Court: Louisiana Court of Appeal; December 9, 1997; Louisiana; State Appellate Court
The appeal concerns the improper erasure of a judicial mortgage inscription related to a judgment against Gilchrist Construction Company. The appellant, Faye Dantzler, argues that the district court erred in ordering the erasure because the judgment remains partially unpaid, and the judgment-debtor is still liable for the remaining debt. Dantzler initially obtained a $50,000 judgment in 1995, which was recorded as a judicial mortgage on the property of Gilchrist Construction Company. In 1996, one of the partners, David Randall Gilchrist, paid half the judgment, which was applied to the balance under a consent decree that limited the erasure of the judgment to his personal liability. However, the trial court later ordered the complete erasure of the judgment, including its effects on the partnership and another partner, John H. Gilchrist, who had declared bankruptcy. The appellate court found that the original judgment only targeted Gilchrist Construction Company and not the individual partners or the corporation, thus making the erasure of the judicial mortgage as it pertained to those parties unnecessary. The court noted that no legal grounds existed for erasing the mortgage on the partnership, indicating a misunderstanding of the legal distinction between a partnership and its partners. Consequently, the appellate court reversed the lower court's decision, reinstating the judicial mortgage against Gilchrist Construction Company.
A partnership holds primary liability for its debts, while partners have secondary liability according to La. Civ. Code art. 2817. Even after a partnership terminates, it retains its juridical personality for the purpose of liquidation. The partnership argued it had ceased to exist due to a partner's bankruptcy in 1991 and a reduction in membership, but evidence shows it actively defended itself in a lawsuit in 1995 and continues to appeal a judgment against it. Partnerships may continue despite causes for termination as per La. Civ. Code arts. 2826, 2827, and 2828, and maintain their juridical existence for liquidation purposes if debts remain. La.R.S. 9:5180.8 stipulates that a clerk can note a partial release of a mortgage but cannot erase the record until the entire debt is discharged. Since only half the debt has been discharged, the complete erasure of the record was inappropriate, though a partial release may have been valid. Additionally, Gilchrist Construction Company, Inc. filed motions that cannot be considered as it is not a party to these proceedings. Dantzler's request to reserve rights against the corporation, lacking a judgment, is also inappropriate for this appeal focused on the mortgage inscription. The district court's judgment is reversed, with Gilchrist Construction Company responsible for the appeal costs.
