author:
HALL, Judge.
      PRICE, Judge,

text:
    William C. McDANIEL, Plaintiff-Appellant, v. CADDO PARISH SCHOOL BOARD, Defendant-Appellee.
    No. 13205.
    Court of Appeal of Louisiana, Second Circuit.
    May 23, 1977.
    En Banc.
    Rehearing Denied June 22, 1977.

      See also, La.App., 347 So.2d 39.
    Pugh & Nelson by Sydney B. Nelson, Shreveport, for plaintiff-appellant.
    Booth, Lockard, Jack, Pleasant & LeSage by Henry A. Politz and Fred H. Sutherland, Shreveport, for defendant-appellee.
    Before PRICE, HALL, MARVIN, JONES and McClendon, jj.
   HALL, Judge.

The issue in this case is whether plaintiff, William C. McDaniel, Director of Personnel for the Caddo Parish School Board, is eligible for a sabbatical leave under the provisions of LSA-R.S. 17:1171 which provides in part:

“Members of the teaching staff of public schools in all parishes and municipalities of the state of Louisiana shall be eligible for sabbatical leaves, for the purpose of professional or cultural improvement, or for the purpose of rest and recuperation, for the two semesters immediately following any twelve or more consecutive semesters of active service in the parish where the teacher is employed, or for the one semester immediately following any six or more consecutive semesters of service.”

This court, after reargument of the case before a panel of five judges pursuant to the mandate of Article V, Section 8(B) of the Louisiana Constitution of 1974, resolves the issue in favor of plaintiff, reversing the contrary decision of the district court.

McDaniel applied for a sabbatical leave for purposes of rest and recuperation. His application was denied by the School Board solely on the basis of the School Board’s determination that he is not “a member of the teaching staff” as that term is used in the statute. McDaniel’s suit for a writ of mandamus compelling the Board to grant the leave was dismissed by the district court, which held that the Board has discretion to determine which employees are and are not members of the teaching staff and the Board’s discretion was not abused in this case.

McDaniel appealed, urging that the trial court’s decision should be reversed for any one of the following reasons:

“(a) The term ‘member of the teaching staff as used in R.S. 17:1171 is clear and includes all personnel whose position requires a teaching certificate; or
“(b) The term ‘member of the teaching staff’ is unclear, but when interpreted in pari materia with R.S. 17:441, R.S. 17:471, R.S. 17:571(23) and R.S. 17:762 includes all personnel whose position requires a teaching certificate; or
“(c) The term ‘member of the teaching staff’ is not clear and is not in pari mate-ria with other definitions of teacher found in Title 17, but must be interpreted uniformly to mean all personnel whose position requires teaching certificate; or
“(d) Is none of the above, but the Cad-do Parish School Board acted arbitrarily in denying plaintiff’s application for sabbatical leave and plaintiff is therefore entitled to the leave; or
“(e) The Caddo Parish School Board did not act arbitrarily, but under the facts of this case are estopped from denying plaintiff’s leave.”

McDaniel’s position is supported by the Louisiana Teachers Association, which filed a brief in this Court as amicus curiae.

The School Board contends that members of the teaching staff include only those persons who take an active and direct role in the instructional or educational process and supervisors who actually supervise teachers or formulate curriculum, general or specific, offered in the school system, or directly assist, instruct, or otherwise impart knowledge or skills to the classroom teacher; and that the Board has the authority to determine whether an individual is a member of the teaching staff and should do so on a case by case basis. The Board contends the Director of Personnel does not come within these criteria.

McDaniel holds a teacher’s certificate. He previously held positions with the Caddo Parish School Board as classroom teacher, counselor, and Supervisor of Classified Personnel. In 1973, he became Director of Personnel. The Director of Personnel is required by the School Board to hold a teacher’s certificate as a qualification for employment in that position.

The Board’s job description for the position and the testimony of witnesses show that the Director of Personnel administers the personnel responsibilities of the Board under the supervision of the Assistant Superintendent of Administration and Personnel. His duties relate to all personnel employed by the Board, both certified personnel who are required to hold teacher’s certificates and classified personnel who are not required to hold teacher’s certificates. In relation to certified personnel, the Director of Personnel is responsible for interviewing and recruiting prospective teachers and participates in the screening, employment, placing and assigning of teachers in the school system. He maintains all personnel records and, generally, is in charge of employee relations. He, along with the Assistant Superintendent, confers annually with a limited number of teachers who are reported by principals as performing below expectations and in this connection offers advice to the teachers in an effort to improve their performance. He confers with teachers in connection with other employment matters. He administers promotional examinations and serves on the promotion interview committee.

Prior to 1975, sabbatical leaves were routinely granted by the School Board, on the recommendation of the administrative staff, to administrative employees holding teacher’s certificates. McDaniel’s predecessor as Director of Personnel was granted a sabbatical leave in 1972. In 1975, the Board questioned this practice in connection with an application for leave by the Director of Public Relations. The minutes of the Board reflect her application was denied. The minutes also reflect a policy adopted by the Board of referring applications by administrative personnel to the Administrative Committee for consideration prior to action by the Board. The testimony shows that the present policy of the Board, which has not been reduced to writing and is not reflected by its minutes, is to decide on a case by case basis as applications are filed whether supervisory and administrative personnel are members of the teaching staff and entitled to sabbatical leave under the statute. The Board’s current policy and procedure in good faith follows opinions of the Attorney General rendered to various school boards in recent years. The opinions are to the effect that supervisory personnel are eligible only if they take an active or direct role in the instructional or educational process; that supervisors are eligible who actually supervise teachers and who actually formulate the curriculum, general or specific, offered in the school system, or directly assist, instruct, or otherwise impart knowledge or skills to the classroom teacher; and that the Board has the authority to determine whether an individual is a member of the teaching staff and should do so on an individual basis.

The central issue then is one of interpretation of “members of the teaching staff” and “teacher” as used in LSA-R.S. 17:1171, et seq. The issue is res nova.

Neither the plaintiff nor the School Board contends that the statute is limited to classroom teachers. The School Board, in its statement of policy and in its practice of actually granting sabbatical leaves to certain supervisory and administrative personnel, recognizes that the statute applies to at least some administrative and supervisory personnel. Likewise, plaintiff would concede that the statute does not apply to supervisory and administrative personnel whose duties do not relate to teaching, who do not hold a teacher’s certificate, and whose employment does not require a teacher’s certificate.

By adoption of the statute mandating sabbatical leaves for members of the teaching staff, it must be assumed that the Legislature intended the statute apply to a certain class or group of persons. There is no basis for the position that the Legislature intended to leave the determination of who is eligible for sabbatical leave entirely to the individual school boards around the state. Any determination by a School Board must be made within the terms and provisions of the statute. Interpretation of the meaning of the statute, in the event of a dispute, is ultimately a judicial function— not a function of the various school boards — although contemporaneous construction of the statute by the administrative agency charged with administering it is one of the guides or tools used by the court in determining the meaning of the statute. Contemporaneous construction is of little assistance in this case because the School Board administered the statute in one manner for several years and now is administering the statute in a different manner. Further, there is no evidence of a uniform construction of the statute throughout the State.

The word teacher is used throughout Title 17 and is defined in several sections for specific purposes. For purposes of tenure a teacher is defined as a person employed by a school board who holds a teacher’s certificate and whose legal employment requires a teacher’s certificate. Teacher is defined more broadly in other sections dealing with retirement and other matters.

In any school system, and particularly in a large one such as that of Caddo Parish, there are administrative and supervisory duties which must and should be performed by teachers, that is, persons holding teaching certificates. The School Board itself has recognized this by creating various supervisory and administrative positions, including Director of Personnel, and requiring that these positions be filled by teachers. Administrative and supervisory positions relating to teaching are, as disclosed by the record, customarily filled by promotion of teachers from within the system. In the course of advancement, a teacher may move from one position more directly related to the direct teaching process to a position less related, and vice versa. The fact that a teacher, required to hold and holding a teaching certificate, with tenure, is promoted and assigned to administrative duties does not make that person any less a teacher or member of the teaching staff. Leave for further study or for rest and recuperation makes as much sense for teachers with administrative responsibility as it does for classroom teachers.

Plaintiff McDaniel is a teacher by education, experience and profession. He holds a teacher’s certificate from the State Board of Education. Although state law does not require that the Director of Personnel of a school system hold a teacher’s certificate as a legal requirement of employment, the Caddo Parish School Board makes that requirement. The position McDaniel occupies is related to teaching and teachers, as recognized by the Board itself in requiring a teaching certificate as a condition of employment in the position. It is inconsistent for the School Board to require that the Director of Personnel be a teacher with a teaching certificate and then, in connection with a sabbatical leave request, take the position that the Director’s duties are not teacher related and that the Director is not a member of the teaching staff.

Consistent with the general use of the term teacher throughout the statutes, the term member of the teaching staff as used in the sabbatical leave statute includes employees who hold a teaching certificate, whose employment requires a teacher’s certificate, and whose duties relate to teaching or teachers. Plaintiff McDaniel is a member of the teaching staff of the Caddo Parish School Board and is eligible for sabbatical leave under LSA-R.S. 17:1171, et seq.

We do not hold that the School Board cannot create administrative and supervisory positions whose occupants are ineligible for sabbatical leave. The School Board has the authority and discretion under LSA-R.S. 17:84 to create other administrative positions, unrelated to teaching, and to employ persons who are not teachers to fill those positions. Examples shown by job descriptions in the record are the positions of Director of Finance and Director of Data Processing, which do not require a teaching certificate as a condition of employment. The fact that a person filling an administrative position happens to hold a teaching certificate would not necessarily make that person eligible for sabbatical leave, if the duties of the position are unrelated to teaching or if there is no requirement that the person holding the position be a teacher.

Plaintiff prayed for a writ of mandamus ordering the School Board to grant his application for a sabbatical leave for the 1976-1977 school year. That school year has substantially expired and will have expired by the time judgment in this case becomes final. In State ex rel Scoggins v. Vernon Parish School Board, 44 So.2d 385 (La.App. 1st Cir. 1950), under similar circumstances, the appellate court ordered the School Board to grant the teacher a sabbatical leave for the ensuing school year.

This is the only effective relief this court can grant at this time.

Accordingly, for the reasons assigned, the judgment of the district court is reversed. It is ordered that writ of mandamus issue directing the Caddo Parish School Board to grant William C. McDaniel sabbatical leave for the 1977-1978 school year. The case is remanded to the First Judicial District Court for issuance of the writ pursuant to this decree.

Reversed, rendered and remanded.

PRICE, J., dissents and assigns written reasons.

PRICE, Judge,

dissenting.

I must respectfully dissent from the result reached by the majority opinion.

There is no ambiguity in the language of LSA-R.S. 17:1171 which affords sabbatical leaves to “members of the teaching staff of public schools.” The plain meaning of the term includes only those persons actively engaged in the instructional process.

This court has not been called upon to interpret the meaning of an ambiguous term or statute. To the contrary, our duty should be limited to a review of whether the School Board in the exercise of its inherent power has been arbitrary or unreasonable in rejecting plaintiff’s application for leave for rest and recuperation because he is not a member of the teaching staff. The majority recognizes that the Board carried out its duty in good faith following legal advice from its counsel and in accord with a series of Attorney General opinions directing such a course be followed by the Board.

The usurpation by this court of the Board’s prerogative is in direct conflict with the basis of the opinion in another sabbatical leave decision rendered by this court on this same date. See Shaw v. Caddo Parish School Board, 347 So.2d 39 (La.App. 2nd Cir. 1977). In Shaw this court quotes with approval expressions of the Supreme Court in State, ex rel Rathe v. Jefferson Parish School Board, 206 La. 317, 19 So.2d 153 (1943) in part as follows:

There is nothing more firmly established in law than the principle that, within the limits of their authority, the power and discretion of legally created governing boards is supreme. Their wisdom or good judgment cannot be questioned by the courts. Members of these boards are appointed or elected because of their peculiar fitness for the post. Judges are elected because of their legal knowledge and ability. They are not experienced in the business affairs of Parishes and municipalities, ... or the conduct of a public school system. A presumption of legality and regularity attaches to the section of all government boards. It is only when it is clearly shown that the action of such a board is beyond its authority or is arbitrary, unreasonable, or fraudulent that a court is justified in interfering.
******
It is indisputable that the jurisprudence of this State is settled beyond doubt that where a statute creates a Board and grants to it certain administrative and executive functions and responsibilities, the courts will not interfere with the bona fide judgment of the Board based upon substantial evidence. It is only where the complainant shows there has been an invasion of his rights by the Board exceeding its powers or doing him an injustice that the courts have set aside the actions of the Board. * * * (Emphasis supplied in Shaw)

I am in accord with the view of the district judge that the legislature by using the term “members of the teaching staff” left the ultimate determination of those to be included within this category to the discretion of the parish or municipal school boards provided it is exercised in good faith. This is not an unconstitutional delegation of legislative power to the School Board.

The majority opinion places undue emphasis on the comprehensive description of the qualifications and duties of the administrative employees of the School Board formulated in connection with a professional survey of the Caddo School system in recent years. Having teacher certification as a “preferred attainment level” for Director of Personnel in the formulated job description does not of itself render the Director of Personnel a member of the teaching staff.

The general duties of plaintiff as Director of Personnel are described in the testimony of Dr. Earl McKenzie, the Superintendent of Caddo Parish schools as “. . . primarily responsible for directing the activities of the personnel department whose job is to recruit and seek employment and to disburse or advise our people of their benefits and rights under their employment privileges.”

Dr. McKenzie further testified concerning the real necessity for having a teacher’s certificate as a qualification for this position:

Q. So holding that certificate is not essential for the job?
A. Not essential, no.
Q. Would you have any reluctance if the job were open and an applicant came from someone who is qualified from industry_business in the field of personnel to recommend to the school board the hiring of that person, the adjustment of the job description to delete the holding of a certificate and the hiring of that person?
A. No, I have no_I might have at one time, but I have no_I think I would be looking for a personnel person, who can do personnel work.
Q. Personnel work as distinguished from instructional work?
A. Yes.

The Director of Personnel is no more a part of the instructional process than the Director of Transportation. These are purely administrative positions which are in support of the teaching process.

The evidence shows that although for a number of years prior to 1975, the School Board blindly followed the recommendations of the administrative staff in granting sabbatical leaves without properly evaluating each case in relation to whether the applicant was eligible under the language of the statute, the practice was stopped after the Board became aware of the Attorney General opinions defining the statute and the Board’s duties and authority.

It is only coincidental that plaintiff made his application at a time the Board began to follow its duty' under the law, and he was thus denied a benefit that had been extended to his predecessor under more lax procedures.

There is no evidence that the Board misrepresented to plaintiff he would continue to be entitled to sabbatical leave eligibility after he left the status of teaching and became a part of the administrative staff of the Board. Plaintiff has not testified that such a representation was made or that such a factor entered into his motivation for accepting the promotion.

The result reached by the majority is contrary to the intent and purpose behind the sabbatical leave law.

      . There are no reported appellate decisions dealing with who is entitled to sabbatical leave under the statute. There are a few cases dealing with related issues involving supervisory or administrative personnel whose eligibility for sabbatical leave was not at issue. Coody v. Natchitoches Parish School Board, 166 So.2d 303 (La.App.3d Cir. 1964) involved the amount of salary due a principal of a high school while on sabbatical leave. McGraw v. Iberia Parish School Board, 310 So.2d 139 (La.App.3d Cir. 1975) involved an assistant superintendent of schools who was granted a sabbatical leave and was appointed as principal of an elementary school upon expiration of the leave. The court held the assistant superintendent was a teacher as defined by the Tenure Law, LSA-R.S. 17:441, in that he was an employee of the school board, held a teacher’s certificate, and was required to hold a teacher’s certificate, and ordered him reinstated to the position of assistant superintendent.


source: Caselaw Access Project

author: MARVIN, Judge. HALL, Judge,

license: Public Domain

text:
    B. L. SHAW, Plaintiff-Appellant, v. CADDO PARISH SCHOOL BOARD, Defendant-Appellee.
    No. 13259.
    Court of Appeal of Louisiana, Second Circuit.
    May 23, 1977.
    En Banc.
    Rehearing Denied June 22,1977.
    See also, La.App., 347 So.2d 33.

      Pugh & Nelson by Sydney B. Nelson, Shreveport, for plaintiff-appellant.
    Booth, Lockard, Jack, Pleasant & LeSage by Henry A. Politz, Shreveport, for defendant-appellee.
    Before HALL, MARVIN and JONES, JJ.
   MARVIN, Judge.

This appeal concerns the status of schoolteachers on sabbatical leave for professional purposes.

In L.R.S. 17:1177, the State has declared what a teacher shall do while in this status. We determine here to what extent, if any, this declaration by the State precludes local school boards from saying what a teacher shall not do while in this status.

On March 4, 1974, the defendant Board granted plaintiff, the principal of Byrd High School, a sabbatical for the school year 1974-75. Plaintiff arranged to enroll in an accredited Wyoming college for the six graduate credit hours required by Sec. 1177. Plaintiff also obtained employment with a Wyoming school district to serve as principal of a large high school for one year commencing July 1, 1974.

After plaintiff began his service as principal and his pursuit of the graduate credit hours in Wyoming, the Board on September 4, 1977, passed this resolution:

“WHEREAS, the Attorney General of Louisiana rendered an opinion on November 5, 1970, construing the Sabbatical Leave Law, which opinion, in part, reads as follows:
1. . . that a teacher on sabbatical leave cannot receive the benefits of such leave from one school board, and at the same time be regularly employed by another school board, because this would indicate that the purpose of granting such a leave would be violated.’
and
“WHEREAS, it is the policy of the Caddo Parish School Board to apply the Sabbatical Leave Law as interpreted by the Attorney General,
“NOW, THEREFORE, be it resolved by the Caddo Parish School Board that the Superintendent is authorized and directed to determine whether or not any teacher who is now on Sabbatical Leave is regularly employed by any other School Board or School District.
“BE IT FURTHER RESOLVED that the Superintendent is directed to notify said teacher that the employment by. the other School Board must be discontinued within 60 calendar days or that the Sabbatical Leave granted by the Caddo Parish School Board will be terminated.”

After notification by the Superintendent, plaintiff elected to discontinue his Wyoming employment, but remained on sabbatical. Plaintiff needed less than one year to reach the twenty-year retirement plateau when the resolution was passed and applied. Had he remained in the Wyoming employment for the entire sabbatical, he would have been eligible to receive twenty-year retirement pay after the sabbatical year and would have had an excellent chance of continuing indefinitely his Wyoming employment.

After an unsuccessful attempt to enjoin the Board from enforcing the resolution against him, plaintiff seeks monetary damage against the Board, founded upon his alleged loss of income and other fringe benefits, mental anguish and injury to his professional reputation. The lower court rejected plaintiff’s demands. We affirm.

Our most recent Constitutions have required that the Legislature provide for public schools and for the creation and election of parish school boards. Art. VIII, La. Constitution 1974; Art, XII, La. Constitution 1921. L.R.S. 17:81 grants general authority to school boards:

“. . .to make such rules and regulations for its own government, not inconsistent with law or with the regulations of the Louisiana State Board of Education, as [each school board] may deem proper.”

The parish school board performs the function of the sovereign in implementing the constitutional mandate and, as the administrator of public education, it is an agency of the state. Jefferson Par. Sch. Dist. v. Jefferson Par. Dem. Ex. Com., 246 La. 51, 163 So.2d 348 (1964).

We also recognize that a school board has such implied powers and authority as is necessarily and properly incident to the performance of its statutory duties and need not have specific legislative authority to perform its duty. Watkins v. Ouachita Parish School Board, 173 La. 259, 136 So. 591 (1931); Disposal Systems Inc. v. Calcasieu Parish School Bd., 243 So.2d 915 (La.App.3d Cir. 1971).

The Sabbatical Leave Law, originally Act 319 of 1940, now comprises L.R.S. 17:1171— 1186. It provides that members of the teaching staff “shall be eligible” for sabbatical for specified purposes (1171). It also requires that the Board be informed, originally in the application (1175) and by written report after the leave has been granted, of the manner in which the leave shall be or is being spent (1177, 1178). If the sabbatical is not being spent within the intent and purposes of the law, Section 1179 authorizes termination of the leave by the superintendent as the elected agent of the Board:

“Any person who fails to comply with the provisions of R.S. 17:1177 and 17:1178 may have his leave terminated by the superintendent at any time, . .

While the Legislature has provided in some detail with respect to eligibility for sabbatical, the ultimate determination of initial or continued entitlement to the privilege of the status is left to the individual Board, according to our understanding of the law.

In State ex rel Rathe v. Jefferson Parish School Board, 206 La. 317, 19 So.2d 153, 167-8 (1943), the Supreme Court said:

“There is nothing more firmly established in law than the principle that, within the limits of their authority, the power and discretion of legally created governing boards is supreme. Their wisdom or good judgment cannot be questioned by the courts. Members of these boards are appointed or elected because of their peculiar fitness for the post. Judges are elected because of their legal knowledge and ability. They are not experienced in the business affairs of Parishes and municipalities, * * * or the conduct of a public school system. A presumption of legality and regularity attaches to the action of all government boards. It is only when it is clearly shown that the action of such a board is beyond its authority or is arbitrary, unreasonable, or fraudulent that a court is justified in interfering.”
il * % *
“. . . It is indisputable that the jurisprudence of this State is settled beyond doubt that where a statute creates a Board and grants to it certain administrative and executive functions and responsibilities, the courts will not interfere with the bona fide judgment of the Board based upon substantial evidence. It is only where the complainant shows there has been an invasion of his rights by the Board exceeding its powers or doing him an injustice that the courts have set aside the actions of the Board. * * * ” Emphasis supplied. See also Blanchet v. Vermilion Parish School Board, 220 So.2d 534 (La.App.3d Cir. 1969)

In addition to claiming the Board was without authority to enact the subject resolution, plaintiff contends he has been denied due process and equal protection; his vested rights have been unconstitutionally impaired; his right to gainful employment has been unreasonably restrained; and alternatively, that the Board should be held to be estopped from applying the resolution to him because the Board knew he intended to accept employment in Wyoming at the time he was granted sabbatical. In the latter respect, the lower court correctly found that plaintiff misrepresented his intention to the Board of the manner in which and the purpose for which he intended to spend the requested sabbatical.

Because of this intentional misrepresentation, plaintiff’s leave could have been abruptly terminated under the authority of Sec. 1179. Plaintiff cannot assert estoppel or absence of authority on the part of the Board for adopting the policy clearly contained in the resolution and applying it to him, even though the resolution, as plaintiff argues, might broadly be said to compel him to terminate his sabbatical. We do not however, interpret the resolution in that manner, because its content and purpose are express and clear.

Also noteworthy is the fact that plaintiff was an employee of the Board at all time while on sabbatical, entitled to certain privileges, but at the same time subject to the employer’s reasonable control. Plaintiff’s continued entitlement to sabbatical was dissipated by eventual fruition of the seeds of his own misrepresentation to his employer and his right thereto, was not indefinitely vested.

In Blanchet, cited supra, the plaintiff also contended unconstitutional impairment of contract by a school board regulation. The court there said:

“The adoption of the regulation did not impair the obligation of any prior “contract” . . . since tenured teachers are always subject to reasonable change of regulation by the employing school board.” 220 So.2d 539. Emphasis supplied.

Likewise, any restraint on plaintiff’s employment in Wyoming, if indeed it exists at all, we find not unreasonable in view of the Louisiana Sabbatical Leave Law.

We do not hold that a school board cannot grant in any case a sabbatical to a teacher who intends to work in full-time, regular employment in his profession during sabbatical for professional improvement. Certainly there may be circumstances where an individual board might deem this to be in the interest of the school system under its supervision. In any event, it is up to the individual board to make the determination in each case on a full and truthful disclosure by the applicant-teacher of the manner in which and the purpose for which the teacher seeks sabbatical. In this case, however, a full and truthful disclosure was not made to the Board and the Board was within its authority in taking the action complained of.

We adopt the excellent detailed opinion of the lower court and for reasons assigned there and herein, at appellant’s cost, affirm judgment below.

AFFIRMED.

HALL, Judge,

concurring.

Plaintiff seeks damages from the Caddo Parish School Board because the School Board, after granting him a sabbatical leave under LSA-R.S. 17:1171, et seq., with knowledge that plaintiff intended to work as principal in another school system during his leave, adopted a resolution prohibiting a teacher on sabbatical leave from being regularly employed by another school system, which had the effect of compelling plaintiff to terminate his employment with the other school system.

Plaintiff contends the resolution of the School Board is contrary to law because the requirements for teachers on sabbatical leave set forth in LSA-R.S. 17:1177 and the grounds for terminating a sabbatical leave set forth in LSA-R.S. 17:1179 are exclusive; the termination of plaintiff’s sabbatical leave constitutes an unconstitutional impairment of vested contract rights and an unreasonable restraint of freedom to engage in any work under the Louisiana and Federal Constitutions; and the Board was estopped from requiring plaintiff to terminate his other employment or have the leave terminated.

The contentions made by plaintiff do not support his claim to damages for loss of income from the other employment, loss of future income, damage to reputation, and the like.

The School Board cannot arbitrarily or unreasonably deny a sabbatical leave to a teacher who qualifies under the statute, nor arbitrarily or unreasonably terminate a leave previously granted. Under LSA-R.S. 17:81 and the authorities cited in the majority opinion, the School Board can, however, adopt reasonable rules and regulations governing the granting and continuance of sabbatical leaves, consistent with the intent and purpose of the statute, which does not purport to be pre-emptive of all matters relating to sabbatical leave. The School Board also has the authority to evaluate applications for and reports on sabbatical leave on a case by case basis to determine whether the teacher’s proposed or continuing activities are consistent with the specific minimum requirements and with the intent and purpose of the statute.

The resolution prohibiting regular employment with another school system by a teacher on sabbatical leave is a reasonable regulation consistent with the intent and purpose of the statute. There is no legal prohibition against the rule becoming effective on the date of its adoption as to all teachers, those on sabbatical leave at the time of its adoption, those with applications pending, and those who might apply in the future. The Board’s action, while perhaps triggered by the circumstances of Shaw’s leave, was not arbitrary or discriminatory or directed solely toward him, but was part of a good faith reevaluation by the Board of sabbatical leaves in general. See McDaniel v. Caddo Parish School Board, 347 So.2d 33 (La.App.2d Cir. 1977), also decided this day.

Nothing in Shaw’s contract with the Board or in the sabbatical leave statute created in him a vested right to work full-time for another school system while on sabbatical leave from the Caddo Parish school system. His employment with the Caddo Parish School Board continued, with pay, and subject to reasonable regulations and conditions which might be adopted by the School Board. The action of the School Board did not amount to a breach of contract. Nor did it deprive Shaw of any vested contract rights in violation of the Louisiana or Federal Constitutions. Nor did the action of the Board, his employer, unreasonably restrain his freedom to engage in work in violation of the Louisiana or Federal Constitutions.

Shaw contends he is entitled to damages because the Board knew at the time it granted the leave that he intended to accept employment as principal of the high school in Wyoming. This equitable contention, based on estoppel, is not valid because full disclosure of the nature and purpose of the employment was not made to the Board. In fact, as found by the trial court, the nature and purpose of the employment was misrepresented to the Board by Shaw, who described it as temporary and as an internship which would be of value to the Caddo Parish school system, knowing at the time that he intended the employment to be permanent and that he did not intend to return to Caddo Parish.

For these reasons, I concur in the majority opinion denying plaintiff the damages he seeks.

      . This section reads in part:
      “Every person on sabbatical leave for the purpose of professional or cultural improvement shall, during each semester of leave:
      “(1) pursue a program of study, earning at least ten undergraduate, or six graduate, credit hours, at an institution of higher learning accredited by the board of education of the state or territory in which such institution is located, provided that in case less than fifteen weeks is so spent the number of weeks less than fifteen not so spent shall be spent in one of the other of the two alternatives below enumerated; or
      “(2) pursue a program of independent study, research, authorship or investigation which involved an approximately equivalent amount of work; or
      “(3) engage in travel which is so planned as to be of definite educational value.”

      . While plaintiff did inform the Board that he was going to accept Wyoming employment, he represented the employment as only a temporary internship for study of the year-round system there, knowing that he intended to permanently remove himself from the Caddo system to the Wyoming position. The lower court’s reasons for judgment specifically detail the testimony supporting this conclusion.


author: JONES, Judge.

text:
    HOME BUILDING INSULATORS, INC., Plaintiff-Appellant, v. GREAT AMERICAN INSURANCE COMPANY et al., Defendants-Appellants, Tri-Con, Inc., et al., Defendants-Appellees.
    No. 13239.
    Court of Appeal of Louisiana, Second Circuit.
    May 23, 1977.
    En Banc.
    Rehearing Denied June 22,1977.

      Nelson & Achee, Ltd. by Harry R. Nelson, Shreveport, for plaintiff-appellant-ap-pellee, Home Building Insulators, Inc.
    Franklin, Moore & Walsh by Charles W. Franklin, Baton Rouge, for defendants-appellants, Great American Ins. Co. and Louisiana Nursing Homes, Inc.
    Simon, Fitzgerald, Fraser & Cooke by Paul M. Cooke, Shreveport, for defendants-appellees John D. Murray, Jr. and Jerry Ann McCaughey Murray.
    Before BOLIN, MARVIN and JONES, JJ.
   JONES, Judge.

Great American Insurance Company and Louisiana Nursing Homes, Inc., appeal from a trial court judgment which held them solidarily liable to Home Building Insulators, Inc., recognized Home Building’s subcontractor's lien against certain immovable property, and cast Great American for ten percent attorney’s fees. Home Building appeals as to that portion of the trial court judgment holding numerous other defendants to be without personal liability. We affirm.

Tri-Con, Inc., a construction company, entered into a construction agreement on April 27, 1973, with Real Properties, Ltd., d/b/a Pierremont Heritage Manor Nursing Home, to construct an addition to the nursing home. The nursing home property was actually owned in indivisión by the individual shareholders of Real Properties, Ltd. Great American Insurance Company provided a performance bond covering TriCon’s obligations under the construction contract.

On September 25,1973, the nursing home property was sold to Tri-Con, which leased the property to Louisiana Extended Care Center, Inc. In the lease Tri-Con obligated itself to perform the construction at its own expense and agreed to later resell an undivided one-half interest in the nursing home property to the individual shareholders of Real Property, Ltd., and to sell the other one-half interest to John D. Murray, the major stockholder of Tri-Con.

In connection with the sale of the nursing home property to Tri-Con, Great American issued a new performance bond. The sale to Tri-Con was recorded on October 18, 1973. Neither the construction contract nor either of the performance bonds were ever recorded.

Tri-Con then entered into a verbal contract with Home Building Insulators, Inc. under which Home Building was to furnish manned heavy construction equipment to Tri-Con for site preparation and related work. Work was commenced on October 22,1973. Although Home Building did substantial work over the next year, it was not paid for a large portion of its work.

On September 3, 1975, Tri-Con sold the nursing home property to Louisiana Nursing Homes, Inc. which agreed, inter alia, to assume all obligations with respect to the nursing home property. In this contract, Great American agreed to indemnify Louisiana Nursing Homes, Inc. and the individuals comprising Real Properties, Ltd. for any claims which might arise out of work previously performed on the nursing home property.

When a substantial part of its bill became past due and remained unpaid, Home Building filed a subcontractor’s lien on the nursing home property and commenced this action. Named as defendants were Great American Insurance Company, Louisiana Nursing Homes, Inc., Tri-Con, Inc., Louisiana Extended Care Centers, Inc., John D. Murray and his wife, Jerry Ann Murray, and the nineteen individuals who were shareholders in Real Properties, Ltd., and who had previously owned the nursing home property in indivisión.

After trial, the lower court awarded Home Building a judgment against Great American Insurance Company, Tri-Con, Inc., and Louisiana Nursing Homes, Inc., in solido, in the amount of $15,634.30, subject to a credit of $771.81 previously paid, plus interest at the rate of seven percent per annum from the date of judicial demand until paid. Great American was also held liable for a ten percent attorney’s fee. Home Building’s lien on the property was recognized but demands against all other defendants were rejected.

Great American and Louisiana Nursing Homes contend that the trial court erred in holding Home Building was entitled to a lien against the nursing home property and a personal judgment against the owners of the nursing home property under the terms of the Private Works Act, LSA-R.S. 9:4801 et seq. They argue the billing invoices sent by Home Building, which itemize charges based solely on the hourly usage of certain heavy equipment, show Home Building was only a lessor of equipment and therefore R.S. 9:4801 is inapplicable since it provided, at the time this claim arose, for a lien in favor of “. . . every contractor, subcontractor, . . . workman, laborer, or furnisher of material, machinery, or fixtures exclusive of anyone who rents or leases movable property, who performs work or furnishes material . . . .” (Emphasis added).

The testimony shows Home Building provided labor and manned equipment, operating under their own supervision, to do site preparation and demolition work for the nursing home renovation and expansion. We find the services provided by Home Building to come within the provision of the statute pertaining to a “. subcontractor . . . who performs work . . . Gifford-Hill and Company v. Harper, 262 So.2d 842 (La.App.2d Cir. 1972), and since no bond or contract was recorded, Home Building is therefore entitled to a lien on the property and a personal judgment against the owner.

Even if the facts of these independent operations were not so clearly shown, Home Building would still be entitled to recovery as the lessor of manned equipment. Such a distinction was made clear in National Surety Corporation v. Highland Park Country Club, 240 La. 747, 125 So.2d 151 (1960). While this case dealt with the Private Works Act prior to the addition of the exclusion emphasized above, the result is the same, as the exclusion merely codified existing jurisprudence, as noted in Continental Casualty Company v. Associated Pipe and Supply Company, 447 F.2d 1041 (5th Cir. 1971), and was not intended to apply to leased equipment where the lessor also provided the operator.

Appellants also complain the trial judge erred in awarding judicial interest on the amount found due from the date of judicial demand because Home Building did not expressly pray for it. This argument is without merit. In their petition, Home Building prayed for conventional interest from the date the services were invoiced to the owners. Although it was not entitled to this interest because there was no contractual provision for it, Home Building was entitled to legal interest from the date of judicial demand, and the trial court properly awarded this smaller amount. LSA-C. C.P. Art. 862, 1921.

Great American complains that because Home Building did not prove it had made amicable demand upon Great American, the trial court award of ten percent attorney’s fees to Home Building under the provisions of LSA-R.S. 9:3902 was erroneous. We find the trial court properly awarded these attorney’s fees. Home Building’s petition clearly alleges amicable demand. Great American’s answer cannot be reasonably interpreted in any manner other than as an admission that amicable demand was made.

The lower court was also correct in rejecting Home Building’s demands against all other defendants. The record shows the previously executed construction contract with Tri-Con, the general contractor, had been terminated at the time Home Building began its work, and none of the other defendants were owners of the nursing home property at the time that work began, or at any time thereafter.

For the foregoing reasons, the judgment of the trial court is affirmed, with each appellant to pay one-third of the costs of this appeal.

Affirmed.

      . “§ 3902. Failure of surety to pay; recovery of attorney's fees

      “If the surety on a bond fails to pay his obligation and it becomes necessary for the creditor to sue thereon, the latter shall be entitled to ten per cent attorney’s fees on the amount recovered, provided he has employed an attorney for the purpose, has made written amicable demand on the principal and surety and thirty days have elapsed from their receipt thereof without payment being made, and the full amount claimed in the demand is recovered.
      “This Section shall not affect the right to recover interest and costs as otherwise provided by law.”


author: HALL, Judge.

text:
    Lee F. REDEMER, Plaintiff-Appellant, v. Brooks S. HOLLIS and Trailer Equipment Manufacturing Company, Inc., Defendants-Appellees.
    No. 13240.
    Court of Appeal of Louisiana, Second Circuit.
    May 23, 1977.
    En Banc.
    Rehearing Denied June 22, 1977.
    C. Sherburne Sentell, Jr., Minden, for plaintiff-appellant.
    Fish & Montgomery by John W. Montgomery, Minden, Cook, Clark, Egan, Yancey & King by Sidney E. Cook, Shreveport, for defendants-appellees.
    Before PRICE, HALL and JONES, JJ.
   HALL, Judge.

Alleging he is the owner of 5% of the outstanding shares of Trailer Equipment Manufacturing Co., Inc., plaintiff, Lee Re-demer, brought this mandamus action to compel the corporation and its president, Brooks S. Hollis, to issue him a stock certificate reflecting his interest in the corporation, to furnish him information as required by LSA-R.S. 12:102 B, and to allow him to inspect the corporation’s business records as required by LSA-R.S. 12:103 D. Plaintiff also sought penalties, costs and expenses, including attorney’s fees, under LSA-R.S. 12:172 B and D, for failure of the corporation and its president to comply with his request for the items mentioned. In response defendants took the position that plaintiff is not a shareholder in the corporation and, therefore, was not entitled to the information and inspection sought; or, alternatively, that the defendant officer was in good faith in believing that plaintiff was not a shareholder. After trial, the district court found that plaintiff was a shareholder and entitled to be issued a stock certificate and to exercise the rights of a shareholder, but the court found that the defendant was not in bad faith and denied penalties, costs and expenses. Plaintiff appealed. For reasons set forth in this opinion we amend the judgment for purposes of clarification and otherwise affirm.

Trailer Equipment Manufacturing Co., Inc. was organized on March 22,1966. Hollis owns 89 of the 100 shares originally authorized and issued. The remaining 11 shares are held by three other persons.

Plaintiff invested $5,000 in the corporation on November 21, 1967. The transaction is evidenced by the following letter:

“November 21, 1967
Mr. Lee Redemer
1102 Tillman Drive
Minden, La.
This is to show receipt for five thousand dollars ($5,000.00) for payment in full for five per cent (5%) interest in Trailer Equipment Manufacturing Co., Inc. of 105 S. Penn. Ayenue, Minden, La.
This letter of receipt shows ownership of this interest as of November 21, 1967, pending revision of the company charter, at which time you shall be issued the proper stock certificates in the amount stated above.
Trailer Equipment Mfg. Co., Inc.
S/Brooks S. Hollis
Brooks S. Hollis, Pres.”

The corporation thereafter had serious financial difficulties but emerged from those difficulties and began showing a profit sometime in 1975. The reorganization or revision of the company charter mentioned in the letter never took place, and plaintiff never received any stock certificates. In September, 1975, plaintiff’s attorney wrote a letter to the president of the defendant corporation demanding that plaintiff be issued a stock certificate and be furnished reports giving certain information concerning the business of the corporation. A second letter was written in June, 1976 and mailed by certified mail, but was refused or unclaimed by defendant. This letter reiterated the previous request and also demanded inspection of the corporate records. Defendant did not respond to or comply with these demands. Suit was filed in August, 1976.

The principal error asserted by plaintiff on appeal is the failure of the district court to award statutory penalties, costs and expenses because of defendant’s failure to furnish plaintiff with the requested reports or to allow plaintiff to inspect the business records of the corporation. Plaintiff also complains that the judgment should be more specific in ordering defendants to issue the stock certificate immediately, to allow immediate inspection of the records and to order that plaintiff be furnished with the requested reports.

LSA-R.S. 12:172 is a penal statute and is to be strictly construed. Penalties are not favored in the law and all doubts must be resolved against imposition of the penalty. Tichenor v. Tichenor, 190 La. 77, 181 So. 863 (1938); Smith v. Chauvin, 212 So.2d 498 (La.App. 1st Cir. 1968).

Construing the applicable statutes strictly in the context of determining whether penalties should be imposed, we conclude plaintiff is not a “shareholder” entitled to exercise the rights provided in LSA-R.S. 12:102 B and 103 D and entitled to penaltifes under LSA-R.S. 12:172 B and D.

Plaintiff’s right to be furnished the report and to be allowed to inspect corporate records, and to penalties for failure of the corporation or its officers to comply, depends initially on whether plaintiff is a “shareholder” or “shareholder of record”, the terms being synonymous under the statute. LSA-R.S. 12:1 defines “shareholder” as “the holder of record of one or more shares.” “Shares” means “the units into which the shareholders’ rights to participate in the control of the corporation, in its profits or in the distribution of corporate assets, are divided.”

The letter evidencing the agreement between the corporation and plaintiff amounts to a subscription and makes plaintiff a subscriber, defined in the statute as “one who subscribes for shares in a corporation, whether before or after incorporation.”

The articles of incorporation authorize the issuance of 100 shares of no par stock. At the time the agreement was made, there were 100 shares issued and outstanding, none of which were held by plaintiff in fact or according to the corporate records. In order for the corporation to comply with its agreement, it is necessary, as the letter indicates, for additional shares to be authorized by appropriate action of the shareholders of the corporation. See LSA-R.S. 12:24, 33 and 53. Until that is done, there are no authorized shares of the corporation of which plaintiff could be the owner or holder of record. He is not at this time a shareholder and, consequently, is not afforded the specific rights granted to shareholders by LSA-R.S. 12:102 B and 103 D. It follows that the defendant officer of the corporation was not required to furnish the report or allow inspection and cannot be cast for penalties for refusing to do so.

A corporation is allowed to rely entirely on its records in determining entitlement to access to financial information. LSA-R.S. 12:79 provides:

“Except as otherwise provided in the articles or by-laws, a corporation, and its directors, officers, and agents, may recognize and treat a person registered on its records as the owner of shares, as the owner in fact thereof for all purposes, and as the person exclusively entitled to have and to exercise all rights and privileges incident to the ownership of such shares; and rights under this section shall not be affected by any actual or constructive notice which the corporation, or any of its directors, officers or agents, may have to the contrary.”

Plaintiff is not registered on the corporation’s records as the owner of shares. He must compel the corporation to list him as a shareholder prior to exercise of the rights given to shareholders of record.

Plaintiff is not without legal recourse. Defendant concedes plaintiff is entitled to judgment in this mandamus proceeding requiring the corporation and its officers to take appropriate steps to authorize and issue plaintiff the shares to which he is entitled. The judgment orders the corporation to issue plaintiff a share certificate for a 5% interest in the corporation. Plaintiff argues the judgment should order the corporation to act “immediately.” A specific time limit for the appropriate corporate action should be set forth in the judgment and the judgment will be amended accordingly.

Plaintiff asks that the judgment be amended to order the furnishing of the report and to allow inspection immediately. He is not entitled to that relief because he is not at this point a shareholder as defined by the statute. At such time as plaintiff becomes a shareholder, he will be entitled to the rights granted by LSA-R.S. 12:102 B and 103 D.

That part of the judgment of the district court ordering the issuance of a stock certificate is amended and recast as follows:

It is ordered, adjudged and decreed that the writ of mandamus issued herein be made absolute in part, and the corporation and Hollis are commanded to cause the authorization of additional shares of the corporation and to issue a share certificate to plaintiff evidencing his ownership of 5% of the total shares of the corporation issued and outstanding, all within thirty (30) days after this judgment becomes final.

As amended, the judgment is affirmed. The costs of appeal are assessed to the defendant-appellee.

Amended, and as amended, affirmed.


author: BOLIN, Judge.

text:
    Herbert BAKER et al., Plaintiffs-Appellants, v. WHELESS DRILLING COMPANY et al., Defendants-Appellees.
    No. 13241.
    Court of Appeal of Louisiana, Second Circuit.
    May 23, 1977.
    En Banc.
    Rehearing Denied June 22, 1977.
    Baker, Culpepper & Brunson by Bobby L. Culpepper, Jonesboro, for plaintiffs-appellants.
    Cook, Clark, Egan, Yancey & King by Dewey W. Corley, Shreveport, for defendants-appellees.
    Before BOLIN, MARVIN and JONES, JJ.
   BOLIN, Judge.

This is the third suit by former owners of a mineral servitude for damages resulting from loss of the servitude through nonuse. The basis of this suit is the alleged breach of an oil and gas lease by Wheless Drilling Company because of its failure to timely secure signatures to a unitization order resulting in plaintiffs’ loss of their mineral rights for ten years nonuse. The trial court found the suit was in contract, sustained a plea of prescription of ten years, and dismissed plaintiffs’ suit. Plaintiffs appeal and we affirm.

The. factual and legal background of this claim has been set forth in detail by this court in the two previous appeals and by the Louisiana Supreme Court, which granted a writ of certiorari in the first suit. Repetition of those facts is unnecessary to this decision.

We agree with the finding of the trial judge that this action is in contract, for which the applicable prescriptive period is ten years under Louisiana Civil Code Article 3544. The present suit was filed September 21, 1976, six months after the termination of the ten year period.

The question is whether plaintiffs’ right to sue for breach of the lease contract prescribed on March 29,1976, or whether a suit filed by plaintiffs in April 1972 interrupted prescription.

Plaintiffs contend prescription was interrupted in April 1972 by the filing of a suit by Herbert Baker and Gertrude Baker Paynter against Wheless, based on the same assertion contained in the present suit. In the 1972 suit a plea of nonjoinder of indispensable parties, filed by defendant, was sustained and plaintiffs were given thirty days in which to amend and add those necessary parties. Plaintiffs failed to do this and judgment was rendered on August 27, 1975, dismissing that action for nonjoinder of indispensable parties. It was noted that Wheless had acquired the oil and gas lease from Herbert Baker, Mrs. Gertrude Baker Paynter, Mrs. Lucille Baker Walker, and Mrs. Annie Baker Holstead Heard, only two of whom filed the 1972 suit. In the present suit Annie Baker Holstead Heard has been joined as plaintiff and Lucille Baker Walker has been joined as defendant.

Determination of the issue here depends on the interpretation of Louisiana Civil Code Article 3519, providing:

If the plaintiff in this case, after having made his demand, abandons, voluntarily dismisses, or fails to prosecute it at the trial, the interruption is considered as never having happened.

Six early cases are cited by plaintiffs in support of their contention that they should receive the benefit of the interruption of prescription occurring from the filing of the 1972 suit. We have examined these cases and find that in five of them there was either an intervention, an amendment, or a second suit filed while the original suit was still viable.

The recent cases dealing with this matter stress the fact that the interruption of prescription continues only if the original suit is still pending, or viable, when the second action or intervention is filed. Levy v. Stelly, 277 So.2d 194 (La.App.4th Cir., 1973, writ refused).

The trial judge examined the rationale of Article 3519 and concluded that by failing to join the necessary parties, as ordered by the court in the 1972 suit, plaintiffs acquiesced in the dismissal of their suit by the court; that, as a consequence, the interruption of prescription must be considered as never having happened.

We find this interpretation of C.C. Article 3519 is correct and in harmony with the decision in Levy v. Stelly, supra.

The judgment is affirmed at appellants’ cost.

      . Baker (Mrs. Gertrude Baker Paynter) v. Chevron Oil Co., 245 So.2d 457 (La.App.2d Cir., 1971), affirmed, 260 La. 1143, 258 So.2d 531 (1972); Herbert Baker and Mrs. Gertrude Baker Paynter v. Wheless Drilling Co., 303 So.2d 511 (La.App.2d Cir., 1974, writ refused 1975).

      . Blanc v. Dupre, 36 La.Ann. 847 (1884); Geisenberger v. Cotton, 116 La. 651, 40 So. 929 (1906); Becnel v. Wagnespack, 40 La.Ann. 109, 3 So. 536 (1888); B. J. Wolf & Sons v. New Orleans Tailor-Made Pants Co., 110 La. 427, 34 So. 590 (1903); Flower v. O’Conner, 17 La. 213 (1841); Myers v. Gulf Public Service Corp., 15 La.App. 589, 132 So. 416 (2d Cir., 1931).


text:
    James L. HENDERSON, Plaintiff-Appellant, v. The MINNESOTA MUTUAL LIFE INSURANCE COMPANY, Defendant-Appellee.
    No. 13243.
    Court of Appeal of Louisiana, Second Circuit.
    May 23, 1977.
    En Banc.
    Rehearing Denied June 22, 1977.
    Baker, Culpepper & Brunson by James R. Hatch, Jonesboro, for plaintiff-appellant.
    Emmons, Henry & Reeves by Joseph A. Reeves, Jr., Jonesboro, for defendant-appel-lee.

      Before BOLIN, MARVIN and JONES, JJ.
   BOLIN, Judge.

Insured sued for mortgage disability benefits, penalties and attorney’s fees allegedly due under a disability insurance policy. Insurer defends on two grounds: (1) that plaintiff misrepresented his physical condition on the application form; and (2) that plaintiff’s disabling illness or disease preexisted the effective date of the policy and was therefore not covered under the terms of the policy. The trial judge pretermitted a finding on the issue of misrepresentation and found that the emphysema and diabetes, from which plaintiff claims he is disabled, both pre-existed the policy date and denied plaintiff’s claim. Plaintiff appeals and we reverse.

The Minnesota Mutual Life Insurance Company issued a group credit accident and health policy to Reid-McGee and Company providing credit insurance to the policy holder. Plaintiff obtained a mortgage loan from Reid-McGee and in connection with the loan filed an application with defendant seeking mortgage loan insurance. The application, which was dated and signed July 17, 1973, contained the following questions which plaintiff answered in the negative:

1. During the last two years, have you been absent from work for a period of more than five consecutive days because of illness or injury?
2. During the last three years, have you been hospitalized or have you consulted a physician for any reason?
3. Have you ever been treated for or advised that you had any of the following: heart, lung, nervous or kidney disorder; high blood pressure; cancer or tumor; diabetes; arthritis?

The defendant issued a certificate effective August 7, 1973, which, in the event of plaintiff’s disability, obligated defendant to pay the monthly mortgage payment of $96.94. A copy of the certificate was sent to plaintiff but the application for this insurance was not attached.

Plaintiff was hospitalized in the Veterans Administration Hospital on September 17, 1973, suffering from shortness of breath and diabetes. Notice of disability was mailed to defendant by Reid-McGee on October 10,1973. On March 8,1974 defendant wrote plaintiff a letter acknowledging receipt of the claim but denying liability because plaintiff had inaccurately answered the questions in the application. In this letter defendant stated it had learned plaintiff was off from work due to a hand injury from August 1972 to July 15, 1973; and that plaintiff was taking medication for hypertension. It was further stated in the letter that had this additional information been available to defendant’s underwriters the company would have declined to insure plaintiff and no certificate of participation would have been issued to plaintiff. In conclusion, defendant denied the claim for benefits and rescinded the coverage. Suit was filed September 11, 1974.

On appeal plaintiff contends the lower court erred in admitting into evidence the application for insurance since the application had not been attached to the certificate issued to plaintiff. Louisiana R.S. 22:618 provides that no application for insurance shall be admissible in evidence in any action relative to such policy or contract unless a correct copy of the application is attached to or made a part of the policy [certificate of insurance] when issued and delivered.

The foregoing statute has been strictly construed against the insurer, the stated purpose of the law being that the insured shall have in his possession at all times the entire evidence of the contract. Fisette v. Mutual Life Insurance Co., 162 La. 620, 110 So. 880 (1926).

In Smith v. North American Company for Life, Accident & Health Insurance, 306 So.2d 751 (La.1975), the court held that the failure of an insurer to attach a correct copy of the application to a health and accident certificate of insurance, as required by R.S. 22:618(A), precluded the insurer from introducing into evidence the application; further, this failure barred the insurer from using any evidence to establish misrepresentation thereon; and any evidence of a pre-existing condition not disclosed in the application which may have resulted in the insured’s disability was improperly considered.

The trial judge, in his written reasons for judgment, pretermitted a determination of the effect of the failure to attach a correct copy of the application to the policy; rather he concluded that the emphysema and diabetic condition, which plaintiff claimed were disabling, both commenced prior to the time the policy was issued. We find, under the ruling of the supreme court in Smith, supra, that the trial court erred in admitting into evidence the application or any evidence of misrepresentation. The all-inclusive nature of the Smith decision also precludes consideration of whether or not plaintiff had a pre-existing condition, prior to the effective date of the insurance, which was responsible for his disability.

With regard to penalties and attorney fees, we find that defendant insurer had good reason to believe it had attached a correct copy of the application to the certificate of insurance since testimony established it was the custom of the company to attach a copy to each certificate. For this reason we conclude defendant is not liable for penalties and attorney fees under La. R.S. 22:657(A).

The medical evidence is uncontra-dicted that plaintiff was totally disabled from October 24,1973, the date of the filing of the application for benefits, until March 1975, when plaintiff sold his house.

The judgment is reversed and there is now judgment in favor of James L. Henderson and against The Minnesota Mutual Life Insurance Company for $1,744.92, the amount due for the eighteen months during which plaintiff was disabled and defendant failed to make the monthly payments to Reid-McGee.

The expert witness fees of ■ Dr. F. X. Cline, Jr., and Dr. R. W. Sharp are fixed at $100 each.

Defendant is cast for all costs, including the fees of the expert medical witnesses.


author: MARVIN, Judge.

text:
    STATE of Louisiana, DEPARTMENT OF HIGHWAYS, Plaintiff-Appellant, v. Dominic TRAINA, et al., Defendant-Appellee.
    No. 13244.
    Court of Appeal of Louisiana, Second Circuit.
    May 23, 1977.

      William Irwin, Jr., Jerry F. Davis, Johnie E. Branch, Charles A. O’Brien, III by Charles A. O’Brien, III, Baton Rouge, for plaintiff-appellant.
    Baker, Culpepper & Brunson by Herman A. Castete, Jonesboro, for defendant-appel-lee.
    Before BOLIN, MARVIN and JONES, JJ.
   MARVIN, Judge.

The State appeals from a judgment awarding $25,779 in an expropriation proceeding, for which the State had deposited $2,179 as its estimate of just compensation under the quick-taking provisions of L.R.S. Title 48. The landowner contends in answer to the appeal that the award should be increased. We amend the judgment below as to the award of severance damage and, as amended, affirm.

The property taken is approximately 1,700 feet west of property previously under consideration by this court in other expropriation cases on State Highway 4 west of Jonesboro. These cases were State, Department of Highways v. Coblentz, 322 So.2d 276 (La.App.2d Cir. 1975) and State, Department of Highways v. Hammons, 322 So.2d 279 (La.App.2d Cir. 1975). Issues as to the extent of the property taken and the value thereof were resolved against the State by the lower court in an excellently reasoned written opinion.

The most serious issue on appeal concerns the award of the lower court of $14,344 as severance damage for diminution in value to a concrete block store building (2,100 sq. ft.) and to an adjacent metal garage building (1,400 sq. ft.). The area immediately surrounding these buildings was considered as commercial property because of its terrain and use or former use. The commercial area fronts approximately 200 feet on the highway and lies near the center of the landowner’s total 930 feet of highway frontage.

Before the taking, the landowner had installed 190 feet of culvert between his property and the highway and had a parking area of about 40 feet in depth in front of his buildings. This area was reduced to a depth of 8-10 feet by the taking. The landowner's parent tract of 390 acres also contained a residential area surrounding his home, with the remaining acreage being pasture and woodland.

The lower court commented:

“Appraisals of the loss suffered by the two structures range from practically nothing suggested by [the State’s appraiser] to over $25,000 suggested by [one of the landowner’s appraisers]. [Two other appraisers for the landowner] appraised this loss at $13,776.62 and $14,-344.00. The Court is of the view $14,-344.00 best fits the before and after analysis usually favored and also, it is a figure the Court believes is more probably than not sufficient to modify defendant’s structures to permit their restoration to their previous utility. Accordingly, defendant is entitled to recover $14,344.00 for damages to his structure.”

The landowner’s appraiser (J) whose testimony is relied on by the lower court assigned a depreciated value of $19,125 to all improvements before the taking and determined that these improvements had been reduced in value by 75 percent because of the proximity of the right-of-way to the buildings. No suggestion or award was made for any severance damage to the land and we are concerned only with the reduction in value to the buildings.

The State’s appraisers did not assign any severance damage. The other landowner appraisers assigned a 50 percent reduction in value to the buildings.

Other evidence relating to the effect of the taking shows the store building is desirable to a tenant where it had been vacant for one and one-half years prior to the taking; that customers formerly at the store did occasionally park on the side of the building; that the amount of traffic on the highway in front of the store is considered “light”: that the store is the furthermost commercial building from Jones-boro; that the same tenant, who occupied for two years before, had occupied the garage building for private purposes since the taking without impairing the tenant’s purposes; that other commercial establishments exist on the highway, including one built after the taking, within four and eight feet respectively, of the right-of-way line. We also note that the general parent tract of 930 acres is little diminished by the total taking of 1.25 acres, of which 1.25 acres the commercial strip comprises about .12 acres.

A diminution in the value of improvements on the remaining parent tract is a proper approach in determining severance damage. State, Department of Highways v. Boss, 335 So.2d 700 (La.App.2d Cir. 1976). Some of the landowner’s appraisers here testified there. There the lower court applied a 40 percent diminution or depreciation factor to remaining improvements because of the taking of a portion of gasoline service station property in Jonesboro. The landowner’s appraisers there testified to a 50-75 percent depreciation factor, while the State’s appraisers there testified to 20-25 percent. In the instant case, with the landowner’s appraisers testifying to a 50-75 percent factor and those of the State to no depreciation, we are of the opinion that the award was excessive. Recognizing that each particular item of property must be valued on its own, and considering all of the evidence concerning the effect of the taking as mentioned herein and by the appraisers, we are of the opinion that a just and fair depreciation factor would be 40 percent.

The State also suggests we should recognize that Act 630 of 1976, effective October 1, 1976, is a “definitional statute” and apply it retroactively to this case, the trial of which concluded July 2, 1975. This statute extends the area acquired as public roads by declaration or by informal dedication to a point one and one-half feet beyond the outside slope of the roadside ditch. We cannot say that this statute is clearly remedial or procedural in nature and decline to give it retroactive effect. Town of Eunice v. Childs, 205 So.2d 897 (La.App.2d Cir. 1967).

CONCLUSION

The award is accordingly amended to reduce severance damages from 75 percent of $19,125 ($14,344) to 40 percent ($7,650). As thus amended, the written reasons of the trial court are adopted, and the judgment below, as amended, is affirmed at appellant’s cost.

      . Since the burden is on the landowner to prove severance damage to a reasonable certainty, we do not adopt the lower court’s comments regarding the cost of “restoration” of the buildings to their “previous utility.” This method (cost to cure) is acceptable only if supported by evidence as in State, Dept. of Highways v. Model Development Corp., 322 So.2d 270 (La.App.2d Cir. 1975).

      . See Jackson v. Town of Logansport, 322 So.2d 281 (La.App.2d Cir. 1975)


text:
    Lorraine JOBSON, Plaintiff-Appellee, v. Donald HODGE, Defendant-Appellant.
    No. 13250.
    Court of Appeal of Louisiana, Second Circuit.
    May 23, 1977.
    En Banc.
    Rehearing Denied June 22, 1977.

      Glen H. Smith, Shreveport, for defendant-appellant.
    Caddo-Bossier Legal Aid Society by Howard M. Fish, Shreveport, for plaintiff-appel-lee.
    Before BOLIN, PRICE and HALL, JJ.
   HALL, Judge.

This appeal is from a judgment sustaining a declinatory exception of insufficiency of service of a rule to show cause on the attorney of record for one of the parties in a child custody proceeding. We reverse the judgment, overrule the exception, and remand the case for- further proceedings.

On November 22, 1976, Lorraine Jobson filed a petition seeking a writ of habeas corpus directed to Donald Hodge commanding him to produce before the court their two illegitimate minor children. The writ was issued ordering defendant to produce the children before the court on November 24, and further ordering defendant to show cause why he should not be deprived of the custody of the children and why their custody should not be returned to plaintiff. On November 24, the date set for the hearing, the writ was returned by the sheriff with the report that he was unable to make service on the defendant.

On December 3, Donald Hodge, under the same style and docket number, filed a petition for permanent custody and rule for provisional custody of the minor children, alleging that one of the children was presently in the custody of her mother and alleging numerous reasons why the mother should not have custody. A rule to show cause was issued ordering Lorraine Jobson to show cause on December 8 why Donald Hodge should not be granted the temporary custody of the minor children and in due course permanent custody. The rule was served on Lorraine Jobson’s attorney of record who had signed the original petition for a writ of habeas corpus.

On the date fixed for the hearing on the rule to show cause, Lorraine Jobson filed a declinatory exception of insufficiency of service of process, contending that the original habeas corpus proceeding terminated upon passage of the return date of the writ without service on the defendant, that the petition filed by Donald Hodge was a new and separate proceeding, and that service of the rule in that proceeding could not be made on the attorney of record in the terminated habeas corpus proceeding.' The exception was sustained by the district court and judgment rendered accordingly. Donald Hodge appealed.

A habeas corpus proceeding is a frequently used and appropriate procedural vehicle for judicially determining child custody disputes. As noted by Henry G. McMahon, in a summary appearing in the Code of Civil Procedure after the introduction of Title III dealing with extraordinary remedies:

“The rules in this title regulate the use of habeas corpus in civil cases. The principal use of this remedy in civil cases is to test the right to the custody and control of minor children. In divorce and separation cases this issue usually is determined through a rule for custody; but when the custody dispute is not between the two parents, habeas corpus provides the remedy.”

The action commenced when plaintiff filed her petition. LSA-C.C.P. Arts. 421 and 3781. As with an ordinary proceeding, once an extraordinary or summary proceeding is commenced it continues until terminated, whether by decision on the merits, judgment of dismissal or some other action of the trial court. Tanner v. Tanner, 341 So.2d 1277 (La.App.2d Cir. 1977). Although service of the writ was not made on the defendant, the proceeding remained viable and was not terminated. In this same proceeding plaintiff could have obtained the issuance of another writ with a later return date, obtained service, and pursued the matter to judgment without commencing a new action. The petition for custody filed by the original defendant was responsive to plaintiffs action and also dealt directly with custody of the children. The trial court had the power to grant the relief sought by the defendant in the habeas corpus proceeding. LSA-C.C.P. Art. 3830; Wood v. Beard, 290 So.2d 675 (La.1974).

Every pleading subsequent to the original petition may be served personally on the counsel of record of the adverse party. LSA-C.C.P. Arts. 1312 and 1314; Imperial v. Hardy, 302 So.2d 5 (La.1974). Service of the rule to show cause issued pursuant to defendant’s petition, a subsequent pleading in the habeas corpus proceeding, was properly made on the original plaintiff’s attorney of record in the ongoing custody action instituted by the original plaintiff.

For the reasons assigned, the judgment of the district court sustaining the declina-tory exception of insufficiency of service of process is reversed, the exception is overruled, and this action is remanded to the district court for further proceedings in accordance with law. The costs of appeal are assessed to the appellee.

Reversed and remanded.


text:
    Victor L. QUICK, Individually and as Administrator of the Estate of the Minor, Andrea LaVaughn Quick, Plaintiff-Appellant, v. AETNA CASUALTY & SURETY COMPANY et al., Defendants-Appellees.
    No. 13251.
    Court of Appeal of Louisiana, Second Circuit.
    May 23, 1977.
    En Banc.
    Rehearing Denied June 22, 1977.

      Nolan, Alderson & Jones, El Dorado, Ark., Richard R. Storms by Richard R. Storms, Ruston, for plaintiff-appellant.
    Mayer, Smith & Roberts by Charles L. Mayer, Cook, Clark, Egan, Yancey & King by Sidney E. Cook, Lunn, Irion, Switzer, Johnson & Salley by Val Irion, Shreveport, for defendants-appellees.
    Before BOLIN, PRICE and HALL, JJ.
   BOLIN, Judge.

Victor L. Quick, individually and as administrator of his minor child, Andrea, brought this malpractice suit against Doctors’ Hospital, various doctors and nurses, and their insurers for Andrea’s blindness allegedly caused by the improper administration of oxygen to the child while she was in an incubator in the hospital. The lower court sustained a plea of prescription of one year and plaintiff appeals. We affirm.

More than one year having elapsed from the date of the alleged tort until this suit was filed, the question is whether or not the plaintiff had actual or constructive knowledge of the possible misconduct of defendants more than one year prior to the filing of this suit.

Plaintiff’s wife gave premature birth to her daughter on April 8, 1973. The baby was immediately placed in an incubator and given oxygen. Shortly after the baby was released from the hospital she developed a problem with a closed tear duct. In September 1973 she was referred by a pediatrician to Dr. Rucker, an ophthalmologist. Dr. Rucker informed plaintiff and his wife that the child had a serious vision problem. He told the parents that the child, in his opinion, had retrolental fibroplasia (RLF), a condition characterized by the formation of scar tissue on the retina. He stated that the problem was oxygen related in that the eyes of a premature child, being extremely sensitive, may be damaged by being exposed to oxygen in an incubator.

After several consultations with Dr. Rucker, Andrea was referred to Dr. Roy, a pediatric ophthalmologist. Dr. Roy examined the baby in January, March, June and December of 1974 and he diagnosed the condition as RLF. He said he told the parents the possible causes of the condition, one of which was oxygen related. Dr. Roy considered the child to be blind and referred plaintiff and his wife to an organization which provided services for the blind. In connection with these services, in February of 1974 plaintiff’s wife was furnished with a pamphlet which dealt with various aspects of RLF. In part the pamphlet stated:

In 1940, a new cause of blindness appeared as a significant factor for the first time among premature infants — a condition called retrolental fibroplasia (RLF), fibrous tissue behind the lens of the eye. That year, only 200 cases were reported; but for the next 15 years, while a great deal of medical detective work was going on, hundreds of new RLF babies were reported annually. Then in 1954 research confirmed that RLF was not caused directly by an infant’s prematurity, or by prenatal factors, but rather by the high concentration of oxygen that was being administered routinely to premature babies.
Many premature infants, especially “blue babies”, must be given oxygen to survive. But investigation indicated that careful administration is required to give just enough — but not too much — oxygen and that too many babies were getting oxygen as a precaution. Until these studies revealed the dangers, there seemed no harm in this routine. (Emphasis added)

Plaintiff’s wife testified that she received the pamphlet but that it did not “have much of an impression” on her. However, she admitted that she testified earlier in a deposition that she read the pamphlet and that it stated RLF was oxygen related.

On August 8, 1974 an article appeared in the Stroller section of the Shreveport Times relating to Sharon Geddes who suffered from RLF and who was a former high school classmate of plaintiffs wife. This article stated:

* * * * * *
Miss Geddes lost her sight as an infant when pure oxygen was used to help her breathe due to a respiratory ailment. Pure oxygen damages the blood vessels in the eyes of infants and medical doctors now use a mixture of oxygen and other gases to avoid such damage.

Plaintiff’s wife testified that several months before reading the newspaper article she visited in the Geddes home in order to discuss the problem with Sharon’s mother. While she denied being told that Sharon’s condition was caused by the improper use of oxygen, she admitted she did know that Sharon’s condition was RLF and that it was oxygen related.

Plaintiff’s counsel admit in their brief that plaintiff and his wife knew from the first visit to Dr. Rucker in September 1973 that RLF was caused by oxygen administered to their baby in an incubator. However, they contend that until they read the newspaper article on August 8, 1974 they had no way of knowing that the administering of pure oxygen to their child in the incubator was the possible cause of the RLF. Suit being filed less than one year following the reading of this article, it is thus contended that one year prescriptive period had not run.

In tort cases prescription generally does not commence to run until the injured party has actual or constructive knowledge of the tortious act, the damage, and the causal relation between the tortious act and the damage. Duhon v. Saloom, 323 So.2d 202 (La.App. 3d Cir., 1975), and cases cited therein.

In Cartwright v. Chrysler Corporation, 255 La. 598, 232 So.2d 285 (1970), the court stated constructive knowledge to be:

“. . . whatever is notice enough to excite attention and put the owner on his guard and call for inquiry is tantamount to knowledge or notice of everything to which inquiry may lead and such information or knowledge as ought to reasonably put the owner on inquiry, is sufficient to start the running of prescription.”

Plaintiff’s child was not suffering from an unknown or mysterious disease. To the contrary the parents were told the name and nature of the disease almost two years before suit was filed. Knowing this, it was their duty to make inquiry as to the exact cause of the disease, and this they failed to do. It may be admirable for them to be more interested in seeking a cure for their child than seeking the basis for a lawsuit, nevertheless that is their duty if a suit is to be timely filed.

We conclude plaintiff and his wife were aware of the contents of the pamphlet furnished them by an association for the blind. This pamphlet stated the exact cause of RLF as plainly as the article in the Shreveport newspaper. It is also significant that plaintiffs wife visited the Geddeses more than a year before this suit was filed. While Mrs. Quick denied discussing with Mrs. Geddes the precise cause of RLF, this is difficult to believe. If she did not discuss this she is charged with the knowledge which she might have learned had she discussed it. At that time she had enough information about her child’s condition to arouse her curiosity as to its cause and she had every opportunity to ascertain this cause by simply asking her friend, Mrs. Geddes.

Considering the totality of the evidence, we find plaintiff had constructive knowledge of the alleged tort more than a year before suit was filed. Accordingly the judgment sustaining the plea of prescription is affirmed at appellant’s cost.


author: PRICE, Judge.

text:
    P. A. HUNT, Sr., Plaintiff-Appellant, v. Danny WALKER d/b/a Dan’s Feed Company, Defendant-Appellee.
    No. 13252.
    Court of Appeal of Louisiana, Second Circuit.
    May 23, 1977.
    En Banc.
    Rehearing Denied June 22, 1977.
    Provosty & Sadler by David P. Spence, Alexandria, for plaintiff-appellant.
    Frank Bright, Shreveport, for defendant-' appellee.
    Before BOLIN, PRICE and HALL, JJ.
   PRICE, Judge.

P. A. Hunt, Sr., a Texas resident, brought this suit to nullify a 1975 default judgment obtained against him by Danny Walker. The trial court sustained an exception of no cause of action filed by Walker, and Hunt perfected this appeal. The judgment is affirmed for the reasons hereafter given.

Hunt initially alleged the judgment was procured by fraud and ill practice, and in supplemental pleadings, alleges his failure to appear at the trial was due to the advice of a Texas attorney who told him that a valid judgment could not be entered against him in Louisiana.

A default judgment cannot be nullified for fraud or ill practice when the moving party does not have a valid excuse for failure to present his defenses at the original trial. See Steele v. Ruiz, 202 So.2d 376 (La.App. 4th Cir. 1967).

The jurisprudence has permitted the action of nullity in instances where a party has actually engaged or believes he has engaged an attorney who failed to defend and allowed judgment to be taken by default. Pryor v. Gions, 188 So.2d 739 (La.App. 2nd Cir. 1966); Bell v. Holderaft, 196 So. 379 (La.App. 2nd Cir. 1940).

Plaintiff has not alleged he either engaged or thought he engaged an attorney. He alleges only that on advice of an attorney in Texas he did not feel it necessary to defend the action against him in Louisiana. Such a circumstance does not excuse his failure to appear and does not create an unfair or unconscionable result.

The judgment is affirmed at appellant’s costs.


text:
    MFA LIFE INSURANCE COMPANY, Plaintiff-Appellee, v. Mary Hislop HUEY and Trustees of Barksdale Federal Credit Union, Defendants-Appellants (Trustees).
    No. 13253.
    Court of Appeal of Louisiana, Second Circuit.
    May 23, 1977.

      Skeels, Baker & Coleman by Donald L. Baker, Shreveport, for Barksdale Federal Credit Union and Trustees, defendant-appellant.
    Herold & Geneux by T. Lynn Geneux, Shreveport, for defendant-appellee.
    Cook, Clark, Egan, Yancey & King by Sidney B. Galloway, Shreveport, for plaintiff-appellee.
    Before PRICE, HALL and JONES, JJ.
   JONES, Judge.

The trustees of the Barksdale Federal Credit Union Pension Trust appeal a trial court judgment holding Mary Hislop Huey to be entitled to the proceeds of an annuity policy. We affirm.

The Barksdale Federal Credit Union, “desiring to encourage the loyalty, continuity of service, and financial security after retirement of its permanent employees . ”, established a pension plan on August 28,1973, to provide retirement benefits for its employees. The retirement benefits were to be funded by an annuity policy on the life of the employee, with the premiums paid solely by Barksdale Federal Credit Union. Upon approval by the Internal Revenue Service the plan was to take effect, applying retroactively to October 1, 1973. The annuity policies were obtained from MFA Life Insurance Company (MFA) through William A. Baldwin; who was a member of the Board of Directors of the Barksdale Federal Credit Union, as well as an agent for MFA. Baldwin obtained individual applications from the qualified employees of the credit union and delivered these applications and a copy of the trust agreement to the MFA home office.

Lynn Edmond Huey, husband of Mary Hislop Huey, was the loan manager and a ten year employee of the credit union. He became a participant in the pension plan at its inception, naming his wife as beneficiary. Lynn Huey died on October 7, 1974, a little more than one year after joining the plan.

Upon Lynn Huey’s death, the proceeds of the annuity policy ($9,158.00) became payable. Under the express terms of the policy Mary Huey, as the named beneficiary, was entitled to these proceeds. However, because of an adverse claim by the Barksdale Federal Credit Union Pension Trust (Barks-dale), MFA provoked a concursus proceeding, naming as defendants Mary Huey and the trustees of the pension plan. The proceeds of the policy were then deposited into the registry of the court. After trial, the lower court rejected Barksdale’s plea for reformation of the annuity policy because of mutual error and held Mary Huey was entitled to the proceeds.

On appeal Barksdale asserts the trial court erred in its factual conclusion that there was no showing of mutual error as regards the terms of the annuity policy, and in failing to reform the annuity policy to reflect the intent of the parties to the policy by incorporating the vesting provisions of the pension plan.

A copy of the annuity policy, Lynn Huey’s application form, and a copy of the pension plan are in the record. The application provides, inter alia, that Lynn Edmond Huey is the annuitant, Mary Hislop Huey is the primary beneficiary, and Barks-dale Federal Credit Union Employee Pension Trust is the owner of the policy.

As regards the death of the annuitant, the policy provides:

“In the event the death of the Annuitant occurs prior to the Retirement Date, the Company will pay to the Beneficiary a death benefit which is equal to the larger of the premiums paid ... or the Net Cash Value. . . .”

As regards a participant’s death prior to retirement, the pension plan provides:

“Distribution Upon Death:
“In the event of the death of a Participant before retirement the Trustee shall cause the Insurer to pay to the designated Beneficiary the amount of the vested interest of the deceased Participant in the same manner as hereinafter provided in the case of termination of employment.
* }fc * * Jfe
“A Participant shall designate on a form satisfactory to the Trustee a Beneficiary of any death proceeds or benefits which may become payable under Policies held with the respect to such Participant

The vesting provision referred to above provides:

“Any policies held for the account of the Participant shall be forfeited by such Participant except as provided herein. Prior to the completion of 5 years of participation no interest shall be vested. Upon the completion of 5 years of participation, 25% shall vest, and an additional 5% shall vest upon the completion of each year of participation thereafter, until the complete interest of the Participant in the guaranteed cash value only of annuity on participant’s life.”

Other than naming Barksdale as the owner of the policy, no reference is made to the pension plan in the annuity contract.

Barksdale asserts the provisions of the pension plan clearly show the intent of the parties is that the beneficiary is not entitled to any proceeds from the annuity policy unless the employee had some vested interest in the pension plan, and since Lynn Huey had no vested interest, the judgment awarding Mary Huey the proceeds of the annuity policy was clearly erroneous. Barksdale asks the annuity policy be reformed so as to incorporate the vesting schedule in the provision of the annuity policy allowing the beneficiary to recover the death benefits.

Under the provisions of LSA-R.S. 22:628, the terms of the pension plan cannot modify the provisions of the annuity policy unless it was made a part of the policy. However, the jurisprudence has allowed reformation of an insurance policy when, because of mutual error or mistake, the policy fails to reflect the intent of the parties. Herbert v. Breaux, 285 So.2d 829 (La.App. 1st Cir. 1973); Gaudet v. North River Insurance Company, 156 La. 719, 101 So. 118 (1924); Singleton v. First National Life Insurance Company, 160 So. 437 (Orl.La.App.1935). After a careful reading of this record, we find Barksdale has not shown there was mutual error.

Barksdale claims since Baldwin was familiar with the terms of the pension plan, and was an agent for MFA, then MFA was considered as having knowledge of the terms of the pension plan. Even assuming this is true, there is no evidence from which it can be concluded that MFA understood it should have incorporated the terms of the pension plan into its annuity policy. The evidence is clear the annuity policy reflects the information contained on the application form signed by Lynn Huey and Barks-dale, and presented to MFA by Barksdale. We can only conclude there was no error on the part of MFA.

Additionally, we cannot agree with Barksdale’s contention that Lynn Huey is not a party to the annuity policy and therefore error need not be shown on his part before the policy can be reformed.

In a situation such as this, the provisions of LSA-R.S. 22:613 and 22:616 require that Lynn Huey be a party to the policy. Barksdale has not shown Lynn Huey intended or would have agreed that Barksdale, rather than his wife, should receive the death benefits of the annuity policy on his life if he should die prior to the vesting of his interest in the pension plan. Barksdale’s reliance on a self-serving provision of the pension plan, which provides a participant conclusively assents to all provisions of the pension plan, is of no avail because Barksdale has not shown Huey knew of and agreed to this provision.

For the foregoing reasons, the judgment of the lower court is affirmed, appellant to pay all costs below and on appeal.

Affirmed.

      . “§ 628. Must contain entire contract
      “No agreement in conflict with, modifying, or extending the coverage of any contract of insurance shall be valid unless in writing and made a part of the policy. This Section shall not apply to the contracts as provided in Part XV of'this Chapter.”

      . “§ 613. Insurable interest required; personal insurances
      “A. Any individual of competent legal capacity may procure or effect an insurance contract upon his own life or body for the benefit of any person. But no person shall procure or cause to be procured any insurance contract upon the life or body of another individual unless the benefits under such contract are payable to the individual insured or his personal representatives, or to a person having, at the time when such contract was made, an insurable interest in the individual insured.
      * ‡ * * * *
      “C. ‘Insurable interest’ as used in this Section and in R.S. 22:616 includes only interest as follows:
      (1) In the case of individuals related closely by blood or by law, a substantial interest engendered by love and affection; and
      (2) In the case of other persons, a lawful and substantial economic interest in having the life, health or bodily safety of the individual insured continue, as distinguished from an interest which would arise only by, or would be enhanced in value by, the death, disablement or injury of the individual insured.”

      . “§ 616. Application for insurance required “No life or health and accident insurance contract upon an individual, except a contract of group life insurance or of group or blanket health and accident insurance as defined in this Code, shall be made or effectuated unless at the time of the making of the contract the individual insured, being of competent legal capacity to contract, in writing applies therefor or consents thereto, except in the following cases:
      (1) A spouse may effectuate such insurance upon the other spouse.
      (2) Any person having an insurable interest in the life of a minor, or any person upon whom a minor is dependent for support and maintenance, may effectuate insurance upon the life of the minor.”