text:
    AETNA LIFE AND CASUALTY COMPANY v. Marie DOTSON.
    No. 11241.
    Court of Appeal of Louisiana, First Circuit.
    May 9, 1977.
    Rehearing Denied June 13, 1977.

      J. Byron Stringer, Ray C. Dawson, Baton Rouge, for plaintiff Aetna Life and Casualty, appellant.
    Frank J. Gremillion, Baton Rouge, for defendant, Marie Dotson, appellee.
    Before LANDRY, EDWARDS and COLE, JJ.
   COLE, Judge.

This is an appeal from a judgment of the trial court maintaining an exception of prescription filed by the defendant-appellee, Marie Dotson. We affirm.

The issue presented on appeal is whether the cause of action asserted by the plaintiff is one in tort which prescribes in one year or one in quasi-contract which prescribes in ten years.

The allegations of fact presented in plaintiff’s petition and clarified by the answers to interrogatories indicate that while Marie Dotson was employed by Alloy Supply and Valve Company, Inc. (Alloy), as a bookkeeper, through various fraudulent schemes beginning January 19, 1973, and ending November 25, 1974, she embezzled $20,716.77. The theft of her employer’s money was allegedly accomplished either by negotiating unauthorized checks with her own endorsement, by drafting and cashing checks based on fictitious purchase vouchers, or by forging the signatures of other employees on the checks and cashing them. Alloy discovered the embezzlement on December 2, 1974.

Under a policy of insurance issued by the plaintiff-appellant, Aetna Life and Casualty Company (Aetna), to Alloy to insure against monetary losses incurred by the employer due to fraud or infidelity of its employees, Aetna paid Alloy $10,000, thereby becoming subrogated to Alloy’s rights against the defendant. Aetna filed suit on December 12, 1975, praying for “restitution of Ten Thousand Dollars ($10,000.00) as part of the money defendant wrongfully received * * * »

The appellant contends the facts in question give rise to concurrent causes of action, one delictual, the other quasi-contractual. The appellant claims to have elected to assert the quasi-contractual action and to have waived the delictual action by setting forth in its petition a cause of action arising under a quasi-contract, thereby making the ten-year prescriptive period of Louisiana Civil Code Article 3544 applicable. Appellant cites several cases to support its position. Dantagnan v. I.L.A. Local 1418, AFL-CIO, 496 F.2d 400 (5th Cir. 1974); Minyard v. Curtis Products, Inc., 251 La. 624, 205 So.2d 422 (1967); Kramer v. Freeman, 198 La. 244, 3 So.2d 609 (1941); State ex rel. Guste v. Estate of Himbert, 327 So.2d 698 (La.App. 1st Cir. 1976); Schouest v. Texas Crude Oil Company, 141 So.2d 155 (La.App. 1st Cir. 1962); Devoe & Raynolds Company, Inc. v. Robinson, 109 So.2d 226 (La.App. Orl.Cir. 1959). While some of these cases can be distinguished, others appear to be authoritative.

It is conceded that facts forming the basis of a cause of action may afford a plaintiff concurrent remedies (contractual/quasi-contractual or delictual/quasi-delictual). See Schouest v. Texas Crude Oil Company, supra; “Prescription, Classification and Concurrence of Obligations,” 36 Tulane L.Rev. 556 (1962). Our jurisprudence has evidently established that if the plaintiff chooses to seek recovery under one remedy, he, in effect, waives his cause of action for the other. Schouest v. Texas Crude Oil Company, supra, and cases cited therein.

The allegations and prayer of the petition determine the true nature of the action and the prescriptive period applicable. Schouest v. Texas Crude Oil Company, supra; American Insurance Company v. Hartford Accident & Indemnity Company, 198 So.2d 757 (La.App. 1st Cir. 1966).

By phrasing its prayer for relief in terms of “restitution” rather than in terms of a prayer for damages, plaintiff seeks to classify its action as one arising out of a breach of a quasi-contractual obligation rather than a delictual obligation.

The concept of quasi-contracts is established in Title V, Chapter 1, of the Louisiana Civil Code. The general provisions applicable to all quasi-contractual obligations provide:

Civil Code Article 2293:

“Quasi contracts are the lawful and purely voluntary act of a man, from which there results any obligation whatever to a third person, and sometimes a reciprocal obligation between the parties.” (Emphasis added)

Civil Code Article 2294:

“All acts, from which there results an obligation without any agreement, in the manner expressed in the preceding article, form quasi contracts. But there are two principal kinds which give rise to them, to wit: The transaction of another’s business, and the payment of a thing not due.”

Louisiana Civil Code Article 2301, appearing under § 3, titled “Of the Payment of a Thing Not Due” provides:

“He who receives what is not due to him, whether he receives it through error or knowingly, obliges himself to restore it to him from whom he has unduly received it.”

This article read alone appears to be applicable to the facts and prayer in the plaintiff’s petition. However, this article must be read in pari materia with Articles 2293 and 2294. Article 2293 makes it clear that any act giving rise to a quasi-contractual obligation must be “lawful.” Moreover, in Article 2301 the word “receives” connotes a passive acquisition of a thing by means of the act of another in giving the thing. Thus, the article would not appear applicable to a situation where a person actively and unlawfully takes a thing to which he is not entitled.

In the case in point, the act allegedly giving rise to the quasi-contractual obligation to restore the money wrongfully taken, was the alleged act of theft or embezzlement by the defendant. This act was clearly unlawful. Louisiana Criminal Code, Article 67.

In the City of New Orleans v. Southern Bank, 31 La.Ann. 560 (1879), when the city treasurer wrongfully converted city bonds to his own benefit, the Court held any action based on this act to be delictual and not founded on a quasi-contract. The Court made the following distinction which we think is pertinent herein:

“ * * * This latter [quasi-contract] is the lawful and purely voluntary act of one from which there results any obligation whatever to a third person. Civil Code, art. 2272 new no. 2293.
******
“The characteristic therefore of offence or quasi-offence is that the act, from which the obligation arises, is unlawful. The marked distinction then between a quasi-contract, and an offence or quasi-offence is, that the act which gives rise to a quasi-contract is a lawful act and therefore is permitted; while the act which gives rise to an offence or quasi-offence is unlawful, and therefore is forbidden. * * *
******
“The distinction between damages ex delicto and ex contractu is, that the latter ensue from the breach of a special obligation, and the former from the violation of a general duty. * * *” (31 La.Ann. at 566, 567)

The two principal kinds of acts giving rise to quasi-contractual obligations enumerated in Article 2293 are not exclusive, as that article indicates. In Minyard v. Curtis Products, Inc., supra, the Court established the theory of a quasi-contractual obligation, independent of any explicit provision of the Civil Code, founded upon an unjust enrichment. This action has precedent in other civil law jurisdictions in the actio de in rem verso. The prerequisites to such an action based on an unjust enrichment, as stated in Minyard v. Curtis Products, Inc., are:

“ * * * (1) [Tjhere must be an enrichment, (2) there must be an impoverishment, (3) there must be a connection between the enrichment and resulting impoverishment, (4) there must be an absence of ‘justification’ or ‘cause’ for the enrichment and impoverishment, and finally (5) the action will only be allowed when there is no other remedy at law, i.e., the action is subsidiary or corrective in nature. * * *
******
“ * * * The fifth requirement, that there be no other remedy available at law, is simply an aspect of the principle that the action must not be allowed to defeat the purpose of a rule of law directed to the matter at issue. It must not, in the language of some writers, ‘perpetrate a fraud on the law.’ Article 21 of the Louisiana Civil Code prohibits a reference to principles of equity in cases which would allow application of more specific legal action.” (205 So.2d at 432, 433)

The remedy provided by Article 2315 specifically applies to the case in point. In this case any remedy provided by an action de in rem verso would be identical in substance and relief to an action in tort. See generally, Nicholas, “Unjustified Enrichment in the Civil Law and Louisiana Law,” 36 Tulane L.Rev. 605, 639-641 (1962). Therefore, the fifth requirement for such an action is absent in this case. Moreover, the general provision of Article 2293 that the act giving rise to the quasi-contractual obligation must be lawful would also apply to any action based on unjust enrichment.

Therefore, for the reasons assigned, we conclude that an employer’s action (and the action of one subrogated to the employer’s rights) against an employee for embezzlement is in tort and prescribes in one year. Louisiana Civil Code, Article 3536. See Northern Assurance Company of America v. Waguespack, 304 So.2d 865 (La.App. 4th Cir. 1974). The judgment of the trial court is affirmed, at the appellant’s cost.

AFFIRMED.


source: Caselaw Access Project

author: COLE, Judge. PER CURIAM:

license: Public Domain

text:
    Lindy WEBB, Widow of Andrew Jackson Wisner v. Paul K. SCOTT.
    No. 11244.
    Court of Appeal of Louisiana, First Circuit.
    May 9, 1977.
    Rehearing Denied June 13, 1977.

      Maurice J. Le Gardeur, Jr., Covington, for plaintiff-appellee.
    Charles A. Verderame, Salvador M. Cusi-mano, New Orleans, for defendant-appellant.
    Before LANDRY, EDWARDS and COLE, JJ.
   COLE, Judge.

This is a suit to rescind the sale of approximately eighty-one acres in St. Tammany Parish brought by the plaintiff-appellee, Mrs. Lindy Webb, against the defendant-appellant, Paul K. Scott. An authentic act of sale was passed on December 22, 1973, with a recited purchase price of $20,000 of which $4,000 was paid and receipt acknowledged in the act. The remaining balance of $16,000, according to the act of sale, was represented by a promissory note.

The trial court in written reasons concluded that the property was accurately valued at $85,000 at the time of the sale and, therefore, found the sale to be lesion-ary and subject to rescission. The defendant was granted an additional sixty days to pay the difference in the property’s value and the amount previously paid. We compliment the trial judge on the clarity of reasons offered in light of the confusing and often incomprehensible testimony offered at trial.

The plaintiff’s petition originally attacked the sale on three alternative grounds: (1) fraud; (2) nonpayment of the purchase price; and (3) lesion. At trial the plaintiff abandoned her allegations of fraud and proceeded on the other two grounds for rescission. The trial judge found as to the second averment of the plaintiff that the purchase price as recited in the instrument was, in fact, paid. The plaintiff does not appeal as to this finding. Therefore, the only remaining issue contested is whether the sale is subject to rescission for lesion beyond moiety under Louisiana Civil Code Articles 1861 and 2589.

The defendant raises basically three defenses in response to the claim of lesion. He asserts that the sale was not lesionary under the Louisiana Civil Code because the plaintiff had actual knowledge of the real value of the land in question. Secondly, the defendant contends that the act of sale was in reality a disguised donation. Finally, the defendant avers that additional consideration was contemplated beyond that recited in the act of sale which consideration, if shown, would place the transaction beyond the reach of the provisions on lesion beyond moiety.

That the plaintiff knew of the actual value of the land in question, as asserted by the defendant, is not a relevant inquiry in a suit for rescission of the sale of the immovables based on lesion. Louisiana Civil Code Article 2589 provides:

“If the vendor has been aggrieved for more than half the value of an immovable estate by him sold, he has the right to demand the rescission of the sale, even in case he had expressly abandoned the right of claiming such rescission, and declared that he gave to the purchaser the surplus of the thing’s value.”

In Blaize v. Cazezu, 210 La. 176, 26 So.2d 689, 690 (1946), the Supreme Court said:

“The law presumes juris et de jure that he who sells an immovable for less than half its value is acting under an error of fact sufficient to invalidate the sale. Civ. Code, Articles 1860, 1861. This presumption is so strong and conclusive that even if the vendor should know and expressly declare he knows the value of the property exceeds twice the price received, and should even declare that it is his purpose to give the purchaser the surplus of the thing’s value over the price received, and that he expressly abandons the right to rescind the sale, nevertheless the law still gives him that right. Civ.Code, Art. 2589; Fernandez v. Wilkinson, 158 La. 137, 103 So. 537. The one prerequisite [is] that the price paid be less than one-half the value of the property as established at the time of the sale.”

The defendant, in effect, contends that Louisiana Civil Code Article 1860 requires as a prerequisite to a suit to rescind a sale as lesionary that the seller be operating under error or imposition. However, Louisiana Civil Code Article 1860 is merely definitional:

“Lesion is the injury suffered by one who does not receive a full equivalent for what he gives in a commutative contract. The remedy given for this injury, is founded on its being the effect of implied error or imposition; for, in every commutative contract, equivalents are supposed to be given and received.”

An action to rescind a sale because it is lesionary is not dependent on error by or imposition upon the seller, but is merely dependent on an arithmetical calculation as to the value of the immovable sold as compared to the price paid. The reference to error or imposition in Article 1860 is merely utilized to state the justification for the rule of law established. See, generally, “Comment,” 14 Tulane L.Rev. 249 (1940).

The defendant’s other two contentions (that the surplus was intended as a donation or that adequate additional consideration was paid) required that we first address the question of whether in a suit to rescind an authentic act of sale on the ground of lesion, the defendant may offer parol evidence to show the alleged true cause of the contract or to show that additional consideration was paid.

The state of the law, as we appreciate it, with regard to the use of parol evidence to enlarge upon, amend, or defeat the recited provisions of an authentic act of sale is far too confused or complicated for this Court to clearly enunciate the law, except as we perceive that it relates to this case. See Taylor v. Brown, 223 La. 641, 66 So.2d 578 (1953), at Footnote No. 1.

The so-called “parol evidence rule” is predicated upon Article 2276, which provides:

“Neither shall parol evidence be admitted against or beyond what is contained in the acts, nor on what may have been said before, or at the time of making them, or since.”

Louisiana Civil Code Article 1900 might arguably be construed to conflict with the above-stated provision to the extent that it provides:

“If the cause expressed in the consideration should be one that does not exist, yet the contract cannot be invalidated, if the party can show the existence of a true and sufficient consideration.”

In Giord v. Vines, 23 La.Ann. 588 (1871), in an action to rescind a sale on the ground of lesion, the defendant contended that pri- or to the act of sale she rendered assistance and care to the plaintiff which constituted a full equivalent for the property. The Court therein applied the provisions of Louisiana Civil Code Article 2276 saying:

“ * * * [The] parties agreed and stipulated that the price of the land w.as $100, and they can not show by parol evidence any other price. Had they intended that the estimated value of the personal services of the vendee were a part of the price, in addition to the sum paid, they should have so expressed the fact and the amount in the act. The allegation that the vendor ‘was aggrieved by the said sale for more than half the value of said land,’ does not bring the case within the rule invoked by defendant, which authorizes parol proof of error or fraud to annul written contracts and the plaintiff has not opened the door by adducing any proof of such error or fraud but simply as to the value of the property at the date of the sale. * * * ” (23 La.Ann. at 589)

However, in Wimbush v. Jones, 136 So.2d 704 (La.App. 2nd Cir. 1962), the opposite result was reached when the Court allowed parol evidence to prove that the consideration paid was $800, rather than the sum of $250 as recited in the act of sale.

The discrepancy in the approaches illustrated above has been discussed as follows:

“The court’s approval in Wimbush v. Jones * * * of the admissibility of parol evidence to show that a price of $800 was paid for certain property, instead of the recited $250, by way of defense to a claim of lesion beyond moiety is difficult to reconcile with earlier cases * * * or with the French treatment of the problem. * * * While it is true that Article 1900 of the Civil Code permits the use of extrinsic evidence to sustain a contract where the cause expressed in the contract does not exist, generally speaking the jurisprudence has restricted the application of this principle to cases where the stated cause or consideration has been disproved by legally admissible evidence, e. g., when a third party attacks an act as a simulation. Such a case was Love v. Dedon, [239 La. 109, 118 So.2d 122] * * * which was cited in support of the court’s opinion. Cases of the latter kind frequently contain statements to the effect that parol evidence is admissible to sustain a contract, although not to destroy it. Applied to a case where the stated cause has been properly disproved and the parties then seek to show the true cause, the statement is correct, but the propriety of the application of the rule to the facts before the court in the instant case seems questionable. It well may be, however, that the basic rule is too stringent.” (“The Work of the Louisiana Appellate Courts for the 1961-62 Term,” 23 La.L.Rev. 278 [1963])

It appears to this Court that in the case in point Louisiana Civil Code Article 1900 is not applicable to allow proof of true or sufficient cause, because the cause expressed in the contract was not proved to be non-existent within the intendment of Article 1900. In fact, the defendant adamantly alleged and proved that the recited purchase price of $20,000 was paid.

Additionally, our law indicates that parol should not be admitted to show, contrary to the statements of an authentic act of sale, that the true intent of the act was to donate rather than to sell the property. Succession of Teagle, 206 So.2d 753 (La.App. 2nd Cir. 1968); Girard v. Donlon, 127 So.2d 761, 763 (La.App. 3rd Cir. 1961); Drewett v. Carnahan, 183 So. 103 (La.App. 2nd Cir. 1938). The remedy provided by Louisiana Civil Code Article 2444, which provides that sales of immovables may be attacked as disguised donations, operates only for the benefit of forced heirs.

In the instant case, the parties consulted an attorney in drawing up and executing the act of sale. Had they intended that the recited price include additional consideration in the form of past services rendered or future services to be rendered, they should have so expressed. Further, had they intended that the transaction was, in fact, a donation, they should have executed a valid act of donation. They did not.

We note further that the evidence urged by the defendant to prove the plaintiff’s alleged donative intent and to prove the additional consideration of past services rendered was admitted at trial only for the purpose of impeaching the plaintiff’s testimony. It is clear that even if such evidence is used to enlarge or amend the written provisions of the authentic act of sale, such evidence is not sufficient to establish dona-tive intent on the part of the plaintiff or to establish that additional consideration was paid sufficient to bring the purchase price paid to one-half of the value of the property-

The plaintiff-appellee has answered the appeal by the appellant claiming that the appeal is frivolous and thereby seeks damages. We find that this contention is without merit.

For the foregoing reasons, the judgment of the trial court is affirmed. The costs of this appeal are assessed to the appellant.

AFFIRMED.

On Application For Rehearing

Before LANDRY, EDWARDS and COLE, JJ.

PER CURIAM:

To remove any doubt as to the time within which defendant-appellant, Paul K. Scott, may pay to plaintiff-appellee, Mrs. Lindy Webb, the difference in the value of the subject property and the amount previously paid therefor, we clarify our opinion to state that the sixty (60) day period decreed shall run from the finality of the affirmed judgment.


author: COLE, Judge.

text:
    LAFOURCHE PARISH WATER DISTRICT NO. 1 v. CARL HECK ENGINEERS, INC.
    No. 11309.
    Court of Appeal of Louisiana, First Circuit.
    May 9, 1977.

      Randolph H. Parro, Block, Block & Parro, Thibodaux, for plaintiff and appellant.
    Philip J. McMahon, and Jerry H. Schwab, Houma, for defendant and appellee.
    Before LANDRY, EDWARDS and COLE, JJ.
   COLE, Judge.

The plaintiff-appellant, Lafourche Parish Water District No. 1, filed a suit for a declaratory judgment against the defendant-appellee, Carl Heck Engineers, Inc., seeking to have a contract with the defendant declared null and void. In the alternative, the plaintiff sought to have the contract declared non-exclusive. The plaintiff appeals the judgment of the trial court which upheld the validity of the contract and also found the contract to be exclusive.

Various enumerated grounds were urged by the plaintiff to support its position that the contract was invalid. Each ground alleged was individually discussed and disposed of by the trial court, as was the alternative contention that the contract was non-exclusive, in its meticulously written reasons quoted in substantial part below:

“It might be well to set out here a brief summary of the events leading to the filing of this suit. The Lafourche Parish Water District Number One is governed by an eleven man Board of Commissioners, as authorized by the provisions of R.S. 33:3812(C). On July 7th, 1975, at a special meeting this Board, by a vote of six (6) to five (5), authorized the signing of a contract with defendant, Carl Heck Engineers, Inc., wherein defendant would provide the necessary professional engineering services in connection with the planning, design, and construction of all public improvements required by plaintiff and specifically authorized by plaintiff. The contract was for a term of five (5) years from date and would be deemed renewed on a year to year basis unless either party elected to terminate the renewed contract by giving written notice to the other party three (3) months prior to the expiration date of the current contract period.

“Apparently the Lafourche Parish Police Jury, the governing authority which appointed the Board of Commissioners, was unhappy with this action of the Board for it expressed its displeasure almost immediately on July 9, 1975, removed Commissioner Terry Ordoyne, one of the six who voted for the contract and replaced him with a member of the Police Jury, W. H. ‘Bill’ Trosclair. On July 12, 1975, the Water District Board was again convened and at this meeting the former minority, now the majority, passed a resolution of the Board by a six (6) to five (5) vote to seek the cancellation of the contract with defendant which had been authorized and accepted on July 7, 1975.

“The case for the plaintiff was presented over a two day period and when the plaintiff rested, the defendant rested without calling any witnesses. Inasmuch as the defendant had exercised its option to conduct a direct examination of two witnesses called by plaintiff under cross-examination, the Court permitted rebuttal testimony to be presented in connection with the direct examination defendant had made of these two witnesses. The matter was submitted to the Court on briefs, and at the suggestion of the Court the briefs were segmented so that each allegation of nullity would be treated separately, and since that method made for greater clarity in reviewing the respective arguments and the authorities cited by counsel, the Court will adopt the same procedure in presenting these written Reasons for Judgment.

“1 THE MOTION AUTHORIZING THE PRESIDENT OF THE WATER DISTRICT TO SIGN THE CONTRACT WAS INVALID, SINCE IT WAS IMPROPERLY PRESENTED AT A SPECIAL MEETING WHEREIN THE CALL FOR THE MEETING DID NOT REASONABLY NOTIFY THE COMMISSIONERS THAT THIS CONTRACT WOULD BE BROUGHT UP FOR A VOTE.

“There is no question concerning the fact that the meeting of July 7, 1975, was a special meeting. It is also true that the Call for the meeting sent out over the President’s signature on July 2, 1975, did not specifically list as one of the purposes of the meeting that the Heck contract would be brought to the floor for a vote. Four matters were listed in this Call, the fourth of which was ‘4. Any other business to legally come before the Board.’

“It is plaintiff’s contention that while there are no specific statutory provisions relating to the call of special meetings of water districts, a jurisprudential rule has evolved that action taken at special meetings is null and void if general corporate provisions are not followed. Many cases are cited both from Louisiana and from other jurisdictions in support of this position. Admitting that there are no cases precisely in point, plaintiff cites R.S. 12:73(D) requiring the notice of shareholders’ meeting to state ‘purpose’ of meeting and that it must be given at least ten days prior to meeting, but if this statutory provision can be extended to meetings of water district boards, we cannot take this one section out of context but should consider the entire subsection referred to. Further in R.S. 12:73(D) we find ‘. . and such shall be deemed to have been given to, or waived by, all shareholders present or represented at any such meeting, except any shareholder who, at the beginning of the meeting, objects to the transaction of any business because the meeting is not lawfully called or convened . . ..’

“It would appear, therefore, that even if the notice required to be sent for shareholders’ meetings applied to meetings of the Water District Board of Commissioners, the lack of proper notice (if the notice which issued was deficient) was waived since no one objected to voting when the vote was called or to holding the meeting because of lack of proper notice.

“Cases cited by plaintiff, Jones v. Shreveport Lodge No. 122, [221 La. 968], 60 So.2d 889 [1952]; Blum v. Latter, 163 So.2d 189 [La.App. 4th Cir. 1964]; and Phillips v. Newland, 166 So.2d 357 [La.App. 3rd Cir. 1964], which were cited in support of plaintiff’s argument that the Louisiana cases have generally held that action taken at special meetings is null and void if general corporate provisions are not followed, can be distinguished. The charters of these private corporations were silent as to requirements for calling special meetings of stockholders so the court applied general corporate provisions, but Exhibit D-4, filed in evidence in this suit, the By-Laws of the Water District, provided for the calling of special meetings and did not require that the purpose be stated. Further, as the Court recalls the testimony, the Board members testified that this was not the first occasion on which matters not specifically set out in a Call were discussed or voted on at a special meeting. The specific language of the By-Laws of the Water District regarding its provision for special meetings is found in Section 3 of Article 2, and it states:

‘Special meetings of the board may be called by the President, Vice-President, or Secretary-Treasurer on three days notice either personal or written by mail or telegram to each member; however, notice may be waived by a two-thirds vote of the whole board. Special meetings shall be called by the President or Secretary in like manner and on like notice of the written request of two board members.’

It would appear that the Board, in formulating its By-Laws did not feel that there was a necessity to state the precise purpose of the Call of a special meeting. As a matter of fact, the special meeting could have been called verbally, making it impossible to tell whether or not any specific purposes were included since the By-Laws provided that the notice could be ‘either personal or written.’ Additionally, notice could be waived. So obviously the inclusion of a ‘purpose’ in the Call was not considered sacramental to the writers of the By-Laws. Apparently, insofar as the Water District was concerned, the requirement for notice to be given was to assure the attendance of the members rather than to apprise them in advance of the purpose. Since all eleven members of the Board attended the meeting of July 7, 1975, at which the President was authorized to sign the engineering contract, there was no omission in the Call which would taint the validity of the Board’s action because the ‘purpose’ of the meeting was not completely set out in detail in the notice of this special meeting. The principle of stating the purposes is admirable, but it is not required by the ByLaws of this particular corporate body.

“Accordingly, the Court cannot rule that the lack of specificity in the Call made the approval of the contract invalid.

“2. THE CONTRACT VOTED ON WAS NOT PRESENT AT THE MEETING AND COULD NOT BE PROPERLY REVIEWED, DEBATED, AND DISCUSSED; AND SINCE NUMEROUS DRAFTS OF THE CONTRACT HAD BEEN PROPOSED BY HECK. THE ACTION TAKEN BY THE COMMISSIONERS WAS INVALID AS CONTRARY TO PUBLIC POLICY BECAUSE THE VOTE TAKEN WAS WITHOUT ADEQUATE CARE AND CAUTION IN DISREGARD OF THEIR TRUST OBLIGATION TO THE PUBLIC. (Emphasis supplied by the Court)

“Before discussing this point, a question arose in the memoranda filed by counsel as to the inclusion of the underlined section in this allegation. It was omitted from plaintiff’s brief and included in defendant’s. The allegation as quoted above is as it appears in the original petition. Plaintiff claimed in its rebuttal brief that it had been agreed at the pretrial conference that the underlined section could be deleted without the necessity of an amendment of plaintiff’s petition. Plaintiff admitted that after the filing of the petition counsel realized that ‘numerous drafts of the contract had not been proposed by Heck,’ but the supplemental pretrial agreement, signed by all counsel and the Court and filed in the record, does not reflect this fact. Additionally, the Court does not recall such an agreement having been reached. However, whether the underlined phrase is omitted or included it has no material bearing on the crux of this allegation. The issue here seems to be that the Court is asked to declare the contract void because there was inadequate debate and discussion of the contract prior to the vote at the meeting of July 7, 1975.

“The testimony of the Commissioners at the trial indicates that a copy of the contract was not presented for review at the meeting before the vote was taken. It is equally clear, however, that the meeting was held at the domicile of the District and that there was a copy present in its official files. The verbatim transcript of the meeting, which was filed in evidence, indicates to the Court that apparently none of the Commissioners requested to see a copy of the contract nor were any so unfamiliar with it that they expressed a ‘need’ to see the contract before casting their vote.

“It is undisputed that several months before this special meeting the President of the Board mailed to each Commissioner a copy of the proposed contract and each Commissioner was specifically requested to study it and direct to the President’s attention in writing any comments, pro and con, on the contract. The record also indicates that the only Commissioners who responded to the President’s request after receiving their copy of the contract were the five Commissioners who with the President made the majority vote of six, which approved the contract at the July meeting. The five Commissioners who opposed the signing of the contract and who with the new commissioner now constitute the majority responsible for authorizing this suit, did not state their opinion of the contract in writing as requested.

“Additionally, a review of the Minutes of previous meetings and correspondence exchanged between the Water District and the Police Jury and the Water District and the District Attorney’s Office indicates that the acceptance of the Heck contract was a subject of prime concern to the Commissioners from at least March, 1975, until it was approved and signed in July. The testimony of the Commissioners on the trial of this matter clearly indicated to the Court that all Commissioners were thoroughly familiar with the contents of the contract and the Court would surmise that this explains why no one bothered to ask for a specific review of the contract point by point at the July 7th meeting.

“The Court concludes, therefore, that there had been ample study made and it is evident that the lines were clearly drawn before the July 7th meeting. The votes as cast were obviously of no surprise to anyone present at that meeting. The request for the Court to sustain this allegation of nullity is actually asking the Court to substitute its judgment for the judgment of the majority of the Board of Commissioners on July 7, 1975, and this the Court has no authority to do. There is nothing in the record to indicate that by its vote the Board ‘abused its discretionary powers’ in authorizing the President to execute this contract. As correctly stated by defendant, citing McCann v. [Mayor and Councilmen of] Morgan City, [173 La. 1063], 139 So. 481 [1932], if a public body acts without fraud being shown, without invading private rights, without manifest oppression, without gross abuse of power, its action is not subject to judicial control. The Court’s review of the evidence introduced concerning the period preceding the vote on July 7th does not indicate that the action was taken in such a cavalier fashion that it should be considered a flagrant abuse of its delegated authority.

“3. THE COMMISSIONERS OF THE WATER DISTRICT SERVE AT THE PLEASURE OF THE LA-FOURCHE PARISH POLICE JURY; CONSEQUENTLY, THE CONTRACT AWARDED TO HECK IS NULL AND VOID BECAUSE OF ITS FIVE YEAR DURATION AND NON-CANCELLABILITY PROVISIONS, SINCE IT CEDES AWAY CONTROL AND EMBARRASSES THE LEGISLATIVE AND GOVERNMENTAL POWERS OF THE POLICE JURY, THEREBY VIOLATING PUBLIC POLICY.

“In this allegation, plaintiff argues to the Court that the Heck contract because of its five year term must be declared invalid since it extends beyond the term of the Commissioners who awarded it. Their argument and the cases which they cite in support thereof is a rather universal contractual rule that political corporations cannot enter into contracts which will bind successors. If this rule is to be stringently applied, then the Board of Commissioners of Lafourche Parish Water District Number One can enter into no contracts at all which could legally endure for more than twenty-four hours. There is no question that the Commissioners only serve at the pleasure of the appointing body, the Lafourche Parish Police Jury. This was clearly demonstrated when apparently the appointing authority, piqued by the action of the Board in signing this contract, summarily replaced a member to make the minority the majority-after-the-fact. An inflexible application of this contractual rule is necessarily impossible with a Board so constituted.

“The evidence submitted by the plaintiff to show the Jury’s dissatisfaction with this contract and a previous engineering contract is clearly indicative to the Court that despite the distinct possibility of summary termination of a Commissioner’s tenure, the history of the Board prior to the fateful meeting of July 7th leaned more toward longevity in its members’ tenure than a rapid turnover in appointments.

“The statutory provisions establishing water districts and making them bodies ‘corporate in law, with all the powers of a corporation, and all powers necessary for it to carry out the objects for which it was created’ necessarily include the authority to negotiate contracts which would conceivably extend beyond the tenure of the individual Commissioners.

“The Court finds no merit in that portion of Point 3 which claims invalidity of the contract because of its five year duration.

“An additional segment of this allegation contends ‘it cedes away control and embarrasses the legislative and governmental powers of the Police Jury.’ It would appear to the Court that it was the intent of the Legislature in R.S. 33:3811, et seq., to empower the Police Jury to create water districts and to delegate to these bodies corporate control of water production and distribution in specified areas. Surely the exercise of this statutory authority by the Police Jury cannot be considered a violation of public policy. The plaintiff has argued that the contract signed with the defendant by the Water District essentially turned over the control of the District to the engineer, but the plaintiff has not by a preponderance of the evidence sustained this allegation. The engineer, under the terms of the contract, agrees to perform those professional services ‘authorized’ by the District and all phases of the contract require submission to the District for review and approval of the work suggested by the engineer. Nowhere does it appear that by signing this contract the District has improperly divested itself of the authority delegated to it by the governing authority.

“It is true that there was testimony from a member of the Police Jury that he and possibly some other Jurors who did not testify were not favorably inclined to the engineering contract executed by the District, but it is equally clear that if the majority of the members of the Police Jury felt that the Commissioners were acting improperly and usurping their authority, they had a totally adequate remedy at any time. The law clearly provided that the Commissioners served at the pleasure of the governing authority. At least through July 7, 1975, the Police Jury members had chosen not to evidence their displeasure and therefore the Court cannot assume that the Police Jury was ‘embarrassed’ by any alleged abuse of power on the part of the Board of Commissioners. As a matter of fact, from the transcript of the Minutes filed, the Police Jury was aware for several months before the signing of the contract that the Board intended to function as the body corporate, which it was, and to exercise the power to carry out the objects for which it was created, employing its independent judgment. If the answer that the board made to the February Resolution of the Jury displeased it or created in it the impression that the Board was exceeding its authority, the Jury had ample time to express its displeasure by removing the offending members.

“Accordingly, the Court finds no merit in this allegation of invalidity.

“4. THE CONTRACT IS NULL AND VOID SINCE IT WAS LET ON A COST-PLUS BASIS IN VIOLATION OF THE LOUISIANA PUBLIC CONTRACTS LAW.

“Plaintiff bases this allegation of nullity on the provisions of R.S. 38:2217, which provides:

‘No contract shall be let on a cost-plus basis.’

This section is found in Part II of Chapter 10 of Title 38 of the Revised Statutes. Title 38 deals with Public Contracts, Works and Improvements, Chapter 10 thereof is entitled ‘Public Contracts,’ and Part II of Chapter 10 is entitled ‘Letting Contracts,’ and as such constitute the statutory requirements for the letting of public work.

“Plaintiff maintains that the above quoted section, 38:2217, is clear and unambiguous and applies to all public contracts without exception and that the only issue before the Court is to determine ‘whether the Heck contract is cost-plus in nature.’

“Defendant on the other hand argues that there are two issues to be considered by the Court, namely, are contracts of water districts subject to the proscription of cost-plus contracts and, if so, is the Heck contract cost-plus in nature.

“Let us, therefore, examine the contract from the basis of ‘cost-plus.’ Admitting that there were no reported cases specifically interpreting R.S. 38:2217, plaintiff cited Standard Oil Company of Louisiana v. Fontenot [198 La. 644], 4 So.2d 634 (1941), for an analysis by the Louisiana Supreme Court of the nature of a cost-plus contract. In that case the Supreme Court stated that there were three types of contracts that an independent contractor could enter into: a lump sum, a cost-plus-a-fixed-fee, and cost-plus-a-percentage-of-the-cost. The court pointed out that in the latter two the contractor ran no risk of losing since this risk could exist only in the lump sum contract. While this case is not determinative of the legislative definition of ‘cost-plus,’ it is interesting to note that the court said:

‘[* * *] In all three types of contracts, however, the contractor is certainly an independent contractor, if the provisions of the contract make him so and do not in any way indicate or state that the parties intended that it was a contract of employment or agency or that the contractor was an instrumentality of the Government. In all of the above cases, the contractor operates his business for his own profit and gain. He is not performing governmental functions and has no authority to, in any way, bind the owner or Government either for the purchase of the materials or for the hiring of labor.’ ([4 So.2d at 643 — ] Emphasis supplied by the Court)

It would appear, therefore, that in this case cited by plaintiff the Supreme Court has distinguished a ‘contract of employment’ from contracts entered into by a governmental agency at arm’s length with an independent contractor.

“As defendant pointed out in his brief, ‘A cost-plus contract is one where the contracting party receives all of the costs and also the plus.’ In the Standard Oil Company of Louisiana case, supra, the Supreme Court opinion emphasized this point by hyphenating the titles of such jobs indicating the connection between the cost-plus-a-fixed-fee or the cost-plus-a-percentage-of-the-cost. It appears, therefore, that a true cost-plus contract requires that the contractor receive not only the ‘plus,’ but also the ‘cost.’ On examination of the compensation portions of the contract in question, Article III of the Heck contract indicates that at least for the basic services on the preliminary phase, the design phase, and the construction phase the defendant receives only the ‘plus,’ which is determined as a percentage of the cost which he does not receive, but which goes to whatever contractor is awarded the job.

“In compensation for ‘Special Services,’ however, the defendant would receive by this contract the cost (Heck’s salary costs) plus a multiplier of 1.5 and, therefore, he receives for this service both the cost and the plus, and this section is indeed ‘cost-plus.’ Again, in the section designated as ‘Direct Non-Salary Expenses’ the defendant receives his ‘cost’ (living and traveling expenses, programming costs, et cetera) plus a 15% service charge, which again, accepting our definition of ‘cost-plus,’ makes this section also cost-plus.

“This determination that two of the five compensation sections are ‘cost-plus’ raises the question as to whether or not these ‘cost-plus’ sections taint the entire contract and render it invalid. It is an interesting question, but not one which requires an answer from this Court because it appears to the Court that the second issue raised by defendant, i. e., the applicability of the cost-plus prohibition to this contract, is controlling. It is the Court's opinion that R.S. 38:2217 does not apply to the engineering contract in question and, therefore, the Court need not determine whether the minor ‘cost-plus’ features of the contract render the entire contract invalid.

“The Court has reached this conclusion, however, for a reason other than that suggested in defendant’s brief. The defendant contended that the source law of R.S. 38:2217 was Act 73 of 1926 and, since that act did not include water districts in its title, it had no application to this type of political subdivision. In its rebuttal plaintiff correctly pointed out that while the 1926 Act did not refer to water districts, it was amended in 1935 by Act 20 at the Fourth Extraordinary Session of the Legislature to include all political subdivisions of the State.

“However, it is the title of this Act that indicates to the Court that consultant or engineering contracts of the type here in question are excluded from the ‘cost-plus’ prohibition of R.S. 38:2217. The 1935 Act, in bringing water districts within the purview of the Public Contract Law, defined the legislative intent to include:

‘An Act relative to the proper letting of contracts for the purchase of materials or supplies, or the doing of public work, by the parochial, municipal and other public corporations and political subdivisions of the State; providing the method of letting such contracts; prescribing a penalty for the violation of the provisions hereof; and repealing all laws or parts of laws, general or special, in conflict herewith.’ (Emphasis supplied by the Court)

It appears, therefore, that the contracts contemplated by the Legislature were for ‘the purchase of materials or supplies or the doing of public work.’

“R.S. 38:2217 is a re-statement of Section 7 of Act 73 of 1926 and, therefore, applies to the purchase of supplies or the doing of public work. Since obviously the Heck contract was not for the purchase of materials and supplies, it can only come under the proscription of R.S. 38:2217 if it is for the ‘doing of public work.’ Fortunately for the Court, the Supreme Court of Louisiana for the first time defined the term ‘public work’ in Wallace Stevens, Inc. v. Lafourche Parish Hospital District # 3, 323 So.2d 794, 796 [La.1975]. The Court said:

‘While the courts of other jurisdictions have thus defined the term public work, this Court has not as yet spoken on the subject. From the statutory language, however, it appears that the term means a building, physical improvement, or other fixed construction. It does not include telecommunications services that may be provided in a building or in connection with its use.
‘By the great weight of authority, public utility service contracts are not within the intendment of statutory bid requirements. (Numerous citations)’

To this Court the message of this case is clear. ‘Public work’ refers to physical construction and an engineering contract for engineering services is consultant and professional in nature and not a contract for ‘a building, physical improvement, or other fixed construction.’

“Inasmuch as the Heck contract was not for the purchase of materials or supplies and not for the doing of public work, we conclude that the ‘cost-plus’ proscription of R.S. 38:2217 is inapplicable to this contract.

“It may be well to note in passing, since considerable time was devoted by counsel for both sides to discussing the pro’s and con’s of the A.S.C.E.-Manuals & Reports on Engineering Practice-No. 45, which was introduced in evidence as Exhibit D-13, that this would appear to be the Bible of the engineering set. Defendant devoted considerable argument to extolling the qualities of this manual and plaintiff in rebuttal noted in discussing the ‘Direct Non-Salary Expenses’ section of the contract that ‘this is the only provision in the contract that refers to the A.S.C.E. Manual and merely copies verbatim language from the manual.’ This statement is not entirely accurate. An examination of the contract in question indicates that Article II-Section A can be found on page 11 of the manual, Article II-Section B on page 12, Article II-Section C on page 12, Article II-Section D on pages 13 and 14, Article III-Section A on pages 26, 27, and 31, Article Ill-Section B on pages 22 and 23, and Article Ill-Section D on page 23 of the manual. It would appear, therefore, that the contract in question is almost as basic an engineering contract as the standard notarial forms used by lawyers for sales and mortgages, and if these engineering contracts are invalid because of form, the courts can prepare for an onslaught of cases involving such contracts.

“5. THE CONTRACT IS NULL AND VOID SINCE IT WAS LET WITHOUT COMPETITIVE BIDDING IN VIOLATION OF LOUISIANA PUBLIC CONTRACT LAW.

“Plaintiff maintains on this point that R.S. 38:2211 ‘establishes the guidelines for the advertisement and letting of contracts by any public corporation or political subdivision of the State, and in particular, requires competitive bidding.’ Plaintiff correctly stated that the contract in question was stipulated as having been let without benefit of competitive bidding. Because of this it argues the invalidity of even this contract for consultant services. In support of this contention plaintiff cites the case of Louisiana v. McIlhenny [201 La. 78], 9 So.2d 467 [1942], as a case of first impression on this question and conceded that it held that the contract was not void since it was one for the employment of professional services for which competitive bidding was not required.

“The plaintiff, however, further contends that this 1942 case was [held to have been] legislatively overruled in the 1972 case of Fisher v. State, Through Department of Labor, 265 So.2d 817 [La.App. 3rd Cir. 1972]. The Court has read with interest the Mcllhenny case where in 1942 the Supreme Court of Louisiana declared that contracts for personal service of professional character calling for technical skill and experience of a high degree were not covered by the competitive bid law, and with equal interest the 1972 Fisher case in which, according to the plaintiff, the Third Circuit declared that the Mcllhenny case had been legislatively overruled. It is true that in the Fisher case the Third Circuit, in discussing the Mcllhen-ny case, stated:

‘Thus, it would appear that the legislature consciously provided against such a result as occurred in the Mcllhenny case, supra. The statutes clearly make advertisement mandatory, and where such advertisement procedures are not followed, such contracts are declared to be void ab initio and of no effect under the terms of LSA-R.S. 39:191.” [265 So.2d at 820]

This Court must agree with defendant’s interpretation and its distinguishing of these two cases. It is also true that in the Fisher case the appellant had urged that he fell within the Mcllhenny case where the Supreme Court had declared that the contract was not void ‘since it was one for the employment of professional services, and such contracts for professional services are generally and almost universally regarded as not being subject to usual advertisement and bid requirements, because of the expertise and professional skills involved,’ and that the Third Circuit found no merit in this contention. But a careful reading of the Fisher case creates the impression in this Court that the Third Circuit in finding no merit in Fisher’s contention that his contract was exempt from the usual advertisement and bid requirements is as logically a determination that the Fisher court did not feel that Fisher’s services could be classified as falling into the category of ‘expertise and professional skills.’ What the Fisher case did definitely hold, citing Conley v. City of Shreveport, 216 La. 78, 43 So.2d 223 [1949], and Labit v. Terrebonne Parish School Board, 49 So.2d 431 [La.App. 1st Cir. 1950], was that the Legislature in adopting Act 370 of 1952 made advertising for public contracts mandatory and not discretionary. This Court does not feel that this 1952 legislation or the Fisher ease additionally removed contracts for professional services from the exemption to the competitive bid law.

“At any rate, the 1975 Supreme Court case of Wallace Stevens, Inc. v. Lafourche Parish Hospital District # 3, 323 So.2d 794 (referred to as controlling on Point Four) is also controlling on this point. Plaintiff, in its interpretation of the Fisher case in its brief, stated that the Fisher case now clearly reflects the present rule of law in Louisiana and requires contracts for consultant services to be let on the basis of competitive bidding and maintains that its interpretation is consistent with the purpose of the Public Bid Law as declared by the Supreme Court of Louisiana in Boxwell v. Department of Highways [203 La. 760], 14 So.2d 627 [1943], but in the 1975 Stevens case the Supreme Court clearly stated:

‘The Public Bid Law is a salutary provision designed to protect the public fisc from favoritism and exorbitant costs. Boxwell v. Department of Highways, 203 La. 760, 14 So.2d 627 (1943). The statute, however, does not apply to every contract of a governmental agency.
‘To fall within the above statute, a public corporation or political subdivision must either have a “public work” to be done exceeding $2500, including both labor and materials, or purchase “materials or supplies” exceeding the sum of $1000. Otherwise, there is no requirement for public bids.’ [323 So.2d at 795]

“To this Court this declaration is very clear. The Public Bid Law applies only to the purchase of materials or supplies or the doing of public work. Since it is clear, as the Court stated in Point Four, that this contract was not for the purchase of materials or supplies nor could it be construed to fall within the definition of ‘public works,’ as defined for the first time in this Stevens case, there was no requirement that the engineering contract executed on July 7th be let only after competitive bidding and we must, therefore, hold that the absence of competitive bidding in awarding the contract to defendant did not make the contract invalid.

“6. THE CONTRACT IS NULL AND VOID SINCE IT WAS LET ON AN EXCLUSIVE BASIS THEREBY CREATING A MONOPOLY AND RESTRAINING TRADE IN VIOLATION OF LOUISIANA LAW.

“In support of this allegation plaintiff argues that the action of the Water District Board of Commissioners on July 7, 1975, in signing an exclusive engineering contract with defendant was beyond the scope of its authority since it had not been granted the express power to award such a contract. In furtherance of this position it maintains that an exclusive engineering contract is tantamount to the granting of a monopoly in restraint of trade and violates Louisiana law. Plaintiff contends that the prevailing rule prohibiting political subdivisions from granting such an exclusive privilege or monopoly unless expressly permitted by legislative fiat was expounded by the Louisiana Supreme Court in discussing the authority of municipal corporations. Plaintiff also cites many common law authorities to the same effect and concludes that the Lafourche Parish Water District was never empowered with such extraordinary powers.

“To accept this theory, however, the Court must agree that awarding an exclusive engineering contract is

“a) the granting of extraordinary powers, and,
“b) required an express delegation of such power by the Legislature.

“The Court has read with interest the cited authorities, but cannot accept either position. It does not seem in any way extraordinary for a Board of Commissioners, not required to be qualified engineers, to sensibly employ the services of trained experts to assure that the mandate of the governing authority in creating the Water District is properly carried out to achieve its purpose. Nor does the Court agree that there must be an ‘express’ delegation of authority to negotiate such a contract of employment.

“As part of the authority granted by the Legislature to the governing authority of Lafourche Parish to create water works districts within its geographical limits the Legislature specifically provided in R.S. 33:3815 that:

‘Any waterworks district thus created and named or numbered by a police jury shall constitute a body corporate in law, with all the powers of a corporation, and all powers necessary for it to carry out the objects for which it was created.

An engineering contract to assure that the water works system operated by the Board of Commissioners is an adequate system that functions properly seems to this Court to be a basic matter and not an unexpected or extraordinary situation. The maintenance of the water works system through the guidance of a competent engineering firm appears to this Court to be the delegation by the Board of Commissioners of a proprietary function and not a governmental function.

“Defendant in its brief cited for the Court the case of Stone v. Police Jury of Parish of Calcasieu [226 La. 943], 77 So.2d 544 [1954]. In that case the dispute was over the right of the governing authority to grant an exclusive limousine franchise in connection with the operation of its airport terminal. The Supreme Court, after acknowledging that police juries under the laws of this State have no powers except those delegated to or conferred upon them by the Legislature, enumerated the powers granted to political subdivisions establishing airports, none of which expressly covered the granting of a limousine franchise. In affirming the Police Jury’s authority to make a contract for exclusive rights of limousine service, the Court said:

‘It is clear from the above provisions that the powers there delegated to the various political subdivisions were conferred on them not primarily in their capacity as agents of the State for governmental purposes, but rather as organizations to care for local needs in a private or proprietary capacity; ... it necessarily follows that all incidental powers are fairly implied which are necessary to perform such functions in the same efficient manner as would a private person .. [I]t would be unwarranted to hold that the Police Jury of Calcasieu Parish did not have the power to make contracts to insure the performance of these services. In the absence of a showing of fraud, oppression or gross abuse, we will not substitute our judgment for that of the body authorized by statute to conduct the operation of the airport, see Caz-Perk Realty, Inc. v. Police Jury of Parish of East Baton Rouge, 213 La. 935, 35 So.2d 860, and cases therein cited.
‘Since the Police Jury was empowered to enter into such a contract, the plaintiff’s contention that the purpose of the Ordinance was to protect a monopoly cannot be legally sustained; its object was to protect the right granted by the contract, so as to insure to the person who obligated himself to provide the service an adequate return for his furnishing of transportation facilities, proper equipment, competent drivers, and sufficient insurance to protect the public.’ [77 So.2d at 547]

This Court can think of no better way to express its appreciation of the power of the Water District to enter into an exclusive engineering contract than by adopting the reasoning of the Supreme Court in the Stone case.

“This allegation of invalidity is also without merit.

“7. THAT IN THE ALTERNATIVE, AND ONLY IN THE EVENT THAT THE COURT DECLARES THE CONTRACT TO BE VALID AND BINDING, PETITIONER ALLEGES THAT THE CONTRACT IS NOT AN EXCLUSIVE CONTRACT THEREBY PERMITTING THE WATER DISTRICT TO EMPLOY A STAFF ENGINEER OR OTHER ENGINEERING FIRMS TO DO THE WORK DEEMED NECESSARY BY THE WATER DISTRICT.

“Inasmuch as the Court has overruled the previous allegations of invalidity argued by plaintiff, it is necessary to pass on this alternative request that the contract be deemed non-exclusive. A reading of the contract would suggest otherwise. The contract states in its preamble, ‘WHEREAS, the services of an Engineering Firm are needed to assist with the projects ..’ (Emphasis supplied.) This does not say engineering firms are needed, but specifically indicates an intent with the word ‘an’ to limit to a single firm. Additionally, the testimony of the Water District Commissioners at the trial, the verbatim transcripts of meetings prior to the meeting of July 7th, 1975, and the ‘pre’ and ‘post’ contract actions of the Police Jury all indicate to this Court a clear intent to enter into an exclusive contract with the defendant. Supplementing this is the lack of any evidence or testimony whatsoever to indicate that plaintiff contacted any other firms or executed with anyone else a similar contract covering the same five year period.

“Finally, if it was not intended to be exclusive, but was merely a ‘guideline’ contract, why is it necessary to seek the cancellation thereof? Perhaps the answer is found in the contract itself, which also points to the exclusive intent of the Water District since it states that it ‘is desirous of obtaining Engineering Services in connection with the planning, design, and construction of all public improvements . . ’ (Emphasis supplied.) Article II of the contract which covers the services for which the District has contracted is certainly comprehensive in its scope, and Article VIII prohibits the assignment of any rights or interest by either party without a written agreement. Surely if it had not been intended to be an exclusive contract there would have been no necessity to secure the defendant’s approval to assign similar work to another engineering firm.

“In the opinion of this Court the contract must be considered exclusive and this alternative plea is also denied.”

The plaintiff urges on appeal that the trial court erred in rejecting each of its seven contentions. After a careful review of the facts and law in the case in point, we conclude that the judgment of the trial court as to the validity and the exclusive nature of the contract is correct for the reasons set forth in the written reasons.

The plaintiff also contends that the trial court erred in assessing court costs against the plaintiff in contravention of La.-R.S. 13:4521, which provides:

“Except as hereinafter provided, neither the state, nor any parish, municipality, or other political subdivision, public board or commission shall be required to pay court costs in any judicial proceeding instituted or prosecuted by or against the state or any such parish, municipality or other political subdivision, board or commission, in any court of this state or any municipality of this state, including particularly, but not exclusively, those courts in the Parish of Orleans and the City of New Orleans. This Section shall have no application to stenographers’ costs for taking testimony. As amended Acts 1964, No. 509, § 1.”

La.-R.S. 13:4521 clearly relieves the Water District, as a public commission, from liability for court costs except those costs relating to the taking of testimony by the stenographer.

Therefore, the judgment of the trial court is affirmed, except to the extent it is amended to relieve the Water District of payment of the court costs, except for the aforesaid stenographic charges.

This minor amendment in no way detracts from the comprehensive, well-reasoned decision of the trial judge whom we compliment for his excellent analysis of the law and clarity of writing.

The costs of these proceedings are assessed to the plaintiff only to the extent permitted by law.

AMENDED AND AS AMENDED, AFFIRMED.

      . R.S, 33:3815.


text:
    Joel MESSER v. DEPARTMENT OF CORRECTIONS, Louisiana STATE PENITENTIARY.
    No. 11318.
    Court of Appeal of Louisiana, First Circuit.
    May 9, 1977.
    Rehearing Denied June 13, 1977.
    Hobart O. Pardue, Jr., Springfield, Phillip T. Hager, New Orleans, for appellant Joel Messer.
    Thomas H. Matuschka, Baton Rouge, for appellee.
    Before LANDRY, EDWARDS and COLE, JJ.
   COLE, Judge.

This appeal was fixed for argument and all attorneys of record were notified. At the time scheduled for argument, the appellant was not present or represented, nor had any brief been filed on behalf of appellant, nor had any motion been filed for continuance.

On authority of Rule VII, Section 5(b), this Court, ex proprio motu, considers said appeal as abandoned; therefore, it is ordered that this appeal be dismissed with prejudice.

APPEAL DISMISSED..


author: CLAIBORNE, Judge.

text:
    R. S. ELECTRIC & ARMATURE WORKS v. GEORGE ENGINE CO., INC., et al.
    No. 11082.
    Court of Appeal of Louisiana, First Circuit.
    May 9, 1977.
    Rehearing Denied June 13, 1977.

      Stanwood R. Duval, Jr., Duval, Arcen-eaux, Lewis & Funderburk, Houma, for plaintiff and appellee.
    Wm. S. Poole, Jr., Adams & Reese, New Orleans, George V. Baus, New Orleans, and John J. Erny, Jr., Larose, for defendants and appellants.
    Before LANDRY, COLE and CLAIBORNE, JJ.
   CLAIBORNE, Judge.

This is a suit for $49,370.93 allegedly due on open account for electrical work performed by the plaintiff on a vessel constructed by Larose Shipyard, Inc., for George Engine Company, Inc. both made defendants.

On December 5, 1973, a contract was entered into by the defendants under which Larose was to construct a pushboat for George according to certain plans and specifications prepared by the latter. The plaintiff was hired by Larose to do the electrical work on the vessel and it did so. At the completion of the job, R. S. Electric remained unpaid.

Suit was originally filed against Larose and George, and later the petition was amended to add Leroy J. Delgrandile, Sr., president of Larose; as a defendant. After trial on the merits, judgment was rendered in favor of the plaintiff against Larose and George, in solido, but was dismissed as to Delgrandile, as to whom issue had never been joined. Only George has appealed, contending that it should not be held liable with Larose. As appellant does not complain about Delgrandile’s dismissal, the only issue before the Court is the liability of George.

It is clear that the plaintiff performed the electrical work and was not paid and that it should have judgment against La-rose who hired it to do the electrical work on the vessel.

The contract between Larose and George contains these provisions:

“THIS CONTRACT, made and entered into as of the _ day of _, 19_, by and between LAROSE SHIPYARDS, INC., a corporation organized and existing under the laws of Louisiana, having a principal place of business at Larose, Louisiana (hereinafter referred to as “SUB-CONTRACTOR”), and GEORGE ENGINE COMPANY, INC., having its principal place of business in Harvey, Louisiana, (hereinafter referred to as “BUILDER”).

George intended immediate sale of the vessel to a third party upon completion.

The theory of the plaintiff’s case as to George is that, despite the terms of the written agreement, Larose was really not an independent subcontractor, and that in hiring the plaintiff Larose acted as agent for George, thus subjecting George to liability for the amount owed.

In a thorough and well-reasoned opinion, the trial court found that George exercised control and supervision over the job to such an extent that Larose was its agent, not an independent contractor. We find that the record fully supports that conclusion.

Counsel have cited cases which set forth the rules regarding the distinction between an independent contractor and an employee or servant. Shelton v. Barber Brothers Company, 94 So.2d 489 (La.App. 1st Cir. 1957); Verrett v. Houma Newspapers, Inc., 305 So.2d 547 (La.App. 1st Cir. 1974). These cases include among the characteristies or tests of an independent contractor relationship the following:

1) existence of a contract between the parties;
2) a specific piecework as a unit to be done according to the contractor’s own methods, without being subject to the control and direction,' in the performance of the service, of the employer, except as to the result;
3) a specified and fixed price;
4) duration for a specified time and not subject to termination or discontinuance at the will of either party without a corresponding liability for its breach.

The greatest of these is held to be the absence of control of the work exercised by the employer. In this regard the right of control, rather than the actual control exercised, has repeatedly been considered the important criterion. Thus if the employer has the right of control it is immaterial that the right is not exercised or that there is no actual supervision of the work. On the other hand, the right to control may be inferred from the actions of the parties with respect to actual supervision and control. An employer who has exercised control and supervision of the work cannot characterize the relationship as one of employer and independent contractor simply because the written contract did not specifically authorize such control.

While we are not here concerned with the distinction between the master-servant relationship and the employer-independent contractor relationship but rather with the distinction between the latter relationship and agency, the tests are similar. In 2A C.J.S. Agency § 12, pp. 570ff the comparison is stated thus:

Generally speaking, whether a person is an independent contractor or an agent is determined by the same rules as those applicable in determining whether he is an independent contractor or an employee or servant, and by the general principles of agency. There are various tests which may be invoked, and a number of factors to be considered, and each case must be decided on its particular facts.
Right to control work. Whether the employer has the right to control the details of the work is the usual test for determining if the relationship is that of principal and agent or employer and independent contractor, and this is the most important factor to be considered.
* * * * * *
Where one who performs work for another represents the will of that other, not only as to the result, but also as to the means by which the result is accomplished, he is not an independent contractor but an agent; and the relationship is one of agency when the employer reserves control and an interest in the performance of the work other than the finished product, or where the contract shows a recognition of the responsibility of the employer for obligations incurred by the other party.

The written contract in the case at bar on its face provides for a specific piece of work at a fixed price, and it is not subject to termination or discontinuance by either party. Both the work and price are made subject to amendment by change order. (As a matter of fact various change orders were made.) With respect to supervision and control the contract provides:

SUB-CONTRACTOR will furnish reasonable space at its yard for the duly authorized representative of BUILDER who shall have reasonable access to the work of SUB-CONTRACTOR. BUILDER’S representatives shall promptly inspect and accept all workmanship and material which is in conformity with the contract specifications and contract plans and shall, with equal promptness, reject all workmanship and material which does not comply with the contract specifications and contract plans provided that the acceptance of such workmanship and material by BUILDER’S representative shall not prejudice the rights of PURCHASER under the provisions of ARTICLE VII hereof.

While the contract provision does not necessarily contemplate supervision to an extent greater than expected from an architect, clerk-of-the-works or other owner’s representative, the actual control exercised by George exceeded mere inspection and acceptance of workmanship and material for conformity with contract specifications. From the actions of the parties as well as the direct testimony of Larose personnel it must be concluded that such supervision and control by George was contemplated and intended by the parties.

The evidence shows that George’s judgment was final on all questions of importance. George’s personnel were highly qualified and possessed superior technical knowledge recognized by Larose’s personnel. Although personal on site visits to Larose’s yards were made only from three to five times a month, frequent telephone conferences were initiated by Larose personnel for advice upon the means of resolving occasional problems encountered. George personnel sometimes required that part of the work be re-done in a different manner although the work was not shown to fail to comply with specifications. As stated by the district court, “George may have claimed that Larose was an independent contractor, but insofar as its relationship with plaintiff was concerned, there was, as adduced by the testimony of George’s own personnel, a definite and substantial supervision by George of the work as it progressed. When decisions were to be made George made the decisions.”

Not only did George personnel virtually take over control of the means of performance but they assumed a proprietary right in the project long before the boat was in fact completed, and when it appeared that Larose was not paying other suppliers and sub-contractors, George paid them directly. One of these payments was made jointly to Larose and Marine Engineering, Inc., but other payments were made without prior consultation with Delgrandile and were apparently made to forestall the possibility of lien filings against the boat. Some payments were made for insurance coverage.

When the vessel was near completion George filed with the United States Coast Guard 1) a Master Carpenter’s Certificate and 2) an Application for admeasurement. A signature blank on the latter with the indication it was to accommodate the signature of the “owner, builder or agent”, was signed, “Larose Shipyards, Inc. by: Leory J. Delgrandile, H.J.L., ITS PRESIDENT”. The initials H.J.L. are those of one of George’s employees who signed for Del-grandile. The application for admeasurement was signed and submitted without Delgrandile’s prior or contemporaneous knowledge. This basic documentation of the vessel was essential to delivery of the boat to the ultimate purchaser.

Delgrandile, who expected to use the Master Carpenter’s Certificate (which he called a “release” of the vessel) as assurance of payment, claimed he did not realize he had signed this document in blank at the time of the contract signing. No improper motive in the handling of documentation was suggested by plaintiff or Larose, but it demonstrates that George with the consent of Delgrandile (perhaps unwitting) intended from the outset to have control over possession of the vessel upon completion without tender of delivery for acceptance. George had physical possession of the pushboat pri- or to its completion and acceptance when after trials it was determined that the vessel should be taken to Avondale Shipyards for the purpose of correcting a defective rudder shaft installation. The work done at Avondale was wholly beyond the control of Larose.

Finally, there is conflicting testimony with regard to the engagement of plaintiff’s services for the electrical work. Del-grandile testified that he was required to obtain prior approval from George before hiring R. S. Electric, and that George gave its approval. One of George’s employees testified he had no prior knowledge of La-rose’s choice of electrical contractor. Another testified that he had foreknowledge, but that George was not consulted for approval nor was such approval necessary. The district court apparently resolved the credibility question by concluding, as follows: “It is true that Larose hired plaintiff, but it is equally true that it was only done with the approval of George and on behalf of George”. As pointed out by the district court, there may be (and probably are) differences to be resolved between Larose and George which were not placed before the court by third-party pleading, but “insofar as plaintiff was concerned, Larose was not an independent contractor, but acted as George’s agent”.

The judgment of the District Court, with whose conclusions we agree, will be affirmed, all costs of this appeal to be paid by the appellant.

Affirmed.


author: SARTAIN, Judge.

text:
    Harry L. SMITH, Jr., Plaintiff-Appellant, v. QUALITY TRANSPORT, INC. et al., Defendants-Appellees.
    No. 11202.
    Court of Appeal of Louisiana, First Circuit.
    May 9, 1977.
    Rehearing Denied June 13, 1977.

      Arthur J. Cobb, Baton Rouge, of counsel for plaintiff-appellant.
    William C. Kaufman, III, and James H. Morgan, III, Baton Rouge, of counsel for defendants Quality Transport, Inc., et al., appellees.
    Robert D. Hoover, Baton Rouge, of counsel for the intervenor United States Fidelity & Guaranty Co., appellant.
    Before SARTAIN, COVINGTON and LOTTINGER, JJ.
   SARTAIN, Judge.

This is a personal injury action arising out of a multi-vehicle accident which occurred on U.S. Highway 61 (Airline Highway) south of Baton Rouge on May 30, 1974. The collision involved a late model pickup truck driven by plaintiff-appellant, Harry L. Smith, Jr.; a tractor-trailer rig driven by defendant-appellee, Donald G. Warner, and owned by defendant-appellee, Quality Transport, Inc. (Quality); and a tractor-trailer rig driven by Hershel E. Kysar and owned by Matlack Trucking, Inc. (Matlack).

Plaintiff brought suit against Warner, Quality and Quality’s liability insurers, Protective Insurance Company and American Re-Insurance Company. United States Fidelity & Guaranty Co. (USF&G), workmen’s compensation insuror of plaintiff’s employer, H. L. Smith, Inc., intervened, seeking recovery against defendants for payments made to plaintiff under the policy.

Following trial on the merits, a jury rendered a verdict in favor of the defendants, dismissing plaintiff’s suit and USF&G’s intervention. Plaintiff and intervenors have appealed from that verdict.

There is little dispute as to how the accident generally occurred. Warner was driving the Quality truck in the outside northbound lane of the highway at about 50 to 55 m. p. h. behind and in the same lane as the Matlack truck, driven by Kysar. The Mat-lack truck was travelling at 45 to 50 m. p. h., having slowed to allow an auto travel-ling ahead of him to turn off the highway. Plaintiff was. driving in the inside northbound lane at a rate of speed faster than either of the tractor-trailer rigs. As plaintiff passed the Quality truck, the two vehicles made contact, with the left front bumper of the Quality truck meeting the right rear bumper of plaintiff’s pickup truck. The force of this initial collision caused plaintiff’s truck to veer out of control and collide with the side of the Matlack truck driving ahead. From there, plaintiff’s truck careened onto the wide median separating the north and south bound lanes of the highway, where it came to rest.

The pivotal issue we must now face is: did the initial collision between plaintiff’s truck and the Quality truck occur in the inside or the outside lane of travel.

Plaintiff maintains that the Quality truck drifted into plaintiff’s lane of travel as plaintiff was passing; while defendants, on the other hand, deny these allegations and assert that it was plaintiff who drifted into defendant’s lane of travel. Both plaintiff and defendant Warner testified that the accident occurred in his respective lane; but neither saw the other actually cross into the wrong lane prior to the collision. Plaintiff testified that he felt control of the vehicle being taken away from him as he passed the Quality truck and that the rear end of his truck began being lifted up. He remembers nothing else after that. Warner testified that he did not see plaintiff’s truck before the collision, that he did not see the collision until he heard it, and that plaintiff came out of nowhere to hit him. He said that he was in his proper lane when the collision occurred.

Kysar, driver of the Matlack truck, did not see the collision between plaintiff’s and defendants’ trucks, and was not aware of the accident until immediately prior to the impact of plaintiff’s pickup truck with the cab of the Matlack truck. At that point he saw plaintiff’s truck about to collide with him.

Trooper Tullier, who investigated the accident, testified that he was unable to determine which lane the vehicles were in when the first impact occurred.

Due to the absence of direct evidence identifying the lane in which the initial collision took place, other than Warner’s testimony, both parties introduced expert testimony.

Plaintiff’s witness was Mr. Andrew J. McPhate, accepted by the court as an expert in the area of dynamics (defined by Mr. McPhate as the study of the interaction of moving objects and the forces created by that movement). His conclusion, drawn from the physical evidence available, was that the Quality truck had been moving at an angle toward plaintiff’s truck when the initial collision occurred. He could not ascertain which lane the collision occurred in, although he thought it more probable that it happened in plaintiff’s lane. Physical evidence relied upon by him were: trajectory of the pickup after the initial collision, testimony as to the speed of the tractor-trailer rig, the nature of the damage to Smith’s truck and the Quality truck as shown by photographs.

Defendants’ witness, Dr. Olin K. Dart, was accepted by the court as an expert in dynamics and accident reconstruction. He failed to find enough physical evidence upon which to conclude that the vehicles collided at an angle. He felt that the accident could have occurred in Quality’s lane of travel.

It is important to note that the conclusions were reached without benefit of certain information, namely, the speed of plaintiff’s truck at the time of the initial collision, the location of the initial collision, and the precise distance between the Quality truck and the Matlack truck at the time of the accident. Estimations of these factors were used to arrive at the stated conclusions.

Thus, it is apparent to us that there was evidence before the jury which furnished a reasonable factual basis for its verdict in favor of the defendants. The jury was required to evaluate conflicting conclusions drawn by two experts, each well-qualified in the subject matter in controversy. We must give great weight to factual conclusions of the trier of fact. Where there is conflict in the testimony, reasonable evaluation of credibility and reasonable inferences of fact should not be disturbed upon review, even though the appellate court may feel that its own evaluations and inferences are as reasonable. Canter v. Koehring Co., 283 So.2d 716 (La.1973), Hooper v. Wilkinson, 252 So.2d 137 (La.App. 3rd Cir., 1971).

Plaintiff appellant asserts that the trial judge erred in failing to instruct the jury as to the purpose of the Louisiana statute which reduced the previous 70 m. p. h. speed limit to 55 m. p. h. He asserts that had the jury received this instruction it could have applied the correct law of the case, the duty-risk test of negligence, more appropriately. There exists no requirement in the law that the jury be instructed as to the purpose of a statute, the violation of which is an issue in the case. Plaintiff asserts that failure to give this instruction caused the jury to believe that plaintiff was under a statutory duty to obey the posted speed limit and that a violation of that duty rendered him negligent per se. There is nothing in the record to suggest that the jury deliberated under this assumption. Further, the jury was instructed adequately on the issue of plaintiff’s contributory negligence. Requested instructions are properly refused when the subject matter is irrelevant or sufficiently covered elsewhere in the charge. Darbonne v. Southern Farm Bureau Casualty Ins. Co., 300 So.2d 506 (La.App. 3rd Cir. 1974). Thus, we find no manifest error in the jury’s verdict.

For the above and foregoing reasons, the judgment of the district court is affirmed at appellant’s cost.

AFFIRMED.


text:
    Reginald JONES, Jr., et al., Plaintiff s-Appellants. v. Dewey W. BUTLER et al., Defendants-Appellees.
    No. 11212.
    Court of Appeal of Louisiana, First Circuit.
    May 9, 1977.
    Rehearing Denied June 13, 1977.
    Joseph A. Gladney, Baton Rouge, of counsel, for plaintiff Reginald Jones et al., appellants.

      J. Huntington Odom, Baton Rouge, of counsel, for defendant Dewey W. Butler et al., appellee.
    Before SARTAIN, COVINGTON and LOTTINGER, JJ.
   SARTAIN, Judge.

This is a suit for money loaned to the defendants by Mrs. H. E. Moise. Plaintiffs, as the heirs and legatees of Mrs. Moise, appeal from a judgment sustaining defendants’ peremptory exception of prescription. We reverse.

The issue here presented is whether the applicable prescriptive period is three years under C.C. Art. 3538 or ten years under C.C. Art. 3544. The facts are not in dispute.

On January 10, 1967, Mrs. Moise issued a check to Dewey W. Butler in the amount of $2,000.00. On the face of the check is contained the notation “loan.” On the same date, Mr. Butler and his wife, Marjorie M. Butler, signed the following:

“1/10/67
“To whom it may concern:
This is to acknowledge receipt of a $2,000.00 loan from Mr. and Mrs. H. E. Moise, this date, to be made as down payment on house to be purchased by the undersigned. Térras of loan will be established at a later date to the satisfaction of the lender.
Dewey W. Butler
Marjorie M. Butler”

Suit was instituted on September 16, 1975.

Defendants’ plea of prescription is based on C.C. Art. 3538, which, in pertinent part, provides:

“Art. 3538. The following actions are prescribed by three years:
“That for arrearages of rent charge, annuities and alimony, or of the hire of movables and immovables.
“That for the payment of money lent.
U # * *
“This prescription only ceases from the time there has been an account acknowledged in writing, a note or bond given, or an action commenced.”

Plaintiffs contend that the above instrument of January 10, 1967, constitutes a written acknowledgement of the debt and renders applicable the ten year prescriptive period found in C.C. Art. 3544, which states:

“Art. 3544. In general, all personal actions, except those before enumerated, are prescribed by ten years.”

In finding for the defendants, the trial judge, in his written reasons for judgment, stated:

“The exception of prescription will be sustained and plaintiffs’ suit dismissed at plaintiffs’ costs for the reasons that the document labeled as P-2 is not an acknowledgment of a pre-existing debt but part of a single loan transaction. Consequently, the instrument (P-2) is simply additional evidence or proof that money was loaned to defendants. The instruments were obviously executed simultaneously on January 10, 1967, and form part of a single transaction.
Assuming that P-2 be found to constitute a subsequent acknowledgment of the debt, this Court finds that the result would at best be an interruption of prescription and not a conversion of the action to a personal one as in the case of an open account.
* * * V

We find that the district judge erred as a matter of law in failing to accord to the instrument of January 10, 1967, above, the legal effect to which it is entitled.

Before addressing ourselves to the issue at hand we think it appropriate to discuss in general terms certain underlying principals pertaining to liberative prescription. C.C. Art. 3457 aptly states that: “Prescription is a manner of . discharging debts, by the effect of time, and under the conditions regulated by law.” It is a peremptory and perpetual bar to every species of action, real or personal, when the creditor has been silent for a certain time without urging his claim. C.C. Arts. 3459, 3528.

The Civil Code then proceeds to classify debts and/or “species of action” and to ascribe the appropriate time in which a creditor must urge his claim. C.C. Arts. 3534, 3536 (one year); C.C. Art. 3538 (three years); C.C. Arts. 3540, 3542 (five years); and C.C. Arts. 3544-3547 (ten years). The classification of a particular action, debt or claim, and the assignment of a specified prescriptive period are based on public policy considerations. Civil Law Translations, Baudry-Lacantinerie & Tissier, Prescription —§ 318-315.

With respect to the shorter prescriptive period, its justification and role, Planiol explains:

“When the creditor remains too long without acting, the law takes away his action. The reason for the liberative prescription is to prevent suits difficult of adjudication. In the interest of order and social peace, it is desirable to liquidate the past to avoid contests on contracts or acts as to which the titles are lost or the memory is gone. The reason for prescription in the matter of credits is therefore about the same as in the matter of property; but its role is different: while in the matter of real rights, prescription is sometimes liberative and sometimes acquisitive; in the matter of credits it never functions except as a means of extinction.” (footnote omitted) Planiol, Civil Law Treatise, Vol. 2, part 1, — § 630.

Writing on the concept of prescription, Aubry & Rau state:

“Nevertheless it is said that prescription is based on the general interest of parties in not being exposed to an action which, if well founded, should have been brought a long time before. It may become difficult or even impossible to establish by proof that the action is well founded or to show that it is not well founded. * * * ” Civil Law Translations, Aubry & Rau — Prescription, § 771.

Our appreciation of the above principals leads us to conclude that those species of actions wherein a prescriptive period is relatively short contemplate that the obligation was incurred with a minimum of formality and accordingly, a correspondingly sparcity of proof when a dispute arises as to satisfaction. Stated another way, the transactions therein contemplated are oral and cover the general broad spectrum of everyday encounters between those furnishing goods and services on the one hand (creditor) and the purchaser (debtor) on the other hand. Davis v. Houren, 10 Rob. 402 (1845). This we find particularly true with respect to C.C. Art. 3538 and the transactions therein enumerated. If it were otherwise, the last paragraph of the article relating to “an account acknowledged in writing” is superfluous.

We think the true intent of the redactors of the Code and the real sense of the article (3538) is that when an oral obligation is incurred encompassing a type of action described in the article and that obligation is acknowledged in writing, the character of the action is changed and it becomes a personal action under the general article (3544). The prescriptive period is transposed from that of three years (3538) to that of ten years (3544).

“The traditional system of French law on this point may be summarized thus: the credit is prescribable by two different delays, the one very short, if nothing happens during its duration which nullifies the legal presumption of payment; the other very long, if there has been an acknowledgment or a suit filed before the expiration of the first. One can therefore say that in such a case the interrupting act interrupts, not only the course of the prescription, but that it also produces a veritable inversion in the nature of the prescription, since the prescription applicable after the interruptive act is not the same which was applicable before. Planiol Civil Law Treatise, Vol. 2, part 1 — § 675. (Emphasis ours)

We find our jurisprudence to be in accord with this view.

C.C. Art. 3538 (formerly Art. 3503, C.C. of 1825) was amended by Act 78 of 1888, which amendment required that the acknowledgment be in writing. Prior to the amendment the courts held that a verbal acknowledgment was sufficient to replace the prescription of three years with that of ten years. James v. Fellowes & Co., 20 La.Ann. 116 (1868). Even in the case of. a written acknowledgment, the issue was not treated as one of interruption but rather as an inversion of prescription. Davis v. Houren, above; Dixon v. Lyons, 13 La.Ann. 160 (1858); Bianchin & Giraud v. C. C. Pickett, 21 La.Ann. 680 (1869).

In Henry Block Co. v. Papania, 121 La. 683, 46 So. 694 (1908), the court was first called upon to interpret the significance of Act 78 of 1888 wherein the acknowledgment was required to be in writing. The court rejected the argument that an acknowledgment must be in writing to interrupt prescription. After a review of the prior jurisprudence, the court held that the Act of 1888 was not intended to preclude the verbal acknowledgment from interrupting the prescription of three years but was intended to preclude the verbal acknowledgment from substituting the longer prescription of ten years. See 14 Tul.L.Rev. 430, 431.

This view has been consistently followed in cases involving open accounts. Harman & Stringfellow v. Legrande, 151 La. 253, 91 So. 726 (1922); W. T. Rawleigh v. Thrasher, 153 So. 719 (La.App. 2nd Cir. 1934); White Brothers Co., Inc. v. Shinn, 160 So. 823 (Orl.La.App.1935); Puritan Chemical Co. v. Vernon Parish Police Jury, 178 So. 888 (La.App. 1st Cir. 1938); T. E. Mixon Lumber Co. v. Boutte, 191 So. 2d 165 (La.App. 3rd Cir. 1966); and Ragas v. Mistich, 223 So.2d 674 (La.App. 4th Cir. 1969).

The theory of inversion of prescription, however, has not been limited to open accounts. In Hotard v. Fleitas, Inc., 67 So.2d 345 (Orl.La.App.1953, writs denied Nov. 9, 1953), plaintiff’s claim was for services rendered to the corporate defendant. In rejecting the plea of three year prescription and refusing to limit the import of the above cited authorities to “accounts for goods sold”, the court stated:

“Lest it be thought that the provision found in the last paragraph of Article 3538 has reference only to claims which are based on accounts for goods sold, we direct attention to the fact that the proviso is found not immediately following those paragraphs in Article 3538 in which are listed ‘accounts of merchants’ and ‘accounts of retailers’, but is found at the end of that article with the necessary result, we think, that it has application to all of the claims listed in the article. This was the view of our Brothers of the Second Circuit as set forth in the case of Dubose v. Bosworth, Gunby’s Decisions (2 Cir. 1885) p. 39, wherein it was said that ‘all the debts mentioned in C.C. 3538 are treated as open accounts * * *.’ ”

We agree with this statement and see no justification to hold otherwise.

We now turn to the written instrument of January 10,1967, above. The trial judge fell into error when he treated this acknowledgment exclusively as an act of interruption rather than one changing the basic character of the obligation. Its legal effect as an acknowledgment in writing is not diminished because it constituted a part of a “single loan transaction.”

Defendants argue that the instrument is a “mere receipt” for the money advanced and does not constitute a contract between the parties so as to bring the obligation therein incurred within the purview of C.C. Art. 3544. Erdal v. Erdal, 224 So.2d 544 (La.App. 4th Cir. 1969); writs refused, 254 La. 815, 227 So.2d 147 (1969). This contention must be rejected.

A mere receipt has been held to have inverted the prescriptive period. Davis v. Houren, above. However, we do not choose to rest our decision on this basis alone for we are satisfied that the subject instrument is more than a mere receipt. The last sentence thereof clearly indicates that the terms of the loan were to be “established at a later date” albeit “to the satisfaction of the lender.”

Lastly, defendants argue that in the event the debt is not considered subject to the prescription of three years, then the instrument in question is a note and is prescribed in five years under C.C. Art. 3540. DeRouin v. Hinphy, 209 So.2d 352 (La.App. 4th Cir. 1968); writs refused, 252 La. 465, 211 So.2d 330 (1968). This contention must also be rejected. Again, the last sentence of the acknowledgment, to wit: “Terms of loan will be established at a later date to the satisfaction of the lender.” is significant. For an instrument to be considered a note (negotiable or otherwise), it must be payable on demand or at a fixed or determinable future time. R.S. 7:126, 184, now repealed but with similar provisions contained in R.S. 10:3-104.

Accordingly, for the above and foregoing reasons, the judgment of the district court sustaining the defendants’ peremptory exception of prescription is reversed and set aside and this matter is remanded for trial on the merits. All costs of this appeal are assessed against defendants. All other costs are to await final disposition.

REVERSED AND REMANDED.