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concluding that the Act "is not intended to grant immunity to a mortgagor from liability, but rather to establish safeguards to protect members of the military during their absence"
Summary of this case from Fodge v. Trustmark Nat'l BankOpinion
No. 11655.
June 2, 1981. Rehearing Denied July 13, 1981.
APPEAL FROM CIVIL DISTRICT COURT, PARISH OF ORLEANS, STATE OF LOUISIANA, HONORABLE L.F. WINGERTER, J.
Francis J. Demarest, Jr., New Orleans, for plaintiff-appellee.
Jerald N. Andry and Gilbert V. Andry, III, Edwin R. Fleischmann, Jr., New Orleans, for defendants-appellants.
Before BOUTALL, SCHOTT and BARRY, JJ.
Dr. and Mrs. Frank M. Chalaire appeal from a judgment dismissing their suit to annul a Sheriff's sale by executory process on an exception of no cause of action filed by the mortgagee.
On November 27, 1974 Dr. Chalaire was the lessee in a sale/leaseback agreement with Taurus Leasing Corporation—the lease was secured by a five year $42,750.00 second mortgage signed by both appellants on their home. The Chalaires' last monthly payment on January 15, 1979 made their mortgage paid through October 27, 1978. The mortgagors made no further payments and on July 25, 1979 Taurus filed a petition for executory process alleging an unpaid balance of $8,550.00 and a writ of seizure and sale was issued.
The sheriff was unable to serve the defendants so Taurus filed a supplemental petition alleging the Chalaires could not be found and a curator ad hoc was appointed upon whom notice of demand and seizure was served. Defendant's mortgaged property was duly advertised and sold on October 18, 1979 for $81,025.00 by public auction to the highest bidder. Taurus' claim including interest and fees amounted to $10,482. 34, defendants' vendor's lien and other expenses were deducted, leaving a balance of $52,146.84 which was subsequently paid to Dr. and Mrs. Chalaire.
On November 30, 1979 defendants filed an unverified Motion to Vacate Judgment alleging the executory proceedings were defective because Dr. Chalaire was on active duty with the United States Army prior to and at the time of the executory process, and that Taurus' counsel was aware of Dr. Chalaire's military status. Additionally, defendant's Motion to Vacate included a charge of deficiency in the authentic evidence and procedural errors in the executory process.
Taurus filed exceptions of no cause and no right of action. The district court maintained the exception of no cause of action and dismissed the Motion to Vacate without providing reasons for judgment.
Defendant's appeal raises one issue and specification of error:
The district court erred manifestly in ruling that the Soldiers and Sailor's Civil Relief Act does not provide a cause of action in Louisiana law.
Where a serviceman's property is seized and sold without any notice to him, does the Soldiers and Sailor's Civil Relief Act provide a cause of action and relief to him under Louisiana law?
Defendants argue and cite, and we agree, that the Soldiers' and Sailors' Civil Relief Act, 50 U.S.C.A. App. § 501 et seq. has been adopted and followed in Louisiana. Pailet v. Ald, Inc., 194 So.2d 420 (La.App. 4th Cir. 1967). Defendants interpreted the trial court's dismissal of their Motion to Vacate as meaning that the Act does not provide a cause of action in Louisiana. We interpret the trial court's decision as meaning that the defendants simply failed to state a cause of action under the Act because Taurus did what it was required to do, i.e., petition the court for appointment of a curator to represent the absent defendants. Section 520(1) of the Act provides:
If an affidavit is not filed showing that the defendant is not in the military service, no judgment shall be entered without first securing an order of court directing such entry, and no such order shall be made if the defendant is in such service until after the court shall have appointed an attorney to represent defendant and protect his interest, and the court shall on application make such appointment.
The appointment of a curator was the proper means to effect service on the two absentee mortgagors and meets the requirements of the Act which are designed to protect members of the military. A creditor cannot be expected to file a nonmilitary affidavit if the status of the debtor is unknown. The creditor's alternative is to have a curator appointed to receive notice of demand and any other pleadings.
We fail to find any evidence in the record which shows that Taurus or its counsel had knowledge of Dr. Chalaire's military status. Counsel for Taurus executed a sworn affidavit that to the best of his knowledge, information and belief the address and location of the defendants were unknown necessitating appointment of an attorney upon whom notice of demand and seizure was effected. There is no claim that Mrs. Chalaire, the co-defendant and co-mortgagor, was in the military.
Section 520(4) of the Act provides for setting aside a judgment against a person in the military service "provided it is made to appear that the defendant has a meritorious or legal defense to the action or some part thereof". Defendants' argue that they had legal defenses which could have been available, but we fail to find any meritorious evidence or any proof to contradict the fact that Dr. Chalaire defaulted on the mortgage and that both defendants owed the balance sued upon.
We feel that LSA-R.S. 13:4112 is applicable:
No action may be instituted to set aside or annul the judicial sale of immovable property by executory process by reason of any objection to form or procedure in the executory proceedings, or by reason of the lack of authentic evidence to support the order and seizure, where the sheriff executing the foreclosure has either filed the proces-verbal of the sale or filed the sale for recordation in the conveyance records of the parish.
If there are substantive defects in the executory proceedings the sale may be attacked as a nullity even though the debtor failed to exercise his right to take a suspensive appeal or enjoin the sale providing the creditor is the adjudicatee at the sale. Brown v. Everding, 357 So.2d 1243 (La.App. 2nd Cir. 1978). However, here the sheriff's proces-verbal of the sale shows the ". . . last and highest bidder for the account of Vivian Dougherty, wife of/and Alvin C. Huber . . ." as the adjudicates of the auctioned property. This is obviously an effort to prevent fraud and makes an exception where a disinterested third party is the buyer, as in this case.
We are cognizant the Act was passed in 1940 and the intent was to protect members of the military who are interested in foreclosure sales of mortgaged property, but the Act also provides relief to mortgagees who could suffer financial loss if compelled to wait until military service is terminated before exercising appropriate legal remedies. The Act is not intended to grant immunity to a mortgagor from liability, but rather to establish safeguards to protect members of the military during their absence.
For the foregoing reasons the judgment of the District Court is affirmed with appellants to pay all costs.
AFFIRMED.
This is an appeal from a judgment sustaining an exception of no cause of action. In order to test the validity of the judgment we must determine if appellants are entitled as a matter of law to the relief which they sought considering only the allegations of their petition and accepting them as true.
Appellants' cause of action is based upon Sec. 520 of the Soldiers' and Sailors' Civil Relief Act. They allege that their property was seized in the executory proceedings instituted by Taurus and that it was sold to Mr. and Mrs. Alvin C. Huber at the sheriff's sale. They pray that the "judgment" be vacated, the sale of the property cancelled and "clear title to the property" be reinstated to them.
Section 520(4) of the Act provides that vacating any judgment because of the provisions of the Act "shall not impair any right or title acquired by any bona fide purchaser for value under such judgment." In an attempt to circumscribe this provision appellants alleged in their motion to vacate that "[p]rior to the consummation of the sale, Mr. and Mrs. Huber were placed on notice, both verbally and in writing, that the aforesaid judgment was under attack, and that a Notice of Lis Pendens had been filed."
Accepting this allegation as true for purposes of this opinion I do not believe that it is sufficient to remove the Hubers from the class of bona fide purchasers for value. Verbal and oral warnings to prospective third party purchasers at public auctions could hardly be sufficient to place those purchasers in bad faith if they disregard such warnings. As far as the alleged notice of lis pendens is concerned unless that notice was recorded or registered in the public records it has no bearing or effect on third parties.
While we do not ordinarily look beyond the four corners of the petition in deciding the merits of an exception of no cause of action, appellants in this case did incorporate by reference in their petition all of the proceedings leading up to the sheriff's sale. The copies of certificates ordered by the sheriff do not disclose any notice of lis pendens filed by appellants.
In addition, an examination of the entire record in this case shows that appellants are not in a position to have the sheriff's sale set aside because they have acquiesced in those proceedings. The record shows that the judgment appealed from was signed on January 11, 1980, but in the meantime on January 7 appellants had filed a motion to compel the sheriff to turn over to them the $52,000 remaining in his hands after the mortgages and the cost of the sale were paid out of the $81,000 for which the house was sold. In that motion appellants recited that they "desire and are entitled to have this balance released to them. . ." A week after the judgment appealed from was signed the court signed a judgment in favor of appellants, ordering the sheriff to turn over to appellants this sum of $52,000.
C.C.P. Art. 2085 prohibits an appeal by a party who voluntarily and unconditionally acquiesces in a judgment rendered against him. Appellants are appealing from a judgment denying them the right to seek a rescission of the sheriff's sale in a case where the purchasers paid the price and appellants not only accepted that price but indeed demanded the delivery of the price to them.
Summing up, I believe that the provisions of the Soldiers' and Sailors' Civil Relief Act specifically prevent appellants from asserting the claim that they have since the property has been sold to bona fide purchasers at the sheriff's sale, and even if there was any merit to appellants' claim they have lost their right to appeal from the adverse judgment because of their acquiescence in that judgment by insisting that the sheriff turn over the proceeds to them and by their acceptance of those proceeds.