Capital Bank & T. Co. v. Broussard Paint & Wall. Co.

198 So. 2d 204
CourtLouisiana Court of Appeal
DecidedApril 17, 1967
Docket6788
StatusPublished
Cited by12 cases

This text of 198 So. 2d 204 (Capital Bank & T. Co. v. Broussard Paint & Wall. Co.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Capital Bank & T. Co. v. Broussard Paint & Wall. Co., 198 So. 2d 204 (La. Ct. App. 1967).

Opinion

198 So.2d 204 (1967)

CAPITAL BANK & TRUST CO.
v.
BROUSSARD PAINT & WALLPAPER CO., Cocreham Materials Corporation, Ronald A. Coco, Inc., and William J. Hughes, Jr.

No. 6788.

Court of Appeal of Louisiana, First Circuit.

April 17, 1967.

*206 Brunswig Sholars, Landry & Landry, Kolb & Rooks, Doris Gates, Rankin, Baton Rouge, for appellant.

Ashton L. Stewart of Laycock & Stewart, Baton Rouge, for intervenors, Broussard Paint & Wallpaper Co. and Cocreham Materials Corp.

Watson, Blanche, Wilson, Posner & Thibaut, Baton Rouge, for intervenor, Ronald A. Coco, Inc.

Bruce Waters, Baton Rouge, for William J. Hughes, Jr.

Robert S. Cooper, Jr., Baton Rouge, for Jesse D. White.

Before LANDRY, ELLIS and BAILES, JJ.

LANDRY, Judge.

Plaintiff, Capital Bank & Trust Co., (Capital) takes this appeal from the judgment of the trial court holding the liens of materialmen and an architect superior to appellant's conventional mortgage and, as such, entitled to be paid prior to the mortgage in the distribution of the proceeds of a sheriff's sale held pursuant to foreclosure proceedings instituted by appellant. The trial court accorded priority of the liens on the ground appellant's mortgage was recorded subsequent to commencement of construction of a residence on the subject property. We are in agreement with the decision of the trial court insofar as it applies to the liens of the laborers and materialmen but not so with the claim of the architect.

The undisputed pertinent facts are as follows: In May, 1963, a corporation known as Jesse D. White Enterprises, Inc. (White Enterprises) purchased a four acre tract of land known as Lot 13-A, University Acres, East Baton Rouge Parish, from Dr. James Hatcher, and others, for the price of *207 $60,000, of which amount $10,000 was paid in cash and a vendor's lien and mortgage accepted for the remainder. On or about June 30, 1964, Jesse D. White (White), sole stockholder in and president of White Enterprises, commenced construction of a large residence for himself on said Lot 13-A. During the construction period, namely, on August 13, 1964, White Enterprises sold Lot 13-A to White, individually, for the stipulated price of $15,000 cash. At the same time the Hatcher vendor's lien and mortgage was canceled and a collateral mortgage in the sum of $75,000 payable to future holder or holders was executed by White individually and accepted by Capital as security for loans and advances subsequently made to White in the aggregate of $60,000.

The materialmen, Broussard Paint & Wallpaper Co., Cocreham Materials Corp. and Ronald A. Coco, Inc., and the architect, William J. Hughes, Jr., intervened in Capital's foreclosure proceeding asserting liens filed because of non-payment of accounts for materials and architect's services sold and furnished, respectively, to White and used in the construction of the residence. All intervenors alleged the superiority of their claims over Capital's mortgage on the ground work had commenced and materials were furnished for the home prior to recordation of appellant's mortgage. Capital became purchaser of the property at sheriff sale for $50,000, which sum proved insufficient to pay both the bank and intervenors in toto.

Tersely stated, appellant contends the trial court erred in awarding priority to the lien claimants and ordering their said claims paid by preference out of the proceeds of the judicial sale.

The law pertinent to determination of the rank of the materialmen's liens involved herein is found in the following portion of LSA-R.S. 9:4801:

"A. Every * * * furnisher of material * * * who * * * furnishes material for the * * * construction * * * of immovable property * * * with the consent * * * of the owner thereof * * * has a privilege * * * upon the land * * *.
B. * * * the privilege given by Sub-Section A of this Section, if evidenced as provided in the applicable provisions of this Sub-Part, is superior to all other claims against the land and improvements except: * * * mortgages if * * * mortgages exist and have been recorded before the work or labor has begun or any material has been furnished. * * *
C. When a mortgage note has been executed by the owner of the immovable for the purpose of securing advances to be made in the future, and the mortgage has been recorded and the note delivered to the lender before any work or labor has begun or material been furnished, * * * the amount of the advances made thereafter shall be deemed secured by the mortgage in precedence to and with priority over any of the claims had under the privileges conferred by Sub-Section A of this Section * * *."

The record contains no evidence of recordation of a construction contract by either White Enterprises or White individually. We assume, therefore, no such contract was in fact recorded thus giving rise to the applicability of LSA-R.S. 9:4812, the relevant parts of which provide:

"When the owner * * * undertakes the work of construction * * * for which no contract has been entered into, or when a contract has been entered into but has not been recorded * * * then any person furnishing * * * material * * * on said building or other work may record in the office of the clerk of court or recorder of mortgages in the parish in which the said work is being done or has been done, a copy of his estimate or an affidavit of his claim * * * which recordation if done within sixty days after the date of the last delivery of all materials upon the said property or the last performance of all services or labor *208 upon the same, by the said furnisher of material * * * shall create a privilege upon the building or other structure and upon the land which it is situated. * * *
The said privilege shall be superior to all other claims * * * except * * * a bona fide mortgage * * * if the mortgage exists and has been duly recorded before the work or labor is begun or any material is furnished. * * *"

Appellant maintains that notwithstanding work was performed and labor furnished on the construction in question prior to the recordation of its collateral mortgage, nevertheless the mortgage outranks the materialmen's lien urged herein because prior to the filing of its mortgage the property was owned by White Enterprises therefore White could not personally contract in relation thereto until after his individual acquisition. On this ground it is urged that the personal commitments by White for material and labor occurred after recordation of appellant's mortgage consequently the mortgage primes the materialmen's liens.

Counsel for appellant makes a further argument which we are not at all certain we understand fully. We gather counsel is urging that the claims for materials furnished prior to the conveyance from White Enterprises to White personally do not prime the mortgage in question because at the time such materials were furnished, the property was subject to the previously recorded vendor's lien mortgages outstanding in favor of the Hatchers.

We find no merit in the argument appellant's mortgage primes the liens in question because White, the owner at the time the liens were filed, could not contract for material or labor until his acquisition, consequently appellant's mortgage filed concurrently therewith, primes any claims for which personally contracted subsequent thereto.

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Bluebook (online)
198 So. 2d 204, Counsel Stack Legal Research, https://law.counselstack.com/opinion/capital-bank-t-co-v-broussard-paint-wall-co-lactapp-1967.