author: LANDRY, Judge.

text:
    Mrs. Mae Savoie THIBODAUX v. Robert A. BURNS, Jr., and James J. Messmer.
    No. 10921.
    Court of Appeal of Louisiana, First Circuit.
    Nov. 15, 1976.
    Rehearing Denied Dec. 20, 1976.

      John T. Bourgeois, Thibodaux, for plaintiff and appellant.
    Jude T. Fanguy, Houma, for defendant-appellee, James J. Messmer.
    Edmund McCollam, Houma, for defendant-appellee, Robert A. Burns, Jr.
    Before LANDRY, EDWARDS and COLE, JJ.
   LANDRY, Judge.

Plaintiff Mrs. Mae Savoie Thibodaux (Appellant) appeals judgment sustaining an exception of res judicata and dismissing her action seeking recovery on a promissory note and recognition and enforcement of the vendor’s lien and mortgage securing the indebtedness, against defendants Robert A. Burns, Jr., and James J. Messmer (Appel-lees). We reverse and remand to the trial court for further proceedings.

On April 30, 1970, Appellees executed a promissory note payable to Appellant in the sum of $17,000.00, due one month from date, bearing interest at 6% per annum, from date, until paid, and providing for attorney’s fees in the amount of 20% on principal and interest in event of default. The instrument was paraphed “ne varietur” for identification with an act of sale with mortgage in favor of Appellant, which transaction was passed before Edmund McCollam, Notary Public. The mortgage and an accompanying act of correction executed before Jude Fanguy, Notary Public, were duly recorded in the records of the Clerk and Record, Lafourche Parish. The mortgage securing subject note contains the following proviso:

“. . . provided further that upon payment of ONE HUNDRED (100.00) DOLLARS first to be applied to the crude (sic) interest and the remainder to the principal, an extension of one (1) month will be granted the maker and upon like payments, like extension will be granted the maker until full and final payment.”

On July 11, 1974, Appellant filed suit on the note in the District Court, Terrebonne Parish, the action being Number 42,817 on the docket of that court. The petition recites the execution of the note by Appellees, avers the note is paraphed for identification with the act of sale with mortgage by which it is secured and alleges that no payment has been made thereon. The petition also alleges plaintiff’s desire that her mortgage be recognized and enforced but makes no reference to the above quoted payment provision contained therein. The prayer of the petition requests judgment against defendants in the sum of $17,000.00, with interest, attorney’s fees and costs, and all general and equitable relief.

Messmer answered the original suit on July 18, 1974. He admitted executing the note and mortgage but denied the full amount of $17,000.00 was then due as alleged by Appellant. He alleged punctual payment of $100.00 per month on the note, as permitted under the mortgage. He further alleged that until recently he had been making monthly payments of as much as $400.00 thereby reducing the balance due. He requested permission to pay $100.00 per month on the note into the registry of the court pending outcome of the litigation. His answer concluded with a prayer for dismissal of the suit and for all general and equitable relief.

On September 3, 1974, Burns filed an answer to the original action, coupled with a third party demand against Messmer. He admitted his execution of the note and mortgage and pled the monthly option provision contained in the mortgage. He specifically alleged all monthly payments due had been promptly paid; that some had been paid in advance; and, that at the time of suit payments on the note were well ahead. Additionally, Burns averred that on April 2, 1973, he transferred his half interest in the mortgaged property to Messmer. As third party plaintiff he prayed for judgment against Messmer for all such sums awarded plaintiff in the principal demand. Burns attached to his answer a copy of his transfer to Messmer.

Notwithstanding the foregoing answers, on September 10, 1974, Appellant filed in Suit Number 42,817, an affidavit dated September 3, 1974, alleging payments had been made on the note reducing the balance due to $12,000.00 as of the affidavit date. On September 10,1974, judgment was rendered confirming a prior preliminary default against Messmer in the sum of $12,000.00 with interest and attorney’s fees.

On September 19, 1974, Messmer moved to set aside the default judgment against him. After a hearing, judgment was rendered October 21, 1974, annulling and setting aside the default judgment rendered against Messmer.

On October 15, 1974, Appellant filed suit against Appellees alleging petitioner to be holder of the same note described in the prior action. The petition alleges the note was paraphed for identification with a mortgage which contains the hereinabove quoted payment option. Alleging that no payments were made since August, 1974, the petition claimed $11,700.00 was due and unpaid, together with interest and attorney’s fees. Appellant prayed for judgment against Appellees in the sum of $11,700.00, with 6% interest from April 30, 1970, and attorney’s fees of 20% on both principal and interest, and for recognition and enforcement of her mortgage as well as all general and equitable relief. This action bears Number 43,536 on the docket of the District Court, Terrebonne Parish.

Messmer responded to the second action by way of declinatory exception of lis pen-dens filed October 18, 1975, and predicated on pendency of Suit Number 42,817. A similar exception was filed by Burns on October 21, 1974. Both said exceptions were set for hearing on November 15, 1974.

Meanwhile, on November 6, 1974, Appellant voluntarily dismissed suit Number 42,-817, with prejudice. On March 19, 1975, Appellant moved to amend the judgment of dismissal with prejudice on the ground said dismissal was made through inadvertence and oversight. Appellant requested that Appellees be cited to show cause why the judgment of dismissal should not be so amended. This issue was never tried.

Included in the record in suit Number 43,536 is an exception of res judicata, filed November 15, 1974. The exception, however, does not name the party on whose behalf it is tendered. Attached thereto is a copy of the petition filed in suit Number 42,817 and a certified copy of the order dismissing said prior action with prejudice. On September 8, 1975, the trial court dismissed suit Number 43,536 with prejudice. No appeal was taken from this dismissal.

This present action was instituted December 15, 1975, on the same promissory note. The petition alleges no payments have been made on the note since October, 1975, and because no extensions were granted, the full balance of $8,344.51 is due with 6% interest from October 15, 1975, with attorney’s fees. Plaintiff prays for judgment in that amount and for recognition and enforcement of her mortgage.

The exception of res judicata, pled herein on December 30, 1975, is predicated on the judgment of dismissal rendered in suit Number 42,817 from which no appeal was taken.

Appellees contend that Appellant’s dismissal of her prior action with prejudice has the same effect as though the former suit were dismissed after trial of the merits in full. Therefore, according to Appellees, since the present suit is on the same note, the previous decree has acquired the authority of the thing adjudged. In support of this position, Appellees cite and rely upon LSA-C.C.P. Article 1673 which states that a judgment of dismissal has the same effect as a final judgment of absolute dismissal after trial. Appellees also cite LSA-C.C.P. Article 1841 which defines a judgment as the determination of the rights of parties to an action; which characterizes judgments as interlocutory or final; and, which provides that a final judgment is one which determines the merits of a controversy, in whole or in part. Additionally, Ap-pellees cite LSA-C.C.P. Article 1842 which provides that a final judgment is definitive when it has acquired the authority of the thing adjudged. On this basis, Appellees contend the prior judgment of dismissal with prejudice bars this present action on the same note.

Indubitably, the judgment of dismissal with prejudice rendered in the prior action is final, no longer appealable and is therefore definitive. LSA-C.C.P. Articles 1673, 1841 and 1842. Such a judgment can never be questioned by the parties to the action. LSA-C-.C. Article 3556(31).

The question, however, as regards applicability of the principle of res judicata, is whether the previous decree possesses the essential characteristics required by LSA-C.C. Article 2286 to vest it with the authority of a thing adjudged. Article 2286, above, recites that to maintain a plea of res judicata three essentials must exist, namely, the demand must be the same; the demand must be founded on the same cause of action; and, the demand must be between the same parties and formed against each other in the same quality. Moreover, the doctrine of res judicata is stricti juris and any doubt as to its applicability must be resolved in plaintiffs favor. Bullis v. Town of Jackson, 203 La. 289, 14 So.2d 1 (1943); Hope v. Madison, 194 La. 337, 193 So. 666 (1940).

Also pertinent is the rule that the nature of a suit is determined by the pleadings and prayer, not by the label put on it by the parties. Lafont v. Arabie, 132 So.2d 106 (La.App. 1st Cir. 1961); Johnson v. Lemons, 157 So.2d 752 (La.App. 2nd Cir. 1963); Pellegrini v. McCarthy, 175 So.2d 410 (La.App. 4th Cir. 1965). Consequently, a judgment has the authority of a thing adjudged only as to the matters put at issue by the pleadings and actually decided by the court or found to be a necessary consequence of the judgment rendered.

In suit Number 42,817, Appellant declared upon a secured promissory note seeking payment in full of the face value of the note on the claim that no payment whatsoever had been made thereon. The answers conceded defendants’ execution of the note, the validity of the obligation and the admission that some portion of the note had been paid and some was still owed. In essence the answers were pleas of prematurity based on the debtors’ claim that all payments due on the obligation were currently made and that while a balance was due, plaintiff had no legal right or cause to claim said balance at the time suit was filed.

The res judicata requirement that the demand must be founded on the same cause of action refers to the fact or facts giving rise to the judicial relief sought or to the principle generating the right asserted. See Comment, 35 La. Law Review 157 (1974). In the initial suit, the cause of action was based upon a note and the alleged failure of the makers to make any payment whatsoever thereon, thereby entitling the holder to judgment in the face amount of the obligation, with stipulated interest and attorney’s fees. The terms of the mortgage granting makers the option of extending payment in full for one month from note date, upon paying $100.00 to be applied first to principal and the remainder to interest, and of making similar monthly payments until the obligation was paid in full, in effect converted the note into an installment note, at maker’s option. The pleadings in the initial suit make it clear that makers had exercised said option and had made all such monthly payments promptly when due and had even paid some installments in advance. So long as makers exercised the option, plaintiff as holder, had no cause to sue on the obligation. In essence this is what makers pled in defense of the action. Plaintiff’s affidavit of September 3,1974, conceding payments on the note which reduced the balance due to $12,000.00 was an admission of payments, either before or since suit was filed. Since the default judgment rendered in favor of plaintiff and against Messmer for $12,000.00 was set aside, it is a matter of no moment. A judgment declared null is as though it were never rendered. LSA-C.C.P. Articles 2001, 2002(2).

The second action, for an alleged balance of $11,700.00, is predicated upon makers’ alleged failure to make the monthly payment due in August, 1974, and no extension being granted beyond September, 1974, consequently holder had a cause of action to demand payment of the balance in full. This second action therefore was a separate and distinct cause of action from the first in that it is based on an alleged subsequent default. This action, dismissed on a plea of res judicata, has acquired the authority of a thing adjudged inasmuch as it was not appealed.

The present action, however, is an entirely separate and distinct cause of action. It is a demand for judgment for $8,344.51, allegedly due and owing at once in full because of a new set of facts and circumstances, namely, Appellees’ failure to make payments of $100.00 per month in November and December, 1975, or otherwise obtain an extension from holder.

The thing demanded in this action is not the same as that demanded in the prior suits. While all of the actions are predicated on the same promissory note, the judgments in the prior suits are definitive only as to the demands therein made and the facts determinative thereof. The amount sought in this action is allegedly due because of facts and circumstances occurring since the prior judgments were pronounced. The question of whether the present balance sought to be recovered is presently due, has not heretofore been raised or litigated. See 10 Toullier, Droit civil Francais, Chap. 6, Sec. 3, Art. 1, No. 157. In Elliott v. La Barre, 5 La. 223 (1833), our Supreme Court appropriately noted that the Court’s decrees “settle, therefore claims as they stood on the day the District Court settled them. They have rights accruing after the judgment below untouched”.

We note that in Untereiner v. Shepard, 52 La.Ann. 1809, 28 So. 319 (1900), the Supreme Court declared:

“. . . where a suit for rent is brought before the expiration of the lease, upon the theory that the last month’s rent has become constructively due, under the terms of such lease, by reason of default with respect to previous months, and the judgment, predicated upon the theory that there had been no such default, rejects the demand, such judgment does not, of necessity, conclude the lessor with respect to such last month’s rent, thereafter actually falling due.”

State v. American Sugar Refining Co., 108 La. 603, 32 So. 965 (1902), is the landmark decision in our jurisprudence concerning the principle of res judicata. In that case the State sued to enforce a statutory license against defendant as a sugar refiner for the year 1898 and prior years. The question was whether a refiner was a manufacturer and as such exempt from the tax. The court held that a refiner was not a manufacturer and therefore not exempt from the tax. Two years later, the State sued the same defendant for licenses due for the years 1900 and 1901. Defendant again contended it was a manufacturer. The State’s plea of res judicata was overruled on the ground that the first suit involved an issue of law, namely, statutory construction as to which there could be no objection to its re-litigation, provided the issue is raised under a different set of facts. In explaining the principle of res judicata, the Court made the following pertinent remarks:

“The basic principle of res judicata is found in the necessity that a time should come when the litigation shall cease, in order that the decree of the court may be carried out. This is what the law concerns itself with, that the object of the judgment shall not remain eternally in suspense, but be delivered into the quiet and undisturbed possession of the successful litigant. This is what the Code means when it says that ‘The authority of the thing adjudged takes place only with respect to what was the object of the judgment.’ The law by virtue of which the object of the judgment is delivered is no part of the object of the judgment. It is only one of the reasons for judgment, and res judicata does not take place with respect to the reasons for judgment, but ‘only with respect to what was the object of the judgment.’ Res judicata deals, if we may so express ourselves, with the decree of the court, as contradistin-guished from the judgment of the court. To give it a wider scope than this is to confound it with stare decisis. The office and function and utility of res judicata is not to settle law questions, but to lend stability to a decree in order that such decree may have effect.”

Utilizing the foregoing rationale, the Court in State v. American Sugar Refining Co., above, overruled the plea of res judica-ta on the ground that the demand was not the same because the second suit sought license due for business conducted after the first litigation. The Court also noted that while the second action was brought under the same statute as the first, res judicata did not apply because one of the prime generative causes of the action was different, namely, the action of defendant in continuing business after the first judgment.

On the question of subsequent actions of a party giving rise to a separate and distinct cause of action which precludes application of the principle of res judicata, we note the Supreme Court’s recent decision in Nicholson v. Holloway Planting Company, Inc., 284 So.2d 898 (La.1973). In this case the Court concluded that a finding of interference in 1966 with a neighbor’s use of his land which did not warrant injunctive relief, did not preclude a party’s right to prove interference in 1970. In so holding the Court observed:

“To hold otherwise would require us to hold that a party having once lost a mandatory injunction suit against a given neighbor, perhaps for failure to prove at that time the neighbor’s assertedly illegal conduct (for example, a trespass) would be forever barred from bringing another such suit, even if he could prove a later transgression.”

Appellees place considerable reliance on Securities Finance Company v. Washington, 195 So.2d 733 (La.App. 1st Cir. 1967), in urging that dismissal with prejudice of a nonsuit on a note precludes further action on the instrument. We find the cited authority distinguishable in that the allegations and issues presented and determined in the first action on the note are not set forth in the opinion. From this we conclude the allegations, contentions and operative facts involved in the second suit are identical to those in the first, and consequently the plea of res judicata was properly upheld.

In this instance the cause of action is founded on the same instrument but it is a different cause of action from those presented in the prior suits. This present suit is for a different demand, namely, an alleged lesser balance due on the same note. The cause of action is not the same in that, while the suit is on the same note, the generative cause of the present demand is entirely separate and distinct from those pled in the former actions, namely, an alleged subsequent default. We hold therefore, res judicata is inapplicable herein.

The judgment of the trial court maintaining the exceptions of res judicata filed by defendants herein is reversed and said exceptions overruled and this matter remanded to the trial court for further proceedings consistent with the views herein expressed, all costs of this appeal to be paid by defendants-Appellees.

Reversed and remanded.


source: Caselaw Access Project

author: SARTAIN, Judge.

license: Public Domain

text:
    Albert MARCOTTE, Plaintiff-Appellant, v. ATLAS CONSTRUCTION CO., INC., and Highlands Insurance Co., Defendants-Appellees.
    No. 10939.
    Court of Appeal of Louisiana, First Circuit.
    Nov. 15, 1976.
    Rehearing Denied Dec. 20, 1976.
    Writ Refused Feb. 18,1977.
    Floyd J. Falcon, Jr., Baton Rouge, for plaintiff-appellant.
    Boris F. Navratil, Breazeale, Sachse & Wilson, Baton Rouge, for defendants-appel-lees.
    Before SARTAIN, COVINGTON and LOTTINGER, JJ.
   SARTAIN, Judge.

Albert Marcotte, (appellant) appeals from a judgment of the district court denying his claim for workmen’s compensation benefits based on total and permanent disability. We are not favored with oral or written reasons from the trial judge. Appellee contends that the judgment appealed should be affirmed on the basis of two reasons, that appellant failed to prove an accident and that he was totally and permanently disabled in the event he proved the accident. For reasons hereinafter stated, we are of the opinion that appellant has proved both and that the judgment of the district court should be reversed.

Prior to July, 1973, appellant was employed by Atlas Construction Company (Atlas) as a heavy duty field mechanic. His job included on-site repairs to heavy equipment (earth movers, road graders, dozers) used in highway construction. As a regular part of his job, he was required to lift and move heavy pieces of machinery. At times various mechanical devices were available for the mechanics’ use in lifting heavier pieces, but often, the mechanics were forced to resort to physical labor alone in lifting and manipulating some parts. These parts often weighed in excess of two hundred pounds. In addition, a significant amount of bending, stooping and straining in awkward positions was required of the mechanics in order to make necessary repairs.

Appellant claims that on the morning of July 24 or 25, 1973, he was working on the transmission of an Euclid earth mover when he slipped and fell against the pilot shaft, thereby sustaining injuries to his back. He says he stopped his work and remained idle for a period of about thirty minutes and then resumed work for the rest of the day. There is some dispute as to when he notified his supervisor, Mr. John Davis, of his injury. Appellant testified he thought he notified Mr. Davis of the accident on the day following. Mr. Davis stated the accident and injury were reported some two days after it happened. During the time before he reported the accident, appellant attempted to perform light work, requiring no straining or lifting, but could not resume the kind of work he had been doing prior to his injury.

After reporting the accident appellant was sent by an Atlas official to the office of Drs. Abramson & Streb of Gonzales, Louisiana, and on July 29, 1973 was admitted to Ascension Hospital. His complaint was of pain in his lower back and legs. He received treatment consisting of physical therapy and pain medication and was released on August 9.

He was then referred to Dr. Richard Bolton who diagnosed mild generalized osteoarthritis and narrowing of the L-5, S-l disc space. He fitted appellant with a lum-bosacral corset and presented physical therapy, pain medication and ultra sound treatments. Appellant was allowed to return to work with Atlas on restricted duty on August 20. Approximately one week later he was allowed to return to regular duty of the type he had been doing prior to his injury. When his condition did not improve, he was admitted to Ascension Hospital by Dr. Bolton on October 15 for bed rest and traction. When further examination indicated a disc problem, he was transferred to Baton Rouge General Hospital for consultation by Dr. Thomas Flynn. Dr. Flynn diagnosed plaintiff’s injury as a herniated disc and on October 29,1973 he performed a laminectomy.

In February, 1974 Dr. Flynn allowed appellant to return to light duty work. In early March appellant returned to work on a restricted basis and since that time has held a series of light duty jobs involving no heavy lifting, straining or bending. In June, 1974, Dr. Flynn pronounced appellant able to return to unrestricted duty. After a period of a couple of months, appellant complained of low back pain which became more severe with increased activity.

Defendant, Highland Insurance Company, has paid all of appellant’s medical and hospital bills ($4,685.57) and workmen’s compensation benefits ($2618.57) for a total of forty weeks. Benefits were paid from August 4 to August 19 and from October 10, 1973 to July 25, 1974.

It is well established in our jurisprudence that in a workmen’s compensation dispute the testimony of a plaintiff alone is sufficient to establish the occurrence of an accident, if nothing is presented to discredit his account of it and where his statements are supported by surrounding circumstances. Smith v. Louisiana Welding Supply Co., Inc., 331 So.2d 606 (1st La.App., 1976); Cavender v. Flenniken Construction Co., Inc., 247 So.2d 652 (2nd La.App., 1971). We, nevertheless, are mindful of the necessity that the plaintiff in all civil cases must establish by a preponderance of the evidence that an accident did occur and that it had a causal relation to the disability complained of. Francis v. Gerlach Meat Company, Inc., 319 So.2d 534 (2nd La.App., 1975).

The circumstances surrounding the incident support appellant’s contention that an accident did occur while plaintiff was repairing the Euclid earth mover on July 24 or 25. At the time of the alleged injury plaintiff was working with his assistant, a Mr. Lockhart, who plaintiff says witnessed the accident. Mr. Lockhart was not present at trial to corroborate plaintiff’s testimony as he could not be located, despite diligent efforts on the part of the plaintiff to contact him, and despite the issuance of two subpoenas which were returned unserved by the sheriff.

It was stipulated at trial that Mrs. Mar-cotte’s testimony would corroborate that of her husband as far as it concerns his claim that he returned from work on the day of the accident suffering from back pain, that he remained in pain until he reported the injury to his supervisor, and that he continued to suffer during the course of treatment by various doctors.

Mr. Davis, to whom appellant first reported his accident, testified that Marcotte had never complained of back problems of any sort until his report of the injury in the alleged accident.

Medical testimony adduced at trial established a causal connection between the injury plaintiff suffered and his residual disability. Certain medical testimony established that plaintiff suffered from mild osteoarthritis and mild degenerative disc disease to the extent that is expected to be present in any fifty-five year old person (the age of plaintiff at the time of the accident). The presence of these afflictions renders an individual more susceptible to injuries such as the disc herniation suffered by appellant. However, jurisprudence in Louisiana in the area of workmen’s compensation holds that an employer takes an employee as he finds him. Bordelon v. Tulane Industrial Laundry, Inc., 275 So.2d 878 (4th La.App., 1973). And, a worker who is normally susceptible to disability from an accident is entitled to coverage under workmen’s compensation even though the same accident would cause little or no harm to a healthy worker. Roberson v. Liberty Mutual Insurance Co., 316 So.2d 22 (3rd La.App., 1975), Kennedy v. Calcasieu Paper Company, 262 So.2d 800 (3rd La.App., 1972).

Dr. Flynn, a neurosurgeon and appellant’s treating physician, testified that appellant’s back pain must be attributed at least in part to his injury and subsequent disc surgery and should be considered as sequelae to that injury and surgery. On this point, the doctor explained:

Q. I’m primarily interested in, Dr. Flynn, how much of this should be ascribed to Mr. Marcotte’s employment from the disc problem and how much of this would be ascribed just to normal aging process, because, as Mr. Falcon pointed out, this is a compensation case and I want my client to be responsible for what my client is responsible for and not for anything else.
So with that in mind, I would like to ask you whether or not the question of disc rupturing is not really something that presupposes some degeneration in the person who suffered this ruptured disc?
A. I’m of the firm opinion that the incidence of an isolated acute rupture of a previously entirely healthy disc is extremely rare, it probably does not occur, and that almost without exception and certainly in a case such as this that this disc rupture, disc protrusion, disc rupture, represents what I believe is called aggravation of the pre-existing condition. This man had, although asymptomatic, pre-existing degree of osteoarthritis and a degree of degenerative disc disease aggravated by his work in lifting. (Emphasis ours)

Dr. F. C. McMains, an orthopedic surgeon whom plaintiff consulted for the purpose of obtaining another evaluation, opined that plaintiff’s pre-existing degenerative disc disease rendered him susceptible to acute disc rupture. He stated that it would take less trauma to rupture a disc in appellant’s back now than in someone younger. Based on Dr. Flynn’s testimony, above, we are convinced that appellant did indeed sustain an injury which aggravated a pre-existing condition, thus fully establishing a causal relation between the accident and plaintiff’s present disability.

Permanent and total disability is defined as “disability to do work of any reasonable character”, R.S. 23:1221(2). The test is that an injured employee is deemed totally and permanently disabled whenever he is unable to perform work of the same or similar description to that which he performed before the accident. Futrell v. Hartford Accident & Indemnity Co., 276 So.2d 271 (La.Sup.Ct.1973). Where an injury has substantially decreased claimant’s ability to compete in the general labor market with able bodied workers possessing similar skills, he is considered totally and permanently disabled. Futrell, supra; Deshotels v. Fidelity & Casualty Co. of N.Y., 324 So.2d 895 (3rd La.App., 1975).

As a result of complaints of lower back pain following his return to work in March, 1974, Dr. Flynn determined that plaintiff suffered from a ten percent residual disability of the body as a whole and indicated that these conditions were permanent. Dr. McMains noted that should he attempt unrestricted manual labor involving heavy lifting, he would experience recurrent back trouble. Dr. Flynn also testified that awkward body positions while straining with the shoulders and arms should be avoided.

The very nature of plaintiff’s previous occupation as a field mechanic required that he perform all those body movements which the medical testimony has established he cannot now perform. He was required, as a field mechanic, to lift heavy objects, to bend and stoop in awkward positions to get at the equipment he was repairing, to strain while loosening or tightening nuts and bolts and the like, and to perform other tasks which he cannot now carry out.

Since his return to work plaintiff has worked on various jobs which require no lifting, stooping or bending. He spends up to seventy-five percent of his working time seated at a bench. His job consists of repairing small engines, operating equipment and keeping various kinds of records.

Plaintiff is not now able to compete in the labor market with able bodied individuals for field mechanic’s positions. Considering the medical evaluation of Mr. Mar-cotte’s physical condition and considering he is not able to return to his former occupation, we find that he is totally and permanently disabled and entitled to full benefits under R.S. 23:1221(2).

For the above reasons, the judgment of the trial court rejecting appellant’s demand for workmen’s compensation benefits for total permanent disability is reversed and judgment is rendered herein in favor of appellant, Albert Marcotte, and against Atlas Construction Company, Inc. and Highlands Insurance Company, in solido, for workmen’s compensation benefits for total permanent disability in the sum of $65.00 weekly during appellant’s continued total disability, not exceeding five hundred weeks, subject to credit for all compensation benefits previously paid, together with legal interest on all past due compensation from dates due until paid, and for all costs of these proceedings.

REVERSED AND RENDERED.


author: SARTAIN, Judge.,

text:
    AETNA INSURANCE COMPANY, Plaintiff-Appellant, v. UNITED STATES FIDELITY & GUARANTY COMPANY, Defendant-Appellee.
    No. 10958.
    Court of Appeal of Louisiana, First Circuit.
    Nov. 15, 1976.
    Rehearing Denied Dec. 20, 1976.
    Timothy G. Schafer, New Orleans, for plaintiff-appellant.
    Wood Brown, III, New Orleans, for defendant-appellee.

      Before SARTAIN, COVINGTON and LOTTINGER, JJ.
   SARTAIN, Judge.,

This litigation involves a dispute between two workmen compensation insurance carriers. The facts leading up to the instant controversy are not in serious dispute.

Clover Construction Corporation (Clover), a Louisiana corporation, is engaged in the construction of streets, drainage, grading and generally all of those things necessary to properly develop a residential subdivision. The principal stockholder and president is George E. Reine, III. Clover was desirous of obtaining a contract to construct the site improvements in a subdivision situated in Slidell, St. Tammany Parish, Louisiana, known as Fountain Estates Addition Number 2. To this end it entered into a contract with the owner, Circle “R”, Inc., and the latter’s mortgagee, Carruth Mortgage Corporation. For this work Clover was to receive the sum of $468,750.00. However, in order for Clover to obtain the contract it was necessary that it issue to the owner and its mortgagee a “Performance Bond” in the amount of the contract. Clover did not possess sufficient assets to obtain such a bond. It, therefore, became necessary that Clover enter into another agreement with Stanley D. Fejta wherein for a fee of $10,000.00 Fejta would lend his financial support to the securement of the required performance bond.

Under date of February 9, 1973, Clover, Reine and Fejta entered into an agreement which was entitled “JOINT VENTURE AGREEMENT FOR SITE IMPROVEMENT OF FOUNTAIN ESTATES ADDITION NUMBER 2.” The agreement, signed by all three of these parties, provided:

“STANLEY D. FEJTA agrees to Joint Venture, execute contract and idemnify (sic) the bond for the construction of the Site Improvement of Fountain Estates, Addition No. 2, Slidell, Louisiana.
“Clover Construction Corporation, and George E. Reine, III, agrees to pay to Stanley D. Fejta a flat agreed fee of $10,000, excluding the bond premium and any other costs for which the owner and/or Clover Construction Corporation and George E. Reine, III, is responsible, for assistance in estimating, purchasing materials, and bond idemnification. (sic) Payment of the fee shall be made to Fejta as money is released as provided in the contract documents. Clover Construction Corporation and George E. Re-ine, III, shall be the managing partner of the joint venture and be responsible for the work. A joint account shall be set up for all disbursements and require two signatures, one from each Clover Construction Corporation and Stanley D. Fejta, individually.
“It is understood that all parties of this joint venture are laible (sic) unto United States Fidelity & Guaranty, Surety, jointly and in solido.”

A performance bond was issued by United States Fidelity & Guaranty Company (U.S.F.&G.) in the amount of the contract, naming as the principals Clover, Reine and Fejta and denominating their legal relationship as “A Joint Venture.”

The performance bond is dated February 6, 1973, and was to cover “Site Improvements of Fountain Estates Addition Number 2, Slidell, St. Tammany Parish, Louisiana, in accordance with drawings and specifications prepared by Borgen Engineering of Slidell, Louisiana.” On February 22, 1973, United States Fidelity & Guaranty Company issued a policy of workmen’s compensation insurance, designating the insured as:

“CLOVER CONSTRUCTION CORPORATION & STANLEY D. FEJTA, A Joint Venture Box 248
Slidell, Louisiana 70458”

On April 25, 1973, Allen Troyani, a regular employee of Clover, was sent to work at Fountain Estates and while doing so sustained injuries.

On April 25, 1973, and for some time prior thereto Aetna Insurance Co. (Aetna) had issued a similar policy of workmen’s compensation to Clover, covering the latter’s employees.

As a result of the injuries sustained by Troyani, claim was made on U.S.F.&G. for workmen’s compensation benefits. U.S. F.&G. denied coverage on the grounds that its policy was “written in the name of the joint venture” and would only be applicable if Troyani’s employer, Clover, did not carry other workmen’s compensation coverage. Aetna accorded Troyani and Clover workmen’s compensation benefits, which included an eventual settlement with Troyani in an aggregate sum of $13,689.93. Aetna then instituted this action seeking indemnification for the above sum or, in the alternative, contribution to the extent of one-half thereof.

In his written reasons for judgment the trial judge concluded that the arrangement entered into between Clover, Reine and Fejta was not a joint venture. He reasoned that inasmuch as U.S.F.&G. insured a “Joint Venture”, which did not in fact and law exist, U.S.F.&G. was not liable. For reasons hereinafter stated, we reverse.

On appeal, Aetna does not really contend that there was in fact a “joint venture” but argues (1) that under the terms of the insurance contract issued by Aetna, the terms thereof control and under R.S. 23:1162(A) the insurer cannot interpose an objection as to coverage that could not be raised by the employer; (2) that when there exists a mutual mistake and the insurance contract does not accurately reflect the real party at interest, the contract should be reformed to reflect the true intention of the parties; (3) that an employer (Clover) has the right to purchase different workmen’s compensation policies for each job or business in which it engages, R.S. 23:1162(B); and (4) that Aetna, having issued the policy, collected an initial premium, and when following an audit, readjusted the premium to and collected a higher rate, is now estopped from denying coverage.

U.S.F.&G.’s defense is twofold. First, it agrees with the finding of the trial court that there was no joint venture and therefore the policy was ineffective. Second, that if there was a joint venture, the same was the principal contractor and Clover, who did all of the work, was a subcontractor. In which event, the joint venture (and U.S.F.&G.) is only secondarily liable and would be responsible only in the event that the subcontractor, Clover, was without other insurance or incapable of providing its employees with workmen’s compensation benefits.

We have no quarrel with the conclusion of the trial judge to the effect that the relationship between Clover, Reine and Fejta did not constitute a true joint venture. The factors of mutual endeavor, control, and participation for profit are not present. The effect of the establishment of a joint venture is to create as between the participants a relationship similar to that found in a partnership with the same liability and responsibility as is imposed upon partners. Ault & Wiborg Co. of Canada, Ltd. v. Carson Carbon Co. et al, 181 La. 681, 160 So. 298 (1935); Suckle v. Hartford Accident and Indemnity Company, 163 So.2d 564 (La.App. 2d Cir. 1964), writ refused 246 La. 582, 165 So.2d 481; Villarrubia v. Roy, 162 So.2d 86 (La.App. 4th Cir. 1964); and Williamson v. Roberts, 103 So.2d 499 (La.App. 2d Cir. 1958). Therefore, the issue here presented must be resolved on the basis that there was no joint venture. This is of little comfort, however, to appellant.

No one in this litigation contends that there was any intent to deceive U.S.F.&G. when the contemplated endeavor was, by three laymen, thought to be a joint venture. An agent for U.S.F.&G. testified that he had represented Mr. Fejta for a number of years and had issued many policies on “joint ventures” entered into by the latter, wherein Fejta “furnishes them (contractors) credit, bond credit” and “we insist on protecting Fejta’s interest.” But Fejta was not the only participant to the enterprise stated in the policy to comprise the “joint venture”. Clover was also named. U.S.F.&G.’s concern as to and its protection of Fejta must also extend to Clover, no more and no less. According to U.S.F.&G.’s argument, if there was no “joint venture” not even Fejta would be protected. This is contrary to U.S.F.&G.’s avowed purpose.

The three instruments namely, the “joint venture” agreement, the subject policy, and the performance bond, were all confected, issued and obtained to cover one specific endeavor, Fountain Estates Addition Number 2 project.

U.S.F.&G., through its agent, was familiar with the participants, the purpose of each of these instruments, the particular interest of the participants, and most importantly, the area and limits of its own responsibility. It cannot now avoid that responsibility.

R.S. 22:619(A) provides:
A. Except as provided in Sub-section B of this Section and R.S. 22:692, no oral or written misrepresentation or warranty made in the negotiation of an insurance contract, by the insured or in his behalf, shall be deemed material or defeat or avoid the contract or prevent it attaching, unless the misrepresentation or warranty is made with the intent to deceive.

The representation that there existed a joint venture was not given with any intent to deceive. To the contrary, it was the sincere belief of the concerned participants.

Further, the scope of U.S.F.&G.’s liability was particularly designated, the project aforesaid. Thus, the fact that there existed no joint venture did not increase, extend or enlarge the moral or physical hazard sought to be insured.

U.S.F.&G.’s policy did not contain any of the typical “other insurance” or “prorate” clauses or endorsements. Under these circumstances Clover and Fejta must be deemed to have been insured individually insofar as this one particular project is concerned. U.S.F.&G. issued the policy, collected the initial premium from Clover, subsequently audited Clover’s payroll (as to the project), billed to and collected from Clover an additional adjusted premium. U.S. F.&G. is estopped to deny coverage. McLain v. National Mutual Casualty Co., 28 So.2d 680 (La.App. 2d Cir. 1946).

The net result is that Clover had two policies of insurance, one with Aetna covering all of its activities and another with U.S.F.&G. covering the project secured with Fejta’s financial assistance. Since neither of these policies contained any restriction or limitation on coverage both insurers are liable for injuries sustained by a Clover employee on the subject project.

We find no merit in Aetna’s contention that inasmuch as the U.S.F.&G. policy was intended to cover a particular activity that its insurer on that activity is primarily responsible. It is on this basis that Aetna seeks complete indemnification. Rather, absent any limitations or pertinent policy provisions, the loss sustained should be covered by both as each is individually liable to the employee. Aetna’s relief is limited to contribution of one-half of the amount of the loss.

Accordingly, for the above reasons, the judgment of the district court is reversed and judgment is rendered herein in favor of the plaintiff and against the defendant in the full and true sum of SIX THOUSAND EIGHT HUNDRED FORTY-FOUR AND 96/100 ($6,844.96) DOLLARS, together with legal interest thereon from the date of judicial demand until paid, and for all costs of these proceedings.

REVERSED AND RENDERED.


author: COVINGTON, Judge.

text:
    William M. BROYLES, et al. v. BATON ROUGE MUNICIPAL FIRE AND POLICE CIVIL SERVICE BOARD.
    No. 10945.
    Court of Appeal of Louisiana, First Circuit.
    Nov. 15, 1976.
    Rehearing Denied Dec. 20, 1976.
    Writ Refused Feb. 11,1977.
    Kenneth L. Riche, Baton Rouge, for appellants.
    Joseph F. Keogh, Parish Atty., and Charles E. Pilcher, Asst. Parish Atty., Baton Rouge, for appellee.
    Before SARTAIN, COVINGTON and LOTTINGER, JJ.
   COVINGTON, Judge.

This is an appeal by two police officers, William M. Broyles and Christopher R. Schroeder, from the judgment of the district court which affirmed the decision of the Baton Rouge Municipal Fire and Police Civil Service Board, which in turn affirmed and upheld the action of the Acting Chief of Police of the City of Baton Rouge which suspended the officers for 90 days without pay for their participation in the publication of a letter which was entitled “Slowdown,” containing instructions to the Police Department of certain methods to be used to get a pay raise. The Board upheld the action of the appointing authority in its determination that the activities of the officers were violative of their duties and that their conduct impaired the efficiency of the Police Department, all of which constituted unlawful action which legally subjected them to disciplinary action. We affirm.

On this appeal, the officers primarily complain, as they did in the district court, that they were deprived of a fair hearing because the Board relied upon legal opinions from its legal advisor, the Parish Attorney, who also served in the dual capacity as legal counsel for the appointing authority, and thus dominated the Board.

The district court answered this complaint finding that: “the Board was not dominated by the Parish Attorney, that it exercised its independent judgment and that the Chairman ruled intelligently and independently of the Parish Attorney on questions affecting the admissibility of evidence. It conducted its hearing and received the evidence in accordance with law and rendered its opinion based on the evidence before it.”

After careful review of the record, we find ample evidence in the record upon which the Board made its findings and rendered its opinion and to support the judgment of the district court. Appellants were suspended for publishing and distributing a letter purporting to instruct police officers of the City of Baton Rouge in effecting a slowdown or partial work stoppage. The evidence shows the appellants typed, reproduced and circulated the letter in question. There is evidence to show that the appellants were the leaders in calling the meeting at which time the letter was formulated and in the formulation of the letter. The evidence substantiates that the Board made its decision" “in good faith for cause.” See LSA-R.S. 33:2501.

The appellants rely upon the cases of Camero v. United States, 375 F.2d 777, 179 Ct.Cl. 520 (1967), and Ruiz v. Delgado, 359 F.2d 718 (U.S. Ct. of App. 1st Cir. 1966), to support its theory of unfairness in the hearing. Neither of these cases deal with factual or legal issues similar to those involved in the instant case and are inapposite.

The Camero case is concerned with the situation where the attorney who had represented the government before the army grievance committee had engaged in ex parte communications with the commanding officer of the depot by participating in the preparation of the general counsel’s legal opinion advising the commanding officer to discharge the classified civil service employee of the Department of Army.

The Ruiz ease is concerned with the peculiar procedure in the Puerto Rican district courts whereby the trial judge acts as both prosecutor and judge. The court held that it was inherently unfair to commingle the functions of prosecutor and decision-maker.

In the instant case the Board served solely as decision-maker and performed no prosecuting duties, and there is no evidence of any ex parte communications between the Parish Attorney and the Board or any participation of the Parish Attorney in the making of the Board’s decisions. The hearing in the instant case was fair in all respects.

The finding of the district court is in line with the decision of this Court in Bland v. City of Houma, 264 So.2d 729, 732 (La.App. 1st Cir. 1972), writ ref. 263 La. 11, 266 So.2d 713 (1972):

“Appellant further contends that the Board hearing was conducted in bad faith and contrary to provisions of the Civil Service Law, more particularly in that the attorney for the Board was allowed
‘. . .to conduct the hearings with the authority of a judge applying strict rules of courtroom procedure to the civil service hearing ... all in spite of the Louisiana State Constitution provisions that in “Appeals by Employees to the Board” “The procedure followed shall be informal and not necessarily bound by the legalistic rules of evidence.” Constitution, La. State, Article 14, Section 15 (15.1), Subsection 31.’

“There seems to be no doubt that the Board has a right to employ independent counsel to represent it, La. Constitution, Art. 14, Section 15.1 (36). The transcript also indicates that the attorney for the Board did act as ‘judge’ in determining whether certain evidence objected to was or was not admissible. His rulings were invariably approved and ratified by the Board. Of course, as each question and objection arose, the Board could have conferred with their attorney and ruled, presumably in accordance with his advice — a much more time-consuming procedure. We must now determine whether the delegation of the authority by the Board to its attorney on all evidential matters so tainted the procedure with ‘bad faith’ as to render it illegal. “We think not, particularly since the Board, composed exclusively of laymen, presumably would follow the advise of their counsel; and the record discloses that evidence objected to, where the objection was sustained, was for the most part ‘proffered’ and available to the Board.”

Accordingly, we affirm the judgment of the district court at appellants’ costs.

AFFIRMED.


author: COVINGTON, Judge: LOTTINGER, Judge:

text:
    Joseph I. LESSARD v. LESSARD ACRES, INC., et al.
    No. 10960.
    Court of Appeal of Louisiana, First Circuit.
    Nov. 15, 1976.
    Rehearing Denied Dec. 20, 1976.
    Writ Granted Feb. 18,1977.

      Ralph Tureau, Gonzales, for plaintiff-ap-pellee.
    Mary Olive Pierson, Baton Rouge, for defendant-appellant.
    Before SARTAIN, COVINGTON and LOTTINGER, JJ.
   COVINGTON, Judge:

This is an appeal from a judgment ranking the collateral mortgage of the First National Bank of Port Allen after the vendor’s privilege and lien of the plaintiff, Joseph I. Lessard. We affirm.

This suit arises out of the interpretation to be placed upon an instrument dated October 30, 1969, entitled “Sale with Assumption of Mortgage and Retention of Second Mortgage,” by which the plaintiff, Joseph I. Lessard, sold to Lessard Acres, Inc., one of the defendants herein, 100 lots situated in the East Half of the Northeast Quarter of Section 22, Township 9 South, Range 3 East, Southeastern District of Louisiana, in the Parish of Ascension, State of Louisiana, of record in Mortgage Book 182, page 3, and duly recorded on October 30, 1969.

The stated consideration was “(A) The price of $35,000.00 payable as follows:

“(1) Buyer has paid in cash, receipt of which is hereby acknowledged by the Seller, the sum of $1,000.00;

“(2) For $3,517.93, Buyer has executed its note, hereinafter described, for the payment of which Seller retains a vendor’s lien and mortgage as hereinafter described;

“(3) For the remainder of said $35,000.00, namely the sum of $30,482.07, Buyer assumes and agrees to hold the Seller, free and harmless from the payment of the balance due on the following described notes: (1) That certain promissory note made and executed by Joseph I. Lessard to the order of Myself, dated September 27, 1967, in the principal sum of $22,000.00, stipulating to bear interest at the rate of 7% per annum, which note was paraphed “Ne Varietur” by Penrose C. St. Amant, Notary Public, for identification with an Act of Collateral Mortgage passed before him of even date therewith, which mortgage rests upon the property herein conveyed and recorded in the office of the Clerk and Recorder of Mortgages of Ascension Parish, Louisiana, in MOB 165, Folio 321, the Buyer herein assuming all of the obligations imposed on the Seller in the said note and the said mortgage; (2) That certain promissory note made and executed by Joseph I. Lessard, to the order of Myself, dated January 27,1967, in the principal sum of $6,800.00, stipulting (sic) to bear interest at the rate of 7% per annum, which note was paraphed “Ne Var-ietur” by Penrose C. St. Amant, Notary Public, for identification with an Act of Collateral Mortgage passed before him of even date therewith, which mortgages rests upon the property therein mortgged (sic), and recorded in the office of the Clerk and Recorder of Mortgages of Ascension Parish, Louisiana, in MOB 159, Folio 381 the Buyer herein assuming all of the obligations imposed on the Seller in the said note and the said mortgage. (3) That certain promissory note made and executed by Joseph I. Les-sard, to the order of Myself, dated January 27, 1967, in the principal sum of $7,000.00, stipulating interest at the rate of 7% per annum, which note was paraphed “Ne Var-ietur” by Penrose C. St. Amant, Notary Public, for identification with an Act of Collateral Mortgage passed before him of even date therewith, which mortgage rests upon the property therein mortgaged, and recorded in the office of the Clerk and Recorder of Mortgages of Ascension Parish, Louisiana, in MOB 168, folio 885, the buyer assuming all of the obligations imposed on the Seller in said note and the said mortgage.

“(B) Performance by Buyer of the following acts at no cost to Seller:

“(1) Erect five (5) foot high chain link fence around oxidation pond and water wells.

“(2) When first ten (10) houses in subdivision are complete, Buyer shall drill water supply well of sufficient capability to furnish water needs for 200 single family residences. Buyer to supply all equipment for water distribution to all lots conveyed herein, including, but not limited to pump, reservoir, and water distribution lines. All of these facilities are to meet the approval of state and parish health department authorities. Upon installation of all these water supply and distribution facilities, title shall, ipso facto, and without further acts or documents, vest in Lessard Acres, Water and Sewer Works, Inc.

“(3) Blacktopping of any new subdivision streets to meet Ascension Parish Police Jury requirements.

“(4) Furnish all utilities to each lot in the subdivision, including, but not limited to, sewerage collection lines, electricity, natural gas (if needed), electricity, water.

“(5) Any additional improvements to the subdivision undertaken by Buyer shall be at its expenses.

“(6) All of the water distribution and supply system, and sewerage collection and disposal system, shall be owned and maintained by Lessard Acres Water & Sewer Works, Inc., which is owned by Seller.

“(7) Buyer agrees to erect houses upon all subdivision lots as soon as sound business judgment dictates. As each house and lot is sold, $500.00 of the proceeds shall be paid to the Bank of Gonzales for the reduction of the principal balance due upon the two mortgages assumed by Buyer hereinabove. These $500.00 payments are to be in addition to the regular monthly installments due and payable on the two mortgages and are to be made to secure a release from the Bank of Gonzales mortgage and the second mortgage retained by Seller herein. Seller agrees to sign a release on each lot sold, upon payment by Buyer of the $500.00 to the Bank of Gonzales. No payment to Seller shall be due on the second mortgage retained herein until the entire balance due on the two mortgages assumed hereinabove has been paid and cancelled.

“Seller agrees that by signing a release on each lot sold hereafter that he does additionally release said lot from any and all the provisions of this agreement, including but not limited to any resolutory condition, vendor’s lien, mortgage, etc.

“(8) All sales of lots out of the subdivision shall be with reservation of ten (10) foot servitudes for public utility purposes, installation and maintenance of water and sewer lines by Seller’s corporation, as shown on survey map.

“(C) As an additional consideration of the consideration of the conveyance herein, Seller does hereby grant to Buyer the exclusive right or option to purchase the following described property:

A certain tract of land situated in the Parish of Ascension in the East Half of the Northeast Quarter of Section 22, Township 9 South, Range 3 East, Southeastern District of Louisiana, and being more particularly described and designated as all that land of Seller lying west of Lots Thirty (30) through Forty-eight (48) as shown on the map of survey by Toxie Craft, C.E., dated July 8, 1968, revised September 4, 1969, attached hereto and made part hereof,

for a term of five (5) years from date. Purchase price for the optioned property to be the completion by Buyer, at his expense, of the following acts upon the optioned property:

“(1) Installation of all streets, lighting, water lines, sewerage collection lines, electricity, or gas distribution system and additional oxidation pond (if necessary), prior to end of the five (5) year option period. After the service lines and streets are installed, the lots shall become the property of Lessard Acres, Inc., upon execution of an Act of Sale by Seller herein, which said Act of Sale Seller binds and obligates himself to execute once the aforementioned service lines, streets, etc. are installed without payment or further consideration.

“(2) Title to all water and sewer lines to be vested in Lessard Acres Water and Sewer Works, Inc.

“At the end of five (5) years from this date, if all one hundred (100) lots described on page one hereof are not sold, and all the mortgages mentioned herein on the property herein conveyed are not paid in full, then all lots remaining unsold by Buyer herein will revert in full ownership to Seller, ipso facto, and without any further act or action on the part of Seller or Buyer herein, and without cost to Seller herein. If for any reason this reverter paragraph is held null and void and unenforceable, then Buyer herein agrees to pay to Seller herein the sum of $500.00 per lot remaining unsold.

“For payment of the hereinabove mentioned $3,517.93, Buyer had made and executed his one certain promissory note to the order of Myself, endorsed in blank, payable at the Bank of Gonzales, payable after the two Bank of Gonzales mortgages are paid out, at the rate of $500.00 per lot sold, upon execution of release by Seller, stipulating to bear interest at the rate of 7% per annum from date.”

On December 14, 1970, Lessard Acres, Inc., executed a collateral mortgage in the sum of $40,000.00 in favor of the First National Bank of Port Allen, affecting the property described above.

Subsequently, this suit was filed on February 10, 1975, the plaintiff alleging that more than five years had elapsed since the date of the act of sale, that Lessard Acres, Inc. had failed to pay the notes which it had assumed, had failed to make the improvements required by the act of sale, and had failed to sell any of the lots. Plaintiff prayed for enforcement of the reverter clause and recognition as owner of the property free and clear of the bank’s mortgage. Alternatively, plaintiff prayed that he be awarded the sum of $500.00 per unsold lot as provided for in the instrument, said sums to outrank the bank’s mortgage as a vendor’s lien and privilege. By supplemental petition, plaintiff sought damages against Lessard Acres, Inc. for nonperformance of the improvements and for the amount which plaintiff had had to pay on the assumed mortgages.

Lessard Acres, Inc. failed to answer and a default judgment was taken against it. The bank answered, asserting the invalidity of the reverter clause, seeking recognition of the validity of its collateral mortgage, and further filed a third party demand against Lessard Acres, Inc. for the balance of $31,059.56 due on the mortgage, together with interest, attorney’s fees and costs.

The trial court, after hearing the evidence at the trial, found that the reverter clause of the act of sale was invalid. The court further found that the agreement of the buyer to pay the seller the sum of $500.00 for each of the unsold lots was a part of the consideration for the sale to the buyer, Lessard Acres, Inc. The court also held that the collateral mortgage of the bank was valid. The court considered that the issue to be decided was primarily one of the ranking of privileges affecting the property in question.

After due consideration, the trial court ranked the claims as follows: First, the collateral mortgage executed by Joseph I. Lessard to Bank of Gonzales, dated September 27, 1967, recorded Mortgage Book 165, page 321, on November 3, 1967, in the sum of $22,000.00; second, the vendor’s Jien and privilege and mortgage executed by Les-sard Acres, Inc. in favor of Joseph I. Les-sard, dated October 30, 1969, recorded on October 30, 1969, in the sum of $3,517.93; third, the vendor’s lien and privilege in the sum of $500.00 per lot for a total of $50,-000.00 created in favor of Joseph I. Lessard by the terms of the act of sale to Lessard Acres, Inc., dated October 30,1969, recorded Mortgage Book 182, page 3, on October 30, 1969; fourth, the collateral mortgage executed by Lessard Acres, Inc. in favor of the First National Bank of Port Allen, dated December 14, 1970, recorded Mortgage Book 189, page 392, in the sum of $40,-000.00.

The bank has appealed the judgment ranking the collateral mortgage of the First National Bank of Port Allen after the vendor’s lien and privilege of Joseph I. Lessard.

The trial court having found the reverter clause invalid and the appellant having not raised the issue of validity of the reverter clause before this Court, we are not called upon to review that ruling of the trial court.

The main issue is the question of the effect to be accorded the clause in the instrument which reads: “If for any reason this reverter paragraph is held null and void and unenforceable, then Buyer herein agrees to pay to Seller herein the sum of $500.00 per lot remaining unsold.”

Appellant contends that this clause is a provision for liquidated damages, which must be sued for and reduced to judgment before it can be considered as a mortgage, lien or privilege against the property. Ap-pellee contends that this clause constitutes part of the consideration for the sale, so that the sum of $50,000.00 for the 100 lots should be ranked as a vendor’s lien and privilege, priming the subsequent mortgage of the bank.

The crucial issue involved in this case is whether the parties to the act of sale intended that the above clause by which the buyer agreed to pay the seller $500.00 for each unsold lot if the reverter clause was invalid be a part of the purchase price and therefore effect a vendor’s lien and privilege, or whether it was intended to stipulate the amount of liquidated damages to be paid for non-performance from breach of covenants agreed to by the buyer.

The trial court viewed the clause as part of the consideration for the sale, effecting a vendor’s lien and privilege on the property, and expressed the opinion that:

“The act of sale clearly contemplates that plaintiff would receive back all unsold lots or the sum of $500.00 per lot. This was a part of the consideration for the act of sale, was so stated in the act of sale, and was spread upon the public records giving notice to all subsequent creditors. No one contends that Lessard Acres, Inc., could escape its obligation to pay plaintiff the sum of $500.00 per lot. Certainly the rights of the bank as a mortgage creditor of Lessard Acres, Inc. can rise no higher than the rights of Lessard Acres, Inc-., acquired in the act of sale to it, and must necessarily be subject to the obligations of Lessard Acres, Inc., as set forth in the act of sale and recorded on the face of the public records. The bank has notice of the claims to which the title of Lessard Acres, Inc., was subject and necessarily took its mortgage subject to those claims.”

It is elementary that until the buyer pays the purchase price he holds by a defeasible title only, and all who deal with him are equally affected. See Shapiro v. Kimbrough, 20 So.2d 24, 28 (La.App. 1st Cir. 1944). The vendor’s privilege is preserved and perfected against a third person when it is recorded, and it primes subsequent mortgages affecting the property. LSA-C.C. arts. 3251, 3274.

The general rule, as quoted in State v. Coverdale, 175 So. 492 (La.App. 2nd Cir. 1937), is:

“Mortgages, either conventional or judicial mortgages, take rank in the order in which they are recorded . .

In the instant case the act of sale preserving the vendor’s lien and privilege to Joseph I. Lessard, the vendor, was recorded on October 30, 1969. The bank’s mortgage was not recorded until December, 1970. Thus, it is obvious that the vendor’s privilege of Lessard primes the bank’s mortgage if the questioned paragraph was a part of the purchase price.

In discussing the purchase price of a sale, the court in Hibernia Bank & Trust Co. v. McCall Bros. Planting & Mfg. Co., 140 La. 763, 73 So. 857, 858 (1917), said:

“In that sense the price is the sum of money which the purchaser has obligated himself to pay for the property bought. . And we see no reason why the vendor and purchaser may not agree that the price shall be a certain percentage more if the vendor has to sue to collect it than if the purchaser pays without a lawsuit. All that the Civil Code requires in that respect is that the price must be fixed and determined by the parties to the sale . .

The Hibernia Bank case stands for the proposition that an obligation to pay a certain percentage as an attorney’s fee in the event it should become necessary to resort to legal proceedings or to employ an attorney to collect the amount of a promissory note representing the purchase price of property, although only a conditional obligation, is a part of the debt or price or consideration of the sale, and is secured by the vendor’s lien and privilege on the property whenever the conditional obligation to pay the attorney’s fee becomes absolute.

In the instant case we find that the questioned clause provided for a conditional obligation to pay an additional sum of $500.00 per lot remaining unsold at the end of five years if the reverter clause was unenforceable. When the conditional obligation became absolute, it was secured by the vendor’s privilege as of the date of recordation of the act of sale.

In addition to its contention that the questioned clause merely provided for liquidated damages, the appellant offers the policy argument that: “An affirmation of this clause as a vendor’s lien would do violence to commercial transactions because, henceforth, no lending institution could safely lend money to a vendee who was a party to such an act of sale for the simple reason that they would have no practical security interest in the property by reason of the so-called ‘vendor’s lien’ which would prime any conventional mortgage even though duly recorded by the lender. Hence, contractors and developers would encounter much difficulty in securing funds with which to operate, thus unduly burdening commerce.” We find no merit in the appellant’s policy argument. The particular instrument was spread on the public records for all the world to see. In fact, the evidence shows that the bank in this case was aware of the particular instrument. The bank could easily have protected itself by requiring the vendor to waive his vendor’s lien or subordinate his vendor’s lien to the bank’s mortgage, and to relinquish his right to dissolve the sale. See, e. g., Sliman v. McBee, 311 So.2d 248 (La.1975). The bank had notice of the claims to which the title of Lessard Acres, Inc., its mortgagor, was subject, and necessarily the bank took its mortgage subject to these claims.

For the foregoing reasons we affirm. All costs of this appeal to be paid by appellant.

AFFIRMED.

LOTTINGER, Judge:

(dissenting).

I disagree with the conclusion reached by the majority. The written agreement is controlling as between the parties. After a careful examination of the “sale with assumption of mortgage and retention of second mortgage”, and in particular, the manner in which the consideration portion of the sale is very neatly described by the use of lettered paragraphs and numbered subparagraphs, it is obvious that the paragraph containing the reverter language or in the alernative a payment of a fee per lot for each lot unsold is nothing more than a penalty clause.

If the buyer had sold all the lots, he would owe nothing further, whereas, if he fails to sell them, he owes an additional sum for each lot unsold. This was nothing more than a penalty clause inserted in an attempt to force the buyer to make a quick sale of the lots. Since it is a penalty clause, I see no way it can be protected by the vendors lien.


author: LOTTINGER, Judge.

text:
    Willie PALMER et ux. v. Shirley Jarvis, Wife of/and Frank JARVIS, et al.
    No. 10951.
    Court of Appeal of Louisiana, First Circuit.
    Nov. 15, 1976.
    Rehearing Denied Dec. 20, 1976.
    Writ Refused Feb. 14,1977.

      Joseph A. Gladney, Baton Rouge, of counsel for plaintiffs-appellants.
    Joseph A. Perrault, Baton Rouge, of counsel for defendants Shirley and Frank Jarvis, appellees.
    Paul H. Spaht, Baton Rouge, of counsel for defendants Transportation Ins. Co., ap-pellees.
    Before SARTAIN, COVINGTON and LOTTINGER, JJ.
   LOTTINGER, Judge.

This is an automobile accident case wherein the plaintiffs are suing to recover for doctor, hospital and medical bills, as well as property damage to their automobile, loss of wages and personal injuries of Mrs. Palmer. The defendants are Frank and Shirley Jarvis, husband and wife, Maryland Casualty Company, which supposedly carried a liability policy on the Jarvis automobile, and Transportation Insurance Company, the uninsured motorist insurer of the plaintiffs (hereinafter sometimes referred to as Transportation). Transportation Insurance Company filed an answer and reconventional demand denying liability of the Jarvises, pleading release as a discharge, and, in the alternative, in the event the release did not act as a discharge, for an offset against plaintiffs for the amount paid out, and additionally, as plaintiff in reconvention, should the release be no good, for a judgment against the plaintiff for the amounts paid as consideration for the release. The Jarvises filed-a general denial.

Maryland Casualty Company was dismissed from the law suit because they did not have any existing liability insurance policy on the Jarvises’ automobile at the time of the accident. The plaintiffs filed an answer to the reconventional demand of Transportation denying that there was ever a release granted. Transportation then filed a third party demand against the Jar-vises in the event the Jarvises were found negligent for any judgment against Transportation. The Jarvises filed a general denial to the third party demand of Transportation.

Following trial on the merits, the Trial Court rendered judgment in favor of plaintiff, Willie Palmer, and against the Jarvises for the sum of $1,224.56, and in favor of plaintiff Fannie Palmer and against the Jarvises for the sum of $750.00. The Trial Court further awarded judgment in favor of Transportation and against the plaintiffs dismissing the plaintiffs demands as to said insurance company and dismissing the re-conventional demand of Transportation against plaintiffs. Judgment was further rendered dismissing the third party demand filed by Transportation against the Jarvis-es. From said judgment, a devolutive appeal was taken by plaintiffs and a protective answer to the appeal was filed by Transportation in the event this Court should reverse the decision of the Trial Court.

The facts disclose that on the early morning of June 6, 1973, Mrs. Fannie Palmer was driving her husband’s automobile east in the right hand lane of the east bound lanes of North Street in the City of Baton Rouge, Louisiana. She stopped for a red light at the intersection of North Street and North Acadian Street. While so stopped, she was hit from the rear by the defendant’s vehicle which was driven by Mrs. Jarvis.

The plaintiffs claim that the Trial Court erred (1) in holding that the receipt signed by Mrs. Palmer was a full release in settlement of the personal injury claim which Mrs. Palmer had against Transportation for all sums due by the Jarvises; (2) in giving any weight to the error in recollection of the part of Mrs. Palmer and in causing her to be denied her right of recovery as a result of a mere error in recollection; and (3) in awarding Mrs. Palmer only $750.00 for the personal injuries, pain and suffering which she sustained as a result of the accident.

As a result of the accident, Mrs. Palmer received certain injuries which were treated by Dr. Alvin Stander, the diagnosis being a contusion of the lower back and forehead. Mrs. Joe Samford, the adjuster for Transportation secured a medical report from Dr. Stander, and received certain bills from Mrs. Palmer which were paid.

Appellant, Mrs. Palmer, argues that the claims adjuster for Transportation never discussed the personal injuries she received as a result of the accident, that she was led to believe the forms she received and signed were merely receipts and not releases and that there was never any intention on her part to settle her claim, thus no meeting of the minds. She further argues that the Trial Judge was in error in placing too much weight on her inability to be able to remember that she received three checks from Transportation rather than one as she originally testified.

The injuries to Mrs. Palmer occurred on June 6,1973. There is filed in evidence the following cancelled checks of CNA Insurance Company, the parent company of Transportation Insurance Company, to wit:

1. Draft issued 8/21/73 payable to Fannie Palmer in the sum of $95.00 for reimbursement of Medical-Bone & Joint Clinic.
2. Draft dated 9/14/73 issued to Fannie Palmer in the sum of $301.25 for reimbursement of hospital bill.
3. Draft issued 10/4/73 to Fannie Palmer in the sum of $406.65 representing reimbursement of loss wages.

There is also filed in the record a letter dated October 4, 1973, addressed to Mrs. Palmer which reads as follows: “We will be in a position to forward our draft in settlement of your claim after you sign and return the enclosed: ‘Proof of loss for $_ Receipt for $707.90.’ ”

Enclosed with the letter was a document entitled “RECEIPT FOR PAYMENT” showing receipt from Transportation of the sum of $707.90 by Fannie Palmer “for payment of all damages by reason of injuries/death sustained by Fannie Palmer and caused by an uninsured automobile owned by Frank Jarvis and operated by Shirley Jarvis.” The receipt further provided:

“The undersigned acknowledges and agrees that said sum represents the full amount of damages due him/her according to the terms of said policy and further agrees, in consideration of such payment, upon the Company’s request, to take such action as may be necessary to recover from the owner or operator of such uninsured automobile the damages suffered by the undersigned. In the event of a recovery, the Company shall be reimbursed out of such recovery to the extent of any payment made to the undersigned; and, in addition, shall be reimbursed for expenses, costs and attorney^ fees by it in connection with such action.”

The receipt was signed by Mrs. Palmer and returned to the insurance company after which the last above mentioned draft was forwarded to Mrs. Palmer. All of the drafts were endorsed by Mrs. Palmer, and in addition, the last draft was also endorsed by her husband.

Mrs. Palmer is apparently an intelligent and educated woman. She attended college for four years, the Baton Rouge Capitol Area Vocational School for thirteen months, and at the time of the accident as well as the time of the trial she was employed at Baton Rouge General Hospital, where she had been so employed since June 10, 1968.

We find no evidence in the record which would disclose that Mrs. Palmer was pressured, harassed or rushed into signing these settlement papers. The documents were mailed to her approximately four months after the accident and after she had recovered and returned to work and after all medical bills which she had presented to Transportation had been reimbursed. She had ample opportunity to study the documents and to consult an attorney or any other third person. She made no phone calls, nor did she write Transportation seeking an opinion or explanation of the language contained in the settlement documents. Although the accident occurred on June 6, 1973, she testified she had no contact with Transportation until approximately two months after being discharged by Dr. Stander. However, she did forward a medical authorization form to Transportation which was on June 14,1973, forwarded to Dr. Stander with a request for a medical report. She testified at first that she received one, and only one, check from Transportation, however, she later testified, after Transportation introduced all three drafts into evidence that she did in fact receive the three drafts introduced.

The Trial Judge in his reasons for judgment said:

“The Court in this case has reviewed the testimony, particularly the previous testimony of Mrs. Palmer. We have heard her testimony today, her explanation. We think the law of this state is to the effect that where a person, reasonably educated and intelligent reads a document saying that it does release claims for personal injuries or death, and in this instance Mrs. Palmer testified that she did so read one of these documents that had that language in it, while it may be unfortunate that the person does not consult an attorney for advise, he or she must be held to have released the insurance company. I believe the Court has to look at this from the standpoint that Mrs. Palmer did read the language which affects the release. We don’t know and would be hesitant to say that she fully understood it but then you must look at the situation from the standpoint of the other side. They proffer it as a release; they pay out $400.00 for loss wages; it was uninsured motorist coverage. They didn’t owe the $400.00 under any provision of the policy as they did under the medical pay provision. They paid out $400 for something in a case in which they thought at the time existed a valid brake defect defense. The law doesn’t say that the insurance adjuster is asked to explain to the payee all her rights and to go into intimate details as to what is being done. It suffices that they deal at arms length and the person who is receiving the money must investigate and use their own judgment as to what they are doing. Over and over we get back to the old admonition that your signature on a document of that sort is not a mere ornamentation. Because of the testimony previously given and the retraction of that testimony today, and the other circumstances, the Court feels compelled to validate the compromise or settlement in this case, and so does.”

Mrs. Palmer contends that the last above quoted sentence in the reasons of the Trial Judge indicate the great weight which he placed on her inability to remember that she had received three checks rather than one. After reading the entire record, and in particular the reasons of the Trial Judge, we cannot agree with this assertion by the appellant. Though the Trial Judge does make mention of this fact in his reasons for judgment, taking into consideration all the facts as found in the record, we cannot agree that this fact alone caused him to find judgment in favor of Transportation and against the plaintiffs. Unless it can be shown that the trier of fact has been manifestly erroneous in its interpretation of the testimony and evidence presented, it is the duty of the Appellate Court not to change factual determinations of the Trial Court. Canter v. Koehring Company, 283 So.2d 716 (La.1973), rehearing denied (1973).

Signatures are not mere ornaments on documents, nor should they be intended to be so. Mrs. Palmer admitted reading the language in the receipt which states that it is a release, and there is no indication in the record that she was so illiterate or uneducated that she could not have understood what she read, or sought help for an explanation of what was contained therein. There is certainly no fraud, duress, harassment or errors shown in the evidence, at least we have not found any. The Trial Court was correct in upholding the validity of the settlement agreement.

Appellant contends that the quantum of $750.00 allowed by the Trial Court as against the Jarvises was grossly inadequate. In the assessment of damages, much discretion must be left to the judge or jury. LSA-C.C. art. 1934(3).

Dr. Stander testified that Mrs. Palmer sustained a contusion of the low back and forehead. He first saw her at Baton Rouge General Hospital on June 6, 1973, at which time he admitted her for observation. She improved gradually and was discharged on June 11. At that time, she was advised to return home and begin a gradual increase in activities. She was next examined by Dr. Stander on July 2, 1973, at which time he prescribed medication for discomfort along with an increase in activity. He did not see Mrs. Palmer after that. She was next seen by Dr. Rieger on May 30,1974. He gave her some mild conservative treatment and next saw her on June 13, 1974, when he concluded that she had sustained a lumbosacral muscle strain resulting in no permanent or total disability. He was of the opinion that the condition was a result of the accident. We feel that under the circumstances the quantum awarded by the Trial Judge, though conservative, is neither excessive nor inadequate.

Therefore for the above and foregoing reasons, the judgment of the Trial Court is affirmed. All cost of this appeal are to be paid by plaintiffs.

AFFIRMED.


author: ELLIS, Judge:

text:
    Paul R. BAIER et ux. v. WOMAN’S HOSPITAL FOUNDATION et al.
    No. 10975.
    Court of Appeal of Louisiana, First Circuit.
    Nov. 15, 1976.
    Rehearing Denied Dec. 20, 1976.
    Writ Refused Feb. 18,1977.

      Paul R. Baier, in pro per.
    Charles W. Wilson, III, Baton Rouge, for defendant-appellee.
    Before ELLIS, CHIASSON and PONDER, JJ.
   ELLIS, Judge:

Plaintiffs Paul R. Baier and Helgard B. Baier bring this suit against Woman’s Hospital Foundation, a non-profit, charitable corporation, for injunctive and declaratory relief, and for damages. From a judgment dismissing their suit, plaintiffs have appealed.

When this suit was first filed, on April 16, 1974, Mrs. Baier was pregnant, and expecting a child on or about May 17, 1974. She and her husband were both trained in the LaMaze technique of natural childbirth, in which the husband remains with his wife throughout labor and the delivery of the child. During this time, he assists and comforts his wife in various ways.

The original policies governing use of the delivery and operating suite at the hospital were written on May 13, 1971, and provided:

“No visitors can be allowed to observe operating or deliveries except M.D.s when indicated or R.N.s or OR/OB Technicians given approval by the Supervisor for a learning situation.”

In the minutes of the meeting of the medical staff of the hospital on July 23, 1973, the following entry appears:

“HUSBANDS IN THE DELIVERY ROOM: There was much discussion concerning husbands in the delivery room. Dr. Miller moved that these requests for husbands in delivery be rejected. The motion was seconded and passed.”

This suit was brought asking for a preliminary injunction restraining the defendant from interfering with Mr. Baier’s access to his wife during delivery; for a permanent injunction to the same effect; for a declaratory judgment declaring the hospital’s rule excluding husbands from the delivery room invalid on its face; and for damages.

A hearing was held on the rule for a preliminary injunction on April 29, 1974, and the rule was recalled, vacated and set aside. No appeal was taken from that judgment.

Mr. and Mrs. Baier then obtained the services of another physician, who practiced at the Lane Memorial Hospital in Zachary, Louisiana, and their baby was delivered there, with Mr. Baier in attendance, on May 2, 1974.

Shortly thereafter, the following regulations were adopted relative to those persons who would be admitted to the operating suite:

“In view of the fact that undue traffic in the operating suite bears a concomitant increase in the infection to mother and child, plus an invasion of privacy to other patients, these regulations are put forth to enhance the welfare of the patients attended at Woman’s Hospital.
“Persons allowed admittance to the operating suite, besides the attending physi-cían and nurses assigned to the case are the following:
“1. Members of the East Baton Rouge Medical Society.
“2. Doctors in good standing from another community, if vouched for by a member of the medical staff of Woman’s Hospital.
“3. ’ Any prominent physician visiting in this area.
“4. Medical students under the proper supervision of the attending physician, or under the same supervision as residents. “5. Properly supervised student nurses at approved scheduled classes. “Exceptions to the above will be cleared with the chief of staff, and subject to the approval of the Executivé Committee. “Any physician member who violates the above rule shall be subject to disciplinary action by. the Executive Committee.”

The foregoing regulations were, those in effect when the case first came to trial on its merits on June 17 and July 18, 1975.

Woman’s Hospital is owned and operated by the Woman’s Hospital Foundation, a private, non-profit, charitable corporation. When the hospital was constructed, 1.6 million dollars of Hill-Burton funds were used in connection therewith. The hospital is licensed by the State of Louisiana, but its operation is financed entirely out of its income and any donations which it may from time to time receive. All regulations for its internal operation are made by the Board of Directors or by the medical staff. There are no state or federal regulations relative to who may be present in a delivery room at the time of birth.

Plaintiffs take the position that we have the authority to inquire into the propriety of the regulations complained of herein under both state and federal law. We think it clear that if “state action” is involved herein, we have the authority to examine the regulations in the light of the protection accorded plaintiffs by the Constitutions of the United States and of the State of Louisiana.

The only factual elements in the case on which “state action” can be based are the use of 1.6 million dollars in Hill-Burton funds in the construction of the hospital, and the fact that the hospital is licensed by the State of Louisiana. In the recent case of Greco v. Orange Memorial Hospital Corporation, 513 F.2d 873 (5th Cir. 1975), the hospital involved adopted a rule preventing use of its facilities for non-therapeutic abortions. The hospital was privately operated by a corporation which leased the land and buildings from Orange County, which owned them. The facility had been built with over one million dollars in Hill-Burton funds and 1.762 million dollars raised by the sale of county hospital bonds. The court found that the hospital corporation was responsible for its own upkeep and operation, and that the county was held harmless from liability arising from the operation under the terms of the lease.

After recognizing the principle of law that there must be a close relationship between state regulation and the challenged activity of the regulated body, the court in the Greco case found that because the state exercised no influence on the policy of the hospital with reference to abortions, no such close relationship existed so as to make the abortion regulation constitute “state action”.

We think the Greco case to be dispositive of the issue of “state action” in this case. There is less governmental involvement in the instant case than in the Greco case, and the application of the same principles of law must lead to the same result.

It follows that plaintiffs’ constitutional arguments as to the infringement of their right of marital privacy, and denial of equal protection of the laws must fall, since these principles apply only when state action is present and not to private regulation of private interests.

Our attention has been called to the case of Fitzgerald v. Porter Memorial Hospital, 523 F.2d 716 (7th Cir. 1975), in which a public hospital’s rule excluding husbands from the delivery room was challenged by plaintiffs desiring to use the LaMaze method of childbirth. The reason advanced for and against the rule are the same as those presented by the parties herein. The court said:

“We hold that the so-called right of marital privacy does not include the right of either spouse to have the husband present in the delivery room of a public hospital which, for medical reasons, has adopted a rule requiring his exclusion.”

It would therefore appear that even if “state action” were present, plaintiffs would have no right to the relief sought herein under the constitutional provisions relied on.

Plaintiffs suggest that in any event we have the authority to intervene in the internal affairs of the hospital, in the event that its administrative regulations are arbitrary or capricious.

In the only Louisiana cases dealing with the regulations of a private medical corporation, Clark v. Physicians and Surgeons Hospital, Inc., 121 So.2d 752 (La.App. 2nd Cir. 1960) and Clark v. Physicians and Surgeons Hospital, Inc., 131 So.2d 144 (La.App. 2nd Cir. 1961), the court held that a private hospital corporation “clearly has the right to adopt rules and regulations for its administration, including the right to exclude its use by licensed physicians for any cause it deems necessary.”

The Hospital Licensing Law, R.S. 40:2100 et seq., does not bestow on the State of Louisiana any specific authority over the internal administrative policies of private hospitals. The record reflects that the responsible state agency takes a “hands off” attitude toward the policy of Woman’s Hospital relative to the exclusion of husbands from the delivery rooms of its operating suite. In fact, we find nothing in the record, or at law, which compels the defendant hospital to accept Mrs. Baier as a patient, much less accede to plaintiffs’ demand in this case.

There may be circumstances in which judicial intervention in the internal administrative affairs of a private hospital may be justified, but if so, they do not exist in this case. At best, plaintiffs have shown that there exists a difference of opinion among well qualified expert witnesses as to whether or not the design of the facilities of Woman’s Hospital is such as to admit of free access for husbands to the delivery room. The trial judge, who heard the witnesses and visited the operating suite, found that there was nothing unreasonable about the rule excluding husbands, and his conclusion is fully supported by the evidence. Even if we had the authority to substitute our judgment for that of the governing body of the defendant hospital, we would not do so in this case.

Plaintiffs object to the witness fees of the experts called by defendants being taxed as costs, alleging that their interests in the case were too closely aligned with that of the defendant hospital to justify assessing a fee. The point is not argued in brief, and we assume, has been abandoned.

The judgment appealed from is affirmed at plaintiffs’ cost.

AFFIRMED.

ON REHEARING

Plaintiff alleges that we incorrectly assumed that he had abandoned his specification of error that no expert witness fees should be allowed to doctors practicing at the defendant hospital who were called as experts on behalf of defendant. These physicians were called and recognized as expert witnesses by the Lower Court, who gave weight to their testimony as such, and who awarded them expert fees. We find no error.

REHEARING REFUSED.