author: McCALEB, Justice.

text:
    233 La. 180
    Mrs. Eunice Vaughn HODGESON et al. v. Mrs. Charlene Westmoreland McDANIEL et al.
    No. 42954.
    Supreme Court of Louisiana.
    June 10, 1957.

      Erlo J. Durbin, Denham Springs, for defendants-appellants.
    Weber & Weber, Emile M. Weber, Baton Rouge, for plaintiffs-appellees.
   McCALEB, Justice.

Plaintiffs, the six grandchildren of Mrs. Angie King, brought this suit to be recognized as her sole heirs and, as such, entitled to the ownership of a 50-acre tract of land in St. Helena Parish, of which she died possessed. Joined as defendants to the action are Mrs. Mona Mae Westmoreland Jenkins, who has been placed in possession of approximately 22 acres of the 50-acre tract as legatee under a will of the late James Rafe King, an uncle of plaintiffs; Mrs. Charlene Westmoreland McDaniel, who acquired 20 acres of the said 50-acre tract by purchase from James Rafe King in 1951, and Cecil King, who also acquired 8 acres of the 50-acre tract by purchase from James Rafe King in 1951.

In resisting the demand, Mrs. Charlene Westmoreland McDaniel and Cecil King, the transferees of James Rafe King, contend that they purchased on the faith of the public records without notice of plaintiffs’ claim and are, therefore, protected by the law of registry. And they joined with the other defendant, Mrs. Mona Mae West-moreland Jenkins, in pleading the five-year peremption applicable to tax deeds provided by Section 11 of Article 10 of the Constitution. All defendants also interposed pleas of estoppel founded on plaintiffs’ laches in failing to assert their claim within a reasonable time following the acquisition of a tax title by James Rafe King.

The district judge overruled all of the special pleas and, after a trial on the merits, maintained plaintiffs’ action, holding that they collectively own an undivided ■one-half interest in the SO acres involved. Judgment was entered accordingly and defendants have appealed.

The facts of the case are not disputed. Mrs. Angie King died intestate in í?21 leaving as her sole heirs her son, James Rafe King, and six grandchildren, the plaintiffs herein, who were the children of a predeceased son, Joseph Coot Vaughn. At the time of her death, she was the owner •of the 50-acre tract of land which is the ■subject matter of the suit. Mrs. King’s succession was never opened and, following her death, her son, James Rafe King, who had been raised on the SO-acre tract, was permitted to remain in sole possession without payment to his coheirs for his use of the property or to account for the revenues ■derived therefrom. James Rafe King paid the taxes on the land which was assessed on the parish assessment roll to the heirs •of Mrs. Angie King. However, due to his failure to pay the taxes for the year 1928, the property was advertised for sale and King purchased it at the tax sale, obtaining a tax deed from the Sheriff dated July 1, 1929, which was duly registered in the conveyance office of St. Helena Parish. Thereafter, King continued to live on the property and paid all taxes subsequently falling due.

On June 30, 1951, King transferred by .authentic act 20 acres of the land to Mrs. McDaniel for a cash consideration of $500. And, on July 7th of the same year, he sold ■8 other acres contained in the tract to Cecil King, also by authentic act, for $100 cash.

James Rafe King remained in possession of the balance of the land (approximately 22 acres) until.his death on July 20, 1953. Shortly thereafter, his olographic will was probated in the district court in St. Helena Parish and his universal legatee, Mrs. Jen'kins, was recognized as owner of all the property of which he died possessed.

It is seen from the above facts that the six plaintiffs were coheirs of an undivided one-half interest in the succession of their grandmother, Mrs. Angie King, through representation of their father, Joseph Coot Vaughn. Plaintiffs’ uncle, James Rafe King, inherited the other undivided one-half interest. Hence, when James Rafe King purchased the 50-acre tract belonging to Mrs. King’s succession at tax sale, he did not thereby acquire an indefeasible title as there still remained equities between plaintiffs and him which existed by reason of their coownership of the land.

It is the established jurisprudence that property sold to one coowner or coheir for delinquent taxes is regarded, so far as his coowners are concerned, as merely a payment of the taxes for all and any one or more of them may be reinvested with title by making claim on the tax purchasing coowner within a reasonable time and paying his proportionate share of the adjudication and subsequent installments. Harris v. Natalbany Lumber Co., 119 La. 978, 44 So. 806; Vestal v. Producer’s Oil Co., 135 La. 984, 66 So. 334; Cooper v. Edwards, 152 La. 23, 92 So. 721; Doiron v. Lock, Moore & Co., 165 La. 57, 115 So. 366; Skannal v. Hespeth, 196 La. 87, 198 So. 661 and Keller v. Haas, 209 La. 343, 24 So.2d 610. However, it is important to note, as a careful examination of the above cited cases will reveal, that a coowner who purchases at a tax sale acquires the legal title to the adjudicated property and that the right of his coowner to be reinvested with legal title is not a statutory or constitutional right but, rather, rests exclusively upon equitable considerations. See Cooper v. Edwards, supra; Harrell v. Harrell, 174 La. 957, 142 So. 138 and other cases above cited. Principles of equity are thus invoked to protect such coowners by not permitting the tax purchasing coowner to profit at their expense provided, of course, that they act with diligence.

The jurisprudence on the subject discloses that there are two situations in which a coowner may lose his equitable right to have his legal title restored by paying to the tax purchasing coowner his proportionate share of the adjudicated price together with all taxes which have subsequently become due. Those instances are (1), when the coowner has not come forward to regain his rights within a time considered reasonable under all circumstances presented in the particular case, he is held to be estopped by his laches from asserting his claim and (2), whenever the rights of third parties have intervened.

In the case at bar, both Mrs. McDaniel and Cecil King are third purchasers without notice and it would therefore appear that plaintiffs’ suit must fail as to them.

The trial judge concluded that, although Mrs. McDaniel and Cecil King were third parties, they could derive no superior right from their status for they were chargeable with notice of plaintiffs’ latent and unrecorded equities by reason of the identity of the family name of the tax debtors (heirs of Mrs. Angie King) in the tax deed and that of the tax purchaser (James Rafe King) and, further, that they had actual knowledge dehors the tax deed of plaintiffs’ equities as they admitted in their testimony that they knew that Mrs. Angie King left other heirs besides James Rafe King, to whom they were related by blood.

This was error. Ever since the landmark decision of McDuffie v. Walker, 125 La. 152, 51 So. 100, it has been the settled public policy, which is founded upon the articles of our Civil Code, that a party dealing with immovable property need look only to the public records and, if such records do not show the recordation of any adverse claim sufficient to put such third party on notice, he obtains a good title notwithstanding that he had personal knowledge of defects therein. Schneidau v. New Orleans Land Co., 132 La. 264, 61 So. 255; Humphreys v. Royal, 215 La. 567, 41 So.2d 220 and see also Thompson v. Thompson, 211 La. 468, 30 So.2d 321.

Thus, if it be conceded that Mrs. Mc-Dafiiel and Cecil King had actual knowledge that plaintiffs had certain equitable claims against the tax purchaser, James Rafe King, this circumstance would not defeat their right to rely on the public records. And it is clear that the public records did not furnish notice to these purchasers of the equitable rights of plaintiffs to have their title restored by James Rafe King. The succession of Mrs. Angie King was never opened and there was nothing of record respecting plaintiffs’ seizin as heirs of Mrs. King. While it is true that the tax deed shows that the tax debtors are the heirs of Mrs. Angie King, there is no document of record disclosing the identity of those heirs or that the tax purchaser, James Rafe King, was one of them. In the absence of the registry of such a document, the vendees of James Rafe King are not put on notice that he was a coheir or coowner of the property. The identity of family name, without more, is not sufficient in law to constitute notice.

Counsel for plaintiffs contend that the public records doctrine has no application to this case due to the fact that plaintiffs were forced heirs, being the coheirs of James Rafe King. The case of Long v. Chailan, 187 La. 507, 175 So. 42, is said to support this position.

The point is not well founded and is not sustained by the decision in Long v. Chailan. There, a certain tract of land standing in the name of Henry F. Long, Sr., which formerly belonged to the community existing between himself and Mrs. Lou Toler Cole Long, was seized by the sheriff under a writ of fieri facias to satisfy a judgment secured against Mr. Long on a debt contracted subsequent to the dissolution of the community by the death of his wife. The property, which was purchased at sheriff’s sale by one Signor, was afterwards acquired through mesne conveyances by the defendant and plaintiffs (the descendants of Mrs. Long) brought suit to set the sales aside on the ground that, since Mrs. Long’s children had inherited her one-half interest in the property at her death, their interest in said property could not be legally seized and sold for the personal debt of Mr. Long and the purchaser at sheriff’s sale obtained no title thereto. The defendant pleaded that she was a third purchaser who had acquired the property on the faith of the public record and that, inasmuch as the interest of the heirs of Mrs. Long had not been recorded, her ownership of the land could not be burdened by the claims of these heirs. But the court overruled defendant’s contention on the ground that the doctrine of McDuffie v. Walker, supra, cannot be construed so as to defeat the rights of heirs who inherit from their mother her half interest in the community property bought in the name of her husband.

The conditions obtaining in Long v. Chailan provide the only recognized exception to the rule announced in McDuffie v. Walker. Those conditions are not presented in the case at bar. Mrs. McDaniel and Cecil King are not attempting to avoid plaintiffs’ inheritance of the property from their grandmother on the theory that that inheritance does not appear on the public record. Their inheritance and seizin of the property by operation of law is not questioned even though it was not recorded. But it is shown that, since their inheritance, plaintiffs have been divested of their legal title to the property by the tax sale which appears on the public record, the purchaser at that tax sale having acquired full legal title subject to the right of redemption by the tax debtors. The right of redemption having long since expired, the legal title in the tax purchaser, James Rafe King, became absolute insofar as third persons were concerned and such persons, who dealt on the faith of the public records, obtained a valid legal title from him without being subjected to whatever equitable claims plaintiffs might have had against him.

Forasmuch as we deduce that Mrs. McDaniel and Cecil King have acquired a good title, it is unnecessary that we consider their plea of the five-year peremption of the tax deed provided by Section 11 of Article 10 of the Constitution. Nevertheless, it is apt to observe that, unless this peremption began to run from the time James Rafe King recorded his tax deed in 1929, it would not have accrued as to Mrs. McDaniel and Cecil King for they did not obtain possession under the deeds in their favor until 1951, or less than five years from the filing of this súit.

With respect to the plea of the five year peremption of Mrs. Jenkins,' legatee and successor of James Rafe King, we find that it was properly overruled by the trial judge. This is because the running of the peremption was suspended during all of the time that James Rafe King remained in possession of the land. It is well settled that the possession of a coowner of land is for the benefit of his coheirs or coowners and he cannot prescribe against them in the absence of notice to them that he is holding adversely to their interests. Alexander v. Light, 112 La. 925, 36 So. 806; Murphy v. Murphy, 136 La. 17, 66 So. 382; Liles v. Pitts, 145 La. 650, 82 So. 735; Hill v. Dees, 188 La. 708, 178 So. 250 and Arnold v. Sun Oil Co., 218 La. 50, 48 So.2d 369.

Notwithstanding that the tax purchase of James Rafe King invested him with legal title to the property, his possession for the account of his coheirs did not change and, under the above cited jurisprudence, he must be regarded as still holding for them in the absence of notice that his possession was adverse. This being so, the five-year peremption provided by Section 11 of Article 10 of the Constitution did not accrue during this possession as it is established that the running of the peremptive period is suspended so long as the tax debtor- remains in possession of the property adjudicated either in person or through tenants or coowners. Pill v. Morgan, 186 La. 329, 172 So. 409 and Thurmon v. Hogg, 225 La. 263, 72 So.2d 500.

The only other defense of Mrs. Jenkins is that plaintiffs are estopped by their laches in allowing 25 years to elapse before demanding restoration of their interest in the land.

We find no merit in this contention in view of the particular circumstances of the case. It appears from the uncontra-dicted testimony contained in the record that, after the death of Mrs. Angie King, plaintiffs permitted their uncle, James Rafe King, to remain in possession of the 50-acre tract as a homestead and he was also allowed to reap all fruits derived from the land including revenues from leases and sales of timber; he paid no rent to his other coheirs and was never asked for an accounting of the revenues he derived from the property, the testimony being that he was allowed full use of the land because he was old and had no other source of income.

Under the above stated facts, the equitable principle of estoppel cannot be employed as a bar to the restoration of plaintiffs’ title. In all of the matters in which this doctrine was successfully invoked against the claim of the coheirs, it appeared not only that a long time had elapsed between the tax sale and the filing of suit but also that the property had become greatly enhanced in value and that it was mainly due to the increased value that the coheirs became interested and were making their belated claim. Although 25 years has elapsed in this case, we feel it would be unjust to conclude that the time aloné operates as a bar against plaintiffs in view of the uncontradicted evidence showing that plaintiffs were without knowledge of the tax sale (believing that their uncle was paying the taxes of approximately $10 falling due each year) and in view of the considerations which prompted them to allow him to remain in sole possession of the property.

The judgment appealed from is therefore reversed insofar as it adversely affects Mrs. Charlene Westmoreland McDaniel and Cecil King and it is now ordered that plaintiffs’ suit be dismissed as to those defendants. In other respects, the judgment is recast so as to recognize plaintiffs as owners of an undivided one-half interest in indivi-sión with Mrs. Mona Mae Westmoreland Jenkins, in the following described property, to-wit:

Fifty (50) acres of land, more or less, in Section 46, T. 4 S., R. 5 E., bounded North by L. H. Westmoreland and J. A. King or assigns; East by heirs of J. H. Koffman or assigns; South by Mrs. T. B. King or assigns and West by Jessie Pevey Estate; less and except 20 acres of said property sold to Mrs. Charlene Westmoreland McDaniel per deed of record in C.O.B. 45, page 76, of the records of St. Helena Parish, dated June 20, 1951 and 8 acres, more or less, sold to Cecil King per deed of record in C.O.B. 45, page 89, dated July 7, 1951, of record in St. Helena Parish, Louisiana.

The costs incurred by Mrs. Charlene Westmoreland McDaniel and Cecil King are to be paid by plaintiffs.

      . It was stipulated at the trial that Cecil King has since sold 4 of the 8 acres he purchased to Mrs. Jenkins, the legatee of James Rafe King, but the deed, containing a description of the acreage, was not offered in evidence.

      . The possession of James Rafe King in his capacity as agent for his coheirs (the plaintiffs) operates in law as a constant protest to his tax title and the constitutional peremption did not commence running as long as the possession continued. Carey v. Cagney, 109 La. 77, 33 So. 89.


source: Caselaw Access Project

author: HAWTHORNE, Justice.

license: Public Domain

text:
    233 La. 197
    Gordon I. ATWATER v. Alberta Miller YOUNG et al.
    No. 43038.
    Supreme Court of Louisiana.
    June 10, 1957.
    Weiss & Weiss, New Orleans, for defendant-appellant.
    Wood Brown, New Orleans, for liquidator-appellee.
    Doyle, Smith & Doyle, Donald W. Doyle, New Orleans, for plaintiff-appellee.
   HAWTHORNE, Justice.

This case is a sequel to Atwater v. Young, 226 La. 840, 77 So.2d 414.

Gordon I. Atwater and 'Mrs. Alberta Miller Young formed a .partnership in 1948 to carry on the business of consulting petroleum geologists. Under the terms of the partnership agreement Atwater’s interest in the partnership was 90 per cent and Mrs. Young’s interest was ten per cent. During the summer of 1952 Atwater notified Mrs. Young of his intention to dissolve the partnership, and on August 20, 1952, he brought suit praying that a receiver be appointed, whereupon Mrs. Young answered and asked for the appointment of a liquidator. A judicial liquidation was agreed upon by the parties, and Mr. Wood Brown, a New Orleans attorney, was asked by them to serve as liquidator and appointed to this position by the court on August 22, 1952. Two months later Atwater and Mrs. Young entered into a settlement agreement dividing all assets and properties of the partnership. Pertinently, under the terms of this agreement the accounting firm of Barton, Pilié and Wermuth was to audit the partnership books and determine the net capital accounts of the partners as of September 9, 1952, the date on which the partnership ended; all fees contracted for up to and including September 9, 1952, were to be credited on the partnership books; expenses incident to completing partnership business were to be determined by arbitration if the parties could not agree upon the amount; and from the date of the execution of the settlement agreement Atwater was to have exclusive control over any remaining partnership business.

The liquidator filed his first provisional account, there was a trial of Mrs. Young’s opposition, judgment was rendered in the district court homologating the liquidator’s provisional account with certain modifications, and Mrs. Young appealed to this court. See Atwater v. Young, supra. While that appeal was pending in this court, the liquidator filed in the district court his second account, covering the period from March 26, 1953, through April 30, 1954. Again an opposition was filed by Mrs. Young, but before the second account was tried on the merits, this court handed down its decision affirming the lower court judgment homologating the liquidator’s provisional account. Atwater v. Young, supra. Shortly thereafter, on January 25, 1955, the liquidator filed his final account in the lower court covering the period March 26, 1953, to December 31, 1954, whereupon the parties agreed that all matters in controversy in the second account should be referred to the final account. Mrs. Young then filed an opposition to the final account, and the matter went to trial.

The basis of Mrs. Young’s opposition to the liquidator’s final account was that many of the items listed on the liquidator’s account were incorrect, and that furthermore her former partner Atwater had concealed and failed to account for various pártnership assets. After 10 long days of trial, the introduction of hundreds of documentary exhibits, and volumes of testimony, much of it given by Mrs. Young herself, the trial judge approved the liquidator’s final account with a few minor corrections. This appeal by Mrs. Young followed.

In this court Mrs. Young raises no issues of law, but in general follows the same line of attack she pursued in the lower court; i.e., she contends that certain items-listed on the liquidator’s account are incorrect, and that various fees received by Atwater after the dissolution of the partnership should have been included in the partnership assets.

In general, Mrs. Young argues that she is entitled to a remand of this case for a completely new trial of the correctness of the final account because (1) she was not kept sufficiently informed .of the auditor’s decisions and given an opportunity to acquaint him with pertinent facts; (2) contrary to the partnership settlement agreement, controversial partnership expenses were not determined by arbitration; and (3) in no instance whatsoever were fees contracted for before the dissolution date of the partnership, but paid after-wards, credited on the partnership books, contrary to the partnership agreement.

These three contentions are unimpressive, and in passing we note that two of them were raised by Mrs. Young on her former appeal — the one concerning the arbitrary nature of the auditor’s decisions, and the issue of arbitration. The record in this case shows that accountants employed by Mrs. Young were given every opportunity to examine the auditor’s books, and every suggestion from them or Mrs. Young was given careful attention. As for Mrs. Young’s argument that she was denied the right to have expenses determined by arbitration contrary to the settlement agreement, she waived any right she had in the matter by failing to ask for arbitration and going to trial on the merits. Finally, the sweeping contention that no fees contracted, for before the dissolution of the partnership were credited on the partnership books is answered by the record, which shows that the liquidator, Mr. Brown, asked the auditors to go over all of Atwater’s billings immediately following the dissolution of the partnership, that Atwater submitted his billings to the auditors for some eight or 10 months after this date, and that Mr. Brown received from Atwater a total of $32,381.26 during the liquidation.

In addition to the above general criticisms, Mrs. Young raises a number of specific objections to this final account, as will be shown below:

McCampbell: Mrs. Young objects to this item’s being charged against her personal account and not being treated as a liquidation expense. Dr. McCampbell of Tulane University was paid by the liquidator to inventory and index approximately 4,000 maps belonging to the partnership. After he had completed his work Mrs. Young told the liquidator that about 100 maps were missing, and Mr. Brown had Dr. McCamp-bell go over the maps with Mrs. Young to satisfy her that they were all there. For this additional work Dr. McCampbell charged $100. The liquidator stated at the trial that in his opinion this $100 charge should properly be made against the partner who caused the expense, the trial judge upheld the liquidator, and we have found no reason to disturb this finding.

Monroe Calculating Machine: Mrs. Young contended at the trial that she was told by Atwater to rent a Monroe Calculator for her own use, at partnership expense, during the liquidation proceedings. Mr. Brown testified that he was frankly uncertain who should pay the $79.32 rent for the machine, and had therefore “arrived at what may be said to be a Solomon’s decision * * * I split it between the two of them”. This explanation satisfied the trial judge, and appears fair to us.

Gueymard v. Gravis Mitchell: Before its dissolution the partnership contracted to do work in this case. After the dissolution Atwater received a fee of $3,000 for the work and turned over to the liquidator' $1,541, retaining the rest of the $3,000 to cover his expenses. Mrs. Young makes several trivial objections about the amount withheld for expenses which we need not discuss in detail. They obviously failed to impress the trial judge as he allowed this item to stand, and his view of the matter will be accepted by us.

Barton, Pillé, Jones & Wermuth: This firm of certified public accountants were auditors for the partnership during its existence, and were selected by the partners as auditors for the liquidator. The record shows that this firm rendered bills totaling $4,300 to cover their services in the liquidation of the partnership, rendition of numerous accounting reports, and court testimony. In brief here Mrs. Young attacks this fee as excessive and argues that the accountants’ fee should be closer to $2,000, which figure was given to the parties in these proceedings by Mr. Brown as an estimate of this item of expense during the early stages of the liquidation. We note that the $4,300 auditors’ fee is acceptable to Mr. Brown and to Gordon Atwater, and the testimony of Abner Hughes, a partner in the accounting firm, shows that the fee is reasonably proportionate to the amount of work which was done by this firm in these liquidation proceedings. We share the trial judge’s approval of this item.

W. T. Smith Lumber Co.: Mrs. Young concedes that this item was on the provisional account which was approved by this court in Atwater v. Young, supra. As it is now res judicata, it cannot be questioned in these proceedings.

Air Line Ticket: Mrs. Young maintains that this item of $120.88 should have been charged against the partnership account and not against her personal one. Shortly before the dissolution of the partnership Mrs. Young and another person bought two airplane tickets to Houston, Texas, and charged the $120.88 plane fare to the partnership. Mr. Brown testified at the trial that he had asked Mrs. Young to furnish' him with some evidence- that this Texas trip was made on partnership business, but no verification was ever received by him, nor was any expense account ever furnished to him as liquidator. Moreover, Mr. Brown’s inquiries at the airline office disclosed that the tickets were in the name of Mr. and Mrs. Young, although at the trial Mrs. Young insisted that her husband had not accompanied her on the trip. The trial judge did not accept Mrs. Young’s explanation on this point, and neither do we.

Joe W. Brozvn: This big oil operator was a client of Gordon Atwater’s before the partnership of Atwater & Young was formed, a client of that partnership .during its four-year existence, and was still a client of Atwater’s when this proceeding was tried. It is Mrs. Young’s position that the fees collected by Atwater from Joe Brown after the dissolution of the partnership were the result of extensive research done for Brown during the existence of the partnership, and that therefore under the terms of the settlement agreement these fees are a partnership asset.

The record shows that on September 9, 1952, the date the partnership was dissolved, there was no contract between Joe Brown and the partnership; that any work Atwater ever did for the oil operator was paid for within a month after it was done; and that the relationship between Brown and Atwater can be terminated at will by either party. It was the opinion of the auditor, the liquidator, and the trial judge that the fees paid by Joe Brown to Atwater after the dissolution of the partnership did not constitute partnership assets, and in her brief filed here Mrs. Young gives no valid reason why this finding should be disturbed.

Miami Corporation: This is another attempt by Mrs. Young to swell the partnership assets, and incidentally her fractional share in these assets.

Around April of 1952 Atwater & Young began to receive a monthly retainer of $500 from Miami Corporation, terminable at will on both sides, in return for which Atwater was to render services to Miami in connection with the corporation’s lands in Louisiana. Some time during the following months Miami sold some of its holdings to Iberia Corporation; Atwater was consulted by Miami at this time and did work in connection with the sale. Atwater said at the trial that for his work in connection with this transaction he received no commission, no overriding royalty — nothing except his regular retainer, although he was paid for a special study he did for Miami at this time. Atwater’s testimony is borne out by letters written to Wood Brown and Mrs. Young herself by S. G. Glaysher, secretary-treasurer of Miami Corporation, and it was accepted as true by the trial judge, who refused to adopt Mrs. Young’s claim that Atwater’s continuing monthly retainer of $500 should be regarded as a commission on the sale. There is absolutely no evidence to indicate that there is any merit in Mrs. Young’s view of the matter.

Benjamin Minerals: On December 30, 1952, E. V. Benjamin sold an oil royalty to J. S. Abercrombie Foundation for $500,000, and in connection with this sale Atwater made a commission. Mrs. Young has claimed throughout these proceedings that this commission is a partnership asset, even though the sale took place after September 9, 1952, the date the partnership was dissolved, because the partnership had worked up geological data on the Benjamin royalties, and the sale had been discussed before the partnership was dissolved. At the trial Atwater denied this and said that negotiations for the sale by Benjamin to Abercrombie Foundation began only in November, 1952, and the testimony of E. V. Benjamin on this point is to the same effect. This item is clearly not a partnership asset.

Royalties Associates: Shortly before the partnership of Atwater & Young began, Gordon Atwater and a number of businessmen formed Royalties Associates, for the purpose of buying up mineral interests in various parts of this country. Up until February, 1951, Atwater received a salary from Royalties Associates totaling over $11,000 for geological work done by him for the corporation, and this money was turned over to the partnership. However, Mrs. Young contends in these proceedings that Atwater’s interest in the sums distributed as a dividend by Royalties Associates, Inc., was in effect a payment for geological services rendered by him to the company, and that therefore these sums should also have been turned over to the partnership. In contradiction of Mrs. Young’s claims, the minutes of the meetings of the board of directors of Royalties Associates, Inc., show that Atwater was paid a salary by Royalties in return for any geological services rendered by him for the corporation, that his salary from Royalties ceased when there was no more need for his services as a geologist. Thereafter Royalties continued to purchase royalty, but E. V. Benjamin, a member of Royalties Associates, testified at the trial that Atwater did not render professional services to the corporation in advance of every purchase of oil interests, that the acquisition of royalty has to be done very promptly, that there is not usually enough time to make any real search into the problem, that they had often bought royalty over the lunch table without ever looking at a map, and that one of their best producing properties was in Texas and had been bought over the telephone from an oil broker without any further information on the subject.

The liquidator did not include Atwater’s interest in sums declared as dividends by Royalties in the partnership assets, the trial judge found no reason to disagree with the liquidator on this classification, and the trial judge’s finding on this item impresses us as correct.

Fausse Point: During the existence of the partnership here being liquidated, At-water & Young bought certain mineral leases in what is known as the Fausse Point Area, Iberia Parish, Louisiana — a counterletter showing that Atwater held these interests for Benjamin Minerals, Inc. E. V. Benjamin testified in the lower court that actually Atwater manages this operation for the account of Benjamin Minerals, Inc., and that when Atwater transfers the leases to Benjamin Minerals, or to a third' party, Atwater will receive a 10 per cent interest in the leases free of cost as his fee. The settlement agreement made between Atwater and Mrs. Young recognizes that Mrs. Young is entitled to a 10 per cent interest in the partnership’s 10 per cent interest in the Fausse Point leases.

On this issue the trial judge said:

“The agreement between the client of the partnership, Benjamin Minerals, Inc., and the partnership is to the effect that these interests will be transferred only upon completion of the leasing project undertaken by Benjamin Minerals, Inc. Mrs. Young is, therefore, entitled only to a similar letter of intent as that provided by Benjamin Minerals, Inc. in favor of the partnership. The court believes that she is further entitled to a reference in said letter to the leases presently taken in the Fausse Point Area of Benjamin Minerals, Inc. and a list of the leases are on file in the record, having been obtained by the liquidator from Benjamin Minerals, Inc. The judgment rendered herein provides that such a letter incorporating such list by reference shall be delivered by Mr. Atwater to Mrs. Young.”

In brief filed here counsel for Atwater says that the above instrument was delivered to Mrs. Young a year ago.

Mrs. Young argues in this court, however, that this letter is not enough, that she should not be forced to wait for her money, that there has been income from wells in Fausse Point field on property covered by these leases for two and a half years, and that Atwater has been paying all income to Benjamin Minerals and not retaining the partnership’s 10 per cent.

The record in this case makes it clear that the partnership’s 10 per cent interest in these mineral leases will only accrue when Atwater transfers them to Benjamin Minerals or to a third party, and therefore the lower court has already given Mrs. Young all the relief to which she is entitled in the Fausse Point matter.

Spartan Drilling Company: Mrs. Young claimed at the trial that in 1951 the partnership of Atwater & Young made an agreement with Spartan Drilling Company whereby the partnership would receive a 5 per cent commission on a proposed sale of the Spartan Drilling Company’s properties in Golden Meadow Field, LaFourche Parish, but that the sale was held up because of a boundary suit and also because B. & D. Cheramie sued Spartan, and all negotiations for sale had to be delayed pending determination of these suits. In short, Mrs. Young thinks that this is a prospective fee, contracted for during the partnership, and that her 10 per cent interest in it should be assured to her by the court.

We note that in the lower court counsel for Atwater denied the existence of this alleged contract with Spartan, but stated that if such a contract exists, “Mr. Atwater hereby relinquishes to that witness any interest he has in any such contract with the Spartan Drilling Company for the transfer of this property”. In his decree the trial judge did not refer to the Spartan item.

Mrs. Young is now asking this court to order Atwater to give her some instrument of transfer covering her rights under this alleged contract. This we cannot do in view of the fact that Atwater denies the very existence of the contract, that there is no evidence to show it exists except Mrs. Young’s testimony, that concededly no sale has taken place, and that there is not even a description of the property which is allegedly to be sold.

Hampshire Field: During the trial of this opposition Mrs. Young testified that in April of 1952, before the dissolution of the partnership, Atwater was retained to appraise properties in Hampshire Field, Jefferson County, Texas, for the estate of Harry Lucas, and had at that time estimated that his fee would be $1,500~$2,000 ; that Atwater collected a fee of $2,578.38 for doing this work early in 1953; and that therefore this fee should be entered as a partnership asset. In support of his claim that the $2,578.38 fee he received in 1953 was not a partnership asset, Atwater testified that he performed no appraisal work for the Lucas estate, as those in charge of that estate had decided not to use his services; that the work done in connection with the Hampshire Field, for which he received the $2,578.38 in 1953, was done for other operators; and that the work had not been contracted for until after the termination of the partnership in September, 1952. The trial judge was satisfied that this fee was not a partnership asset, Mrs. Young has pointed to no evidence at variance with tlie lower court finding except her own testimony, and the lower court judgment in this respect will not be disturbed.

Under the heading Miscellaneous Mrs. Young contends that the liquidator should investigate the rights of Atwater in certain assignments made by Helis; the true interest of the partners in the royalty interest called A. J. Caillouette; and every instance in which Mrs. Young’s testimony was at variance with Atwater's.

Mr. Brown, the liquidator, stated at the trial of this case that he had investigated every controversial matter in the liquidation on which he had been given definite, substantial evidence by either of these litigants — everything “except just bold accusations without support” — but that in his opinion many of the so-called issues raised by the opposition were in the nature of a fishing expedition. If the liquidator did not investigate any matters in this liquidation which were questioned by Mrs. Young, it is probably because, in his opinion, they fell into the latter category.

The district court judgment is affirmed. Mrs. Young is to pay all costs of this appeal.


author: PONDER, Justice.

text:
    233 La. 214
    The STATE of Louisiana ex rel. Harold R. WOOD, Jr., et al. v. Albin P. LASSITER, District Attorney.
    No. 43433.
    Supreme Court of Louisiana.
    June 28, 1957.
    Harvey G. Fields, Farmerville, for plaintiffs-appellants.
    Albín P. Lassiter, District Attorney, Monroe, for defendant-appellee.
   PONDER, Justice.

Plaintiffs seek mandamus against the District Attorney of the Fourth Judicial District directing him to file a usurpation suit against the Mayor of the City of Monroe, Louisiana. The district court sustained an exception of no cause or right of action filed by the District Attorney and the plaintiffs have appealed to this Court.

The basis for jurisdiction in this Court, as set out by plaintiffs, is the emoluments of the office of Mayor which is allegedly $5,000.

Since this is a suit to compel the District Attorney to file a usurpation suit against the Mayor of the City of Monroe, there is no amount in dispute. In the case of Grace v. Boggs, 220 La. 22, 55 So.2d 768, 769, which involved a dispute as to defendant’s candidacy for the Democratic nomination for Governor, this Court said:

“At the outset, we consider, ex pro-prio motu, whether this court has appellate jurisdiction of the case. The jurisdiction of the Court, original, appellate and supervisory, is established by Section 10 of Article 7 of the Constitution. The grant of appellate jurisdiction set forth therein is of a limited nature, being confined to seven different classes of cases. See First Nat. Life Ins. Co. v. City of New Orleans, 218 La. 9, 48 So.2d 145. The instant appeal, which involves solely the assertion and enforcement of a political right granted by statute, is not cognizable here under our appellate jurisdiction as defined by Section 10 of Article 7 — for, obviously, there is no amount (monetary or something capable of monetary appraisal) in controversy nor does it fall within any of the other types of cases of which we have appellate jurisdiction, even though there be no amount in dispute.” See also Allen v. Republican State Central Committee of La., 220 La. 722, 57 So.2d 413.

For the reasons assigned, it is ordered that this appeal be transferred to the Court of Appeal for the Second Circuit provided that the record is filed in that court within thirty days from the date of this decree; otherwise, the appeal shall be dismissed. All costs to await the final disposition of the case.


text:
    233 La. 217
    ST. CHARLES DAIRY, Inc. v. Jerome A. HAYES, Jr.
    No. 42859.
    Supreme Court of Louisiana.
    June 10, 1957.
    E. B. Charbonnet, Jr., New Orleans, for defendant-appellant.
    Graham & Graham, George S. Graham, Louis B. Graham, New Orleans, for plaintiff-appellee.
   HAWTHORNE, Justice.

St. Charles Dairy, Inc., is the holder of a promissory note executed by Jerome A. Hayes, Jr., dated February 28, 1955, in the principal sum of $2,910 with 6 per cent per annum interest from date until paid. The note was made payable at 2735 Tulane Avenue in New Orleans and was to be paid in installments. The first installment, $750, was to fall due on June 1, 1955, and the balance was to be paid in quarterly installments of $250 each commencing on September 1, 1955. This note contains the following provisions:

“Failure to pay any installment on this note as herein provided, shall render, at the option of the holder hereof, all remaining installments at once due and exigible without putting in default.

“In the event it becomes necessary to place this note, or any renewal thereof, in the hands of an attorney for collection or suit, I agree to pay twenty-five (25%) per cent, on the amount of the note as attorney’s fees which fees are agreed to be part of the principal obligation of this note.”

The holder of the note, alleging that the maker had failed to pay the $750 installment that fell due on June 1, 1955, instituted this suit and obtained a judgment for the full amount of the note with interest at 6 per cent per annum from its date until paid, 25 per cent attorney’s fees, and all costs, subject to certain credits for sums deposited by the defendant in the registry of the court. From this judgment defendant has appealed.

Defendant does not deny the execution of the note or the existence of the indebtedness. In the lower court he opposed the right of the plaintiff to accelerate the payments and declare the note due in its entirety, and also opposed the assessment of 25 per cent attorney’s fees. On this appeal the principal question seems to be whether under the facts of this case plaintiff is entitled to the 25 per cent attorney’s fees, which as of this date amount to approximately $800. This is evidently because the due dates of all installments on the note except one have already passed or will have passed before this judgment becomes final.

The note in question was evidently prepared by the attorney for plaintiff, at whose .office it was made payable. On May 10, 1955, this attorney wrote the defendant that the first payment of $750 would fall due on June 1, 1955, and requested him to call by the office and make this payment. According to the testimony of defendant, in the early hours of May 30 he delivered an envelope containing three checks, drawn to the order of plaintiff’s attorneys and aggregating the full amount of the principal and interest on the June 1 installment, at -the office of plaintiff’s attorney by dropping it through a mail chute on the office door, and there were sufficient funds in the accounts on which these checks were drawn to pay them in full. Another witness testified that he was with the defendant on this occasion and saw him deposit the envelope in the mail chute. Defendant also offered and filed in evidence a page of check stubs from his checkbook on the Citizens National Bank of Hammond, Louisiana, and a duplicate voucher drawn on the Bank of Franklin issued by Meadville Milk Company. According to these exhibits all these checks were made payable to plaintiff’s attorneys and were issued to pay the installment due on June 1, 1955.

What happened to these checks we are unable to say. They were never cashed, and plaintiff’s attorney says he never received them. This attorney on the next day, May 31, mailed to defendant a special delivery letter stating that he would expect him in the office on June 1 to make the payment then due on the note. Defendant denies ever receiving this letter. About two weeks later, on June 14, 1955, plaintiff instituted this suit. Plaintiff’s attorney admitted that he did not communicate with defendant between June 1, the date the installment fell due, and June 14, the date the suit was filed. Under these circumstances defendant did not know until the institution of the suit that these checks had not been received.

When defendant’was served with a copy of the petition, his attorney offered to pay to plaintiff’s lawyer the full amount of the June 1 installment, but this payment was refused. Defendant stopped payment on the three checks and deposited in the registry of the court the full amount of this installment, and while the suit was pending in the lower court, he deposited in the registry of the court the full amounts of all installments on or before their due dates. When judgment was rendered against him, he appealed suspensively and executed a suspensive appeal bond in the sum of $6,000 to satisfy whatever judgment might be rendered against him.

Even if defendant deposited the checks in the mail slot of the attorney’s office, the fact remains that the June 1 installment on the note was not paid, as these checks were never received, accepted, or cashed by plaintiff’s attorney. Therefore under the plain provisions of the note defendant’s failure to pay this installment on or before its due date gave the holder of the note the option to declare all remaining installments at once due and exigible without putting the defendant in default. It is our view that the only way defendant could have prevented plaintiff from exercising its option under the acceleration clause would have been to show either payment or, at the least, a real tender of the amount of the installment on or before its due date and the refusal of the tender by plaintiff. Under the law the burden of proving these facts would be on the defendant. See Art. 2232, La.Civ.Code. It follows that since no payment or real tender was made, plaintiff had the option of declaring the full amount of the note due and exigible without putting defendant in default, and it was not bound to accept defendant’s offer through his attorney to pay the June 1 installment after its due date.

We shall next consider the question of attorney’s fees under the provision of the note that if it becomes necessary to place the note in the hands of an attorney for collection or suit, the maker agrees to pay 25 per cent of the amount of the note as attorney’s fees.

In the leading case of Succession of Foster, 51 La.Ann. 1670, 26 So. 568, 572, this court on rehearing pointed out that a provision similar to the one we have here under consideration was to be regarded in the nature of a stipulation for a penalty, and that “the burden would rest upon the party seeking to enforce it to establish clearly, and affirmatively, the existence of the conditions required for such enforcement”. In that case the clause in the act of mortgage contained a stipulation that “in case it becomes necessary to resort to legal proceedings for the recovery of the amount of said notes, or of any part thereof, he the said Thomas J. Foster [mortgagor], hereby binds and obligates himself to pay the fees of the attorney who may be employed for that purpose, which fees are hereby fixed at ten per cent, on the amount sued for ”. The court in that case in discussing this clause said that “ * * * the strong language used in the contract precludes the idea of a resort to legal proceedings, such as would entitle the holder of the notes to attorney’s fees, except in case of necessity; that the burden rests upon the plaintiff, seeking to recover, upon the ground that she has resorted to legal proceedings, to show that there was a necessity for so doing; that such necessity could be shown only by evidence that, at least, a reasonable effort had been made to obtain payment in some other way, or that any such effort would have been impracticable and useless * * * See also Holstead v. Lewis, La.App., 160 So. 834, and authorities there cited; “Attorneys’ Fees Based on Percentage”, 1951, 17 A.L.R.2d 288.

The provision in the note here involved contains the clause “In the event it becomes necessary”. Thus, for the holder of the note to recover the attorney’s fees here sought, it had to prove that it had become necessary for it to place the note in the hands of an attorney for collection or suit.

In the instant case, as we have said, failure to pay the June 1 installment gave the holder of the note the option to declare all remaining installments at once due without the necessity of putting the defendant in default. However, plaintiff has not shown in this case by affirmative evidence that the defendant ever knew before suit that it, the holder of the note, had exercised this option (as it had a perfect right to do), and has not shown that demand was ever made on the defendant after June 1 for the payment of the note in its entirety. Moreover, so far as the record discloses, defendant was never given the opportunity of paying the note in full before it was placed in the hands of an attorney for collection or suit, and hence he never had the chance to avoid the payment of 25 per cent attorney’s fees amounting, as we have said, to approximately $800.00. Furthermore, there is no evidence in the record that the holder of the note, before placing it in the hands of an attorney for collection or suit, made any effort whatever to obtain the payment of the note in full, and no evidence that such an effort, as said in the Foster case, would have been impracticable or useless. It is our view that it would be inequitable and unjust under these facts to require the defendant to pay the attorney’s fees here sought.

As already stated, defendant does not deny the existence of the obligation, and we think his acts clearly show that he is not trying to avoid the payment of the principal amount of the note and interest, for he deposited in the registry of the court the amounts of all installments a short time before their due dates and executed a sus-pensive appeal bond to satisfy any judgment that might be rendered against him.

For the reasons assigned the judgment appealed from is amended by striking from it the provision allowing to plaintiff 25 per cent attorney’s fees, and as thus amended the judgment is affirmed


author: HAMITER, Justice.

text:
    233 La. 226
    Jessle GAY v. UNITED BENEFIT LIFE INSURANCE COMPANY.
    No. 43170.
    Supreme Court of Louisiana.
    June 10, 1957.
    Julian B. Humphrey, Sidney F. Braud, New Orleans, for defendant-appellant.
    W. W. Thimmesch, Metairie, for plaintiff-appellee.
   HAMITER, Justice.

As beneficiary, Mrs. Jessie Gay seeks to recover herein the proceeds (some $8,000) of an insurance policy issued by the United Benefit Life Insurance Company upon the life of Wilma Earl Gay, her husband. The special defense urged is that untrue material statements made by the insured in the application for the insurance rendered the contract null and void.

The policy was issued on December 1, 1953 without a medical examination. In the application Gay, when answering certain propounded questions, denied that he had ever been afflicted with any heart or circulatory disease. He died July 31, 1954. An autopsy disclosed that he had experienced a very serious congenital heart defect which, it is- conceded, would have materially affected the risk.

The district court rendered judgment in favor of plaintiff. Also, it maintained the intervention of an assignee under the policy. The defendant is appealing.

Appellant, in assigning error to the judgment, submits the following propositions: “(1) The statute which is controlling (Louisiana Statutes Annotated R.S. 22:-619), is authority for the principle of law that a false statement which materially affects either the acceptance of the risk or the hazard assumed by the insurer will bar recovery under the insurance contract, ■even though the applicant did not know of its falsity; (2) Alternatively, under the same statute, the insured made these false statements with actual intent to de■ceive, concealing his knowledge of facts which these questions were meant to elicit.”

Early in our jurisprudence, in cases involving insurance contracts, this court recognized a distinction between statements made as warranties and those given as mere representations. The statements held to be warranties, and on which the validity of the policies depended, were required to be literally true and correct regardless of materiality or other considerations. However, in 1906, by Act 52, the Legislature declared that “ * * * all statements purporting to be made by the insured shall in the absence of fraud be deemed representations and not warranties. * * * ” This language was repeated in Act 227 of 1916 when the 1906 statute was amended and reenacted.

After the 1906 act, as well as subsequent to the 1916 statute, this court interpreted such language to mean that incorrect statements in an application would not vitiate the policy unless they were wilfully made with an intent to deceive and were material to the risk. Cole v. Mutual Life Insurance Company of New York, 129 La. 704, 56 So. 645; Goff v. Mutual Life Insurance Company of New York, 131 La. 98, 59 So. 28; Valesi v. Mutual Life Insurance Company of New York, 151 La. 405, 91 So. 818; Cunningham v. Penn Mutual Life Insurance Company of Philadelphia, Pa., 152 La. 1023, 95 So. 110; and Carroll v. Mutual Life Insurance Company of New York, 168 La. 953, 123 So. 638.

In 1948 the above quoted provision of the 1906 and 1916 statutes was substantially carried into the then adopted Louisiana Insurance Code (Act 195) as a part of Section 14.09, Paragraph 2 thereof (now LRS 22:619B), it reading: “In any application for life or health and accident insurance made in writing by the insured, all statements therein made by the insured shall, in the absence of fraud, be deemed representations and not warranties. * * * ” And to it there was added: “ * * * The falsity of any such statement shall not bar the right to recovery under the contract unless such false statement was made with actual intent to deceive or unless it materially affected either the acceptance of the risk or the hazard assumed by the insurer.” On this added declaration appellant relies in contending for his legal proposition that a material false statement will bar recovery under the insurance contract even though the applicant did not know of its incorrectness.

Undoubtedly the declaration relied on is inartistically drawn and, when read with the remaining part of the section, it tends to create ambiguity. Hence, it requires interpretation.

Now, in interpreting the provisions of codifications it must be borne in mind that primarily the general purpose of the lawmakers in enacting such legislation is to clarify and codify the laws as they then existed and as construed by the courts— not to change them. In this connection the following is stated in Crawford on Statutory Construction (1940), Section 324: "A code is simply a part of the statutory law and has no higher standing or sanctity than an ordinary statute. Like many other legislative enactments, a code or revision should be subjected to a liberal construction, in order to promote the objects for which it was enacted — to clarify existing statutes * * *.

“Accordingly, where there is ambiguity in the revised statutes, it should be construed as expressing the law as it was prior to the revision, unless the court finds a clear intention to alter the old law.
“Furthermore, the judicial construction of a statute later incorporated in a codification or revision may be referred to for assistance, since the court’s interpretation of the law under such circumstances, by adoption, becomes a part of the code or revision.
“Even a change in the language or phraseology of a statute included in a codification or revision will not, as a general rule, alter the law, unless the change be so material or radical as to indicate an intention on the part of the legislature to modify the law, or unless the intention to change clearly appears from the language of the revised statute, and especially when considered in connection with the subject matter and the legislative history.
d * * * * *
“In fact the court will presume that the legal effect of a consolidation and restatement is the same as that of the old statutes. Consequently, the revisors are presumed not to have changed the law, if the language which they have used fairly admits of a construction making it consistent with the old law. * * * ”

The declaration relied on herein by appellant does not clearly evidence an intention to change the law as it existed prior to the drafting of the Louisiana Insurance Code. This is particularly true when we consider that the signification of the original statutory provision had been determined by judicial interpretation many-years prior to the codification and the-Legislature never saw fit during -that lengthy period, by means of an ordinary-statute, to alter that determination. And' after a careful reading of the cases in, which the preexisting law was interpreted and applied we are convinced that the codifiers, with reference to the provisions in question (LRS 22:619B), were merely attempting to express the courts’ holding to-the effect that in order to vitiate a policy a misstatement must have been made fraudulently or with the intent to deceive, — that is (or), knowing it to be untrue and believing it to be material to the risk (or of' such nature that it would be only reasonable to assume that he must have believed', that it was material). Incidentally, we-especially note that the general language of the added declaration (on which appellant relies) definitely appears to be an attempt to follow the language of the opinion, in Carroll v. Mutual Life Insurance Com-, pany of New York, supra, the last dear-expression of this court prior to the co’di--fication with respect to the instant matter,.

Appellant’s second, or alternative-proposition, presents the question of fact:did the insured know of the existing physical defect and suppress the information for-the purpose of deceiving the insurer ? The trial judge correctly resolved that question^ in the following well considered written-reasons: “The insured was what is commonly known as a ‘blue baby’, that is, he-was born with a malformed heart, a condition which caused his death * * *.

“Here the decedent was informed as a-, small child that he had been a ‘blue baby’. But there is no evidence that he had any understanding of the meaning of the term,- and the court feels that, contrary to the testimony of one of the expert witnesses,, such understanding is rare among most laymen. In addition, the evidence is to the-effect that the decedent reasonably could, have doubted and disbelieved what he had; been told about being a ‘blue baby’ and that. the ordinary person, in all probability, entertained such doubt and disbelief. For the ‘blue baby’ almost invariably dies within the first year or at most within the first five years, is unable to lead a normal life, has a distinct and easily noticeable bluish color, and is subject to quick and extreme fatigue. But this decedent lived to reach the age of thirty-seven years, was normal and apparently healthy even to the extent that he was under no doctor’s care and, as far as the evidence shows, had had no need of consulting a doctor for a period of years, did not have a noticeable bluish color (which is established by the testimony of the defendant’s agent who sought out the decedent for the purpose of writing the insurance and did not notice such color), and was obviously not subject to quick fatigue as shown by his regular occupation of truck driver in which he engaged in long hours of work driving large trucks between New Orleans and California.

“Opposed to these considerations is the history given by the insured in the Los Angeles Hospital where he suffered a severe attack. But the court is not particularly impressed by this history as it affects the previous knowledge and beliefs of the decedent. For it is apparent that the doctors in Los Angeles knew the cause of his illness, questioned him accordingly and, I believe, put down and emphasized that information which they received from him which would more definitely tie down the diagnosis. The condition of his fingers, emphasized by the expert testimony at the trial, apparently was not to such a marked degree as to cause the decedent or the ordinary layman to be suspicious thereof even though they would arouse such suspicion in the medically trained mind.

“Considering all of the evidence the court is of the opinion that the answers which the defendant complains of were not true and correct answers but that the same were not ‘false’ (within the meaning of the statute) because the decedent did not know that they were untrue.”

What was said by the district judge about the history given by the insured in the Los Angeles Hospital is appropriate to a somewhat similar history given in the Charity Hospital of Louisiana at New Orleans, in which institutions he did not become a patient until subsequent to the issuance of the policy.

Supporting the above announced findings, we might further observe, is the proven fact that for several years prior to the issuance of the contract in question the insured carried a health policy under which he made no claims whatever.

For the reasons assigned the judgment appealed from is affirmed.


text:
    233 La. 235
    Succession of Joseph J. GAUDIN.
    No. 43015.
    Supreme Court of Louisiana.
    June 10, 1957.

      Breazeale, Sachse & Wilson, Baton Rouge, for appellant
    Kantrow, Spaht, West & Kleinpeter, by Carlos G. Spaht, Baton Rouge, for appellee.
   McCALEB, Justice.

The universal legatee under a will executed by her deceased uncle, Joseph J. Gaudin, presented the will for probate. The brother of decedent opposed the probate and the district judge sustained the opposition, holding the will invalid on the ground that it does not comply with the form prescribed by law. Hence this appeal.

Since the succession effects have not been inventoried and there is no evidence in the record as to their value, this Court is without appellate jurisdiction of the case, our jurisdiction being dependent upon whether the fund to be distributed exceeds $2,000, irrespective of the amount claimed. Section 10, Article 7 of the Constitution; Succession of Bechtel, 231 La. 459, 91 So.2d 602 and authorities there cited.

Counsel for appellant, nevertheless, profess that we have jurisdiction for two reasons. First, it is said that, forasmuch as the parties have declared in a joint motion to have the case placed on the preference docket that the amount involved in the succession exceeds $50,000, our appellate jurisdiction is amply shown as this Court has original jurisdiction under Section 10 of Article 7 of the Constitution, to determine questions of fact affecting its own appellate jurisdiction in any case pending before it.

There can be no doubt of our constitutional power to consider affidavits or other evidence for the purpose of establishing appellate jurisdiction and the Court has done so in the past. See Succession of Price, 172 La. 606, 134 So. 907; Frierson v. Cooper, 196 La. 450, 199 So. 388 and many other cases. But, in recent years, the Court has reversed its policy and we have consistently held that it must be affirmatively shown by the record that the amount in dispute or to be distributed exceeds $2,000 and that no affidavits, stipulations or declarations will be received for the purpose of establishing jurisdiction here. Succession of Derouen, 216 La. 957, 45 So.2d 91; Succession of Wesley, 222 La. 411, 62 So.2d 625 and Succession of Bechtel, supra.

Counsel also point out that this Court must have already concluded that it has jurisdiction of the appeal because the case was placed on our preference docket notwithstanding the alternative plea contained in the joint motion that the case be transferred to the Court of Appeal in the event we did not consider that there was a sufficient showing that the amount to be distributed exceeded $2,000.

Counsel labor under a misapprehension. The signing of the order placing the case on the preference docket cannot in any sense be regarded as a holding that this Court was vested with jurisdiction of the appeal.

It is therefore ordered that the case be transferred to the Court of Appeal, First Circuit provided that the record is filed in that Court within 30 days from the date upon which this decree shall become final; otherwise, the appeal shall be dismissed. The costs incurred in this Court shall be paid by appellant.

      . The only exception to this rule occurs in eases which have been dismissed on exceptions in advance of a trial on their merits. In those matters the Court is perforce required to accept the well-pleaded allegations as to the amount in dispute as establishing appellate jurisdiction. See Winsberg v. Winsberg, 229 La. 61, 85 So.2d 31.


text:
    233 La. 239
    Amalia Steen SPIERS v. Carrie Moore DAVIDSON.
    No. 42866.
    Supreme Court of Louisiana.
    June 10, 1957.

      Alwine L. Mulhearn, Tallulah, Theus, Grisham, Davis & Leigh, Monroe, for plaintiff-appellant.
    McHenry, Lamkin, Snellings & Breard, Monroe, Young & Watson, St. Joseph, for defendant-appellee.
   HAWTHORNE, Justice.

This appeal is from a judgment of the lower court dismissing the suit of Mrs. Amalia Steen Spiers on numerous exceptions and pleas filed by defendant, Mrs. Carrie Moore Davidson, these being exception of no cause of action, exception of no right of action, pleas of prescription of one, four, and five years, exception of want of tender, and plea of estoppel. Appellant contends that the district judge erred in sustaining the exceptions of no cause and no right of action, want of tender, and plea of estoppel to her suit to set aside an act of sale by her mother, now deceased, to the appellee on the ground that it was a pure simulation.

The lengthy petition, which contains over 50 paragraphs, purports to allege numerous other causes of action besides the one in simulation. For instance, in the petition plaintiff sought to set aside the deed on the ground of lesion beyond moiety, to have it annulled as a donation in disguise, to have the act of sale reformed, to recover a money judgment for the amount paid on a mortgage on certain property, etc. Some of the exceptions and pleas which were sustained by the trial judge were aimed at these other causes of action. Appellant now, however, has abandoned all of these various causes of action except the one in simulation, which was pleaded in the alternative, and stated emphatically in argument before this court that she relies solely and entirely on this cause of action. Consequently the only question presented to us on this appeal is the correctness of the trial judge’s ruling on the exceptions and pleas aimed at plaintiff’s action to declare a simulation.

It is well settled that an exception of no cause of action addresses itself to the sufficiency in law of the petition and is triable on the face of the papers; that for the purpose of determining the issues raised by such an exception the well pleaded facts contained in the petition must be accepted as true; and that a suit will not be dismissed on exception of no cause of action if allegations of fact set forth a cause of action as to any part of the demand. Smith v. Kennon, 188 La. 101, 175 So. 763; Adkins’ Heirs v. Crawford, Jenkins & Booth, 200 La. 561, 8 So.2d 539; Ingersoll Corporation v. Rogers, 217 La. 79, 46 So.2d 45; Kennedy v. Perry Timber Co., 219 La. 264, 52 So.2d 847; Ane v. Ane, 225 La. 222, 72 So.2d 485.

The following facts are alleged in the petition: That appellant is the only child of the marriage between Mrs. Alice Moore Steen and William J. Steen, both deceased, and is their sole heir; that on June 13, 1943, Mrs. Alice Steen conveyed certain real estate described in the petition to her sister, the appellee, and this deed is duly recorded; that in this deed the vendee, Mrs. Carrie Moore Davidson, assumed the balance of $4,375 due on a promissory note secured by a mortgage on the property conveyed, which had been executed by the vendor on June 4, 1941; that this note was originally for $5,000 and was payable $125 quarterly; that the last installment fell due on June 4, 1951, and there was a complete cancellation of the mortgage on this date; that no cash consideration for the purported sale was paid by Mrs. Davidson or intended to be paid, and the conveyance was a mere simulation made by the vendor to avoid the payment of certain debts and obligations which she owed at the time; that the real estate conveyed was revenue-producing property, which w.as continuously rented and occupied both before and after the execution of the deed; “that the true agreement made whereunder the property was deeded to Mrs. Davidson was that Mrs. Davidson would collect the rents and manage the property. That Mrs. Davidson would support Mrs. Stein [Steen] from the rents and revenues of the property, that Mrs. Davidson would pay off the mortgage creditors, that Mrs. Davidson would pay the necessary insurance, taxes etc., and other [sic] that Mrs. Davidson would account for the rents and revenues from the property as against the payment of the mortgage and the payment of support and other necessary expenditures to Mrs. Alice Steen or on Mrs. Alice Steen’s death would account to Amalia Steen, and return to [the] property on the mortgage being paid off and the expenses being paid off from the income therefrom” (Paragraph 41, petition) ; that Mrs. Davidson was to meet the notes as they came due on the property, and was also to pay Mrs. Steen $250 per month from the proceeds of the property; and that she made the payments to Mrs. Steen until the latter’s death on June 5, 1948.

Thus, in substance, the petition alleges that to defraud her creditors Mrs. Steen in 1943 pretended to sell the real estate in controversy to her sister, Mrs. Davidson, but that the true intention of the parties was that no transfer should take place, that the property should remain that of Mrs. Steen, that the mortgage apparently assumed by Mrs. Davidson and all taxes and repairs were to be paid out of the rents collected on the property, and that at some future appropriate time Mrs. Davidson was to reconvey the real estate to her sister or niece. In short, no title was to pass, and no consideration was to be paid.

Upon these facts appellant alleges that the conveyance was a simulated one which she as a forced heir has a right to annul by parol evidence under Article 2239 of the Louisiana Civil Code. That article provides :

“Counter letters can have no effect against creditors or bona fide purchasers ; they are valid as to all others; but forced heirs shall have the same right to annul absolutely and by parol evidence the simulated contracts of those from whom they inherit, and shall not be restricted to the legitimate [legitime].”

As conceded by counsel for appel-lee, a simulated contract is one which has no substance at all, or is purely fictitious and a sham, an act of mere pretense without reality. Such a contract, although clothed in concrete form, is entirely without effect and may be declared a sham at any time at the demand of any person in interest. See Houghton v. Houghton, 165 La. 1019, 116 So. 493; Hibernia Bank & Trust Co. v. Louisiana Avenue Realty Co., 143 La. 962, 79 So. 554; Lemann, Some Aspects of Simulation in France and Louisiana, 29 Tul.L.Rev. 22 (1954).

In the instant case appellant, a forced heir, has alleged these elements of a simulation : The act of sale executed by her mother is valid on its face and recites a consideration, but the intention of the parties to the act was that the ownership of the property was to remain in the vendor. The property was not to be transferred in fact, and the recited consideration was not in fact to be paid. In other words, she has alleged that the act of sale was a sham. See Lawrence v. Claiborne, 215 La. 785, 41 So.2d 680. In our opinion appellant has therefore alleged facts showing that her deceased mother and the appellee entered into a simulated contract within the meaning of Article 2239 of the Civil Code, and consequently she has stated a cause of action under this article.

We wish to make it clear that in considering and discussing the exception of no cause of action it has not been our intention to express any opinion on the merits of this case. Whether appellant can establish by strong, convincing, and legal evidence that the act of sale was simulated remains for future determination. See Miller v. Miller, 226 La. 273, 76 So.2d 3; Dietz v. Dietz, 227 La. 801, 80 So.2d 414.

Counsel for appellee call our attention to the well established jurisprudence holding that when the price, no matter how inadequate, has been paid by the purchaser in a sale, the transaction is not a simulated one. See Citizens’ Bank & Trust Co. v. Willis, 183 La.“ 127, 162 So. 822, and authorities there cited; Succession of Nelson, 224 La. 731, 70 So.2d 665; Bank of Abbeville & Trust Co. v. Lyons, 185 La. 117, 168 So. 513; Byrd v. Pierce, 124 La. 429, 50 So. 452; Succession of Quaglino, La., 95 So.2d 481. Counsel then state that the petition admits the payment by Mrs. Davidson of the balance due on, and the cancellation of, the mortgage which she as-, sumed in the act of sale, and additionally admits payment by Mrs. Davidson to Mrs. Steen of $250 a month for a period of five years, or some $15,000.

This argument is without merit in view of the additional allegation that these payments were to be made from the revenues produced by the property, title to which, under the agreement between the parties to the act and according to their alleged true intention, never passed to Mrs. Davidson but remained in Mrs. Steen. Thus under appellant’s theory the funds with which all these payments were to be made were revenues from Mrs. Steen’s own property and belonged to her. Accordingly the petition, when considered as a whole, does not allege that any consideration was paid by Mrs. Davidson.

With reference to the exception of no right of action and plea of estoppel, ap-pellee says that the allegations of the petition disclose that appellant has unconditionally accepted the succession of her mother, Mrs. Steen, and that accordingly she is unconditionally bound for all of her mother’s obligations and particularly is bound by Mrs. Steen’s warranty of title of this property in the authentic act of sale offered in evidence in support of these exceptions. See Art. 2236, La.Civ.Code. Ap-pellee states further that under these circumstances appellant, claiming as an heir, has no right of action and is estopped from attacking appellee’s title.

A similar argument was rejected by this court over 100 years ago. In the case of Croizet’s Heirs v. Gaudet, 6 Mart., O.S., 524, the court held that forced heirs are not bound by the authentic acts of their ancestor if these acts deprive the heirs of their legitime, and that furthermore forced heirs can attack such instrument by parol evidence. Thus prior to 1884 forced heirs had a right under the jurisprudence to attack by parol evidence simulated conveyances by their ancestor to the extent that such conveyances prejudiced their legitime. See Prudence v. Bermodi, 1 La. 234; Louis v. Richard, 12 La.Ann. 684. The passage of the 1884 amendment to Article 2239 of the Civil Code went one step further, as it gave forced heirs the right “to annul absolutely and by parol evidence the simulated contracts of those from whom they inherit, and shall Hot he restricted to the legitimate [legitime]”. (Emphasis added.) See Le-mann, Some Aspects of Simulation in France and Louisiana, 29 Tul.L.Rev. 22 (1954).

To say that forced heirs are bound by the warranty of title in an authentic act which they seek to set aside on the ground of simulation would, in effect, be denying to them the very right which Article 2239 gives to them. Therefore, as to appellant’s suit in declaration of simulation, the exception of no right of action and the plea of estoppel are without merit and should have been overruled.

Appellee also contends that the exception of want of tender was properly sustained by the lower court. In this connection appellee argues that the petition admits the expenditures by Mrs. Davidson of approximately $20,000 in payment of the debts of Mrs. Steen and in her support, and that consequently appellant cannot maintain this action without tender to Mrs. Davidson of these sums as a condition precedent to her suit.

As we have pointed out, according to the allegations of the petition the funds so expended were to be derived from Mrs. Steen’s own property and belonged to her. Moreover, the exception of want of tender cannot validly be urged in an action under Article 2239 to declare a simulation because the basis of such an action is that no consideration has been paid by the defendant, and if such tender were made, the plaintiff would be out of court.

For the reasons assigned the judgment of the district court sustaining exceptions of no cause of action, no right of action, want of tender, and plea of estoppel as to plaintiff’s cause of action in declaration of simulation is reversed and set aside, and the case is remanded to the district court for further proceedings in the suit to have the act of sale set aside on the ground that it was a simulation. Costs of this appeal are to be paid by appellee; all other costs are to await final determination of the case.


author: GLADNEY, Judge.

text:
    WILLIAM VOLKER & COMPANY OF LOUISIANA, Inc., Plaintiff-Appellant, v. W. E. ALLEN, d/b/a Allen's Cash Store, Defendant-Appellee.
    No. 8678.
    Court of Appeal of Louisiana. Second Circuit.
    June 28, 1957.
    Rehearing Denied July 25, 1957.
    Writ of Certiorari Denied Nov. 12, 1957.

      Eugene J. Coen, Shreveport, for appellant.
    Roy M. Fish, Springhill, for appellee.
   GLADNEY, Judge.

Plaintiff has appealed to this court from an order refusing its application for a new trial and rehearing, timely filed after the rendition of an adverse judgment. The record herein submitted does not contain a transcript of the evidence and proceedings of trial, nor is there a statement of facts obtained pursuant to Articles 602 and 603 of the Code of Practice. The only issue that can be raised before this court is whether the case should be remanded for a new trial in the interest of justice.

A chronology of the relevant pleadings and rulings shows:

December 16, 1955: Suit filed for balance due on account, the petition being accompanied by a verified, itemized statement;

February 10, 1956: Answer filed in form of general denial, no special defenses urged;

June 5, 1956: Trial had pursuant to regular setting. Judgment rendered rejecting plaintiff’s demands;

June 7, 1956: Motion for new trial or rehearing filed on ground judgment was contrary to law and the evidence;

September 11, 1956: Plaintiff filed a supplemental and amended petition, annexing thereto certain exhibits;

September 17, 1956: Defendant filed opposition to allowance of new trial, and filing of supplemental and amended petition;

January 22, 1957: Hearing on motion for amended petition disallowed;

January 25, 1957: Motion in opposition to filing of amended petition sustained. Motion for rehearing overruled;

February 8, 1957: Judgment signed. Orders of appeal taken.

The exhibits annexed to the amended petition are herewith briefly described as: (1) A scribbled notation on the reverse side of a blank check, reading: “Will pay bal. June 1, 1955. W. E. Allen”; (2) A check dated June 5, 1955, bearing the signature “W. E. Allen”, payable to counsel for plaintiff for $100; Allen stopped payment when presented for payment; and (3) There was a letter written by the attorney for appel-lee addressed to counsel for plaintiff, reading as follows:

“April 5, 1956
“Mr. Eugene J. Coen
Attorney at Law
Shreveport, Louisiana
“Re. 19309
Volker v. Allen
“Dear Mr. Coen:
“Mr. Allen advised me by telephone today that he will send me a check for you in the above captioned suit for the full amount within the next few days.
“With best wishes, I am
“Very truly yours,
/s/ Roy M. Fish.”

It is contended plaintiff’s request for a new trial should not be considered for the reason it does not set forth specifically any grounds therefor, nor does it set forth any statutory basis for granting the application. Before this court counsel for appellant, it is argued, took no bill of exception to any ruling of the trial court during the course of the trial, that he has not attempted to obtain a stipulation as to the facts which constituted the evidence submitted to the court for the rendition of judgment and, therefore, appellant finds itself asking the appellate court to review a judgment not on a basis of evidence adduced before the trial court and the record as made up, but rather on the basis of allegations not supported by evidence and outside the record. Further, it is argued that a new trial is not sanctioned under Article 560 of the Code of Practice and there has been no abuse of discretion by the trial court.

The record does show timely application for a new trial or rehearing was filed before the signing of judgment and while the judgment was still under proper control of the judge a quo, who was vested with judicial discretion to grant a new trial. Where the circumstances timely create serious doubt that a judgment may have been improvidently rendered, judicial discretion may and should be exercised to prevent the loss of personal or property rights through an unjust decision.

The causes for which a new trial may be granted are not restricted to those enumerated in Article 560 of the Code of Practice, which article provides:

“A new trial shall be granted.
“1. If the judgment appear clearly contrary to law and evidence.
“2. If the party has discovered, since the trial, evidence important to the cause, which he could not, with due diligence, have obtained before.
“3. If the cause has been tried by a jury, and it be shown that the jury has been bribed, or has behaved improperly, so that impartial justice has not been done in the cause.”

The Supreme Court of Louisiana has on man}' occasions held a trial judge in the exercise of his discretion should grant a new trial when the interest of justice indicates such is the proper course to take. In Burthe v. Lee, La.App., 1934, 152 So. 100, 102, the court said:

“Lawsuits are not games in which courts are the mere referees or umpires, and in which technicalities must be allowed to triumph over actual justice. It is our duty to permit litigants all reasonable opportunity to place before us all facts bearing on the issues involved * * *.”

The same court declared through Justice Higgins in Succession of Robinson, 1936, 186 La. 389, 172 So. 429, 431, in which case the trial judge had refused to reopen the case after argument:

“The trial judge’s ruling is subject to review and is not final, and where an injustice is done and substantial rights are lost through mere technicalities, it is our duty to interfere. * * * The modern trend of the jurisprudence in the trial of lawsuits is to render justice upon the merits of the controversy, rather than defeat justice upon technicalities. In the instant case, with due deference to our learned brother below, it is our opinion that he arbitrarily exercised the discretion vested in him by law in refusing to reopen the case or to grant a new trial, which was manifestly in the interest of justice. Gerth’s Realty Experts v. Kracke, 156 La. 36, 100 So. 41; Parker v. Ricks, 114 La. 942, 38 So. 687; Hill v. Miller, 7 La. Ann. 621.”

We are strongly impressed by the persuasive effect of the exhibits above referred to. Unless spurious, and there is no intimation to that effect, these clearly show an admission of liability by the defendant, not only once but on three separate occasions after he filed an answer denying his indebtedness. The interests of justice require that a new trial should be granted and it is of no importance that the evidence was not presented at the trial on June 5, 1955. What is important, we think, is the very strong indication that if such evidence be considered upon a new trial, a different verdict would be reached.

For the reasons assigned, the judgment from which appealed is annulled and set aside, and the case is remanded to the district court for a new trial, the costs of the appeal to be borne by appellee and all other costs to await final disposition of the case.