Chrysler Credit Corp. v. Breaux

• Decision Date: 01 February 1974
• Docket Number: No. 9615,9615
• Citation: 293 So.2d 261
• Parties: CHRYSLER CREDIT CORPORATION v. Mrs. Anne B. BREAUX and W. D. Atkins, Jr., et al.
• Court: Court of Appeal of Louisiana — District of US

Page 261

293 So.2d 261

CHRYSLER CREDIT CORPORATION v. Mrs. Anne B. BREAUX and W. D. Atkins, Jr., et al.

No. 9615.

Court of Appeal of Louisiana, First Circuit.

Feb. 1, 1974.

Rehearing Denied March 22, 1974.

Writ Refused May 17, 1974.

Clement Story, III, Lafayette, for W. D. Atkins, Jr.

Ashby W. Pettigrew, Jr., Houma, for Mrs. Anne B. Breaux, and others.

Roger B. Jacobs, New Orleans, for appellee.

Before LOTTINGER, BLANCHE and CRAIN, JJ.

CRAIN, Judge.

The matter before us involves a suit for deficiency judgment by the plaintiff-appellee, Chrysler Corporation against Ira J. Breaux and the defendant-appellants, Anne B. Breaux and W. D. Atkins, Jr. The trial was held on February 19, 1973 and judgment in favor of Chrysler Credit Corporation was rendered. From this decision, the appeal is taken.

The record reflects that on July 18, 1969, suit for executory process was initiated by Chrysler Credit Corporation against Ira J. Breaux, the maker of a certain note in favor of Chrysler Credit Corporation, and Anne B. Breaux, a co-signer on the note. The suit was brought to effect a seizure on a 1968 Plymouth automobile owned by Ira J. Breaux upon which he had granted a chattel mortgage to Chrysler Credit Corporation. Judgment was rendered authorizing the issuance of a writ of seizure commanding the Sheriff to take into his possession the Plymouth automobile.

The demand for payment was waived by the debtor and therefore was not served prior to the seizure. The writ of seizure and sale together with the original petition initiating the executory process was served personally on Ira J. Breaux and was allegedly served by domiciliary service on Anne Breaux. The automobile was duly advertised, appraised, and sold at a judicial sale August 20, 1969. The automobile was appraised as $2,100.00 and was bought in by Chrysler Credit Corporation for $1,400.00.

On September 29, 1969, Chrysler Credit filed a deficiency judgment suit against Ira J. Breaux and Anne B. Breaux and on March 30, 1970 the suit was amended to include as a party defendant W. D. Atkins, another co-signer on the note.

The defendants all answered the suit. The maker, Ira Breaux, alleged his discharge in bankruptcy. The other defendants filed motions for summary judgment which were in due course denied. The trial was held on February 19, 1973 and the deficiency judgment was granted. Anne Breaux and W. D. Atkins, Jr. have appealed.

The appellants' claim that the appellee's failure to notify, cite, serve, inform, or make demand on them in the executory process proceedings preclude the appellee from securing a deficiency judgment against them. Appellant, Atkins, in addition contends that the failure of the appellee to join him as a party defendant in the executory process precludes a suit for deficiency against him. Anne Breaux additionally contends that although the record contains a Sheriff's return showing that she was served by domiciliary service, the service was effected by giving a copy of the petition and notice of seizure to Ira J. Breaux at his home. She further claims that she was not living with Breaux, and in fact had established residence in another parish so that the service was invalid placing her in a position to also assert the claimed deficiency of having not been made a party defendant in the original suit for executory process. Appellants contend that the alleged failures preclude the action for deficiency judgment against them under state law, and secondarily that if the procedure followed by the appellee is valid under state law, it is in contravention of the fourteenth amendment to the United States Constitution under decisions handed down by the United States Supreme Court.

We perceive the issue presented for us to be whether the failure to name an accommodation endorser as a party defendant in executory process proceedings on a note and chattel mortgage and the lack of service of notice of the proceedings whether in the form of a demand for payment or notice of seizure, precludes the suit for deficiency judgment against them. The appellants' contentions must be first considered under existing state law and in light of Fuentes, et al. v. Shevin, et al., 407 U.S. 67, 92 S.Ct. 1983, 32 Le.Ed.2d 556 (1972).

Under our statutory law and jurisprudence a debtor may oppose the suit for deficiency judgment if the property secured was sold without appraisal or if the executory process proceedings were fatally defective so that no deficiency judgment could be based upon them. The record in this case reveals that there was in fact an appraisal and therefore this defense is not available to the appellants.

The second defense raised under Louisiana law is that because of the lack of notice, and in the case of Atkins, the failure to name him as party defendant in the executory process suit, the defendants were deprived of the ability to protect their interest as regards cost and security. This deprivation, it is contended taints the executory process with illegality insofar as they are concerned and therefore no deficiency judgment against them can be based thereon. We agree with the trial court that the executory process as conducted in this case was valid.

The relationship of the appellants to the appellee was that of accommodation endorsers on Breaux's note and as such they agreed to become solidarily liable with him for its payment. Under the statutes and codal provisions regarding solidary liability, the creditor is allowed to proceed against each solidary obligor separately for the full amount of the indebtedness. When one solidary obligor is sued, the other solidary obligors are not necessary parties to the lawsuit. Campbell v. Libersat, 203 So.2d 730 (La.App.3rd Cir. 1967). In fact it has been held that the creditor may proceed against all solidary obligors in separate suits at the same time. Polk Chevrolet v. Vicaro, 162 So.2d 761 (La.App.1st Cir. 1964). We have not been shown any obligation imposed on the creditor to give each solidary obligor notice when one of them is sued.

The Louisiana executory process proceeding allows a creditor to effect a judicial seizure and sale of mortgaged property without the necessity of first obtaining a judgment against the debtor. Buckner v. Carmack, 272 So.2d 326 (La.S.Ct. 1973). In return for this procedural right given to the creditor, the law imposes upon him certain requirements which must strictly and rigidly be adhered to such as the evidence required to support the initiation of the proceeding. This includes service of notice of the demand for payment unless it is waived and service of the notice of seizure which is mandatory and not capable of being waived. In the case before the court, service of these notices was not effected on the accommodation endorsers. Consequently, the question arises as to whether the term debtors as used in the executory process articles includes accommodation parties on a promissory note who have no interest in the property under mortgage. We hold that it does not.

In the case of Polk Chevrolet, Inc. v. Vicaro, supra, one Vince Vicaro co-signed a note for his son, Samuel, in order to accommodate him in his purchase of an automobile. Samuel Vicaro gave a chattel mortgage on the car as security for his payment of the note. He later defaulted and the car was seized and duly sold. Vince Vicaro was not notified or named defendant in the executory process suit. Later a deficiency judgment suit was filed against both persons. Vince Vicaro then attempted to have the judgment set aside on the grounds that he should have been named a defendant and notified in the foreclosure proceedings. In...