Seal v Crain

707 So.2d 798 (La App 1 Cir 2000)

FACTS: Seal initiated this suit on 8/20/98 by filing a rule against the Clerk in order to seek cancellation of the collateral mortgage that was recorded on 1/27/83. In a later pleading, Seal joined Hibernia Bank (successors of First State Bank) in the suit. No party presented any testimony at trial and the entire evidentiary record was limited to four exhibits filed by Seal. o Certified copy of the collateral mortgage o Incomplete document certified as a true copy of a collateral mortgage o Certified copy the Notice of Reinscription. o Certified copy of a cash sale deed Because the original action was a rule to show cause, neither the Clerk nor Hibernia Bank filed a formal answer, so no additional undisputed facts were established by the pleadings. In addition, from the record, it can be seen that; o On 1/27/83, James and Jacqulene Ezell mortgaged a parcel of land, along with other property, by an act of collateral mortgage recorded. o On 1/11/95, First State Bank filed a document to reinscribe the 1/27/83 collateral mortgage. o On 8/22/97, Homer and Lucille Seal acquired the property from Jacqulene Ezell Gersfeld by cash deed recorded. The trial court ruled for Seal and ordered the Clerk to cancel the collateral mortgage. The trial court signed the judgment on 10/1/98. Hibernia Bank appealed. ISSUE: Whether reinscription of the collateral mortgage prior to Seals purchase of the property allows the mortgage to be rendered effective by the late reinscription? HOLDING: The court affirmed the trial courts ruling ordering the Clerk of Court to cancel the collateral mortgage recorded on 1/27/83. REASON: The earlier courts looked to jurisprudence which interpreted former La. C.C. Art 3369 and ignored the existence of La. R.S. 9:5161. In each of these cases, the original mortgagor still owned the property at issue when the collection efforts began or the original mortgagor no longer owned the property at the time of reinscription. None of the prior decisions considered the effect of La. R.S. 9:5161. The present court saw this as dicta and did not use the language from the previous cases, concerning the mortgage ranking of an untimely reinscribed mortgage.

This court stated that we must look to the clear language of R.S. 9:5161 and concluded that the trial court did not err in ordering the Clerk to cancel the mortgage.

RULE: La. R.S. 9:5161: On the simple written application of the property owner, creditor of the owner, or other party interested, the recorder of mortgages, or person acting as such, shall cancel in full from the records of this office all inscriptions of mortgages affecting the property which have not been reinscribed within the period of time specified by C.C. Art 3328 3331, R.S. 6:830, or other special legislation.