author: PONDER, Judge. COVINGTON, J.,

text:
    Patrice V. BERRY et al. v. Barbara Sue BERRY.
    No. 12250.
    Court of Appeal of Louisiana, First Circuit.
    April 16, 1979.
    Writ Refused June 11, 1979.
    Ashton Stewart, Baton Rouge, of counsel for plaintiff-appellee, Patrice V. Berry et al.
    Earl A. Morgan, Baton Rouge, of counsel for defendant-appellant, Barbara Sue Berry-
    Before LANDRY, ELLIS, COVINGTON, LOTTINGER, CHIASSON, EDWARDS, PONDER, SARTAIN  and BAILES , JJ.

      Serving by appointment of the La.Sup.Ct,

   PONDER, Judge.

Defendant, Barbara Sue Berry, appealed from the judgment awarding plaintiff judgment on a contract containing a stipulation pour autrui between defendant, plaintiff’s aunt, and Doss H. Berry, Jr., plaintiff’s father.

The issues are:

(1) Was there a trust?

(2) Was there a contract containing a stipulation pour autrui?

We reverse.

Doss Berry, Jr., plaintiff’s father, and Peggy Jo Hilsmeyer Berry, plaintiff’s mother, were divorced in 1971. Thereafter, Doss Berry, Jr., made his sister Barbara Sue Berry the beneficiary of. life insurance policies totaling $59,500.00. Defendant testified her brother looked into the possibility of setting up a trust estate but decided against it because of the expense and the inflexibility. Instead, he told her he wanted her to pay his debts, care for their father, who was an invalid in a nursing home, and to “act as a backstop for the education of his two children.” Miss Berry testified to these purposes in both a previous case and the current case. In the latter she added the purposes of benefitting herself. At any rate defendant and one of her witnesses testified that Doss Berry, Jr., expressed his wish that she exercise her judgment in expending the funds.

After the death of her brother, defendant did pay his debts and did pay for some of their father’s benefits. She advanced some money to Doss Berry, III, when he decided not to attend college as had been anticipated by the father. The relations between plaintiff and her mother on the one hand and the defendant on the other have been less than cordial. When plaintiff presented a list of expenses evidently made by her mother for attending an out-of-state school, defendant refused to advance any money saying that she owed obligations to three persons not just one person and that it was not intended that the money be used to defray all expenses of attending college. When there was no more contact between plaintiff and defendant, plaintiff in her fourth year in college filed suit asking that the arrangement be declared a trust and that all proceeds after the payment of the decedent’s debts and the care of Doss Berry, Sr., be recognized as her and her brother’s property. Peggy Jo Hilsmeyer Berry joined in the suit as the tutrix of Doss Berry, III. When the latter reached majority and did not want to be a plaintiff, he was joined as a defendant.

The lower court found that there was no trust but found a contract between Doss Berry, Jr. and his sister for plaintiff’s benefit.

We agree that there was no trust. In the first place, it is clear that Doss Berry, Jr., did not want and did not intend to create a trust. Furthermore the requirements for an inter vivos or testamentary trust have not been met.

We disagree that a contract containing a stipulation pour autrui for plaintiff’s benefit was confected between Doss Berry, Jr., and Barbara Sue Berry. To create a legal obligation enforceable by the beneficiary there must be certainty as to the benefit to accrue to the beneficiary. Miller v. Crusel, 135 La. 649, 65 So. 873 (1914). For statements of certainty required in all contracts, see Jones v. Janes, 156 La. 715, 101 So. 116 (1924); TAC Amusement Company v. Henry, 238 So.2d 398 (1970); Wright v. Mark C. Smith & Sons, La., 283 So.2d 85 (1973).

Indicative of the uncertainty of the “object” of the agreement between Doss Berry, Jr., and his sister are the following questions: what would be the amount of his debts; what would be the amount required to care for his father; would Doss Berry, III, attend college; what is meant by “education” of his children, for instance did he mean attendance at the most expensive of colleges and finishing schools or did he mean a business course at a local business college or beauty college; what was the extent of the obligation in view of his statement that the children would be drawing social security and getting help from the mother and grandparents; what is the extent of obligation to “backstop” other contributions to their education; what is defendant’s obligation in view of Berry’s statement that she use her good judgment.

Furthermore, we are convinced that Berry did not intend to enter a contract containing an enforceable stipulation pour au-trui. He had rejected a trust because of its inflexibility. A contract with an enforceable stipulation pour autrui would be even more inflexible. While it is likely that Berry, a licensed and practicing Louisiana attorney, knew of the statement in Fontenot v. Marquette Casualty Co., 258 La. 671, 247 So.2d 572 (1971), that a stipulation pour autrui must be in writing, we do not base our decision thereon. Instead, we believe that he did not intend that the “arrangement” be a legally enforceable contract, much less one containing a stipulation pour autrui.

For these reasons the judgment of the lower court is reversed and there is now judgment rejecting plaintiff’s demands at her costs both in this court and the lower court.

REVERSED AND RENDERED.

COVINGTON, J., dissents for written reasons assigned.

LANDRY, J., dissents for written reasons by COVINGTON, J.

COVINGTON, J.,

dissenting:

The nature of the case warrants a full discussion of the facts and the law.

This is a suspensive appeal by defendant, Barbara Sue Berry, from a judgment of the District Court in favor of plaintiff, Patrice V. Berry, in the amount of $2,800.00, with legal interest on $1,500.00 thereof from September 1, 1974, until paid, and with legal interest on $1,300.00 thereof from September 1, 1977, until paid. The judgment also reserved the right of Patrice V. Berry to bring further proceedings in this matter for any additional sums which may become due. The plaintiff has answered the appeal, asking for an increase in the amount awarded, for a declaratory judgment fixing her rights under the alleged contract, and for an order requiring the defendant to furnish security as trustee.

The facts show that Doss Berry, Jr. and Peggy Jo Hilsmeyer Berry were married on August 16, 1952. They adopted two children, Patrice V. Berry and Doss Berry, III. During the period of 1971 and early 1973, Doss Berry, Jr., who was an attorney and member of the Louisiana State Bar employed by the Ethyl Corporation, had a Metropolitan Life Insurance Company policy on his life in the amount of $49,500.00, and a Veteran’s Administration (National Service Life Insurance) policy on his life in the amount of $10,000.00. During most of this time the beneficiary of the Metropolitan Life policy was his wife, Peggy Jo Hilsmeyer Berry, and the beneficiary of the Veteran’s Administration policy was his mother, Grace Vaughan Berry.

Doss Berry, Jr. and Peggy Jo Hilsmeyer Berry were divorced on June 22, 1971. Thereafter, on April 18, 1972, Doss Berry, Jr. changed the beneficiaries of both policies, naming his sister, Barbara Sue Berry, pursuant to an arrangement by which she agreed to pay her brother’s just debts, care for their elderly father, and see to the education of the Berry children, and Doss Berry, Jr. agreed to name his sister the beneficiary of his insurance. The next year, on March 22, 1973, Doss Berry, Jr. died, leaving an estate inherited by his children valued at $2,245.06, with debts of $7,808.18.

Shortly after the death of Doss Berry, Jr., Barbara Sue Berry, the defendant herein, collected the $59,500.00 proceeds of the two life insurance policies. She also collected the funds, as named beneficiary, of Berry’s retirement and savings plans with his employer amounting to $4,490.12. The former wife of Doss Berry, Jr., individually and as tutrix of the two minor children, successfully sued Barbara Sue Berry for these funds, and the matter concerning the retirement and savings plans funds is no longer an issue. See Berry v. Equitable Life Assurance Society of U. S., 316 So.2d 399 (La. App. 1 Cir. 1975). In addition, the former wife sued the insurer for the insurance proceeds. In Berry v. Metropolitan Life Insurance Company, 327 So.2d 521 (La.App. 1 Cir. 1976), this Court held that the designation of Barbara Sue Berry as beneficiary of the Metropolitan policy entitled her to the proceeds of $49,500.00 of that policy payable on the death of Doss Berry, Jr. Out of the insurance funds received by Barbara Sue Berry and of money received from her father, she paid the deceased’s debts amounting to $7,808.18. She was not required to expend any personal funds to pay these debts.

The present action seeking a declaratory judgment to establish the existence of a trust and the rights of the beneficiaries thereunder was filed by Patrice V. Berry, the daughter of Doss Berry, Jr., and by Peggy Jo Hilsmeyer Berry as tutrix of the minor son, Doss Berry, III, against Barbara Sue Berry, the sister of Doss Berry, Jr. The grandfather, Doss Berry, Sr. was also named as a party defendant. Subsequently, when Doss Berry, III came of age, he refused to join as a party plaintiff and was named as a defendant. At the trial, all of the evidence produced by the plaintiff was offered against the grandfather in confirmation of default since he failed to answer and a preliminary default had previously been entered against him; Doss Berry, III waived his appearance and adopted the evidence presented by the defendant, Barbara Sue Berry, as his case.

The essence of the present action is that the plaintiff, the daughter of Doss Berry, Jr., has sued her aunt, the defendant, for a declaratory judgment asking for recognition of an agreement between her father and her aunt, and declaring the plaintiff’s rights thereunder. Admittedly, the agreement, if any, was an oral agreement. The basis for the alleged agreement is found in the testimony given by Barbara Sue Berry at the present trial and at the trial of Berry v. Equitable Life Assurance Society of U. S., supra:

“By Mr. McNeil (the attorney for Barbara Sue Berry during the Berry-Equitable trial):
Q. Miss Berry, prior to your brother’s decease, did he let you know that he was making you beneficiary of these two plans?
A. He asked me if I would accept the responsibility.
Q. Did he discuss what responsibility he had in mind?
A. Yes.
Q. What was that?
A. He said that he wanted — wanted me to see that the children got an education. To take care of our father. To pay his just debts.
Q. And as these checks represent, you paid his debts; is that correct?
A. Yes, sir.
Q. Are you currently taking care of your father?
A. Yes.
Q. And is it your intention to make an effort to take care of his children’s education to the best of your ability? A. Yes.” (Emphasis added.)

At the present trial, regarding the agreement, Barbara Sue Berry testified:

“Q. In this letter you state that quote ‘as I told you then,’ referring to March 29th of last year which had been in ’73, ‘my intentions are to see that Patrice and Buddy get an education and to take care of daddy. I have three responsibilities not just one.’ Now, was that referring to the insurance money that you had?
A. I felt that I had a moral responsibility to carry out my brother’s wishes. My brother’s wishes were that I help the children and act as a backstop for them, in case they needed something that they should feel free to come to me to get what they needed. The night that, well, I guess it was about a week after my brother died, I told Patrice and Buddy that very thing, that I would
Q. That you would help them be educated?
A. That I would help them and act as a backstop, that his social security would be more than he would be able to provide for them if he was alive, that certainly the Hilsmeyers and Peggy had responsibility, and that if there was anything they wanted or needed and I felt that it was proper in my opinion and as a backstop, I would provide it for them; and I told Patrice and Buddy this, that is, if it was proper in my judgment.
Q. . . .1 was referring to the conversation that you had with your brother at the time he made you beneficiary. At the time your brother named you the beneficiary, did he state that he that you were to be made the beneficiary and that you were to take care of his . the education of his children, to pay his debts, and to take care of his father?
A. He did not state that I was to take care of the education of the children. He told me that I was to act as a backstop. His social security and his mother and his grandparents could pay and whatever the children needed in my judgment, above and beyond that, that I was to provide for them, to let me know if they needed anything and they could come to me.”

The trial judge, after finding that the agreement between Doss Berry, Jr. and Barbara Sue Berry was that “in return for being designated as beneficiary, Miss (Barbara Sue) Berry agreed to pay her brother’s just debts, take care of their father and see to the education of Doss Berry’s two children, Patrice and Doss, III,” interpreted the provision relating to the children’s education as follows:

“Logic and common sense make it clear that Doss Berry, Jr.’s intention could not have been for his sister to pay for the entire cost of Patrice’s and perhaps Doss, Ill’s college education. If that was his intent, then Barbara Sue Berry would not have had enough money to pay debts, to care for her father and to pay for two college educations. This Court finds that the true intent was for Barbara Sue Berry to aid in the education of the children — do not let them fail to get an education solely because of lack of funds.”

I agree with the trial judge that there was an agreement between Doss Berry, Jr. and Barbara Sue Berry that if Doss Berry, Jr. changed the beneficiary of the two insurance policies to Barbara Sue Berry, she promised him to financially see to the education of the Berry children. It appears from the evidence that this education provision particularly concerned the plaintiff, Patrice V. Berry, since Doss Berry, Jr. and Barbara Sue Berry rightly anticipated that Doss, III would not seek a college education.

My independent research convinces me that the agreement between Doss Berry, Jr. and Barbara Sue Berry is a stipulation pour autrui. The stipulation pour autrui is provided by LSA-C.C. arts. 1890 and 1902, which state:

“Art. 1890:
A person may also, in his own name, make some advantage for a third person the condition or consideration of a commutative contract, or onerous donation; and if such person consents to avail himself of the advantage stipulated in his favor, the contract can not be revoked.”
“Art. 1902:

But a contract, in which anything is stipulated for the benefit of a third person, who has signified his assent to accept it, can not be revoked as to the advantage stipulated in his favor without his consent.”

It is rudimentary that stipulations in favor of third-party beneficiaries are favored in our law, being expressly authorized by the codal articles quoted above. See Andrepont v. Acadia Drilling Co., 255 La. 347, 231 So.2d 347 (1969); Albert v. Cuna Mutual Insurance Society, 255 So.2d 170 (La.App. 3 Cir. 1971).

In Carl Heck Engineers, Inc. v. Haselden & Associates, Inc., 316 So.2d 890 (La.App. 1 Cir. 1975), writ denied, 320 So.2d 912 (La.1975), this Court observed:

“Our understanding of Articles 1890 and 1902, above, is that the nature or classification of the obligation stipulated in favor of a third party does not vitiate the stipulation. Rather, the articles require that validity demands only that the obligation stipulated in favor of the third person be either a condition upon which the agreement between the parties depends, or a consideration of the agreement between the contracting parties.
“As noted above, Article 1890 provides that an advantage in favor of a third person may be made either the condition or consideration of a commutative contract or onerous donation. The fact that such a stipulation is conditional or penal, or whether it is the primary or secondary purpose of the agreement, is a matter of no moment. If the parties agree to such a stipulation, a binding obligation results.”

The assent of the third-party beneficiary is of consequence only where revocation of the agreement by the promisor and prom-isee is attempted. No such revocation can be involved here, the promisee being deceased and the promisor having accepted the benefits of the agreement accruing to her. No particular kind of assent is required. Thus, the assent may be found in any action by the third-party beneficiary which manifests his recognition of the advantage or interest provided for him, such as by instituting suit. This is made abundantly clear by the language of our Supreme Court in First State Bank v. Burton, 225 La. 537, 73 So.2d 453 (1954):

“The law does not provide for an express acceptance of or consent to a stipulation pour autrui by the beneficiary nor does it prescribe any particular form of acceptance or consent. In some cases it was held that the appearance of the beneficiary as claimant in a suit before the Court is evidence of acceptance and certainly it would seem, under that jurisprudence that the claim now being asserted . in this proceeding, regardless of any other proof of their assent, is sufficient. See Muntz v. Algiers & Gretna Ry. Co., 114 La. 437, 38 So. 410; Vinet v. Bres, 48 La.Ann. 1254, 20 So. 693.” See also Smith, Third Party Beneficiaries in Louisiana: The Stipulation Pour Autrui, 11 Tul.L.Rev. 18, 55 (1936).

Article 1890 of the Civil Code, quoted above, specifically authorizes the advantage for the third-party beneficiary to be made by an onerous donation.

The onerous donation is defined as “that which is burdened with charges imposed on the donee.” LSA-C.C. art. 1523.

In Voinche v. Town of Marksville, 124 La. 712, 50 So. 662 (1909), the Court stated:

“It is a principle of civil-law jurisprudence that the donee is bound to execute the charges or obligations imposed on him by the act of donation in the same manner and to the same extent as the debtor in any ordinary contract.”

A donor has the right to impose on the donee any charges or conditions he pleases, provided they contain “nothing contrary to law or good morals.” LSA-C.C. art. 1527; Board of Trustees v. Richardson, 216 La. 633, 44 So.2d 321 (1949). In order to make the donation an onerous one, the charge or obligation need not be in favor of the donor, but may be in favor of a third person. LSA-C.C. arts. 1774, 1890; Thompson v. Société Catholique D’Education Religieuse et Litteraire, 157 La. 875, 103 So. 247 (1925).

Applying these principles to the instant case I conclude that the plaintiff is a third-party beneficiary under a stipulation pour autrui of an onerous donation. LSA-C.C. art. 1890.

I find that the parties herein did agree to a stipulation for the benefit of the plaintiff and that, consequently, a binding obligation did result. See Carl Heck Engineers, Inc. v. Haselden & Associates, Inc., supra. The advantage in favor of the plaintiff was made as a charge placed upon the donation of the insurance proceeds to the defendant, and is thus an onerous donation. LSA-C.C. art. 1523. The onerous donation is governed by the rules applicable to contracts, not the peculiar rules applicable to donations inter vivos. LSA-C.C. art. 1526; Oppenheim, the Donations Inter Vivos, 43 Tul.L.Rev. 731, 754 (1969).

The defendant’s brief suggests two principal defenses to the application of the stipulation pour autrui here. It is asserted that (1) the provision for the benefit of third persons must be in writing, and (2) the object forming the matter of the agreement was not certain.

The defendant objects that the agreement can not constitute a stipulation pour autrui because it was not in writing. To support the contention that a stipulation pour autrui must be in writing, major reliance has been placed on Fontenot v. Marquette Casualty Co., 259 La. 671, 247 So.2d 572 (1971). However, any language in that case pertaining to a stipulation pour autrui is clearly obiter dictum. The issue was whether a third person, damaged by a party who was insured, may exercise his rights in a direct action against the reinsurer of the tortfeasor’s insolvent liability insurer. This is made clear on page 575 of the opinion, where it is specifically pointed out that reinsurance is “not to be for a third party’s benefit.” Reinsurance is not a stipulation pour autrui; therefore, it was not necessary for the Court to gratuitously comment on the requirements for same. Landesman v. Ford Motor Company, 331 So.2d 106 (La. App. 1 Cir. 1976), follows the Fontenot case for the proposition that the stipulation pour autrui must be in writing. However, in that case the plaintiff purchased a dealership from a particular automobile agency knowing full well that Ford Motor Company would not give him a franchise. Merely purchasing the assets of the dealership, and operating it, did not create a stipulation pour autrui in the purchaser’s favor such that Ford was obligated to grant him a franchise. A stipulation pour autrui was not involved and, again, the remarks by this Court pertaining to the necessity of a “writing” were gratuitous. In Hertz Equipment Rental Corp. v. Homer Knost Construction Company, Inc., 273 So.2d 685 (La.App. 1 Cir. 1973), Fontenot is again cited with approval; again, a stipulation pour autrui was not involved. The insurer only agreed to indemnify the insured for any claim that it was required to pay for damages to equipment. The Court found the insurance clause to be an indemnification provision, not a stipulation pour autrui.

I find the language in Spaht-Johnson, Work of the Appellate Courts for the 1975-1976 Term-Obligations, 305, 346-347 (1977), of interest:

“Must the Stipulation be in writing?
“In several cases, it is stated that the stipulation in favor of a third party must be in writing though there does not appear to be any support for this proposition. The first such statement appears to be in Fontenot v. Marquette Casualty Co., in which the court cites as authority articles 1890 and 1902 of the Civil Code. Neither article mentions a writing requirement. The statement in Fontenot may be a dicta, since the agreement there under consideration was in writing; no issue was present on the effect of a non-written stipulation. The Fontenot statement was cited with approval in Hertz Equipment Rental Corp. v. Homer Knost Construction Co., in which it may have played some part in the court’s conclusion that no third party benefit was present. “There is no more reason to require that an advantage for a third person stipulated in a contract be in writing than there is to have a general requirement that contracts be in writing. We have no such general requirement, despite the requirement of writing for specific types of contracts. While most stipulations for the benefit of third parties which are enforced in the jurisprudence are in writing, it does not appear to be wise to have a rule, absent codal or statutory authority, that such stipulations must be in writing.

In Snelling & Snelling v. Delta Data Service, Inc., 259 So.2d 446 (La.App. 4 Cir. 1972), writ denied, 261 La. 1053, 262 So.2d 39 (1972), the promise to pay the employment agency, which was found to be a stipulation pour autrui, was definitely not in writing. While it is true that the written requirement was not an issue (the issue was whether or not the promise was made “directly” to the third party), the Court did hold that there was a stipulation pour au-trui and did discuss some of the requisites of such a stipulation. There was a letter evidencing “a bilateral contract,” but there is not the slightest intimation that the bilateral contract could not have been “evidenced” in some other manner. The bilateral contract is discussed in LSA-C.C. arts. 1765 and 1766; consent of the parties is required, but there is no requirement that it be in writing. In fact, LSA-C.C. art. 1762 specifically warns that the “contract must not be confounded with the instrument in writing by which it is witnessed.” This is further emphasized by LSA-C.C. art. 1779 which lists the four requisites for the validity of a contract: 1. Legally capable parties; 2. consent of the parties; 3. a certain object; and 4. a lawful purpose. No requirement of writing is made in this article.

As the Snelling case holds, “article 1890 does not require the promise be made directly to the third party in writing” in order for it to be a stipulation pour autrui enforceable by the third party beneficiary. In State ex rel. Guste v. Simoni, Heck & Associates, 331 So.2d 478 (La.1976), there was no promise in writing directly to the State, which was to be the ultimate owner of the building; yet, the Court found that there was a stipulation in the contract intended for the advantage of the State, so the State could maintain the action against the contractor who performed engineering services under his contract with the architect.

I feel very strongly that there was a definite agreement between Doss, Jr. and Barbara. It was no mere expression of desire on the part of these parties. There was a certain agreement, as we have already found in Berry v. Equitable Life Assurance Society of U. S., 316 So.2d 399 (La.App. 1 Cir. 1975). In that case, Barbara positively testified that it was their intent that she should discharge his debts, care for their father and see to the education of the Berry children, and she would be named beneficiary of his insurance policy. I am unimpressed by her new version (after retaining new counsel) that she had this great latitude in carrying out Doss, Jr.’s “wishes.” These were not merely precatory expressions where she would get the full benefit of the insurance proceeds as absolute owner thereof in their entirety; and, if convenient, she would try to carry out the desires of her deceased brother. I can not accept any conclusion that Doss, Jr. merely “wanted” the insurance proceeds to pay his debts, care for his father and educate his children, and that he merely requested his sister to carry out his wishes if she found it convenient to do so. The fact that he considered a trust, but decided against it because of its presumed (by him) “inflexibility”, does not detract from the idea that he wanted a binding agreement; rather, it enforces the idea that he wanted his sister to be bound, but to have some flexibility because he thought his son probably would not want a college education and he could not be sure how much longer his elderly father would live. The idea of a stipulation pour autrui by an onerous donation admirably fulfilled his need of a more flexible arrangement (than the trust) and, yet, one binding upon his sister. This agreement created no mere natural obligation, but a validly enforceable contract.

The plaintiff in the instant case is in the position of a third-party beneficiary in whose favor a stipulation pour autrui was made with the specific intent of benefiting her.

In summary, the cases cited by the defendant requiring that the agreement be in writing find their authority in Article 2278 of the Civil Code, which interdicts parol evidence to prove any promise to pay the debt of a third person, not in Article 1890, which makes no requirement that the stipulation pour autrui be in writing. The agreement or stipulation in the instant case is not a promise to pay the debt of a third person.

Finally, our Supreme Court, in Ardoin v. Hartford Accident & Indemnity Company, 360 So.2d 1331 (La.1978), emphasized that in deciding issues we must refer “first to the code and other legislative sources” rather than treating judicial opinions as the primary source of law. In the instant case, considering the primacy of the code, and particularly Civil Code art. 1890, I find no justification whatsoever for the position that a stipulation pour autrui must be in writing.

The defendant further objects that the agreement or stipulation pour autrui did not meet the requisites necessary to the validity of a contract in that there was no “certain object, which forms the matter of agreement” as required by LSA-C.C. art. 1779(3), and the obligation did not have for “its object something determinate, at least as to its species,” as required by LSA-C.C. art. 1886. The cases cited by the defendant in support of this contention are factually distinguishable. In the instant case, the stipulation was for certain objects, one of which was Patrice’s education.

The next question to be answered is what portion of the insurance proceeds did the parties intend for the plaintiff’s education. From the evidence in the instant suit, as well as that presented in the two previous actions, I can only conclude that this is an onerous donation which is jointly in favor of the obligees; LSA-C.C. art. 2081. The parties clearly intended that there was to be a portion for taking care of their elderly father, a portion for the children’s education, and a portion for the donee for carrying out the obligations imposed. See Commercial Union Insurance Company v. Maise, 340 So.2d 684 (La.App. 4 Cir. 1976), writ refused, 342 So.2d 1112 (La.1977).

My review of the record convinces me that the trial court was correct in fixing the amount to be awarded the plaintiff in the sum of $2,800.00, with interest as set out in the judgment. This amount is well within the portion intended by the parties for the plaintiff’s education.

I also feel that the trial court was correct in reserving to Patrice V. Berry, the plaintiff, the right to bring further proceedings in this matter for any additional sums to which she may be entitled.

In addition to the issues discussed above, the defendant has re-urged on appeal her exception of no cause of action, which the trial court properly overruled. Hero Lands Company v. Texaco, Inc., 310 So.2d 93 (La.1975). The petition states a cause of action.

The defendant also assigned as error the failure of the District Court to sustain her Motion for Summary Judgment. It is obvious from the affidavits filed with this Motion that there were genuine issues as to material facts and that, as a matter of law, the defendant was not entitled to judgment in her favor. LSA-C.C.P. art. 966; Hughes v. Eagle Trucking Co., 340 So.2d 1067 (La. App. 1 Cir. 1976).

Regarding the position of the majority concerning the alleged uncertainty of the “object” of the agreement, the “object” of many contracts is, at the time of the making of the agreement, uncertain. Under C.C. art. 1886, “the quantity of a thing may be uncertain, provided it be capable of being ascertained.” Our courts are competent to determine the intent in the event of any lack of specificity.

The majority opinion states that no trust was created. While I agree, since I maintain that the agreement is a stipulation pour autrui by an onerous donation, it is not necessary for me to address the issue of a trust.

Accordingly, I respectfully dissent.

      . Berry v. Equitable Life Assurance Society of U.S., 316 So.2d 399 (1st Cir. 1975).

      . LSA-R.S. 9:1752:
      “An inter vivos may be created only by authentic act or by act under private signature executed in the presence of two witnesses and duly acknowledged by the settlor or by the affidavit of one of the attesting witnesses."

      .LSA-R.S. 9:1751:
      “A testamentary trust may be created only in one of the forms prescribed by the laws regulating donations mortis causa.”

      . See Succession of Jones, 172 So.2d 312 (4th Cir. 1965) writ refused 247 La. 718, 174 So.2d 131 (1965).

      . This statement has been criticized, 37 La.L.R. 346-7.

      . The judgment makes no mention of Doss Berry, Sr. or of Doss Berry, III. Their claims, if any, were not adjudicated, and no judgment was rendered against them. They have not appealed, and are not represented in this appeal.

       See, e. g., La.Civ.Code art. 1536 and La. R.S. 9:2721 (1950) (requirement that to affect third persons, instruments concerning immova-bles must be recorded, which assumes that they must be in writing of some form).”


source: Caselaw Access Project

author: GUIDRY, Judge.

license: Public Domain

text:
    George W. GWATNEY, Raywood Baudoin, Walter Broussard, Cecil Chatman, Jr., Emile Choplin, Jr., Archie Cobb III, Jeanette Francez, Karl Girouard, Lawrence Harry, Terry Hayes, Charles E. Humbird, James M. Jacques, Raymond Jeoffroy, William S. Menard, Steve Pearson, Alton Pitre, Charles Robinson, Kenneth Short, John Tufts, Jr., Plaintiffs-Appellees, v. Joseph Edward MILLER, Defendant-Appellant.
    No. 6959.
    Court of Appeal of Louisiana, Third Circuit.
    May 23, 1979.
    Rehearing Denied July 11, 1979.

      Seidel & Bailey, Fred K. Bailey, Lafayette, for defendant-appellant.
    DeBaillon & Miller, Roderick L. Miller, Lafayette, for plaintiffs-appellees.
    Before CULPEPPER, DOMENGEAUX and GUIDRY, JJ.
   GUIDRY, Judge.

Plaintiffs instituted this action against the defendant, Joseph Miller, seeking to enjoin him from using a 2.935 arpent tract of land owned by him for storage of various pieces of “street fair” equipment. The 2.935 arpent tract owned by defendant forms part of a larger tract of land known as the “Oakcrest Plantation Subdivision” and is hereafter referred to as lot 26.

Plaintiffs allege that defendant’s use of lot 26 for the purpose of storing this equipment is violative of a restrictive covenant which was placed on the land by the plaintiffs’ and defendant’s ancestors in title. Following a hearing on a rule to show cause why a preliminary injunction should not issue enjoining defendant’s use of his land in said manner, the trial court determined that Mr. Miller’s actions constituted a violation of the restrictive covenants to which the property was subject, and issued a preliminary injunction against him. Trial was subsequently held to determine if the preliminary injunction should be made permanent and if plaintiffs were entitled to the damages and attorney’s fees prayed for. Following trial on the merits, the court issued a permanent injunction enjoining defendant from storing his street fair equipment on lot 26 and rejecting plaintiffs’ demands for damages and attorney’s fees. Defendant has appealed, urging that the trial' court erred in its issuance of the permanent injunction. Plaintiffs have neither appealed nor answered the appeal. The substantial issues on appeal are:

I.DO THE PLAINTIFFS HAVE A RIGHT OF ACTION TO ENFORCE THE RESTRICTIVE COVENANTS SET FORTH IN THE DEED WHEREBY DEFENDANT ACQUIRED LOT 26?
II.DID JOSEPH MILLER VIOLATE THE RESTRICTIVE COVENANT PRECLUDING NON-RESIDENTIAL USE OF LOT 26?
III.HAS THE RESTRICTIVE COVENANT PRECLUDING NON-RESIDENTIAL USE ON LOT 26 BEEN ABANDONED?

I. DO THE PLAINTIFFS HAVE A RIGHT OF ACTION TO ENFORCE THE RESTRICTIVE COVENANTS SET FORTH IN THE DEED WHEREBY DEFENDANT ACQUIRED LOT 26?

The record reveals that lot 26, along with each of the lots owned by plaintiffs, originally formed part of an 82.15 acre tract of land owned by Lucien Hulin, Jr., Lewis C. Picard and Raywood J. Meyers. All the plaintiffs (with the exception of George Gwatney) purchased their lots directly from Messrs. Hulin, Picard and Meyers. Mr. Gwatney and the defendant acquired their lots from Elmer Brown, who had purchased them from the original owners. Nine restrictive covenants, identical in form and content, were incorporated into each act of sale for the lots purchased by plaintiffs. These restrictive covenants were likewise incorporated into defendant’s act of sale for lot 26. Restrictive covenant number 6 which appears in each such deed reads as follows:

“The purchaser named in the Act of Sale to which this Exhibit is attached, hereby binds and obligates himself, his heirs, successors or assigns not to use or permit to be used any house or houses erected or to be erected on the property described in the said Act of Sale either directly or indirectly, for trade or business of any form or for any purpose other than that of a residential purpose.”

Defendant contends that plaintiffs do not have a right of action to enforce the restrictive covenants on his property. He contends that insofar as the restrictions were not originally devised for the purpose of pursuing a general building plan or scheme for the area, they are purely personal obligations which can be enforced by the vendor-developer alone. Without specifically addressing defendant’s exception of no right of action, the trial court apparently found no merit to defendant’s contentions. We agree.

In support of his position, appellant relies upon the following jurisprudence: Murphy v. Marino, 60 So.2d 128 (La.App. 1st Cir. 1952); Lamana-Panno-Fallo, Inc. v. Heebe, 352 So.2d 1303 (La.App. 4th Cir. 1977) and In re Congregation of St. Rita Roman Catholic Church, 130 So.2d 425 (La.App. 4th Cir. 1961). In Murphy, supra, the court stated:

“It is our understanding of the law that in order to create a binding covenant running with the land in a subdivision, and enforceable by any purchaser of property therein, there should be a uniform plan of restriction applicable to the subdivision as a whole, or to a particular part of the subdivision, known to each purchaser and thereby, by reference or implication, forming a part of his contract with the subdivider. As stated before, that situation did not exist in the case of the Steele Place Subdivision.
26 Corpus Juris Secundum, Deeds, § 167, pages 552 and 553, covers the above point as follows:
‘A general building scheme may be defined as one under which a tract of land is divided into building lots, to be sold to purchasers by deeds containing uniform restrictions. * * * In determining whether land is included in a building scheme, doubts are to be resolved in favor of the free use and enjoyment of the property and against restrictions. * * * the right to enforce restrictions imposed pursuant to a general scheme must be universal or reciprocal, that is, the same restrictions must apply substantially to all lots of like character or similarly situated, and the scheme must be incorporated in all the deeds. ’ ” at pg. 180.

In Murphy the court concluded that the restrictive covenants sought to be enforced had not been created pursuant to a general building plan or scheme, noting at the outset that the restrictions had not been uniformly imposed on the lots in the subdivision and had, in many instances, been amended or changed completely. In the instant case, however, appellant failed to produce any evidence at trial to indicate that the restrictive covenants imposed on the lots within Oakcrest Plantation Subdivision had not been uniformly imposed, or had been amended or changed by the subdi-vider. On the contrary, defendant’s act of sale, as well as each of the plaintiffs’ acts of sale reveal that the restrictive covenants for all these lots are identical.

In the case of Lamana-Panno-Fallo, Inc. v. Heebe, supra, the court found that the restrictive covenants sought to be enforced were unenforceable because they had been abandoned. In dicta, the court did state that the restrictions had not been made pursuant to a general subdivision plan, however it did not discuss the facts which formed the basis for this conclusion. Therein the court stated:

“The restrictive covenants in the title did not come into being as one overall or general plan of restrictions imposed upon the entire subdivision, but instead, restrictive stipulations were inserted in the initial title deeds from the owner and developer ... to purchasers . ” at pg. 1304

The fact alone that restrictive covenants are inserted into individual acts of sale does not establish that they were not intended to pursue a general plan of development for the subdivision. Rather the uniformity or consistency of the restrictions must be examined in order to determine the original intentions of the subdivider. See Yiannopoulos, Real Rights: Limits of Contractual and Testamentary Freedom, 30 La.Law Rev. 44 (1969) at p. 64.

In the case of In re Congregation of St. Rita Roman Catholic Church, supra, the court found that the covenant sought to be enforced was a purely personal obligation, stating:

“Building restrictions, such as those in question, are valid and enforceable where inserted in deeds in pursuance of a general plan devised by the ancestor in title to maintain certain building standards; such restrictions inure to the benefit of all other grantees under a general plan of development, and are real rights running with the land, which the grantees or their successors in title may enforce by injunction. Murphy v. Marino, La.App., 60 So.2d 128; Munson v. Berdon, La.App., 51 So.2d 157; Salerno v. De Lucca, 211 La. 659, 80 So.2d 678; Alfortish v. Wagner, 200 La. 198, 7 So.2d 708; Edwards v. Wiseman, 198 La. 382, 3 So.2d 661.
However, where restrictive covenants do not appear in chains of title of half the lots of a subdivision, for which no general plan of subdivision or restrictions had been recorded, as obtains here, such restrictions will not be enforced as covenants running with the land against any of the grantees of original subdivider or their successors. Herzberg v. Harrison, La.App., 102 So.2d 554. The cited case, from our First Circuit Court of Appeal (1958) contains an exhaustive and clear review of our jurisprudence establishing this principle.
Where the restriction is not a covenant running with the land, it is personal to the creator of the restriction, in this case Interstate Land Co., whose existence is unknown or unaccounted for herein. Murphy v. Marino, La.App., 60 So.2d 128.- ” at pg. 428

In St. Rita Roman Catholic Church, the subdivider included the building and use restrictions in dispute into only 60% of his acts of sale. In the instant case, defendant has failed to produce any evidence to establish that a similar factual situation exists. We find, therefore, that the jurisprudence relied upon by appellant on this issue is not supportive of his position, and that he has failed to produce any evidence to refute the plaintiffs’ contention that the area has been developed pursuant to a general building plan or scheme. In the case of Camelot Citizens Association v. Stevens, 329 So.2d 847 (La.App. 1st Cir. 1976), writ refused June 11, 1976, the court stated:

“It cannot be questioned that the owners of property in a subdivision have the right to impose building restrictions on their land in order to further a general plan of development. See Yiannopoulos, Civil Law of Property, sec. 104, page 310 (1966); Smith, Building Restrictions in Louisiana, 21 La.L.Rev. 468 (1961); Taggart, ‘Equitable Restrictions’ in Louisiana, 33 Tul.L.Rev. 822 (1959). To ascertain the effect to be given to such building restrictions, we must first decide whether such a restraint on the use and disposition of property should be classified as a servitude, a real obligation, a covenant running with the land, or some other classification. Professor Yianno-poulos holds the opinion, and we agree with him, that due to the unique nature of building restrictions, they should be classified as ‘sui generis real rights akin to predial servitudes,’ and they should be governed by the general rules applicable to predial servitudes, subject to any exceptions established by a special legislation or jurisprudence as to their creation, enforcement or termination. Yiannopou-los, Real Rights: Limits of Contractual and Testamentary Freedom, 30 La.L.Rev. 44, 63 (1969); also see Fitzwater v. Walker, 281 So.2d 790, 792 (La.App. 3rd Cir. 1973).
We can thus sav that buildine: restrictions. such as those in question, are valid and enforceable where inserted in deeds in pursuance of a general plan devised by the ancestor to maintain certain buildine' standards: such restrictions inure to the benefit of all other grantees under a eren-eral plan of development and are real rights running with the land, which the grantees or their successors in title may enforce bv injunction proceedings. See Salerno v. De Lucca, 211 La. 659, 30 So.2d 678, 679 (1947); Edwards v. Wiseman, 198 La. 382, 3 So.2d 661, 663 (1941); Herzberg v. Harrison, 102 So.2d 554, 555 (La.App. 1st Cir. 1958).” (Emphasis ours) at p. 849

We conclude that the building and use restrictions which were uniformly incorporated into plaintiffs’ and defendant’s acts of sale were devised for the purpose of maintaining a general plan of development for the area, and therefore constitute real rights which inure to the benefit of all other grantees under said plan of development. Plaintiffs, therefore, clearly have a right of action to enforce the restrictive covenants on lot 26. We find this position to be further supported by the express terms of the covenants themselves. Restrictions numbered eight and nine provide:

“8. Should any of these restrictions be violated, or should any attempt be made to violate the covenants and restrictions contained herein, any and all persons owning any property in a tract in which the property described in the Act of Sale to which this rider is attached is located are hereby granted the right and privilege to prosecute any proceedings at law or in equity against the person or persons violating or attempting to violate the said covenants or restrictions. Invalidation of any one of these covenants by judgment or court order shall in no wise affect any of the other provisions, which shall remain in full force and effect.
9. These covenants and restrictions are to run with the land and shall be binding on all parties and all persons claiming under them.”

We find no merit to this assignment of error.

II. DID JOSEPH MILLER VIOLATE THE RESTRICTIVE COVENANTS TO WHICH HIS LAND WAS SUBJECT?

The record reveals that Mr. Miller is in the business of operating a “street fair” for schools and churches in the Lafayette area. The equipment used for the fair, i. e., rides, concession stands, billboards, etc., is owned by Mr. Miller. The defendant also owns a number of trucks, including two tractor-trailers, which he uses to transport this equipment to and from fair sites. When defendant’s fair is not “on location”, he stores the trucks and the equipment on lot 26, on which is also situated the mobile home in which he and his family reside. There is no evidence that Mr. Miller has ever charged admission for entrance onto his property, or conducted the fair or operated any of the equipment for direct financial gain while it was situated on lot 26. He uses the land to store the equipment, and while it is so situated, he inspects it for mechanical problems and makes any necessary repairs or improvements to it. There is no dispute that when the defendant purchased this lot, he did so subject to several restrictive covenants. The express terms of the act of sale for lot 26 provided:

“This sale is made and accepted subject to the restrictive covenants, easements, mineral reservations and rights of way and obligations of ownership affecting the property, and particularly the restrictive covenants referred to in Exhibit A of Act 603681, which exhibit is made a part hereof by reference.”

Plaintiffs allege that defendant has violated and continues to violate restrictive covenant number six which we have previously quoted.

In its written reasons for judgment granting the preliminary injunction the trial court stated:

“Plaintiffs herein contend that defendant, Miller’s use of his land constitutes a violation of Provision No. 6 of the restrictive covenant found in Act No. 603681 and binding upon the defendant and plaintiffs alike. As such, plaintiffs contend that defendant Miller should be enjoined from using his property as a place to store his street fair equipment. .
The intent of Provision No. 6 leaves little room for reasonable minded persons to differ. The provision is clearly meant to preclude all commercial endeavors from the land affected by the covenant.
In this regard, the court finds the use of the land made by the defendant falls within the scope of the restriction intended by the grantor.”

We agree. In the case of Salerno v. De Lucca, 211 La. 659, 30 So.2d 678 (1947) the court stated:

“It is well established jurisprudence of this state that where restrictions have been inserted in deeds in pursuance of a general plan devised by the ancestor in title to maintain certain building standards and uniform improvements, such as those here under consideration, they are valid and enforceable. Queensborough Land Co. v. Cazeaux. 136 La. 724, 67 So. 641, L.R.A.1916B, 1201, Ann.Cas.1916D, 1248; Hill v. Wm. P. Ross, Inc., 166 La. 581, 117 So. 725; Rabouin v. Dutrey, 181 La. 725, 160 So. 393; and Ouachita Home Site & Realty Co. v. Collie, 189 La. 521, 179 So. 841. These are real rights or covenants that run with the land for the benefit of land owners within the area and to prevent the violation of these restrictions injunction proceedings may be resorted to. See Collie and Oueensboro cases, supra, and also Edwards v. Wiseman, 198 La. 382, 3 So.2d 661.
Although these stipulations are stricti juris and every doubt should be resolved in favor of the unencumbered use of the property, whenever differences arise as to the extent or limitation of these restrictions, we must look to the intention of the party encumbering the property from the words used in the stipulations in the deed, consideration being given to the entire context of the instrument rather than to a single phrase or clause, for obviously those acquiring the property in the restricted area were motivated and influenced to purchase the same because of these limitations and they are entitled to the presumption that they will be fairly and faithfully complied with.” at pp. 679-80

Applying this reasoning, the Supreme Court in Salerno, supra, determined that a restrictive covenant which provided that “ ‘there shall be no business establishments’ ” on defendant’s property was intended to preclude the erection of billboards thereon.

In the case of LeBlanc v. Bowen, 238 So.2d 369 (La.App. 4th Cir. 1970) a tract of land which was situated adjacent to property subject to a residential restrictive covenant sought by plaintiff to be enforced was being used by a trailer sales company for commercial purposes. On occasion the trailer sales company would partially park its trailers on defendant’s property and would use a roadway on defendant’s property to transport its trailers back and forth from the highway. The court determined that such activities on defendant’s property were within the scope of a restrictive covenant which provided that:

“No commercial establishment, nor dairy, nor noxious or offensive establishment shall be erected or maintained thereon; .

We have examined all of the building and use restrictions which apply to Mr. Miller’s property and find that the clear intent of the subdividers was to maintain the lots exclusively for residential purposes. We find the appellant’s contention that restriction number six governed solely the use to which “houses” on the lots were employed (and not the use to which the land itself was employed) to be untenable. To construe this restriction so as to preclude commercial activities only when such are conducted from “houses” would clearly subvert the subdividers’ intention to maintain an area purely residential in character. A lot which is being used to store a “street fair” — albeit immobilized — is nevertheless being employed to further a commercial enterprise. The clear import of the restrictive covenant is not simply to prevent lot owners from transacting business or exchanging money for goods or services while occupying the land, but rather to maintain the visual aesthetics of the area and to keep away the ordinary manifestations of commercial activities such as signs, trucks and nonresidential structures. The covenant precludes using the property, either directly or indirectly, “. ... for trade or business of any form OR FOR ANY PURPOSE OTHER THAN THAT OF A RESIDENTIAL PURPOSE.”. The record reflects that defendant stores numerous trucks (including two tractor-trailers), a “merry-go-round”, a “spook house”, concession stands and various other rides, attractions and billboards on lot 26. While this equipment is so situated, he repairs, maintains and makes improvements on it. We find that such activity does not constitute a “residential purpose” within the intendment of restriction number six. We therefore agree with the trial court that the storage and/or repair of this equipment while it is located on lot 26 violates the restrictive covenant to which such lot is subject.

III. HAS THE RESTRICTIVE COVENANT PRECLUDING NONRESIDENTIAL USE OF LOT 26 BEEN ABANDONED?

The defendant contends that restriction number six, precluding non-residential use of lot 26, cannot be enforced because it has been abandoned. In support of this contention, appellant has produced several photographs allegedly depicting violations of this restriction within the subdivision. The trial court apparently found that the defendant failed to establish an abandonment of this restrictive covenant although it did not specifically address the issue in its reasons for judgment. We agree, and likewise find no merit to this assignment of error.

It is not every violation of a building restriction which will constitute its abandonment. Insubstantial, technical or infrequent violations which do not manifest an intent to subvert the original plan or scheme of development will not constitute an abandonment of the restrictions. However, when the property owners can be regarded as having abandoned the plan of development which the restrictions were intended to implement by virtue of their acquiescence to frequent and numerous violations thereof, such restrictions are considered abandoned. Edwards v. Wiseman, 198 La. 382, 3 So.2d 661 (1941). In the case of Marquess v. Bamburg, 188 So.2d 721 (La.App. 2nd Cir. 1966), the court stated:

“In determining whether the restriction has been abandoned by the property owners, it is essential to consider the number and the nature of the violations and their proximity to the objecting residents. Appropriate discussion of this question is to be found in 26 C.J.S. verbo Deeds § 169, p. 1164 and in 14 Am.Jur. § 295 § 298. These authoritative comments received the approval of the Supreme Court in Guyton v. Yancey [240 La. 794, 125 So.2d 365 (1960)], supra.
‘The character, as well as the number, of claimed violations must be considered in determining whether the complaining property owners have waived or forfeited the benefit of a restriction. Where an owner has permitted or acquiesced in so many violations of the restriction, or such violation, without objecting thereto that the plan may fairly be said to have been abandoned, he cannot thereafter object to a subsequent violation; waiver has been held not to result unless there have been general and multiple violations without protest. On the other hand, if violations have not been permitted to such an extent as to evidence an abandonment of the plan, a party will not be prevented from objecting to further violations by the fact that he has not objected to previous violations by others, particularly where such violations did not immediately affect the enjoyment of his own premises, or where they were trivial, or minor, in character as compared with those complained of; and the fact that plaintiff has acquiesced in, or has not objected to, a violation committed by defendant does not estop him to prevent an additional or enlarged violation. * * * ’ (26 C.J.S. verbo Deeds § 169, pp. 1164-1166).” at p. 723

Whether there has been acquiescence in violations of subdivision restrictions sufficient to defeat enforcement of the restrictions depends upon the circumstances of each case, including particularly the character, materiality and number of the violations. Guyton v. Yancey, 240 La. 794, 125 So.2d 365 (1960). As a result of the alleged abandonment of the restriction in dispute a substantial change in the intended nature of the subdivision must take place. Guyton, supra; Marquess, supra; Adair v. Chrysler, 212 So.2d 552 (La.App. 2nd Cir. 1968); See also Plauche v. Albert, 42 So.2d 876 (La.App. 1st Cir. 1949); Melrose Civic Association v. Universal Builders, Inc., 289 So.2d 521 (La.App. 1st Cir. 1973), writ refused 293 So.2d 167 (La., 1974).

The record reveals that among the plaintiffs, Alton Pitre sells real estate from his home; Lawrence Harry sells shrimp from his home; William Menard sells tomato plants which are grown on his property; Raymond Jeoffroy advertises his concrete business in the yellow pages using his home telephone number; and, Jeanette Francez parks a school bus on her property when she is not driving it for a living. Assuming arguendo that each of these activities constitutes a violation of building and use restriction number six, we do not find that these few violations manifest an intention to abandon the plan of development which the restriction was originally intended to implement. The record reveals that Mr. Harry and Mr. Menard make only periodic sales to other neighbors of their goods, and do not rely on these periodic sales for a living. After examining all the evidence in the record, including photographs submitted by appellant, we are unable to find any outward manifestation of nonresidential activities taking place on these lots where the alleged violations are taking place. We do note that one property owner has a sign on his lot reading “Puppies”, and that he presumably has puppies for sale on the property. However, we find that the character of these technical violations fails to establish a general intent to substantially change the intended nature of the subdivision from that of a purely residential area. We therefore find no manifest error in the trial court’s determination that the evidence failed to establish an abandonment of the building restriction herein sought to be enforced.

For the above and foregoing reasons, we affirm the judgment of the trial court. All costs of these proceedings are to be paid by appellant.

AFFIRMED.

      . Neither Elmer Brown, defendant’s immediate ancestor in title, nor any of the original owners of the 82.15 acre tract are party plaintiffs to the instant suit.

      . The above cited jurisprudence and that referred to hereafter in this opinion has recently been codified by Acts 1977, No. 170, § 1, which repealed the former Title V of Book II of the Louisiana Civil Code, and substituted a new Title V, “Building Restrictions”, containing Articles 775 to 783.


author: CULPEPPER, Judge. GUIDRY, J.,

text:
    GENERAL ELECTRIC CREDIT CORPORATION, Plaintiff and Appellant, v. Louis Ray SMIGURA, Defendant and Appellee.
    No. 6963.
    Court of Appeal of Louisiana, Third Circuit.
    May 23, 1979.
    Rehearing Denied July 11, 1979.

      Brame, Bertstedt & Brame, David A. Fraser, Lake Charles, for plaintiff and appellant.
    Darrell D. Ryland, Marksville, for defendant and appellee.
    Before CULPEPPER, DOMENGEAUX and GUIDRY, JJ.

      Guidry, J., voted for a rehearing.

   CULPEPPER, Judge.

This suit commenced with a petition by General Electric Credit Corporation to foreclose by executory process on a chattel mortgage on a mobile home. The defendant, Louis Ray Smigura, filed a petition to enjoin the seizure and sale on the grounds that he was not delinquent in the monthly payments on the note secured by the chattel mortgage, and that the enforcement of the debt was therefore premature. Defendant also filed a reconventional demand for damages for the wrongful seizure of his mobile home.

On July 5, 1978, the defendant obtained a temporary restraining order prohibiting the sale of the mobile home by the sheriff. A hearing on the preliminary injunction and on the reconventional demand was held on July 25, 1978. The issue was whether the payments on the note were delinquent. After hearing evidence presented by both parties, the trial judge held the payments were not delinquent.

On August 1, 1978, a judgment was rendered holding the temporary restraining order was properly issued, which necessarily means the seizure was held wrongful. A preliminary injunction was granted prohibiting the sheriff from proceeding with the sale. The injunction was issued without bond under the provisions of LSA-C.C.P. Article 2753(2) that no bond is necessary where there has been a premature attempt to enforce a debt secured by a mortgage. There was no appeal from the judgment of August 1, 1978, although General Electric had a right to appeal from the granting of the preliminary injunction. LSA-C.C.P. Article 3612.

On August 30, 1978, a hearing was held on the amount of damages suffered by Smi-gura as a result of the wrongful seizure of his mobile home. On September 29, 1978, judgment was rendered awarding Smigura damages for wrongful seizure in the total sum of $3,180, of which $2,000 was for general damages, $180 was for special damages (rental of another home and storage of furniture, etc.) and $1,000 was for attorney’s fees. The plaintiff, General Electric Credit Corporation, appealed only the judgment of September 29, 1978.

On appeal, General Electric’s first argument, as we understand it, is that the judgment of September 29,1978, awarding damages for wrongful seizure is improper because there has never been a trial on the merits “of the main demand in this case.” In this connection, we note the record shows that on August 15, 1978, which was after the seizure was held to be wrongful on August 1, 1978, but before the August 30, 1978 hearing on damages, General Electric filed an amended petition converting its action to one by ordinary process and praying for judgment in the sum of $10,739 for the balance due on its note and for recognition of its lien under its chattel mortgage.

At the hearing on August 30, 1978, General Electric sought to have the court hear evidence on both its action by ordinary process as well as the question of damages for the wrongful seizure. The court refused to hear the action by ordinary process because the defendant Smigura had not filed an answer and was not prepared to defend the suit by ordinary process. Over General Electric’s objection, the court proceeded to hear only the issue of damages caused by the wrongful seizure.

We find no error in the procedure followed by the district court. Briefly reviewing the status of the matter on August 30,1978, General Electric had filed a suit to foreclose by executory process. The defendant Smigura had filed a petition to enjoin the sale coupled with a reconventional demand for damages for unlawful seizure. At the first hearing on July 25, 1978, the district court decided the note was not delinquent and that General Electric’s suit was therefore premature and the seizure was wrongful. The temporary restraining order was held to have been properly issued, and a preliminary injunction prohibiting the sale was issued. That judgment was not appealed. Instead, General Electric converted the suit on August 15,1978 to one by ordinary process.'

At the hearing on August 30, 1978, the trial judge clearly acted within his discretion in deciding to limit the hearing to the question of damages caused by the wrongful seizure. The reconventional demand is an action in tort, wrongful conversion, under LSA-C.C. Article 2315. It arises out of the original suit by General Electric to foreclose by executory process. It does not arise out of the new suit by ordinary process. General Electric filed an answer to both the demand for injunctive relief and to the reconventional demand, thereby putting both at issue. At the first hearing on July 25, 1978, both the demand for injunctive relief and the reconventional demand were heard, and the district judge decided that payments on the note were current, and that General Electric’s executory proceedings were therefore premature and the seizure was wrongful. The issue of damages for the wrongful seizure was set for trial on a later date, August 30, 1978. There was nothing improper in having separate hearings on the issue of whether the seizure was wrongful and the issue of damages resulting therefrom. And, this is not what General Electric objects to. As we understand it, General Electric’s principal contention is that damages cannot be awarded without a hearing on the merits of the permanent injunction. In a supplemental brief filed in this court, General Electric emphasizes the issue is: “Can damages be awarded the prevailing party following a judgment granting a preliminary injunction?”

As stated above, the facts are that after the seizure was held to be wrongful in the hearing on the preliminary injunction and on the reconventional demand, General Electric voluntarily abandoned its executo-ry proceeding, thereby releasing the seizure and permitting the return of the mobile home to Smigura. Thus, the permanent injunction became moot. Clearly, General Electric could not avoid damages for its tortious conversion by returning the seized property.

In First National Bank Building Co., Ltd. v. Dickson & Denny, 202 La. 970, 13 So.2d 283 (1943), the plaintiff lessor sued the defendant lessee for rent and procured a writ of provisional seizure. The lessee filed a motion to dissolve the writ on the grounds the seized properties were the tools of his profession as a lawyer and thus exempt from seizure. The motion was tried, but before the judge rendered a decision the lessor released the seizure. The lessee thereafter filed a reconventional demand for damages for unlawful seizure, to which the lessor filed an exception of no cause of action which the trial judge sustained. In a decision reversing the trial judge our Supreme Court stated:

[3] As we have already stated, after evidence was heard on Dickson & Denny’s motion to dissolve the writ of provisional seizure, and before the judge rendered his decision thereon, the plaintiff voluntarily released the seizure. This does not prove, but it does strongly indicate, to say the least, that the seizing creditor anticipated that the judge would rule that the seizure of defendants’ property was illegal. If the district judge had ruled against the plaintiff on this point and if the ruling had been sustained by a court of last resort, such ruling would have been pri-ma facie evidence of the wrongful issuance of the writ, and the wrongful issuance of a writ of provisional seizure, entitles the lessee to recover such damages as he may have sustained due to the unlawful seizure of his property. The judge should have overruled the exceptions and should have permitted plaintiffs in reconvention to offer such testimony as they could in support of their demands.

In Personal Finance, Inc. v. Simms, 148 So.2d 176 (1st Cir. 1962) the plaintiff garnished the wages of both Mr. and Mrs. Simms. Mrs. Simms filed a petition for damages for wrongful garnishment on the grounds that the debt was community, and that she was not personally liable. The Finance Company then released the garnishment of Mrs. Simms’ wages. The court held:

It is difficult for us to perceive how this circumstance may be considered in mitigation of the wrongful garnishment of plaintiff’s wages when it also appears that, for several months thereafter, defendant failed to return the money wrongfully obtained. As correctly pointed out by able counsel for (Mrs. Simms), voluntary release of property seized does not exonerate the seizing creditor from liability for the wrongful seizure thereof. First Nat. Bank Bldg. Co., Limited v. Dickson & Denny, 202 La. 970, 13 So.2d 283.

We agree with the rule as quoted above from Personal Finance, Inc. v. Simms. Equity strongly supports the application of the rule in the present case. It would be grossly unfair to allow General Electric to force Smigura to move from his home and then, after five months, say to him in effect: “We are sorry we seized your home by mistake. You can return now.”

General Electric also argues the trial judge erred (1) in not finding the note delinquent, (2) in allowing Smigura credit for payments made by the endorser on the note and (3) in not finding certain late payment charges were due. These factual findings were made by the trial judge after hearing evidence by both parties. We have reviewed the record and find no manifest error.

The next argument by General Electric is that damages cannot be awarded to Smigura because the temporary restraining order and the preliminary injunction should not have been issued without bond. LSA-C.C.P. Article 2753(2) expressly provides that no bond is required where the enforcement of the debt secured by the mortgage is premature because the time allowed for payment has not expired. Thus, no bond was required in the present case.

General Electric’s final contention is that the amount of the general damages was not proved. Although defendant Smi-gura did not testify, his wife testified at length as to the extent of the expense, inconvenience and mental anguish caused by the wrongful seizure of their mobile home. The seizure was on June 21, 1978. On that date, defendant and his family had to move their furniture and other belongings to another dwelling. They had to pay additional utility costs, additional rent and storage costs. Their mobile home was taken to a storage place in Marksville where it remained until about August 11, 1978, a total of about 50 days during which Smigu-ra and his family were dispossessed of their home by reason of the unlawful seizure. Under the circumstances, we find the award of $2,000 in general damages was clearly within the much discretion of the trial judge.

For the reasons assigned, the judgment appealed is affirmed. All costs of this appeal are assessed against the plaintiff-appellant, General Electric Credit Corporation.

AFFIRMED.

GUIDRY, J.,

dissents, being of the opinion that although it may be said the plaintiff voluntarily released the seizure of defendant’s property, thus far defendant has made but a prima facie showing that the seizure was wrongful. Plaintiff is entitled to a full hearing on this issue and should not be cast for damages absent such showing.


text:
    EDCO PROPERTIES, a partnership, Plaintiff-Appellee, v. Fred J. LANDRY, Defendant-Appellant.
    No. 6986.
    Court of Appeal of Louisiana, Third Circuit.
    May 23, 1979.
    Rehearing Denied July 11, 1979.

      Poteet & Landry, John G. Poteet, Jr., Lafayette, for defendant-appellant.
    Bean & Rush, Ernest L. Parker, Lafayette, for plaintiff-appellee.
    Before CULPEPPER, DOMENGEAUX and GUIDRY, JJ.
   GUIDRY, Judge.

In this suit plaintiff, Edco Properties (Edco) seeks specific performance of an option to purchase immovable property. On October 29, 1975, the defendant, Fred J. Landry, entered into a lease-option agreement with a partnership known as Edco Properties, the object of which was a 97 acre tract of land located in Lafayette Parish. By the terms of this agreement, the lessee (Edco) was given, during the term of the lease, the option to purchase the leased property for the sum of $776,000.00 after giving to the lessor (Landry) timely notice of its intention to do so. The agreement expressly precluded the lessee from either assigning or sub-letting its rights in the contract without the written consent of the lessor. On November 30, 1977 Mr. Landry notified the lessee that he considered the lease-option agreement to have been dissolved as a result of the lessee’s alleged violation of the non-assignment clause. On December 28, 1977 Edco nevertheless notified Landry that it intended to exercise its right to purchase the leased property. When Mr. Landry refused to sell Edco the property, Edco instituted suit for specific performance to compel Landry to convey title to the lease property to plaintiff pursuant to the terms of the lease-option agreement. Defendant filed various exceptions as well as a motion for summary judgment, contending, in effect, that the sale by some of the original partners of their interest in Edco Properties, during the term of the lease, effected a dissolution of the partnership and constituted a transfer or assignment of the lease in violation of the non-assignment clause. The trial court overruled defendant’s exceptions and denied his motion for summary judgment concluding that the sale of partnership interests by some of the original partners in Edco did not operate to either dissolve the partnership or effect an assignment and/or transfer of the lease. The trial court subsequently granted plaintiff’s motion for summary judgment, and ordered defendant to convey to Edco the 97 acre tract of land under the terms set forth in the lease-option agreement. Defendant has instituted this appeal.

On appeal defendant contends that the trial court erred in so holding and additionally argues for the first time that, in any event, the monthly lease rentals represent earnest money payments which entitles him to recede from the agreement upon compliance with the provisions of R.C.C. Article 2463. The substantial issues on appeal are:

(1) Did the monthly lease rentals represent earnest money payments?
(2) Did the transfer of interests in Edco by some of the individual partners effect a transfer or assignment of the lease in violation of the non-assignment clause?
(3) Did the transfer of interests in Edco by some of the individual partners operate to dissolve the partnership and serve to vest title to the lease-option agreement in the successor partnership in violation of the non-assignment clause?

I. DID THE MONTHLY LEASE PAYMENTS REPRESENT EARNEST MONEY?

LSA-C.C. Articles 2462 and 2463 provide:

Art. 2462. “A promise to sell, when there exists a reciprocal consent of both parties as to the thing, the price and terms, and which, if it relates to immova-bles, is in writing, so far amounts to a sale, as to give either party the right to enforce specific performance of same. One may purchase the right, or option to accept or reject, within a stipulated time, an offer or promise to sell; after the purchase of such option, for any consideration therein stipulated, such offer, or promise, can not be withdrawn before the time agreed upon; and should it be accepted within the time stipulated, the contract or agreement to sell, evidenced by such promise and acceptance, may be specifically enforced by either party.” Art. 246S. “But if the promise to sell has been made with the giving of earnest, each of the contracting parties is at liberty to recede from the promise; to-wit: he who has given the earnest, by forfeiting it; and he who has received it, by returning the double.”

Appellant contends that the monthly lease payments made by Edco (which under the agreement were to be applied to the sale price) were intended by the parties to represent earnest money. If determined to be such, the lessee would be precluded from seeking specific performance under LSA-C.C. Article 2463. The basis for appellant’s contention is the apparently well settled rule that all deposits made pursuant to a contract to sell are presumed to be earnest money in the absence of an express intention to the contrary. Collins v. Demarest, 45 La.Ann. 108, 12 So. 121 (La.1892); Terrebonne v. Cheramie, 151 La. 929, 92 So. 388 (La.1922); Haeuser v. Schiro, 235 La. 909, 106 So.2d 306 (La.1958), and authorities cited therein. It is undisputed that there is no stipulation in the lease-option agreement stating that the lease payments were not earnest money. However, we do not find the above stated presumption applicable under the circumstances of this case.

The case of Moresi v. Burleigh, 170 La. 270, 127 So. 624 (La.1930) involved a suit for specific performance of an option to buy stock. The option agreement in dispute therein expressly provided that the price paid for the option was not earnest money. However, the court made the following observations concerning earnest money and option contracts:

“ ‘In an option contract, the optionee acquires no rights in the land or the subject-matter optioned. There is no transfer of title. It is simply a contract by which the owner grants the optionee the right to purchase the thing at a fixed price and within a fixed time. Davis v. Roseberrv. 95 Kan. 411, 148 P. 629, 3 A.L.R. 564; Ide v. Leiser, 10 Mont. 5, 24 P. 695, 24 Am.St.Rep. 17.
“ ‘The option is a contract preliminary to an agreement to purchase. When exercised it ceases to exist, a new contract arising, which is enforceable against either party. There is no provision for the siviner of earnest money with an option. The right acquired by an optionee is an unqualified right to purchase if he so elect. He can release himself without a forfeit by simply failing to exercise the right acquired.’” (Emphasis ours) 170 La. 270, 127 So. at pg. 627

It is likewise pointed out by Justice Tate in his dissent in Haeuser, supra, that in light of the comparative legislative histories of Articles 2462 and 2463, the latter article should only be applied to the “promise to sell” referred to in subsection one of Article 2462 and not to the “option” contract provided for in subsection two of that article. At the time Article 2463 was drafted, option contracts were not recognized in our law. When paragraph two was added to Article 2462 recognizing the option contract in Louisiana, the continuity of thought which had originally existed between these two articles was broken. A peculiar problem therefore arises when we attempt to reconcile this traditionally civilian notion of the giving of earnest with the common law notion of an option contract. However, it is clearly inconsistent with the nature of an option agreement to presume that — in the absence of an express stipulation to the contrary — the parties to the contract intend for the price paid for the option to represent a relinquishment of the option holder’s right to specific performance, and a reservation of the option grantor’s right to recede from the contract. A party who secures an option to buy is merely securing the right to compel the grantor to sell at his (the option holder’s) discretion. If the consideration paid for such an option was to be presumed to give the grantor the right to refuse to sell, the option would serve no legal function. See, 2 Litvinoff, Obligations, § 123, 7 Louisiana Civil Law Treatise, 1975; Litvinoff, “Of The Promise of Sale and Contract to Sell”, 34 La.L.R. 1017 at 1073 (1974); Smith, “An Analytical Discussion of the Promise of Sale and Related Subjects, Including Earnest Money”, 20 La. L.Rev. 522 at 537 (1960); Comment, “The Effect of Article 2462 of the Louisiana Civil Code”, 3 La.L.Rev. 629 (1941); See also, Smith Enterprises, Inc. v. Borne, 245 So.2d 9 (La.App. 1st Cir. 1971) writ ref. 258 La. 574, 247 So.2d 393.

The agreement in the instant case is clearly a lease coupled with an option to buy. We conclude and thus hold that LSA-C.C. Article 2463 does not apply to an option contract in the absence of an express agreement that the consideration therefor is intended to represent earnest money. In the absence of such a stipulation in the agreement in question we find that the payments made by the lessee were not intended as such, and that Edco has the right to seek specific performance of the option to buy.

II. DID THE TRANSFER OF INTERESTS IN EDCO BY SOME OF THE INDIVIDUAL PARTNERS EFFECT A TRANSFER OR ASSIGNMENT OF THE LEASE IN VIOLATION OF THE NON-ASSIGNMENT CLAUSE?

III. DID THE TRANSFER OF INTERESTS IN EDCO BY SOME OF THE INDIVIDUAL PARTNERS OPERATE TO DISSOLVE THE PARTNERSHIP AND SERVE TO VEST TITLE TO THE LEASE-OPTION AGREEMENT IN THE SUCCESSOR PARTNERSHIP IN VIOLATION OF THE NON-ASSIGNMENT CLAUSE?

On the date which the lease-option agreement was entered into by the parties, Edco was a partnership consisting of James D. Edwards, Robert E. Gaither and Richard D. Mitchell. The agreement to form this partnership was dated June 3, 1975 and recorded June 30, 1975 as entry no. 646140 of the records of the Lafayette Parish Clerk of Court’s office. On December 22,1976, after the lease-option agreement was entered into, Edwards and Mitchell (owners of a 90% interest in Edco) conveyed their interests in the partnership to Gaither and James R. Leonard. Gaither received 90% of their interests and Leonard received 10%. On January 21, 1977, Gaither and Leonard conveyed 75% of their combined interests to Thomas R. Becnel, Britt Busch, Donald J. O’Rourke, John Price and George Schneider. Gaither retained 25% interest in Edco. Appellant contends that when Edwards and Mitchell initially transferred their interests in Edco to Leonard and Gaither, such action effected a dissolution of the partnership and constituted an assignment of their interests in the lease-option agreement. By the terms of the lease-option agreement, the lessee was not entitled to assign or transfer its interest in the contract. Consequently, appellant contends, the contract was dissolved. Appellee, on the other hand, alleges that although the agreement precluded the assignment or sub-letting of an interest in the contract, it did not preclude the individual partners in the partnership from conveying their interests in the partnership itself. Appellee further contends that the transfer of the individual partners’ interests in the partnership did not result in a dissolution of the partnership nor did such action amount to a transfer of any interest in the contract to a third party.

(a) DID THE TRANSFER OF PARTNERSHIP INTERESTS CONSTITUTE A TRANSFER OF AN INTEREST IN THE LEASE-OPTION AGREEMENT?

The Louisiana partnership has long been considered a. juridical person for certain purposes. It is possessed of rights and privileges and it is subject to obligations distinct from those of the individuals composing it. The partnership itself may own property, and it stands as the creditor or debtor of its own rights and obligations. Blanchard v. Cole, 8 La. 153 (1835); Dick v. Byrne, 7 Rob. 465 (1844); Succession of Pilcher, 39 La.Ann. 362, 1 So. 929 (1887); O’Neal, “An Appraisal of the Louisiana Law of Partnership: A Comparative Focus on Source Materials and Underlying Practices”, Part II, 9 La.L.Rev. 450. A partnership may institute suit in its own name to assert its interests in its property, such being a corollary of the well settled rule that both movable and immovable partnership property is owned by the firm itself and not by the individual partners. Succession of Pilcher, supra; Toelke v. Toelke, 153 La. 697, 96 So. 536 (1923); Posner v. Little Pine Lumber Co., 157 La. 73, 102 So. 16 (La.1924); Wolf v. New Orleans Tailor-Made Pants Co., 52 La.Ann. 1357, 27 So. 893 (1900); E. B. Hayes Machinery Co. v. East-ham, 147 La. 347, 84 So. 898 (1920); Snyder v. Davidson, 172 La. 274, 134 So. 89 (1931). The right of the individual partners to property standing in the name of the partnership is no more than a right to an undivided interest in whatever property remains after the partnership is dissolved, its rights and obligations are satisfied, and its unliquidat-ed assets liquidated. In Posner, supra, the court stated:

“On the legal proposition that the debts must be paid before the partners can divide the property, that the assets belong to no partner separately, but are a common stock pledged for the debts of the partnership, see Ward v. Brandt, 11 Mart. (O.S.) 331, 13 Am.Dec. 352; United States v. Baulos. 5 Mart. (N.S.) 567; Purdy v. Hood. 5 Mart. (N.S.) 626; Claiborne v. Their Creditors. 18 La. 501; Mourain v. Delamarre. 2 La.Ann. 142.
We quote the following from the Succession of Pilcher, 39 La.Ann. 362, 1 So. 929.
‘A partnership once formed and put into action becomes, in contemplation of law, a moral being, distinct from the persons who compose it. * * * The partners are not the owners of partnership property. It belongs to the ideal being which has the control and administration thereof to enable it to fulfill its legal duties and obligations. The partners own the residuum.’
See, also, Perry v. Holloway, 6 La.Ann. 265; and Liquidating Com’rs of Bank of Monroe v. Dodson, 131 La. 990, 60 So. 659, wherein this court said:
‘The transfer by a partner of his half interest in assets belonging to a partnership is a transfer of his interest therein, as may appear on a settlement with his copartners.’” 157 La. 73, 102 So. at pg. 18

It is well settled that a partner has no interest in the individual assets of the partnership. A partner may not grant a mortgage on any of the partnership assets, Harrington v. Harrington, 151 So. 648 (La.App. 2nd Cir. 1934); O’Neal, supra, nor can the creditor of an individual partner seize a particular partnership asset in satisfaction of his claim, Levy & Sugar v. Cowan and Mayo, 27 La.Ann. 556 (1875); City of New Orleans v. Gauthreaux, 32 La.Ann. 1126 (1880); Toelke, supra; and, the sale by one partner of his interest in an unliquidated partnership is neither a sale of specific property nor of any interest in specific property. Posner, supra.

Applying the above rules to the facts established in the record, it is clear that when appellant entered into the lease-option agreement with Edco, he entered into á contractual relationship with the partnership entity itself. The contract therefore became a partnership asset. When Edwards and Mitchell transferred their interests in Edco to Gaither and Leonard, they were transferring only an undivided interest in an unliquidated partnership, the value of which would be determined after all partnership affairs were settled and unliquidated assets liquidated. Posner, supra. As they had no specific interest in the lease-option agreement itself, (it being an asset of the partnership entity) they could not transfer or assign any interest therein. We find, therefore, that the various transfers of partnership interests by the individual partners of Edco did not effect a transfer of any interest in the lease-option agreement.

(b) DID THE TRANSFER OF PARTNERSHIP INTERESTS EFFECT A DISSOLUTION OF THE PARTNERSHIP AND VEST TITLE TO THE LEASE-OPTION AGREEMENT IN THE SUCCESSOR PARTNERSHIP IN VIOLATION OF THE NON-ASSIGNMENT CLAUSE?

Appellant contends that the transfer of interests in Edco by some of the individual partners operated to dissolve the partnership and served to vest title to the lease-option agreement in the successor partnership in violation of the non-assignment clause. On the other hand appellee contends that the transfer by a partner of his interest in a partnership does not result in a dissolution of the partnership. It is argued that such a conclusion is supported by Louisiana’s partnership “entity theory”, insofar as a change in personnel should not alter the construction of the entity. The trial court so held, relying on Posner v. Little Pine Lumber Co., supra; Shalett v. Brownell-Kidd Company, 153 So.2d 425 (La.App. 1st Cir. 1963), writ denied, 244 La. 1004, 156 So.2d 57 (1963); and, Goldman v. General Supply Co., 6 So.2d 778 (Orleans, 1942).

In Posner, a withdrawing partner accepted a note as partial payment for his interest in the partnership. The remaining partners, who purchased the withdrawing partner’s interest, expressly assumed all partnership liabilities existing at the time of his withdrawal, including a mortgage indebtedness. When the former partner’s endorsee sued for recognition of a vendor’s lien on the partnership’s property, the mortgagee filed a third party opposition, seeking to have his mortgage prime the note. The Court rendered judgment for the mortgagee, finding that the sale of a partner’s interest could not create a lien on specific items of partnership property — a finding clearly in line with the above cited jurisprudence. However, the court, in dicta, made the following comment which is relied upon by appellee in support of its position:

“The Court of Appeal, in the two opinions which it delivered in this case, one on the original hearing and the other on rehearing, admits the correctness of the legal principle that the sale by one of the partners of his interest in an unliquidated partnership is not a sale of specific property or of any interest in specific property, and that, therefore, no vendor’s lien can be created by such a transaction. It holds, however, that the act of sale from Colbert to Baker and Stell evidenced a dissolution of the partnership and a liquidation of its affairs, and that the sale by Colbert of his undivided one-third interest in the partnership property was not the sale of an unliquidated interest in an unliquidated partnership.
If the position assumed by the Court of Appeal be legally correct, then every time one partner disposed of his interest in a partnership to his copartners it would constitute a sale of an interest in specific property, and operate as a dissolution and liquidation of the partnership. Such is not the law.” (Emphasis added) 157 La. 73, 102 So. at pg. 17.

This language, was not determinative of the issue presented in Posner and is therefore dicta and cannot be construed as authority for the proposition that the sale of a partner’s interest will not result in a dissolution of the partnership. However, in any event, the dissolution of a partnership is clearly separable from the liquidation of its assets, which may take place long after the partnership has been dissolved.

In Shallet and Goldman, supra, the intermediate appellate courts did construe the above quoted language in Posner to mean that the sale of a partner’s interest would not operate to dissolve the partnership. The Supreme Court denied writs in Shallet with the statement that “[o]n the facts found by the Court of Appeal, the result is correct”. We do not construe this writ denial in Posner as a clear holding from our Supreme Court that the sale of a partner’s interest will not result in a dissolution of the partnership.

We observe that in the Louisiana State Law Institute’s proposed revision of the Civil Code Articles on Partnership they propose a new Article 22, which provides that:

“A partnership does not terminate as a result of a change in the number or identity of the partners.”

The comments by the Louisiana State Law Institute do state, however, that this proposed article presents a new concept.

Our research in connection with this interesting question has disclosed early and contrary jurisprudence to the effect that if a partner chooses to sell his interest and to either add a new partner or to simply withdraw the partnership is thereby dissolved and a new partnership is created with the new and/or remaining partners. Abat & Generes v. Penny, 19 La.Ann. 289 (1867); Violett v. Fairchild, 6 La.Ann. 193 (1851); Resor v. Capelle, 140 So. 699 (Orl., 1932); 68 C.J.S. Partnership § 347; § 31, Uniform Partnership Act (which substantially conforms with the provisions of LSA-C.C. Article 2876); Planiol Traite Elementaire De Droit Civil, Vol. 2, Pt. 2, No. 1975. See also Terzia v. The Grand Leader, 176 La. 151, 145 So. 363 (La.1932). Support for the conclusion reached in the cited jurisprudence is found in the well settled rule that when a partner transfers his interest in a partnership, the new partner will not be liable for any partnership liabilities incurred prior to the date of transfer. It is only for the debts of the “new” partnership which the entering partner will be held liable for in the absence of an express assumption of the “old” firm’s liabilities made in writing. Paradise & Bro. v. Gerson, 32 La.Ann. 532 (1880); Resor v. Capelle, supra; Taylor v. Victoria Nav. Co., 176 So. 519 (Orleans, 1937).

Although, as set forth above, there appears to be a serious conflict in the jurisprudence on the issue as to whether a change in the number or identity of the partners terminates the partnership, we decline to make a categorical determination of that issue as to do so would constitute mere dicta. This is so because even were we to hold that Edco was dissolved by the sale of partnership interests such ■ circumstance would not and could not result in a dissolution of the lease-option agreement or a transfer and assignment of that agreement to the new partnership. Rather, in such event, the lease-option agreement would remain as an asset of the dissolved partnership with right of enforcement in the latter entity. A dissolved partnership maintains a fictional existence with respect to its past transactions and existing assets, until all of its affairs are wound up and completed. This fictional existence permits the partnership to liquidate its affairs, perform existing contracts, collect its debts, pay its obligations and distribute its assets according to the partnership agreement. Cambre v. St. Paul Fire and Marine Insurance Co., 331 So.2d 585 (La.App. 1st Cir. 1976), writs refused, 334 So.2d 434 and 334 So.2d 435; Harrison v. Frye, 46 So.2d 382 (1st Cir. 1950); Duvic v. Home Finance Service, 23 So.2d 790 (Orleans, 1945); Johnson v. Iowa Rice Dryer, Inc., 226 So.2d 194 (La.App. 3d Cir. 1969); 68 C.J.S. Partnership § 351; Comment, “Landlord and Tenant: Summary Ejectment in Louisiana”, 21 Tul.L.Rev. 256 (1946); Snellings, “Certain Aspects of Heritable Obligations”, 30 Tul.L.Rev. 305 (1956).

In conclusion, we find that when Edwards and Mitchell disposed of their interests in Edco, they did not transfer and/or assign any interest in the lease-option agreement contrary to the non-assignment clause in such agreement. Nor did such circumstance effect a dissolution of the lease-option agreement or constitute a transfer and assignment thereof to a new partnership even if as a result of such sale by Edwards and Mitchell Edco was dissolved and a new partnership was formed.

The record reveals that on December 28, 1977 Edco — through its original partners Gaither, Mitchell and Edwards— notified Landry of its intention to purchase the 97 acre tract of land pursuant to the terms of its option. When appellant refused to execute the act of sale, he did so in violation of his contract with Edco. Edco, either as an on going partnership or a partnership in liquidation, had the capacity to sue in its partnership name to assert its contractual rights under this agreement, appearing through one of the partners (Gaither). Montague v. Weil and Bro., 30 La.Ann. 50 (1878); Guess and Albin v. Ham, 183 So. 61 (La.App. 2nd Cir. 1938); writs denied August 5, 1938; Cambre v. St. Paul Fire and Marine Insurance Co., supra. Considering the above we find that the trial court properly granted Edco Properties specific performance of the purchase option.

For the above and foregoing reasons, the judgment of the trial court is affirmed. All costs of these proceedings are to be paid by appellant.

AFFIRMED.

      . By reference, Justice McCaleb incorporated Justice Tate’s reasons into his own dissenting opinion in this case.

      . By Act 249 of 1910.

      . For an historical examination of the correlation between the option contract and the giving of earnest, see Note, 33 Tul.Law Review 418 (1959).