Rowe v. Louisiana Agricultural Corporation

• Decision Date: 04 February 1924
• Docket Number: 23982
• Citation: 99 So. 206,155 La. 241
• Court: Louisiana Supreme Court
• Parties: ROWE v. LOUISIANA AGRICULTURAL CORPORATION

99 So. 206

155 La. 241

ROWE v. LOUISIANA AGRICULTURAL CORPORATION

No. 23982

Supreme Court of Louisiana

February 4, 1924

Appeal from Twenty-Ninth Judicial District Court, Parish of Plaquemine; Leander H. Perez, Judge.

Action by William A. Rowe against the Louisiana Agricultural Corporation. Judgment for defendant, and plaintiff appeals.

Affirmed.

James Barkley Rosser, Jr., of New Orleans, for appellant.

Miller Miller & Fletchinger, of New Orleans, for appellee.

OPINION

ROGERS, J.

Plaintiff, as the holder of more than 25 per cent. of the amount of bonds or mortgage notes of the defendant corporation, brings this suit to obtain judgment for the amount of the past-due coupons attached to his said bonds or notes, with recognition of the mortgage on the lands described in the act.

Defendant excepted on the ground that plaintiff "is not authorized to bring this suit, and is without right to enforce, as against exceptor, the mortgage referred to in his petition." The exception was sustained, and plaintiff appealed.

The judgment of the lower court is correct. The mortgage was in favor of the Interstate Bank & Trust Company of New Orleans as fiduciary trustee. The act of mortgage (paragraph 5) stipulates that no holder of any principal note or coupon shall have any right to institute suit for the foreclosure of the mortgage, or to use any other remedy provided therein without first giving to the trustee written notice of the fact that default had occurred, nor unless, also, the holders of 25 per cent. in amount of the notes or bonds then outstanding shall have made written request to said trustee and shall have afforded to said trustee reasonable opportunity to institute such suit in its own name.

On trial of the exception it was shown that neither plaintiff nor any other bondholder had previously requested the trustee to foreclose the mortgage, or to take any other action with respect thereto, or to declare any default thereunder.

Plaintiff argues that the instrument of mortgage is a common-law deed and trust, purely and simply, which under the settled jurisprudence of this state must be interpreted and given effect as a conventional mortgage, and that, accordingly, he, as the holder of notes or bonds secured thereby, may proceed in his own right, and independently of any action by the trustee or any other note or bond holders in conjunction with him, to enforce the obligations of the mortgage contract. He insists that he is not foreclosing his mortgage, but is proceeding via ordinaria for the recognition thereof.

The authorities cited and relied upon to support plaintiff's argument are cases heard and determined prior to the year 1914. In that year the Legislature enacted a statute (Act No 72 of 1914) expressly authorizing the execution of conventional mortgages to fiduciary trustees to secure payment of two or more notes, bonds, or obligations. The mortgage contract under consideration here appears to have been entered into with respect to and under the authority of this statute. It is therefore not only not in opposition to the laws of the...