This is a hypothecary action by Pringle Associated Mortgage Corporation (Pringle) to foreclose, by ordinary process, a mortgage on real property granted by defendant mortgagor, Ernest R. Eanes. Pay, Inc. (Pay), assignee of Eanes, has taken this appeal from the default judgment of the trial court in favor of Pringle in the sum of $263,615.70, with interest and attorney's fees, and also recognizing Pringle's mortgage and ordering the sale of the mortgaged property to satisfy the obligation.
The single issue of law presented on this appeal was raised by way of an exception of no right and no cause of action filed in this court on behalf of Pay. Basically, the exception contends that the obligation was not due when foreclosure proceedings were instituted, therefore the judgment of the trial court is null and void and its invalidity should be recognized and declared by this Court. We find no merit in appellant's contention and affirm the judgment of the lower court.
Considering this matter is before us for the second time, narration of its chronological development will assist in a clearer understanding of the issue before the Court.
On March 28, 1966, Pringle instituted foreclosure proceedings via ordinaria against Eanes upon a note secured by a mortgage on certain real property situated in East Baton Rouge Parish. A preliminary default was entered against Eanes on April 15, 1966. On April 20, 1966, the default was confirmed and judgment rendered against Eanes as hereinabove indicated. Eanes' right, title and interest in and to the mortgaged property (including the right to defend the foreclosure proceeding) was acquired by Pay on May 26, 1966, pursuant to a transaction denominated a Sale and Assumption. Thereafter, on July 20, 1966, devolutive appeals from the judgment of the trial court were taken by Pay and a corporation known as Air Control Products, Inc. (Air Control). Both said appellants in substance alleged they were neither plaintiffs nor defendants in the foreclosure proceeding, but each possessed an interest in the outcome of the litigation and therefore were entitled to intervene therein. The appeal of Air Control has since been abandoned and is no longer at issue. Upon Pringle's motion, Pay's appeal was dismissed by judgment of this court rendered March 13, 1967. In dismissing Pay's appeal we found that Pay, as an intervenor, took the case as it found it. We also held the basis of Pay's exception of no right and no cause of action was in essence a plea of prematurity which should have been filed in the trial court. We also held that as intervenor, Pay had no rights on appeal other than those possessed by Eanes, and since Eanes could not have asserted a plea of prematurity on appeal, neither could Pay. See Pringle-Associated Mortgage Corporation v. Eanes, La. App., 197 So.2d 160. Upon denial of its application for rehearing by this court, Pay applied to and was granted a writ of review by the Supreme Court. Pringle-Associated Mortgage Corporation v. Eanes, 250 La. 910, 199 So.2d 919. By judgment rendered January 15, 1968, 251 La. 711, 206 So.2d 81,
The pertinent allegations of Pringle's foreclosure petition may be summarized as follows: Pringle is the holder of a note executed by Eanes under date of July 15, 1965, in the sum of $335,000.00, bearing interest at 6% per annum from date. The note is duly paraphed by a notary public for identification with an attached mortgage securing payment of the note by hypothecating, in favor of the holder, certain real property expressly described. Pursuant to a construction loan agreement (copy of which is attached to the petition), Pringle has, from time to time, advanced Eanes sums aggregating $263,615.70 for the construction of certain apartment buildings on the mortgaged premises. According to the note, mortgage and construction loan agreement, interest on advances to Eanes during the period July 15, 1965, through June 1, 1966, is payable monthly at the rate of 6% per annum. Principal and interest due on the note for the period commencing June 1, 1966, through May 1, 1986, is allegedly payable in consecutive monthly installments of $2,401.00, the remaining balance of the principal sum being due and exigible May 1, 1986. All installments of principal bear interest at 8% per annum from due date, until paid. Finally, Pringle asserts that Eanes paid the monthly interest due through December 19, 1965, but having failed to make subsequent similar payments notwithstanding amicable demand therefor, Pringle accelerated payment of the entire indebtedness pursuant to the terms of the note and mortgage.
Upon confirmation of the preliminary default, Arthur Mitchell, Pringle's Administrative Vice President, testified that interest due on the note from July 15, 1965 to June 1, 1966, was payable monthly on the first day of each month. He further stated such payments were made only through December 19, 1965, hence the foreclosure proceeding.
The provisions of the note germane to the case are as follows:
The mortgage recites that the sums advanced are to be repaid in the following manner:
Appellant's exception of no right and no cause of action, admittedly based on the concept of prematurity, is urged as a preemptory exception which may be filed on appeal in accordance with LSA-C.C.P. Article 2163 rather than a dilatory exception which must be plead in limine litis conformably with LSA-C.C.P. Articles 926 and 928.
More particularly appellant relies upon LSA-R.C.C. Article 2052 and LSA-C.C.P. Article 423. Article 2052, supra, states that what is due only at a certain time cannot be demanded previously. Article 423, supra, provides that an obligation implies a right to enforcement which may or may not immediately arise. If a term for performance is allowed, the right of enforcement does not accrue until the term has elapsed. If enforcement is subject to a suspensive condition, the enforcement privilege does not arise until the occurrence or performance of the condition. An action brought before accrual of the right of enforcement shall be dismissed as premature but may be brought again after the right has accrued.
Pay's aforesaid exceptions are founded on the contention that "the indebtedness was not due and owing at the time the petition was filed and judgment was obtained." On this premise it is argued the petition and annexed documents (which must be taken as true for purposes of disposing of the exceptions) affirmatively reflect that no interest payments were due on the note until June 1, 1966. Consequently, according to appellant, suit prior to June 1, 1966 was premature since Eanes was not required to make any payment before said date. Nor does it matter, according to counsel for appellant, that Pringle's Administrative Vice President, Arthur Mitchell, testified upon confirmation of the default that interest on the note during the period July 1, 1965 to June 1, 1966 was payable monthly on the first of each month but was actually paid only through December 19, 1965. This evidence, says counsel, is of no moment inasmuch as Foltz v. Foltz, La.App., 197 So.2d 376, is authority for the rule that on confirmation of a default judgment, the pleadings may not be considered enlarged by the introduction of additional or inconsistent testimony since
Our statutory law classifies obligations as either simple or conditional. According to LSA-R.C.C. Article 2020 simple obligations are those not dependent for their execution upon any event stipulated by the contracting parties and which do not become void upon the occurrence of a stated event.
Conditional obligations are defined in LSA-R.C.C. Article 2021, which provides:
Also appropos the issue at hand are LSA-R.C.C. Articles 2048 through 2051, inclusive, regulating the time of performance of limited and unlimited obligations, which said codal articles read as follows:
The question herein posed is brought more sharply into focus by the provisions of LSA-C.C.P. Article 423, which states:
In elucidation of Article 423, supra, the Official Revision Comment (a) appended thereto observes that the article more clearly states the rule regarding accrual of the right of action with respect to an obligation dependent upon a suspensive condition, following which a list of authorities dealing with this particular issue are cited. We also note Official Revision Comment (b) which states:
"Time of Filing Exception
From the foregoing it is clear that in determining the scope of and the stage of the proceedings when such an exception may be filed, the determining factor is whether the obligation is presently existent but not yet enforceable, or whether the obligation itself does not exist because of the nonfulfillment of a stated suspensive condition indispensable to its creation. Where the obligation presently exists but the right to enforcement has not accrued, either because the term for enforcement has not expired or because of the nonperformance or nonoccurrence of some act upon which enforcement is conditioned, the objection of prematurity falls within the classification of a dilatory exception which must be plead in limine litis. Where, however, the obligation does not itself arise until the fulfillment of a suspensive condition upon which its existence depends, it may not be enforced under any circumstances until the required condition is met. In this latter instance the objection of prematurity is not waived by failure to urge such objection in limine litis. Halbert v. Klauer Mfg. Co., La.App., 181 So. 75.
Pringle alleged and introduced evidence to establish that the sums advanced bore interest at the rate of six (6%) per cent payable monthly commencing with the date of the note. In this regard it relies upon the recitation in the note and mortgage that the obligation shall be repaid "with interest thereon from the date hereof, payable monthly at the rate of (6) per cent per annum; the principal and interest payable as follows, namely:" following which a schedule of monthly payments in the fixed sum of $2,401.00 is set forth, commencing June 1, 1966. The latter provision is the basis of appellant's exception.
As we understand appellant's argument it is claimed that since the note recites principal and interest is payable in monthly installments of $2,401.00 commencing June 1, 1966, the obligation did not come into existence until the first such installment matured. On this ground it is averred that the obligation itself did not arise until June 1, 1966. Appellant's argument is unsound
In view of the allegations of plaintiff's petition and the terms and provisions of the annexed note, mortgage and construction agreement, it is clear beyond doubt that Eanes' obligation to repay arose and came into existence immediately upon his receipt of advances from Pringle. Nothing in any of the documents even remotely suggests that the obligation intended to be assumed (repayment of the amounts loaned) would come into existence only upon the occurrence of some future event. Nor is there anything in the documents indicative of intent to suspend creation of the obligation pending the happening of any stated contingency. The agreements evince the immediate assumption of a stated obligation whose terms of enforcement are dependent upon stated eventualities. Assuming arguendo, no interest payments were due until June 1, 1966, as contended by appellant, it would avail appellant nothing. In such event plaintiff's suit would have been vulnerable only to that plea of prematurity which retards or delays the action and therefore must be filed in limine litis. LSA-C.C.P. Articles 923, 926, 928; Halbert v. Klauer Mfg. Co., supra.
Since Eanes' obligation to repay existed from the moment he executed the note and mortgage, the only question is whether the stipulated terms for enforcement were fulfilled when suit was filed. Therefore, conceding, for arguments sake, no interest was due until June 1, 1966, Eanes could only have urged that a condition precedent to enforcement had not transpired. This, of course, has no bearing upon Eanes' then present liability for the debt.
H. B. Claflin Company v. B. Feibleman & Co. et al., 44 La.Ann. 518, 10 So. 862, cited and relied upon by Pay, is not in point. In the quoted authority the endorser of a promissory note was permitted to prevail upon an exception of no cause of action grounded on prematurity. The circumstances were that the holder failed to establish demand upon the maker and notice thereof to the endorser. In sustaining the plea of prematurity, the court did so on the ground that demand and notice were conditions precedent to the endorser's liability on the note.
We also find Catlett v. Heffner & Likens, 23 La.Ann. 577, inapposite to the case at hand inasmuch as said authority involved a case wherein prematurity was expressly pleaded in the trial court.
Accordingly, appellant's exception of no cause and no right of action is rejected and dismissed and the judgment of the trial court affirmed at the cost of appellant, Pay, Inc.