Opinion
No. 4082.
March 9, 1970. On Rehearing July 6, 1970. Further Rehearing Denied October 5, 1970. Writ Refused November 9, 1970.
APPEAL FROM CIVIL DISTRICT COURT FOR THE PARISH OF ORLEANS, NO. 501,298, DIVISION "B", CLARENCE DOWLING, J.
Gerald A. Stewart, in pro. per., and John M. Holahan, New Orleans, also for Gerald A. Stewart, relator-petitioner for injunction.
Plough, Jumonville Mulla, Moreau J. Jumonville, New Orleans, for Union Savings Loan Assn., respondent-original plaintiff.
Monroe Lemann, John L. Glover, New Orleans, for William S. Simmons, amicus curiae.
Before SAMUEL, DOMENGEAUX and SWIFT, JJ.
This matter is before us on an Alternative Writ of Certiorari issued to the Civil District Court for the Parish of Orleans on the application of Gerald A. Stewart.
By notarial act passed on February 11, 1966 The Grand Company, a partnership composed of five partners one of whom was Gerald A. Stewart, a New Orleans attorney, purchased certain immovable property from Union Savings Loan Association. A promissory note in the amount of $262,500 was given for the purchase price. All of the partners executed the act, which is in the form of an authentic act of sale of immovable property with vendor's lien and mortgage, and made and subscribed the note.
Alleging delinquency in the payment of installments and other obligations required by the act and note, on December 3, 1969 Union filed a petition for foreclosure by executory process, annexing to and filing with the petition the note and a certified copy of the act, and obtained an order for executory process. Mr. Stewart (we refer to him hereinafter as "petitioner") then filed a petition for an injunction, together with a restraining order, to arrest the executory process for the alleged reason that the two persons who appear in the act as witnesses did not appear before the notary and the partners and were not present during the execution of the act. The petition does not allege fraud, error or mistake. The trial court refused to issue the temporary restraining order but did grant a rule nisi ordering Union to show cause why a preliminary injunction should not issue.
To the petition for injunctive relief Union filed: (1) an exception of no right or cause of action; and (2) a pleading styled a "plea of estoppel by deed" in connection with which plea it averred that subsequent to the date of the acquisition by the partnership petitioner had purchased all of his co-owners' interest in the property and in the act of purchase had assumed the vendor's lien and mortgage and had agreed to perform all of the obligations imposed by the provisions contained in the act transferring the property from Union to the partnership; a certified copy of that act of acquisition and assumption was annexed to Union's pleadings and filed therewith.
When the rule nisi was heard petitioner was not permitted to introduce parol evidence to prove his allegation that the two persons who appeared in the act as witnesses were not present during the execution of the act, the trial court ruling that such evidence was inadmissible. As a result no evidence was introduced. After the hearing there was judgment denying the application for a preliminary injunction and dismissing the petition for injunctive relief.
Petitioner's application for writs was based solely on the alleged incorrectness of the trial judge's ruling that the parol evidence sought to be introduced was inadmissible and this is the only question now before us.
Under LSA-C.C. Art. 2234, which defines the authentic act as the same relates to contracts, if the act is not executed in the presence of the subscribing witnesses it is not an authentic act. Cotton v. Washburn, 228 La. 832, 84 So.2d 208; Jackson v. Spearman, 188 La. 535, 177 So. 658; Pain v. Plicque Le Beau, 10 La. 304; Mossler Acceptance Co. v. Osborne, La. App., 14 So.2d 492. It is not disputed that if the act in suit is in fact authentic it will support the use of executory process. As every link of evidence must be in the authentic form in order to justify use of that process (LSA-C.C.P. Arts. 2634 and 2635), if the act is not authentic Union cannot foreclose via executiva and the writ of injunction sought by petitioner must be issued.
We do not consider Union's pleading styled "plea of estoppel by deed" because the act of acquisition and assumption relied on as the basis for that plea is not before us. Although a certified copy of that act was annexed to and filed with the pleading, the hearing on the rule never reached the point where it was necessary for Union's counsel to introduce the certified copy into evidence, which introduction would have afforded petitioner an opportunity to object thereto, and they did not do so. The act not being in evidence, we cannot consider the plea.
In support of Union's exceptions of no right or cause of action its counsel argue that in the absence of proper allegations of fraud, error or mistake petitioner could not introduce parol evidence for the purpose of destroying the authenticity of the act, particularly citing LSA-C.C. Arts. 2236 and 2238 and quoting extensively from the opinion in Succession of Tete, 7 La. Ann. 95. Relying on the pertinent provisions of LSA-C.C.P. Art. 2753 and the rule that mortgages are considered stricti juris and strictly construed, petitioner contends the parol evidence was admissible.
LSA-C.C. Art. 2236 provides the "* * * authentic act is full proof of the agreement contained in it, against the contracting parties and their heirs or assigns, * * *". The article merely states the evidentiary effect of an authentic act and, as the authenticity of the act is attacked in the instant case, the article has no application here. Nor is Succession of Tete, supra, or the language quoted from that case by counsel for Union, authority for their contention. The quotations are from the original majority opinion. But on rehearing, for unspecified reasons, the original "judgment" was set aside, a new trial granted and the case remanded. The original majority opinion and decree having been set aside, neither has any judicial or legal existence.
We have concluded that the matter before us is controlled by Civil Code Article 2238, which reads as follows:
"An act, whether authentic or under private signature, is proof between the parties, even of what is there expressed only in enunciative terms, provided the enunciation have a direct reference to the disposition.
Enunciations foreign to the disposition, can serve only as a commencement of proof."
LSA-C.C. Art. 2238.
Here the act specifically provides that, should the purchasers fail to promptly or fully comply with any of their obligations thereunder, at its option Union could proceed immediately to cause the property to be seized and sold by executory or other legal process. The act also contains the usual concluding paragraph providing that it was done and passed in the presence of the two subscribing witnesses. The right granted to Union to use executory process is one of the important dispositions contained in the act. As the act must be authentic in order to use that process, and as the presence of the subscribing witnesses is necessary for authenticity, the declaration that the act was done and passed in the presence of its subscribing witnesses certainly is not foreign to the disposition relating to executory process; in our opinion it has a direct reference to that disposition. Therefore, under the above quoted article 2238 the petitioner, a party to the act, cannot prove by parol evidence that the enunciation to the effect that the act was passed in the presence of the two subscribing witnesses is incorrect.
We repeat that Mr. Stewart's petition does not allege fraud, error or mistake. In the absence of such an allegation parol evidence is not admissible against and beyond what is contained in an act, whether authentic or under private signature; under such an allegation, properly made, parol evidence is admissible against and beyond what is contained in an act, whether authentic or under private signature. LSA-C.C. Arts. 2246, 2275 and 2276; Gulf States Finance Corp. v. Airline Auto Sales, Inc., 248 La. 591, 181 So.2d 36; Templet v. Babbitt, 198 La. 810, 5 So.2d 13; Hodge v. Hodge, 151 La. 612, 92 So. 134; Pain v. Plicque Le Beau, supra; Bash v. Sims, La. App., 210 So.2d 180; Elrod v. Le Ny, La. App., 193 So.2d 299; Dixie Pine Products Co. v. Switzer, La. App., 111 So.2d 518.
We do not agree with petitioner's argument that Code of Civil Procedure Article 2753 makes admissible the parol evidence in question. In pertinent part that article reads as follows:
"The original debtor, his surviving spouse in community, heirs, legatees, and legal representative are not required to furnish security for the issuance of a temporary restraining order or preliminary injunction to arrest a seizure and sale, when the injunctive relief is applied for solely on one or more of the following grounds:
* * * * * *
(5) The order directing the issuance of the writ of seizure and sale was rendered without sufficient authentic evidence having been submitted to the court, or the evidence submitted was not actually authentic." LSA-C.C.P. Art. 2753. (Emphasis ours).
The emphasized portion does contemplate situations in which a petitioner for injunction may offer proof that the order directing the issuance of the writ of seizure and sale was rendered on evidence not actually authentic; in other words, that such evidence, although authentic on its face, was not authentic in fact. But the article does not purport to establish the nature, sufficiency or admissibility of evidence establishing the alleged fact that the order of seizure and sale was rendered on evidence not actually authentic. It merely provides that any of those named in the first sentence of the article may obtain the temporary restraining order or preliminary injunction on one or more of the listed grounds without furnishing security for the issuance thereof. To illustrate, if a petition for an injunction to arrest a seizure and sale under executory process alleges fraud, error or mistake the petitioner could as we have pointed out, offer parol evidence to prove the writ was issued on evidence not actually authentic and, if successful, under the article, could obtain a preliminary injunction without furnishing security.
For the reasons assigned, the Alternative Writ of Certiorari issued in this matter is recalled and vacated and the proceedings in this court are dismissed at the cost of relator, Gerald A. Stewart.
Writ recalled and vacated and proceedings dismissed.
SWIFT, J., dissents.
ON REHEARING
We granted this rehearing primarily because we wanted to reconsider the effect of LSA-C.C.P. Art. 2753(5) in the light of subsection (3) of that article. The facts are adequately stated in our original opinion and need not be repeated.
Code of Civil Procedure Article 2753 reads, inter alia:
"The original debtor, his surviving spouse in community, heirs, legatees, and legal representative are not required to furnish security for the issuance of a temporary restraining order or preliminary injunction to arrest a seizure and sale, when the injunctive relief is applied for solely on one or more of the following grounds:
* * * * * *
(3) the act evidencing the mortgage or privilege is forged, or the debtor's signature thereto was procured by fraud, violence, or other unlawful means;
* * * * * *
(5) the order directing the issuance of the writ of seizure and sale was rendered without sufficient authentic evidence having been submitted to the court, or the evidence submitted was not actually authentic." LSA-C.C.P. Art. 2753.
After more mature consideration we are of the opinion we were in error in concluding that, because he did not allege fraud, error or mistake, the petitioner for injunctive relief was precluded from offering parol evidence to prove the writ of seizure and sale was issued on evidence (the act of sale, vendor's lien and mortgage) not actually authentic. In arriving at our original conclusion we inadvertently overlooked subsection (3) of the quoted article.
As pointed out in the original opinion, article 2753 provides any of those named in the first sentence of the article may obtain a temporary restraining order or preliminary injunction solely on one or more of the listed grounds without furnishing security for the issuance thereof. Subsection (3) requires allegations of fraud, violence or other unlawful means by which the debtor's signature was procured. As subsection (5) contains no such requirement, it now appears to us that the petitioner for injunctive relief may prove the evidence submitted to obtain the order was not actually authentic by any kind of otherwise admissible evidence without alleging fraud, error or mistake. A contrary holding would impose on a petitioner for injunction an added burden not contemplated by the subsection.
Insofar as parol evidence is concerned, it appears to us that subsection (5) contemplates and thus permits the use of such evidence. Since, with very rare exceptions, parol evidence is the only conceivable means of proving, in the words of the subsection, the writ was rendered "without sufficient authentic evidence having been submitted to the court, or the evidence submitted was not actually authentic", to prohibit the use of parol evidence would have the effect of rendering the subsection inapplicable in the vast majority of cases in which it is intended to apply. Certainly this is true in the instant case in which parol is the only conceivable evidence by which an absence of witnesses during the execution of the act can be proved.
As a result of these considerations we also have changed our conclusion regarding the effect of Civil Code Article 2238. The only references to witnesses in the act of sale, vendor's lien and mortgage in suit are contained in the second sentence and in the last paragraph of the act. In the customary fashion they recite, respectively:
"BEFORE ME, MARGARET GAUDIN, a Notary Public duly commissioned and qualified in and for the Parish of Orleans, therein residing, and in the presence of the witnesses hereinafter named and undersigned,"
"THUS DONE AND PASSED at my office in New Orleans, on the day and in the month and year first above written in the presence of MRS. BETTY JANE TRACY and MRS. DEIDRE GLORIOSO witnesses of lawful age, residing in this city, who have signed their names, with the appearers and me, Notary, after due reading of the whole."
Whether these enunciations have a direct reference to, or are foreign to, the disposition now appears to us to be immaterial. They are recitations, not by any of the parties to the act, but by the notary alone and therefore cannot deprive one of those parties, the petitioner for injunction herein, of the right given him by article 2753(5).
Regardless of other considerations, the act must be in authentic form in order to justify foreclosure via executive and Code of Civil Procedure Article 2753(5) authorizes the issuance of a temporary restraining order or preliminary injunction to arrest a seizure and sale under executory proceedings when the order directing the issuance of the writ was rendered on evidence not actually authentic. We therefore conclude that petitioner in the instant case may introduce parol evidence to prove his allegation that the two persons who appeared in the act as witnesses were not present during the execution of the act.
Finally, we must consider a plea of equitable estoppel urged by Union. We did not mention or discuss that plea in the original opinion because the result there reached made the same unnecessary. Mr. Stewart, the petitioner for injunctive relief, is an attorney at law and was practicing as such when the act of sale, vendor's lien and mortgage was passed. Union argues that as an attorney he was charged with a knowledge of the law, including the requisites of authentic acts, and if the witnesses were in fact not present at the time the act was executed, he should have made objection to the proceeding at that time. Having failed to make any such objection, Union further argues, he must be deemed to have acquiesced in the alleged informality and waived objections thereto.
We find no merit in this plea. In addition to the fact that there is no evidence before us showing petitioner made no objection to the witnesses' alleged absence during the execution of the act, we know of no compelling reason why he should have made such an objection or why a failure to make objection should prevent him from now attacking the authenticity of the act. Authenticity was a necessary essential for Union alone, the act appears to have been passed before Union's notary, and petitioner was under no obligation to protect Union in this regard.
For the reasons assigned, both on rehearing and in the original opinion insofar as the latter are not in conflict with this opinion, our original decree is recalled and set aside, the alternative Writ of Certiorari issued herein is reinstated and made peremptory, the trial court ruling, that the parol evidence sought to be introduced by petitioner for injunction was inadmissible, is annulled and set aside, and this case is remanded to the trial court for further proceedings in accordance with law and in conformity with the views expressed herein; all costs to await a final determination.
Original decree recalled; ruling complained of annulled and set aside; and case remanded.