Consolidation Loans, Inc. v. Guercio

• Decision Date: 28 December 1966
• Docket Number: No. 6842,6842
• Citation: 200 So.2d 717
• Parties: CONSOLIDATION LOANS, INC. v. Russell A. GUERCIO et ux.
• Court: Court of Appeal of Louisiana — District of US

Page 717

200 So.2d 717

CONSOLIDATION LOANS, INC. v. Russell A. GUERCIO et ux.

No. 6842.

Court of Appeal of Louisiana, First Circuit.

Dec. 28, 1966.

On Rehearing June 30, 1967.

Richard C. Cadwallader, Baton Rouge, for appellant.

Ralph Brewer, Baton Rouge, for appellee.

Before LANDRY, ELLIS and BAILES, JJ.

LANDRY, Judge.

Defendant, Helen K. Guercio (appellant), judicially separated from defendant, Russell A. Guercio, has taken this appeal from the decree of the trial court granting a deficiency judgment in solido against appellant and her said husband, in favor of plaintiff, Consolidation Loans, Inc. (appellee), following foreclosure by executory process of a mortgage granted by defendants jointly. Respondent Russell A. Guercio has not appealed.

We find that the judgment of the trial court must be reversed and set aside because of the nullity of the executory proceeding previously had between the parties to the present litigation.

In effect appellant herein maintains the executory proceeding, pursuant to which the mortgaged property was seized and sold, was null and void and therefore cannot serve as the basis of an action for deficiency judgment against her. Appellant's contentions in this regard may be summarized as follows: (1) She was not served with the demand for payment which, according to LSA-C.C.P. Article 2639, must precede by three days issuance of the writ of seizure and sale indispensable to an executory proceeding unless waived by the debtor; (2) Appellant was not personally bound for the obligation considering the indebtedness in question was contracted during the life of the community of acquets and gains which existed between defendants as husband and wife; (3) The note and mortgage sued upon were executed by appellant solely as agent for the aforesaid community without express intent to personally obligate herself thereon; and (4) The appraisal made of the property in the course of the prior executory proceeding was patently erroneous and totally unrepresentative of the fair value of the property at the time of sale.

Except as hereinafter otherwise noted the facts attending this lawsuit are not in serious dispute.

Under date of April 30, 1963, defendants jointly executed and negotiated to plaintiff, a certain promissory note in the sum of $4,500.00, payable to the order of themselves and by them endorsed in blank, payable in monthly installments in the sum of $75.00 and stipulating to bear interest at the rate of 8% Per annum. Said note was secured by a second mortgage signed by both defendants covering Lot 346, Brooks-town Place, East Baton Rouge Parish, with all buildings and improvements thereon.

Plaintiff, alleging an unpaid balance due on the aforesaid note in the sum of $3,825.00, with interest at 8% From February 10, 1964, until paid, proceeded via executory process against defendants to foreclose the mortgage and realize the aforesaid amount due on the note, together with 25% Additional as attorney's fees, and costs, as provided for in the note in question.

The mortgaged property was sold to plaintiff for the sum of $3,952 .51, with appraisal, which amount was sufficient to pay the prior mortgage and all costs of the executory proceeding and leave a remainder of $15.00 to be credited to plaintiff's claim.

Neither appellant nor her husband appeared or filed any answer or exception in the executory proceeding. In this present action, however, both defendants filed numerous exceptions which were overruled by the trial court and none of which are urged by appellant on this appeal.

We find that we must first dispose of the question of appellant's alleged lack of liability on the note predicated on the ground a wife is not liable for the debts of the community unless she expressly and unequivocally assumes such obligation.

Appellant testified that whereas she voluntarily signed the note and mortgage in question, she did so only as a wife joining in an act to enable her husband to borrow money for a community purpose, in this case the purchase of a home in which the couple was to live. On this ground, relying on O'Dowd v. McNeill, La.App., 110 So.2d 755; Rouchon v. Rocamora, La.App., 84 So .2d 873; Wilson & Gandy v. Cummings, La.App., 150 So. 436; D. H. Holmes Co. v. Van Ryper, La.App., 173 So. 584 and Alpha v. Aucoin, La.App., 167 So. 835. Counsel for appellant maintains appellant was not personally liable on the note presently in suit. We have considered each of the cited authorities and find none in point. Counsel for appellant does indeed correctly argue the general rule to be that, despite enactment of the so-called 'emancipation statutes' contained in LSA-R.S. 9:101 et seq., a married woman nevertheless does not become liable for a community obligation unless she expressly and specifically so obligates herself. In each of the cases cited by counsel for appellant, wherein the wife was exonerated from liability, it appears the suit was either an action on an open account or suit for judgment for attorney's fees for professional services rendered the wife incident to suit for either divorce or separation.

In a suit on a negotiable promissory note, however, the rule is well established to the contrary. It is settled beyond the peradventure of argument that the wife who joins her husband in the execution of a promissory note and mortgage binds herself personally thereon and may be sued individually for such indebtedness. Howard v. Cardella, 171 La. 921, 132 So. 501; United Life & Accident Ins. Co. v. Haley, 178 La. 63, 150 So. 833; Perdido Finance Co. v. Falgout, La.App., 77 So.2d 896; Friendly Loans, Inc. v. Morris, La.App., 142 So.2d 810.

In the instant case the wife makes no claim of fraud, duress, intimidation or deceit attending her signing of the note and mortgage in question. She concedes her voluntary execution of these instruments and further concedes the veracity of plaintiff's allegation to the effect plaintiff is a holder in due course of the instrument sued upon. Under such circumstances appellant is precluded from the contention she had no intention to be personally bound. Friendly Loans, Inc. v. Morris, supra. We hold, therefore, appellant was personally obligated to plaintiff herein on the note in question.

We next consider appellant's claim the executory proceeding was null and void because she was not served with the three day notice of demand for payment required pursuant to LSA-C.C.P. Article 2639. In this regard the record discloses that appellant and her said husband were judicially separated pending this litigation. However, at the time of service of the notice of demand for payment, the couple, while not judicially separated, were nevertheless living separate and apart, the husband occupying the family home and the wife residing with her mother in the latter's home. The jurisprudence is clear that the wife not judicially separated from her husband can have no domicile other than that of her spouse. Dugat v. Markham, 2 La. 29.

Our careful review of the record discloses that whereas the three day notice of demand for payment stipulated by LSA-C.C.P. Article 2639 was personally served upon defendant husband as evidenced by the sheriff's return to that effect, no return showing either personal or domiciliary service of said notice upon appellant is contained in the record. We do note, however, a return indicating domiciliary service on appellant, through defendant husband, of the notice of seizure and sale required upon expiration of three days following service of notice of demand for payment. Said return shows compliance in full with the laws regarding domiciliary service of said notice of seizure and sale upon appellant considering appellant is presumed to have been residing in the home of her said husband when such service was effected. Under such circumstances appellant is assumed to have knowledge of the notice of seizure and sale notwithstanding her complaint her husband, with whom she was not then living, withheld such information from her.

Nevertheless, as previously shown, it is patent on the face of the record that only one notice of demand for payment was served in the executory proceeding, namely, upon defendant husband personally. The question, therefore, is whether one notice of demand for payment in an executory proceeding on a spouse at his domicile can serve as proper domiciliary service on the other spouse.

It appears well settled there can be no legal notice in an executory proceeding in the absence of lawful service thereof by some duly authorized officer. Although no citation in the ordinary sense is required in the foreclosure of a mortgage via executiva, nevertheless the three day preliminary notice or demand for payment required by law is mandatory. LSA-C.C.P. Articles 2639 and 2640. Carrere v. Aucoin, 122 La. 258, 47 So. 598.

The importance of notice to the debtor of demand for payment in a mortgage foreclosure via executiva was long ago recognized in Nash v . Johnson, 9 Rob. 8 (1844), wherein it was declared the primary reason for such notice is to provide the obligee opportunity to pay the indebtedness and thus avoid litigation which is otherwise imminent.

Likewise our jurisprudence appears settled that notice of demand for payment as required by LSA-C.C.P. Article 2639 (formerly C.P. Article 735) is essential to the validity of an order of seizure and sale to enforce payment of a debt. La Plaq Realty v. Vaughan, 209 La. 481, 24 So.2d 870.

While counsel for appellee argues strenuously the record shows service of notice of demand upon appellant through her husband, no evidence to that effect appears in the transcript. We find a notice of demand addressed solely to Mr. Guercio and on the reverse thereof the sheriff's return indicating personal service upon him alone. In essence appellee maintains one notice was served upon the husband individually and the other upon him as agent for appellant, thus representing...