Woods v. Stoma

• Decision Date: 11 December 1970
• Docket Number: No. 11528,11528
• Citation: 242 So.2d 320
• Parties: Marshall WOODS et al., Plaintiffs-Appellants, v. Pete STOMA, Defendant-Appellee.
• Court: Court of Appeal of Louisiana — District of US

Page 320

242 So.2d 320

Marshall WOODS et al., Plaintiffs-Appellants, v. Pete STOMA, Defendant-Appellee.

No. 11528.

Court of Appeal of Louisiana, Second Circuit.

Dec. 11, 1970.

En Banc. Rehearing Denied Jan. 11, 1971.

Writ Refused March 10, 1971.

Robert G. Chandler, Shreveport, for plaintiffs-appellants.

Johnston, Johnston & Thornton, by J. Bennett Johnston, Jr., Shreveport, for defendant-appellee.

Before AYRES, BOLIN and PRICE, JJ.

AYRES, Judge.

The object of this action is threefold: to decree (1) a purported act of sale of a described 80-acre tract of land to be a contract of security, (2) that petitioners are the owners of the land, and (3) that the debt for which the purported sale was executed to secure is prescribed.

The defense is that the act of sale, redemptive in form, has, by lapse of the prescribed time, become absolute, vesting title to the property in defendant. Defendant further contends that by the execution of another instrument correcting the description of a portion of the property without reference to any redemptive period, the original deed was thereby converted into and took upon itself the nature and effect of an outright sale of the property.

In addition, defendant claims, for the first time, in this court, that plaintiffs' action is in the nature of an action for the reformation of the deed and as such is prescribed by the lapse of ten years under LSA-C.C. Art. 3544. A special plea to that effect was filed in this court.

The trial court concluded, after trial, that the sale was complete and that, accordingly, title was vested in defendant. Plaintiffs' demands were, therefore, rejected and defendant was decreed the owner of the property. From the judgment plaintiffs appealed suspensively and devolutively to this court.

The pertinent facts may be first briefly reviewed.

Plaintiffs, Marshall Woods, Mary Woods Howard, and John Woods, Jr., are the children and sole heirs of John Woods, Sr., and Lina Woods, both now deceased. During the marriage of plaintiffs' parents, the community of acquets and gains existing between them acquired by purchase from Alice C. Patterson et al, on January 19, 1903, a tract of land described as the SE 1/4 of the SW 1/4, Sec. 23, and, on November 4, 1921, another tract described as the NE 1/4 of the NW 1/4, Sec. 26, all in T. 11 N., R. 13 W., Louisiana meridian, DeSoto Parish, Louisiana.

Lina Woods, surviving widow of John Woods, Sr., and plaintiffs, on November 20, 1950, mortgaged the aforesaid property to the First National Bank in Mansfield to secure a loan evidenced by a note of $2,013.01, payable $1,013.01 one year after date and $1,000.00 two years after date. This note was subsequently negotiated to Thomas W . Hardee, Jr. The note was afterward acquired by defendant's father, John B. Stoma, of whom defendant was an only son and sole heir. Thereafter, on June 23, 1953, plaintiffs and their mother executed the instrument which is the subject matter of this action. Upon presentation of the note on the date previously mentioned, the mortgage was canceled and erased from the records.

The instrument or deed with which we are concerned recited a consideration of $2,492.75 paid in cash for the property, an amount proximating the sum due on the original note. This instrument also contained this recital:

'The vendors herein are hereby given the right to redeem said property within twelve months from the date of this sale, June 23rd 1953, upon paying the amount of $2,492.75, together with 8% Per annum interest thereon from this date until paid, as well as all costs of sale; otherwise, after said date if said amount is not paid with interest and costs, said property shall completely be vested as to title in the owner, John B. Stoma, free and clear of all encumbrances.'

Thereafter, under date of November 25, 1957, another instrument was executed by plaintiffs and their mother and John B. Stoma, the purpose of which was to correct the section number in the description of one of the 40-acre tracts. The consideration was recited to be the same as shown in the original instrument. No redemptive period was noted in the second of these instruments, the only purpose of which was to correct an erroneous description, as aforesaid, of a portion of the property misdescribed in the original .

The principle has been well settled in the jurisprudence of this State to the effect that, as between the parties, and consequently between the privies, and in the absence of evidence to the contrary, a sale of immovable property will be regarded as a contract of security if the vendor specifically reserves the right of redemption and thereafter remains in possession of the property during the entire period allowed for its redemption. Latiolais v. Breaux, 154 La. 1006, 98 So. 620 (1923); Marbury v. Colbert, 105 La. 467, 29 So. 871 (1901); Gross v. Brooks, 130 So.2d 674 (La.App., 3d Cir. 1961); Jackson v. Golson, 111 So.2d 876 (La.App., 2d Cir. 1959--writs denied); Jackson v. Golson, 91 So.2d 394 (La.App., 2d Cir. 1956--writs denied).

With respect to the rights of the parties and their privies in situations such as presented here, the court, in Kernan v. Baham, 45 La.Ann. 799, 13 So. 155, 159 (1893), observed:

'The extent of the rights of the deceased and of the community regulates those of the heirs and of the widow in community, who succeed to all his rights, and those of the community, but they are transmitted with all their defects, as well as all their advantages, the change in the proprietor producing no alteration in the nature of the title or possession.'

See, also:

Jackson v. Golson, supra (91 So.2d 399).

Unquestionably the issue of possession has an important bearing upon the determination of the rights of the parties. More accurately stated, the question is, Did plaintiffs (debtors) voluntarily deliver possession of the property to their creditor, either John B. Stoma or defendant, Pete Stoma? The delivery of possession is an absolute requirement for the translation of title under a deed with a right of redemption. This principle was unequivocally declared in what is uniformly regarded as the leading case on this issue--Latiolais v. Breaux, supra. The court therein declared (98 So. 621):

'Hence the one test by which to determine whether a contract evidences a real sale with right of redemption, or a mere contract of security, has ever since been whether the purchaser has gone into actual possession. (See the authorities therein cited.)

'We think the rule, as thus stated, and as adhered to by this court, is sound in law, simple of comprehension, and easy of application. It avoids the necessity of attempting to reconcile the always conflicting testimony of the parties, where perchance each may be telling the truth as to his own intentions; and thus leaves the contract to be interpreted by facts readily proved and in accordance with the well-settled rule of law that a contract is to be interpreted according to the manner in which the parties themselves have executed it. C.C. art. 1956.

'From the foregoing it results that the title of the purchaser is perfected by the delivery of actual possession. If that delivery takes place before the delay for redemption has expired, the vendor, of course, preserves his right of redemption. But if the vendor delivers the property after the delay for redemption has expired, obviously the sale then becomes absolute. By such delivery the vendor acknowledges that the thing belongs to the purchaser, and he...