W. T. Grant Co. v. Mitchell

• Decision Date: 06 November 1972
• Docket Number: No. 52388,52388
• Citation: 263 La. 627,269 So.2d 186
• Parties: W. T. GRANT COMPANY v. Lawrence MITCHELL.
• Court: Louisiana Supreme Court

Page 186

269 So.2d 186

263 La. 627

W. T. GRANT COMPANY v. Lawrence MITCHELL.

No. 52388.

Supreme Court of Louisiana.

Nov. 6, 1972.

Rehearing Denied Dec. 11, 1972.

John W. Reed, Robert J. Hobbs, New Orleans, for defendant-relator.

Favret & Favret, Marshall J. Favret, New Orleans, for plaintiff-respondent.

SUMMERS, Justice.

Lawrence Mitchell purchased a refrigerator, range, stereo and washer from W. T. Grant Company on an installment sales contract. When Mitchell defaulted in his payments, Grant instituted this suit in the First City Court of New Orleans for $574.19, the balance due on the contract.

Grant alleged its entitlement to 'a vendor's lien and privilege' on the merchandise and that it 'fears that said defendant will encumber or alienate same during the pendency of the proceeding . . ..' Accordingly, Grant alleged, the issuance of a writ of sequestration was necessary to protect its interest. La.Code Civ.P. arts. 3501, 3571.

In an attached affidavit Jerry Dunnegan, Grant's Credit Manager, verified the facts of the petition and affirmed that petitioner 'has reason to fear and believe that the said defendant, Lawrence Mitchell, will encumber, alienate or otherwise dispose of the merchandise . . . during the pendency of these proceedings, and that a writ of sequestration is necessary . . ..' La.Code Civ.P. art. 3501.

The Judge of the City Court signed an order for the issuance of a writ of sequestration upon plaintiff furnishing bond in the amount of $1,125. La.Code Civ.P. art. 3574. On the same day bond was furnished, February 2, 1972, the writ of sequestration issued, and Mitchell was cited to answer within five days. On February 7, 1972 Mitchell's stove, refrigerator and electric wash tub were provisionally seized pursuant to the writ of sequestration.

Thereafter, on March 3, 1972, Mitchell's counsel filed a motion to dissolve the writ of sequestration, alleging that the refrigerator, stove and electric wash tub were exempt from seizure by any process whatsoever under Section 3881 of Title 13 of the Revised Statutes. The motion to dissolve was also based upon the assertion that Mitchell was denied due process of law in that he received no notice prior to the provisional seizure under the writ of sequestration nor was he afforded an opportunity to defend his rights to the personal property prior to the seizure. Mitchell also alleged his poverty and want of means and sought to proceed in forma pauperis as authorized by Article 5181 of the Code of Civil Procedure.

Mitchell's motion to dissolve and the application to proceed in forma pauperis were denied by the judge a quo, and a subsequent application for review to the Court of Appeal, Fourth Circuit was also denied. We granted review on Mitchell's application.

I.

Section 3881 of Title 13 of the Revised Statutes exempts from seizure the stove, wash tub and refrigerator 'under any writ mandate, or process whatsoever'. ¹ This section was added to the Revised Statutes by Act 32 of 1960 to replace Article 644 of the Code of Practice ² when the latter was repealed, having been superseded by the Code of Civil Procedure. See Act 15 of 1960.

After its inclusion in the Revised Statutes, Section 3881 was amended in 1961 to remove all doubt that the wages, salaries, and other compensation of public employees and contractors were subject to garnishment. The second reason was to effectuate the recommendation of the Louisiana Sheriff's Association that the refrigerator used in a debtor's household be exempted from seizure. Act 25 of 1961; Comments by Henry G. McMahon to Section 3881. In all other respects the subject matter of Article 644 of the Code of Practice was unchanged by Section 3881.

This conclusion is further confirmed by the inclusion of Section 3881 in Chapter 18 of Title 13 of the Revised Statutes dealing with seizures in general. This chapter also contains enactments pertaining to execution of judgments under a writ of fieri facias; whereas a separate chapter (Chapter 20) in the same title collects the sections pertaining to provisional remedies (attachment, sequestration, etc.). If the compilers of the Revised Statutes, and the Legislature, intended that the exemptions of Section 3881 should apply to provisional remedies, it would have been more orderly and logical to include this section with the sections on that subject. Instead this exemption provision was included with those sections pertaining to seizures under fieri facias.

Article 644 of the Code of Practice was contained in Chapter 6, 'Of The Proceedings in Execution of Judgments.' Section 3 of that chapter dealt with 'The Execution of Judgments Directing the Payment of a Sum of Money.' Paragraph 1 of Section 3 pertained to the Writ of Fieri Facias. Article 644 falls under this heading. It is for this reason that the courts have held that Article 644 related to exemptions from seizure under the writ of Fieri facias only, refusing to allow the exemption against a provisional seizure to assert a lessor's privilege. Ross v. Rosenthal, 1 Orleans App. 203 (1904), cert. denied by Supreme Court June 30, 1904; Benton v. Jarrett, No. 2136 on the Docket of the Court of Appeal, Parish of Orleans, cert. denied. In Stewart v. Lacoume, 30 La.Ann. 157 (1878), commenting upon the effect of Article 644, this court said: 'It is evident that the exemptions of property from seizure provided for by Art. 644 C.P. and by the Acts of 1872 and 1874, do not apply in favor of the lessees as against their lessors.'

These results were based upon the proposition that the lessor's privilege established by Article 2705 of the Civil Code was not on the same subject matter as the exemptions of Article 644 'and the Code of Practice was framed exclusively with a view to judicial proceedings, and its provisions on the subject of general laws do not necessarily repeal those of the Civil Code that are contrary to, or inconsistent with them.' Ellis v. Prevost, 13 La. 230 (1839). See also Kay v. Furlow, 178 La. 635, 152 So. 315 (1934); Kyle v. Sigur, 121 La. 888, 46 So. 910 (1908); Ross v. Rosenthal, 1 Orleans App. 203 (1904). In essence, the conclusion has been that exemptions from seizure under fieri facias were inapplicable to provisional remedies to assert privileges created by the Civil Code. On this basis we hold that the exemptions allowed by Section 3881 cannot be allowed against a provisional seizure by writ of sequestration to preserve a vendor's privilege.

II.

Article 3217 of the Civil Code announces that 'The debts which are privileged on certain movables, are the following: . . . The price due on movable effects, if they are yet in the possession of the purchaser . . ..'

Article 3227 elaborates:

He who has sold to another any movable property, which is not paid for, has a preference on the price of his property, over the other creditors of the purchaser, whether the sale is made on a credit or without, if the property still remains in the possession of the purchaser . . .

The vendor's privilege on movables exist against the property sold as a substantive right incident to the contract of sale. Johnson v. Bloodworth, 12 La.Ann. 699 (1857); State ex rel. Landry v. Broussard, 177 So. 403 (La.App.1937).

The privilege has been an integral part of the law of Louisiana since the adoption of the State's first code in 1808. ³ Its practical importance has diminished somewhat since adoption of the Chattel Mortgage Act, the latter having been enacted principally to supply the commercial deficiency of the vendor's privilege, which in general does not follow the movable when it leaves the vendee's possession. Nevertheless, the vendor's privilege remains an important and valuable right in commerce. The formality, time and expense involved in executing and recording chattel mortgages often prevent their use, particularly on small, inexpensive chattels or where the vendor neglects or is prevented from using the chattel mortgage. Daggett, Louisiana Privileges and Chattel Mortgages, p. 91 (1942); Margolin, Vendor's Privilege, 4 Tul.L.Rev. 237 (1929).

As understood in our law, the vendor's privilege does not exist at common law. It is distinguished from the common law vendor's lien, which the vendor loses when he delivers possession of the article sold to the vendee. Daggett, Id.

The privilege exists upon the sound equitable principle that when the purchaser acquires the vendor's property, his estate is enriched. 'It would indeed be unjust to place an unpaid vendor on a footing of equality with other creditors of the purchaser . . . It would be iniquitous to permit the property sold to become the prey of the creditors of the purchaser without requiring, as a condition precedent, the payment of its cost . . ..' De L'Isle v. Succ. of Moss, 34 La.Ann. 164 (1882).

As defined by Laurent, Vol. XXX, p. 6, § 2; p. 18, § 16, the Raison d'etre of the vendor's privilege is the enrichment of the purchaser's estate by the acquisition of the vendor's property. The right to the payment of the price has, therefore, always commended itself to the favorable consideration of courts.

Planiol gives this justification of the privilege:

As long as the price is not paid the sale augments the patrimony of the buyer at the expense of the vendor; the latter has impoverished himself, he has alienated his property and has not received anything in exchange. The vendor has thus gratuitously augmented the common pledge of the creditors of the buyer; the latter can be paid with the property sold without the vendor being paid, they enrich themselves at his expense, which is unjust . . .. (Planiol, Vol. 2, No. 2608)

The privilege alone as defined by the Civil Code is of limited value. It is essentially a right without a remedy for its implementation. The machinery for its enforcement and protection is found in our procedural law. Louisiana has long recognized a need for several types of seizure before judgment. Today two are allowed:...