Lamar Life Ins. Co. v. Babin

• Decision Date: 14 December 1962
• Docket Number: No. 5848,5848
• Citation: 148 So.2d 366
• Parties: The LAMAR LIFE INSURANCE COMPANY v. Mark P. BABIN and Mrs. Ethel Porche Babin.
• Court: Court of Appeal of Louisiana — District of US

Page 366

148 So.2d 366

The LAMAR LIFE INSURANCE COMPANY v. Mark P. BABIN and Mrs. Ethel Porche Babin.

No. 5848.

Court of Appeal of Louisiana, First Circuit.

Dec. 14, 1962.

Rehearing Denied Jan. 18, 1963.

Certiorari Granted March 15, 1963.

Ted J. Borowski, Houma, for appellant.

O'Neal & Waitz, by Joseph L. Waitz, Ellender, Wright & Wurzlow, Houma, for appellee.

Before ELLIS, LOTTINGER, HERGET, LANDRY and REID, JJ.

LOTTINGER, Judge.

The trial Judge rendered written reasons for judgment which we herewith set forth in full:

'The property of the defendants was sold by executory process under a mortgage containing a waiver of homestead, for the sum of Fourteen Thousand Dollars ($14,000.00). The first mortgage, under which the seizure and sale was made, has been paid in full in the sum of Eight Thousand Three Hundred One and 65/100 Dollars ($8,301.65) with interest and attorney's fees, as well as a sewerage lien, and there remains in the hands of the Sheriff the sum of Three Thousand Eight Hundred Ninety Four and 86/100 Dollars (3,894.86) to be applied toward the payment of other creditors listed in the certificate of mortgages.

'The said certificate shows the following judgments and mortgages due and owing as follows:

'(1) A judgment in favor of D. H. Holmes Co., Ltd. in the sum of $158.62, with interest and costs '(2) A conventional mortgage in favor of E--Z Finance plan of Houma, Inc. in the sum of $2,640.00, with attorneys fees and costs; which mortgage contains a waiver of homestead.

'(3) A judgment in favor of Dr. Earl Fernandez in the sum of $86.42, with interest and costs.

'(4) A judgment in favor of Isaac W. Sharp, Jr. in the sum of $600.00 with interest and costs.

'(5) A conventional mortgage in favor of Charles Collins in the sum of $1,055.84 with interest, attorneys fees and costs; which mortgage contains a waiver of homestead.

'(6) A judgment in favor of Texman's Ladies, Inc. in the sum of $183.68 with interest and costs.

'(7) A judgment in favor of Robert A. Eschete in the sum of $129.00 with interest and costs.

'The holders of the conventional mortgages listed hereinabove as (2) and (5), alleging themselves to be preferred creditors by virtue of their mortgages with homestead waivers, have ruled the judgment creditors into Court to show cause why the mortgage creditors should not be paid by preference over the judgment creditors. Their contention is that the waiver of homestead gives them a preference over other creditors. The effect of such contention is that there can be as many homestead exemptions and waivers as there are conventional mortgages, or, to put it another way, that there can be more than one homestead exemption.

'In support of their contention they cite Glenn vs. Bresnan (123 La. 1014), 49 So. 690, and Anderson vs. Finley (La.App.), 84 So.2d 845, which hold that

"It is, of course, recognized by our jurisprudence that a mortgagee in whose favor a waiver of homestead has been made, takes precedence over a prior mortgage whose act contains no waiver of the homestead exemption.'

'The Glenn vs. Bresnan case holds that the holder of the first mortgage without waiver of homestead acquired no rights against the homestead, but only as to the surplus over and above the amount of the homestead; and that the holder of the second mortgage with waiver of homestead primed the first mortgage up to the value of the homestead. That case has no relevancy or application to the facts of this case, for the reason that only the homestead fund was referred to.

'The facts of the Anderson vs. Finley case are that there was a judicial mortgage recorded first and then a conventional mortgage with homestead waiver, that there was a foreclosure under the conventional mortgage, and that the sale price was less than the amount of the homestead exemption. The holding of the Court was that the claim of the holder of the mortgage with homestead waiver primed that of the holder of the judicial mortgage. While the language of the holding is broad, it is our view that the language of the Court applies to the particular facts in that case, but that it has no relevancy or application in the instant case, for the reason that only the homestead fund was dealt with.

'A conventional mortgage has no inherent priority over a judicial mortgage. The Judicial mortgage is that resulting from judgments (whether these be rendered on contested cases or by default or whether they be final or provisional) in favor of the person obtaining them. LSA-CC 3321. The judicial mortgage takes effect from the day that judgment is recorded. LSA-CC 3222.

'The judicial mortgage may be enforced against all the immovables which the debtor actually owns or may subsequently acquire. LSA-CC 3328. Among creditors, the mortgage, whether conventional, legal or judicial, has force only from the time of recording. LSA-CC 3329.

'Thus, when a creditor obtains a judgment and places it to record in the mortgage office, it becomes a judicial mortgage and remains upon all real property owned by the debtor at that time, whether exempt or not, priming all subsequent judicial or conventional encumbrances which might attach. Schexnailder vs. Fontenot, 147 La. 467, 85 So. 207, 1920.

'Louisiana Constitution 1921, Article 11, Section 1, provides that there shall be exempt from seizure the homestead owned by a debtor To the total value of not more than Four Thousand Dollars ($4,000.00). If the homestead exceeds this sum, it may be sold and the Excess only subjected to the claims of creditors. Section 3 of this article, however, provides a manner in which a person may voluntarily waive his homestead rights in favor of certain creditors. It is, of course, recognized by our jurisprudence that a mortgagee, in whose favor a waiver of homestead has been made, takes precedence over a prior mortgagee whose act contains no waiver of the homestead exemption, as appears above. Hardesty v. Warner, 1921, 130 La. 735, 58 So. 527; Bank of Erath v. Broussard, 1926, 161 La. 657, 109 So. 347; Anderson v. Finley, 2 C.A. (La.App.), 84 So.2d 845, 1956. But such precedence takes place only up to the amount of the homestead exemption, as is shown hereinafter in the Bank of Erath v. Broussard (161 La. 657), 109 So. 347.

'The latter case covers precisely the factual situation that we find in this proceeding. In the Bank of Erath case, there were certain judgments and mortgages recorded against the defendant as follows:

'(1) Certain judicial mortgages recorded prior to December, 1916, and aggregating something in excess of $40.00.

'(2) Mortgage to F. B. Collins Inv. Co., in the principal sum of $1,500.00, recorded December 26, 1916, and containing a homestead waiver.

'(3) Mortgage held by Bank of Erath, in the principal sum of $1,500.00, recorded November 27, 1929, and containing No homestead waiver. (This is the mortgage foreclosed upon.)

'(4) Mortgage to Ove Broussard, in the principal sum of $2,800.00, recorded February 28, 1921, and containing a homestead waiver.

'The Bank of Erath foreclosed under its mortgage listed as (3). The defendant intervened and claimed his homestead exemption, which was then in the sum of Two Thousand Dollars ($2,000.00), contending that in the event the property should bring more than enough to pay the...