Smith v. His Creditors , 21 La. Ann. 241 ( 1869 )

IIowell, J.

The syndic lierein filed an account of Ms administration, by wMcb, after allowing certain charges, lie- proposed to distribute the balance of the funds in Ms bands among the heirs of Mrs. Mary C. Smith, wife of the insolvent, on account of their claim for paraphernal funds received by the insolvent during the marriage and seeured by legal mortgage. He also set down the said heirs as creditors with tacit mortgage in the sum of ten thousand dollars, for half the value of cotton on hand at the death of their mother and sold by the-father.

Alfred Penn, as a creditor, with a judgment duly recorded against Gordon A. and Joseph D. Smith, in solido, opx>osed the account on the grounds, among others, that Ms claim is omitted; ;that the claim of tho heirs of Mrs. Smith- to the funds to he distributed, and that for ten thousand dollars, are not legal charges against the insolvency, and if they exist, are ordinary claims; and that liis mortgage upon the property sold is superior to the title of J. D. Smith, the insolvent, who acquired it after the death of his wife.

The facts necessary to the inquiry arc the following :

In 1845 the Bank of Louisiana caused a plantation, called “ Solitude,” and the slaves tliereon, to be sold as the property of J. D. Smith, and became tbe purchaser thereof.

In 1846 the bank sold the same property to Gordon A. Smith, a brother of said J. D. Smith, and took a mortgage to secure the amount of the bond given in payment of the price. Ten days thereafter, Gordon A. Smith executed this instrument:

St. Fkancisville, May 18, 1846.

Having purchased of the Bank of Louisiana a certain tract of land, known as the Solitude plantation, and the slaves thereon, mentioned in said sale, mortgaged to the Bank by Joseph D. and Luther L. Smith, I, Gordon A. Smith, do agree and obligate myself, my heirs and assigns, when the amount of my bond for the sum of $11,779 97, shall have been satisfied, with the interest, to the Bank of Louisiana, by Joseph D. Smith and his wifo Mary Cora Smith, to transfer and make good to them the titles to said property, they to remain in possession of the same, to guard and repair as for their own use and benefit, said property.

(Signed) GORDON A. SMITH.

In 1858 this same property was seized under a jft. fa. issued in the case of the “ Union Bank of Louisiana v. Joseph D. Smith, Luther L. Smith and Ann E. Smith,” when Gordon A. Smith, as owner thereof, enjoined the sale. A compromise was effected, by which Gordon A. Smith and Joseph D. Smith gave the Union Bank their joint and several notes amounting to five thousand dollars, which became the property of Penn, the opponent, who obtained judgment on three of them in 1865, against G. A. and J. D. Smith, in solido, which was recorded on seventh December, 1865.

In June, 1863, Mrs. Mary C. Smith died, leaving nine children, the eldest being then married and of age.

On seventeenth May, 1866, Gordon A. Smith, by authentic act, sold the Solitude plantation to J. D. Smith, nominally for five thousand dollars cash, but shown, by the testimony of the two, to have been in consideration of the payment, by J. D. Smith, prior to January, 1860, to the Bank of Louisiana, of the amount of G. A. Smith’s bond, in compliance with the above document of eighteenth May, 1846.

On twenty-third May, 1866, six days after the above transfer, the succession of Mrs. Smith was opened and the father was confirmed in the tutorship of seven of the children. In the inventory, the “Solitude” plantation was included as community property, and the paraphernal claims, allowed by the syndic, were described. Counsel for the opponent admit in their brief that funds of the wife amounting to six thousand dollars, were received by the husband in 1857 or 1858.

On thirty-first January, 1867, J. D. Smith made a cession of his property to his creditors, placing on Ms schedule said plantation as community property, the proceeds of wMcb are nowin controversy between Penn and the heirs.

It is clear that the judicial mortgage in favor of Penn, the opponent, attached to said property on the seventh December, 1865, whether it belonged to Gordon A. Smith or Joseph D. Smith,’for his judgment was against both, in solido, and was recorded on that day; and the question is, had the mortgage set up by the heirs previously attached ? If so, it is because the property belonged to J. D. Smith before Penn’s judgment was recorded.

The legal title to the property existed in Gordon A. Smith, until he transferred it on the seventeenth May, 1866, but it is contended that the property actually belonging to Joseph D. Smith by virtue of the instrument of eighteenth May, 1846, the payment made by him in accordance therewith prior to the year 1860, and his constant possession up to the sale in these proceedings. This document, however, was never recorded, and whatever may have been, its effect as between the parties, it had none as to Penn, until it was adduced on the trial of his opposition herein — unless he had knowledge of it before, which is not shown. It is urged that his attorneys were aware of the actual ownership in J. D. Smith, because they were the attorneys of the Union Bank in 1858, when it's seizure was enjoined and the compromise was made, and also were the attorneys of the insolvent in opening the succession in May, 1866, when under their advice or superintendence, the “ Solitude” plantation was inventoried as community property.

The knowledge, presumed from the injunction against the Union Bank, is adverse to any ownership in J. D. Smith at that time; for the' injunction was successful in leaving the ownership claimed ande worn to by Gordon A. Smith, undisturbed and' recognized. At the date of opening the succession of Mrs. Smith, the transfer had been made to J, D. Smith, and the act of inventorying it as community property does not imply a knowledge in the’ attorneys that it had belonged to J. D. Smith by virtue of the written instrument in question.

In no other mode is knowledge imputed to the opponent, and we are not prepared to charge him with any such knowledge upon the evidence in the record, which, on the contrary, shows the title to have been in Gordon A. Smith from the eighth May, 1846' to the seventeenth May, 1866 — over twenty years — during which time his creditors could have made it liable for their claims against him. 6 A. 809; 16 A. 436. The claim of the opponent had its origin, as to him, in 1858, and passed into the form of a judgment with mortgage against him on seventh December, 1865, and the property went into the-hands or ownership of.J. D. Smith incumbered with said mortgage, and then became also subj ect to the mortgage as against the purchaser, J. p. Smith, by virtue of the same judgment. C. C. Arts. 3289 and 3296. This case is not parallel to that of Peters v. Toby, 10 A. 410.

Our conclusion is, that the mortgage of the opponent is superior to any in favor of the heirs of Mrs. Smith, deceased wife of the insolvent, and that, under the circumstances, this mortgage can ho enforced against the proceeds in the hands of the syndic. They are the proceeds of the property subject to opponent’s mortgage, which he can follow, and there is no proof that the mortgagor has other property. C. C. 3362; C. P. 301,402,403; 7 A. 344. Such a proceeding avoids a circuity of action.

As the judgment of the District Court simply denies the right of the heirs to the fund derived from the sale of the plantation, distributed in the account now before the court, and cannot affect their claims against any fund to be hereafter distributed, or against their father, we deem it unnecessary to disturb said judgment; nor do we think it essential to pass on the bills of exception in the record.

Judgment affirmed.