the letter of the Gauche Co., of September 22nd. containing a waiver of their privilege in favor of Sullivan, the latter would have been preferred to the former upon the theory that where there are two consecutive lessors the first lessor enjoys a priority of privilege over the second. We do not find it necessary to pass upon this point.

It Is true that all contents of the leased premises up to September 30th. 1916 were impressed with Sullivan's privilege, as lessor. Admitting that they continued thus impressed with a privilege superior to Gauche it cannot avail Sullivan in so far as Sni the licenses, are concerned. These were not on the premises during Sullivan's lease which expired on September 30th.1916. They were placed therein only after January 1st.1917, during Gauche's lease. Therefore Sullivan's lease never affected them. But this question of law may assist in interpreting Gauche's letter of September 22nd, by virtue of which Sullivan claims a preference.

By that letter did the Company waive its rightsonly upon the contents of the premises contained therein on September 22nd.,or upon all such contents as might be therein at the time it would become necessary for Sullivan to seize?

The allegations of the petition of intervention of the Gauche Company contain^ rather an interpretation of that it . letter as they would have^read jlfi, rether than the language itself. We shall adhere to the letter.

Article C.C.1951 (1946) provides: "When a clause is susceptible of two Interpretations,it must be understood.in that In which it may have some effect rather than in a sense which would render it nugatory." C.N.1157.

This is a textual translation of Rule Second of pothier on Obligations Part 1 Ch. 1 Article VII 92. Pothier gives as an example: "For Instance, if it is said In an act of partition,' "It has been agreed between Peter and Paul that Paul bbbbíSx could pass over his property"; although these terms "hia property" , in a grammatical sense,may mean the property of Paul as well-aa that of Potar, nevertheless It la not doubtful that they must be understood to mean the property of Peter; otherwise the clausa would be without effect, inasmuch as Paul had no muwz need to stipulate that he could pass over his own property."

"Is it not reasonable Indeed to presume that parties have not Intended to insert in their agreement a useless clause." 25 Pemolombe p.11 $12 .See 10 M.575; 3A.364.

If we accept the interpretation of the Gauche Company that they waived their privilege only as to the contents In the premises on September 22nd. we must assume that they Inserted "a useless.clause", and that they renounced to nothing, because they had no privilege to renounce, Inasmuch as the privilege of Sullivan alone affected those contents on thst date. If on the contrary we adopt the interpretation of Sul]Ivan that the renunciation of superiority made by Guachiapplied to such contents as might be in the premises at the time It became necessary for him to issue his seizure, then we give substance and effect to the waiver by making It apply to an. existing right of superior ..privilege which' the Gauche Company really had over Sullivan on the two licenses at the time he seized them.

We believe that such was the Intention of both the Gauche Company and of Sullivan at the time the letters were exchanged on September; in other words, that the Gauche Company was abandoning some right it had, and that Sullivan was. acquiring soms he did not have. We cannot believe that Sullivan consented to restrict his privilege only upon the contents ofi the premises on September 22nd. which were being sold and disposed of daily.

We believe that the sum and substance of the agreement made between Sullivan and the Gauche Company was as followss

That Sullivan was willing to grant Springer an extension of time for thé payment of the f1000.00 he owed him, but he was fearful that, in the meantime, the Gauche Company would acquire rights superior to his; In order to obtain his consent to the extension, the Gauche Company agreed not to claim rights superior to his upon the contents of the premises -**>£**-ii existing at such timers» should M become necessary for him to seize the premises at any time between October 1st. 1916 and ■October 1st. 1917." According to Gauche's interpretation they would have waived nothing and Sullivan would have acquired nothingb^But this agreement of waiver was the promise of the Gauche Realty Company. Articles 1957 (1952) and 1958 (1953) of the Civil Code provide: "In a doubtful case the agreement is interpreted against him who has contracted the obligation. But If the doubt or obscurity arise for the want of necessary explanation which one■of.the parties ought to have given, or from any other negligence or fault of his, the construction mast favorable to the other party shall be adopted, whether he be obligor or obligee."

It was incumbent upon the Gauche Co., to have explained and make clear what It meant by the words "on the contents of said premises", wnether present or future contents, and not having done so the law presumes that the explanation would have been to It3 disadvantage. 6A204.

C, C. 1901 (1895) "Agreements legally entered into, have the effect of lawe on those who have, formed them. They must be performed with good faith."

C. C. 1903 (1897) "The obligation of contracts extends- not only to what is expressly stipulated but also to everything that bylaw, equity, or custom, is considered as in- ■ eldental to the particular contract, or necessary to carry into effect," '

But the Gauche Co., contends that Sullivan bound n * himself to file suit against Springer at once if he failed to make the payments on the first of any «hath in accordance with ths last paragraph of his latter to Sponger which petóse as follows:

February 27th. 1918.

"It is understood that If you fall to make payments on- the first of. any month, I will at once file the suit and•reoute the Judgment for any balance that may be due on this rent claim."

Vs do not Interpret that stipulation to have been in-tiro* of the Gauche Co., or to have imposed upon.Sullivan the obligation or duty to file suit against Springer Immediately after Ms default.

The stipulation was for the benefit of Sullivan only and conferred upon him a right, and he might well have Indulged- Springer, without Incurring any liability to the Gauche Co.

The Gauche Co., was not a surety for Springer. Hel-theh ha« the Gauche Co., proved that It suffered any damage by the indulgence.

It 1b therefore ordered, adjudged, and decreed that the JUdjjaaht of the-District Court In so far as It Is In favor of the Gauche Realty Co., be avoided and reversed; and It Is -now ordered that there be Judgment In favor of John P. Sullivan and agalnSt the Gauche Realty Company rejecting and dismissing its petition of Intervention at its cost and ordering the Sheriff to pay the.net proceeds of the Sale herein to the plaintiff herein, John P. Sullivan.