Choate Oil Corp. v. Glassell , 153 La. 715 ( 1922 )

DAWKINS, J.

Defendants were the holders and owners of notes of the plaintiff for a large amount, secured by mortgage upon certain oil and gas leases, and including “four completed oil wells, with all equipment for operating the same, including tanks and standard pumping rigs and all other improvements on said leases belonging to said mortgagor, whether specially described herein or not.” The notes not having been paid at maturity, foreclosure proceedings were instituted. The demand and notice of seizure were properly served upon J. A. Thigpen, as the Louisiana Agent of the Choate Oil Corporation (hereinafter called the Choate Compány), but because of some defect in the proceedings it was decided to make new service. Thereupon another demand and notice were issued and served upon one Albert P. Garland, as attorney of record for the Choate Company. The property was advertised for sale, and Joseph Reid Gas Engine Company intervened, claiming a vendor’s lien upon certain machinery and appurtenances; and on November 11, 1921, the leases, together with all oil wells, machinery, appurtenances, etc., were adjudicated to A. C. Glassell and K. E. Merrin, for $45,000, out of which, the return recites, the .costs were paid and the balance “applied on writ per receipts attached.” Sheriff’s deed • was accordingly executed on the following day, November 12th, and recorded in the conveyance records of Caddo parish on the 17th of that month.

The Choate Company on November 26, 1921, filed suit to annul the said sale for the reason that no service of the demand to pay and notice of seizure had been made upon it, and prayed that the sheriff’s deed be declared “null and without legal effect.” The defendants in that suit first denied the allegations of the Choate Company, but subsequently filed an amended answer admitting the nullity, and judgment was rendered declaring the said sale “to be null and void and without legal effect.” This judgment was signed December 14, 192L

While the sheriff had noted in his return, as above shown, this sale, distribution of proceeds, etc., as a matter of fact, he had not returned the writ to the clerk’s office and the property was still in the custody of his keeper. On December 1, 1921, after the filing of answers by the purchasers at the sheriff’s sale admitting its nullity, another demand and notice were served upon Thigpen, the lawful agent of the Choate Company, and the same property was, on December 6th following, again advertised for sale on January 7, 1922. On the latter date, it was again bought in by Glassell et ai. for $47,000, which the return recites was applied pro tanto to their claims, and sheriff’^ deed,was again executed and recorded.

Plaintiff brought the suit covered by this appeal to annul the second sale, reciting the pertinent facts above related and seeking to have it annulled upon the following grounds, to wit: • ,,

(1) That the authority of the sheriff had “expired” or was exhausted when the first sale was made and recorded;

(2) That said sale and recordation of the deed operated as a release in fact and law of the seizure, and the sheriff was without authority to take any further proceedings, without obtaining a new order for executory process and serving a new demand to pay and notice of seizure;

(3) That said sale was not an absolute but a relative nullity, and, until set aside by judgment of court, was in full force and effect;

(4) That the sale was without legal effect because of the failure to obtain a new order of seizure and to serve a new demand and notice of seizure;

(5) That it was also null because 30 clear days had not elapsed between the date of the judgment of nullity (December 14th) and the sale (January 7th) because until annulled; the former sale had the effect of vesting title and possession in the purchasers, and prevented the sheriff from advertising the property for sale until the said judgment was signed.

(6) In the alternative, if the sale herein attacked is found to be valid, then that the mortgage foreclosed' covered the leases alone, and did not include the oil wells, equipment for operating same, including tanks, gas engines, pumping rigs, and other improvements on said leases, for the reason that the resolution of plaintiff’s^board of directors authorizing said mortgage covered the naked leases only.

Defendant first pleaded judicial estoppel, based upon the fact that in ,the former suit to annul, plaintiff had alleged that the first sale was “illegal, null and void and without legal effect,” that the court below had so adjudged it to be in that identical language, and plaintiff could not afterwards shift its position and claim the sale to have been only relatively null. Further, that plaintiff was judicially estopped from alleging that the said mortgage did not cover the oil wells, equipment, tanks, gas engines, pumping rigs, and other improvements on said leases, for the reason that in said former suit it had alleged:

“That said proceedings under which petitioner’s title and ownership of said property was attempted to be sold by the sheriff of Caddo parish on November 11, 1921, was an ex-ecutory process on certain promissory notes and a conventional mortgage securing the same covering the property described in paragraph 1 and 3 hereof (which described all of the property now claimed not to have been covered by the resolution) given by you,r petitioner on the 6th day of January, 1921, said mortgage being filed for record in the mortgage records of Caddo parish, La., January 7, 1921, and recorded in Book 76 of Mortgages, p. 757; made part hereof by reference.”

The court below sustained the plea of estoppel as against all grounds of attack, save the alternative allegation that the resolution authorizing the mortgage did not cover the •oil wells, machinery, etc., and as to which latter point it held the law and evidence to be in defendant’s favor, rejecting plaintiff’s demands in toto.

Opinion.

In the first paragraph of its petition for the annulment of the first sale by the sheriff, plaintiff alleges that it “is the owner and in the actual corporal possession of the following described property,” while in the present suit it is alleged and contended that as a result of said sale, both in fact and law, the present defendants were put in possession, which látter contention is relied upon as divesting the sheriff of the custody and operating as a release of the seizure of the property.

Plaintiff cannot be allowed to thus change its position at will, and to suit its requirements. What it meant to say in that case was that, the proceedings leading up to the sale were so illegal, null and void that its possession had not been divested; but it certainly had the effect of emphatically charging that the pretended purchasers were not in possession. As a matter of fhct, the sheriff remained in possession through his keeper at all times, until the sale on January 7, 1922, and all bills for expenses incurred during that time were approved by that officer and paid by the plaintiff in execution as the party primarily liable for costs. Besides, plaintiff obtained a judgment decreeing the said sale to have been without legal effect, which has been acquiesced in by both sides, and it is now too late for it to take a contrary position. Johnson v. Levy, 109 La. 1037, 34 South. 68 ; Williams v. GilkersonSloss Co., 45 La. Ann. 1017, 13 South. 394 ; Gaudet v. Gauthreaux, 40 La. Ann. 187, 3 South. 645 ; Folger v. Palmer, 35 La. Ann. 743 ; V. S. & P. Ry. Co. v. Tibbs, 112 La. 51, 36 South. 223. Again, the demand and notice of seizure takes the place of citation in executory proceedings, and where both have failed, as in the first sale, we think the act of the sheriff in attempting to sell was absolutely null. Grant v. Walden, 6 La. 631V; Saillard v. White, 14 La. 84.

Our conclusion is that the sheriff could ignore what he had done in the first attempt to sell the property, and after making proper demand and service of notice of seizure, was fully authorized to proceed with the advertisement and sale of the property, as was done in this case.

The Alternative Demand.

The lower court did not sustain the plea of estoppel as to the property claimed in the alternative demand, although the Choate Company had alleged in its first suit that the same was covered by the mortgage, but rejected it upon the merits. Defendants have neither appealed from that ruling, nor answered the appeal, and hence we can make no change in the judgment in their favor based upon estoppel. However, we are convinced that at least a part of the items covered by the alternative demand, such as the wells, casing, pumps, etc., are a part of the leases and necessary to their full operation; but since the proof in the record is not sufficient to enable us to determine whether all of those items have become immovables by destination covered by the mortgage, we think that justice can best be done by remanding the case for further evidence and adjudication upon the alternative demand. If such property had been attached to the leases and was necessary to their operation and development, they were immovables by destination and covered by the mortgage of said leases. R. C. O. 468; Scovel v. Shadyside Co., 137 La. 919, 69 South. 745, Ann. Cas. 1917B, 178V; Townsend v. Payne, 42 La. Ann. 913, 8 South. 626. The argument made by counsel for plaintiff to the effect that the owner of land to which improvements have been attached may claim the same when the land is recovered, while in a case like this the owner of the lease without the fee would not have that right, is without merit. The situation is- no different to any other case where the title to the immovable is or may become defeasible. If the mineral 'leases should be allowed to expire (and there was no agreement to the contrary), a mortgage covering either the leases or the immovables by destination would likewise come to an end, and the property would revert to the owner of the fee with full right to its owner to claim or require the removal of the improvements as provided by the Code. The .power of the holder of a defeasible title is certainly no greater for the purpose of incumbering, than it would be for purposes of alienation. The difference between this case, and those cited by plaintiff where it was held that improvements placed upon property by a lessee, reverted to the owner of the premises is that the mineral leases are a species of real property, made so by Act 232 of 1910.

For the reasons assigned, the judgment of the lower court is affirmed, except as to the alternative demand, and as to this, it is set aside, and this cause is remanded for the purpose of receiving further proof and for adjudication of the ease according to law and the views herein expressed; defendants to pay the costs of this appeal' and the costs pertaining to the alternative demand to await final judgment.