Willis v. Scott , 33 La. Ann. 1026 ( 1881 )

The opinion of the Court was delivered by

Fenner, J.

The plaintiff enjoins the seizure, under ft. fa. issued against his father, J. W. Willis, Sr., of immovable property which he claims as belonging to himself.

The seizing creditor defends by charging that the title of the plaintiff is a fraudulent simulation, and that the property really belongs to his judgment debtor.

The'plaintiff, in support of the allegations of his petition, exhibits a conveyance by authentic act of sale from the judgment debtor, antedating the execution enjoined by a considerable period, for a price, adequate in amount, represented by his negotiable note secured by mortgage and vendor’s lien, actually executed and delivered to the vendor, and still outstanding and unmatured at the date of this suit. The evidence is uncontradicted that the sale was accompanied by actual delivery of the property to the plaintiff, as vendee, who lias possessed, controlled and administered it, as owner, ever since.

He further proves, by satisfactory testimony, that his vendor, the judgment debtor, is possessed of ample property to satisfy the defendants judgment, and that if, after discussion thereof, defendant’s judgment remains in any part unsatisfied, the said judgment, by virtue of record prior to the sale to plaintiff, is secured by the first judicial mortgage on the very property seized, which may be enforced by the hypothecary action.

Defendant’s evidence tends to contradict the sufficiency of his debtor’s property for the satisfaction of his judgment, and to establish the simulation of plaintiff’s title; but does not attack the apparent validity of the title, nor the delivery and continuous possession of plaintiff.

The plaintiff relies, for the affirmance of the judgment perpetuating his injunction, on the following propositions, viz.:

1st. That, having exhibited his title to the immovable seized, by authentic act of sale, executed by the delivery of his negotiable obligation for the price in accordance with its term.s, and also by the actual delivery of the property, and having established his continuous possession, administration and control, as owner — such title and possession are, in law, so presumably real, that they cannot be disregarded by ai seizure, but can only be attacked in a direct action.

2d. That a creditor has no right to attack, directly or indirectly,, either fraudulent or simulated conveyances of his debtor, without alleging and proving that they operate injuriously to him — which, he contends, is neither alleged nor proved in this case.

3d. That the evidence does not establish the simulation of plaintiff’s title.

It is difficult to reconcile all the decisions on this subject, but it cannot be denied that the weight of authority maintains the correctness of the first proposition above stated. In Barbarin vs. Saucier, 5 N. S. 361, a third person enjoined the seizure of a slave claimed by Mm as Ms property under a sale from the judgment debtor. The defense was. precisely similar to that interposed here, viz.: that the sale was collusive and simulated and designed to defraud creditors. The Court said: " The sale, whether fraudulent or not, vested the legal title to the slave in the plaintiff, and until set aside by the action which the law gives to creditors for that purpose, the sheriff has no right to seize it as the property of the vendor.”

Although the Court uses the word “fraudulent,” the statement of the issue shows that it means “ fraudulent simulation.”

In Peet vs. Morgan, 6 N. S., on precisely the same issue of fraudulent simulation, the Court reiterated the doctrine and gave the following reasons : “ The principle on which it rests is, that men are presumed to act honestly, until the contrary is proved ; that the conveyances alleged to be'fraudulent are, prima facie, correct and fair, and that it is improper, in opposition to these presumptions, the creditor should exercise rights that could only properly belong to him, in case the acts of his debtor were null and of no effect. In many instances, should a contrary doctrine prevail, sales, which were alleged fraudulent (simulations), might turn out to be bona fide (and real) and the purchaser be deprived of the use of property which was honestly his. In the uncertainty which must prevail until the matter undergoes a judicial investigation, it is certainly the wisest course, and the one most conducive to general utility, to consider the thing sold as belonging to him in whom the title is vested.”

In both the above cases, we assume, as was no doubt the fact, that the claimant had possession as well as title.

In the following cases, it has been distinctly decided that, where the third person enjoining held under a conveyance, valid on its face, accompanied by delivery and continuous possession, as owner, to the date of seizure, and where the defense was, as in this case, fraudulent simulation, a seizure, in disregard of such title and possession, could not be sustained, but the creditor must resort to a direct action, revocatory, or en declaration de simulation. Peet vs. Morgan, 6 N. S. 140, 580; Yocum vs. Bullitt, id. 324; Trahan vs. McManus, 2 La. 214; Weeks vs. Flowers, 9 La. 385; Morton vs. Crosby, 14 La. 426; Presas vs. Lanata, 11 R. 288; Kirkland vs. Gas Co., 1 An. 300; Collins vs. Shaffer, 20 An. 41; McAdam vs. Soria, 31 An. 864; Payne vs. Graham, 23 An. 773. See, also, 17 La. 555; 1 Rob. 435; 2 R. 389; 7 R. 234; 12 R. 95.

Some question has been made as to the application of this doctrine, in its full extent, to movable-property, but its application even to such property has been sustained in several cases, and notably in McAdam vs. Soria, 31 An. 864. On this question, however, we express no present opinion. As applied to immovable property, the doctrine has never been directly questioned.

We have not failed to observe that, in most of the cases quoted, the language of the Court refers to acts of fraud; but, in all of them, the issue is distinctly stated to be fraudulent simulation, and we are compelled to assume that the fraud referred to, is fraudulent simulation. The defendant opposes to this doctrine the well-established principle that, in cases of simulation, the creditor may seize, notwithstanding the apparent transfer, and if enjoined, may plead and show the simulation on trial of the injunction.

We have examined the authorities referred to, by defendants’ counsel, in which this doctrine was announced, viz.: 5 An. 1, 668, 702 ; 6 An. 710; 10 An. 570, and in all of them it appears that claimant had never had possession. The same feature appears in 1 Rob. 31; 7 An. 89; 15 An. 5, 53, 177; 19 An. 153; 29 An. 4; 2 An. 323, 912; 6 An. 716; 12 An. 173, and many other cases holding this doctrine. We find no case distinctly holding that immovable property held under a title, translative of property, valid on its face, and accompanied by actual delivery and continuous possession and control as owner, could be directly seized by a creditor of the transferrer.

To reconcile the two lines of authority, it is necessary to regard the case last stated as an exception to the general rule, that simulated titles-may be disregarded and direct seizures made at the suit of creditors of an alleged real owner. The defendant also refers to several authorities holding that, when a sale of property under execution is enjoined by a third person, claiming to be owner, he occupies the position of a plaintiff in a petitory action and must establish his title. In 1st Rob. 41, and 7 An. 89, the only ones direetly in point, the claimant had never had possession. In 8 N. S. 662 and 15 An. 136, it was merely held that seizure-could not be released without proof of claimant’s title and possession. It was neither held nor suggested that, after plaintiff had proved authentic title and possession, the creditor could, under his seizure, attack' them as fraudulent simulations without overcoming, by contrary proof, the prima facie sufficiency of the title, or the fact of possession. We are far from desiring to extend, in any manner, the opportunities of debtors to embarrass and delay the pursuit of creditors, by fraudulent manipulations of titles to property. But authentic titles to real estate,, valid on their face, published to the world by proper record, accompanied by delivery and continuous control as owner, afford such potent presumptions of ownership, that to permit the holder’s possession to be-divested by seizure under an execution against another, in advance of any proof of merely alleged fraud and simulation, would open the door to gross abuses, and would be a reversal of the ordinary course of remedial justice. The only foundation of the creditor’s right would be in the proof of his allegations. Ordinarily, the establishment of the right must precede the exercise of the remedy. The exceptions presented in the cases of the conservatory writs, are limited and strictly construed, and are guarded by bonds for damages. It is better that the creditor should suffer the delay incident to the establishment of his right by direct action, than that presumptive, and possibly real, owners should be stripped of possession, under proceedings to which they are not parties, and upon allegations which they dispute, and which have not been proved.

In the case of immovable property (to which, be it understood, this opinion is confined), the remedy of the creditor by direct action is perfect and complete. The meVe institution of the suit fastens the property in its existing condition, and prevents its alienation or incumbrance, to the prejudice of his claim. He can suffer no harm, except the delay, and, if successful, must find the property, at the end of his suit, open to the execution of his established right. Surely, it is better that he should submit to the delay incident to the judicial enforcement of all litigated rights, however clear, than that third persons should be subjected to the risk of such invasions of their most sacred rights of property.

In most of the cases, in which a contrary doctrine has been indicated, it will be found that there was either entire absence, or interruption, or some infirmity or ambiguity of the possession established, which tended to rebut the presumption of ownership, and to create an indicium of simulation. Where the title, possession and control of the claimant have all been perfect and complete, on their face, it has never been held, in any well-considered ease, that the transaction could be treated as such a pure simulation as to maintain a direct seizure.

Particularly should this doctrine be enforced in a case, like the present, where the consideration stated in the act is evidenced by a negotiable promissory note, actually executed and delivered, and outstanding, unmatured, at the date of seizure. Whatever be the understandings between the parties, the vendor could not claim the restitution of the title without surrendering the note. To maintain the seizure and sale of the property, while leaving the note, unmatured and capable of transfer free from all equities, in the hands of the vendor, would expose the claimant to grave danger.

Nor can we maintain the doctrine that a creditor can, directly or indirectly, attack the authentic title and possession of a third person, upon the ground of either fraud or simulation, without alleging and proving that they operate injuriously to him.

It is admitted that such allegation and proof would be necessary in a direct action en declaration de simulation; and we can conceive of no reason or principle upon which the creditor may escape this necessity by beginning with a direct seizure. The cases cited (1 R. 41; 15 An. 136; 8 N. S. 662; 1 An. 364; 7 An. 89; 2 An. 325), are either cases in which the claimant had not possession, or only hold that the enjoining claimant must administer proof of his pretensions. But when he alleges •and proves title, valid on its face, and possession, such title and possession cannot be assailed, in any form, by a creditor, without proving injury and interest. In the instant case, it is manifest the creditor is not injured, because not only has his debtor sufficient property to satisfy the debt, but the very property seized was sold to the plaintiff subject to his judicial mortgage, and may be subjected to the payment of his judgment, irrespective of whether the plaintiff’s title be real or simulated.

The foregoing grounds are sufficient for the decision of this case, and we shall, therefore, express no opinion on the question of simulation vel non, which the defendant may raise by direct action and on proper allegations, if he think the evidence in this case could sustain him.

Whenever questions, of this kind are properly presented, we shall probe the good faith and reality of transactions with merciless penetration. We think the District Judge has done justice, and reject the prayer.for increase of damages.

The judgment appealed from is affirmed at appellants’ cost.