Elmwood Federal Savings & Loan Ass'n v. M & C Partnership in Commendam

552 So. 2d 1217, 1989 La. App. LEXIS 1981, 1989 WL 132641
CourtLouisiana Court of Appeal
DecidedOctober 31, 1989
DocketNo. 89-CA-180
StatusPublished
Cited by3 cases

This text of 552 So. 2d 1217 (Elmwood Federal Savings & Loan Ass'n v. M & C Partnership in Commendam) 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
Elmwood Federal Savings & Loan Ass'n v. M & C Partnership in Commendam, 552 So. 2d 1217, 1989 La. App. LEXIS 1981, 1989 WL 132641 (La. Ct. App. 1989).

Opinion

GRISBAUM, Judge.

This appeal relates to a preliminary injunction concerning executory process. Having secured an order through exec-utory process for seizure and sale of defendant’s property, the plaintiff was met with [1218]*1218a motion for a preliminary injunction to enjoin the sale. The trial court denied the preliminary injunction which plaintiff now appeals on the grounds of certain defects in the proceedings. We set aside and remand.

ISSUES

Numerous issues have been raised; however, we deem only two principal questions require addressing:

(1) Whether the executory proceedings were defective where no evidence is of record of the authority of the partnership’s agents to execute the mortgage, and

(2) Whether the executory proceedings were defective where no corporate resolution appears of record showing authority to assign the mortgage note to the entity enforcing the mortgage via executory process.

FACTS AND PROCEDURAL HISTORY

Plaintiff, Elmwood Federal Savings and Loan Association (Elmwood), filed a verified petition for executory process against defendant, M&C Partnership in Commen-dam (M & C), seeking to foreclose on property mortgaged by M & C. Included in the petition was the allegation that the defendant was in default on his obligation. Attached to that petition were:

(1) a copy of a mortgage note signed on behalf of M & C, executed in authentic form and paraphed for identification with an act of mortgage, and made payable to the order of General American Life Insurance Company;
(2) a copy of an act of mortgage executed in authentic form naming M&C as mortgagor and signed on M & C’s behalf;
(3) a copy of an authentic act of transfer of the mortgage note and mortgage from General American to Elmwood; and
(4) a copy of a letter sent by certified mail from Elmwood’s attorney to M & C advising of plaintiff’s election to accelerate the balance of the note and of plaintiff’s intent to file suit for execu-tory process if the balance remained unpaid after seven days from date of letter.

Based on this evidence, the trial court granted an order of executory process pursuant to which defendant’s property was seized. Thereafter, M&C filed a petition seeking to enjoin the sale, alleging that plaintiff’s petition for executory process was defective in numerous respects. A hearing was held wherein the trial court denied the defendant’s request for an injunction.

ANALYSIS — ISSUE ONE

La.C.C.P. art. 2635 lists the authentic evidence which shall be submitted with a petition for executory process:

(1) The note, bond, or other instrument evidencing the obligation secured by the mortgage or privilege.
(2) The authentic act of mortgage or privilege on immovable property importing a confession of judgment.
(3) The act of mortgage or privilege on movable property importing a confession of judgment whether by authentic act or by private signature duly acknowledged.
(4) Any judgment, judicial letters, order of court, or authentic act necessary to complete the proof of plaintiff’s right to use executory process.

Additionally, certain documentary evidence is “deemed to be authentic” for purposes of executory process. La.C.C.P. art. 2636. Also, C.C.P. art. 2636 lists evidence which need not be authentic when used for executory process.

Plaintiff attached to its petition for exec-utory process documents tending to prove its right to an order of executory process. However, they did not include any evidence showing the authority of M & C’s general partners to execute the mortgage on behalf of the partnership.

Our jurisprudence has repeatedly stated that executory process is a unique and harsh remedy and because of these attributes the rules which allow a creditor to proceed with this remedy must be strictly construed. The requirement of authentic evidence to support every link in the chain of evidence in an executory proceeding is [1219]*1219the very foundation of executory process. Bank of St. Charles and Trust Co. v. Great S. Coach Corp., 424 So.2d 462 (La.App. 5th Cir.1982). Importantly, jurisprudence clearly requires as one such “link” that a properly certified corporate resolution authorizing the mortgage of the debt- or’s property be included in all applications for executory process against property mortgaged by a corporation. La.R.S. 13:4103; First Guaranty Bank v. Baton Rouge Petroleum Center, Inc., 529 So.2d 834 (La.1987); Bank of St. Charles, supra, and cases cited therein. Defendant claims that a similar link is necessary where an act of mortgage is executed on behalf of a partnership, arguing that statutory law and jurisprudence also mandate that a certified copy of the contract of partnership was required to be attached to the petition.

Plaintiff, on the other hand, argues that no such evidence is necessary. It first states that this is not a specifically listed requirement of La.C.C.P. art. 2635. Plaintiff also recognizes that La.C.C.P. art. 2636 recites that a certified copy of a partnership contract authorizing execution of a mortgage is deemed to be authentic for executory process purposes and correctly states that this article alone does not directly mandate the filing of this evidence. It then distinguishes this situation from that where a corporation’s property has been mortgaged. It argues that, since the legislature adopted La. 13:4103 mandating the attachment of a corporate resolution while adopting no similar provision for partnerships, no such requirement exists. The trial court, in its Reasons for Judgment, agreed with this argument and found that filing partnership articles was not necessary.

What this argument overlooks, however, is that La.C.C.P. art. 2635(4) also gives a broad requirement of authentic evidence “necessary to complete the proof of plaintiff’s right to use executory process.” The article does not specify what this encompasses, but it appears that evidence of the authority to mortgage partnership property is included in this requirement.

In First Guaranty Bank, supra, the Louisiana Supreme Court reviewed the history of submitting authentic evidence of a corporate resolution authorizing the mortgage of debtor’s property. The court states that this practice is “merely a specific application of the well-established rule that when a mortgagor acts through an agent in executing a mortgage and note, authentic evidence of the agent’s authority to act must be presented in order to take advantage of executory process.” Id. at 835 (emphasis added). This requirement of executory process, as well as others, existed in the jurisprudence since the 1800s and was merely codified in La.R.S. 13:4103 and La.C.C.P. art. 2635 et seq. Although these articles were subsequently amended, the Louisiana Supreme Court also notes that

the contemporaneous official revision comments to article 2635 state the purpose of that article was not to change the law, but simply to recognize “well-settled jurisprudential rules.” La.Code Civ.P. Ann. art. 2635, comment (a) (West 1961).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
552 So. 2d 1217, 1989 La. App. LEXIS 1981, 1989 WL 132641, Counsel Stack Legal Research, https://law.counselstack.com/opinion/elmwood-federal-savings-loan-assn-v-m-c-partnership-in-commendam-lactapp-1989.