First National Bank In Mansfield v. Lawrence

207 So. 2d 907, 1968 La. App. LEXIS 5205
CourtLouisiana Court of Appeal
DecidedFebruary 5, 1968
DocketNo. 10939
StatusPublished
Cited by2 cases

This text of 207 So. 2d 907 (First National Bank In Mansfield v. Lawrence) 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
First National Bank In Mansfield v. Lawrence, 207 So. 2d 907, 1968 La. App. LEXIS 5205 (La. Ct. App. 1968).

Opinion

PRICE, Judge.

This is an appeal from a judgment of the Eleventh Judicial District Court in DeSoto Parish granting priority to a chattel mortgage held by the plaintiff, First National Bank in Mansfield, over a chattel mortgage of the appellant, Continental-Emsco Co., on three drilling rigs owned by the defendant, M. D. Lawrence.

The defendant, M. D. Lawrence, a drilling contractor domiciled in DeSoto Parish, Louisiana, was indebted to both the First [908]*908National Bank in Mansfield and to Continental-Emsco. Each of these creditors requested that defendant give them security for this indebtedness. The defendant granted a chattel mortgage to the First National Bank in Mansfield on September 8, 1966, covering three drilling rigs which were identified in the instrument as Rigs #1, 2 and 3. This mortgage was recorded only in DeSoto Parish, Louisiana, which was the domicile of the mortgagor. The mortgage instrument, however, indicated that the rigs were located as follows:

“C/M Rig #1 — (Evelyn, Louisiana.) * * *
C/M Rig #2 — (Lake Charles, Louisiana.) * * * ; and
C/M Rig #3 — (Black Lake, Louisiana.) * * *

The testimony showed Evelyn to be in DeSoto Parish, Lake Charles to be in Calcasieu Parish, and Black Lake to be in Natchitoches Parish.

On November 28, 1966, the defendant executed a chattel mortgage in favor of Continental-Emsco covering the same three drilling rigs which were identified in the instrument by numbers identical to those used in the aforementioned mortgage. The actual location of the rigs at the time of execution of both mortgages was: Rig #1, DeSoto Parish; Rig #2, Tensas Parish; and Rig #3, Natchitoches Parish. The Continental-Emsco mortgage instrument provided that the intended locations of the rigs were: Rig #1, Lafayette County, Arkansas; Rig #2, DeSoto Parish, Louisiana; and Rig .#3, Natchitoches Parish, Louisiana. This mortgage, or a duplicate thereof, was recorded in the domicile of the mortgagor, DeSoto Parish, in Natchitoches Parish, Louisiana, and with the Secretary of State of the State of Arkansas. Subsequently, the First National Bank in Mansfield brought suit to foreclose its mortgage by executory process, and a petition of intervention was filed by Continental-Emsco claiming that its mortgage was superior to that held by the plaintiff bank as the bank’s mortgage was not recorded at the places where the property was intended to be located in accordance with the mortgage instrument.

After trial in the district court judgment was rendered recognizing the priority of the bank’s mortgage on all three drilling rigs, and the properties were sold. The proceeds of the sale are being held by the Sheriff of DeSoto Parish pending final judicial determination of the rank of these mortgages. From this judgement Continental-Emsco has appealed. However, it concedes that the district court was correct insofar as Rig #1 is concerned, and this is no longer at issue.

The bank’s mortgage was not recorded in the parishes where Rigs #2 and #3 were actually located or in the parish seats of the places the mortgage instrument showed to be their location. The Continental-Emsco mortgage was recorded in the parishes where the mortgage instrument stated they were to be located. However, a multiple original of the acts of mortgage was not recorded where Rig #2 was actually located. It has been conceded by Continental-Emsco that they had actual knowledge of the existence of the chattel mortgage of the bank on all three rigs at the time of execution of their mortgage. Its knowledge arose through the mortgagor’s full disclosure of this fact as he was reluctant to grant the mortgage because he was fearful of violating some criminal law for mortgaging property that was already mortgaged. It was only after some alteration of the printed mortgage form to delete all declarations of the mortgagor with reference to the property being free from liens and other encumbrances that he would execute the instrument to appellant.

The district judge, in a very ably written opinion, found a difference in the legal effects resulting from the factual circumstances surrounding the mortgaging of Rigs #2 and #3. He found the failure by Continental-Emsco to record the mortgage in the parishes of the actual locations of [909]*909the property not to be a sufficient compliance with the law, even though it was recorded in the parishes where by the terms of the instrument the rigs were intended to be located. We do not find .it necessary to consider this distinction because of our views on the other legal issues involved in this matter.

Appellee contends that the admitted actual knowledge of the appellant, Continental-Emsco, vitiates the registry requirements of LSA-R.S. 9:5353. In opposition to this position appellant’s counsel relies principally on a change that was effected in the wording in the chattel mortgage law by Act 172 of 1944. Prior to the amendment, the law, as then contained in 3 Dart, Louisiana General Statutes, § 5023, provided as follows :

“Every such mortgage of property mentioned in section 1 [§ 5022] shall be in writing, setting out a full description of such property to be mortgaged, so that the same may be identified, and also stating definitely the time when the ob-litigation shall mature. In order to affect third persons without notice, both within the parish where recorded and outside of the parish where recorded, but within the State of Louisiana, said instrument must be passed by notarial act, or by private act duly acknowledged by one of the parties thereto, or by a subscribing witness thereto, before a notary public, and the original or a certified copy thereof shall be recorded in the office of the recorder of mortgages in the parish where the act of mortgage is executed, and also at the domicil of the mortgagor; provided, further, that the right to foreclose upon said mortgage by executory process shall not be permitted unless the mortgage be by authentic act. [Acts 1918, No. 198, § 2; 1932, No. 189, § 1; 1936, No. 178, § 1.]” (Emphasis supplied.)

After the 1944 amendment the Statute no longer contained the wording “without notice”, as will be noted by reference to the present law found in LSA-R.S. 9:5353, which reads as follows:

“In order to affect third persons, every chattel mortgage shall be by authentic act, or by private act, duly authenticated in any manner provided by law. A multiple original of every such act of mortgage shall be filed in the office of the recorder of mortgages of the parish where the mortgaged property is to be located according to the terms of the mortgage instrument and also in the office of the recorder of mortgages of the parish of the mortgagors’ domicile, if the mortgagor is domiciled in the state. If the mortgagor is not domiciled in the state, filing in the office of the recorder of mortgages of the parish where the property is to be located according to the terms of the mortgage instrument will be sufficient. Upon receipt of the instrument the recorder of mortgages shall note thereon the date, hour, and minute of receiving it and shall record it in their respective offices. The recorder of mortgages shall immediately cause to be indorsed on the instrument his certificate of recordation. For these services each recorder of mortgages shall receive one dollar.”

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Related

Queen City Broadcasting Co. v. Wagenwest, Inc.
264 So. 2d 336 (Louisiana Court of Appeal, 1972)
First National Bank v. Lawrence
216 So. 2d 304 (Supreme Court of Louisiana, 1968)

Cite This Page — Counsel Stack

Bluebook (online)
207 So. 2d 907, 1968 La. App. LEXIS 5205, Counsel Stack Legal Research, https://law.counselstack.com/opinion/first-national-bank-in-mansfield-v-lawrence-lactapp-1968.