Court: Louisiana Court of Appeal; September 23, 1987; Louisiana; State Appellate Court
FRED W. JONES, Jr. Judge. A bank appealed a judgment that prohibited it from using executory process due to inconsistencies between the dates on a collateral mortgage note and the corresponding collateral mortgage. United Mercantile Bank (UMB) sued Stephen and Cynthia Schwartz for a promissory note of $25,525.41 dated August 8, 1985, secured by a collateral mortgage note dated September 27, 1979, which was linked to a collateral mortgage also dated September 27, 1979. However, the paraph on the collateral mortgage note referenced a mortgage dated October 2, 1979. The defendants requested an injunction on the grounds of this inconsistency and claimed the debt had been settled around August 6, 1980. The trial court held a hearing and subsequently directed the Federal National Mortgage Association (FNMA) to intervene, asserting it had paid off the notes held by UMB. After trial, the court ruled that the inconsistency rendered executory process inappropriate, requiring UMB to use ordinary process instead. UMB appealed, arguing the trial court erred in issuing the injunction. Under La.C.C.P. Article 2635, a plaintiff must provide authentic evidence to use executory process, including a properly identified note and mortgage. La. C.C.P. Article 2636 specifies that such evidence must be paraphed for identification by a notary. The law emphasizes the need for authentic evidence to protect debtor rights, and failure to support a petition for executory process with such evidence renders the remedy unavailable, necessitating ordinary process as an alternative.
Executory process is a stringent legal remedy necessitating precise adherence to procedural rules. The case of Miller, Lyon & Co. v. Cappel establishes that a mortgage note must be appropriately authenticated to qualify for executory process. Specifically, a mortgage note was deemed unauthentic due to lack of paraphed identification with its securing mortgage and discrepancies in dates. Although the Louisiana Supreme Court later upheld executory process based on two other valid mortgages despite issues with the third, this did not support the appellant UMB's claims.
In Colonial Financial Service, the appellate court ruled that an authentic act of assignment need not be paraphed with the note it identifies, referencing La.R.S. 9:5305, which provides that obligations need only be identified by specific details. In France, a similar issue arose with date variances, but the appellate court distinguished it from prior rulings, noting that such defects could affect rights to deficiency judgments but not necessarily annulment suits.
The ruling concluded that while the variances in dates precluded UMB's right to a deficiency judgment, they did not impede a suit for annulment. The trial court's decision was affirmed, emphasizing that the inconsistency in dates constituted a flaw in the authentic evidence chain necessary for executory process, thereby relegating UMB to ordinary process. The judgment was affirmed at UMB's cost.
