Aetna Finance Co. v. Antoine

• Decision Date: 15 March 1977
• Docket Number: No. 7906,7906
• Citation: 343 So.2d 1195
• Parties: AETNA FINANCE COMPANY v. Mr. Jeff ANTOINE and Mrs. Elaine Antoine.
• Court: Court of Appeal of Louisiana — District of US

Page 1195

343 So.2d 1195

AETNA FINANCE COMPANY v. Mr. Jeff ANTOINE and Mrs. Elaine Antoine.

No. 7906.

Court of Appeal of Louisiana, Fourth Circuit.

March 15, 1977.

Stahl & Berke, Kenneth J. Berke, New Orleans, for plaintiff-appellee.

Noble, Moon, Slaughter & Clayton, Paula A. Perrone, New Orleans, for defendants-appellants.

Before LEMMON, GULOTTA and MORIAL, JJ.

GULOTTA, Judge.

Husband and wife, judgment debtors, appeal from the dismissal on exceptions of no cause of action and res judicata of their petition seeking injunctive relief from the seizure by writ of fieri facias of household movable furnishings, upon which a chattel mortgage had been granted. The Antonies seek to arrest the sale of seized pieces of household furnishings which are exempt under LSA-R.S. 13:3881. ¹

The debtors contend that the statutory exemption covering the seized household property ² has not been waived by the granting of the chattel mortgage. In support of their position, the Antoines analogize the exemptions of these statutorily-exempt movables to the homestead exemption which requires a written waiver. ³ According to petitioners, if indeed authority exists for a waiver, the waiver, express or implied, must be voluntarily, intelligently and knowingly made.

Aetna claims, on the other hand, that when the debtors granted the chattel mortgage, they impliedly waived the exemptions afforded under LSA-R.S. 13:3881. Aetna alternatively argues that the default judgment maintaining the chattel mortgage against the debtors is res judicata, and any claim for injunctive relief from seizure and sale of the mortgaged items is now barred because any defenses which they may have had should have been asserted at the time the suit was brought on the note and mortgage.

Considering Aetna's contentions in reverse order, we find no merit to the claim that injunctive relief sought by petitioners is res judicata. Aetna filed suit in March, 1975, for the balance owed on a note and for recognition of the chattel mortgage. Default judgment was rendered in the amount prayed for and the chattel mortgage was recognized. In May, 1975, a writ of fieri facias was issued against the debtors, and it was at this time that the Antoines' petition for injunctive relief to arrest the sale of the seized exempt property was filed. Their petition for injunctive relief does not address itself to whether or not an indebtedness is due (subject of the default judgment), but addresses itself rather to whether or not the judgment creditor rightfully seized exempt property to satisfy the judgment. It was not until such time as the seizure included the exempt property that the debtors could be heard to complain. It was then that the Antoines brought this action for injunctive relief for the arrest of the sale of the seized exempt property. The Antoines could not have raised the issue whether the waiver in the chattel mortgage was knowingly, voluntarily and intelligently made until such time as the creditor seized the exempt items. The debtors had no way of knowing that exempt items would be seized to satisfy the judgment until they were in fact seized. The matter before us is clearly not res judicata. See Scurlock Oil Company v. Getty Oil Company, 294 So.2d 810, 818 (La.1974) for discussion of res judicata .

We are more concerned with the primary issue, i.e., whether the debtor who has executed a chattel mortgage may subsequently, absent allegations of fraud, assert the defense that the waiver was not voluntarily, knowingly and intelligently made.

Waiver is defined as:

'A voluntary and intentional relinquishment or abandonment of a known existing legal right, advantage, benefit, claim, or privilege, which except for such waiver the party would have enjoyed.'

Breaux v. Laird, 230 La. 221, 234, 88 So.2d 33, 38 (1956). See also Pittman Construction Company v. Housing Authority of New Orleans, 248 La. 471, 179 So.2d 900, 904; Michel v. Efferson, 223 La . 136, 65 So.2d 115, 119 (1952).

As also stated in Estoup Signs v. Frank Lower, 10 So.2d 642, 645 (La.App.Orl.1942), citing 31 C.J.S. Estoppel § 61, p. 244:

'A waiver occurs, takes place, or exists when one dispenses with the performance of something he is entitled to exact or when one in possession of any right, whether conferred by law or by contract, with full knowledge of the material facts, does or forbears to do something the doing of which or the failure or forbearance to do which is inconsistent with the right or his intention to rely upon it.'

See also Fox v. City of Monroe, 15 La.App. 192, 131 So. 483, 484 (2d Cir. 1930).

It is well-settled that a debtor, in mortgaging his property, may waive statutory exemptions. In those instances involving the mortgage of property covered by the homestead exemption, the debtor must make a written waiver. ⁴ In those instances involving property exempt from seizure under LSA-R.S. 13:3881, however, no express waiver is required. Indeed, our jurisprudence recognizes an implied waiver through conduct, i.e., the execution of the chattel mortgage itself. In Kay v. Furlow, 178 La. 637, 644, 152 So. 315, 317 (1933), the Louisiana Supreme Court dealt with a case involving property exempt from seizure under Code of Practice, art. 644, the precursor to LSA-R.S. 13:3881. The defendant in Kay had executed a chattel mortgage on tools of his trade and sought an injunction to prevent the sale of the mortgaged property. In affirming a dismissal of the petition, the court stated:

'Defendant, in consenting to the mortgage, by necessary implication, waived his exemption, otherwise he would not have been granting a mortgage at all, but only a mere sham. The implied waiver, as appears from the authorities cited, is a valid waiver. The waiver, as we have seen, does not violate public policy.'

See also: Kyle v. Sigur, 121 La. 888, 46 So. 910 (1908). In our case, the property seized included certain household items exempt under the terms of LSA-R.S. 13:3881; they are not items encompassed within the constitutional homestead exemption. Accordingly, in view of the Kay and Kyle decisions, we conclude that the Antoines have granted an implied waiver of their right to assert the exemptions afforded them by LSA-R.S. 13:3881.

We now turn to a consideration of whether the debtor, who has executed a chattel mortgage on exempt property, has the right to raise the defense that the implied waiver granted in the chattel mortgage was not knowingly, voluntarily and intelligently made. If we conclude that the signing of the mortgage, which lists the exempt property, cannot be vitiated by allegations and proof that the waiver was not knowingly, voluntarily and intelligently made, an irrebuttable presumption exists in favor of the validity of the waiver. If, on the other hand, the implied waiver is subject to an attack, on the grounds that the waiver was not so made, the presumption is rebuttable. To hold that the presumption is irrebuttable would result in a foreclosure (absent...