Velez v. Cronvich

447 F. Supp. 285, 1978 U.S. Dist. LEXIS 19203
CourtDistrict Court, E.D. Louisiana
DecidedMarch 7, 1978
DocketCiv. A. No. 76-2209
StatusPublished

This text of 447 F. Supp. 285 (Velez v. Cronvich) is published on Counsel Stack Legal Research, covering District Court, E.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Velez v. Cronvich, 447 F. Supp. 285, 1978 U.S. Dist. LEXIS 19203 (E.D. La. 1978).

Opinion

CASSIBRY, District Judge:

The plaintiff Harold P. Velez, d/b/a Velez Piano Company, Inc., seeks an injunction prohibiting Alwynn Cronvieh, Sheriff of the Parish of Jefferson, and the Gulf South Bank ^id Trust Company (formerly Mercantile Bank and Trust Company), a judgment creditor of Harold P. Velez, from selling at judicial sale the “Velez Player Piano” seized in these proceedings, and seeks a judgment ordering the return of the piano to 2319 Metairie Road, Metairie, Louisiana, the place from which it was seized.

The judgment under which the seizure was made was rendered in Orleans Parish on May 2,1974 in favor of Gulf South Bank [287]*287and Trust Co. (Gulf South) against plaintiff individually and made executory in Jefferson Parish on May 25, 1976. Pursuant to a writ of Fiera Facias, the Civil Sheriff for Jefferson Parish seized plaintiff’s invention known as the “one man band player piano,” but before its sale plaintiff filed this injunction proceeding. The Small Business Administration (SBA) as a holder of a chattel mortgage on the inventory of Velez Piano Company, Inc., intervened to protect its interest in the one man band and removed the case to the United States District Court for the Eastern District of Louisiana. The material facts are not in dispute; therefore, the parties have submitted the case on briefs and memoranda for disposition of their motions for summary judgment. The central issue is whether Gulf South’s seizure is valid, or whether it should be set aside so that the one man band can be returned to the inventory of Velez Piano Company, Inc., upon which the SBA has a chattel mortgage.

Several transactions of the parties have culminated in the present suit. On August 3,1971 plaintiff Harold P. Velez, in order to secure a loan in the amount of $11,000.00 from Mercantile Bank and Trust Company (now Gulf South), put a third mortgage on a certain piece of real estate plus a chattel mortgage on certain player pianos. The purpose of the loan was to develop plaintiff’s invention, the one man band. Subsequent to the loan plaintiff dismantled the player pianos which were the subjects of the chattel mortgage and used various parts to make the one man band. When plaintiff defaulted on his loan Gulf South proceeded against Velez in an ordinary suit and obtained a judgment in Orleans Parish on May 2, 1974 in which its chattel mortgage and its third mortgage on the real estate were specifically recognized. Under this judgment the one man band was seized. Gulf South thereafter purchased the first and second mortgage notes on the real estate so that it held all three mortgages plus the chattel mortgage on the player pianos. Gulf South foreclosed on the first mortgage, and the real estate, which was sold without appraisal, brought an insufficient amount to apply any sums toward plaintiff’s defaulted loan. In September of 1975 plaintiff removed the one man band from Orleans Parish to Jefferson Parish. However, he remained domiciled in Orleans Parish.

On February 2, 1976 plaintiff’s wife executed a promissory note to the SBA and secured the note with a chattel mortgage on the entire inventory of Velez Piano Company. This inventory included the completed one man band. On March 12,1976 plaintiff incorporated and sold all of his assets, including his inventory, to Velez Piano Company, Inc., in consideration of the corporation’s paying the SBA. On May 25, 1976 Gulf South made its judgment executory in Jefferson Parish and had the Civil Sheriff seize the one man band. Plaintiff filed in the Twenty-Fourth Judicial District Court, Parish of Jefferson, State of Louisiana, a petition for a preliminary and permanent injunction against the Civil Sheriff of Jefferson Parish prohibiting him from selling at judicial sale the one man band and ordering him to return it to plaintiff’s corporation. The SBA intervened in this suit to protect its interest in the one man band under its chattel mortgage on plaintiff’s inventory, and removed the case to this court.

Both plaintiff and the SBA want the one man band returned to the corporation’s inventory, therefore, their positions are somewhat similar. Plaintiff contends that (1) Gulf South’s judgment is an invalid deficiency judgment because of the bank’s failure to appraise the real estate seized and sold pursuant to the first mortgage, and (2) Gulf South’s chattel mortgage became ineffective when plaintiff dismantled the player pianos and made the one man band. The SBA claims (1) that its chattel mortgage primes that of Gulf South because Gulf South’s chattel mortgage has no present legal effect since Gulf South failed to rein-scribe it within five years, and that the judgment obtained by Gulf South did nothing to toll the reinscription statute, and (2) that Gulf South seized the property of Velez Piano Company, Inc., instead of the [288]*288property of Velez individually. Each of these claims will be discussed in turn.

Plaintiff first contends that La.R.S. 13:4106 prohibits Gulf South’s judgment as a deficiency judgment after a sale made without appraisal.1 Gulf South admits that it sold the real estate seized under the first mortgage without appraisal, but contends that the judgment at issue was rendered on a debt entirely separate from the debt secured by the first mortgage. The court agrees with Gulf South that its judgment was obtained on a separate debt and La. R.S. 13:4106 does not apply. A reading of that statute indicates that it covers a deficiency judgment obtained after foreclosure and sale on a single debt. This is not the situation in the present case as Gulf South was the holder of three mortgage notes on the real estate and a chattel mortgage on player pianos to secure three debts. The judgment here resulted from a suit on a debt distinct from the debt secured by the first mortgage on the real estate. The suit was not a proceeding against Velez personally to recover any deficiency resulting from the sale of the real estate to satisfy the first mortgage note, and the judgment therefore is not a deficiency judgment prohibited by La.R.S. 13:4106. Plaintiff’s first contention is not well founded.

Plaintiff next argues that Gulf South’s chattel mortgage became ineffective when plaintiff dismantled the player pianos subject to the chattel mortgage and used their parts to create the one man band. It follows from this, he says, that the judgment obtained by Gulf South on May 2, 1974 was invalid because it was obtained on an invalid chattel mortgage. In support of this position plaintiff cites La.C.C. Art. 2219 which states:

When the certain and determinate substance, which was the object of the obligation, is destroyed, is rendered unsalable, or is lost, so that it is absolutely not known to exist, the obligation is extinguished, if the thing has been destroyed or lost, without the fault of the debtor, and before he was in default.

Plaintiff cites no cases to support this argument; therefore, we rely on the plain meaning of article 2219. First, the objects of the obligation, the player pianos, cannot be said to be absolutely non-existent. The player pianos, albeit their dismembered components, still exist in the one man band. Furthermore it cannot be said that this occurred without any fault on the part of plaintiff since he himself dismantled the player pianos. For these reasons article 2219 is inapplicable. Since plaintiff obtained the loan from Gulf South to build the one man band and voluntarily mortgaged the player pianos to be used, the burden was on plaintiff to show which parts, if any, of the one man band were not obtained from the mortgaged player pianos.

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Cite This Page — Counsel Stack

Bluebook (online)
447 F. Supp. 285, 1978 U.S. Dist. LEXIS 19203, Counsel Stack Legal Research, https://law.counselstack.com/opinion/velez-v-cronvich-laed-1978.