Jeffer v. Livaccari

• Decision Date: 07 January 1963
• Docket Number: No. 901,901
• Citation: 148 So.2d 318
• Parties: Marx JEFFER v. Mrs. Alma ZAHN, wife of and John LIVACCARI.
• Court: Court of Appeal of Louisiana — District of US

Page 318

148 So.2d 318

Marx JEFFER v. Mrs. Alma ZAHN, wife of and John LIVACCARI.

No. 901.

Court of Appeal of Louisiana, Fourth Circuit.

Jan. 7, 1963.

Beryl E. Wolfson, New Orleans, for plaintiff-appellant.

Thomas A. Early, Jr., and Frank J. Varela, New Orleans, for defendants-appellees.

Nathan Greenberg and J. Joseph Blotner, Gretna, in pro. per.

Before REGAN, YARRUT and HALL, JJ.

YARRUT, Judge.

On January 7, 1961 Plaintiff-Appellant brought this foreclosure suit (via ordinaria) to enforce payment of a promissory note executed by Defendants-Appellees, dated July 13, 1959, secured by mortgage on the latters' home, for $3911.16, with 8% Interest and 15% Attorney's fee, subject to a credit of $651.82.

Defendants answered admitting execution of the note but plead want of consideration, in that they were induced to execute the note through the fraud and misrepresentation of one Sheldon D. Baum, from whom Plaintiff acquired the note; and that Plaintiff was not a holder in good faith for value before maturity. Defendants further challenged the validity of the note and mortgage on the ground they were not executed before the notary recited in the act of mortgage.

Defendants then called as third-party Defendants, Baum and his attorney and notary, and prayed for judgment over and against them for the $651.82 they paid to Plaintiff under the belief it was on account of their mortgage note issued to liquidate Eureka's loan.

The evidence shows that one Sheldon D. Baum, a contractor, made certain improvements on Defendants' home. Defendants obtained a loan from the Eureka Homestead Association, a local building and loan association, giving their note for $3117.41 under the Federal F.H.A. Title I Plan to pay Baum. Eureka required Baum to endorse Defendants' note.

Baum handled the loan for Defendants with Eureka and was paid $2500.00 for his work. Later, Baum told Defendants that Eureka could not carry the loan any longer and it was necessary for him to secure another lender to take over Eureka's loan.

One evening (July 13, 1959) Baum, accompanied by his attorney, called at Defendants' home with the new mortgage and note already prepared for signature. Defendants only objection was to the increase of the interest from 6% To 8%. After explanation by Baum and the attorney, they signed the mortgage and note. However, as Baum's attorney was qualified only as a notary in Orleans Parish, he could not officially act in Jefferson Parish; hence, had the papers formally notarized by his law partner, a Jefferson Parish notary.

Baum took the note to Plaintiff, with whom he had previous business dealings, and borrowed $1800.00, for which he gave his hand note secured by Defendants' mortgage note as collateral. Baum made only a few monthly payments to Eureka to conceal his fraud from Defendants. Baum then left the City for parts unknown. When Eureka made demand upon Defendants for delinquent payments, Defendants learned for the first time of Baum's fraud.

Plaintiff, receiving no payments from Baum on his hand note, brought suit against Baum on February 23, 1960 for $1682.16, balance due, with interest and attorney's fee. Baum could not be found. He had decamped, being under criminal indictment and paroled under $5000.00 appearance bond.

On May 16, 1960, Plaintiff filed a supplemental petition against Baum asking for the seizure of Defendants' pledged mortgage note under a non-resident attachment and for the appointment of a curator to represent the absent Baum. Before any further action was taken thereon, Baum voluntarily called at the office of Plaintiff's attorney and executed a complete transfer and assignment of title to Defendants' pledged mortgage note to Plaintiff, in return for the cancellation of his indebtedness to Plaintiff, no further consideration being paid.

In dismissing Plaintiff's suit, the District Court gave written reasons, inter alia, as follows:

'The evidence shows that Sheldon D. Baum through fraud caused the Livaccaris to execute the promissory note and mortgage in question. After receiving the note from the Livaccaris, Baum pledged it to the plaintiff as security for his own hand note in a lesser amount. Baum was supposed to have substituted the note and mortgage in question to take the place of a previous note and mortgage held by Eureka Homestead. Subsequently the Livaccaris became aware that both mortgages were outstanding and attempted to...