La Sec Dev Kilborn

7/25/2019 La Sec Dev Kilborn

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Louisiana Security Devices

Fall 2004

J. Kilborn

PART ON! T"e #re$itor%Debtor Relations"i&

Chapter One Creditors Remedies Under State Law

I. Assi'n(ent )! Re(e$ies o* +nsecure$ #re$itors un$er State La, a. What is an Unsecured Creditor?

i. An unsecured creditor does not receive secured status because either there is nocontract with the debtor or secured status is not statutorily granted.

ii. When an unsecured creditor has obtained judgment of liability, it does not changethe status of the unsecured creditor, but gives them title of judgment creditor.

b. How o Unsecured Creditor!s Com"el #ayment? $ %imitations on Com"elling #ayment.i. Concerned with the avoidance of violence when collecting.

ii. &ou cannot ma'e threats, etc. to collect on thisiii. (he sheriff cannot sei)e all of the "ro"erty, because there are e*em"tions in %A.

+or instance, you have a motor vehicle e*em"tion of one "er house.iv. (hin' of the difficulties for a creditor to get "aid. -*em"tions are not on the test,

but 'now that are in the e*ce"tionv. /o assets means there are no attachable assets.

vi. All you can sei)e is their interest in the house and none of the ban' in themortgage e0uity is all that you can ta'e1 however many states have a homesteade*em"tion in %A 2 you have a 3456 e*ce"tion on e0uity.

vii. &ou can garnish the wages, which will "robably also have "roblems, because theymay not ma'e enough7 thus, enforceability is a "roblem.

--. Assi'n(ent 2! Security

a. (he /ature of 8ecurityi. #ur"ose of security devices

9. :ive creditor security that obligation will be "aid when time comes to "ay.a. Allows the creditor to avoid an e*em"tion.b. Allows c!or to avoid the long "rocess of litigation and "uts a reservation

on the "ro"erty. 2 encourages lender to lend.ii. ; 'inds of secured transactions in %A.4. Consensual 8$ev in immovable "ro"erty ortgage. %A this is in the civil

code and in the ancillaries of the code @ol 9 4 of CC.B. /onconsensual device 2 the law will im"ose a security device. In %A this is

a %ien1 outside of %A this is a "rivilege. (his is accessory to the "rinci"leobligation.

;. Accessory #ersonal Dight 2 Dight against a "erson and not "ro"erty. (his"erson is called a guarantor$surety.

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Chapter 3 Creation of Security Interests

---. Assi'n(ent ! For(alities For Attac"(ent

a. In :enerali. How do I get one, a sec. ev. (hat is securable by the creditor and enforceable on

the debtor? (his is called attachment under UUC =.9. We say that the right attaches to immovable "ro"erty.ii. (al' about "erfection later

b. +ormalities for Article = 8ecurity Interests!"#3 $a%& $b%i. B De0uirements for sec. int. to be enforceable against the debtor and B#$

9. Value must have been given this is intentionally fle*ible and it does not haveto go the debtor or the creditor (he debtor may not be the obligor and mayonly be owed the collateral the collateral is the "ro"erty #ast loan counts asvalue

4. (he debtor must actually have rightsin the collateral. ore often than not,that right is ownershi". Eut they may also have a leasehold right, etc.

B. Unless the collateral is in the "ossession or control of the creditor, the debtormust have authenticated a sec. agreement that describes the property.a. Authenticated 2!'#"$a%$(%2 when

i. 8igned, orii. Ado"t a 8ymbol or similarly "rocess a record in whole or in "art,

with the "resent intent of the authenticating "erson to I the "ersonand acce"t the record

b. Fnly re0uirement for this to be an agreement is that there is a recordofthe agreement record must be in retrievable form.i. Fnly oral if the "ro"erty is in the control$"ossession of the creditor.

ii. Ftherwise, /o oral security agreementii. It ma'es sense to describe the obligation, but it is not re0uired. +urther, they are

often very general and not s"ecific when they are made.c. #ledge 2 there is a series of code articles dealing with this. &ou "ledge the security by

giving the "ro"erty over to the creditor. UCC = su"ercedes this code articles when thetransaction is after 9==G.

d. Proble( Set #. 959 2 .9, .B, .;e. Online Attac"(ent Proble(

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I. Assi'n(ent /! o, &recisely (ust t"e collateral be $escribe$ in t"e S1a

a. Inter"reting 8ecurity Agreementsi. Conventional obligation rules a""ly, so basic 6 inter"retation rules a""ly.

'. When the agreement is ambiguous, "arole evidence may be used.". Distinguish2 escri"tion of collateral from 8ecured ocument Agreement 2

+or 6 rules to a""ly 2 they only a""ly to ocumentii. !"#'$a%binds the creditor to B#!s.

iii. Inter"reting escri"tions of Collateral'. (he article = definitions of terms are im"ortant because they are used by

"arties when forming the agreements. Used to consider the "arty!s intent. Ifthe "arties don!t e*"licitly incor"orate article =, you might be able to arguethat this was not the intent. However, you are not li'ely to get "ast theterminology because it is widely used. (his is for nonconsumers

a. Consumers have more "rotections 2 you cannot use categories in thecase of consumers. ore "articularity in descri"tion is re0uired whenyou are dealing with consumers.

". !'#"2 efinitions (hings descri"tions will covera. $a%$"%2 Accounts 2 Includes an account receivable. (his is not a de"osit

account li'e you chec'ing account.b. $a%$33%2 -0ui"ment 2 :oods other than inventory, farm "roducts or

consumer goods -*< "ens, dra"ery, etcc. $a%$)*%2 Inventory 2 (his can include inventory ac0uired in the future.

b. 8ufficiency of escri"tion< Article = 8$a.i. !'#*2 8ufficiency of the escri"tion of collateral

'. (he collateral descri"tion can be 0uite vague

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". Can Include %ists, category of item, s"ecific listing, etc.3. However, it cannot say all the debtors propertyin 8$a.

a. Can use this in +inancing 8tatementii. In the 8$a it must reasonably describe what is reasonably meant to be identified

under the agreement. Std: Objectively Determinable

iii. Ee careful with cars1 "robably ade0uate if it reasonably id!s the car$object.c. escribing AfterAc0uired #ro"erty!"#)$a%2 fter c!uired "ollateral

i. &ou cannot say everything$all with anyone, you have to be more specific'. such as all future accounts, FD". All current and future indebtedness.

ii. #olicy:Avoid granting sec. int. in all of one!s "ro"erty w$o reali)ation of such agrant.

iii. fter c!uired "ollateral "lause ineffective $hen:

'. collateral is consumer goods,J a sec. int. does not attach, unless the debtorac0uires rights in them w$in 9G days after the secured "arty gives value, FD

". Commercial tort Claim

d. What Fbligations Are 8ecured?!"#)i. Could be something "ossibly ac0uired in the future

'. -ven if there is uncertainty whether they will ever obtain that thing.ii. +uture loans can be used as secured.

iii. =4G;c includes accounts, chattel "a"er, "ayment intangibles or "romissorynotes may be subject to 8$a even when not "art of obligation.

e. Proble( Set /2 =.9, =.4, =.B, =.;, =.K

II. Assi'n(ent )0! Procee$s3 Pro$ucts3 an$ Ot"er alue%Tracin' #once&ts

a. Fne way to assure that a security interest will follow the value is to include e*"ress

language in the descri"tion of the collateral in the security agreement that cover all formsthe value is li'ely to ta'e. Another way to do this is to em"loy what is called valuetracing conce"ts 2 terms of art that indicate that in certain 'inds of transformations of thecollateral the 8I should follow the value in "rescribed ways. (he valuetracing conce"tsmost commonly em"loyed are "roceeds, "roducts, rents, "rofits, and offs"ring

b. #roceeds!'#"$a%$+)%i. If the debtor sells the collateral, the 8I will attach to the "rice "aid, whether it is in

the form of an account, a "romissory note, or cash.ii. #roceeds are collateral within the definition of the latter term in!'#"$a%$'"%.

As a result, when "roceeds are dis"osed of or rights arise out of them, whatever isreceived is "roceedsJ. (hus the "roceeds of "roceeds are "roceeds.

iii. (he conce"ts of "roceedsJ and after ac0uired "ro"ertyJ fre0uently overla", butthe former is a valuetracing conce"t, while the latter is not.

i,. -ven if the security agreement ma'es no mention of "roceeds, a 8I automaticallycovers them. (he rule derives from!"#3$f%, 3'-$a%.

,. =9G4aK; 2 defines "roceeds in an e*"ansive way 2 including under C

rights which arise out of collateral7 this could be really broad if you inter"ret thewords that way. If collateral "roduced "rofits, royalties may fit within this. Dentsoff a lease could be included in this.

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,i. (ermination of 8ecurity Interest in Collateral After Auth. is"osition'. !3'-$a%2 (he Euyer ta'es free of the security interest and the secured

creditor can loo' only to the debtor for the "roceeds,ii. Continuation of 8ecurity Interest in Collateral After Unauthori)ed is"osition

'. -ven if the security agreement e*"ressly "rohibits sale of the collateral, the

debtor has the "ower under!)#' to transfer ownershi" to a buyer. (hetransfer will be a breach of the security agreement and "erha"s even a crime.". Dead!)#'with!3'-$a%$'%, which "rovides that a 8I continues in

collateral notwithstanding sale.Ja. Desult is that after a sale that the secured "arty has not authori)ed to be

free of the 8I, the buyer will own the collateral subject to the sec. int.b. #roceeds also subject to sec. int.

3. Creditors can im"liedly waive the restrictions on sale by ignoring them andallowing the debtor to sell his collateral.

,iii. %imitations on 8ecured Creditor!s Ability to (race Collateral'. !3'-$a%$"% A 8I continues to encumber "roceeds only so long as they

remain identifiable.J (o figure out what this means, begin by distinguishingthe conce"ts of commingling and identifiably. (o commingle collateral is to"ut it together in one mass with identical noncollateral so that no one can tellwhich is actually which.

". /evertheless, commingled collateral may be legally identifiable< that is, thelaw may "rovide a rule that arbitrarily designates a "articular "art of the massas the collateral. 8uch a tracing rule enables the court to tell which grain islegally which.

3. !3'-$b%"rovides that a secured "arty can "revail when trying to identifycommingled collateral in a ban' account by a method of tracing, includinga""lication of e0uitable "rinci"lesJ that is "ermitted under nonUCC lawwith res"ect to the ty"e of collateral. Comment B to B95 refers to thee0uitable "rinci"le most commonly em"loyed< the lowest intermediatebalance rule. (hat rule "rovides that the amount of the secured creditor!scollateral remaining in a ban' account is e0ual to the lowest balance of allfunds in the account between the time the collateral was de"osited to theaccount and the time the rule is a""lied.

). What about money emerging from the ban' account? !33"$b%"rovidesthat a transferee of funds from a de"osit account ta'es the funds free of asecurity interest in the de"osit account unless the transferee acts in collusionwith the debtor in violating the rights of the secured "arty.J

-. (he secured "arty has the burden of establishing that something constitutesidentifiable "roceeds from the sale or dis"osition of the secured "arty!scollateral. (o do this, the secured "arty must trace the claimed "roceeds bac'to the original collateral1 in other words, the secured "arty must establish thatthe alleged "roceeds arose directly from the sale or other dis"osition of thecollateral and that these alleged "roceeds cannot have arisen from any othersource.J

+. (he 8ec. Creditor must be able to trace value withspecificity.

c. Fther @alue (racing Conce"ts

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i. #roducts'. (he "roduct of collateral is something the collateral "roduces. (he term is

most commonly used in the conte*t of agriculture. Is has been held that woolis the "roduct of shee", mil' the "roduct of cows, and ma"le syru" the"roduct of trees.

".

#roducts may include "roceeds, but that is unclearii. #rofit, rents, and offs"ring are other valuetracing words.

iii. !"#3$f%2 "roceeds are included im"liedly when descri"tion of collateral doesnot mention them.

d. /on@alue(racing Conce"tsi. (his includes After Ac0uired #ro"erty, De"lacements, Additions, and

8ubstitutions 2 in that they can "ic' u" "ro"erty ac0uired by the debtor with valuenot derived from the "reviously e*isting collateral.

e. Proble( Set )02 9G.9, 9G.4, 9G.;, 9G.5, 9G.K

PART T5O! T #RD-TOR%T-RD PART6 RLAT-ONS-P

Chapter + erfection

III. Assi'n(ent )7! T"e Personal Pro&erty Filin' Syste(

a. What is #riority?i. A creditor gets "riority over other creditors by "erfecting. (o do this he must file

a financing statement +8 in the UCC records mortgage records in order to "utothers on notice that he has an interest. (his is "erfecting.

ii. If one creditor has "riority, then he gets "aid first. He is a senior creditorJ andthe other creditors without "riority are junior creditors.J

b. How do Creditors :et #riority?i. Consensual creditors get "riority by "erfecting their 8I!s.

'. #erfection re0uires the following2 45.9, 45.4a, c, d1e. NOT!We are concerned with maintaining "erfection in the collateral and not with the

sec. interest. -ven without "erfection, the security interest continues, but it will lose"riority without "ro"er "erfection.

Chapter Competitions


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'. ate of levy 2 day sheriff ta'es "ossession of "ro"erty.". ate of elivery of the writ3. ate of service of a writ of garnishment). ate of recordation of a judgment 2 date judgment filed.

c. #riority Eetween %ien Creditors and 8ecured Creditors!3'( 2 3""

i. !3'(2 :enerally, the lien creditor wins when his rights arise "rior to thesecured creditor is "erfected. However, if the secured creditor "erfects "rior tolien creditor, then the sec. creditor wins.

ii. #roblem arises when the lien creditor ste"s in and attaches the collateral while thesecured creditor was in the "rocess of "erfection i.e. still waiting for attachmentafter having "refiled for the interest with the security agreement and financingstatement. Here, the secured creditor would win if he has both the financingstatement and has gotten a sec. agreement with the debtor.

d. #urchase oney #riorityi. !3'($e%: If the sec. int. that is un"erfected is a #8I even if the lien creditor!s

int. was "erfected "rior to the 8ec. Creditor!s interest, if sec. creditor "erfects his

int. in "urchase money w$in 4G days of the debtor receiving the value, then thesec. creditor wins. must be between attachment and filing 2 usually at differenttimes

e. Proble( Set 22 4.91 4.4 a, b1 4.K1 4.N

f. :now4 $hat is a lien creditor8 $hen do the rights of the lien creditor arise8 and $hendoes a security interest arise

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'. #8I "erfected in goods other than inventory within 4G days of delivery ofthe collateral to the debtor beats everyone, every secured creditor at least.!3")$a%

ii. Inventory!3")$b%'. Difficult /2ception: When the collateral is inventory, the rule is< a #8I in

inventory beats a battling sec. interest in that inventory ifa. #erfection at or before delivery of collateral A/b. Eefore that inventory is delivered to the debtor, they must send the

com"eting creditor an authenticated notification 5notice6 that you intendto get a #8I in the inventory which they also have an interest in.i. )he #(S& in inventory beats the prior interest in inventory8Eut

U8( meet the re0uirements2 on the test and the bar.

e. #urchaseoney #riority in #roceedsi. :enerally s"ea'ing, "urchasemoney "riority under!3")$a% e*tends to the

collateral or its "roceeds.ii. Demember "riority in the original collateral is the same that you would have in

the "roceeds of that original collateral.!3'-$d% says that there are a number ofways that you can follow this.

iii. /2ception: #urchasemoney status flows only into chattel "a"er, instruments andcash "roceeds. !3")$b%.

'. (he limitation "revents "urchasemoney status from flowing into other 'indsof "roceeds, most notably accounts

". -ven the e*ce"tion is limited by!3"(& !33#

f. #riority in Commingled Collateral 2%ot covered by "lass

6. Proble( Set


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a. &ou have to be buying from someone in the business of selling that thing.Can only be a buyer in the ordinary course of inventory, you cannot be abuyer of e0ui"ment. A/ must be in ordinary course of inventoryseller!s business.

3. Euyer in ordinary course must meet the following criterion to ta'e free of any

"reviously "erfected sec. int. to another dealer,when > had an sec. int. attached 2 b$c not in the ordinary course of businessto sell between dealers

-. Cannot ta'e free of a int. in farm "roducts7 cannot buy a farm "roduct freeand clear7 will not loo' to why this is b$c of se"arate law7 just 'now it.+. (he inventory that the buyer is buying cannot be in the "ossession of the sec.

creditor.iii. Consumer to Consumer 8ale -*ce"tion!3"#$b%2 A6A :arage 8ale -*ce"tion

'. (he goods must be consumer goods for "ersonal use in the hands of theseller and the buyer to fit within this e*ce"tion.

". If the buyer does not have 'nowledge of the sec. int. and the sec. int. isun"erfected, the buyer ta'es free and clear.

a. In %A 2 'nowledge does not matter, only the failure to file matters.

c. Proble( Set

a. estined for harvestb. #romised$Conveyed in advance to the ultimate owner.c. Fnly if the landowner has conveyed that timber to a nonlandowner in a

recorded timber agreement.

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". ineral Dights 2 Category called as e*tracted collateral 2 this is oil, gas andmineral rights which are included in a sec. agreement and the interest doesnot attach until the minerals are e*tracted.

3. Cro"s 2 istinction in cro"s that are owned by the landowner and not ownedby him. If a sec. int. is given in these, then they are moveable by

antici"ation. (he only law that a""lies is article =. 8o, you cannot get amortgage on cro"s, because it is not an immovable "ro"erty right. !3))$i%ma'es this clear.

iii. Issue arises between the mortgage holders and the "erson with a sec. int. in acom"onent "art to the building fi*tures.

b. +i*turesi. :enerally B;

'. +irst, you have to determine what will be included within this? Willcom"onent "arts be included in this? On 1inal8 5o6note that this is an issue

". :oods are fi*tures when the have become so related to "articular real "ro".that an interest in them arises under real "ro"erty law.!'#"$a%$)'%

3. istinction between this and lien is that he lien encumbers the entire"ro"erty1 whereas, a sec. int. in a fi*ture only encumbers that fi*ture.

ii. How oes a 8ecured Creditor #erfect in +i*tures B5GB55'. Outside 7:!33)$e%

a. Ey ortgage on the "ro"erty,b. Ey Article = +i*ture +iling, FDc. +iling an ordinary financing statement in the UCC "ersonal "ro"erty

filing system, a sec. creditor can "erfect a security int. in goods that arefi*tures.!-#'2 does not re0uire filing in real estate records to "erfectin fi*tures.

d. Distinguish the follo$ing:

i. ifference from a /ormal financing statement is that it describes theimmovable "ro"erty of which the fi*ture is attached.

ii. Fther big difference is that fi*ture filings are made in the mortgagefilings. (hus, it must be filed in the mortgage records in the countywhere the immovable "ro"erty is located as o""osed to the statelevel.

". &n 7 5O%7=62 B s"ecific rules$e*ce"tionsont worry about this too much& @ust understand three step process of $'% >efaut& $"%Repossession $3% forecosure

;I;. Assi'n(ent 4! Ju$icial Sale an$ De*iciency2 Covered Above

a. 8trict +oreclosure

b. +oreclosure 8ale #rocedure

c. #roblems with +oreclosure 8ale #rocedure

d. Credit Eidding At Oudicial 8ales

e. Oudicial 8ale #rocedure< A +unctional Analysis

f. Proble( Set 42 ;.9;;. Assi'n(ent >! Article / Sale an$ De*iciency2 Covered Above

a. 8trict +oreclosure Under Article =

b. 8ale #rocedure Under Article =

c. #roblems with Article = 8ale #rocedurei. +ailure to 8ell the Collateral

ii. (he De0uirement of /otice of 8aleiii. (he De0uirement of a Deasonably Commercial 8ale

d. Article = 8ale #rocedure< A functional Analysise. Proble( Set >2 5.4, 5.B, 5.K A7> O< 0R?ICLA

LA #--L #OD =t'.B Priv.B P5AB SuretyC-. #onventional =ort'a'es

a. "reation

i. Introduction

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'. 0rtice 3"(* 3"*3a. ortgage is a non"ossessory security right against an immovable.b. It confers u"on the creditor the right to have the "ro"erty sei)ed and soldc. It is an indivisible real right which burdens the entire "ro"erty and which

follows the "ro"erty

d. It!s established only as authori)ed by legislatione. It!s accessory to the obligation that it secures.i. (hus, mortgage is only enforced to the e*tent the mortgagee may

enforce any obligation it secures.". )ypes:0rtice 3"*) *-

a. Conventional 6,b. %egal F"erations of law, FDc. Oudicial est. by law to secure judgment1d. -*tent of ortgage

i. @eneral (ortgage2 Eurdens all "resent and future "ro"erty of themortgagor

ii.Specific (ortgage2 Eurdens only certain s"ecified "ro"erty of themortgagor

'. istinction< lies in the necessity for "articularly identifying the"ro"erty subject to a s"ecial mortgage.

". :eneral ortgage is valid u"on "roof that the mortgagor ownedthe "ro"erty during the time a general mortgage is effective.8ubject to the "rinci"les of recordation.

3. Absent legislation, Conventional ortgage is s"ecial, whilelegal and judicial mortgages are general.

3. #ro"erty 8usce"tible of ortgage0rtice 3"*+a. Cor"oreal Immov. And their Cor"oreal #arts

b. Usufruct of Cor"oreal Immovablec. %easehold rightsd. 8ervitude of right of Usee. Any #ro"erty made susce"tible of ortgage by 8"ecial %awf. %ote:this can include "artial ownershi" in an undivided interest of

"ro"erty). 0rtice )+& "))# cmt. $b%& R.S. 4-3'

a. ortgage automatically e*tends to any of the com"onent "arts that are"art of the immovable, whether future or "resent.

ii. Conventional ortgages Com"are this w$ UCC ='. /o s"ecial words re0uired to form a mortgage.". ; De0uirements of 6 of ortgage 0rt. 3"*(& 3"**

a. -stablished only by -ritten B. 0rt. 3"*(b. 8tate "recisely the nature and situation of each of the immovables or

other "ro"erty over which it is granted1Descriptioni. Avoid use of munici"al address

ii. Use etes and Eounds "ro"erty descri"tion1 with reference tosubdivision or "lat ma".

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iii. How do you describe the "ro"erty if it is a related right li'e ausufruct or lease, etc?

'. Usufruct 2 state usufruct and the descri"tion of the "ro"erty.". %ease 2 you have the law of lease which "rovides for this 2 you

would only have to ma'e a reference to the recorded lease. (o

be safe, you could also ma'e a crossreference to the recordedmtg. filing.c. 8tate the amount or the ma*imum amount of the obligation1 A/d. Ee signed by the ortgagor.

3. (he re0uirements for a mortgage are similar to the UCC = in that they re0uirevalue be given, but the form re0uirements are biggest difference.

). ortgagee need not sign 6 of mortgage, whose consent is "resumed. 0rt.3"*

-. ust have "ower to alienate "ro"erty to est. mortgage 0rt. 3"#+. #resum"tion that things are subject to Conventional ortgage, unless "arties

"rovide otherwise. 0rt. 3"'

(. When ortgage of future "ro"erty is "ermissible< 0rt. 3""a. F/%& do this when you can s"ecifically describe the "ro"erty.b. A s"ecial mtg. is est. when the mortgagor ac0uires the "ro"erty

described.i. :eneral tg. of indefinite future "ro"erty is "rohibited. cmt.,

unless e*"ressly "rovided by law.*. A conventional mtg. ay be est. to secure "erformance of any lawful

obligation1 (he obligation may have a term or subj. to condition. 0rt. 3"3. tg. Which secures an obligation other than the one for the "ayment of

money secures the claim of mtg!ee for damages arising from breach ofobligation u" to amt. stated in mtg. 0rt. 3")

'#. Cannot assert lac' of ca"acity or discharge in Ean'ru"tcy as a defense to amortgage securing another!s obligation. 0rt. 3"-''.%ease re"resents two rights 9 right of landlord to rent, and 4 lessor!s

reversionary right to sell the "ro"erty B lessee!s right to remain on the"ro"erty1 However, a mtg. cannot encumber a lease or a rent for a securitydevice 2 must followLa. R.S. 4))#'.

iii. In Dem ortgages'. (he mtg!ee!s recourse for the satisfaction of an obligation secured by a mtg.

may be limited in whole or in "art to the "ro"erty over which the mtg. isestablished. 0rt. 3"(

i,. #ignorative Contracts and Eond for eed'. (his a transaction which is a mortgage, but is disguised to avoid the effects of

a mortgage.". Courts will treat this as a mortgage, but if you don!t follow the

law$re0uirements of mortgage, you will lose out since it never created thesec. int.

,. #lass )4 Proble(s

b. 'ecording 5#ublic 'ecords Doctrine6 9 #erfection under ;"" >.

i. +iling$Decordation

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'. Eiggest ifference in real estate filing and "ersonal "ro"erty filings is that thedebtor!s name is not as significant in the mortgage system.

". #riority de"ends on the ty"e of statute governing the filingI05O7> SAR/ICAS ,. 1A7OI? Stands for 9 (he C/is not really enforceable, because not a real obligation. (hehand notes are the only real obligation.

vii. Only if the debtor does not pay bac< the hand notes8 $ill he be in

default. )he "(% $as itself secured by a mtg. Under the "ledge ofthe C/ 2 the hand notes can go u" and down, because the "ledgelaw does not care about the amount of the note. (he mtg. com"lieswith the mtg. law, because now you have the "recise obligation to bedescribed, which is the C/. It described the C/ as 3N.5 mil.(his is a fictitious obligation one time which will never be re"aid.

(he only re"ayment will only be on the hand notes, because it!s theonly real obligation.viii. &ou can foreclose on the 3N.5 mil. tg. to retain amount of money

owed. #roblem is that the debtor did not borrow N.5 mil.ix. (he courts do not allow this, the total amount that you could ever

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b. (ultiple &ndebtedness (ortgages A6A B4= tg1 or tg. to secure future adv.i. Ean'!s "riority WD( a mtg. ran's when it!s filed, and it can describe any future

indebtedness in whatever amount, "rovided it states a ma*imum amount. 0rt.3"*

'. ReBuired an6ua6e4 0ny and a indebtedness up to a ma9imum amountD

ii. When recording, must entitle the document as multi"le indebtedness mtg.J ormulti"le obligations mtg.J on the first "age.iii. (his should not be "ara"hed in any way, because it messes things u". Also, don!t

have to do for collateral mtg.i,. isadvantage is only that "eo"le are not used to it. Oudges in "articular.

c. #lass )8 Proble(s

---. Le'al an$ Ju$icial =ort'a'esB Ranin' =ort'a'es

a. 7egal (ortgages

i. %egal mtg. secures an obligation s"ecified by the law that "rovides for the mtg.ii. %egal mtg. arises when the law "rovides for it. 0rt. 33#'

iii. %egal tg. on "ro"erty of tutor or curator ceases ; years after termination orjudicial removal from the tutorshi" or curatorshi".0rt. 333' E0'. (he same ; year "eriod a""lies to s"ecial mtgs. give by tutors, curators of

interdicts and absentees, and succession re"s.". Degardless, the effect of recordation ceases ten years after the date of the act

of mtg. 0rt. 333' E1i,. @-D& CF#%ICA(- A/ WI%% #DFEAE%& /F( CF- U# F/ +I/A%

b. Gudicial (ortgages

i. Oudicial mtg. secures a judgment for "ayment of 3.0rt. 3"ii. Can Ering foreclosure "roceedings on this.

iii. Oudicial tg. is created by filing judgment with recorder of mtgs.0rt. 33##i,. /ot affected by or sus"ended by a sus"ensive a""eal or stay of e*ecution. 0rt.

33#)

,. Oudgments of anther jd. 2 ust file an authenticated co"y of judgment of a courtof a jd. foreign to this state, only creates a mtg. by ?RUS? CO. ,. C051ALL2 Collateral tg. v.

aterial man!s lien 2 elivery to the ban' of the mortgage and note by thedebtors constituted a "ledge of the mtg. and note to the ban' to secure futureindebtedness, and as such, should be given ran'ing so as to affect B#!s from thesubse0uent recordation.

,. La. R.S. 4---#!---'$0%& $1%

e. Proble(s 2/.) an$


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". S#/"&7#rivilege 2 e*tend only to s"ecific "ro"erty.9. %ist of s"ecial "rivileges on "articular movables0rt. 3"'(

9i. %ist of s"ecial "rivileges on immovables0rt. 3")b. :eneral #rivileges

i. :eneral "rivileges on both immov. And movables e*tend to the following


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d. -*"enses of last sic'ness include fees of "hysicians, surgeons, nurses,and "rice of meds.i. Unless a 6 sets out the amount of these e*"enses, the judge will fi*

an amount.e. (hese rules e*tend to children of the debtor too.

f. /F dollar limit, but today insurance would ste" in. However, %A has ashortage of insureds, so this may still be a "roblem in %A.). Wages of 8ervants 2 for "ast year and current year

a. 0rts. 3"#-!3"#(

b. 8ervants must demand their wages w$in 9 year of leaving and wages arelimited to the "revious year and that which is due for current year.

c. Eetween elimination of serv. and %abor %aw, will n$a anymore.-. 8u""lies #rovision 2 made to debtor or family w$in last K mo!s. i.e. ba'er

a. 0rts. 3"#*!3"'3

b. Detailers ought to demand their money w$in 9 year from time of firstsu""ly1 but the "rivilege only e*tends to the last si* months and the rest

of su""lies, they are in same situation as creditors.c. Wholesalers have no "rivilege, and their only rights would come by mtg.or judgment duly recorded.

d. Inn'ee"ers, asters of boarding houses, teachers and "rece"tors"rivilege only e*tends to last year due and for what has e*"ired of thecurrent year.

+. #rivilege of Cler's 2 salaries of secretaries and similar "eo"le.a. -*tends to wages of last year ela"sed and that much as has ela"sed of the

current year.0rt. 3"')%ote:/ot common and construed narrowlyiii. %O)/:(H-8- F/J( CF- U# F+(-/ A( A%%LLL Oust used to show that

you must inter"ret the statute narrowly and that must read them carefullyL

c. iscellaneous 8"ecial #rivilegesi. (his is intended to give us a general idea of the ty"e of activity that the law wantsto encourage

ii. -arehouses2 still somewhat common for farmers to give their cro"s to a w$h for,in "articular, cotton.

'. He does not mean the selfstorage "eo"le, but same ideaont worry about 3#-( not on bar or testJ

;K


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-. When see'ing contribution from each other, they will not get attys fees. Eutthey may get costs from gen. rule that loser "ays costs.

,i. #lass 2> Proble(s

b. >efenses and ?ermination

i. 6inds of 8uretyshi" B (y"es of 8uretyshi"

Documents

La Sec Dev Kilborn