Utah-Louisiana Investment Co. v. International Development, Inc.

262 So. 2d 553, 1972 La. App. LEXIS 6473
Louisiana Court of Appeal·Decided April 17, 1972·No. No. 8804·Published·Cited by 8 cases

Opinions

LOTTINGER, Judge.

This is an appeal from a judgment denying injunctive relief sought by the defendant in an executory proceeding in which the petitioners seek to foreclose, on a second mortgage on certain real property situated in the Parish of Tangipahoa. The matter has been before this Court on two prior occasions, most recently an application for writs by petitioners which resulted in the issuance of a stay order pending a hearing on the merits of defendant’s contention. 262 So.2d 551.

The facts show that on February 17, 1964, Rebo Land Corporation in liquidation, sold some 9,321.20 acres of swamp land located on the northwestern shore of Lake Pontchartrain in Tangipahoa Parish to International Development, Inc., the defendant herein. The consideration for the sale was $1,155,828.80 of which the sum of $115,582.-88 was paid in cash with the balance represented by nine proper promissory notes secured by first mortgage on the property sold. The said promissory notes were payable in ten equal, annual installments commencing one year from the date of the sale bearing interest at 5% per annum from date of sale.

Notes 1, 2, 3 and 4 in the series of notes executed at the time of the sale were acquired by petitioners with the other notes having been acquired by separate parties who are in no way connected with this suit. However, through the execution of mutual releases at the request of the defendant, the petitioner acquired a first mortgage on all of the property involved in this litigation and released their mortgage on the other property on which the other group of note holders retained their mortgage. In effect, the mortgage was divided so that the defendant could deal with each group of hold[555] ers separately. It is contended that no payments of principal were ever made on this first mortgage.

Subsequently, on May 20, 1968, the defendant issued to petitioners four promissory notes in the total amounts of $421,-044.04, these notes being secured by a second mortgage on 7,691.48 acres of land which also secured the first mortgage notes acquired by petitioners as aforesaid.

The promissory notes secured by the second mortgage matured in principal and interest on February 17, 1969, and were conditioned to bear interest at 8% from February 17, 1968 until paid. No payments were ever made on the second mortgage, either in principal or interest, and no transfers of any other valuable consideration were ever made as payment on said notes. Several extensions were given to defendant for the making of payments on these promissory notes, and finally on July 29, 1969, after defendant had continued to fail to perform its promise of payment both on the first mortgage and the second mortgage, plaintiff agreed to a final extension of time to October 23, 1969. In consideration for this extension of time, the defendant confessed judgment both on the four promissory notes received by defendant in connection with the original sale of land and also on the four promissory notes secured by the second mortgage executed on May 20, 1968. The defendant again failed to perform on its promise of payment as aforesaid and so, after almost four years of delay and continued broken promises, the petitioners finally filed this executory proceeding on October 31, 1969. This litigation is simply a foreclosure under executory proceeding on the second mortgage dated May 20, 1968, subject to the vendor’s lien and special mortgage dated February 17, 1964.

The foreclosure sale was scheduled for March 25, 1970, however, a petition for in-junctive relief was filed by defendant on March 24, 1970, claiming to have made payments of some $868,000 of the amount secured by the mortgage and as a result thereof, allegedly became entitled to the release of 4,290 acres of the mortgaged property under a release clause contained in the act of first mortgage. With little time remaining to investigate the allegations of the defendant, the Trial Judge granted a temporary restraining order and a hearing for injunctive relief was scheduled for April 9, 1970. After certain delays in said hearing date caused by the defendant, the petition for preliminary injunction was dismissed upon motion of defendant’s own counsel and at defendant’s costs. Accordingly, the sale of the property was rescheduled for July 15, 1970, however, defendant refiled a petition for injunctive relief almost identical in wording to the petition which he had previously abandoned. No hearing was scheduled on the petition because defendant permitted the temporary restraining order to expire without action and the sale was rescheduled for September 21, 1970. The sale, however, was stopped a third time when the defendant made an application for supervisory writs to this Court realleging all of the contentions that had previously been made to the District Court and was successful in obtaining a stay order of the sale scheduled for September 21, 1970. This Court rejected the defendant’s application for writs on October 15, 1970.

In the meantime, on December 14, 1970, the defendant entered a preliminary default on its petition for injunction which it had filed on July 15, 1970 and on December 18, 1970 the defendant had the default confirmed.

With no knowledge of the preliminary default and considering the petition for an injunction filed July 15, 1970, to have been abandoned by defendants, the petitioner rescheduled the judicial sale for December 23, 1970. Upon learning from another attorney who had been in court that a default judgment had been taken on December 18, 1970 against the petitioner, the petitioner’s counsel moved for a new trial on December 21, 1970, and of course, the sale scheduled for December 23, 1970 was again postponed.

[556] It is the confirmation of this default which forms the basis for petitioner’s charge that the defendant had done it a substantial injustice and “had worked a fraud upon the Court”. Petitioner claims that the default judgment was obviously based upon false testimony and deliberately misleading representations to the Court by counsel for defendant.

Following hearing on petitioner’s motion for a new trial, the Lower Court granted a new trial and same was set for May 12, 1971.

Despite the fact that prior to the trial date a pretrial conference was held to clarify the issues, the defendant’s counsel appeared in Court on May 12, 1971 and asked for a continuance of the trial on the ground that he had not understood that the trial would be held on that date. The trial was held, however, at which the defendant called no witnesses on direct examination. Following trial, the Lower Court took the matter under advisement. After several delays in the filing of brief on the part of the defendant, the Trial Court, on September 21, 1971, without a brief having been filed by defendant, rendered judgment denying the injunction. Following the denial of a motion by defendant for a new trial, a motion for a suspensive and devolutive appeal to this Court was ordered upon defendant posting a $500 bond. Petitioners filed a motion to increase the bond or to clarify the judgment rendered by the Trial Court so that the judicial sale could proceed. A hearing was held on the motion and the Trial Judge denied the relief sought by the petitioners. Thereafter, an application for writs was filed with this Court by the original plaintiffs herein and on December 20, 1971, this Court issued an alternative writ of Mandamus, Certiorari and Prohibition to the Lower Court commanding it to:

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Utah-Louisiana Investment Co. v. International Development, Inc., 262 So. 2d 553, 1972 La. App. LEXIS 6473 (La. Ct. App. 1972).

262 So. 2d 553 (Utah-Louisiana Investment Co. v. International Development, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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