author: PRICE, Judge. MARVIN, Judge

text:
    Frank W. BRUNER, Jr., Plaintiff-Appellant, v. Mavis Smith BRUNER, Defendant-Appellee. Mavis Smith BRUNER, Plaintiff-Appellee, v. Frank W. BRUNER, Jr., Defendant-Appellant.
    Nos. 13485 and 13486.
    Court of Appeal of Louisiana, Second Circuit.
    Feb. 20, 1978.
    En Banc. Rehearings Denied April 4, 1978.
    Writ Granted May 12, 1978.

      Francis M. Gowen, Jr., Shreveport, for plaintiff-appellant in no. 13485 and defendant-appellant in no. 13486.
    Booth, Lockard, Jack, Pleasant & Lesage by H. F. Sockrider, Jr., Shreveport, for defendant-appellee in no. 13485 and plaintiff-appellee in no. 13486.
    Before PRICE, HALL and MARVIN, JJ.
   PRICE, Judge.

These are appeals in related suits in which judgments were rendered awarding a wife a divorce on the husband’s adultery, recognizing past due pendente lite alimony, and awarding permanent alimony.

We affirm the judgment of divorce, modify the judgment accruing alimony penden-te lite, and reverse the award of permanent alimony.

The background of this litigation is as follows: Frank Bruner, Jr., Obtained a legal separation from Mavis Bruner on April 7, 1976, on grounds of Mavis Bruner’s habitual intemperance. By consent and in response to a preliminary rule in this matter, Mavis Bruner was awarded alimony pendente lite of $350 per month and use of the community residence. Frank Bruner was ordered to pay the monthly installments on the mortgage note, all utilities, and to maintain certain insurance policies. On March 15, 1977, Mavis Bruner filed suit for a divorce on grounds of adultery and for permanent alimony. On April 13, 1977, after the accrual of one year from his obtaining the separation decree, Frank Bruner filed suit for a final divorce under La.R.S. 9:302. Mavis Bruner filed exceptions of lis pendens and no cause of action to this suit. In May 1977 Mavis Bruner filed a rule to accrue past due alimony pendente lite. Frank Bruner answered claiming offsetting credits for amounts paid to third persons on behalf of Mavis Bruner.

All of the pending proceedings were consolidated and tried together. The trial court sustained the exception of no cause of action in Frank Bruner’s suit for final divorce under R.S. 9:302 and awarded Mavis Bruner a divorce in her suit based on adultery. The court also awarded her permanent alimony of $689.25 per month on finding that her preseparation fault no longer precluded her from alimony under La.C.C. Art. 160 because of the act of adultery committed by her husband after the separation. The court recognized an arrearage of $832.83 in pendente lite alimony subject to the offset claimed of $851.21.

Frank Bruner has appealed from all of the trial court’s rulings other than the allowance of the offset against the accrued alimony. Mavis Bruner has answered the appeals asking for an increase in the amount of permanent alimony, modification of the judgment accruing alimony pendente lite to deny the offsets claimed, and for reasonable attorney fees in obtaining the past due alimony.

The principal issues presented for review are:

1. Was the evidence sufficient to sustain the trial court’s finding of adultery?
2. Was the trial court correct in sustaining the exception of no cause of action in Frank Bruner’s action for divorce under R.S. 9:302?
3. Was Mavis Bruner entitled to permanent alimony after having been found at fault in the prior separation from bed and board?
4. Was the trial court’s award of past due alimony and the offset allowed against it correct?

PROOF OF ADULTERY

The proof relied on to establish adultery was by circumstantial evidence. Appellant contends the evidence did not exclude every other reasonable hypothesis other than adultery as required by the jurisprudence. This is primarily a factual determination which must be resolved in a large part by the credibility of the testimony of the parties and evaluation of the circumstances of the relationship shown in the light of generally accepted standards of conduct. In such matters the findings of the trial court should be left undisturbed in the absence of a showing of manifest error. The Supreme Court recently reemphasized the trial court’s discretion in domestic affairs, stating:

In the area of domestic relations, much discretion must be vested in the trial judge and particularly in evaluating the weight of evidence which is to be resolved primarily on the basis of the credibility of witnesses. The trial judge having observed the demeanor of- the witnesses is in the better position to rule on their credibility. Trosclair v. Trosclair, 337 So.2d 1216 (La.App. 1st Cir. 1976). The factual findings of the trial court are therefore to be accorded very substantial weight on review, (cite omitted) Pearce v. Pearce, 348 So.2d 75 (La.1977)

The trial court based its finding that adultery was proven on the following undisputed circumstances: About the time Frank Bruner separated from his wife in the early fall of 1975, he began a relationship with a local widow. After his separation he moved into his elderly mother’s residence on Unadilla Street in Shreveport. In November 1975 he began a pattern of seeing the widow daily. He stopped by her home for coffee on his way to work each morning and returned for dinner each evening. On occasion they dined together at public restaurants. His visits at night usually lasted until bedtime, although on a few occasions he fell asleep watching television and stayed until after midnight. During this period of time they made several out-of-town trips to golf tournaments and occupied adjoining and connecting motel rooms. In March 1977 Frank Bruner’s mother became hospitalized and for a period of seventeen days he stayed at the widow’s home overnight. The widow lived alone at this time as her children were grown and married. Both testified they have a romantic interest.in one another and have had discussions concerning marriage at such a time that Frank Bruner obtained a final divorce.

The foregoing circumstances are adequate without acceptable explanation to exclude any other reasonable hypotheses and to lead to a reasonable conclusion that adultery did occur.

The testimony of Frank Bruner and his alleged accomplice deny that any sexual relations have occurred between them. They seek to explain that they have had a proper social relationship between two middle-aged persons (fifty-one and fifty-two) who have developed an attraction for one another. They contend the reason Frank Bruner moved into the widow’s home during the period his mother was hospitalized was to make it more convenient for the widow to care for the needs of Frank’s mother and her home while she was hospitalized. They also contend Frank needed someone to care for him during his mother’s illness. The trial judge did not find that this explanation overcame the presumption of adultery created by the circumstantial evidence. His conclusion is supported by substantial evidence and is in accord with the decision of the Supreme Court in Hermes v. Hermes, 287 So.2d 789 (La.1973), a case which is analogous both factually and legally to the present suit. Under present jurisprudential standards, it would be reasonable to conclude that a married man, who has an admitted romantic relationship with an unmarried woman, and who spends seventeen consecutive nights with that woman has placed himself in a position to warrant a finding of adultery. Certainly when the trial judge observes the witnesses and concludes that adultery has occurred under these circumstances, it would be unreasonable for us to reverse that factual finding.

DISMISSAL OF FRANK BRUNER’S ACTION UNDER LA.R.S. 9:302

The record shows Mavis Bruner filed her action for divorce based on postseparation adultery prior to the accrual of Frank Bruner’s right to apply for a final decree under R.S. 9:302. These circumstances bring the trial court’s dismissal of Frank Bruner’s action within the holding of the First Circuit in Cox v. Cox, 341 So.2d 1351 (La.App. 1st Cir. 1977) in which the court resolved this issue as follows:

He further argues that he should be granted judgment on his reeonventional demand under R.S. 9:302, since, when it was filed, more than one year had elapsed since the rendition of the judgment of separation. The petition for divorce was filed by Mrs. Cox over a week before the lapse of one year from the date of separation. Her main demand for divorce therefore took precedence over the recon-ventional demand, and the divorce judgment was properly granted in her favor. McCaa v. McCaa, 163 So.2d 434 (La.App. 2nd Cir. 1964); Perry v. Perry, 207 So.2d 819 (La.App. 1st Cir. 1968).

The exception of no cause of action was properly sustained.

RIGHT TO PERMANENT ALIMONY

Appellee presents a two-fold argument to support her claim to permanent alimony in spite of her having been determined “at fault” in the prior separation proceeding.

Primarily she contends the decision in Fulmer v. Fulmer, 301 So.2d 622 (La.1974) declares that the wife’s fault previously determined in a separation decree shall not be dispositive on the question of her right to alimony where a divorce is sought for postseparation fault such as adultery. Although the trial court apparently followed this expression in awarding appellee alimony, we consider this discussion of this issue in Fulmer dicta and not binding on the appellate courts.

She further acknowledges that the recent decision of the First Circuit in Bennett v. Bennett, 349 So.2d 909 (La.App. 1st Cir. 1977) concerning the identical legal issue is adverse to her position. She contends the result reached in Bennett is an unconstitutional application of the language of La.C.C. Art. 160 because it gives the husband favored treatment in the effect postseparation fault has on the payment of permanent alimony. Appellee argues that “both husbands and wives who have obtained their legal separations and thereby have secured themselves either from or to post litem alimony may through their carelessness and moral turpitude forfeit those rights by committing adultery.” Appellees contend sexual discrimination exists under the Louisiana Constitution of 1974 if the husband who is at fault in the separation may deprive the wife of her right to permanent alimony because of her postseparation adultery, but the wife who was at fault in the separation may not have her right to alimony restored by proving postseparation adultery on the part of the husband. In view of the recent Louisiana Supreme Court decision in Loyacano v. Loyacano, 358 So.2d 304 (La.1978), this argument has no merit. This decision holds that husbands are also entitled to the benefits of Art. 160 to render the article nondiscriminatory under the Louisiana Constitution of 1974. The preseparation fault once determined will operate as a bar to future alimony claims of either spouse under Art. 160 without regard to postseparation conduct of the other party. There is no discrimination because of sex in this result.

Appellee alternatively contends that even though she was found at fault on proof of habitual intemperance in the separation decree obtained by her husband, her conduct was caused by alcoholism which is an involuntary disease and she was not “at fault” in the sense this term is intended under Art. 160. She relies on expressions of the appellate court decision in Pearce v. Pearce, 344 So.2d 75 (La.App. 4th Cir. 1977). The Pearce decision, which was overruled by the Supreme Court on other grounds, 348 So.2d 75 (La.1977) is not applicable to the issue before us as in Pearce there had been no considered determination of fault in the separation proceedings which was based on one year living separate and apart. Once fault has been judicially determined in the separation proceeding, it should be definitive for the purpose of alimony eligibility under Art. 160.

The trial court properly rejected appellant’s argument based on Pearce, but was in error in awarding permanent alimony under his finding that the subsequent adultery of appellant purged the preseparation fault of appellee. Therefore, the award of alimony should be reversed.

ACCRUAL OF PAST DUE ALIMONY AND AWARD OF OFFSETTING CREDITS

The judgment ordering appellant to pay pendente lite alimony provides in part as follows:

. ordering the defendant in rule to pay unto the plaintiff in rule the sum of THREE HUNDRED FIFTY AND NO/100 ($350.00) DOLLARS per month as alimony pendente lite, payable $350.00 on the fifteenth day of each month, commencing December 15, 1975, and that plaintiff in rule be granted the use of the home at 7112 Creswell Street, Shreveport, Louisiana, with defendant in rule being ordered to pay the house payment in connection with said home, that he be ordered to pay the following utility bills: electricity, gas and water (but not the telephone bill), and that he be responsible for the upkeep on said property.

Appellant paid the $350 per month payment provided by the judgment each month through the date of trial. The dispute centers on the effect a subsequent community property settlement on January 19, 1977, giving appellee the residence on Creswell and a sale by her of this property on February 11, 1977, has on the obligation of appellant to pay under the provisions of the judgment. Appellee contends the provision for appellant to pay the mortgage payment and utilities was intended to be a housing allowance, and his obligation to pay an equivalent amount continued on after her disposition of the house. The trial judge accepted this contention and awarded judgment accordingly.

The court was in error in its evaluation of the effect of the judgment. There is no ambiguity in the language employed. By disposing of the home, appellee has extinguished the obligation of appellant to continue paying the mortgage payments or utilities. The judgment makes no provision for an alternate payment in the event the home was sold. Where no ambiguity exists, the court was in error in seeking to determine the intent behind the provisions in question.

A second provision of the judgment ordered appellant to maintain present policies of insurance for appellee, including hospitalization, car, household, fur, and jewelry insurance. Appellee claims an arrearage for life insurance premiums of $18.05 per month. As the judgment specifies which forms of insurance are included and does not list life insurance, there is no obligation' on appellant for this item. There is also a claim for a renewal of the premium for auto insurance on February 7, 1977. This premium of $176 when prorated to date of trial of the rule is approximately $75, and appellee is entitled to judgment for this amount.

Appellant was allowed a credit or offset of $851.21 by the trial court for payments to third parties on appellee’s behalf.

There is no evidence showing these payments were made at the request of or with the consent of appellee. Therefore, under the jurisprudence these credits should not have been allowed. See Odum v. Odum, 273 So.2d 576 (La.App. 1st Cir. 1973).

The trial court properly denied ap-pellee’s request for attorney fees in recovering past due alimony under these circumstances.

DECREE

For the foregoing reasons, the judgment in favor of Mavis Bruner against Frank W. Bruner, Jr. (Suit NO. 243,714 of the First Judicial District Court) is amended to reject the demands of plaintiff for permanent alimony, and as amended, the judgment is affirmed.

The judgment appealed in the suit of Frank W. Bruner, Jr. v. Mavis Bruner (Suit NO. 233,798 of the First Judicial District Court) sustaining the exception of no cause of action and rejecting the demands of plaintiff, Frank W. Bruner, Jr., is affirmed.

The judgment appealed on the rule brought by Mavis Bruner to accrue alimony in the foregoing styled suit is amended to reduce the amount of past due alimony provided in paragraph III thereof from $832.83 to $75, and is further amended to delete the offset allowed Frank W. Bruner, Jr., by paragraph IV of the judgment, and his demands for this relief are rejected. As amended, the judgment is affirmed.

Costs of this appeal are assessed equally to appellant and appellee.

MARVIN, J., concurs in part and dissents in part.

MARVIN, Judge

(concurring in part and dissenting in part).

In written reasons for judgment, the lower court concluded:

“The actions of these people are not acceptable to the majority of people in today’s society. They are not governed by the standards of Florida, or California but the standards of the majority of this state’s populace. If the Court cannot find adultery under these facts what will prevent a couple from:
1. Living in an adulterous relationship for years, but
2. Attempting] to hide the fact by keeping their clothes in separate bedrooms, and
3. Making it appear to their friends that two beds have been slept in, and, then
4. Testifying] their relationship is purely platonic and they have never had sexual relations?
“The Court cannot go that far.
“The facts of this case are extremely close to those in Hermes v. Hermes, 287 So.2d 789 (La.1974). It would appear that Mr. Bruner and M. T. were following the Hermes script, with only a few minor changes.”

Recognizing, of course, that adultery can be proved by circumstantial evidence, Hermes expressly held that the circumstances must fairly and necessarily lead to the conclusion that adultery has been committed. Hermes then followed that holding with this observation:

“Further, that in these modern times, the mere fact that a man and a woman are alone together does not necessarily presume it is for an affaire d’amour.” 287 So.2d 790.

Savin v. Savin, 218 La. 754, 51 So.2d 41 (1951) was cited in Hermes as authority. Savin observed:

“Plaintiff has amply succeeded in proving that the occasions were numerous when defendant and Thomas had the opportunity of committing adultery. But for us to declare that they did, we must draw upon our imagination, and rule that whenever a man and a woman have the opportunity . . . , they do commit adultery. Such an observation is far from being in harmony with present day social standards.” 51 So.2d 45.

The cases are legion where we uphold the trial court’s discretion in determining facts and where we recognize the great weight to which this determination is granted on appellate review. If this case, however, was decided below on the basis quoted (“that the actions of these people are not acceptable to the majority of people in today’s society” and if adultery is not found in this case then other people will commit adultery), as I deem that it was, then the lower court has grossly misconstrued and misapplied the legal burden of proof in adultery cases. Because of its patently erroneous basis, the lower court’s determination is not entitled to the traditional great weight, and we are obligated to make our own factual findings and inferences as to whether the burden of proof hás been met. This is the essence of my dissent from the majority’s opinion according great weight to the trial court in this particular case.

If the great weight factor is removed as it should be, I am convinced that even my brethren on the majority opinion would conclude that the burden of proof in this case has not been met and that every reasonable hypothesis negates, rather than fairly and necessarily establishes, adultery.

The lower court said “the bottom line [in this case] clearly shows adultery . [and] the evidence excludes every reasonable hypothesis other than adultery . [basing its conclusions] solely upon the actions and relationship of [the husband, Frank, and his girlfriend, Meda] . ”

I must respectfully disagree.

Frank legally separated from his wife in 1976. Sometimes after they ceased living together Frank met Meda, a widow. Both are about 51-52 years old with grown children and are grandparents. Frank lived with his 77-year-old mother. The actions and the relationship of Frank and Meda (on which the lower court based its conclusions) essentially boil down to these circumstances:

(1) Frank and Meda have many mutual friends and are active in church and in golfing circles. Their respective and respectful character shines through the record. They are open, honest and not devious people. Frank heads a business. Meda is the widow of a deceased elected official. They enjoy each other’s company and are mature and reserved people, both certainly conscious of their respective reputations and the reputation of each other. During the year preceding trial, Frank stopped at Meda’s home on his way to work for coffee almost daily. Each night they dined together, more often than not at public restaurants and sometimes returned to Meda’s home.

(2) In March 1977, Frank’s mother was hospitalized and Frank moved into a guest bedroom in Meda’s home where he stayed for 17 nights. After Frank’s mother recovered, he returned home with her.

(3) On three occasions, Frank and Meda journeyed out of town where either or both of them played in senior golf tournaments (Monroe and Alexandria). On one of these trips, Meda stayed with friends in Alexandria and Frank stayed at a motel. On other trips, they stayed at the same motel in adjoining rooms.

(4)Frank and Meda admit they are contemplating marriage, but both vehemently deny any physical or sexual involvement, anywhere, anytime, anyplace.

What impresses me is the openness of the relationship. Meda’s home is open to relatives and friends. Many of these people have keys to her home and are in and out at all hours. A key is often available to these people who do not have keys. Meda’s grown children are in and out of the house and often arrive unannounced and unexpected. His children and Frank and Meda’s mutual friends were with them at times on the out-of-town golfing trips. The motel registrations show he registered and paid for one room while Medá registered and paid for the other.

More importantly, what is not shown is:

(A) Any history of any display of petting or physical affection from one to the other.

(B) Never is there shown any state of undress. The “worst” evidence in record is that Meda is in a flannel longsleeved house robe, zipped to her neck on some of the mornings when Frank calls or on some of the mornings when he stayed at her home. We have no evidence whatsoever that he is in his robe or pajamas at anytime in her presence. Relatives and neighbors or friends have sometimes dropped in while Frank was at Meda’s and he was always dressed in street clothes.

The testimony of private detectives who observed Frank and Meda for some length of time does not suggest adultery. Lights which may have been on in the rear of Meda’s home cannot be seen from the front or sides of the home according to these witnesses. Frank’s presence at Meda’s home at all times was well explained. As I view the record, Frank and Meda were not practicing deceit or in any way attempting to cover up adultery.

Could they have committed adultery? Certainly. That is what the lower court found. But under the correct legal test, the circumstances under which adultery may be inferred must exclude all other reasonable hypotheses and must fairly and necessarily lead to the conclusion that adultery has been committed.

Did they commit adultery? I do not know, but the record falls far short of facts from which I can exclude other reasonable hypotheses and from which I can fairly and necessarily say that they did commit adultery. The mere fact that Frank and Meda were alone together, frequently or occasionally, morning or night, early or late, away from or at home, does not necessarily prove or presume adultery. Each case of alleged adultery must be determined on its own particular circumstances. But in all cases of alleged adultery the same legal burden of proving adultery should be applied.

I would reverse the lower court on the adultery issue because that issue was decided on what I believe was a misconstruction and misapplication of the legal burden of proof of adultery.

I concur in the majority opinion as to the remaining issues.


source: Caselaw Access Project

author: BOLIN, Judge.

license: Public Domain

text:
    Illie Andrew SISK, Jr., Plaintiff-Appellant, v. INSURANCE COMPANY OF NORTH AMERICA and Olinkraft, Inc., Defendants-Appellees, American Manufacturers Mutual Insurance Company, Intervenor-Appellee.
    No. 13487.
    Court of Appeal of Louisiana, Second Circuit.
    Feb. 20, 1978.

      Milton P. Masinter, Robert D. Edwards, New Orleans, for plaintiff-appellant.
    Hayes, Harkey, Smith & Cascio by Thomas M. Hayes, Jr., and Thomas M. Hayes, III, Monroe, for defendants-appellees.
    Before BOLIN, PRICE and MARVIN, JJ.
   BOLIN, Judge.

Plaintiff was employed by an industrial painting firm which had been awarded a cost-plus contract to perform a continuous maintenance program at defendant Olin-kraft’s paper plant. Plaintiff was painting a boiler in a building open to the weather when he slipped and fell on a stairway. After negotiating a settlement with his employer’s workmen’s compensation insurer, plaintiff sued Olinkraft and its liability insurer for damages. The workmen’s compensation insurer intervened to recoup benefits paid.

Plaintiff alleges his injuries were caused by defendant’s negligent failure to correct a known hazardous condition, i. e., the presence of a slippery pool of standing water on the stairway. The trial court found Olin-kraft was plaintiff’s statutory employer (Louisiana Revised Statutes 23:1061); since it determined plaintiff’s exclusive remedy against Olinkraft was the recovery of workmen’s compensation benefits (La.R.S. 23:1032), it rejected all demands without considering the question of defendant’s negligence. Plaintiff appeals. Agreeing with the trial court’s conclusions, we affirm its judgment.

The issue is whether plaintiff has a remedy in tort against defendant Olinkraft. To resolve this issue we must answer two questions: (1) Do the facts indicate Olinkraft was plaintiff’s statutory employer? (2) If so, is workmen’s compensation the exclusive remedy against Olinkraft?

After modernizing its West Monroe facilities, Olinkraft instituted a program of preventive maintenance. Although it directly employed a small maintenance crew, the corporation determined that its plans for continuous upkeep of plant and equipment would more effectively be implemented by engaging the services of an independent contractor. Plaintiff’s employer and other painting firms contracted with Olinkraft to do this work for several years both before and after the date of plaintiff’s accident.

La.R.S. 23:1061 provides that a principal is liable for workmen’s compensation benefits to the employees of an independent contractor who are injured on the job, if that contractor is performing work which is a part of the principal’s trade, business, or occupation. Whether a contractor’s activity is a part of his principal’s business is primarily to be decided from the facts of each case. Foster v. Western Electric Company, 258 So.2d 153 (La.App.2d Cir., 1972), and cases cited therein.

The evidence in the present case indicates the purpose of the painting program at Olinkraft was to maintain both plant and equipment in good condition, avoiding costly repair and replacement. The program contributed substantially to the efficient operation of Olinkraft’s business. Testimony indicated that Olinkraft would have employed a larger maintenance crew to carry out this preventive maintenance had it not decided to engage an independent contractor. Under the facts presented by this record, we agree with the trial court that Olinkraft was plaintiff’s statutory employer. See Mau v. Industrial Steel Products Company, 119 So.2d 654 (La.App.2d Cir., 1960).

La.R.S. 23:1032 provides an employee’s rights and remedies under the Workmen’s Compensation Act are exclusive of all other rights and remedies he might otherwise have had against his employer. We have consistently held the exclusive remedy provision applicable to a statutory employer, most recently in Pallig v. Shreveport Packing Co., Inc. of Kansas, 342 So.2d 1217 (La.App.2d Cir., 1977), and we adhere to this position.

We are aware of the possible conflict between our holding and the recent decision in Cain v. Witco Chemical Corporation. 341 So.2d 1220 (La.App.1st Cir., 1976), writ denied, 343 So.2d 1079 (La.1977). However, we choose to follow abundant authority upholding the statutory employer defense in tort cases. In so doing, we do not concede that Witco is factually indistinguishable from the present case. If Witco conflicts, we explicitly choose not to follow it. See Kelly v. United States Fidelity & Guaranty Company, 353 So.2d 349 (La.App.1st Cir., 1977); Vincent v. Ryder Enterprises, Inc., 352 So.2d 1061 (La.App.3d Cir., 1977).

The judgment is affirmed at appellant’s cost.


author: HALL, Judge.

text:
    Sonya Diane Shuler WISDOM, Plaintiff-Appellee, v. Charles Franklin WISDOM, Defendant-Appellant.
    No. 13489.
    Court of Appeal of Louisiana, Second Circuit.
    Feb. 20, 1978.

      Booth, Lockard, Jack, Pleasant & LeSage by John R. D’Anna, Shreveport, for defendant-appellant.
    Love, Rigby, Dehan & Love by Kenneth Rigby, Shreveport, for plaintiff-appellee.
    Before PRICE, HALL and MARVIN, JJ.
   HALL, Judge.

Defendant, Charles F. Wisdom, appeals from a judgment ordering him to pay to plaintiff, Sonya D. Wisdom, $4,362.50 for past due alimony and child support. The issue on appeal is whether defendant should be allowed a credit for one-half of the child support due under a 1974 judgment during a period of time when one of the parties’ two children was actually living with and being cared for by defendant.

The parties were divorced in 1974. Plaintiff was granted custody of the two minor children, Laurie and Steve, and was awarded $400 per month as child support and $170 per month as alimony. In November and December of 1975 and January of 1976, because of personal problems and the need for medical attention, Laurie lived with her father in New Orleans. During that three-month period defendant reduced the child support payments made to plaintiff by one-half.

Laurie returned to Shreveport and lived with her mother from February 1976 until September 1976. At that time, after an argument with her mother, without her mother’s consent, and with a plane ticket paid for by her father, seventeen-year-old Laurie went to live with her father and was still living with him on the date of trial in August 1977. During that period of time defendant reduced the child support payments and alimony payments made by him by one-half. Other than asking Laurie to come home in a letter and telephone calls, plaintiff made no effort to regain custody. Until the rule to accrue past due alimony and child support was filed in July 1977, eleven months after Laurie left her home, plaintiff made no protest about the reduction in alimony and child support payments. Also during this period of time, defendant took no steps to have the prior custody, alimony and child support judgment modified.

The trial court found that there was an agreement between the parties relative to the father’s custody and reduction of child support payments from November 1975 through January 1976, and allowed a $600 credit for that period of time. This credit is not at issue on appeal.

The trial court further found, however, there was no agreement between the parties relative to custody or a reduction in child support for the period from September 1976 until trial and ordered the full amount of past due alimony and child support to be paid by defendant to plaintiff. No issue is made on appeal as to the award of past due alimony as defendant concedes the reduction in alimony was not warranted. The only issue on appeal is whether defendant is entitled to a reduction of or credit against child support since Laurie began living with him. We affirm the judgment of the district court denying the credit.

The general rule is that a judgment for alimony or child support remains in full force and effect in favor of the party to whom it is awarded until the party held liable applies to the court and obtains a modification. Pisciotto v. Cruda, 224 La. 862, 71 So.2d 226 (1954); Sampognaro v. Sampognaro, 222 La. 597, 63 So.2d 11 (1953); Wallace v. Wallace, 316 So.2d 496 (La.App.2d Cir. 1975); Coleman v. Coleman, 209 So.2d 801 (La.App.2d Cir. 1968).

The wife in whose favor the alimony and child support judgment is made is entitled to spend the payments as she chooses and may determine how the funds will be disbursed. Odum v. Odum, 273 So.2d 576 (La.App. 1st Cir. 1973). The wife may, through agreement with her former husband, make arrangements for payment of alimony or child support in a way other than direct payments to her and may waive rights under a previous alimony judgment. Henson v. Henson, 350 So.2d 979 (La.App. 2d Cir. 1977); Hodge v. Hodge, 338 So.2d 161 (La.App. 2d Cir. 1976); Caraway v. Caraway, 321 So.2d 405 (La.App. 2d Cir. 1975), writ ref. 323 So.2d 479 (La.1975); Wallace v. Wallace, supra; Silas v. Silas, 300 So.2d 522 (La.App. 2d Cir. 1974); Odum v. Odum, supra; Duplechan v. Duplechan, 270 So.2d 264 (La.App. 3d Cir. 1972).

Defendant relies heavily on Silas v. Silas, supra, and Caraway v. Caraway, supra, claiming that the plaintiff’s failure to make any significant attempt to reacquire the actual custody of her daughter or obtain payment of the full amount of child support indicates her consent to such an arrangement. In Silas this court allowed the father credit for child support during a six-month period where the mother requested the father to take physical possession of the children and provide for their needs and support, which he did. In Caraway it was held that where the wife voluntarily places the only child of a marriage in the custody of the husband for an extended period of time the husband is entitled to credit for such period of time on any past due child support. Henson v. Henson, supra, reached the same result under similar facts.

In the case at bar the evidence amply supports the trial court’s finding that there was no agreement on the part of plaintiff for the defendant to assume custody of the daughter or reduce the child support payments due to plaintiff. This case is distinguishable from Silas, Caraway and Henson in which the court found such an agreement by the mother. The fact that the mother in this case did not take any active legal steps for ten or eleven months after the daughter went to live with the father does not imply consent or an agreement to the unilateral action of the father.

It should also be noted that the child support award under the 1974 judgment was an in globo award for the support of two minor children. Where there is an in globo award of child support for more than one child, the father is not entitled, without seeking court modification of the judgment, to reduce the child support payments on a pro rata basis even where child support is no longer due for one of the children because of majority or other reason. Halcomb v. Halcomb, 352 So.2d 1013 (La.1977); Wallace v. Wallace, supra.

The trial court properly denied credit to the defendant for a pro rata portion of the child support payments due during the period of time in question. The judgment of the district court is affirmed at appellant’s costs.

Affirmed.


author: MARVIN, Judge.

text:
    Samuel J. TRUELOVE, Plaintiff-Appellee, v. BLUE CROSS OF LOUISIANA and Louisiana Health Service and Indemnity Co., Defendant-Appellant.
    No. 13491.
    Court of Appeal of Louisiana, Second Circuit.
    Feb. 20, 1978.
    En Banc. Rehearing Denied April 4, 1978.
    Writ Denied May 19, 1978.

      Emmons, Henry & Reeves by W. Jack Emmons, Jonesboro, for defendant-appellant.
    Baker, Culpepper & Brunson by Bobby L. Culpepper, Jonesboro, for plaintiff-appellee.
    Before BOLIN, PRICE and MARVIN, JJ.
   MARVIN, Judge.

From judgment for the insured for benefits under a hospitalization policy ($954) and for attorney’s fees ($500), the insurer appeals. We affirm.

The insurer contends that the medical condition for which benefits were sought pre-existed the policy and that Art. IX of the policy should control since it excludes from coverage such pre-existing conditions during the first year of the policy.

Emphasizing that no application was attached to the policy as required by R.S. 22:618 (see also R.S. 22:219, 616), the lower court held that no evidence of a pre-exist-ing condition could be admitted or considered, citing Henderson v. Minn. Mut. Life Ins. Co., 347 So.2d 53 (La.App.2d Cir. 1977) and Smith v. North American Co. for Life, Acc. & Health Ins., 306 So.2d 751 (La.1975).

In Smith, the Supreme Court said:

“. . [T]he trial court . . .erroneously admitted the application for insurance into evidence. Thus all evidence concerning pre-existing conditions not disclosed in the application was improperly considered. Failure to disclose that evidence is not available to the insurer as a defense because a correct copy of the application . . . was not attached to or otherwise made a part of the policy.” S06 So.2d 754.

The Supreme Court then concluded:

“In light of our conclusions, it is unnecessary to consider whether [the insured] had a pre-existing condition prior to the effective date of the insurance . . . ” ibid, p. 755.

In Henderson, the insurer likewise failed to attach the application to the policy. There, we said:

“We find, under the ruling of the Supreme Court in Smith, supra, that the trial court erred in admitting into evidence the application or any evidence of misrepresentation. The all-inclusive nature of the Smith decision also precludes consideration of whether or not plaintiff had a pre-existing condition, prior to the effective date of the insurance, which was responsible for his disability.” 347 So.2d 55.

The insurer argues here that neither litigant contends a formal application was made or required, that the issue is not a false statement on the application, but instead, the issue is whether the exclusionary provision of the policy should be applied..

While exclusionary provisions of this type are authorized (R.S. 22:213) and are not contrary to the law or public policy (Muse v. Metropolitan Life Insurance Co., 193 La. 605, 192 So. 72 (1939)), the issue for our determination is whether our interpretation of Smith in Henderson is correct.

We recognize that there may be a distinction between the defense based on the insured’s false statement in the application (R.S. 22:219, 616, 618, 619) and the defense based on a policy exclusion of the type at issue here as authorized by R.S. 22:213(A)(13)(b). Smith perhaps may be too inclusive, but it is nonetheless the latest expression of our Supreme Court and we are bound by it.

Under Smith, we hold evidence of a preexisting condition is not admissible where a correct copy of the application is not attached to the policy as required by R.S. 22:219, 618, even though the insurer defends solely and exclusively on the basis of a policy exclusion as authorized by R.S. 22:213(A)(13)(b). R.S. 22:211(A); Henderson, supra. See also Spain v. Travelers Ins. Co., 332 So.2d 827 (La.1976).

At appellant’s- cost, judgment is

AFFIRMED.

      . The pertinent part of Art. IX reads:
      “A. No Health Care Allowance will be provided for:
      1. services rendered during the first year of coverage for, or as a result of, any ailment, disease, or physical condition, the symptoms of which exhibit themselves before the Original Effective Date; . . . ”
      The evidence here establishes the condition resulting in the hospitalization of the insured’s wife pre-existed the policy. The policy was effective May 15, 1975. On that day, the wife saw a medical doctor. The doctor hospitalized her for further treatment on May 19. The doctor testified that the wife’s condition arose a “few weeks” prior to May 19 and resulted in the hospitalization because of gradually increasing pain.

      . This section reads:
      “(b) No claim for loss incurred commencing after three years from the date of issue of this policy shall be . denied on the ground that a . . . physical condition . . . had existed prior to the effective date of coverage of this policy.”


text:
    W. A. McMICHAEL CONSTRUCTION COMPANY, Plaintiff-Appellee, v. D & W PROPERTIES, INC., et al., Defendants-Appellants.
    No. 13492.
    Court of Appeal of Louisiana, Second Circuit.
    Feb. 20, 1978.
    En Banc. Rehearing Denied April 4, 1978.
    Writ Refused June 2, 1978.

      Wiener, Weiss, Madison & Howell by John M. Madison, Jr., Shreveport, for defendants-appellants.
    Wilkinson, Carmody & Peatross by Charles B. Peatross and Samuel W. Caver-lee, Shreveport, for plaintiff-appellee.
    Before PRICE, HALL and MARVIN, JJ.
   HALL, Judge.

Plaintiff, W. A. McMichael Construction Company, a partnership composed of Willie A. McMichael and Fred J. McMichael, filed suit as a former partner in a land development partnership seeking to set aside an agreement by which it withdrew from the partnership, transferred its interest in the partnership to the managing partner, D & W Properties, Inc., and released all claims against the partnership, its partners and its assets. The petition alleged fraud, withholding of material information, and breach of fiduciary duty by the managing partner. Plaintiff prayed that it be restored to the equity position it held on the date of execution of the agreement, that it be recognized as the owner of a 41% percent interest in the partnership assets, and, alternatively, that it be awarded damages. After trial the district court found that D & W breached its fiduciary obligation owed to plaintiff, declared the agreement void, and ordered plaintiff reinstated to its former position. Defendants appealed. For reasons expressed in the trial court’s reasons for judgment and in this opinion, the judgment of the district court is affirmed, except that plaintiff’s interest is recognized as 38.9 percent rather than 41% percent.

After careful review of the record, this court is in full agreement with and adopts the findings of fact and conclusions expressed by the district court, as follows:

“In August, 1973, a partnership was formed between plaintiff, Evans & Evans, an architectural partnership, and D & W Properties, Inc. The partnership so formed was called Southside Center Associates, with each of the partners owning an undivided one-third interest. The partnership owned an option from Alice Bell McCrary, et al., to lease a 34.35 acre tract of land located in the southwest portion of Shreveport. D & W Properties, Inc., with F. H. Delaney as President, was designated as managing partner of Southside Center Associates under the terms of the partnership agreement.

“The architectural firm of Evans & Evans became dissatisfied with the situation and on February 22, 1974, wrote to defendant Delaney and expressed its desire to withdraw from the partnership. On March 5, 1974, effective February 28, 1974, Evans & Evans withdrew as a partner in South-side and conveyed its entire interest to the partnership. Following this withdrawal, two additional corporations were added as partners to Southside, namely John J. Guth Associates, Inc. and Aillet, Fenner, Jolly & McClelland, Inc., each of whom acquired an undivided one-twelfth interest, leaving a five-twelfths interest owned by D & W Properties, Inc. and the remaining five-twelfths interest owned by plaintiff.

“It was not long before the McMichaels became dissatisfied with progress of their investment. The record shows that the property on which the partnership held an option to lease was nearby the property on which the South Park Mall was constructed and this latter development had an adverse effect on development of the partnership option acreage. In July, 1974, a meeting of the Southside Center Associates partners was held and there was considerable pessimism expressed by Mr. Delaney regarding the efforts of D & W or himself in obtaining development of the partnership property. It was known at the time of this meeting and reported to the partners by Mr. Delaney that he had been negotiating with a real estate agent for a local bank to lease a portion of the property.

“Subsequent to the July meeting the McMichael partners made inquiries of Mr. Delaney concerning progress in developing and obtaining leases on the option acreage, but they were advised that there had been no progress. Plaintiff failed to make payment of monthly statements it received for its part of partnership expenses, including monthly option payments to the McCrary property owners from after June, 1974. Plaintiff, through W. A. McMichael, discussed this with Mr. Delaney and advised that plaintiff would make no more payments to the partnership, but would take a reduced percentage of ownership in the partnership. In September, Mr. Delaney discussed this problem with one of his attorneys, Mr. Jacques L. Wiener, Jr., and was advised that there was a serious problem in resolving the dispute between the partners if litigation had to be pursued since the option was due to expire in the early part of 1975. On October 4, 1974, a letter was sent by Mr. Delaney on behalf of Southside Center Associates (Exhibit J-D) advising plaintiff that it was in default under the terms of the partnership agreement and was deemed to have voluntarily withdrawn from the partnership, but that Mr. Delaney and his ‘associates’ would agree to cancel any past or future indebtedness of plaintiff and refund the sum of $1,958.00 if plaintiff would withdraw from the partnership. This letter was received by plaintiff on October 5 or 6, 1974.

“On October 4, 1974, D & W Properties, Inc., through its President, P. H. Delaney, executed a document entitled ‘Agreement to Lease’ a portion of the property covered by the partnership’s option. The Agreement to Lease was with The First National Bank of Shreveport and was signed by its President, J. Hugh Watson, on October 9, 1974. This document is identified as Exhibit J-G.

“By letter dated and mailed October 16, 1974, to Mr. Delaney (Exhibit J-E), plaintiff declined the earlier offer contained in Mr. Delaney’s letter of October 4 to plaintiff concerning withdrawal from the partnership and requested that no action be taken that would affect plaintiff’s rights as a partner.

“Prior to receipt of the letter from plaintiff, Mr. Delaney, on October 16, 1974, arranged for and met with the McMiehael brothers in their office and at that meeting Mr. Delaney, on behalf of D & W Properties, Inc., offered plaintiff the sum of $23,-000.00 in cash for its interest in the partnership. The next day, on October 17, 1974, plaintiff accepted this second offer of cash and entered into a formal transfer of all of its interest in the partnership to D & W Properties, Inc. (Exhibit J-F).

“The evidence is clear, convincing and uncontradicted that Mr. Delaney did not reveal to the McMiehael brothers the existence of the Agreement to Lease which he had executed with The First National Bank of Shreveport. Further, the evidence established that he did not inform them of letters between himself and Mr. Jim Dowl-ing, a member of the real estate firm of J. Wesley Dowling & Associates, Inc., who was obtaining a site for The First National Bank. These letters, filed in evidence as Exhibits P-1, P-2 and P-3, contained specific proposals in connection with a ground lease, the area to be contained within the lease, the term, the rental, etc. Reference to the Agreement to Lease subsequently signed by the bank and by Mr. Delaney shows that most of the proposals were accepted and incorporated therein.

“Subsequent to the withdrawal of the plaintiff as a partner, Southside Center Associates conveyed all of partnership’s right, title and interest in the McCrary property to Park South Properties, a partnership which was formed for the purpose of obtaining that option. This new partnership consisted of its general partner, Delaney Mansfield Properties, a partnership composed of F. H. Delaney, Howard R. Crum-ley, Norman V. Kinsey and Edwin F. Whited, and its partners in commendam, John J. Guth, Jr., Robert R. Aillet, Robert D. Fen-ner, Edward M. Jolly and H. H. McClelland. The percentage ownership was established as Delaney Mansfield Properties owning 90 percent, Mr. Guth owning five percent, and 1.25 percent each owned by Messrs. Aillet, Fenner, Jolly and McClelland.

“On December 31,1974, Park South Properties exercised its option to lease the McCrary property. On April 7, 1975, Park South entered into a ground sub-lease (Exhibit J-K) with The First National Bank covering 1.15 acres of the property on which Park South had obtained the ground lease by virtue of exercising the option. This sub-lease appears to contain most of the essential provisions as set forth in the Agreement to Lease previously identified as Exhibit J-G.

“The McMiehael brothers, Willie A. McMiehael and Fred J. McMiehael, had no knowledge of the Agreement to Lease or the sub-lease. In October, 1975, the McMi-chaels became aware of the Agreement to Lease (Exhibit J-G) which had been executed in October, 1974. This suit was then filed seeking, among other remedies, to set aside the October 17, 1974, agreement by which it had withdrawn from the partnership and seeking to restore it to its position prior to execution of the agreement of October 17, 1974, and recognizing it as owner of 41% percent interest in the lease between the McCrary owners and Park South Properties and, in turn, the lease between Park South and The First National Bank. Alternative remedies sought in the event that plaintiff could not be restored to its former position consisted of a demand for money damages.

“Before proceeding further we think it important to also comment that Mr. W. A. McMichael testified that he was of the opinion that the partnership agreement gave his partnership the right to cease payments of regular partnership expense items and thereby reduce its equity position in the partnership. Whether he was justified in this view is not so important as the fact that he adhered to this view and discussed it with Mr. Delaney prior to Mr. Delaney’s meeting with Mr. Jacques Wiener, Jr. in September, 1974.

“We believe that the law of this state places upon each partner a fiduciary relationship with his other partners. This fiduciary relationship or duty would certainly apply to the managing partner who has been given management responsibilities by the remaining partners. We do not believe that such fiduciary relationship was observed by Mr. Delaney when he acquired the interest of plaintiff without making full disclosure of the Agreement to Lease which he signed on October 4 and which was signed by The First National Bank on October 9.

“While Mr. Delaney characterized this document as a mere ‘negotiating tool’ and as not being an overly significant document, we can not accept such a view as reasonable or excusable in view of the facts. This was the only significant development in connection with the property covered by the option. It is further noted that Mr. Delaney testified in his discovery deposition in answer to a question as to whether it had ever entered his mind to tell the McMicha-els about the Agreement to Lease, T was out there to buy them out, not to give them a progress report.’

* * * * * *

“We are satisfied that a fiduciary relationship existed between the partners in this case and that this relationship was breached by one of the partners, acting through Mr. Delaney. Accordingly, we hold that the Agreement of October 17, 1974, Exhibit J-F, is now set aside and plaintiff is to be restored to its position immediately prior to the execution of that Agreement. An appropriate accounting as between plaintiff and defendants is called for. We believe that based on the evidence in this case plaintiff can be restored to its former position and, therefore, order that this be done in lieu of our assessing monetary damages. We will leave it to the very capable counsel for the parties herein to prepare an appropriate judgment. A reasonable time will be given within which they may attempt to work out the details which are to be incorporated in such judgment so as to restore plaintiff to its previous position as a partner in the ownership of the option of McCrary property. Such judgment will, of course, cast defendants for all costs of these proceedings.”

The judgment signed in accordance with the district court’s opinion recognized plaintiff as the owner of 41% percent of the interest in and to the lease agreement by and between Alice Bell McCrary, et al and Park South Properties, and referred to a written agreement entered into between the parties pursuant to the judgment. A copy of the agreement between the parties is not in the record.

Defendants’ contentions, expertly and vigorously urged on appeal, may be summarized as follows:

(1) No fiduciary duty was owed to the plaintiff by the managing partner, D & W, or its president, Delaney, after August 1974, when plaintiff announced its refusal to pay its share of the monthly lease option payments due by the partnership, thereby breaching plaintiff’s obligations under the partnership agreement;

(2) The failure of D & W and its president, Delaney, to disclose the existence of the Agreement to Lease did not amount to a breach of fiduciary duty because the agreement was not significant or material to the partnership venture or the negotiations being carried on between D & W and plaintiff, and, at the most, the failure to disclose an oversight or negligent act on the part of Delaney;

(3) The negotiated, written agreement of compromise and settlement should not have been set aside in the absence of a finding by the court of fraud or willful misrepresentation; and

(4) In any event, plaintiff is entitled only to a reduced interest in the partnership assets in view of its failure to pay its share of the monthly lease option payments, and a new trial should be granted in order to determine the amount of plaintiff’s interest.

I.

Although the fiduciary relationship between partners is not expressly defined in the articles of the Louisiana Civil Code on partnership, LSA-C.C. Arts. 2801, et seq., and there are few Louisiana cases dealing with the subject, the fiduciary duty owed by partners to each other is uniformly recognized throughout the country. Louisiana courts have frequently drawn on authority from other states in dealing with the law of partnerships. See F. Hodge O’Neal, An Appraisal of the Louisiana Law of Partnership, 9 La.L.Rev. 307 and 450 (1948-1949).

In Corpus Juris Secondum, the general rule and the higher duty of a managing partner are stated as follows:

“The relation of partnership is fiduciary in character, and imposes on the members of the firm the obligation of the utmost good faith in their dealings with one another with respect to partnership affairs, of acting for the common benefit of all the partners in all transactions relating to the firm business, and of refraining from taking advantage of one another by the slightest misrepresentation, concealment, threat, or adverse pressure of any kind.
The obligation is especially stringent on a partner who is managing the business .
“Although, in some jurisdictions, statutes expressly provide that partners are trustees for each other with respect to partnership property and transactions within the meaning of statutes relating to trust, the relationship of trust has also been held to exist between partners without reference to statute. A managing partner particularly is held to be under a duty analogous to that of a trustee, and he must conduct the business in the interest of the partnership.
“It has been held that each partner has a right to know all that the others know regarding the partnership affairs, and is under the duty not only of not concealing any material matter regarding such affairs, but of fully divulging to his co-partners all matters within his knowledge material to the affairs or property of the partnership, at least on demand.” 68 C.J.S. Partnership § 76 (pp 516-518) (fn. deleted) (emphasis supplied)

In analyzing the obligations at the time one partner purchases another partner’s interest, this Encyclopedia states:

“The necessity for good faith as between the partners extends to cases of the transfer of one partner’s interest to another or to a transfer of a part of his interest, and full disclosure of all material facts must be made even though strained relations may exist between the partners.” 68 C.J.S. Partnership § 102 pp 542-543 (fn. deleted) (emphasis supplied)

American Jurisprudence 2d, Partnership, Sec. 123, pp. 47-48 and Sec. 125, p. 50, is to the same effect.

The fiduciary relationship is recognized in the Uniform Partnership Act. 6 U.L.A. (Partnership'Act) § 21. See also, Annotation: Duty in Respect of Good Faith and Disclosure of Information Upon Sale of Member’s Interest in a Partnership Adventure to Other Members, 120 A.L.R. 724.

Legal writers in Louisiana have discussed the fiduciary relationship between partners. In 45 Tul.L.Rev. 367 (1971), the general fiduciary duty is explained:

“In all matters related to the partnership, partners are regarded as fiduciaries of one another and of the firm. The partnership relation, one of trust and confidence, necessarily imposes upon the parties the highest standards of good faith and due diligence — the duty to act for the common benefit in transactions relating to or affecting the firm, and the duty to refrain from obtaining any personal advantage by the slightest misrepresentation, subterfuge or concealment. This obligation continues with regard to the firm’s assets even after dissolution of the partnership.
“The scope of the partner’s fiduciary obligation is not limited to the circumstances previously discussed. The modern tendency has been to expand the breadth of the fiduciary duty in all areas of substantive law, and certainly, partnership law will not escape the influence of this modern approach. Consequently, an attorney, in advising a client of the extent of his obligation as a partner, should be aware of the possible applicability of the fiduciary rules even to good faith transactions.”

In 35 La.L.Rev. 887, 888 (1975), it is observed:

“French theory views partnership as a reciprocal contract of mandate which suggests a fiduciary relationship between the partners. Likewise at common-law, a partnership has been characterized as a legal relationship which implies knowledge of and competence in the personal character, skill and ability of the associates, with each partner entitled to rely on the personal cooperation, advice and aid of the other partners in all partnership endeavors.”

In Jansen v. Bellamore, 147 La. 900, 86 So. 324 (1920), the court found that between two parties jointly involved in a lease:

“ . . . there arose and continued to exist until its termination, a relationship carrying with it all the rights and obligations of a particular or limited partnership. . . .all of the benefits and advantages, actual or potential, which it gave, belonged to them in indivisión, and nothing that the one might do could deprive the other of his share. This rule of fair dealing was as effectually written into their agreement by the law as if it had been specifically stipulated.
* ifc * ifc * Jfc
“The rule is not confined to any particular class of contracts or undertakings, but applies with equal force in every case where there exists a relationship of trust between the parties, requiring the exercise of mutual good faith and fair dealing, though it finds most frequent application among partners, attorneys and clients, tutors and wards, principals and agents, etc. . . . ”

The court held that once the existence of the relationship was shown, the burden shifted to the party who obtained a gain upon renewal of the lease “ . . . to establish by convincing evidence that he acted only after a full disclosure to his associate in the matter.”

One of the defenses was that the plaintiff had no interest in renewal of the lease. The court held:

“ . . .we hardly think, taking all of the circumstances of the case into consideration, that he would have refused it. He undoubtedly had the right to a fair opportunity to consider what action he would take, after a full and fair disclosure of the true circumstances.” (Emphasis supplied)

In the case of Lowry v. Cobb, 9 La.Ann. 592 (1854) the court very early analyzed the basic relationship of a partner to a partner:

“ . . [A] partner has not a right to prefer his own interest to that of the firm, nor deprive the partnership of a profitable bargain by taking to his own account. The doctrine is obviously deducible from the nature of the contract of partnership, on entering into which, the partner promises to his associates his efforts for the common benefit. This promise he would violate, by seeking his individual advantage to that of the partnership. Hence, the books abound in cases where a partner who, while his relations as such existed, has stipulated clandestinely for any private benefit to himself, has been compelled to divide such gains with his associates.” 9 La.Ann. at 593.

In Grand Isle Campsites, Inc. v. Cheek, 262 La. 5, 262 So.2d 350 (1972), involving a joint venture which is likened to a partnership, the court held that there was a fiduciary relationship between the joint ventur-ers and found a violation of the fiduciary duty.

In Noe v. Roussel, 310 So.2d 806 (La.1975), a case concerning a transaction between a corporate liquidator and a foreign corporation in which the liquidator had a financial interest, the court discussed the fiduciary duty and burden of a corporate liquidator as follows:

“We hold, therefore, that an agent who acquires his principal’s property, or one who otherwise acts in a fiduciary capacity, bears the burden of establishing that the transaction was an arm’s length affair. This means that the agent or fiduciary must handle the matter as though it were his own affair. It also means the agent or fiduciary may not take even the slightest advantage, but must zealously, diligently and honestly guard and champion the rights of his principal against all other persons whomsoever, and is bound not to act in antagonism, opposition or conflict with the interest of the principal to even the slightest extent. The reason for the rule is obvious.” 310 So.2d at 818. (emphasis supplied)

LSA-R.S. 9:3801 includes “partner” in the definition of “fiduciary” in the Uniform Fiduciaries Law.

The law applicable to the case at bar may be summarized as follows: The relationship of partners is fiduciary and imposes upon them the obligation of the utmost good faith and fairness in their dealings with one another with respect to partnership affairs. Each partner must refrain from taking any advantage of another partner by the slightest misrepresentation or concealment of material facts. The obligation is especially stringent on a partner who is managing the business, his duty being analogous to that of a trustee. The fiduciary duty of the partners is particularly applicable when one partner seeks to purchase the interest of another partner. Such a sale will be sustained only when it is made in good faith, for a fair consideration, and on a full and complete disclosure of all important information as to value. This duty of disclosure holds true despite the fact that the relations between the partners have become strained or in conflict. The fiduciary duty continues through the sale or purchase of a partner’s interest or through termination and liquidation of the partnership.

Defendants do not seriously contend that there was not a fiduciary relationship between the partners, acknowledging that partners have a duty to deal fairly and honestly with each other. Defendants do seriously contend, however, that D & W’s fiduciary duty to disclose was terminated by plaintiff’s refusal to make further payments to the partnership account which was an active breach of the terms of the partnership agreement.

The answer to this argument is twofold. First, the partnership agreement did not obligate plaintiff to make further capital contributions to the partnership without its consent, as will be discussed more fully in a later section of this opinion. Second, the great weight of authority is that the fiduciary relationship continues to exist even though there is conflict and disagreement between the partners and even though cause is given by one of the partners for dissolution of the partnership. The fiduciary relationship has been consistently recognized in connection with buy and sell transactions which are often brought about by conflicts and disagreements between the partners. D & W, through its president, Delaney, had a fiduciary duty to disclose to plaintiff all material facts within its knowledge through the time of the execution of the agreement by which D & W purchased plaintiff’s interest in the partnership.

II.

Defendants next contend that the agreement to lease signed by Delaney on October 4 and by the Bank on October 9, prior to consummation of the buy out on October 17, was not significant because it represented a mere intent to lease, was not a binding contract, and required considerable further negotiation before the lease could become a reality. Defendants characterize the agreement to lease as a mere step in negotiations or as a negotiating tool. Defendants contend the execution of the agreement to lease was not material because it was not objectively demonstrated that plaintiff would have stayed in the partnership if it had known about the agreement to lease.

The evidence is to the contrary and fully supports the trial court’s finding that the execution of the agreement to lease was significant and material.

The agreement to lease obligated the partnership and the Bank to enter into a lease of part of the partnership property and covered the basic and essential terms such as duration of the lease, annual rental, size of the property, and the like. The agreement contained a clause providing that only the basic elements of the proposed lease were outlined and that all details of the lease would be prepared at a later time. This clause might have provided an escape for either of the parties had they chosen not to go through with the deal. Nevertheless, there was agreement on the basic essentials of the lease and no reason to contemplate, after signing of the agreement, that the lease would not be consummated. Although there were some hard negotiations on the other provisions of the lease and some problems, such as title problems, which had to be resolved, a lease was in fact consummated in due course in accordance with the basic terms of the agreement to lease. At the time the agreement to lease was signed, D & W, through its president, Delaney, had every reason to believe that the lease would be consummated. The agreement to lease was a major and significant step in the progress of the venture and in accomplishment of the basic purpose and object of the partnership.

The lease of a corner lot containing slightly more than one acre of the 34 plus acres included in the option to lease provided for an annual rental of $20,500, as compared to the total annual rental of $24,000 to be paid by the partnership to the McCrarys on the lease of the whole property, leaving the balance of the property subject to further development. The McMicha-els testified they would not have sold their interest in the partnership if they had known about the agreement to lease. Objectively, it would seem that a lease of one acre out of a 34-acre tract at a rental which would cover the greater part of the lease rental on the whole tract reasonably assured the ultimate success of the venture, although it would still be operating at a deficit until further development. Objectively, it would seem that a reasonable businessman who had elected to go into this kind of venture would not have, with knowledge of the agreement to lease, sold his interest for less than the amount he had invested in the venture. In any event, plaintiff was entitled to make that election with full knowledge that the agreement to lease had been signed. The continued participation by the D & W group and other partners weighs against the contention that the venture was still not an attractive business deal even with the agreement to lease in hand.

Even if Delaney’s failure to disclose the existence of the agreement to lease was unintentional, or a mere oversight or negligence on his part, as urged by defendants, the failure to disclose is not any less a breach of the managing partner’s fiduciary duty.

III.

Defendants contend the court should not have set aside the negotiated written agreement of compromise and settlement between D & W and plaintiff in the absence of a finding of fraud or willful misrepresentation. The instrument was entitled “Agreement of Settlement, Termination and Release” and recognized that “real and justiciable controversies” had developed between the parties. In addition to providing for the withdrawal of the plaintiff from the partnership and the transfer of plaintiff’s interest to D & W, it provided that the compromise was intended to be “total, permanent and unconditional as to all matters of every nature and anywise directly or indirectly related to the activities, assets, adventures in which said parties were formerly involved, directly or indirectly, and that none of the parties reserve any rights, claims or charges, past, present or future, disclosed or undisclosed.”

Defendants rely on the following principles of law; public policy strongly favors compromise settlements to avoid litigation, Meinerz v. Treybig, 245 So.2d 557 (La.App. 3d Cir. 1971), writ refused 258 La. 580, 247 So.2d 395 (1971); a compromise settlement agreement has the same effect as a definitive judgment upon the parties to the agreement, LSA-C.C. Art. 3078; Matthew v. Melton Truck Lines, Inc., 310 So.2d 691 (La.App. 1st Cir. 1975); and a compromise agreement may not be set aside unless there, has been fraud or misrepresentation of material fact by one of the parties; Thompson v. Stacy, 148 So.2d 834 (La.App. 4th Cir. 1963). Defendants contend that fraud as defined by LSA-C.C. Art. 1847 was not established because it was not proved that Delaney had the requisite intent to deceive.

Legally given consent of both parties is requisite to the validity of a contract, so that there is no consent and no valid contract where the consent has been produced by error or fraud. LSA-C.C. Arts. 1779, 1819, 1824. Compromises are a species of contract which cannot be attacked because of error of law, but which may be rescinded because of error of fact, or in the case of fraud. LSA-C.C. Arts. 3078, 3079. See also LSA-C.C. Arts. 1828-1831. In the case of error, where the information which would have destroyed the error has been withheld by the other party to the contract, it comes under the heading of fraud, and invalidates the contract. LSA-C.C. Art. 1832.

Numerous cases hold that an intention to deceive and resulting loss or damage are essential elements of fraud. Fraud must be proved by him who alleges it, but it may be proved by simple presumptions or by legal presumptions, as well as by other evidence. The maxim that fraud is not to be presumed means no more than it is not to be imputed without legal evidence. LSA-C.C. Art. 1848.

Louisiana courts have had difficulty articulating, within the framework of civil law concepts, the theory upon which redress is granted for breach of fiduciary duty, particularly where the redress is the setting aside of a sale. Mansfield Hardwood Lumber Company v. Johnson, 263 F.2d 748, on rehearing 268 F.2d 317 (5th Cir. 1959), certiorari denied, 361 U.S. 885, 80 S.Ct. 156, 4 L.Ed.2d 120 (1959), rehearing denied 361 U.S. 926, 80 S.Ct. 290, 4 L.Ed.2d 241. However, whether based on fraud, presumptive or constructive fraud, error, or equitable principles, Louisiana courts have consistently set aside transactions or otherwise afforded effective relief where a fiduciary secured an unfair advantage by failure to disclose material information to the principal’s detriment. See the cases cited in Section I of this opinion and the cases cited in Mansfield Hardwood Lumber Company v. Johnson, supra. Although the result in some of these cases was predicated on a specific finding of fraud or an intent to deceive, the same result was reached in a number of other cases without such a specific finding. Breach of fiduciary duty was the key ingredient in all of the cases.

On the basis of the finding by the trial court and this court that the managing partner through its president breached its fiduciary duty to plaintiff by failing to disclose material and pertinent information, plaintiff is entitled to have the settlement agreement which included a sale of its interest in the partnership set aside and is entitled to be restored to the position it held at the time the agreement was executed.

IV.

In the summer of 1974, the capital contributions previously made by the partners were depleted. In order to make the monthly lease option payments it was necessary that additional capital contributions be made by the partners. D & W and the minority partners paid their share of the monthly payments as they came due. Plaintiff refused to pay its share of the monthly payments, taking the position that under the partnership agreement it was not required to make additional capital contributions, and that as necessary additional contributions were made by the other partners plaintiff’s interest in the partnership would be reduced. Plaintiff’s refusal was made prior to the time negotiations with the Bank’s broker intensified and there was no failure to disclose information at that time. D & W advanced plaintiff’s portion of the monthly lease option payments for June, July, August, and September, billing plaintiff for its share, which plaintiff never paid.

Defendants contend that since plaintiff did not make its share of additional capital contributions and was claiming a reduced interest in the partnership at the time the October buy-out agreement was signed, plaintiff should not be restored to its full 41% percent interest in the partnership or its assets. Defendants contend that because plaintiff’s “capital account” was in a deficit position at the time of the buy out, plaintiff’s interest was reduced to zero. Defendants ask that the case be remanded to determine the exact interest of plaintiff prior to the buy out.

The partnership agreement provides in pertinent part:

“IV
“CAPITAL
“A. The original capital of the partnership shall be contributed in cash by the parties hereto as follows:

D & W Properties, Inc. $25,000.00 (33%%)

Evans & Evans $25,000.00 (33%%)

W. A. McMichael Construction Company $25,000.00 (33%%)

“B. The parties hereto recognize that additional capital may and probably will become necessary or advisable, and they agree that, upon the affirmative vote of all of the partners, they will furnish such additional capital as may be called for by such partners, provided, however, that no call or calls for additional capital shall exceed TEN THOUSAND AND 00/100 ($10,000) DOLLARS per partner in the aggregate.
“C. Should any partner fail or refuse for any reason to contribute additional capital, if additional capital is necessary under the provisions of Sub-Paragraph B above, then it is agreed that the remaining partners, or any one of them, shall have the right to contribute the defaulting partner’s portion of the additional capital, in the same proportion that they have contributed to the capital of this partnership, and having done so, each partner so contributing thereby increases his percentage in the partnership.”

Paragraph IV B. recognizes that additional capital might be necessary but requires the furnishing of additional capital only upon the affirmative vote of all of the partners. Since plaintiff did not affirmatively vote to furnish additional capital it was not obligated or required to do so and was not in breach of its obligations by refusing to pay its share of additional expenses. Plaintiff refused to contribute additional capital and D & W contributed the defaulting plaintiff’s portion of the necessary additional capital. Having done so, D & W thereby increased its percentage in the partnership and plaintiff’s percentage was reduced, under the express provisions of Paragraph IV C. The increase and corresponding reduction should be calculated in proportion to the total capital contributed by the respective partners. The status of plaintiff’s capital account, which takes into consideration partnership losses, and the provisions of the partnership agreement on withdrawal from the partnership, have no application to the circumstances governed by Paragraph IV of the partnership agreement.

The evidence discloses that D & W and plaintiff originally contributed $25,000 each. They each later contributed an additional $5,000. From June through September 1974, D & W contributed an additional $2,443.75 for its own account and advanced $2,152.08 for plaintiff’s share of expenses during that period. Plaintiff contributed an additional $291.67. At the end of September 1974, the total capital contributed by each partner was $34,595.83 by D & W and $30,291.67 by plaintiff. In proportion to each other D & W has contributed 53.3 percent and plaintiff has contributed 46.7 percent of their combined contributions of $64,887.50. Applying these percentages to their original combined 83.3 percent interest gives D & W a 44.4 percent interest and plaintiff a 38.9 percent interest in the partnership. Under the provisions of Paragraph IV B. of the partnership agreement, this was the interest of the partners at the time the buy-out agreement was executed and is the interest to which the partners should be restored upon setting aside that agreement. The judgment will be amended accordingly.

The judgment of the district court is amended to provide that the interest of plaintiff, W. A. McMichael Construction Company, is 38.9 percent and, as amended, the judgment of the district court is affirmed, at appellants’ costs.

Amended, and as amended, affirmed.


author: PRICE, Judge.

text:
    WEST MONROE POLICE PENSION AND RELIEF FUND, Plaintiff-Appellant, v. Harold Boyce LOFTON, Defendant-Appellee.
    No. 13493.
    Court of Appeal of Louisiana, Second Circuit.
    Feb. 20, 1978.
    En Banc. Rehearing Denied April 4, 1978.

      James A. Norris, Jr., West Monroe, for plaintiff-appellant.
    Joiner & Roberts, Ltd. by Charles E. Joiner, West Monroe, for defendant-appellee Harold Boyce Lofton.
    William J. Guste, Jr., Atty. Gen. by William T. Reeves, Jr., Asst. Atty. Gen., Baton Rouge, for Municipal Police Employees Retirement System defendant-appellee.
    Before PRICE, HALL and MARVIN, JJ.
   PRICE, Judge.

Petitioners, Harold Boyce Lofton and the West Monroe Police Pension and Relief Board, seek a declaratory judgment to determine whether Lofton is entitled to retirement benefits from the West Monroe Police Pension and Relief Fund (hereinafter referred to as the West Monroe system). The Municipal Employees Retirement System (hereinafter referred to as the Municipal system) was cited as a defendant by the West Monroe system.

The case presents two issues: (1) Whether the law pertaining to transfers between retirement systems, La.R.S. 42:696, et seq., entitles Lofton to utilize four years of military service, for which credit is afforded under the Municipal system, in computing his eligibility for retirement under the West Monroe system where such service is not creditable, and (2) Whether the 1975 amendment to R.S. 42:697 should be given retroactive application to a transfer between retirement systems which occurred in 1974.

The parties filed a joint stipulation of facts as follows:

(1) That Mr. Harold Boyce Lofton joined the West Monroe City Police Department on August 1st, 1959, and was continuously employed by said West Monroe City Police Department until his retirement from said Department on May 1, 1976, with the exception of said Mr. Lofton having been suspended one (1) day, thus giving Mr. Lofton a total of sixteen (16) years, eight (8) months, twenty-nine (29) days, of creditable active service with the West Monroe City Police Department.
(2) That Mr. Harold Boyce Lofton entered the Military Service on October 15th, 1952 and was honorably discharged from the United States Armed Services on October 12th, 1956.
(3) That Mr. Harold Boyce Lofton, by application dated April 9, 1974, and signed by him, requested a transfer of his membership in the West Monroe Police Pension & Relief Fund to the Municipal Police Employees’ Retirement System, said transfer to the Municipal Employees’ Retirement System to become effective June 1, 1974.
(4) That in accordance with the above mentioned transfer or request, the membership of Mr. Harold Boyce Lofton in the West Monroe Police Pension & Relief Fund was terminated as of June 1, 1974. That any and all contributions or credits to the account of Mr. Harold Boyce Lof-ton in the West Monroe Police Pension and Relief Fund have been retained in said West Monroe Police Pension and Relief Fund since the date Mr. Harold Boyce Lofton terminated his participation in said fund.
(5) That on June 1, 1974, Mr. Harold Boyce Lofton transferred to and became a member of The Municipal Police Employees’ Retirement System.
(6) That after June 1, 1974 there were no payments made to the credit of Mr. Harold Boyce Lofton in the West Monroe Police Pension & Relief Fund; and that no deductions were made from the salary of Mr. Harold Boyce Lofton for payment to the West Monroe Police Pension & Relief Fund.
(7) That, between June 1, 1974 and May 1, 1976, pursuant to State Law, the City of West Monroe, Louisiana, withheld from the compensation paid Mr. Harold Boyce Lofton, as an Officer of The West Monroe City Police, the sum of $1,554.98, said sum representing the amount due by Mr. Harold Boyce Lofton, to the Municipal Police Employees’ Retirement System for the period of June 1, 1974 through May 1, 1976; and that the entire above mentioned amount was transmitted by The City of West Monroe, Louisiana to The State of Louisiana and credited to the account of Mr. Harold Boyce Lofton in The Municipal Police Employees’ Retirement System.
(8) That, between June 1, 1974 and May 1, 1976, pursuant to state law, the City of West Monroe, Louisiana, contributed to the Municipal Police Employees Retirement System funds in the amount of $1,332.87, said sums representing the amount due by the City of West Monroe, Louisiana, to the account of Mr. Harold Boyce Lofton, in the Municipal Police Employees Retirement System for the period of June 1,1974, through May 1,1976; and that the entire above mentioned amount was transmitted by the City of West Monroe, Louisiana, to the State of Louisiana, and credited to the account of Mr. Harold Boyce Lofton in the Municipal Police Employees Retirement System.

It is uncontroverted that Lofton has met the twenty year retirement requisite under the Municipal system and is entitled to benefits thereunder; however, benefits under that system are not distributed until the retiree attains age fifty. Lofton is forty-three years old, therefore, the present litigation was initiated to determine whether Lofton has met the twenty year retirement requisite under the West Monroe system, and can begin drawing pro rata benefits under that system which has no minimum age restriction for distribution of benefits.

The crux of the controversy is whether Lofton can credit his military service toward retirement in the West Monroe system, which involves the interpretation of three statutes: (1) R.S. 33:2241, the general statute under which the West Monroe system was created, which restricts military service for retirement eligibility to World War II service; (2) R.S. 33:2374(D) which allows Lofton to count his non World War II military service as retirement credit in the Municipal system; and (3) R.S. 42:697 as amended in 1972 which regulates transfers between retirement systems.

Lofton and the Municipal system contend that under the act regulating transfers Lof-ton can utilize his four years of military service credit allowable under the Municipal system as creditable service for eligibility under all systems, including the West Monroe system. It relies on paragraph B of R.S. 42:697 which provides:

B. The service credit transferred under the provisions of this section together with all future service credit earned by the member shall be used as creditable service for regular retirement, disability retirement and survivor’s benefits for eli-. gibility in all systems.

The West Monroe system contends that Lofton’s military service cannot be included for service credit in its system because each system’s requirements must be met for retirement eligibility, citing paragraph E of § 697, which reads as follows:

E. To be eligible for survivor’s benefits, disability or regular retirement in each system, the transferred member must meet the eligibility requirements of each system. A member may meet the eligibility requirements in one system and begin drawing benefits from that system even though he is not at that time eligible for benefits from the other system; provided, however, that the member shall not be eligible to receive benefits for so long as he is contributing to either system.

The West Monroe system also contends that the 1975 amendment to § 697 is applicable, and under its provisions the West Monroe system can absolve itself of all liability in this matter.

The trial judge held the 1975 amendment to § 697 inapplicable since the transfer occurred in 1974. He further found the provisions of § 697 as amended in 1972 ambiguous, giving the benefit of the ambiguity to the retiree and awarding Lofton retirement benefits under the West Monroe system. We affirm.

La.R.S. 42:697, as amended in 1972, does not contain language which is clearly dispositive of the issue raised under these facts. Even when all paragraphs of the section are read in pari materia, this statute can be reasonably interpreted as supportive for the contentions made by all parties. The statute is ambiguous and any ambiguity should be liberally construed in favor of the retiree. Since the statute provides that each system is to pay a pro rata share of benefits based on the number of service years which that system bears to the proportion of the total years in all systems, we note that one of the possible effects of denying Lofton retirement eligibility under the West Monroe system would be to provide him with only the six years of retirement benefits credited in the Municipal system. The law does not favor denial of retirement benefits whenever there exists a reasonable construction otherwise. Miller v. City of Shreveport, 90 So.2d 565 (La.App.2d Cir. 1956).

The trial court correctly held that since the transfer occurred in 1974, the 1975 amendment to R.S. 42:697 is inapplicable.

For the reasons assigned, the judgment is affirmed.


text:
    Warren L. BUTLER, Plaintiff-Appellant, v. MFA MUTUAL INSURANCE COMPANY et al., Defendants-Appellees.
    No. 13494.
    Court of Appeal of Louisiana, Second Circuit.
    Feb. 20, 1978.
    En Banc. Rehearing Denied April 4, 1978.
    Writ Refused May 12, 1978.

      Skeels, Baker & Coleman by Ben E. Coleman, Shreveport, for Warren L. Butler, plaintiff-appellant.
    Mayer, Smith & Roberts by Caldwell Roberts, Shreveport, for Government Employees Ins. Co., defendant-appellee.
    Before PRICE, HALL and MARVIN, JJ.
   PRICE, Judge.

This appeal arises out of a multiplicity of consolidated actions resulting from a three-car collision in which five persons were killed and one seriously injured. Two of the cars, referred to as the Barnett and Collins vehicles, were racing on the Pinehill Road in Caddo Parish after dark, and as Barnett was attempting to pass Collins on the crest of a hill, the Barnett car collided head-on with a third vehicle proceeding in the opposite direction.

Plaintiff, Warren L. Butler, whose sixteen-year-old daughter, Sabrina, was a passenger in the Barnett vehicle, brought suit for damages for her death against the owners of the Barnett and Collins automobiles and their liability insurers. Plaintiff also sued his insurer, Government Employees Insurance Company, under the uninsured motorist provisions of the liability policy covering two automobiles owned by him.

The suit was consolidated with four other actions relating to the same accident, and after trial, judgment was rendered in plaintiff’s favor for $16,900.75 against the owners of the Barnett and Collins vehicles and their liability insurers. Because the awards for the multiple plaintiffs exceeded the total liability insurance on the Barnett and Collins vehicles, the court prorated the proceeds resulting in plaintiff receiving a recovery of $6,004.57. Plaintiff’s demands against his insurer, GEI Co., for the balance of his damage under the uninsured motorist coverage were rejected on a finding that Sabrina was not an insured under the policy definition.

Plaintiff has appealed from the judgment denying his claim against GEI Co., and this is the only matter before us for review. For the reasons discussed herein we reverse and award judgment for plaintiff.

There are three defenses raised by GEI Co. to plaintiff’s action against it:

1) Sabrina Butler is alleged to have been guilty of contributory negligence or to have assumed the risk of harm by failing to protest to the driver of the Barnett vehicle concerning the manner of his driving.
2) GEI Co. contends that since custody of Sabrina was awarded to her mother after a divorce from plaintiff, she is not covered under the uninsured motorist provision of her father’s insurance policy as the policy definition of this term only includes a spouse or relative “while residents of the same household.”
3) GEI Co. also contends the Barnett and Collins automobiles were not “uninsured motor vehicles” within the purview of the uninsured motorist statute in effect at the time the policy of insurance was issued.

CONTRIBUTORY NEGLIGENCE AND ASSUMPTION OF THE RISK

The trial judge found no negligence on the part of any of the passengers in the Barnett vehicle. The burden is on defendant to show that plaintiff’s daughter had an opportunity to make an effective protest which would have prevented the accident. The evidence is insufficient to carry this burden to support either a plea of contributory negligence or assumption of the risk. A very short period elapsed from the time the two drivers met and accelerated to a high rate of speed until the accident occurred. The trial court correctly rejected these defenses.

WAS SABRINA AN INSURED UNDER THE POLICY?

Plaintiff and his wife were divorced out of state in 1964, and the custody of Sabrina and her sister was awarded to the wife. Plaintiff thereafter moved to Shreveport and bought a home at 1105 Englemead Street and moved his divorced wife and children into this residence. He rented a room at another address and allowed his family to have full use of his property. He paid the mortgage payments, personally maintained the yard, and occasionally stayed overnight with the children when his former wife was out of town. He also furnished Sabrina and another daughter a Volkswagen automobile to drive which was kept at the Englemead address. The Volkswagen and a Pontiac used by plaintiff are the two vehicles insured by GEI Co. under a family automobile policy with liability coverage of $50,000/$100,000, and uninsured motorist coverage on each vehicle of $5,000/$10,000.

GEI Co. contends the policy language precludes coverage of Sabrina because she was not “a resident of the same household” with plaintiff after her custody was awarded to her mother following the divorce. Defendant relies on the decisions in Ursin v. Oubre, 343 So.2d 1189 (La.App. 4th Cir. 1977), and Chapman v. Allstate Insurance Company, 306 So.2d 414 (La.App. 3rd Cir. 1975), which interpreted similar provisions of an automobile liability policy to deny coverage. These were cases where coverage on minor children was disputed by their father’s insurer since the children were in the legal custody of the mother pursuant to a divorce or separation decree.

These cases are factually distinguishable from the instant situation. In Ursin and Chapman the child lived in a residence provided solely by the mother to whom custody had been awarded. The courts in Ursin and Chapman in construing the provision “a resident of the same household” to deny coverage gave emphasis to the “legal residence” of a minor following a custody award.

Here the subject child was residing in her father’s home. The critical factor is whether plaintiff was also a resident of the same household. The evidence shows he exercised such dominion and control over the property to justify a finding that it continued to be his legal residence even though he spent most nights in a rented room at another address. He was the owner of the property, filed a homestead exemption from taxes on it, provided all upkeep and maintenance. A substantial amount of his time was spent there with Sabrina and his other daughter. Under these circumstances, plaintiff and his deceased daughter should be considered members of the same household to afford coverage under the uninsured motorist provisions of the policy. This result is in accord with the intent of the uninsured motorist statute and has not increased the risks without additional premium to the insurer beyond what was anticipated under a family automobile policy.

WERE THE BARNETT AND COLLINS AUTOMOBILES UNINSURED MOTOR VEHICLES?

GEI Co. contends that as the Barnett car was covered by liability limits of $15,-000/$30,000, and the Collins vehicle carried limits of $10,000/$20,000, these vehicles were not “uninsured” in accord with the uninsured motorist statute in effect at the time of the issuance of plaintiff’s policy on July 6, 1974. This statute, Act 137 of 1972, defined an “uninsured motor vehicle” to include an insured vehicle when the liability insurance on it was less than the uninsured motorist, coverage carried by an insured. Plaintiff contends the vehicles were uninsured for two reasons: 1) That Act 154 of 1974 became effective prior to the accident sued upon, and it provides that a motor vehicle is uninsured when the automobile liability insurance coverage on it is less than the amount of damages suffered by an insured or passengers in his vehicle; furthermore, the statute requires all policies issued afford uninsured motorist coverage equal to the liability coverage unless the policy holder selects a lesser coverage. 2) That even should Act 154 of 1974 not be given retroactive effect, the Barnett and Collins vehicles were uninsured under the 1972 statute because the net recovery of plaintiff from proceeds of the liability insurance under the court proration was less than the uninsured motorist coverage provided by the GEI Co. policy.

The first contention of plaintiff concerning the retroactive effect of Act 154 of 1974 has been resolved adversely to him. The recent jurisprudence on this question holds the amendments to the uninsured motorist statute have no retroactive effect on policies issued prior to the effective date of the act. See Doucet v. Insurance Company of North America, 302 So.2d 731 (La.App. 3rd Cir. 1974); Lindsey v. Aetna Casualty and Surety Company, 324 So.2d 842 (La. App. 2d Cir. 1975); Fontenot v. Guillory, 327 So.2d 578 (La.App. 3rd Cir. 1976).

Plaintiff’s second position should be resolved to afford him recovery. GEI Co. contends that since the liability coverage on the Barnett and Collins vehicles was equal to or more than the uninsured motorist coverage carried by plaintiff, that under the 1972 amendment to the statute, and the policy provision which tracks the language of the statute, these vehicles were not uninsured; therefore, plaintiff’s uninsured motorist coverage was not effective. A literal and strict reading of the statutory and policy language would support GEI Co.’s contention. Such a result, however, would not be in keeping with the intent and purpose of the uninsured motorist statute. Because of the multiple claims filed against the insurers of these vehicles, and the court’s apportionment of the policy proceeds, the effective liability coverage was less than the uninsured motorist coverage carried by plaintiff. The 1972 amendment of the statute expanded the protection afforded to an insured under the original statute to include damages caused to the insured by underin-sured motor vehicles as well as vehicles without liability insurance. It is apparent that the legislature intended the insured should be reimbursed by his own insurer in these instances in the amount at least equal to the uninsured motorist coverage carried by him. Where the liability insurance on the automobile causing the insured’s damage is ineffective for any reason to pay to the insured this required amount, then the vehicle should be deemed “uninsured” for the purpose of resolving recovery of uninsured motorist protection. The statute should be construed to mean the effective liability coverage. By giving the statute and policy provision this interpretation, plaintiff is entitled to recover that portion of his damages determined by the trial court ($16,900.75) which was not recoverable from the liability insurance proceeds on the Barnett and Collins vehicles from his uninsured motorist insurer, GEI Co., up to the limits afforded by the policy. As the GEI Co. policy covered two vehicles owned by plaintiff with $5,000/$10,000 uninsured motorist protection for each vehicle, he is entitled to stack these amounts to receive a total coverage of $10,000. See Barbin v. United States Fidelity and Guaranty Co., 315 So.2d 754 (La.1975). Since the judgment awarded plaintiff is $16,900.75, and the net recovery from liability insurance proceeds only amounted to $6,004.57, plaintiff is entitled to the maximum coverage of $10,000 under his uninsured motorist coverage against GEI Co.

For the foregoing reasons, the judgment appealed is reversed in so far as it rejected plaintiff’s demands against Government Employees Insurance Company, and it is ordered, adjudged, and decreed that there be judgment in favor of plaintiff, Warren L. Butler, against Government Employees Insurance Company in the sum of $10,000 together with legal interest from date of judicial demand. Costs of this appeal are assessed to appellee.