526 So. 2d 471

Michael SPALITTA v. Constance F. SILVEY, et al.

No. 87 CA 0519.

Court of Appeal of Louisiana, First Circuit.

May 17, 1988.

Rehearing Denied June 24, 1988.

*472Barry H. Grodskey, Paul Mirable, Me-tairie, for plaintiff, appellee.

Lamar Richardson, Jr., Mandeville, for defendants, appellants.

Before COVINGTON, C.J., and SAVOIE and LeBLANC, JJ.

SAVOIE, Judge.

The facts in this case are not in dispute. On December 20, 1983, plaintiff, Michael Spalitta, purchased 1.21 acres of land in St. Tammany Parish from defendants/appellants, Rusty and Constance Silvey, for $10,-000. Following the sale, Spalitta discovered that the Silveys did not own roughly half of the property purportedly conveyed to him. Spalitta filed suit against the Sil-veys on May 4,1984 to rescind the sale and to seek return of the purchase price of $10,000, closing costs, and attorney’s fees.

After institution of the lawsuit, Spalitta pursued his claim under his policy of title *473insurance against Safeco Title Insurance Company. In return for Safeco’s payment of $10,000 to Spalitta, Spalitta executed a release in favor of Safeco on September 6, 1984, releasing Safeco from liability arising out of this particular claim. Spalitta also executed a cash sale of the property to Safeco on September 6, 1984 for the same $10,000. Spalitta executed an act of assignment on September 6,1984 whereby he assigned any cause of action he might have against the Silveys to Safeco in return for the same $10,000.1 On October 22, 1984, plaintiff filed an amended petition whereby Safeco was added as a plaintiff.

Following trial on the merits, the court rendered judgment in favor of Safe-co, finding it entitled to rescission of the sale between Spalitta and the Silveys, to $10,000 as the consideration for the sale, and to court costs.2 From this judgment, the Silveys appeal.

The Silveys contend that because Safeco did not introduce into evidence the act of assignment whereby it was assigned Spalit-ta’s claim against the Silveys, it must recover on some other basis. The Silveys then contend that Safeco is not entitled to recover based on the cash sale from Spalit-ta to Safeco because the sale was without warranty and because Safeco purchased the property with full awareness that title to the property was defective; these limitations in the sale from Spalitta to Safeco precluded Safeco from proceeding against the Silveys, according to the Silveys’ argument.

The trial judge in his reasons for judgment stated as follows;

The sale by notarial act [from Spalitta to Safeco] subrogated Safeco ... to all the rights in the action held by plaintiff [Spalitta]. Plaintiff did not warrant the title as between himself and Safeco, but the warranties made by defendant [the Silveys] to plaintiff by their act of sale passed to Safeco by virtue of the subro-gation. ... Louisiana Civil Code of 1870 Articles 2160, and 2161 [These articles dealt with conventional subrogation and legal subrogation respectively.]

We find that Safeco is entitled to recover through the subrogation language in the cash sale between it and Spalitta as well as under LSA-C.C. art. 2503.3 Pertinent language in the sale between Spalitta and Safeco reads as follows:

[V]endor ... declares that he does by these presents grant, bargain, sell, convey, transfer, assign, set over, abandon and deliver without any warranty whatsoever, even for the return of the purchase price, but with full substitution and subrogation in and to all the rights and actions of warranty which said vendor has or may have against all preceding owners and vendors, unto:
SAFECO TITLE INSURANCE COMPANY, a California corporation.

*474Spalitta and Safeco expressly agreed in the act of cash sale that Safeco was subro-gated to Spalitta’s rights in warranty against prior vendors such as the Silveys. Former LSA-C.C. art. 2160 (presently LSA-C.C. art. 1827). This language in the act of sale coupled with Safeco’s payment of $10,000 to Spalitta is sufficient to constitute conventional subrogation. See United States Fidelity and Guaranty Co. v. Richardson, 486 So.2d 929, 932 (La.App. 1st Cir.1986). Thus, the trial court did not commit error in concluding that Safeco was subrogated to Spalitta’s rights under former LSA-C.C. art. 2160.

The civil code also allows Safeco to become subrogated to Spalitta’s warranty action against the Silveys. LSA-C.C. arts 2503 and 2505 read as follows:

Art. 2503. Modification or exclusion of warranty; buyer’s subrogation to seller’s warranty against others
The parties may, by particular agreement, add to the obligation of warranty, which results of right from the sale, or diminish its effect; they may even agree that the seller shall not be subject to any warranty.
But whether warranty be excluded or not the buyer shall become subrogated to the seller’s rights and actions in warranty against all others.
Art. 2505. Restitution of price in case of eviction, exception
Even in case of stipulation of no warranty, the seller, in case of eviction, is liable to a restitution of the price unless the buyer was aware, at the time of the sale, of the danger of the eviction, and purchased at his peril and risk.

While Safeco can not pursue an action in warranty against Spalitta because Safeco purchased without warranty and with knowledge of the defective title (LSA-C.C. art. 2505), Safeco is entitled to pursue whatever actions Spalitta might have against prior vendors. LSA-C.C. art. 2503 was explained in the case of Hoggatt v. Halcomb, 250 So.2d 471, 473 (La.App. 2d Cir.1971): “The buyer is ... subrogated to the seller’s rights and actions in warranty against all others even where there has been no express stipulation to that effect, and regardless of whether the immediate seller warrants title.” (Emphasis ours). See also Collins v. Slocum, 317 So.2d 672, 681 (La.App. 3d Cir.), writs refused, 321 So.2d 362-364 (La.1975); Aizpurua v. Crane Pool Company, Inc., 449 So.2d 471, 472 (La.1984); Russell v. Bartlett, 139 So.2d 770, 776-7 (La.App. 4th Cir.1961); Butler v. Bazemore, 303 F.2d 188, 196 (5th Cir.1962).

The Silveys contend that the case of Tennent v. Caffery, 170 La. 680, 129 So. 128 (1930), bars Safeco from recovering from them. We have examined the Tennent case as well as the case of Davis v. Millaudon, 14 La.Ann. 808 (New Orleans 1859) cited therein, and find that they are not controlling in the case before us. Because we have decided that Safeco is entitled to recover based on both the subrogation language in the sale from Spalitta to Safeco and LSA-C.C. art. 2503, we will not address Safeco’s contention that it is legally subrogated to Spalitta’s claims against the Silveys.4

For these reasons, the judgment of the trial court is affirmed. Costs to be assessed against the Silveys, defendants/appellants.

AFFIRMED.

Spalitta v. Silvey
526 So. 2d 471

Case Details

Name
Spalitta v. Silvey
Decision Date
May 17, 1988
Citations

526 So. 2d 471

Jurisdiction
Louisiana

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