text:
    Eric GUIRARD v. 2001 OF BATON ROUGE, INC.
    No. 13295.
    Court of Appeal of Louisiana, First Circuit.
    Jan. 21, 1980.
    Tom Withers, III, Baton Rouge, for plaintiff-appellant Eric Guirard.
    Weldon J. Hill, II, A. Edward Hardin, Baton Rouge, for defendant-appellee 2001 of Baton Rouge, Inc.
    Before COVINGTON, LOTTINGER and COLE, JJ.
   COLE, Judge.

Plaintiff, Eric Guirard, appeals from the trial court’s refusal to grant a preliminary injunction. We are asked to dismiss this appeal on the ground of mootness and to assess damages for frivolous appeal.

Guirard sued the defendant-appellee, 2001 of Baton Rouge, Inc., asking for a preliminary and a permanent injunction, a declaratory judgment and damages. The basis for Guirard’s suit was the defendant’s policy of denying admittance to its nightclub to persons under the age of twenty-one.

When suit was filed, Guirard, whose birth date was July 13, 1958, was twenty years old. When this appeal was taken, Guirard had reached the age of twenty-one. Also, counsel for Guirard acknowledged in his appellate brief that the policy of defendant had been changed to admit persons between eighteen and twenty-one.

On this appeal, Guirard asks us to reverse the trial court and order a preliminary injunction enjoining the defendant from excluding persons between the ages of eighteen and twenty-one. The only matter covered in the trial court’s judgment was the denial of a preliminary injunction. The hearing below was expressly limited, at defendant’s request, to the issue of the preliminary injunction. Guirard’s request for damages and for a declaratory judgment on the constitutionality of defendant’s admission policy are still pending before the district court and, after a hearing and judgment, will be subject to appeal to this court.

We agree with defendant that the question of Guirard’s entitlement to a preliminary injunction is moot. Defendant has abolished the admission policy which Gui-rard wants to enjoin, and even if the former admission policy is reinstated, Guirard would not be affected since he is now twenty-one. The issuance of an injunction at this point would serve no purpose. It is not the function of appellate courts to give opinions on moot questions. Cox v. Watts, 329 So.2d 917 (La.App. 1st Cir. 1976).

Damages for frivolous appeal are denied. C.C.P. art. 2164.

For the foregoing reasons, the appeal is dismissed as moot. All costs are to await a final determination.

APPEAL DISMISSED.


source: Caselaw Access Project

author: GUIDRY, Judge.

license: Public Domain

text:
    Margaretta LeSage MEARES et al., Plaintiffs-Appellees, v. PIONEER PRODUCTION CORPORATION et al., Defendants-Appellants.
    No. 7439.
    Court of Appeal of Louisiana, Third Circuit.
    March 5, 1980.
    Rehearings Denied May 5, 1980.

      Liskow & Lewis, Lawrence P. Simon, Jr., Lafayette, for defendant-appellant, Pioneer Production.
    Robert H. Carpenter, Jr., Baton Rouge, for defendant-appellant, Union Oil Co.
    Gordon, Arata, McCollam _& Walters, John M. McCollam, New Orleans, Sanders, Downing, Kean & Cazedessus by Gordon Kean, Jr., Baton Rouge, for plaintiffs-ap-pellees.
    Before CULPEPPER, GUIDRY and DOUCET, JJ.
   GUIDRY, Judge.

This declaratory judgment action concerns ownership of the fee title to a strip of land 200' in width which cuts diagonally across Lots 5, 6, 11 and 12 or Fractional SW/4 Section 1, Township 10 South, Range 3 West, Jefferson Davis Parish, Louisiana. The strip of land in question contains approximately twelve (12) acres and is burdened with a servitude for railroad purposes in favor of the Louisiana Western Railroad Company (now Southern Pacific Railroad).

The adverse claimants to the fee title of the twelve acre tract, hereafter referred to as the “disputed strip” are plaintiffs, Mar-garetta LeSage Meares and Mayble Oliver Williams, hereafter referred to as the “Ker-nan heirs”, and defendant, Union Oil & Development Company, Ltd., hereafter “Union”, a formerly defunct Louisiana corporation now in involuntary liquidation under the provisions of LSA-R.S. 12:143G. The other plaintiffs W. G. Gillette, Jr., Richard D. House, Willis E. Conaster, Andrew McCollam, Jr., and Abaco Exploration, Inc., hereafter “Gillette Group” are the oil, gas and mineral lessees of the Kernan heirs. The remaining defendant, Pioneer Production Corporation, hereafter “Pioneer” is the oil, gas and mineral lessee of defendant, Union.

The chain of title to the disputed strip and other matters directly related thereto is set forth in a joint stipulation of the parties. The joint stipulation reflects the following:

1. Prior to segregation from sovereignty of Frl SW/4 Section 1 T. 10 S., R. 3 W. the United *States, pursuant to Act of Congress of March 3, 1875 (18 Stat. 482, 43 U.S.C.A. 934) granted to the Louisiana Western Railroad Company a servitude one hundred (100) feet wide on each side of the center line of the company’s railroad, which servitude, as ultimately located, extended through the Fractional SW/4 Section 1 T. 10 S., R. 3 W.

2. By U.S. Patent dated November 6, 1889, Samuel Cooper acquired Lots numbered 5, 6, 11 and 12 or the entirety of Fractional Southwest Quarter of Section 1 T. 10 S., R. 3 W., said to contain 179.96 acres, the original of which patent was recorded in Book 38, folio 556, Conveyance Records of Calcasieu Parish, Louisiana.

3. By deed dated October 16, 1901, recorded in Book 39, folio 290, conveyance records of Calcasieu Parish, Samuel Cooper conveyed the entire tract of land patented by him as aforesaid to Union.

4. By deed dated August 23, 1903, recorded in Book 46, folio 356, records of Calcasieu Parish, Union sold that portion of the property acquired by it from Cooper located northwest of the north boundary of the Railroad right-of-way to Frederick C. Hubbell. We will refer to this tract hereafter as the “Hubbell Tract”.

5. By tax sale held November 28, 1904 dated and recorded December 31, 1904, in Book 64, folio 11, Conveyance Records of Calcasieu Parish, Thomas J. Kernan purported to acquire, as tax purchaser, from Union, as tax debtor, property in said sale described as Lots 5, 6, 11 and 12 or Frac. SW Sec. 1-10-3.

6. The copy of the ad valorem tax assessment rolls for the Parish of Calcasieu for the Year 1903 on file in the State Auditor’s office reflect an assessment to Frederick C. Hubbell of the property acquired by him as set forth in numbered paragraph 4 above.

On this same assessment roll there appears an assessment in the name of Union of the following described property:

“Lots 5, 6,11,12 or Frac. SW Sec. 1-10-3 (Less part sold)”.

Under this assessment there is reflected as due $6.00 for State taxes and $10.00 as Parish taxes.

On this same assessment roll there appears an assessment to the Louisiana Western Railroad Company as follows: “60 00/ioo miles mainline tract (sic) incl depos and bed @ $12,500 per m — 10 68/ioo miles sidetracked @ $3,000.00 per m. SW SW 35-9-8-SE 25-10-13-SW 30-9-6-17 71/acres of land at Jacksonville; 1 lot at Vinton 900 X 15

On this same assessment roll there appears an assessment to Jacob Mentz of the North Half of the Southwest Quarter, Section 1, Township 10 South, Range 3 West. In connection with this latter assessment the record reflects that in the year 1903 Jacob Mentz did not own any land in Southwest Quarter Section 1 T. 10 S. R. 3 W., but did at on time hold recorded title to the N/2 of SW/4 Section 1, T. 10 S. R. 13 W.

7. The publications in the official journal for Calcasieu Parish i. e., the Lake Charles American Press of the list of delinquent tax debtors for the Parish of Calca-sieu for the year 1903 on November 11, 17 and 25, 1904 show that among the property to be sold for unpaid taxes of 1903 was the following:

“Union Oil & Dev. Co., lots 5, 6, 11 and 12, or frac SW 1 — 4, 1-10-3 (less part sold)”

8. • The public records of Calcasieu and Jefferson Davis Parishes show no tax sales or adjudications for property assessed to Frederick C. Hubbell or Louisiana Western Railroad Company for 1903 taxes.

9. Thomas J. Kernan, was, according to the charter of Union dated October 12, 1901, one of the original shareholders and a member of the first Board of Directors of the said corporation.

10. By instrument dated April 13, 1908 recorded in Book 93, folio 275, records of Calcasieu Parish Thomas J. Kernan executed a cancellation of the 1904 tax sale in favor of Frederick C. Hubbell insofar as it purported to affect the Hubbell Tract.

11. By instrument dated July 18, 1918 recorded in Book N, folio 295, records of Jefferson Davis Parish, Hon. Paul Capde-ville, State Auditor of Public Accounts, purporting to act pursuant to the provisions of Section 7 of Act 315 of 1910, authorized the Recorder of Conveyances of Jefferson Davis Parish to cancel the 1904 tax sale to Thomas J. Kernan in its entirety, stating that “evidence is now on file in this office showing that the sale to Thomas J. Kernan of the property hereinafter described, situated in the Parish of Jefferson Davis, Louisiana, for the unpaid taxes of 1903, assessed in the name of Union Oil & Development Company, Ltd., is erroneous, to-wit: Lots 5, 6, 11 and 12 or Fractional Southwest Quarter 1-10-3.”

In connection with the above the parties stipulated that the record or evidence, if any, on which the Auditor acted in granting the aforesaid cancellation certificate could not be located.

12. By instrument dated June 24, 1942, L. B. Baynard, Auditor of the State of Louisiana, authorized the Recorder of Conveyances of Jefferson Davis Parish to correct his records to exclude from the 1918 cancellation of the December 1904 tax sale that portion of the land covered thereby lying southwest of the south line of the Railroad right-of-way.

13. By instrument dated October 26, 1976 S. E. Vines, Jr., Appropriations Control Director of the State of Louisiana, purported to amend the 1942 Correction instrument, referred to in numbered paragraph 11, so as to exclude the disputed strip from the 1918 Cancellation Certificate described in numbered paragraph 10 above.

14. Any title to the Disputed Strip acquired by Thomas J. Kernan under the December 31,1904 tax sale if not lost by other acts, is now owned by the plaintiffs, Marga-retta LeSage Meares and Maybel Oliver Williams, subject to oil, gas and mineral leases executed by them in favor of the “Gillette Group”.

15. Under the provisions of certain Louisiana Department of Conservation Orders, effective in May, July and December, 1974, portions of the disputed strip were included in producing units operated by Pioneer Production Company.

16. By instrument dated September 30, 1976, dated effective September 1, 1974, Warren L. Mengis, Liquidator of Union, granted an oil, gas and mineral lease covering the disputed strip to Pioneer, as lessee.

17. The fee title claimants have never exercised any possession over the disputed strip. The Louisiana Western Railroad Company and its successors have used some for railroad purposes continuously since pri- or to the year 1900.

The Kernan heirs and their lessees rely for their title on the 1904 tax sale to Thomas J. Kernan, asserting that it is valid and now immune from attack under the per-emptive provisions set forth in Article 233 of the Louisiana Constitution of 1898, Article 233 of the Louisiana Constitution of 1913, and Article 10 Section 11 of the Louisiana Constitution of 1921. In addition the plaintiffs-appellees assert that the 1918 cancellation certificate is invalid and of no effect. The Gillette Group asserts in the alternative that' should title to the disputed strip be ultimately held to belong to Union and subject to the Pioneer lease that they should be declared owner of the Pioneer lease because such lease was acquired by Pioneer in direct violation of the fiduciary obligation owed by it as operator of the several units in which the disputed strip is located.

On the other hand Union argues that the tax sale upon which their opponents rely was void ab initio and not subject to protection under the constitutional provisions referred to because of dual assessment and prior payment of taxes. Further Union contends that the 1904 tax sale is invalid and ineffective because the tax purchaser, Thomas J. Kernan, was allegedly a shareholder and director of Union in the years 1903 and 1904, and that in such capacities, he owed said corporation a fiduciary duty to pay the taxes. Finally Union contends that the tax sale was effectively cancelled in the year 1918 by the State Auditor pursuant to the provisions of Act 315 of 1910 and that such cancellation is now final, unassailable and not subject to correction as was purported to have been done in the years 1942 and 1976. In addition to the above Pioneer contends in the alternative that even if the title of Union should fail, its lease is still effective since Pioneer took the lease as a third party relying on the faith of the public records.

The trial court decided the title issue favorable to plaintiffs concluding that the 1904 tax sale to T. J. Kernan was valid and now constitutionally immune from attack. Accordingly, judgment was rendered recognizing the Kernan heirs as owners of the disputed strip, upholding validity of the leases owned by the Gillette Group, and ordering Pioneer, as operator of the several conservation units which include portions of the disputed strip to account to plaintiffs for all production attributable to said tract subject to the obligation of plaintiffs to bear their proportionate share of the cost of unit development and operation.

Defendants have appealed specifying the following errors:

1. The trial court erred in upholding the validity of the 1904 tax sale.
2. The trial court erred in concluding that the 1918 cancellation was invalid and of no effect.
3. The trial court erred in failing to conclude that the mineral lease of Pioneer is valid, primary and in full force and effect by virtue of Pioneer’s reliance on the faith of the public records.

We will discuss these issues in the order set forth above.

VALIDITY OF THE 1904 TAX SALE

Appellants assail the validity of the 1904 tax sale on the grounds that (1) there was a dual assessment of a portion of the property sold; (2) there was a prior payment of taxes on a portion of the property sold; (3) the purchase by Kernan is invalid or must be considered for the benefit of Union because Kernan was, in 1904, an alleged shareholder and officer of Union; and, (4) the tax sale was cancelled by the State Auditor in 1918 under the provisions of Section 7 of Act 315 of 1910 (LSA-R.S. 47:1991). The first and second grounds urged for invalidity are closely related issues and will be considered together.

The Louisiana Constitutions of 1898 and 1913 provided that “no sale of property for taxes shall be set aside for any cause, except on proof of dual assessment, or of payment of the taxes for which the property was sold prior to the date of sale, unless the proceeding to annul is instituted within six months from service of notice of sale, which notice shall not be served until the time of redemption has expired, and within three years from the date of recordation of the tax deed, if no notice is given. . . ”

The jurisprudence interpreting the quoted constitutional provision was to the effect that the sale of property for taxes, a part of which taxes were paid prior to the sale, rendered the tax sale null and void. Harris v. Deblieux, 115 La. 147, 38 So. 946 (La. 1905); Page v. Kidd, 121 La. 1, 46 So. 35 (La.1908); Board of Comm’rs v. Concordia Land & Timber Company, 141 La. 247, 74 So. 921 (La.1917); Eivers' Heirs v. Rankin’s Heirs, 150 La. 4, 90 So. 419. In the Constitution of 1921 the tax sale peremptive provision was amended so as to eliminate dual assessment and partial prior payment as a cause for annulment of a tax sale and this amendment was made retroactive except as to pending suits or any suit brought within .a period of twelve months from the date of the adoption of the Constitution. Close v. Rowan; 171 La. 263, 130 So. 350 (La.1930). In light of the above appellants argue that the 1904 tax sale is invalid and not subject to constitutional peremption because a portion of the property described in and purported to be conveyed by said sale was dually assessed and taxes were paid under said assessments. In support of this argument appellants point to the assessments of property on the 1903 ad valorem tax rolls to Frederick Hubbell, Jacob Mentz and the Louisiana Western Railroad Company and the apparent payment of taxes by these tax debtors under such assessments as is reflected by the fact that there were no sales for taxes of the properties so assessed. Appellants further argue that the 1904 tax sale was duly cancelled by the State Auditor in the year 1918 under proper authority and that such cancellation effectively foreclosed any possibility of the provisions of the 1921 Constitution being applied retroactively so as to validate the tax sale as to that portion of the disputed strip on which taxes were not paid.

It must be conceded that if the issue as to whether or not there was a dual assessment and prior payment of taxes on a part of the property sold is to be determined by reference solely to the description of property as set forth in the tax sale, then obviously the sale is invalid for the available evidence in the record reflects that for the year 1903 Frederick Hubbell was assessed with and presumably paid taxes on that part of Frl. SW/4 Sec. 1 T. 10 S.R. 3 W., located northwest of the disputed strip. However, we do not believe, for the reasons hereinafter set forth, that the validity or invalidity of the tax sale should be judged and determined solely be reference to the property as described in the tax sale.

Our statutory law has long provided that for purposes of assessment and tax sales the description of property set forth therein will be sustained so long as it reasonably identifies the property intended to be assessed and sold. Act 140 of 1890, which was the statute in effect in 1904, so provided and such concept has been maintained in effect to this date in LSA-R.S. 47:2181 and 2184. The cases applying this legal concept are legion and have been consistent in sustaining the validity of tax sales containing errors in description or assessment where a consideration of all available evidence permits reasonable identification of the lands intended to be assessed and sold. E. g. Knapp v. Jefferson-Plaquemines Drainage District, 224 La. 105, 68 So.2d 774 (La.1953); Van Norden v. Martin, 149 So.2d 684 (La. App. 1st Cir. 1963) writ refused.

Knapp, supra, states the rule as follows:

“In the jurisprudence of this state it is well settled and established that, where a tax sale is made under an assessment in the name of the owner and an error is made in the description of the land intended to be assessed, the tax sale under such assessment is valid if, notwithstanding the error in description, the land can be reasonably identified by the assessment or description as found in the tax deed, or if the description therein furnishes the means for such identification. Further, if a description of the property intended to be assessed or sold is too indefinite and uncertain as to be defective, resort may be had to evidence outside the assessment roll or tax deed to identify the property, provided such evidence establishes unmistakably the identity of the property. The cases generally hinge on the point as to whether the description is such as to enable interested persons to identify the property. Tillery v. Fuller. 190 La. 586,182 So. 683, and the numerous authorities therein cited; Jackson v. Irion. 196 La. 728, 200 So. 18, 133 A.L.R. 566; Yusres Realty. Ltd, v. Jefferson Parish Developers. Inc.. 205 La. 1033, 18 So.2d 607.” 68 So.2d 778.

To the same effect is Brown v. Tauzin, 163 So. 764, 766-67 (La.App. 2d Cir. 1935), rev’d on other grounds, 185 La. 86, 168 So. 502 (1935), where the following analysis appears:

“Section 3 of Act No. 140 of 1890 provides: ‘That no assessment or tax sale shall be set aside or annulled for any error in description or measurement of the property assessed, in the name of the owner, provided the property assessed or sold can be reasonably identified’.
“And section 4 provides: ‘That the tax sale shall convey and the purchaser shall take the entirety of the property, neither more nor less, intended to be assessed and sold and such as it was owned by the delinquent tax payer, regardless of any error in the dimensions or description of the property assessed and sold and the tax collector in the advertisement or deed of sale may give the full description according to original titles.’
“It is clear from these provisions of the act, that the tax purchaser has the right to take possession of the land owned by the debtor, and intended to be assessed and sold, and that the tax collector may incorporate in his deed a correct description of the property intended to have been adjudicated for delinquent taxes, regardless of how described on the tax roll or in advertisement of sale, and to this end may refer to original titles. There fore, had the tax collector correctly described plaintiffs' land in the deed to Mrs. Tauzin, he would have been within his legal rights, and the deed would be without the objection presently urged against its validity. If a ministerial officer, such as a tax collector, is vested with such authority in such matters, then it seems obvious that in appropriate proceedings in the dispensation of justice a court would unquestionably have the right, by decree, to bring about such a result.”

If a tax sale assailed for want of description will be sustained if the description employed in the assessment and/or tax sale although defective affords reasonable identification of the property intended to be assessed and sold then it must follow as a necessary corollary that when a tax sale is attacked on the ground of dual assessment and prior payment a determination as to whether or not there was in fact a dual assessment and prior payment of taxes should be determined on the basis of all available evidence indicating what property was intended to be assessed and sold. Stated another way, it appears to us, that when a tax sale affords reasonable identification although defective in some particular (in the instant case “over description”) that resort may be made to the assessment rolls and other extrinsic evidence to determine if in fact there was a dual assessment and prior payment of taxes on the property intended to be assessed and sold. We feel this conclusion to be warranted by the fact that under our law and jurisprudence tax sales are presumed valid and the party attacking same bears the burden of proving the alleged invalidity. See, La.Const.1974 Art. 7, Section 25(A); Stone v. Kimball’s Heirs, 199 La. 240, 5 So.2d 758 (La.1942); Verret v. Norwood, 311 So.2d 86 (La.App. 3rd Cir. 1975).

Considering the tax sale, the assessment rolls for the year 1903 and all other pertinent extrinsic evidence in the record we determine that the 1904 tax sale to Thomas J. Kernan is not invalid by reason of dual assessment or prior payment of taxes on a portion of the property sold. As previously indicated on August 23,1903 Union sold that portion of Frl SW/4 Sec. 1 located northwest of the disputed strip to Frederick C. Hubbell. Hubbell is assessed with the property acquired by him as aforesaid on the 1903 assessment rolls. The assessment to Union for 1903 describes the entirety of Frl SW/4 “Less part sold”. The only reasonable interpretation of these two assessments is that the assessor intended to assess to Union the property acquired by it from Samuel Cooper less that portion sold to Hubbell. The exception in the Union assessment although somewhat vague was sufficient in our opinion to put one on notice who might investigate the title that Union had conveyed a portion of the described tract and that such portion so sold was not included in the Union assessment. See Andry v. Pfaff, 3 So.2d 232 (La.App. Orleans 1941). In the year 1903 Union owned no other property in the Parish of Calcasieu other than that acquired by it from Cooper less the part sold to Hubbell and therefore reference to the 1903 assessment rolls for a supportive assessment would have placed one on notice that the description in the tax sale was an “over description”. That it was the intention of the assessor and tax collector to assess and sell only that portion of Frl SW/4 Sec. 1 owned by Union in the year 1903 is corroborated by the fact that the several advertisements of delinquent tax debtors for 1903 printed in the official journal of Calcasieu Parish correctly described the property owned by Union. Finally, corroborative of the extent of property intended to be conveyed by the 1904 tax sale is the fact that the lands were sold, according to the proces verbal of the tax adjudication for unpaid State and Parish taxes amounting to $16.00. This is the precise amount of the State and Parish taxes indicated to be due on the 1903 assessment to Union of “Lots 5, 6, 11, 12 or Frac. SW Sec. 1-10-3 (less part sold)”.

For the above reasons we conclude that the 1904 tax sale was clearly intended to convey and did in fact convey, the property of Union as described in the 1903 assessment to it and that the “over description” in the tax sale was an inadvertent clerical error. Accordingly, the assessment to Frederick C. Hubbell of the Hubbell tract does not constitute a dual assessment with the Union assessment nor did the payment of taxes under the Hubbell assessment constitute a prior payment of taxes on any portion of the property sold in the 1904 tax sale to Thomas J. Kernan.

We likewise find that the Mentz assessment and the assessment to Louisiana Western Railroad Company on the 1903 assessment rolls are not dual with the Union assessment. The assessment to the Louisiana Western Railroad Company does not by description purport to cover any part of Frl SW/4 Sec. 1 T. 10 S. R. 3 W., and of course this is consistent with the fact that the railroad owned only a servitude and not the fee title to any portion of said land. As to the assessment to Jacob Mentz the record reflects that Mentz never acquired any part of SW/4 Sec. 1, T. 10 S. R. 3 W., although he did at one time own N/2 of SW/4 Section 1 T. 10 S. R. 13 W. This being so it is reasonable to conclude that the assessment to Mentz with land in Sec. 1 T. 10-3 in lieu of Sec. 1 T. 10-13 is an obvious clerical error which cannot be considered as giving rise to a dual assessment. White v. Lockhard, 129 So.2d 917 (La.App.1961); Verdine v. Carter, 170 La. 226,127 So. 609 (La.1930); Mansfield Hardwood Lumber Company v. Butler, 234 La. 322, 99 So.2d 129 (La.1958).

Appellants next contend that the tax sale is invalid or must be considered for the benefit of Union because Kernan was, in 1904, an alleged shareholder and officer of Union. Suffice it to say in regard to this contention that there is no admissible evidence in the record establishing any relationship between Thomas J. Kernan and Union in the years 1903 and 1904. It is true that the original charter of Union dated in 1901 reflects that Kernan was a shareholder and director however, it would be only speculation to assume that this relationship continued without interruption or termination up to and including the date on which he purchased the disputed strip at tax sale in 1904. Considering the strong presumption of validity accorded to tax sales if such relationship did exist it was incumbent on defendants-appellants to establish same by competent proof. Having determined that this contention is without merit for lack of evidence we do not reach the substantive issue as to the effect which such a relationship would have upon the validity of the tax sale if evidence in support thereof were in the record.

Finally, appellants urge that the tax sale was effectively cancelled in the year 1918 by the State Auditor pursuant to the provisions of Section 7 of Act 315 of 1910 (now R.S. 47:1991) and plaintiffs-appellants are bound by this cancellation. We disagree.

The cited act reads in pertinent part as follows:

“Upon [a] statement of the facts, made under oath and verified and approved by assessor and collector of the parish or district in which the property is situated, that the assessment is a clerical error, or an erroneous or double assessment, or that the property is exempt by Article 230 of the Constitution from taxation: the auditor may authorize the collector to cancel the assessment on the roll on file in his office, and the recorder of mortgages to erase and cancel the inscription of the tax mortgage. In case the property has been sold for taxes and adjudicated to a third party the auditor shall authorize the recorder of conveyances to cancel the sale.” (Emphasis supplied)

According to the cited act the Auditor was authorized to issue a cancellation certificate upon a showing that the assessment on which the tax sale was based was a clerical error; or that the assessment was an erroneous or double assessment; or that the property sold was exempt from taxation. There is nothing in the record to indicate that the property was exempt from taxation and we have previously demonstrated that the assessment was not in error or dual with any other assessment set forth in the 1903 assessment rolls for Calcasieu Parish. Under such circumstances the cancellation was unauthorized, improvidently granted, and without effect. Further, we observe that the certificate of cancellation was issued by the Auditor some 14 years after recordation of the tax sale, long after passage of the peremptive period provided for in Articles 233 of the Constitution of 1898 and 1913. Act 315 of 1910 authorized the ex parte administrative cancellation of a tax sale merely upon a statement of facts made under oath and verified by the assessor and collector that the assessment is a clerical error, or an erroneous or double assessment or that the property was exempt from taxation. However, the constitution, then in effect, after passage of the three year period specifically provided that no sale of property for taxes shall be set aside for any cause, except on proof of dual assessment or of payment of the taxes for which the property was sold prior to the date of the sale. In our view under the cited constitutional provisions, which have been perpetuated in the constitutions of 1921 and 1974, subsequent to the expiration of the peremptive period the only causes for which a tax sale can be invalidated are those specifically mentioned therein and proof thereof must be adduced in an adversary judicial proceeding. In other words, we conclude that after passage of the constitutional peremptive period there is no remedy available under the provisions of Act 315 of 1910 (R.S. 47:1991). Accordingly, we conclude that the 1918 cancellation certificate was null and void ab initio having been executed by the Auditor in contravention of the provisions of Articles 233 of the Louisiana Constitutions of 1898 and 1913. For the reasons set forth above we determine that the 1904 tax sale is valid and the 1918 cancellation was void ab initio and of no force or effect. In view of this conclusion we need not consider appellants contentions with regard to the inefficacy of the 1942 and 1976 amendments to the 1918 cancellation certificate or plaintiffs-appel-lees alternative argument that the provisions of Act 315 of 1910 are violative of the due process clauses of the State and Federal Constitutions.

SHOULD THE PIONEER LEASE BE RECOGNIZED AS VALID AND PRIMARY BECAUSE OF THE PUBLIC RECORDS DOCTRINE?

Pioneer contends that if it is held that the 1904 tax sale is valid nonetheless under the public records doctrine its lease from Union should be recognized as valid and primary because Pioneer was entitled to rely upon the apparent validity of the 1918 Cancellation Certificate. We believe Pioneer’s reliance on the public records doctrine to be misplaced.

It is well settled in our law that no instrument of writing relating to or affecting immovable property shall be binding on or affect third persons unless and until filed for registry in the office of the parish recorder; and neither secret claims nor other matters outside the public records shall be binding on or affect such third parties (C.C. 2266 and LSA-R.S. 9:2721).

It is now firmly established in our jurisprudence that non-recorded claims are null and void as to third parties in spite of actual knowledge by such third party of the unrecorded claim. In other words actual knowledge of matters dehors the record is not equivalent to registry and therefore one dealing with immovable property is required to look only to one source, i. e., the public records. McDuffie v. Walker, 125 La. 152, 51 So. 100 (La.1909). This is the public records doctrine. A corollary to this rule however, is that a purchaser is charged with knowledge and bound by every thing that the record shows. Thus the public records doctrine does not operate to protect a purchaser or lessee who in examining the public records through error of law attaches significance to one transaction and none to other recorded transactions and as a result acquires from a party who is not the true record owner of the immovable. A purchaser can acquire no better title then was owned by his ancestor in title. Placid Oil Company v. A. M. Dupont Corporation, 244 La. 1075, 156 So.2d 444 (La.1963); Smith v. Taylor, 226 La. 235, 75 So.2d 850 (La.1954); Otis v. Texas Co., 153 La. 384, 96 So. 1 (La.1923).

In the instant case plaintiffs-appel-lees title to the disputed strip is not vindicated on the basis of secret claims or matters outside the public records, rather their title is upheld on the basis of the 1904 recorded tax sale which we determine to be valid and which served to divest title out of Pioneer’s lessor, Union. It is true that the 1918 cancellation certificate was also of record, however, Pioneer was not entitled to blindly rely on the assumed validity of this cancellation certificate and ignore the tax sale, (which was never cancelled pursuant to this certificate) the ad valorem tax rolls for the year 1903 and other matters of record including the 1942 amendment to the cancellation certificate, all of which reflected doubt as to the validity of the cancellation certificate and that an adverse title to the disputed strip was being actively asserted by the heirs of the tax purchaser. Suffice it to say that under the circumstances of this case we find the public records doctrine inapplicable. In view of this conclusion we need not consider plaintiffs-appellees alternative argument that under the rational of Wells v. Joseph, 234 La. 780, 101 So.2d 667 (La.1958) and Neblett v. Placid Oil Company, 257 So.2d 167 (La.App. 3rd Cir. 1972) even if the public records doctrine would be applicable Pioneer is not entitled to its protection.

For the above and foregoing reasons the judgment of the trial court is affirmed at the cost of defendants-appellants.

AFFIRMED.

      . The Parish of Jefferson Davis was carved out of Calcasieu Parish and therefore the early title to the subject land is recorded there.
      All parties agree by stipulation that the initial patentee and his successors in title acquired the lands described in the Cooper patent subject to the prior servitude rights of Louisiana Western Railroad Company and its successors and that the latter has continuously used the servitude for railroad purposes since sometime prior to 1900.

      . The joint stipulation of the parties reflects that the Assessor’s copy and Sheriff’s copy of the 1903 assessment rolls for Calcasieu Parish were destroyed by fire in the year 1912.

      . The joint stipulation reflects that this assessment was the only assessment to Union appearing on the 1903 tax rolls and that Union did not own any other property in the Parish of Calcasieu, Louisiana.

      . Inasmuch as the trial court decided the title issue favorable to plaintiffs-appellees it did not rule on this alternative demand of the Gillette Group.


author: CULPEPPER, Judge.

text:
    R. C. ANDERSON, Plaintiff-Appellant, v. Don LESTER et ux., Defendant-Appellee.
    No. 7463.
    Court of Appeal of Louisiana, Third Circuit.
    March 5, 1980.
    Rehearing Denied May 5, 1980.

      Gahagan & Gahagan, Russell E. Gahagan, Natchitoches, for plaintiff-appellant.
    Gold, Little, Simon, Weems & Bruser, Henry B. Bruser, III, Alexandria, for defendant-appellee.
    Before CULPEPPER, GUIDRY and DOUCET, JJ.
   CULPEPPER, Judge.

This is a suit for payment of a promissory note-and for recognition of a mortgage on immovable property. Plaintiff, R. C. Anderson, holds the promissory note,- dated January 27,1975, in the principal amount of $77,000. Defendants, Donald E. Lester and Suzanne F. Lester, are makers of the promissory note secured by the pledge of a collateral mortgage note, which in turn is secured by the mortgage on their home and two noncontiguous lots. The defense is violation by plaintiff of the provisions of 15 U.S.C. § 1601, et seq., The Truth in Lending Act, (the Act), and certain Federal regulations issued pursuant thereto. In the alternative, defendants urge usury. Defendants also filed a reconventional demand for damages and attorney’s fees under the Act.

Trial of the matter was initiated on June 2, 1977, at which time an exception of prescription of one year under Section 1640(e) of the Act was filed by plaintiff. After one day of trial, the case was continued. During the continuance, plaintiff caused a writ of sequestration to issue, seizing the mortgaged property. Plaintiff then filed a second suit against defendants and the sheriff to take physical possession of the property. Trial of the case continued on April 10 — 11, 1978, the parties stipulating that both pending suits, plaintiff’s re-urged exception of prescription and defendants’ subsequent motion to dissolve the writ of sequestration would be heard together. Trial was again continued to May 27, 1979, at which time it was completed.

With written reasons, the trial judge dismissed plaintiff’s demands. He granted defendants’ reconventional demand for rescission of the transaction, cancellation of the mortgage, damages and attorney’s fees under the Act. The trial judge also ordered a forfeiture of the money loaned. The trial court opinion makes no reference to plaintiff’s exception of prescription, or to plaintiff’s second suit or to defendants’ motion to dissolve the writ of sequestration.

The issues on appeal are whether the trial court erred: (1) in applying the Act; (2) in ordering the forfeiture of the loan proceeds; (3) in awarding damages and attorney’s fees under the Act, despite the one-year prescriptive period; and (4) in failing to award damages and attorney’s fees for wrongful issuance of the writ of sequestration.

FACTS
In late 1974, defendant Lester was experiencing financial difficulties. His business operations, a trucking firm known as Delta Express, Inc., and a feed mill, were heavily indebted. Lester was personally obligated on many of the business debts, as well as three Federal tax liens, the largest of which arose out of an assessment of estate taxes on Lester’s father’s estate. Defendant feared the immediate loss of his one unencumbered asset, his home. To pay off the most pressing creditors, defendant sought to obtain another loan.

Plaintiff is a wealthy individual who makes private loans. On January 27, 1975, plaintiff and defendant, accompanied by defendant’s attorney, met at the office of plaintiff’s attorney to complete a loan transaction. Mrs. Lester also came to the office for a brief moment to sign the appropriate documents. Both attorneys left the room while plaintiff and Donald Lester reached a final' agreement. There is no contention that any notices or disclosures required under 15 U.S.C. § 1601, et seq., were made by plaintiff.

The plaintiff testified that he gave defendant $7,000 in cash and $70,000 by check or money order, making a total of $77,000 loaned, represented by a demand note bearing interest at the rate of 10% per annum from date, secured by a collateral mortgage note payable in monthly installments. Defendants admit signing the note for $77,000 but deny that they actually received more than the $70,000 money order. According to defendants, the $7,000 was additional interest on the loan. Defendants’ attorney deposited $70,000 in a trust account. Records of the disbursement show that part of the funds were used to pay personal debts and part were used for business debts.

Defendant paid a total of $8,983.28 on the loan and then ceased payment. Plaintiff filed this suit on November 18, 1976 and obtained a default judgment, which was later set aside. On May 5, 1977, defendants’ attorney mailed to plaintiff a letter stating:

“Pursuant to the provisions of the Truth in Lending Act and Regulation Z thereunder, Donald E. Lester, Jr. and Suzanne Furger Lester hereby elect to rescind the captioned credit transaction entered into with you on January 27, 1975.”

Plaintiff’s response was to continue prosecution of his suit for payment.

APPLICATION OF 15 U.S.C. § 1601, ET SEQ.

The following definitions provided in 15 U.S.C. § 1602 are applicable:

“(e) The term ‘credit’ means the right granted by a creditor to a debtor to defer payment of debt or to incur debt and defer its payment.
“(f) The term ‘creditor’ refers only to creditors who regularly extend, or arrange for the extension of, credit which is payable by agreement in more than four installments or for which the payment of a finance charge is or may be required, whether in connection with loans, sales of property or services, or otherwise. ***** *
“(h) The adjective ‘consumer’, used with reference to a credit transaction, characterizes the transaction as one in which the party to whom credit is offered or extended is a natural person, and the money, property, or services which are the subject of the transaction are primarily for personal, family, household, or agricultural purposes.”

15 U.S.C. § 1603 sets forth the following pertinent exemptions from the Act:

“This subchapter does not apply to the following.:
“(1) Credit transactions involving extensions of credit for business or commercial purposes,
* * * * * *
“(3) Credit transactions, other than real property transactions, in which the total amount to be financed exceeds $25,000.” Section 1631 of the Act provides in part: “Disclosure requirements — Clear and conspicuous disclosure to person extended consumer credit
“(a) Each creditor shall disclose clearly and conspicuously, in accordance with the regulations of the Board, to each person to whom consumer credit is extended, the information required under this part or part D of this subchapter.
“Statement of information where more than one obligor
“(b) If there is more than one obligor, a creditor need not furnish a statement of information required under this part or part D of this subchapter to more than one of them.”

The plaintiff argues that the Act does not apply in this case for two reasons: First, because the transaction is exempt under Section 1603(1) and, second, because plaintiff is not a “creditor” as defined in Section 1602(f).

EXEMPTIONS UNDER THE ACT

In determining whether a particular transaction falls within the Act, the court in Sapenter v. Dreyco, Incorporated, 326 F.Supp. 871 (E.D.La.1971), affirmed 450 F.2d 941 (5th Cir. 1971) gave the following analysis of the issue:

“Not all credit transactions are covered by the Truth In Lending Act, however, and the Act expressly provides that it does not apply to ‘[cjredit transactions involving extensions of credit for business or commercial purposes * * *15 U.S.C. § 1603(1).
* * * * * *
“Furthermore, the Truth In Lending Act was enacted as part of the Consumer Credit Protection Act of 1968, and specifically deals only with consumer credit transactions, characterized as ‘one in which the party to whom credit is offered or extended is a natural person, and the money, property, or services which are the subject of the transaction are primarily for personal, family, household, or agricultural purposes.’ 15 U.S.C. § 1602(h). (Emphasis added).
* * * * * *
“In determining whether a particular transaction is exempt, therefore, the purpose of the transaction or extension of credit is controlling, not the property on which the security interest is retained.

Accordingly, the first issue here is to determine whether the loan transaction is to be characterized as having a business or commercial purpose, or whether the loan is to be deemed a transaction within the comprehension of the Truth In Lending Act. Plaintiff, contends that the use of part of «he funds for business debts rendered the business exemption applicable. Defendant contends that the loan should be characterized according to the purpose for which the money was borrowed or most funds actually used, which, under defendants’ calculations, went toward personal and agricultural debts. Defendant is supported by Smith v. Chapman, 436 F.Supp. 58 (W.D.Tex.1977), where the federal court applied the Act to a transaction in which the plaintiff purchased an automobile primarily for her personal use, even though the vehicle was also used incidental to plaintiff’s business. In doing so, the court stated:

“[1,2] The Act is aimed at providing consumers with information in order to be able to intelligently shop for credit. 15 U.S.C. § 1601, Mourning v. Family Publications Service, Inc., 411 U.S. 356, 93 S.Ct. 1652, 36 L.Ed.2d 318 (1973). A ‘consumer credit’ transaction is one in which the credit is given ‘primarily for personal, ' family or household purposes.’ (emphasis added) 15 U.S.C. § 1602(h); 12 C.F.R. § 226.2(p). The term ‘business credit’ is not defined but since the purpose of the Act is to provide information in ‘consumer credit’ transactions, then it must be clear that business credit is something other than credit given primarily for personal, family or household purposes.
“It stands to reason that the business credit exemption arises whenever the credit is given primarily for a business purpose and not just when the credit is given entirely for a business purpose. On the other hand the Act applies when the credit is given primarily for a personal, family or household use and not just when it is given entirely for a personal, family or household use.”

We find even more persuasive support for defendants’ position in the case of Gerasta v. Hibernia National Bank, 411 F.Supp. 176 (E.D.La.1976), affirmed in part, reversed in part 575 F.2d 580 (5th Cir. 1978). In that case, the court applied the Act to a transaction in which the debtor had used the acquired funds for the purpose of repairing and/or improving property which initially was rented but “ultimately” was intended to be the debtor’s home. This attention to the debtor’s ultimate purpose is consistent with the usual liberal construction of the Act in favor of the debtor. Sellers v. Wollman, 510 F.2d 119 (5th Cir. 1975).

In the present case, the evidence clearly shows that the defendants’ purpose in entering into this transaction was to prevent a seizure on their home. The defendants testified that they were motivated to seek a loan after being examined. By the attorney for a judgment creditor, Natchitoches Collections, Inc., who informed defendants that their home would be seized. The funds were applied to selected debts which represented the most immediate threats to the security of their home. Furthermore, both plaintiff’s testimony, and correspondence from defendants’ attorney show that plaintiff was made aware of defendants’ concern for their home and the purpose of the loan.

We conclude the transaction was not one for business or commercial purposes and is not exempt under Section 1603(1).

“CREDITOR” UNDER THE ACT

The plaintiff next contends that the Act does not apply because he is not a “creditor” as defined in Section 1602(f). The court in Gerasta, supra, at the trial level, interpreted this section as follows:

“In enacting truth-in-lending legislation, it was Congress’ intention to “assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit.’ 15 U.S.C. § 1601. The disclosure requirements, however, are imposed only on ‘creditors,’ or those who ‘regularly extend, or arrange for the extension of credit for which the payment of a finance charge is required, whether in connection with loans, sales of property or services, or otherwise.’ 15 U.S.C. § 1602(f) (emphasis added).
“[5] The Board has further defined the term ‘creditor’ to mean one ‘who in the ordinary course of business regularly extends or arranges for the extension of consumer credit, or offers to extend or arrange for the extension of such credit.’ 12 C.F.R. § 226.2(m) (emphasis added). The exemption is limited, therefore, to those whose ‘extensions [or arrangement] of credit are an occasional, isolated, and incidental portion of their business.’ ”

The question here, then is whether plaintiff was in the business of regularly extending credit. At trial, plaintiff denies that he made more than an “occasional” loan. He stated that he had no more than six to eight loans outstanding at any one time, including January, 1975.

Plaintiff’s position at trial is contrary to all other evidence and to plaintiff’s own admissions at the time of his deposition, when he responded as follows:

“Q. What is your occupation?
“A. Well, I used to be a farmer, I have a few cattle now, and I have a little lending business, just mostly coasting right now.
“Q. What is the nature of this lending business?
“A. What do you mean by the nature of it?
“Q. Well, what type of loans do you make?
“A. Most any kind of loans, I don’t loan on automobiles, no, school teachers or cars, or nothing like that. Mostly real estate.
“Q. Primarily real estate and would these loans be secured by mortgages?
“A. Right.
“Q. How long have you been doing this?
“A. Since 1945.
“Q. Say, at any particular point in time, can you tell me approximately how many loans you might have outstanding?
“A. That I have out now? I would have to go through the book and add them up . fifteen or twen-
ty, I imagine, something similar to that.
“Q. Is this number fairly constant?
“A. Yes.
“Q. Moneywise, I suppose the total of the outstanding amount of the loans would vary, depending upon the size of the loan?
“A. Right, the size of the loan.
“Q. Would this also be true for the situation that existed in January of 1975?
“A. What do you mean, what would be true?
“Q. Well, the number of loans you had outstanding?
“A. Practically the same amount. ******
“Q. Just say, right now, outstanding, would you say that you had in excess of a half a million dollars in loans outstanding right now?
“A. I got more than that.
“Q. Would you think it would be a million?
“A. No, not that much.
“Q. Seven hundred fifty thousand?
“A. I’m not going to tell you how much I got out, to be frank with you. I don’t believe that’s quite any of your business. It’s between a half million and a million.
“Q. Would it have been about this amount when you made the loan to Don Lester?
“A. Approximately.”

Further evidence of the extent and regularity of plaintiff’s lending activities is found in plaintiff’s income tax returns for the years 1965-1976, which were introduced at trial. These returns include for each of those years, a form entitled “Schedule C— Profit (or Loss) from Business or Profession.” Starting in 1968, plaintiff listed “Store and Loans” as his principal business activity. Entries show that plaintiff paid the following amounts of interest on business indebtedness:

“1969 - $96,000.00
1972 - 36,437.00
1973 - 63,575.00
1974 - 29,790.00
1975 - 34,158.46
1976 - 34,807.00”

At his deposition, plaintiff explained the 1976 entry as follows:

“Q. Other than that, the other large deduction item on this return is interest on business indebtedness. It says $34,809.85. Can you just brief-: ly tell me the nature of that business indebtedness, what the money was borrowed for?
“A. No, I can’t. .. . that’s money I borrowed?
“Q. Yes, sir, interest on money that you borrowed?
“A. Oh, well, that could have been several different places. I get by, and once in a while I get a chance to make a loan and I go and borrow the money ... I used to know when I had some money coming in, but I don’t know that no more. Since I have had them two years behind with their payments. I used to borrow a little money from banks, to make a loan. I’m not sure what that was for.
“Q. Would the loan be for the store? “A. No, sir, the store has nothing to do with the loan business. The store stands out on its own, it operates on its own.
“Q. This interest that we are talking about .
“A. Interest is the interest that I make on my loaning business.
“Q. But this interest that you paid, this $34,809.00?
“A. That is some more of my loan business.
“Q. You borrowed money and turned around and loaned it to somebody else?
“A. That’s right.”

Based on the above and other evidence in the record, we have no difficulty in concluding that plaintiff is a “creditor” covered by the Act.

REMEDIES UNDER 15 U.S.C. § 1601, ET SEQ.

Since we find the Act applies, the next issue is whether defendant is entitled to the remedies found in Sections 1635(a), (b) and

(f), and 1640(a), which provide as follows: “Section 1635. Right of rescission as to certain transactions — Disclosure of obli-gor’s right to rescind

“(a) Except as otherwise provided in this section, in the case of any consumer credit transaction in which a security interest, including any such interest arising by operation of law, is or will be retained or acquired in any real property which is used or is expected to be used as the residence of the person to whom credit is extended, the obligor shall have the right to rescind the transaction until midnight of the third business day following the consummation of the transaction or the delivery of the disclosures required under this section and all other material disclosures required under this part, whichever is later, by notifying the creditor, in accordance with regulations of the Board, of his intention to do so. The creditor shall clearly and conspicuously disclose, in accordance with regulations of the Board, to any obligor in a transaction subject to this section the rights of the obligor under this section. The creditor shall also provide, in accordance with regulations of the Board, an adequate opportunity to the obligor to exercise his right to rescind any transaction subject to this section.
“Return of money or property following rescission
“(b) When an obligor exercises his right to rescind under subsection (a) of this section, he is not liable for any finance or other charge, and any security interest given by the obligor, including any such interest arising by operation of law, becomes void upon such a rescission. Within ten days after receipt of a notice of rescission, the creditor shall return to the obligor any money or property given as earnest money, downpayment, or otherwise, and shall take any action necessary or appropriate to reflect the termination of any security interest created under the transaction. If the creditor has delivered any property to the obligor, the obligor may retain possession of it. Upon the performance of the creditor’s obligations under this section, the obligor shall tender the property to the creditor, except that if return of the property in kind would be impracticable or inequitable, the obligor shall tender its reasonable value. Tender shall be made at the location of the property or at the residence of the obligor, at the option of the obligor. If the creditor does not take possession of the property within ten days after tender by the obligor, ownership of the property vests in the obligor without obligation on his part to pay for it.
“Time limit for exercise of right
“(f) An obligor’s right of rescission shall expire three years after the date of consummation of the transaction or upon the sale of the property, whichever occurs earlier, notwithstanding the fact that the disclosures required under this section or any other material disclosures required under this part have not been delivered to the obligor.”
“Section 1640. • Civil liability — Individual or class action for damages; amount of award; factors determining amount of award
“(a) Except as otherwise provided in this section, any creditor who fails to comply with any requirement imposed under this part or part D or E of this subchapter with respect to any person is liable to such person in an amount equal to the sum of—
“(1) any actual damage sustained by such person as a result of the failure;
“(2)(A)(i) in the case of an individual action twice the amount of any finance charge in connection with the transaction, or (ii) in the case of an individual action relating to a consumer lease under part E of this subchapter, 25 per centum of the total amount of monthly payments under the lease, except that the liability under this subparagraph shall not be less than $100 nor greater than $1,000;
♦ sfc Hi sfc ;Je *
“(3) in the case of any successful action to enforce the foregoing liability, the costs of the action, together with a reasonable attorney’s fee as determined by the court.
‡ * * sfc $ ‡
“Jurisdiction of courts
“(e) Any action under this section may be brought in any United States district court, or in any other court of competent jurisdiction, within one year from the date of the occurrence of the violation.”
In discussing the issue of remedies, the court in Gerasta, supra, on appeal stated:
“[2] This court has recognized that the Truth in Lending Act provides ‘detailed remedial machinery’ to redress violations of the Act. Sosa v. Fite, 498 F.2d 114, 117 (5th Cir. 1974). Therefore, courts should apply those remedies provided in the Act. Burgess v. Charlottesville Savings and Loan Association, 477 F.2d 40,45 (4th Cir. 1973); Jordan v. Montgomery Ward & Co., 442 F.2d 78, 81-82 (8th Cir.), cert. denied, 404 U.S. 870, 92 S.Ct. 78, 30 L.Ed.2d 114 (1971).
# ‡ * * * *
“[3,4] Section 1635 and § 1640 are not mutually exclusive remedies; a consumer may be entitled to both rescission pursuant to § 1635 and damages pursuant to § 1640. See Mourning v. Family Publications Service, Inc., 411 U.S. 356, 376, 93 S.Ct. 1652, 36 L.Ed.2d 318 (1973); Sellers v. Wollman, 510 F.2d 119, 123 (5th Cir. 1975).”

SECTION 1635

This section becomes operative where, as here, the consumer credit transaction results in a security interest in a debt- or’s home. Section 1635(a). Since the Act applies, defendant here had a right to rescind the transaction for three days after the transaction or delivery of notices. Where, as here, no notices were ever delivered, the debtor’s right to rescind continued until exercised or the three-year period expired. Within the three years, defendant notified plaintiff of his desire to rescind. Defendant testified that plaintiff did not respond to the notice.

Plaintiff, in his brief, concedes that under Section 1635(b), defendant owes no interest and the mortgage is cancelled. Plaintiff raises a substantial question, however, as to the principal amount of the loan, i. e., $70,-000. Does the debtor’s right to rescind include the right to retain the loan proceeds.

In granting the rescission, the trial court ordered a forfeiture of the loan proceeds, stating that “The federal law also specifies that the plaintiff must forfeit the entire amount of the funds advanced to the defendants in connection with the loan.” As we appreciate the federal jurisprudence, the trial judge erred in ordering an automatic forfeiture.

In Gerasta, supra, the court of appeal reversed the district court decision on the issue of the forfeit, only, and explained their position as follows:

“The statement of law contained in this opinion may be usefully illustrated by its application to the facts involved in the case on appeal. The Gerastas determined that the defendant Bank had violated the disclosure provisions of the Act. Therefore, the Gerastas notified the Bank of their intention to rescind the loan transaction pursuant to § 1635. The Bank did not perform its statutorily prescribed duties within ten days, allegedly because the Gerastas’ rescission was equivocal and because the Bank was uncertain whether the transaction came within the ambit of the disclosure and rescission provisions of the Truth in Lending Act. The Bank’s noncompliance exposed the Bank to- the possibility of increased liability pursuant to § 1640(a).

“[6] It has now been judicially determined that the Gerastas were entitled to rescind their transaction with the Bank and that the Gerastas’ notice of rescission was valid. Therefore, the Bank now must return to the Gerastas any money or property that it has received from them in connection with this transaction. The Bank also must take any action necessary to reflect the termination of any security interest created in the Gerastas’ property by the transaction. Upon the Bank's performance of its duties, the Ger-astas must tender the loan proceeds to the Bank. They should be given a reasonable time within which to do so. Unless the Bank fails to take possession within ten days of tender, its interest will not be forfeited.

“This court’s decision in Sosa v. Fite, 498 F.2d 114 (5th Cir. 1974), does not require a different result. In Sosa, as in the case on appeal, the creditors did not perform their statutorily prescribed duties after receiving the consumer’s notice of rescission. In Sosa, however, the consumer’s notice of rescission was accompanied by the consumer’s express offer to return the creditor’s property. The court in Sosa emphasized that the consumer’s obligation to restore the creditor to the status quo ante- was discharged by the tender. In the case on appeal, on the other hand, the Gerastas stated in their rescission notice that they refused to tender the loan proceeds until the Bank performed its statutorily prescribed duties.” (emphasis supplied)

There is no evidence nor contention in the present case that defendant ever tendered to plaintiff the loan proceeds. Therefore, the forfeiture provision in Section 1635(b) is not now applicable. Upon plaintiff’s performance of his duties under the Act, the defendant must, within a reasonable time, tender to plaintiff the $70,000 loan.

SECTION 1640. PENALTIES AND ATTORNEY’S FEES

There is also a substantial question of law on the issue of damages and attorney’s fees under Section 1640. At trial on June 2, 1977, plaintiff filed an exception of prescription based on Section 1640(e), quoted above. The record does not contain a ruling on this exception, but there is reference to it having been overruled. Obviously, it was overruled because the trial court awarded the $1,000 maximum statutory damages under Section 1640(a)(2)(A)(i) and attorney’s fees of $10,000 under Section 1640(a)(3).

Defendant concedes in brief that the exception of prescription of one year should have been maintained as to Section 1640 damages. However, defendant argues that this prescription does not apply to the award of attorney’s fees, citing Burley v. Bastrop Loan Company, Inc., 407 F.Supp. 773 (W.D.La.1975). In that case, the district court held that a debtor who obtained rescission for a creditor’s violation of the Act was entitled to an award of attorney’s fees, even though his claim for damages had prescribed. This decision was reversed and remanded on the issue of liability, 590 F.2d 160 (5th Cir. 1979) but continues to be cited by some Federal District Courts for its holding on the issue of attorney’s fees. See Clemmer v. Liberty Financial Planning, Inc., 467 F.Supp. 272 (W.D.N.C.1979).

Although decisions of Federal District Courts and Circuit Courts of Appeal construing federal statutes are persuasive, they are not binding on state courts. Only such decisions of the United States Supreme Court are binding on us. State v. Selman, 300 So.2d 467 (La.1974); Morris v. Transworld Drilling Company, 365 So.2d 46 (La.App. 3rd Cir. 1978); Bromley v. Crisp, 561 F.2d 1351 (10th Cir. 1977).

We cannot agree with the decision in Burley v. Bastrop Loan Company, Inc., supra. In our view, Section 1640(e) is clear and free of ambiguity. It states that “[a]ny action under this section (i. e., Section 1640) may be brought . . . within one year from the date of the occurrence of the violation.” Section 1640 provides for damages, limited to $1,000, and a reasonable attorney’s fee. Under 1640(e), any action for such relief must be brought within one year of the violation. We are supported in this view by Sosa v. Fite, 498 F.2d 114 (5th Cir. 1974) and the cases cited there, which hold that penalty damages under Section 1640 are prescribed in one year. If penalties are prescribed in one year, it necessarily follows that attorney’s fees are also, because both are provided by the same statute, Section 1640.

It is noteworthy that in at least two cases the Court of Appeal, Fourth Circuit, State of Louisiana, allowed a prescribed claim for damages under 15 U.S.C. 1640 to be used as a defense to a creditor’s suit on the transaction. Termplan Mid-City, Inc. v. Laughlin, 333 So.2d 738 (La.App. 4th Cir. 1976) and Reliable Credit Service, Inc. v. Bernard, 339 So.2d 952 (La.App. 4th Cir. 1977). In these two cases the court applied LSA-C.C.P. Article 424, which permits a prescribed claim to be used as a defense to a suit on a related transaction. However, by Act No. 254 of 1977 our legislature amended Article 424 to expressly exclude prescribed claims under the Federal Consumer Credit Protection Act. Thus, Article 424 no longer has application in these suits.

WRONGFUL ISSUANCE OF SEQUESTRATION

The next issue is whether defendants are entitled to damages and attorney’s fees for plaintiff’s wrongful issuance of the writ of sequestration seizing their home.

The grounds for a writ of sequestration are provided in LSA-C.C.P. as follows:

“Art. 3571. Grounds for sequestration “When one claims the ownership or right to possession of property, or a mortgage, lien, or privilege thereon, he may have the property seized under a writ of sequestration, if it is within the power of the defendant to conceal, dispose of, or waste the property or the revenues therefrom, or remove the property from the parish, during the pendency of the action.”

LSA-C.C.P. Article 3506 provides for dissolution of a wrongfully issued writ and for damages and attorney’s fees.

Defendant complains here that the trial court erred in its omission of any reference to the issue of the wrongful sequestration. We agree. In light of the judgment canceling the mortgage, there was no real need to make a separate rule on the dissolution of the writ, but we find that a separate damage award is warranted because plaintiff had no grounds for the writ.

In a case dealing with a wrongful attachment, this court in American Steel Building Company v. Brezner, 158 So.2d 623 (La.App. 3rd Cir. 1963) stated:

“As stated by our Supreme Court in General Motors Acceptance Corp. v. Sneed, 167 La. 432, 119 So. 417, 421 (1929):
‘ “Where a plaintiff sues out a writ of attachment in the honest belief that it is necessary for the protection of its rights, it seems rather unfortunate that it must be held liable for the payment of damages. But the writ of attachment is an extremely harsh remedy, and, when a party makes use of this powerful legal weapon he must be ready to respond in damages if it be found that the writ was wrongfully used.” ’ ”

The issuance of the writ of sequestration in this case, coupled with the posting of the bond to attempt to obtain release of physical possession of the premises to the plaintiff, and the companion suit by plaintiff against the sheriff seeking to compel actual physical delivery of the defendants’ home to the plaintiff during the pendency of this litigation, appears to have been a willful and deliberate attempt to cause harm, damage, harassment, inconvenience, and mental anguish to the defendants. This action by the plaintiff was totally unwarranted for the reason that the property was subject to his mortgage of record, a suit for foreclosure was pending, and even had been tried one day at the time the writ of sequestration issued.

Mrs. Lester suffered emotional strain as a result of the issuance of the writ of sequestration and service upon her of the pleadings in the suit to compel the sheriff to deliver to R. C. Anderson actual physical possession of her home during the pendency of this drawn-out litigation. Mr. Lester also suffered.

Awards for inconvenience, anxiety and embarrassment caused as a result of the wrongful issuance of a writ are compensable damages. Homemakers Loan & Consumer Discount Company v. Arthur, 333 So.2d 686 (La.App. 4th Cir. 1976); American Steei Building Company v. Brezner, 158 So.2d 623 (La.App. 3rd Cir. 1964).

Defendants have prayed for $2,500 as damages and $1,500 as attorney’s fees for the wrongful issuance of the writ of sequestration. They are entitled to these amounts.

USURY
Having granted defendants’ demand for rescission of the transaction under the Act, we do not reach defendant’s alternative demands based on usury.
DECREE
For the reasons assigned, the judgment appealed is affirmed in part and reversed in part and is recast to read as follows:

It is ordered, adjudged and decreed that, under the provisions of 15 U.S.C. Section 1635, that certain credit transaction entered into between plaintiff and defendants on January 27, 1975 is rescinded. Plaintiff is ordered to return to defendants the sum of $8,983.28 in interest previously paid on the loan. Plaintiff is ordered to cancel and return to defendants the promissory note herein sued on. Plaintiff is ordered to cancel the collateral mortgage note in the sum of $77,000 of date January 27, 1975, made by defendants payable to themselves, and by them endorsed in blank, and plaintiff is ordered to take such steps as necessary to cancel and erase from the public records that certain collateral mortgage executed by defendants of date January 27,1975, for the principal sum of $77,000, recorded in Mortgage Book 339, page 747 of the records of Natchitoches Parish, Louisiana, with which mortgage the note is paraphed for identification. Within a reasonable time, not to exceed thirty days, after plaintiff has performed the above obligations under this judgment, defendants are ordered to tender to plaintiff the sum of $70,000, representing the principal amount loaned in the credit transaction, without legal or conventional interest or any other charge. If defendants fail to tender to plaintiff the $70,000 within said thirty days, this judgment shall have the effect of a judicial mortgage under the provisions of LSA-C.C. Articles 3321, et seq. If defendants tender the $70,000 within said thirty days and plaintiff does not accept the $70,000 within ten days after tender, ownership of the money loaned vests in defendants without any obligation on their part to repay it.

It is further ordered, adjudged and decreed that the exception of prescription of one year filed by plaintiff as to defendants’ reconventional demand for damages and attorney’s fees under 15 U.S.C. Section 1640 be sustained, and defendants’ demand for said damages and attorney’s fees is dismissed.

It is further ordered, adjudged and decreed that there be judgment herein in favor of Donald E. Lester, Jr. and Suzanne Surger Lester and against R. C. Anderson for the sum of $2,500 as damages, plus the sum of $1,500 as attorney’s fees for the wrongful issuance of the writ of sequestration.

All costs in the trial court, as well as the costs of this appeal, are assessed against R. C. Anderson.

AFFIRMED IN PART, REVERSED IN PART, AND RECAST.


author: PRICE, Judge.

text:
    BOUCHER & SLACK CONTRACTORS, INC., and Bronner Investment Company, Inc., a joint venture, Plaintiffs-Appellees, v. Harvey McLEAN, Jr., Liquidator of Woodlands of Huntington, Inc., et al., Defendants-Appellants.
    No. 14083.
    Court of Appeal of Louisiana, Second Circuit.
    March 31, 1980.
    En Banc. Rehearing Denied May 13, 1980.
    Writ Granted June 23, 1980.
    Wilkinson, Carmody, Peatross & Caverlee by Samuel W. Caverlee and Charles B. Pea-tross, Shreveport, for defendant-appellant, Harvey McLean, Jr., Liquidator of Woodlands of Huntington.
    Cook, Clark, Egan, Yancey & King, by Charles G. Tutt, Shreveport, for defendant-appellee, Commercial Nat. Bank.
    Wiener, Weiss, Madison & Howell, by James Fleet Howell, Shreveport, for plaintiff-appellee, Bronner Inv. Co., Inc.
    Charles E. Tooke, Jr., Shreveport, for plaintiff-appellee, Boucher & Slack Contractors, Inc.
    Before PRICE, MARVIN and McCLEN-DON, JJ.
   PRICE, Judge.

Plaintiff filed suit to enjoin defendant-bank from honoring a draft presented pursuant to a letter of credit issued to defendant, Woodlands of Huntington, Inc., on plaintiff’s behalf. The trial court denied the injunction but ordered defendants to pay the funds into the registry of the court pending judicial determination of whether plaintiff was in default. The liquidator of Woodlands appeals that part of the judgment ordering the funds paid into the registry of the court. We reverse.

Early in 1978 plaintiff, a joint venture composed of Boucher and Slack Contractors, Inc. and Bronner Investment Company, Inc., entered into negotiations with Woodlands for construction of an apartment complex on Woodland’s property. As part of the contract negotiations and its ultimate execution, no performance bond was required and it was agreed that plaintiff would obtain a letter of credit from the Commercial National Bank of Shreveport in the amount of $708,000. This letter of credit was issued in favor of Woodlands and provided the following:

For the account of Boucher & Slack Contractors, Inc. and Bronner Investment Co., Inc., a JOINT VENTURE, we hereby authorize you or your transferee to draw on us at sight up to an aggregate amount of $708,000.00, conditioned only that the Drawer on this Letter of Credit or its transferee shall furnish the Bank a sworn affidavit that the sum of the draft is due by Boucher & Slack Contractors, Inc. and Bronner Investment Co., Inc., a JOINT VENTURE, under the provisions and obligations of the Contract between' the parties of date January 31, 1978 for the construction of “Woodlands of Huntington,” by reason of default on the part of said JOINT VENTURE therein, which affidavit shall be accompanied by a statement of the basis for the claim.
This Credit is irrevocable and transferable. The Credit may be transferred without charge one or more times upon receipt of your written instructions submitted in accordance with the attached transfer form.
Drafts drawn under this Credit must specify the number of the Credit and be presented at this office not later than February 1, 1980.
This Credit sets forth in full the terms of our obligation to you, and such undertaking shall not in any way be modified or amplified by any agreement in which this Credit is referred to or to which this Credit relates, and any such reference shall not be deemed to incorporate herein by reference any agreement.

During the negotiations Woodlands was also concerned about a completion date for construction of the project. Although this question was discussed on several occasions plaintiff refused to agree to a specific date for completion. As a result the contract executed by the parties provided only that plaintiff would complete the project with “due and reasonable diligence.”

Construction began in February 1978 and as it progressed plaintiff encountered several problems consisting primarily of adverse weather conditions, lack of adequate access to the property, and difficulties with its subcontractors and its own supervisory personnel. During the summer of 1978, Harvey McLean, Jr., the sole shareholder of Woodlands who had negotiated the contract with plaintiff, made several complaints regarding the delays in completing the various phases of the project. Correspondence regarding these delays was exchanged and on September 29 McLean stated by letter his intentions to assert a claim in excess of $40,000 for alleged loss of rentals and additional administrative expenses.

Construction continued. As each section of the project was completed it was turned over to Woodlands for rental and Woodlands continued to make all progress payments required by the contract. By June 20,1979, the project was finished except for miscellaneous repairs and corrections and Woodlands furnished plaintiff with a certificate of substantial completion. The additional repair and correction was apparently done and on September 4, 1979, plaintiff received from Woodlands the final payment due under the contract. Although plaintiff had previously requested that the letter of credit be returned at the time of final payment, it was retained by Woodlands without objection. At this point in time Woodlands had made no further complaints regarding damages for delay.

On July 31, 1979, Woodlands, before final payment, conveyed the entire apartment complex and the land upon which it was built to McLean in his individual capacity. In August 1979 Woodlands was placed in voluntary liquidation with McLean as liquidator.

On September 6, 1979, McLean, in his capacity as liquidator for , Woodlands, presented a draft in the amount of $440,-127.58 to Commercial National Bank with an attached affidavit stating this amount to be due Woodlands under the contract with plaintiff because of plaintiff’s failure to complete the project with “due and reasonable diligence.” The damages listed in the affidavit and accompanying statement were itemized as lost rentals and excess interest paid by Woodlands because of its inability to obtain permanent financing until the project was completed.

The bank notified plaintiff of McLean’s demand and this suit seeking a preliminary injunction was filed. Upon plaintiff’s motion the trial court issued a temporary restraining order prohibiting payment under the letter of credit. After this order was obtained plaintiff also filed a separate demand seeking a declaratory judgment that it had not breached the contract with Woodlands and owed no damages. McLean filed a motion to dissolve the restraining order and to dismiss plaintiff’s suit.

After a hearing on the injunction and the motion to dissolve, the trial court held that under the applicable statutes an injunction to prohibit a draw upon a letter of credit may be granted unless (1) the claim providing the basis of the draft is fraudulent; (2) the documents submitted in connection with the draft do not comply with the terms of the letter; or (3) the claim asserted has no basis under law. The court found that the draft and accompanying documents presented by McLean fully complied with the terms of the letter of credit and that since there was a legitimate dispute as to whether plaintiff completed the project with “due and reasonable diligence,” the claim made on behalf of Woodlands was not fraudulent or without a basis in law. Consequently the court dissolved the restraining order, denied the injunction sought by plaintiff, and ordered the bank to honor the draft.

However, despite these findings, the court ordered the bank and McLean to pay the amount of the draft into the registry of the court. The court reasoned that since the apartment complex had been transferred from Woodlands to McLean in his individual capacity, the letter of credit was the only substantial asset left in the corporation; and since Woodlands was in liquidation and there would be nothing to prevent the corporation and its liquidator from disbursing these funds, it was possible that there would be no assets in the corporation which could be recouped by plaintiff in the event it was successful on the merits of its demand for declaratory judgment regarding its liability under the construction contract; therefore, this action was necessary to insure protection of the rights of all parties pending final determination of the underlying dispute.

The judgment was later amended on motion of all parties to order the clerk of court to invest the fund in a ninety-day certificate of deposit to be renewed every ninety days until further order. This amendment was apparently designed to allow the fund to draw commercial rather than legal interest and resolve the objections of McLean.

McLean appeals only from that portion of the judgment, as amended, which ordered payment of the amount of the draft into registry of the court. Since plaintiff obviously does not question the correctness of the trial court’s refusal to issue the injunction, this appeal presents only one issue:

In the absence of fraud, does a court have discretion to order funds due under a letter of credit deposited into the registry of the court pending the outcome of litigation concerning the alleged breach of the underlying contract?

Both parties agree that under La.R.S. 10:5-114 the bank must honor a draft which complies with the terms of the letter of credit without looking beyond the documentation presented and without determining the merits of the beneficiaries claim on the underlying contract, and that a court may interfere with this obligation to pay only upon proof of fraud on the part of the beneficiary.

McLean argues, however, that the court’s action in denying Woodland’s access to the fund which is undeniably due under the letter of credit law totally defeats the purpose of a letter of credit and constitutes an unauthorized judicial interference with the payment process. He argues that a letter of credit is a unique type of security device which allows the beneficiary immediate access to cash upon compliance with its terms and thereby allows him to become the stakeholder during the pendency of any disputes regarding the underlying contract; that to allow the court to deny the beneficiary access to the cash due in situations not authorized by the letter of credit law would convert letters of credit to nothing more than surety agreements under which the beneficiary must fully litigate his entitlement to damages before any funds are paid; and that the action of the trial court is tantamount to an unauthorized granting of a preliminary injunction and constitutes an abuse of discretion.

Plaintiff argues that the trial court’s action did not interfere with the payment process set forth in the letter of credit law since the draft was honored by the bank; that after the completion of the payment process the trial court possessed the inherent authority to sequester the fund in order to preserve it until the issue of its legal ownership is judicially established; and that the trial court’s exercise of this authority should not be disturbed on appeal absent abuse of discretion.

Code of Civil Procedure Article 3573 provides the basis of the court’s authority to sequester property which is the subject of litigation. It states:

The court on its own motion may order the sequestration of property the ownership of which is in dispute without requiring security when one of the parties does not appear to have a better right to possession than the other.

Consequently, in order to uphold the action taken by the trial court, we must find that (1) the ownership of the fund paid by the bank pursuant to the letter of credit is in dispute and (2) Woodlands does not appear to have a better right to possession of this fund than plaintiff. We find neither situation to be present.

The Louisiana statutes governing letters of credit (La.R.S. 10:5-101 through 10:5-117) clearly indicate that a letter of credit creates an obligation on the part of the issuer in favor of the beneficiary which is totally independent of the underlying contract. This view is generally accepted in jurisdictions where the Uniform Commercial Code, the source of the Louisiana statutes, has been adopted. See Intraworld Industries, Inc. v. Girard Trust Bank, 461 Pa. 343, 336 A.2d 316 (1975).

Once the trial court found plaintiff had no right to an injunction and that the bank should honor the draft, Woodlands was then the owner and entitled to the proceeds. Plaintiff’s demands against Woodlands, whether based on the underlying contract or the beneficiary’s warranty under R.S. 10:5-111(1), constitute separate unliquidated claims and do not render the ownership of the proceeds paid pursuant to the letter of credit a matter of dispute.

For the foregoing reasons the judgment of the trial court ordering defendants to pay the amount of the draft into the registry of the court is reversed and it is ordered that this fund, together with all accrued interest, be paid to Harvey McLean, Jr., as liquidator of Woodlands of Huntington, Inc. Costs of this appeal are assessed to appel-lees.

      . (1) An issuer must honor a draft or demand for payment which complies with the terms of the relevant credit regardless of whether the goods or documents conform to the underlying contract between the customer and the beneficiary. The issuer is not excused from honor of such a draft or demand by reason of an additional general term that all documents must be satisfactory to the issuer, but an issuer may require that specified documents must be satisfactory to it.
      (2) Unless otherwise agreed when documents appear on their face to comply with the terms of a credit but a required document does not in fact conform to the warranties made on negotiation or transfer of a document of title or of security or is forged or fraudulent or there is fraud in the transaction
      (a) the issuer must honor the draft or demand for payment if honor is demanded by a negotiating bank or other holder of the draft or demand which has taken the draft or demand under the credit and under circumstances which would make it a holder in due course and in an appropriate case would make it a person to whom a document of title had been duly negotiated or a bona fide purchaser of a security; and
      (b) in all other cases as against its customer, an issuer acting in good faith may honor the draft or demand for payment despite notification from the customer or fraud, forgery or other defect not apparent on the face of the document but a court of appropriate jurisdiction may enjoin such honor.
      (3) Unless otherwise agreed an issuer which had duly honored a draft or demand for payment is entitled to immediate reimbursement of any payment made under the credit and to be put in effectively available funds not later than the day before maturity of any acceptance made under the credit.


text:
    Edward H. LOWRY et al., Plaintiffs-Appellants, v. MRT EXPLORATION COMPANY et al., Defendants-Appellees.
    No. 14090.
    Court of Appeal of Louisiana, Second Circuit.
    March 31, 1980.
    En Banc. Rehearing Denied May 13, 1980.
    Writ Refused June 23, 1980.

      James H. Dawdy, Jr., Homer, for plaintiffs-appellants.
    Shotwell, Brown & Sperry by James H. Napper, II and Reginald E. Cassibry, Monroe, for MRT Exploration Co., defendant-appellge.
    Bodenheimer, Jones, Klotz & Simmons by David Klotz, Shreveport, for Discovery Oil Co., Inc., Robert E. Adair, Everett Enterprises, Inc., Jack T. Everett, Smackover Producing Co., Robert E. Adair, Jr., Thomas J. Adair, Rebecca Lee Griffith, William Bryan Brown, and Winifred H. Price, defendants-appellees.
    Wright & Kerstein by Morris Wright and Dudley Yoedicke, New Orleans, for Anita Solomon Marx and Rae Rose Solomon Cul-ver, defendants-appellees.
    James R. Hatch, Homer, for Daniel B. Feitel, defendant-appellee.
    Before PRICE, HALL and JONES, JJ.
   PRICE, Judge.

Plaintiffs filed suit to be declared owners of all or a portion of the mineral rights in a tract of land and for an accounting of past oil and gas production. All but one of the defendants filed a motion for summary judgment which was granted by the trial court. Plaintiffs appeal and we affirm.

Prior to September 27, 1966, the property in question was owned in indivisión by Arthur Feitel, Milton Feitel, and Daniel Fei-tel. On that date they conveyed the property to Jimmy Wayne Bottoms by an act of sale which contained the following reservation:

It is expressly understood and agreed that the VENDORS reserve unto themselves, their heirs and assigns, all of the oil, gas and other minerals lying in and under the above described property.

The property was subsequently sold on three separate occasions by deeds which contained no mention of outstanding mineral rights. Ultimately, however, plaintiffs acquired the property on May 24,1978, by a deed with the following clause:

This sale is subject to any and all outstanding oil, gas, and mineral leases and all sales of mineral interests and/or royalties affecting the property described herein on file and of record prior to this sale.

Daniel Feitel died in 1967 and his mineral interest in the property created by the reservation in the 1966 deed to Bottoms was inherited by his brothers, Arthur and Milton. Milton died in 1969 and his interest eventually devolved to several of the defendants. On May 13, 1975, Arthur Feitel sold all his mineral interest in the property to Smackover Producing Company and Jack T. Everett.

On May 6, 1976, Smackover Producing Company and Jack T. Everett leased their interest acquired from Arthur Feitel to Smackover Producing Company. On about September 21, 1976, a well was drilled on the property. Both the sale from Arthur Feitel to Smackover and Everett and the lease to Smackover were recorded in the conveyance records prior to plaintiffs’ acquisition of the property in 1978.

Plaintiffs filed this suit against Arthur Feitel, his vendees and their assignees, and the heirs of Milton Feitel seeking to be declared owners of all mineral rights in the property. This claim was based on plaintiffs' contention that the drilling operations conducted by Smackover did not interrupt the ten-year liberative prescription on the servitude created in the 1966 sale to Bottoms. Alternatively they contended the reservation in this 1966 act of sale created three separate servitudes and consequently Smackover’s activities interrupted prescription only as to the interest previously owned by Arthur Feitel. All defendants except Arthur Feitel filed a motion for summary judgment which was sustained on the ground that as a matter of law plaintiffs owned no interest in the minerals.

Although plaintiffs allege numerous errors on the part of the trial court, this case presents two principal issues: (1) whether the reservation in the 1966 deed from the Feitels to Jimmy Wayne Bottoms created a single or multiple servitudes and (2) if only a single servitude was created, did its use by one co-owner inure to the benefit of the other co-owners and thereby interrupt prescription running against their interests.

In Hodges v. Norton, 200 La. 614, 8 So.2d 618 (1942), two co-owners conveyed property by a deed which reserved to them a one-half interest in the oil, gas, and other minerals. The court found that (1) this reservation created only one servitude; (2) conveyance of an undivided interest in this servitude did not have the effect of dividing it; and (3) use of this single servitude by one co-owner inured to the benefit of all other co-owners thereby interrupting prescription as to the entire servitude.

Article 174 of the Mineral Code, R.S. 31:174, provides as follows:

A use or possession of a mineral right inures to the benefit of all co-owners of the right.

Comments under this article state:

Insofar as mineral servitudes are concerned, Article 174 is a restatement of established law. See Hodges v. Norton.

Applying these principles to the present case, the reservation in the 1966 deed to Bottoms created only one servitude which was owned in indivisión by Arthur, Milton, and Daniel Feitel. When Arthur Feitel sold his interest in the minerals to Smackover and Everett, they became co-owners in indivisión of this servitude along with the heirs of Milton Feitel. The drilling activities conducted on the property by Smackover within ten years from the creation of this servitude interrupted prescription as to all co-owners. Therefore plaintiffs, who bought subject to all outstanding mineral rights, own no interest in the minerals in this property.

Plaintiffs also argue that due to the language in the mineral deed from Arthur Feitel to Smackover and Everett which referred to a sale of “all the oil, gas and other minerals,” this instrument should be construed as an attempt to create an additional servitude which is impermissible since only a landowner may create a mineral servitude. Even though this language is commonly used by landowners to create an original servitude, it is also used to transfer an entire or fractional interest in an already existing servitude and this was the obvious intent of the parties. The sale of Feitel’s undivided interest did not divide the single servitude previously created nor was it an attempt to create a new servitude. Ilodg-es, supra.

The judgment is affirmed at appellants’ costs.


text:
    David A. THOMPSON, Plaintiff-Appellee, v. Miriam Posey THOMPSON, Defendant-Appellant.
    No. 14103.
    Court of Appeal of Louisiana, Second Circuit.
    March 31, 1980.

      Jesse S. Heard, Jr., West Monroe, for defendant-appellant.
    Blackwell, Chambliss, Hobbs & Henry by James A. Hobbs, West Monroe, for plaintiff-appellee.
    Before PRICE, HALL and McCLEN-DON, JJ.
   PRICE, Judge.

This is an appeal from a judgment rejecting the wife’s request for a change of custody of her three-year-old son whose custody was granted to the husband on a preliminary rule in his action for a divorce on grounds of the wife’s adultery.

The trial court in its reasons for judgment concluded “that the child could be cared for more appropriately, wholesomely, and consistently by his father, paternal grandmother, and regular baby-sitter and that the husband’s circumstances and the procedure he has followed in the care of his son remained clearly in the best interest of the child.” It is from this decision that plaintiff-wife now appeals.

Appellant-wife claims that she is now better suited or at least equally enabled to care for the child and that it would be in the best interest of a child of such a young age to be with his mother. Appellant relies upon the jurisprudence which has applied the maternal preference rule in circumstances concerning young children and the appellate decisions which have allowed a previously “unfit” mother to recover custody upon improvement of her circumstances.

The 1979 amendment to La.C.C. Art. 157, provides that the principal criteria for determining custody of children shall be what is in the best interest of the child and no preference shall be given because of the sex of the parent. The mother no longer enjoys the preference previously accorded her under the prior jurisprudence relied on by appellant.

The trial court in this instance has determined it is in the best interest of the child to remain with the father in the familiar environment of Ouachita Parish. The court found that the father and paternal grandmother have made substantial sacrifices in their employment to spend the necessary time with the child, and that the father is providing the boy with a proper home.

Although the mother contends she has reformed her previous moral standards the court did not consider that sufficient time had elapsed to adequately evaluate the sincerity of her claims.

Under the circumstances presented it has not been shown that the trial court abused its discretion in rejecting appellant’s demands for a change of custody. The judgment is affirmed. Costs of this appeal are assessed to appellant.