Universal C. I. T. Credit Corp. v. Spring

242 So. 2d 73, 1970 La. App. LEXIS 4928
CourtLouisiana Court of Appeal
DecidedNovember 16, 1970
DocketNo. 8107
StatusPublished
Cited by5 cases

This text of 242 So. 2d 73 (Universal C. I. T. Credit Corp. v. Spring) 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
Universal C. I. T. Credit Corp. v. Spring, 242 So. 2d 73, 1970 La. App. LEXIS 4928 (La. Ct. App. 1970).

Opinion

BLANCHE, Judge.

This is a devolutive appeal perfected by defendant-reconvener, Carl A. Spring (hereinafter referred to as “Spring”), from a deficiency judgment rendered in favor of plaintiff, Universal C. I. T. Credit Corporation (hereinafter referred to as “Universal C. I. T.” , and from judgment dismissing Spring’s reconventional demand.

On December 1, 1964, Universal C. I. T. filed suit against Spring for seizure and sale of a motor vehicle under executory process, seeking judgment for the accelerated principal balance of $1,173.69, with eight percent per annum interest thereon from maturity together with twenty-five percent attorney’s fees and all court costs, [74]*74attaching to the petition a note purportedly executed by Carl A. Spring on July 11, 1964, in the principal amount of $1,341.36 made payable to “Universal C I T or bearer or order,” which note was paraphed “Ne Varietur” for identification with act of sale and mortgage of even date. To the petition was also attached the act of sale and chattel mortgage again purportedly executed by Carl A. Spring in favor of Bob Williamson Motors, Inc., as seller-mortgagee, which chattel mortgage was duly acknowledged before a Notary Public by a subscribing witness thereto. Pursuant to an order for executory process, the Sheriff of Tangipahoa Parish seized the vehicle under a writ of seizure and sale, and in due course sold the vehicle to plaintiff with benefit of appraisement. Universal C. I. T. thereafter on March 14, 1966, filed a supplemental petition for a deficiency judgment against Spring subject to a credit in the sum of $435 realized from the Sheriff’s sale of the mortgaged property. Spring answered both petitions denying the validity of the executory proceeding and sale thereunder and reconvened for damages for the alleged illegal seizure and sale of his vehicle, asserting that the documents sued on were not in authentic form nor was the assignment of the note in authentic form. To the reconventional demand Universal C. I. T. filed peremptory exceptions of no cause of action and no right of action, contending that Spring’s sole remedy was to have enjoined the seizure and sale or to have taken a sus-pensive appeal from the order directing the issuance of the writ of seizure and sale as provided in Louisiana Code of Civil Procedure Article 2642. The trial court referred these exceptions to the merits, after which Universal C. I. T. answered the reconventional demand denying the allegations thereof and pleading its status as a holder in due course. Judgment was rendered, read and signed in favor of Universal C. I. T. and against Spring in the amount sued for together with interest, attorney’s fees and all court costs, subject to the credit of $435, and dismissing the reconventional demand. A motion for new trial was filed by Spring which was denied. From this judgment Spring appealed.

The essence of Spring’s complaint is that the executory proceeding was null and void for the reason that there is a variance between the note and the chattel mortgage and that the executory proceeding was not supported by the requisite authentic evidence. Spring contends that inasmuch as the promissory note signed by him was made payable to Universal C. I. T., whereas the chattel mortgage was granted by him in favor of Bob Williamson Motors, Inc., this constitutes a variance between the promissory note and the chattel mortgage such as to render null the executory proceeding. Spring further contends that Universal C. I. T. failed to furnish authentic evidence of its rights as assignee, with the result that the executory proceeding brought by Universal C. I. T. was null and void, and with the further result that the seizure and sale of Spring’s motor vehicle pursuant to the invalid executory proceeding constituted an illegal seizure entitling Spring to recover damages against Universal C. I. T. under his reconven-tional demand.

Universal C. I. T. answers Spring’s con•tentions by first stating that Spring is precluded from attacking the executory proceedings by virtue of his not having sought to enjoin the seizure and sale or having perfected a suspensive appeal from the order directing issuance of the writ of seizure and sale as provided by Louisiana Code of Civil Procedure Article 2642.1 Universal [75]*75C. I. T. states that its peremptory exceptions should for this reason have been sustained and the reconventional demand dismissed.

We do not agree with the position taken by Universal C. I. T. in this respect. Article 2642 is directory and states that defenses and procedural objections to an executory proceeding may be asserted either by means of an injunction or a suspensive appeal. The failure of the defendant to use one of these methods would not, in our opinion, prohibit him in a proper case from filing a separate action to question the validity of executory proceedings. Our jurisdiction has sanctioned the questioning of the validity of executory proceedings by means of a separate suit or action. See Viley v. Wall, 154 La. 221, 97 So. 409 (1923); Doherty v. Randazzo, 128 So.2d 669 (La.App. 4th Cir. 1961); Tapp v. Guaranty Finance Company, 158 So.2d 228 (La.App. 1st Cir. 1963), writ refused, 245 La. 641, 160 So.2d 228. The amount of the deficiency for which plaintiff seeks the judgment is entirely dependent on the executory proceedings wherein the security was sold and the proceeds therefrom were credited to the writ.2 Thus, in a suit for a deficiency judgment the defendant should be able to show that the executory proceedings were a nullity for failure to strictly comply with the letter of the law. See Tapp v. Guaranty Finance Company, cited supra, citing therein cases holding that where there is a discrepancy between the note sought to be collected and the note described in the mortgage, this discrepancy is fatal to executory process.

With regard to the merits of Spring’s contentions, Universal C. I. T. asserts that the note executed by Spring constitutes bearer paper, with the result that it is transferable merely by delivery and with the further result that no act of assignment was necessary from Bob Williamson Motors, Inc., to Universal C. I. T. in order to entitle Universal C. I. T. to bring these executory proceedings and to seek a deficiency judgment. We agree with Universal C. I. T. in this regard and accordingly affirm the judgment of the District Court.

As previously stated the note executed by Spring is made payable to “Universal C I T or bearer or order.” In General Contract Purchase Corporation v. Doyle, 56 So.2d 432 (La.App. Orl.Cir. 1952), the appellate court was faced with a similar attack on an executory proceeding wherein the note executed by the defendant was made payable to the order of Dutch O’Neal Motors or bearer. In upholding the validity of the executory proceedings, the appellate court made the following pertinent comments:

“Appellee’s counsel contends that notwithstanding that the note in question is payable to Dutch O’Neal Motors or bearer, it is, under the provisions of the law, payable to bearer and transferable by delivery, and that the endorsement is surplusage and should be ignored by the court, and no authentic evidence as to the verity of the endorsement of Dutch O’Neal Motors was necessary. In support of his position that plaintiff, irrespective of the endorsement, is entitled to proceed by way of executory process against the mortgaged automobile, counsel points to the case of Nolen v. Davidson’s Succession, supra [La.App., 190 So. 827]. In that case the notes, which were payable to C. V.

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Bluebook (online)
242 So. 2d 73, 1970 La. App. LEXIS 4928, Counsel Stack Legal Research, https://law.counselstack.com/opinion/universal-c-i-t-credit-corp-v-spring-lactapp-1970.