Receivership of Bryce Cash Store, Inc.

• Decision Date: 18 November 1929
• Docket Number: 3117
• Citation: 124 So. 544,12 La.App. 365
• Court: Court of Appeal of Louisiana — District of US
• Parties: RECEIVERSHIP OF BRYCE CASH STORE, INC. (Opposition of Traders Securities Company et al.)

124 So. 544

12 La.App. 365

RECEIVERSHIP OF BRYCE CASH STORE, INC. (Opposition of Traders Securities Company et al.)

No. 3117

Court of Appeals of Louisiana, Second Circuit

November 18, 1929

Rehearing Refused December 31, 1929.

Appeal from the Second Judicial District Court, Parish of Bienville. Hon. John S. Richardson, Judge.

Receivership of Bryce Cash Store, Inc. Opposition of Traders Securities Company and Baker Grocery Company.

There was judgment striking from the list of privileged claims that of the Baker Grocery Company and ordering it scheduled as an ordinary debt.

Baker Grocery Company and others appealed.

Judgment reversed, ordering that the receiver's account list Baker Grocery Company's claim as privileged.

Judgment reversed.

P. E Brown, of Arcadia, attorney for plaintiff in opposition appellee.

J. Rush Wimberly, of Arcadia, and George M. Wallace, attorneys for Baker Grocery Co., Inc., defendant in opposition, appellant.

I. J. McConathy, of Arcadia, attorney for Arcadia Mercantile Company and for Receiver, appellant.

OPINION

ODOM, J.

A receiver was appointed for the Bryce Cash Store, Incorporated, a corporation, on October 15, 1926, and upon application of the receiver, the court, on January 15, 1927, ordered him to sell at private sale all of the assets of the concern to pay the debts. Having sold the assets of the corporation, the receiver filed his account on which he listed separately the privileged and ordinary claims filed with him, advertised the account and applied to the court for an order to pay the claims as listed.

Among the claims scheduled as privileged was one in favor of the Baker Grocery Company, Inc., for $ 155.66. The Traders Securities Company, and other creditors, who claimed no privilege and whose claims were scheduled by the receiver as ordinary debts, opposed the account on the ground, as they claim, that the Baker Grocery Company had no privilege and that its claim should have been listed along with those of the other ordinary creditors. On trial of the opposition, all parties being present or duly represented, the district court sustained the opposition and ordered the account amended so as to place the claim of the Baker Grocery Company on the list of ordinary creditors. Hence, this appeal.

The grounds on which the Baker Grocery Company claims that its debt should be paid by preference over the opposing creditors, none of whom claim any privilege, are that previous to the appointment of the receiver it had sued the Bryce Cash Store, and, under proper allegations, had caused the property of its debtor to be attached and had carried its suit to judgment, which judgment maintained the attachment and specifically recognized its privilege, as allowed by law to attaching creditors on the property attached, and ordered it sold to pay the claim by preference.

The Baker Grocery Company did not execute its judgment and have the property sold and counsel for opponents now contends that because it did not execute its judgment, it had no privilege. Counsel's contention is set forth in his brief and we quote therefrom as follows:

"The opposition is based on the allegations that the judgment of the Baker Grocery Company was rendered on an ordinary claim, such as the claims of the opponents are, and that there was no privilege resulting to the Baker Grocery Company by reason of its attachment, because no execution has ever issued on the judgment which sustained the attachment."

And, quoting the last paragraph of the brief:

"There is no authority under the law for a receiver to allow a privilege, as in this case, which is not lawfully created--and a privilege like this cannot be perfected under the laws of this State except through execution."

In other words, counsel for opponents grounds his case solely upon the proposition that as a matter of law an attachment confers no privilege unless there is execution on the final judgment obtained in such proceedings, and, in support of his contentions, cites Code of Practice, article 724, and Eymar vs. Lawrence et al., 8 La. 38.

Article 724 of the Code of Practice reads:

"Provisional seizures (attachments--see Beck v. Brady, 6 La.Ann. 444) and sequestration give no privilege to those who have made them, until they have obtained a judgment and order of execution on the property sequestered or provisionally seized."

The Code does not say and it cannot be construed to mean that an execution must issue in order that a privilege may exist. It says the seizures confer no privilege in favor of those who have made them "until they have obtained judgment and order of execution." Strictly speaking, an attachment gives no privilege upon the property attached for, as was stated in Beck v. Brady, Brown & Company, 7 La.Ann. 1, the attachment may be dissolved or the property bonded and released. But, where the attachment proceedings are carried to final judgment which specifically maintains the writ and recognizes the privilege allowed by law to attaching creditors, the privilege is perfected and dates back to the service of the writ. Harris v. Andrews & Company, 20 La.Ann. 561. The requirements of the Code of Practice, article 724, for obtaining the privilege are met when the Court maintains the writ and recognizes the privilege, which is equivalent to an order of execution. Swift & Co. v. Leon Cahn & Company, 151 La. 837, 92 So. 355.

Counsel in his brief quotes the first paragraph of the syllabus in the case of Eymar v. Lawrence, supra, which reads:

"The creditor who proceeds against the property of his...