Hemenway Furniture Co. v. Lindsay

Summary

The Louisiana appellate court held that a vendor's lien on goods sold on account did not extend to a collateral note, and that the creditor failed to prove the seized goods remained unpaid. Because the creditor had no enforceable lien and the bankruptcy proceeding permitted seizure only under existing liens or mortgages, the seizure was illegal. The court reversed the judgment, ordered the seizure released, permanently enjoined the sale, and reserved the debtor's claim for damages.

Holdings

1. A privilege existing on the original account does not extend to a collateral note when the note was taken only as collateral and not in payment of the account.
2. A vendor claiming a lien must prove both the sale of the specific articles and that those articles remain unpaid; Hemenway failed to meet that burden.
3. A creditor without an established lien may not seize and sell property released from bankruptcy custody when the property is not subject to seizure for an unsecured ordinary money judgment, even if the debtor has not proven the property exempt.
4. Because the judgment resolved the only real issue and was final and definitive in effect, the appellate court could reverse it and order a permanent injunction restraining the sale and release of the seizure.

Questions Presented

1. Whether a vendor's lien on goods sold on an open account extends to a collateral note given to secure the account.
2. Whether the creditor established that the specific seized goods remained unpaid and were therefore subject to a vendor's lien.
3. Whether the seized property could lawfully be sold after its release from bankruptcy custody when the creditor had no established lien, even though the property was not proven exempt.
4. Whether the judgment denying injunctive relief should be treated as final and whether a permanent injunction should issue.

Disposition

reversed_and_remanded