CHAPTER II - WHO MAY MORTGAGE AND WHAT THING MAY BE MORTGAGED
Art. 32. As the mortgage is intended to secure to the creditor, the payment of what is due to him, and as this payment can be obtained against the will of the debtor, only by the sale of the mortgaged property, it follows that a mortgage tends to an alienation and that therefore those alone who are capable of contracting and selling, may mortgage their property.
Art. 33. Neither the wife nor the husband with her consent, can alienate or mortgage the effects which she had received in dowry, unless under judicial authority in the cases of exceptions comtemplated by law.
With respect to the paraphernal effects, that is to say, those which are not included in the dowry, the wife may mortgage them with the authorisation of her husband or with that of the judge, if the husband refuses his.
Art. 34. The property of persons under age, interdicted or absent, as long as the possession thereof is made over only provisionally, cannot be mortgaged, except for the causes and in the forms directed by law or by virtue of a judgment.
Art. 35. Things only which are in commerce and which may be alienated are capable of being mortgaged.
Art. 36. The only property capable of being mortgaged are:
1st, The immoveables which are in commerce and their accessories which are deemed immoveable;
2d, Slaves in general;
3d, The usufruct of the said property and its accessories for the time it lasts.
Art. 37. Moveables shall no longer be subject to be mortgaged, either generally or specially.
But they may be subject to a privilege when they are yet in the debtor's possession, or within a certain time limited by law, after they have been put out of his possession.
Art. 38. The present disposition no way alters or affects the dispositions of the maritime or trade laws, respecting ships and sea vessels.
CHAPTER III - OF THE EFFECTS OF MORTGAGE
SECTION I - OF THE EFFECTS OF MORTGAGE WITH REGARD TO THE DEBTOR
Art. 39. The mortgage has the following effects:
1st, That the debtor cannot sell, engage or mortgage the same property to other persons, to the prejudice of the mortgage which is already acquired to another creditor:
2d, That if the mortgaged thing goes out of the debtor's hands, the creditor may claim it in whatever hands it may have passed, in so much that the third possessor of it is obliged either to pay the debt for which the thing is mortgaged, or to leave it to be sold, that the creditor may be paid out of the proceeds thereof.
3d, That the mortgagee has the benefit of being preferred to the mere chirographee or personal creditors and even to the other mortgagees who are posterior to him in the date of their mortgage or of its registry.
Art. 40. When the things mortgaged are in the debtor's possession, the creditor may, in case of failure of payment, proceed against him in the usual manner, by citing him to obtain judgment against him, if the original titles does not amount to confession of judgment, and causing afterwards the thing mortgaged to be seized and sold, and if the title amounts to a confession of judgment, he may on his oath that the debt is due, obtain from the judge an order for an immediate seizure of said thing; but if the thing mortgaged is out of the debtor's possession, but in the hands of a third possessor, he must then proceed against this third possessor by what is called the action of mortgage as is directed in the following section.
SECTION II - OF THE EFFECTS OF MORTGAGES AGAINST THE THIRD POSSESSORS AND OF THE ACTION OF MORTGAGE
Art. 41. The creditors who have either a privilege or a mortgage on immoveable property or on slaves, may pursue their claim on them in whatever hands they may happen to pass, to be paid out of their proceeds in the order of collocation, agreeably to their privileges or mortgages, provided that their titles have been registered in the cases and in the manner directed by law.
Art. 42. The third possessor of the immoveable property or slaves mortgaged, is bound either to discharge the principal together with all interest of the debt for which the said property was mortgaged, to whatever sum they may amount, or to relinquish the property, without any reservation.
Art. 43. In case the third possessor fails to comply with either of these obligations, every mortgagee creditor is entitled to cause the immoveable or the slaves mortgaged to be sold, after having previously obtained against the principal debtor a judgment for the debt for which the mortgage had been given.
The seizure of the property mortgaged shall be ordered by a judgment, on the producing of a copy in due form of the act of mortgage, as well as of the judgment obtained against the principal debtor, supported by the oath of the mortgagee creditor stating that the amount of said judgment is actually due to him and that the property mortgaged has been sold to a third person named in the petition; but the order of seizure obtained on said petition shall be served on the third possessor ten days before its execution, in order to know whether he will not rather chuse to discharge the debt, than to let the property mortgaged be seized and sold.
Art. 44. The third possessor who is not personally liable to the debt, may notwithstanding, within ten days from his being served with an order of seizure, oppose the sale of the property mortgaged which is in his possession, if he has good cause to shew in support of such opposition as that the mortgage has not been registered or other plea, or if there is other property mortgaged for the same debt within the possession of the principal debtor or debtors, in which last case said possessor may demand that his property be previously come upon (which is called discussion) in the form directed under the title of suretyship and during the process against said property, that is during the discussion the sale of the property mortgaged and in the possession of the third person, shall be suspended.
Art. 45. The plea of discussion cannot be opposed to the creditors who have either a privilege or a special mortgage on the property found within the possession of a third person.
Art. 46. The third possessor who wishes to avoid the action of mortgage, may before or after the order of seizure, declare that he relinquishes the property affected to the mortgage of which he has possession.
This relinquishment may be made by all the third possessors who are not personally bound for the debt, nor does it bar them before the sale in execution of the right of retaking the property mortgaged which was in their possession, on discharging the debt together with the interest and costs.
Art. 47. Said act of relinquishment shall be executed before a notary public in the presence of two witnesses and notified to the creditor or creditors who have brought the hypothecary action.
On the petition of the first of the interested persons who sues, a curator is appointed to the property relinquished, and under him the sale of the property is conducted in the manner prescribed by law.
Art. 48. The deterioration which proceed from the deed or neglect of the third possessor, to the prejudice of the creditors who have a privilege or a mortgage, give rise against the former to an action of indemnification, but he can claim for his expences and improvements only to the amount of the increased value which is the result of the improvement made.
Art. 49. The fruits or income of the property mortgaged, are due by the third possessor only from the time when the order of seizure was served on him and in case of the discontinuance of the suit during one year, only from the day when a new order of seizure shall be served on him.
Art. 50. The services and incorporeal rights that the third possessor hold on the property before its possession, are renewed after his relinquishment or after the sale in execution made upon him.
His own creditors, after all those who held their titles under the preceding proprietors, exercise their rights of mortgage in their order, in the property relinquished or sold at auction.
Art. 51. The third possessor who has either discharged the mortgaged debt or relinquished the property mortgaged or suffered them to be sold in execution, has, according to law, an action of warranty against the principal debtor.