as registered under No. 1,449, in the record- | claimed by plaintiff; that he be quieted in er's office, in book X, p. 329, and also cancel- his title and possession, with all costs of ing the act of partition and erasing the inscription thereof, as registered under No. 37,232, in book Q 3, p. 37, in so far as said act affected petitioner's property, and also canceling the inscription of the pretended act of sale to Louis Domongeaux, as registered in said office, under No. 37,685, in book R. 3, p. 167, and condemning said defendants, jointly and in solido, to pay to petitioner the full sum of $300 as damages as aforesaid, with legal interest on said sum from judicial demand until paid. He further prayed for all necessary orders, for costs, and for general relief.

change the nature of that possession, and, having leased said property, as aforesaid, from respondent and their authors, the plaintiff was estopped from asserting title thereto. Respondents admitted that they were surviving widow of Pierre Gerac, Sr., and the heirs of Pierre Gerac, as alleged by plaintiff. In view of the premises, respondents prayed that the title of Louis Domongeaux, as the vendee of Ellen Gerac, wife of Rene Delhomme, be recognized; that he be placed in possession and quieted therein with all costs; and, in the alternative, if judgment be rendered against the said Louis Domongeaux, that defendants be decreed to pay as warrantors only the sum at which Ellen Gerac obtained said property in said partition and for general relief.

The district court rendered judgment in favor of the plaintiff, but, on appeal to the Court of Appeal, that judgment was reversed. After an unsuccessful application for a rehearing, that judgment, under orders of this court, has been brought before it and is now before it for review. The Court of Appeal assigned the following reasons for its judgment:

"The first question to which our attention is directed by the appellant is the refusal of the trial judge to rule out all the parol evidence to show a different intent from that expressed in the act of sale, and to show that there was no money paid as the price of the sale as recited in

the act.

The objection was that plaintiff, having signed the authentic act attacked as a sale for a cash price and with delivery of possession, could not contradict the act by parol; second, that, having since the sale and up to the period of redemption worked the plantation (land) from Gerac Bros. and their legal representatives as lessee, cannot be permitted to change the status of his possession or to contradict defendant's title.

"The objection appears to us to be well founded. The act which the plaintiff characterizes as a pledge, in the form of a sale, with the right of redemption 'vente à réméré,' is authentic in form. On its face it evidences a sale with a full warranty, made for a cash consideration in hand paid, for which the vendor gives full acquittance. It is declared that the purchasers acknowledge delivery and possession of the prop erty conveyed. The only condition imposed is the right of redemption stipulated in the following words:

The condition of this sale is such that if the said vendor shall pay and reimburse unto said Gerac Freres (Gerac Bros.) the price hereinafter mentioned, of two hundred and two 29/100 dollars ($202.29), before the first day of January, eighteen hundred and eighty-seven, then this sale shall be null and void, otherwise, on failure to exercise his right of redemption, before said date, property shall be irrevocably vested in said Gerac Bros.'

"Here we have then a perfectly valid contract specially authorized under the law. Civ. Code, arts. 2566-2588. It is purely a sale, with the right of redemption, evidenced by an authentic act, with nothing upon its face to suggest that the parties to it had any other intention in making it than that therein expressed. The authentic act is full proof of the agreement contained in it against the contracting parties, and their heirs or assigns, unless it be declared and proved a forgery. Civ. Code, art. 2236.

"Parol evidence will not be admitted against |

or beyond what is contained in the act, nor on what may have been said before or at the time Calderwood v. Calderwood, 23 La. Ann. 658, of making it or since. Civ. Code, art. 2275; 659.

"Declaration of a party in an authentic act can be contradicted by parol testimony by such McRae v. Creditors, 16 La. Ann. 305, on page party only in cases of fraud, error, or violence. 307.

"The instant case does not fall within the exception. We conclude that the parol testimony ten act, and it was therefore improperly conwas inadmissible to vary or contradict the writsidered in determining the issues herein. The testimony of the notary and of the plaintiff as not therefore be regarded here in passing on to the intention of the parties to the act will the contention of the plaintiff that the sale was not intended as a bona fide sale, but merely as a security for debt. In Lawler & Huck v. Cosgrove, 39 La. Ann. 488, 2 South. 34, the Supreme Court says:

"It is settled beyond the possibility of a doubt that a bona fide sale of property for a valuable tion, transfers the ownership to the purchaser, consideration, coupled with the pact of redempunder a condition suspensive as to the vendor, resolutory as to the vendee.' See authorities cited therein.

lutory and not a suspensive condition as to the "The right of redemption constitutes a resopurchaser, and he therefore becomes at once proprietor, and can exercise all the rights of property, including the right of disposition. 23 La. Ann. 658.

"Whether a sale with right of redemption is the part of the vendor to sell, concurring with a bona fide sale-that is, with an intention on buy, and it be made for a valuable consideration the intention on the part of the purchaser to or written proof to vary or explain the authen-are questions which, in the absence of literal tic act evidencing it, must depend upon the facts and circumstances of the case. right of redemption being a contract authorized The sale with and regulated by law, the burden of proof rests primarily on the vendor to show facts and cirIf it be shown that the sale was for an inadecumstances tending to negative a bona fide sale. quate consideration and unaccompanied by deto the vendee, for, without sufficient evidence livery of the thing sold, then the burden shifts to the contrary, such a sale will be treated as mere security for debt. La. Ann. 307, 4 South. 450; Baker v. Smith, Howe v. Powell, 40 44 La. Ann. 925, 11 South. 585; Davis v. Kendall, 50 La. Ann. 1121, 24 South. 264; Marbury v. Colbert, 105 La. 467, 29 South. 871.

ceipt signed Gerac Freres (Gerac Bros.) append"The plaintiff has produced in evidence a reed to an account, dated February 18, 1886, of amount due by himself to Gerac Bros., as proof that the sale was intended to secure the amount due by himself to Gerac Bros. This receipt is written in French, and reads: 'Recu par une vente à réméré payable dans un an pour solde de tout compte a ce jour. [Signed] Gerac Freres.' (Received by a sale with right of redemption payable in one year in full settlement of all accounts up to this day.)

"This is not conclusive proof that the parties intended by the act a mere security, and not a bona fide sale with right of redemption; for a debtor may make a valid sale to his creditor in payment of his debt, stipulating the right of redemption, and, if he fails to pay the price in accordance with the terms of the contract, his right of redemption will be forfeited, and the title of the property will vest absolutely in the purchaser. Bevens v. Weill, 30 La. Ann. 185; Soulie v. Ranson, 29 La. Ann. 161; Keough v. Meyers & Co., 43 La. Ann. 952, 9 South. 913.

"The receipt shows that Gerac Bros. considered the account paid and extinguished by the sale or dation en paiement with right of redcmp

tion, and the proof is that, though the plaintiff continued to deal with them at their store for years, old account, so settled, never figured again on their books.

"Measured by the value of property of the vicinage at the time of the sale, the price paid was adequate. It was not a vile or grossly inadequate price held in jurisprudence as one of the indicia that the contract was intended as mere security for debt, though in the form of a sale. It but remains to consider the question of possession, and whether the plaintiff paid to Gerac Bros. the price stipulated within the delay fixed for the exercise of the right of redemption. The plaintiff alleges and testifies that he remained in possession of the land continuously after the sale, and worked and cultivated the same. The bare fact of possession is not disputed, but the nature of that possession is the point around which the controversy revolves. "The defendants contend that the plaintiff remained in possession, not as owner, but as tenant or lessee of Gerac Bros., and, after their deaths, of their legal representatives. A careful reading and appreciation of the testimony bearing on this point fully supports their position. The plaintiff himself admits that, while at first he turned over all the cotton raised on the plantation, later he delivered one-third to Gerac Bros. and two-thirds came to him. When asked why, after the death of the Geracs, of Gerac Bros., he continued to give their representatives one-third and kept for himself two-thirds of the cotton, he answered: 'I followed the condition between me and Mr. Gerac. I followed the condition, although verbal.'

"This fully confirms the testimony of Henry Gerac, Pierre Gerac, Jr., and Mrs. Gustave Lacoste, children of Pierre Gerac, deceased, of Gerac Bros., that the plaintiff, during the lifetime of their father, worked the land now claimed by him as tenant, yielding annually one-third of the crop as rental.

to the conclusion that the judgment below is erroneous, and must be reversed.

"For the foregoing reasons, it is ordered, adjudged, and decreed that the judgment appealed from be annulled, avoided, and reversed, and it is now ordered and decreed that the plaintiff's demand be rejected in its entirety, at his costs in both courts, and the defendant Louis Domongeaux be, and he is hereby, recognized and declared to be the true owner of the land in controversy fully described in the pleadings, and he is hereby quieted in the title and possession thereof."

Plaintiff makes a strong showing in the brief filed in his behalf in respect to the position taken by him in this case that the act, purporting to be a vente à réméré, was, in fact, intended as an act passed to secure payment of a debt due by the party named as vendor to the party appearing as vendee therein, and not an absolute sale. While the price declared in the act cannot be said to have been a "vile" price (that is, one not serious), we think it was below the real and actual value at the time of the act of the property transferred. The plaintiff has always remained in actual physical possession of the property since the so-called act of sale. Defendants urge that, although plaintiff has been in the physical possession of the property since the act of the 17th day of February, 1886, his status has always been that of a tenant. There is no direct evidence that the relation of landlord and tenant existed between plaintiff and declared

vendee. No one swears to an actual knowl"This act alone concludes the plaintiff in the edge of such fact. The evidence of such a absence of error or fraud, and establishes the relation is merely argued upon, presumptivenature of his possession as the possession of his vendees and their assigns. Leasing the prop- ly based on, the fact that several years afterty by the vendor after the time for redeeming er the act was passed the plaintiff consented it has passed, in the absence of error or fraud, to receive one-third of the products of the estops him from asserting title thereto. Jackson v. Lemle et al., 35 La. Ann. 855. Here not only is there no error or fraud alleged, much less proven, but the plaintiff himself frankly admits, under oath, that he continued to give one-third of the crop raised on the land to the widow and usufructuary in accordance with the verbal condition or agreement between himself and Mr. Gerac, his vendee. He is therefore estopped from asserting title to the land, or, at least, from denying the possession of his vendees through him. As to the payment of the price, the plaintiff does not assert positively that he has paid it, but avers that he delivered all the cotton made on the land to Gerac Bros. during a number of years, and he believes that the value thereof far exceeded the price of the property which he was to return to redeem it. The proof of the record is that the plaintiff continued

to deal with Gerac Bros. and to receive advances on the crop from them, and that his share of the proceeds of the cotton delivered to Gerac Bros., was applied to the payment of the price for the redemption of the property. 35 La. Ann. 855.

"We consider the evidence conclusive on this point, but, even if it were not, the result would be the same, for the burden of proof is upon the plaintiff to show the payment within the delay fixed, and in this he has signally failed. We have carefully considered every phase of this case, because somewhat loath to disturb the judgment appealed from, which means much to the plaintiff, an aged negro, tottering to the grave. Our appreciation of the law and the

farm, while the Geracs received two-thirds, which is the usual agreement as to the consideration for a lease between a tenant working land on shares and the owner. The testimony shows that plaintiff shipped for several years to the Geracs the whole of the crop raised on the land, to be by them sold, and the proceeds of the same applied, so plaintiff testifies, to the extinguishment of his indebtedness.

If this be true, it would appear that, if the plaintiff ever occupied the position of a tenant of the Geracs, he became so, not contemporaneously with the passing of the act, but at a later period, by some subsequent agreement. If in point of fact the contract of the 17th of February, 1886, evidenced originally a contract of security for money due and not a contract of sale, the ownership of the property remained after the act in the plaintiff, and the title could be transferred or shifted only by written evidence, and not by parol proof of a verbal lease of the property as between the parties. The rule is that "once a mortgage, always a mortgage." That is, an act of mortgage cannot be converted into an act transferring ownership unless

After the passing of the contract of February 17, 1886, the Geracs dealt at their store with the plaintiff, and the latter appears to have become indebted to them in a large amount for goods, wares, and merchandise sold him, later than that date, distinct and separate from the debt to secure which the act of February 17th was passed. For this later debt Jolivet executed his note. The act of mortgage did not extend to nor cover that debt; it covering only the specific debt existing when the act was passed. We think it was to this last debt that plaintiff referred when he said that he consented that two-thirds of the product of the crop, which were retained by the Geracs, might be imputed to it. We do not think that the plaintiff ever admitted that those two-thirds were retained by them by reason of their being his lessors of the property on which the crops were produced. The Geracs have never made a settlement between them and plaintiff further than to get the latter to recognize an indebtedness due by him to them to the amount of the note.

The property was assessed for taxation in the name of the plaintiff for the years 1887, 1888, and 1889, and in the name of the Geracs for the years 1890 to 1902. In 1902 it was again assessed in the name of the plaintiff. In the year 1908 the plaintiff refused to deliver to Mrs. Delhomme one-third of the crop, and she brought suit to recover it in the justice's court. That suit is still pending. Plaintiff then brought the present suit (November 13, 1908). On October 28, 1908, Mrs. Delhomme sold the property to Louis Domongeaux. It appears that in 1897 (a short time before his death) Mr. Gerac desired to sell this land to a Mr. Arceneaux, and the latter, having been advised that, in order to avoid a lawsuit, the signature of the plaintiff would have to be obtained, so informed Mr. Gerac, who stated that he knew this and would attend to it, but never did, and that he died three or four months

after.

Plaintiff alleges in his pleadings that the act relied on as a sale did not conform to the intention of the parties, and he demands substantially a reformation of the contract so as to make matters conform to "the contract and to make matters take their actual shape." The Court of Appeal was of the opinion that parol evidence was not admissible for that purpose in the absence of an express charge of fraud, but we think the court carried the rule on that subject too far.

In Peugh v. Davis, 96 U. S. 332, 24 L. Ed. 775, the Supreme Court of the United States used the following language:

"It is established doctrine that a court of equity will treat a deed absolute in form as a

loan of money. That court looks beyond the terms of the instrument to the real transaction, and not of sale, it will give effect to the actual and when that is shown to be one of security, control of the parties. As the equity upon which the court acts in such cases arises from the real character of the transaction, any eviadmissible. The rule which excludes parol tesdence, written or oral, tending to show this, is timony to contradict or vary a written instrument has reference to the language used by the from its natural import, but must speak for itparties. That cannot be qualified or varied self. The rule does not forbid an inquiry into the object of the parties in executing and receiving the instrument. Thus it may be shown that a deed was made to defraud creditors or to give a preference or to secure a loan or for any other object not apparent on its face. The object of parties in such cases will be considered by a the exercise of its jurisdiction, which will alcourt of equity. It constitutes a ground for ways be asserted to prevent fraud or oppression and to promote justice." Hughes v. Edwards, 9 12 How. 139, 13 L. Ed. 927; Taylor v. Luther, Wheat. 489, 6 L. Ed. 142; Russell v. Southard, 2 Sumn. 228, Fed. Cas. No. 13,796; Pierce v. Robinson, 13 Cal. 116.

er.

"A subsequent release of the equity of redempThere is nothing in the policy of the law which tion may undoubtedly be made to the mortgagee. forbids the transfer to him of the debtor's interest. The transaction will, however, be closely scrutinized so as to prevent any oppression of said on one occasion by this court, when the the debtor. Especially is this necessary, as was creditor has shown himself ready and skillful to take advantage of the necessities of the borrowRussell v. Southard, supra. Without citing from them that a release to the mortgagee will the authorities, it may be stated as conclusions not be inferred from equivocal circumstances and loose expressions. It must appear by a mortgagor's interest, or such facts must be writing importing in terms a transfer of the shown as will operate to estop him from asserting any interest in the premises. The retion; that is to say, it must be for a consideralease must also be for an adequate consideration which would be deemed reasonable if the transaction were between other parties dealing in similar property in its vicinity. Any marked undervaluation of the property in price paid will vitiate the proceeding."

The same views, even more forcibly expressed, were announced in Brick v. Brick, 98 U. S. 514, 25 L. Ed. 256. Counsel refer the court to 27 Cyc. pp. 1023, 1024; to 20 Am. & Eng. Ency. of Law (2d Ed.) p. 953; and counsel refers the court to 29 Id. (2d Ed.) p. 847; to 10 Current Law, p. 859; to Leger v. Leger, 118 La. 322, 42 South. 951; Franklin v. Sewell, 110 La. 294, 34 South. 448; Baker v. Smith, 44 La. Ann. 925, 11 South 585; Marbury v. Colbert, 105 La. 467, 29 South. 871, and authorities; 7 Current Law, p. 1830; also Rion v. Reeves, 122 La. 650, 48 South. 138; Collins v. Pellerin, 5 La. Ann. 99; Le Blanc v. Bouchereau, 16 La. Ann. 11; Crozier v. Ragan, 38 La. Ann. 154; Ware V. Morris, 23 La. Ann. 665; Parmer v. Mangham, 31 La. Ann. 348; Howe v. Powell, 40 La. Ann. 307, 4 South. 450. I personally am of the opinion that the act of February 17, 1886, was not what it purports to be (a sale with power of redemption), but was intended to evidence a security for a specific debt; that it did not convey the ownership of the property

.

the ownership of the same remained in Jolivet, and it still remains in him. I am also of the opinion that the relation of landlord and tenant between the plaintiff and the Geracs has never existed. The record does not satisfactorily show the state of the accounts between the plaintiff and the Geracs, and it would be impossible for us to fix by it the situation of the parties as creditors and debtor. There is a feature of this case which has been passed by without much comment. It is how far the decision in the case is to be affected by the rights resulting from the sale of this property by Mrs. Delhomme to Louis Domongeaux on October 28, 1908. The act of February 17, 1886, was, on its face, an act of salę, with power of redemption. It was recorded as such. Such a contract is recognized in law as a valid contract. The public had a right to act with it on the faith of the record. The attorney of the plaintiff testified that shortly before or shortly after Domongeaux bought the property from Mr. Delhomme (he did not know which) he met Domongeaux and spoke to him of Jolivet's claims to the property, and that he said he knew all about it, and

(125 La.) No. 17,681.

ALFRED HILLER CO., Limited, v. INSUR-
ANCE COMPANY OF NORTH
AMERICA.

(Supreme Court of Louisiana. March 14, 1910.
Rehearing Denied April 11, 1910.)

(Syllabus by the Court.)

1. INSURANCE (§ 281*)-FORFEITURE OF POLICY-PADDING INVENTORY.

The "padding" of an inventory of merchandise by false entries of articles not on hand will work a forfeiture of a fire insurance policy, when such entries cannot be explained on any reasonable theory of honest mistake. [Ed. Note. For other cases, see Insurance, Cent. Dig. §§ 597, 598; Dec. Dig. § 281.*] 2. INSURANCE (§ 388*)-FORFEITURE-WAIVER. Under the New York standard policy, a forfeiture is not waived by any requirement, act, or proceeding on the part of the insurer relating to the appraisal of the loss or to any examination of the insured provided for in the policy.

[Ed. Note.-For other cases, see Insurance, Dec. Dig. § 388.*]

Orleans; John St. Paul, Judge.
Appeal from Civil District Court, Parish of

North America. Judgment for plaintiff, and defendant appeals. Reversed, and suit dismissed.

Action by the Alfred Hiller Company, Limhad taken an indemnity bond to fully pro-ited, against the Insurance Company of tect him, from which he argues, that Domongeaux was not a purchaser in good faith. Domongeaux purchased the property from Mrs. Delhomme under an act of sale with full warranty. The act of the 17th of February, 1886, purporting to be an act of sale recognizing and reciting that possession of the property, had been delivered to the Geracs. It is not claimed that in point of fact Domongeaux knew of the actual relations between the Geracs and the plaintiff, or had heard of any admissions made by Gerac, Sr., before his death.

We are of the opinion that the act of the 17th of February, 1886, purporting, on its face, by authentic act, to be a sale with right of redemption, having been recorded as such, and no redemption of the property appearing on the records, although the delay for redemption had expired, Louis Domongeaux who bought the property from Mrs. Delhomme on the faith of the record is protected in his purchase from an attack on his title on the ground that the act purporting to be a sale with right of redemption was, in fact, an act of mortgage or security, securing a specific debt of the apparent vendor to the declared vendee in that act.

We are of the opinion that the judgment of the Court of Appeal brought up for review is correct, and it is hereby affirmed.

BREAUX, C. J. I concur in the decree. LAND and MONROE, JJ., concur in the decree. PROVOSTY, J., concurs in the decree for the reasons given by the Court of Appeal.

Clegg & Quintero & Gidiere and McLaurin, Armstead & Brien, for appellant. T. M. & J. D. Miller and Dart, Kernan & Dart, for appellee.

LAND, J. This is a suit on two policies of fire insurance for $2,500 each, issued by the defendant on plaintiff's stock of merchandise in a certain storehouse on Magazine street in the city of New Orleans. There was other insurance on the same stock. Plaintiff sued for $4,120.29 as representing defendant's proportion of liability for the loss.

The petition represents that the plaintiff's stock of merchandise was directly damaged and destroyed by fire to the full amount and value of $30,969.19, after deducting all salvage, and that the amount of insurance then held by the plaintiff on said property aggregated $37,250.

The petition represents that the defendant refused, and still refuses, to pay its proportion of the aforesaid loss or any part thereof, and has denied, and continues to deny, liability in the premises upon the utterly false pretense that petitioner has exaggerated its loss by making fraudulent entries in its inventories, books, and records, and submitting fraudulent proofs from its books.

The gist of defendant's answer is that the two policies were forfeited through fraud and false swearing-fraud in the padding of the inventory, and false swearing on the