Security Devices

Question 1

Reinscription of Mortgages

Answer 1

add 10 years to the date the act of mortgage was signed, UNLESS:

the secured obligation has a term of 9 years or more beyond the signing date of the act of mortgage AND the act of mortgage clearly expresses the maturity date of the secured obligation (ie the act of mortgage includes a reference to the promissory note and the date of maturity of the promissory note)

in this case, add 6 years to the maturity date of the secured obligation

Question 2

Mortgages: Requirements

Answer 2

(1) in writing
(2) signed by mortgagor
(3) describe indebtedness secured or the maximum amount that might be secured at any time
(4) describe precisely the nature and situation of the immovable property

Question 3

Liberative Prescription on a Promissory Note

Answer 3

5 years from the date payment is exigible

interrupted by payment

*when secured by a mortgage - the mortgage (accessory) prescribes when the promissory note (principal) prescribes

Question 4

Mortgages: Effectiveness against Third Parties

Answer 4

must be recorded in the mortgage records in which the immovable is located, and the effect of that inscription must not have lapsed

Question 5

Notice of Reinscription

Answer 5

must be filed prior to lapse of the mortgage

must include:
(1) signature of mortgagee
(2) name of mortgagor
(3) recordation number
(4) declares the mortgage reinscribed

extends effectiveness of mortgage for 10 more years from the date of filing of the notice (date of mortgage is now irrelevant)

Question 6

Artist/Repairperson Privilege

Answer 6

Code: priority over everything
security rights in any movable thing repaired/made by a workman/artisan to secure the unpaid price of the artisan’s labor but only so long as the thing remains in the artists’ possession

Revised Statutes: priority over all rights except Ch. 9 and vendor’s
security rights in any movable thing repaired by a repairman to secure both labor and materials expenses
if repairman releases repaired thing to obligor, privilege remains for 120 days from the last day materials/labor was supplied or until repairperson relinquished possession of the item

Question 7

Lessor’s Privilege

Answer 7

security rights to landowners who lease their land/buildings to secure payment of rent and other obligations under a lease of immovables

affects lessee’s movable property located on the leased immovable property

if lessee removes movable property from premises, privilege persists for 15 days (so long as lessor can still identify property as lessee’s)

priority over vendor’s privilege and all general privileges

Question 8

Vendor’s Privilege

Answer 8

gives seller security rights in any movable or immovable property sold on credit to secure the buyer’s purchase price

immovable –> must be recorded in mortgage records; only has priority over a filed mortgage if the act of credit sale is recorded BEFORE the filed mortgage (or within 7 days of the act of credit sale)

movable –> privilege only lasts so long as property is in buyer’s possession

has priority over all general privileges, but subordinate to ch.9 and lessor’s privileges

Question 9

Judicial Mortgage

Answer 9

created when the judgement creditor of a money judgement files a certified copy of the judgement in the mortgage records

effective against third parties 10 years from the date of the judgement

effective as to all of the debtor’s rights in immovable property located in the parish where filed

general mortgage

Question 10

Suretyship

Answer 10

an accessory contract by which a person binds himself to a creditor to fulfill the obligation of another upon the failure of the latter to do so

Question 11

Suretyship: Requirements

Answer 11

(1) express
(2) in writing
(3) signed by the party acting as a surety

Question 12

Commercial Surety

Answer 12

(a) surety is paid, or
(b) principal or surety is a business entity, or
(c) the guaranteed obligation arises from a commercial transaction

Question 13

Extinguishment of Suretyship by Material Impairment of the Real Security

Answer 13

only for commercial sureties

release of the mortgage over the real property (but only to the extent the impairment prejudices the surety)

Question 14

Extinguishment of Suretyship by Modification

Answer 14

only for commercial sureties

obligee modifies the obligation in some material way without the surety’s consent (but only to the extent the modification harms the surety)

Question 15

Mortgage property description did not include a number of buildings on the lot of land, only a description of the lot of land itself

Answer 15

the mortgage of a corporeal immovable includes component parts. it is not necessary to describe the component parts to have an effective mortgage.

Question 16

Privilege: Definition

Answer 16

a privilege is a form of legal security that is placed on certain property of a debtor without the debtor’s consent - it arises by operation of law.

Question 17

Time Period for Filing a Statement of Claim and Privilege

Answer 17

60 days after the earlier of:
(a) filing of the notice of termination or
(b) date of substantial completion or abandonment of the work

Question 18

PWA Privileges: When to Rank

Answer 18

rank either from when:
(a) notice of contract is timely filed, or
(b) when “work” begins

Question 19

When “Work” Begins

Answer 19

when materials worth at least $100 are delivered to the worksite, or

when other work is conducted on the site that is visible from a simple inspection and reasonably indicates that work has begun

Question 20

PWA grants a privilege on…

Answer 20

the immovable on which work was done, and

a cause of action directly against the owner of the immovable when privity of contractor between the owner and the claimant does not already exist

Question 21

PWA Claim Prescriptive Period

Answer 21

1 year from date of filing of the statement of claim and privilege