Gulf Union Mortg. Corp. v. Michael & Barber Const. Co.

• Decision Date: 30 June 1971
• Docket Number: Nos. 8434,8435,s. 8434
• Citation: Gulf Union Mortg. Corp. v. Michael & Barber Const. Co., 251 So.2d 459 (La. App. 1971)
• Parties: GULF UNION MORTGAGE CORPORATION, Plaintiff-Appellant, v. MICHAEL AND BARBER CONSTRUCTION COMPANY, Defendant (Bayou State Discount House, Inc.), Intervenor-Appellee. GULF UNION MORTGAGE CORPORATION, Plaintiff-Appellant, v. Edwin Reed NETTERVILLE and Marjorie Jordan Netterville, Defendants (Bayou State Discount House, Inc.), Intervenor-Appellee.
• Court: Court of Appeal of Louisiana

Page 459

251 So.2d 459

GULF UNION MORTGAGE CORPORATION, Plaintiff-Appellant, v. MICHAEL AND BARBER CONSTRUCTION COMPANY, Defendant (Bayou

State Discount House, Inc.), Intervenor-Appellee.

GULF UNION MORTGAGE CORPORATION, Plaintiff-Appellant, v. Edwin Reed NETTERVILLE and Marjorie Jordan Netterville,

Defendants (Bayou State Discount House, Inc.),

Intervenor-Appellee.

Nos. 8434, 8435.

Court of Appeal of Louisiana, First Circuit.

June 30, 1971.

Rehearing Denied Sept. 2, 1971.

Donald S. Zuber, of Seale, Smith, Baine & Phelps, Baton Rouge, for plaintiff-appellant.

Karl W. Cavanaugh, of Nesom, Mellon, Cavanaugh & Due , Denham Springs, for intervenor-appellee.

Before LOTTINGER, SARTAIN and TUCKER, JJ.

SARTAIN, Judge.

These consolidated cases arise out of executory proceedings filed by Gulf Union Mortgage Corporation, plaintiff-appellant herein, against Michael and Barber Construction Company, a partnership, and Mr. and Mrs. Edwin Reed Netterville, after the partnership and the Nettervilles had defaulted on their respective obligations under mortgage notes held by Gulf Union. Bayou State Discount House, Incorporated, intervened seeking to enjoin the foreclosures and asking that its judicial mortgage be recognized and enforced against the subject properties. From a judgmnt in favor of the intervenor, plaintiff Gulf Union has appealed. We affirm the judgment of the trial court.

The facts giving rise to these suits are not seriously in dispute. On January 30, 1969, one Thomas L. Sullivan sold two lots in Livingston Parish (being designated for the sake of convenience herein merely as Lots 10 and 14) to 'MICHAEL AND BARBER CONSTRUCTION COMPANY, a partnership domiciled in the Parish of Livingston, State of Louisiana, represented by James H. Michael and James W. Barber'.

On February 7, 1969, 'MICHAEL AND BARBER CONSTRUCTION COMPANY, a partnership domiciled in the Parish of Livingston, State of Louisiana, represented by James H. Michael and James W. Barber' executed a construction mortgage in favor of any future holder or holders on Lot 10 as security for a promissory note in the sum of $15,750.00. The mortgage was signed by both partners and it was designated that they were signing as representatives of the partnership. The promissory note was made payable to 'ITSELF' and likewise endorsed in blank in the name of the partnership with both partners signing in a representative capacity. The mortgage was duly recorded on February 10, 1969. The original holder of the promissory note endorsed it to plaintiff herein, Gulf Union Mortgage Corporation, on May 4, 1970, and on May 21, 1970, Michael and Barber Construction Company having defaulted on its obligation, Gulf Union filed a petition for executory process seeking to foreclose on the mortgage.

Bayou State Discount House, Incorporated, filed a petition of intervention asserting a judicial mortgage resulting from a default judgment recorded April 24, 1970, against 'Michael and Barber Construction Company, James H. Michael and James W. Barber, in solido, as between (the Company, Michael and Barber), and jointly as between James H. Michael and James W. Barber.'

Also, on February 7, 1969, 'MICHAEL AND BARBER CONSTRUCTION COMPANY, a partnership domiciled in the Parish of Livingston, State of Louisiana, represented by James H. Michael and James W. Barber' executed another construction mortgage in favor of any future holder or holders on Lot 14 as security for another promissory note in the sum of $15,750.00. As in the case of the mortgage on Lot 10, the act was signed by both partners, clearly in a representative capacity, and the promissory note was made payable to 'ITSELF'.

On November 14, 1969, by an act of sale with mortgage, 'MICHAEL & BARBER CONSTRUCTION COMPANY, a partnership domiciled in the Parish of Livingston, State of Louisiana, between James H. Michael and James W. Barber, herein represented by James H. Michael' transferred Lot 14 to the Nettervilles for a consideration of $21,000.00, of which $800.00 was paid in cash and the balance of which was secured by a mortgage and the vendees' promissory note. On October 2, 1970, the Nettervilles having defaulted on their obligation, Gulf Union again filed executory proceedings, as holder of the note, and again Bayou State Discount House intervened, asserting that the sale to the Nettervilles was invalid and asking that its judicial mortgage be recognized and enforced.

It is stipulated between the parties that no written articles or act of partnership for Michael and Barber Construction Company were recorded in Livingston Parish at any relevant time.

In sum, we are concerned with the validity vel non, first, of the mortgage from the partnership to Gulf Union on Lot 10, and, second, of the sale from the partnership to the Nettervilles and of their mortgage to Gulf Union on Lot 14, where the act of partnership had not been reduced to writing and recorded as required by law.

Article 2836 of the Civil Code reads as follows:

'Act. 2836. If any part of the stock of (an ordinary) partnership consist of real estate, it must be in writing, and made according to the rules prescribed for the conveyance of real estate, and recorded as is hereafter prescribed with respect to partnership In commendam.'

Article 2848 of the Civil Code reads, in part, as follows:

'Art. 2848...