author: MILLER, Judge.

text:
    Daisy LaCOUR, Plaintiff-Appellant, v. COLONIAL LIFE & ACCIDENT INSURANCE COMPANY, Defendant-Appellee.
    No. 5285.
    Court of Appeal of Louisiana, Third Circuit.
    Dec. 24, 1975.

      Edwin Dunahoe, Natchitoches, for plaintiff-appellant.
    Watson, Murchison, Crews & Arthur by Ronald E. Corkern, Jr., Natchitoches,, for defendant-appellee.
    Before MILLER, WATSON and CU-TRER, JJ.
   MILLER, Judge.

Plaintiff Mrs. Daisy LaCour appeals the trial court judgment denying the full amount of her claim for hospital and disability benefits provided by defendant Colonial Life & Accident Insurance Company. Plaintiff also appeals the trial court’s refusal to award penalties and attorney fees. We affirm.

The trial court awarded plaintiff the $1,480 tendered by defendant after suit was filed, but expressly held plaintiff was not totally and permanently disabled within the meaning of the policy. We do not understand this inconsistent ruling, however, defendant did not answer the appeal to seek a reversal of the judgment.

We fail to find manifest error in the trial court’s factual determination that plaintiff failed to prove she was wholly and continuously disabled from performing any and every duty pertaining to her occupation.

On April 28, 1974 Mrs. LaCour was employed as a teacher in the Natchitoches Parish School system. While on a fishing trip she fell causing severe injuries to her knee. She was taken to the hospital and her physician thought an operation might be necessary to repair the injury. The doctor advised this 211 pound 41 year old patient not to place weight on that leg. He thought she would not return to her work and was not informed that she actually returned to work.

After missing four days of school Mrs. LaCour returned to her classroom on crutches and finished the school year ending May 30, 1974. On June 5 an orthopedic surgeon reconstructed the patellofe-moral mechanism, and plaintiff was not discharged as able to return to her teaching profession until January 19, 1975.

The first notice of this claim was received by Colonial on August 19, 1974 in the form of an incompleted proof of loss. There was no indication surgery had been performed. The top half of the one page proof of loss was completed by the treating physician and it stated plaintiff was injured April 28, 1974 and was continuously totally disabled from April 1974 thru “undetermined.” The bottom half of the proof of loss was to be completed by Mrs. LaCour. She did not answer the four questions asking for 1) dates totally disabled, 2) dates partially disabled, 3) dates confined to hospital, and 4) dates confined to house. Plaintiff explained why she didn’t answer these questions at Tr. 34:

Let me explain myself, but in the meantime I couldn’t say that I was totally disabled from [April 28] up to the time I went back to work because I did go back to work, and if I have been totally disabled I could not have gone back to work even though after going back to work I was on crutches. But if I had been totally disabled I would have been at my house.

Colonial’s policy did not provide benefits for partial disability and defined total disability as injuries “sustained by the Insured and within 20 days from date of accident, independently of all other causes, wholly and continuously disable the Insured from performing any and every duty pertaining to his occupation.” Monthly benefits of $200 were to be paid “for the period of such loss of time.”

On September 11, 1974 plaintiff for the first time notified Colonial of her claim that she had been totally disabled from the date of the April 28th accident. Within ten days of this notice, the company received a report from Mrs. LaCour’s orthopedic surgeon stating she was only partially disabled.

To establish manifest error, in the trial court’s holding (that Mrs. LaCour failed to establish she was disabled within the meaning of the policy), she cites Ayres v. New York Life Ins. Co., 219 La. 945, 54 So.2d 409 (1951); Pete v. Metropolitan Life Ins. Co., 171 So. 868 (La.App. 1 Cir. 1937), and Dennis v. Business Men’s Assurance Company of America, 175 So.2d 431 (La.App. 2 Cir. 1965). These cases recognize the rule that total disability is a relative matter and must rest chiefly on the peculiar circumstances of each case and particularly upon capabilities of the person injured. Total disability as contemplated by an accident insurance policy does not mean, as its literal construction would require, a state of absolute helplessness but contemplates inability to do substantially all the material acts necessary to the prosecution of the insured’s business or occupation in substantially his customary and usual manner. The trial court acknowledged this to be a correct statement of the law.

In both Ayres and Dennis, the appellate court affirmed the trial court’s holding that the insured proved his disability and could not return to work. In Pete, the trial court found that, after receiving thirteen weeks of disability benefits, a railroad section laborer had performed his usual work for a three week period. The appellate court reversed and held the insured laborer proved he was unable to perform his work during the period his employer asked him to return to the job. This was confirmed when the employer discharged him at the end of the three week period because the section laborer could not perform the work.

As distinguished from these cases, Mrs. LaCour returned to work within five days of the accident and worked for a period of almost one month. By h'er own testimony she was not “wholly and continuously disabled from performing any and every duty pertaining to [her] occupation.” Although she testified she couldn’t do the work required of her as a school teacher, she did not bring evidence to disprove the school records that established she performed her work as a classroom teacher.

Where evidence is before the trier of fact which, upon a reasonable evaluation of credibility, furnishes a reasonable factual basis for the trial court’s finding, the appellate court should not disturb this factual finding absent manifest error. Where there is conflict in the testimony, reasonable evaluations of credibility and reasonable inferences of fact should not be disturbed even though the appellate court may believe its own evaluations and inferences are as reasonable. Canter v. Koehring Company, 283 So.2d 716 (La.1973); Bertrand v. Aetna Casualty & Surety Company, 306 So.2d 343 (La.App. 3 Cir. 1975).

Finding no manifest error in the trial court’s factual determination, we do not reach the issue of penalties and attorney fees under LSA-R.S. 22:657.

The trial court judgment is affirmed at plaintiff’s costs.

Affirmed.


source: Caselaw Access Project

author: WATSON, Judge.

license: Public Domain

text:
    Sybil Jane SWOPE, Plaintiff-Appellee, v. William Joseph MITCHELL, Jr., Defendant-Appellant.
    No. 5281.
    Court of Appeal of Louisiana, Third Circuit.
    Dec. 24, 1975.
    Peter C. Piccione, Lafayette, for defendant-appellant.
    Bares & Placer by J. Michael Placer, Lafayette, for plaintiff-appellee.
    Before MILLER, WATSON and CU-TRER, JJ.
   WATSON, Judge.

Plaintiff, Sybil Jane Swope, filed this suit against defendant, William Joseph Mitchell, Jr., her former husband, to obtain a partition of the community of acquets and gains. Subsequently, the parties entered into a compromise partition of the property with the exception of Mitchell’s retirement pay from the United States Marine Corps, the disposition of which was left to the court. The trial court rendered judgment awarding the wife Sybil Swope 11/25 of Mitchell’s retirement pay. Captain Mitchell served in the Marines for 25 years; 22 of those years were during the existence of the community; and the wife was awarded 11/25 of the retirement income. The amount due from dissolution of the community until rendition of judgment was calculated at $15,113.45, and Mitchell was ordered to pay his wife 11/25 of all future payments as received.

Defendant Mitchell has appealed, contending :

(1) that the trial court erred in finding that his retirement pay formed part of the community of acquets and gains; and
(2) in the alternative, that the percentage awarded his wife is too large and partially consists of benefits earned in non-community property states.

The issue is whether Mitchell’s retirement pay constitutes an asset acquired during the existence of the community. A second issue is whether, if the retirement pay is an asset of the community, all of it has that character or only the portion earned while the parties were domiciled in community property states.

Facts

The facts were stipulated as follows:

Mitchell entered the Marines on December 2, 1940, at Des Moines, Iowa, and was voluntarily discharged with the rank of captain on June 30, 1965, at Jacksonville, North Carolina. His retirement pay commenced July 1, 1965. Mitchell and his wife were married August 1, 1943, in Louisiana and remained in the State for three months after the marriage. Immediately following Mitchell’s retirement, the parties returned to Lafayette, Louisiana. The community was dissolved on March 17, 1970. A judgment of separation was obtained in Lafayette on April 23, 1970, and a divorce from the same court on May 14, 1971. During the course of Mitchell’s military career the parties resided in various places throughout the United States and abroad.

Codal Provisions

The parties’ marriage in Louisiana created a community of property by operation of the law.

“LSA-C.C. art. 2399: Every marriage contracted in this State, superinduces of right partnership or community of ac-quets and gains, if there be no stipulation to the contrary.”

The property falling into the community is defined in LSA-C.C. art. 2402 in pertinent part as follows:

“. . . the produce of the reciprocal industry and labor of both husband and wife, and of the estate which they may acquire during the marriage, . . .”

Louisiana Jurisprudence

The question of a divorced wife’s interest in her former husband’s retirement benefits has previously been considered in Louisiana. Daigre v. Daigre, 228 La. 682, 83 So.2d 900 (1955), held that benefits under a, noncontributory, unenforceable pension plan are in the nature of a gratuity, and pension payments made after dissolution of the community are separate property. Daigre has not been followed in the later cases, which are distinguishable by the enforceable nature of the pension plans considered. In Laffitte v. Laffitte, 232 So.2d 92 (La.App. 2 Cir. 1970), and 253 So.2d 120 (La.App. 2 Cir. 1971), an employee husband’s vested interest in a profit-sharing plan earned during the marriage was declared an asset of the community. The wife’s participation was limited to one-half the rights acquired while there was a community between the parties and her right to that interest was made effective only when the proceeds were available to her husband. Langlinais v. David, 289 So.2d 343 (La.App. 3 Cir. 1974), decided that a divorced wife was entitled to one-half her former husband’s interest in a retirement fund. Since the community in Langlinais, supra, was dissolved before the husband’s retirement, the wife was not entitled to one-half of the monthly retirement check but only to one-half the value of the fund as of the date of dissolution of the community. This distinction is not applicable here where the husband retired prior to the dissolution of the community. Hamilton v. Hamilton, 258 So.2d 661 (La.App. 3 Cir. 1972), held that a wife’s interest in the employee husband’s retirement and thrift plan was limited to one-half that portion derived from contributions made during the period of the marriage. Lynch v. Lawrence, 293 So.2d 598 (La.App. 4 Cir. 1975), writs refused La., 295 So.2d 809 and 814, dealt with the divorced wife’s share in her husband’s noncontributory pension plan with the telephone company. The husband’s interest had vested before the dissolution of the community, although he had not retired. Lynch held that the wife was entitled to receive one-half the discounted value of the deferred pension plan as of the date of dissolution, but payment would not begin until her husband’s retirement. Other cases, such as the recent one of T. L. James & Co., Inc. v. Montgomery, 308 So.2d 481 (La.App. 1 Cir. 1975), writ granted La., 310 So.2d 850, reversed 310 So.2d 856 (La.1975), deal with death benefits in retirement plans.

The only Louisiana cases which have been found dealing specifically with military retirement and disability pay are: Howard v. Ingle, 180 So. 248 (La.App. 2 Cir. 1938); Succession of Lewis, 192 La. 734, 189 So. 118 (1939); and Succession of Scott, 231 La. 381, 91 So.2d 574 (1956). Howard, supra, holds that a pension for military service which was earned and payment of which had commenced prior to marriage did not fall into the community. Lezvis, supra, holds that United States Service Bonds earned by military service and received prior to marriage are separate property. The instant case presents the converse situation, and the converse of Howard and Lewis is that a pension for military service which was earned and payment of which had commenced during marriage is community property. Scott, supra, holds that government payments to a veteran for a disability sustained in the military during his marriage are community property.

Jurisprudence of Other Jurisdictions

Other states are in accord with the Louisiana jurisprudence to the effect that vested retirement benefits, attributable to employment during marriage, constitute a community asset and have applied this rule to military retirement.

The California case of In re Marriage of Fithian, 10 Cal.3d 592, 111 Cal.Rptr. 369, 517 P.2d 449 (1974), cert. den. 419 U.S. 825, 95 S.Ct. 41, 42 L.Ed.2d 48, is specifically concerned with military retirement pay and holds that it is properly the subject of state community property laws. There, the parties had been married for 16 of the husband’s 22 years in the Marine Corps and became residents of California prior to the husband’s retirement. 71% -of the retirement pay was declared to be community property, and the husband was directed to pay 35)4% of the benefits to his former wife as he received them, a result very similar to that reached by the trial court herein.

Mora v. Mora, 429 S.W.2d 660 (Tex.Civ.App.1968), is a Texas case which holds that the portion of a military retirement plan earned during marriage constitutes community property. The proportionate amount was calculated and expressed in a fraction in the same way the trial court calculated Sybil Swope’s interest here.

The same conclusion has been reached in New Mexico, LeClert v. LeClert, 80 N.M. 23S, 453 P.2d 755 (1969); Washington, Payne v. Payne, 82 Wash.2d 573, 512 P.2d 736 (1973); Idaho, Ramsey v. Ramsey, 96 Idaho 672, 535 P.2d 53 (1975); and other states.

One of the contentions made by Mitchell is that his retirement pay is compensation for his present service in the Reserve rather than payment for past services. This is incorrect and was appropriately dealt with iri Fithian, supra, as follows :

“Apart from the foregoing judicial declarations on tangential issues, military retirement pay must be realistically viewed as compensation for past, not present, services. Congress’ purpose in ^creating the retirement pay system was to enhance the morale of the serviceman and to encourage him to remain in the military, and not to compensate him for his limited responsibility to the government after his retirement. Indeed, the amount of retirement pay a serviceman receives bears no relation to any continuing duties after retirement, but is calculated solely on the basis of the number of years served on active duty and the rank attained prior to retirement. (10 U.S.C. § 6323(e).) Moreover, should the serviceman actually be recalled to active duty, he is not only additionally compensated according to the active duty pay scale, but his rate of retirement pay is also increased thereafter. (10 U.S.C. § 1402.) The conclusion is inescapable that retirement pay is awarded in return for services previously rendered and therefore is divisible as community property to the extent the serviceman was married while on active duty.”
111 Cal. Rptr. 376, 377, 517 P.2d 449, 456.

Residence Outside Louisiana

Mitchell contends that the portion of his retirement earned during residence in non-community property states is separate property. However, his right to retirement pay was acquired during the marriage and is presumed to be community property in the absence of strong proof to the contrary. LSA-C.C. art. 2405; R.D.M. Corporation v. Patterson, 255 La. 301, 230 So.2d 820 (1970). In addition, the record does not reveal whether Mitchell’s various military transfers were accompanied by an intention to change the couple’s domicile. In the absence of evidence showing such an intention, the mere fact that he was assigned from place to place did not change the legal residence of the parties. 25 Am.Jur.2d § 39; LSA-R.S. 1:54; LSA-C.C. art. 46. The matrimonial domicile was originally established in Louisiana, and there is no proof that it was ever changed. Stevens v. Allen, 139 La. 658, 71 So. 936 (1916). Although Mitchell entered the Marine Corps in Iowa, the record does not reveal whether Iowa was in fact his domicile. Since the parties were married in Louisiana, returned to Louisiana after Mitchell’s retirement, and were divorced in a Louisiana court, we conclude that they regarded this State as their permanent home and domicile. See the Idaho case of Ramsey v. Ramsey, supra, which also placed the burden of proof to prove change of domicile and separate nature of property on the husband alleging these facts. Here, Mitchell has not met that burden.

Conchision

For the foregoing reasons, there is no error in the finding by the trial court that Sybil Jane Swope is owner of an 11/25 interest in her divorced husband’s military retirement income-. The judgment of the trial court is affirmed. All costs of this appeal are assessed to defendant-appellant, William Joseph Mitchell, Jr.

Affirmed.

      . LSA-C.C. art. 2405:
      “Presumption of community as to all effects at dissolution of marriage
      Art. 2405. At the time of the dissolution of the marriage, all effects which both husband and wife reciprocally, possess, are presumed common effects or gains, unless it be satisfactorily proved which of such effects they brought in marriage, or which have been given them separately, or which they have respectively inherited.”

      . LSA-R.S. 1:54:
      “Residence; forfeiture Residence once acquired shall not be forfeited by absence on business of the state or of the United States. Voluntary absence from the state of two years, or the acquisition of residence elsewhere, shall forfeit a residence within this state.”

      .LSA-C.C. art. 46:
      “Absence from state; forfeiture of domicile
      Art. 46. Domicile once acquired shall not be forfeited by absence on business of the State or of the United States, but a voluntary absence of two years from the State, or the acquisition of residence in any other State of this Union, or elsewhere, shall forfeit a domicile within this State.”


author: CUTRER, Judge.

text:
    Sandra Kaye ANDREWS et ux., Plaintiffs and Appellees, v. Carol L. JOHNSON et al., Defendants and Appellants.
    No. 5280.
    Court of Appeal of Louisiana, Third Circuit.
    Dec. 24, 1975.

      Lewis & Lewis by Seth Lewis, Jr., Ope-lousas, for defendants and appellants.
    Sandoz, Sandoz & Schiff by Leslie J. Schiff, Opelousas, for plaintiffs and appel-lees.
    Before MILLER, WATSON and CU-TRER, JJ.
   CUTRER, Judge.

Plaintiffs, Sandra Kaye Andrews and her husband, Timothy Andrews, sued Carol L. Johnson and their uninsured motorist insurer, The Employers’ Fire Insurance Company, for damages resulting from an accident allegedly caused by the negligence of Mrs. Johnson. A trial was had and judgment rendered in favor of plaintiffs. Defendants have appealed and plaintiffs have answered the appeal. We amend and affirm.

The accident which brought about this suit occurred on October 23, 1973, in Opelousas, Louisiana, at the intersection of Vine Street and North Court Street. Vine Street is a one-way, two-laned street with the traffic flow moving from west to east. North Court Street is a two-way, two-laned street with the traffic flow moving north and south. The accident took place when a 1965 Volkswagon automobile driven by Mrs. Andrews was struck at the intersection of Vine and North Court Streets by a 1965 Pontiac automobile being driven by Mrs. Johnson. The intersection is controlled by an electric traffic light. The factual issue before the trial court was who ran the red light. This question was resolved in favor of plaintiffs. The issue before this court is whether there is manifest error in that determination.

The conflict in the testimony is as follows: Mrs. Andrews testified that she was returning to work after lunch and that as she approached the intersection while traveling in a northerly direction on North Court she saw that the light was red and she stopped in obedience of that signal. While stopped at the intersection a pickup truck approaching from the west on Vine signalled a right turn and Mrs. Andrews was required to back her automobile in order to give the pickup truck sufficient space to make the right turn from Vine to North Court. When she looked at the light Mrs. Andrews noticed that it had turned green and she placed her vehicle into low gear and proceeded into the intersection. As she got to the center of the intersection her automobile was struck on the left side by the automobile being driven by Mrs. Johnson.

Mrs. Johnson testified that she was returning home from shopping when the accident occurred. She had her two young children in the car as well as her sister-in-law and her young child. She was proceeding along Vine Street in the left lane of travel moving in an easterly direction. Her testimony was that as she approached the intersection of Vine and North Court Streets the traffic light was in her favor and that it never changed before the accident occurred. The testimony of her sister-in-law was substantially the same. The other witnesses who testified were the man driving the turning pickup truck, Francis Dar jean, and the city policeman who investigated the accident, Johnny Ray Hargroder.

The trial judge did not give any determinative weight to the testimony of Dar jean. The relevant portions of his testimony were.conclusions drawn by him with reference to the timing of the traffic signal change after he turned the corner from Vine to North Court. As pointed out by the trial judge in his written reasons for judgment the witness’s conclusions involved considerations of distance, location, rates of speed, rates of acceleration, rates of deceleration and time intervals which factors were not known to the court or the witness. The testimony of the policeman was of no assistance in determining who had the right of way. The trial judge found that since Mrs. Andrews was stopped at the intersection waiting for the light to change, it was more likely that she saw that the light had changed and Mrs. Johnson, who was proceeding down Vine Street, had failed to see the light change from green to red. Judgment was accordingly rendered in favor of plaintiffs in the amounts of $5,427.20 for medical expenses, $10,000.00 ' for pain and suffering and $5,000.00 for loss of earnings.

We have carefully reviewed the record in this case and find ample evidence to support the conclusions of the trial judge that the accident resulted from the negligence of Mrs. Johnson and that Mrs. Andrews was free from negligence. Finding no manifest error on the part of the trial judge we affirm the judgment with reference to liability.

The tortfeasor in this case, Mrs. Johnson, was not covered by liability insurance at the time of the accident. For that reason plaintiffs joined their uninsured motorist carrier as a party-defendant. In his written reasons for judgment dated March 11, 1975, the trial judge held that the judgment against the insurer was restricted to $10,000.00, apparently relying on this court’s decision in Barbin v. United States Fidelity & Guaranty Co., 302 So.2d 631 (La.App. 3rd Cir. 1974), which prohibited “stacking” of uninsured motorist coverage under an insurance policy containing the same provisions as the one with which we are concerned in the present case. This court’s interpretation of the 1972 amendment to LSA-R.S. 22:1406 was reversed by the Supreme Court on June 23, 1975 (315 So.2d 754). Plaintiffs have answered the appeal in this case asking that the judgment be amended so as to permit the stacking of uninsured motorost coverage provided for the two cars insured under the policy provided by their insurer. After reviewing the record in this case, and applying the Supreme Court’s interpretation of LSA-R.S. 22:1406 to the facts before us, we find that uninsured motorist coverage provided for plaintiffs’ two automobiles should be “stacked” to provide a total available coverage to plaintiffs of $20,000.00.

In their answer to the appeal the plaintiffs have also asked this court to increase the award for pain and suffering on the part of Mrs. Andrews from $10,000.00 to $20,000.00. Although Mrs. Andrews sustained a fracture of the left ileum, a fracture of the left inferior pubic ramus, and a comminuted fracture of the left ace-tabulum, requiring 52 days of hospitalization and totally disabling her for about one year, the trier of facts has much discretion in the assessment of damages under LSA-C.C. article 1934. We have carefully reviewed the evidence presented in this case and find no clear abuse of the trial judge’s much discretion. Fox v. State Farm Mutual Automobile Insurance Co., 288 So.2d 42 (La.1973).

For the reasons assigned, it is ordered, adjudged and decreed that there be judgment herein in favor of plaintiff, Timothy Andrews, and against defendants, Carol L. Johnson and The Employers Fire Insurance Company, in solido, in the full and true sum of Five Thousand Four Hundred Twenty-seven and 20/100 ($5,427.20) Dollars, with legal interest at the rate of seven (7%) per cent per annum thereon from date of judicial demand, until paid, subject to a credit of One Thousand and NÓ/100 ($1,000.00) Dollars, in favor of The Employers Fire Insurance Company; it is further ordered, adjudged and decreed that there be judgment here in favor of plaintiff, Sandra Kaye Andrews, and against defendants, Carol L. Johnson and The Employers Fire Insurance Company, m solido, in the full and true sum of Fifteen Thousand and NO/lOO ($15,000.00) Dollars, with legal interest at the rate of seven (7%) per cent per annum thereon from date of judicial demand, until paid. In all other respects the judgment of the trial court is affirmed at defendants-appellants’ costs.

Amended and affirmed.

      . The plaintiffs’ insurer provided uninsured motorist coverage on two vehicles owned by plaintiffs, the 1965 Volks wagon involved in the accident and a 1971 Chevrolet.


author: HUMPHRIES, Judge.

text:
    Norwood Watts Benjamin DAVIS, Plaintiff-Appellant, v. SOUTHERN FARM BUREAU CASUALTY INSURANCE CO. et al., Defendants-Appellees.
    No. 5260.
    Court of Appeal of Louisiana, Third Circuit.
    Dec. 24, 1975.
    Guillory, McGee & Mayeux by John G. Fontenot, Eunice, for plaintiff-appellant.
    Jack C. Frugé, Ville Platte, for defendants-appellees.
    Before MILLER, HUMPHRIES and PETERS, JJ.
   HUMPHRIES, Judge.

Norwood Davis filed suit against Aides Vidrine, Jr., Joseph Ardoin and Southern Farm Bureau Casualty Insurance Company for personal injuries and medical expenses. He claims that, while stopped at an intersection, a vehicle owned by Vidrine, driven by Vidrine’s employee, Ardoin, and insured by Southern Farm, struck his pick-up truck from the rear.

Defendants filed an exception of no cause or right of action. The ground alleged as supportive of the exception was the granting of a full and final release, in connection with the accident. The release which was introduced into evidence at the trial on the exception was given in consideration of $154.00.

The trial judge maintained the exception of no right of action and dismissed plaintiff’s suit.

Plaintiff has appealed from the judgment below, contending that he signed the release under a mistake of fact, sufficient to vitiate the release. In support of this contention plaintiff cites Cole v. Lumberman’s Mutual, 160 So.2d 785 (La.App., 3rd Cir. 1964); Carlton v. Great American Insurance Co., 273 So.2d 655 (La.App., 4th Cir. 1973), and Wells v. Aguillard, 244 So.2d 689 (La.App., 4th Cir. 1971). The Cole and Carlton cases are inapposite. In those cases, the “error” was the representation that there was a limited and much smaller amount of insurance coverage than that in fact existed. In Cole, the Court said:

“. . . since the agreement was entered into by reason of an error of fact as to the principal or at least a material cause of the contract, . . . which error was in fact induced and abetted by the action of the other party so procuring the thus — invalid consent to the compromise.” (citations omitted and emphasis added)

Wells v. Aguillard, supra, involved a factual situation somewhat similar to this case. It, however, is distinguished on the basis of the trial court’s finding “that the release was obtained by deceit.” The Court also construed against the defendant its failure to introduce the testimony of the insurance adjustor.

There is no indication of deceit or misrepresentation on the part of any defendant in this case. Plaintiff is an intelligent and literate individual having a Masters Degree plus 30 hours toward a doctorate in the field of education. No pressure was exerted on plaintiff. He requested the settlement and received the release form in the mail. He signed it although admittedly without having read it. The settlement was for almost the exact amount of property damages sustained by his car and when he signed the settlement he did not think he had sustained serious personal injuries. The settlement however specifically stated all claims for property damage and personal injuries were released.

In Thigpen v. Guarisco, 197 So.2d 904 (La.App., 1st Cir. 1967) the Court stated:

“It is clear that where literate and intelligent persons execute a release which is clear and unambiguous in its terms, they cannot later have the release nullified in the absence of fraud or violence, or unless there can be shown error as to the person or on the matter in dispute. Civil Code Article 3079”
“As pointed out in the Tooke case, [Tooke v. Houston Fire and Casualty Insurance Co., La.App., 122 So.2d 109], supra, the failure to read a release is neither an acceptable defense nor a reasonable excuse.”

There was no error in the conclusion of the trial court that the release was validly obtained and is binding.

While we agree with the conclusion reached below, we find that the trial court was in error when it maintained the exception of no right of action. In Bielkiewicz v. Rudisill, 201 So.2d 136 (La.App., 3rd Cir. 1967) the Court said:

“However, the exception of no right of action is not available to urge a defense to the effect that the plaintiff is without interest simply because the defendants have a defense to the plaintiff’s action.” (citations omitted)
“For instance, in Wischer [Wischer v. Madison Realty Co., 231 La. 704, 92 So.2d 589], the Supreme Court reversed the lower court and held that the defendants could not by this exception introduce a compromise and quitclaim agreement executed by the plaintiff in favor of the defendants in order to prove that he lacked interest or right to file the suit in question.”

The proper label of the exception should have been that of “res judicata”. The lower court was correct in its ruling, but was in error in maintaining the exception of “no right”. It should have recognized and overlooked the miscaptioning and maintained the exception as one of “res ju-dicata”.

In the body of the exception the defendants specifically set up their objection that plaintiff had compromised his cause of action.

“That plaintiff has no cause or right of action or no interest in the plaintiff to institute this suit, as plaintiff, on June 24, 1974, granted unto your alleged defendants a full and final release in connection with the accident which occurred on or about May 27, 1974, which is the basis of this suit, all as will more fully be shown by copy of said release attached hereto.”

It is clear that defendants seek to plead the previous compromise as a bar to this suit. Present practice dictates that the courts look to what the party seeks and not merely at the label he uses. C.C.P. Arts. 865, 5051. In Jackson v. Dickens, 236 So.2d 81 (La.App., 1st Cir. 1970) the court treated an exception of no right of action as an exception to procedural capacity. In Moore v. Shell Oil Co., 228 So.2d 205 (La.App., 3rd Cir. 1970) an exception of no right of action was treated as an exception of no cause of action. We treat this exception as one of res judicata and sustain it.

For the reasons assigned the judgment appealed from is affirmed. All costs of the appeal are to be paid by the plaintiff-appellant.

Affirmed.


author: PETERS, Judge ad hoc.

text:
    Harry FREEMAN, Plaintiff-Appellant, v. AMERICAN MUTUAL LIABILITY INSURANCE COMPANY, Defendant-Appellee.
    No. 5270.
    Court of Appeal of Louisiana, Third Circuit.
    Dec. 24, 1975.

      Guillory, McGee & Mayeux by John G. Fontenot, Eunice, for plaintiff-appellant.
    Mouton, Roy, Carmouche & Hailey by John K. Hill, Jr., Lafayette, for defendant-appellee.
    Before MILLER, HUMPHRIES and PETERS, JJ.
   PETERS, Judge ad hoc.

This is an appeal from a judgment denying plaintiff’s claim for workmen’s compensation benefits. The trial^ court held that plaintiff failed to show by a preponderance of the evidence that he was injured in an accident arising out of and in the course of his employment. We affirm.

It is undisputed that plaintiff is suffering from myositis ossificans, a calcification that forms when blood from a bruise is not reabsorbed by the body. The calcium deposit is located near plaintiff’s hip. Plaintiff alleges he received the bruise that led to the myositis ossificans in an accident that occurred while he was working for defendant’s insured. The alleged accident occurred while plaintiff was working with Alvin Aclise, another employee of defendant’s insured. Plaintiff and Aclise were the only witnesses to the alleged accident.

Plaintiff testified he and Aclise were loading a cattle trough onto a three-quarter ton truck when Aclise pushed the trough into plaintiff’s body causing the injury. He said that he was standing in the bed of the truck attempting to lift the front of the trough onto the roof of the truck’s cab when Aclise, who was standing on the ground, pushed the other end of the trough, causing the trough to strike plaintiff.

Aclise admitted he and plaintiff had loaded a cattle trough onto a truck on the day in question but denied that plaintiff was ever struck by the trough. He said that he put the front of the trough on top of the cab while plaintiff pushed the trough from the rear. He further testified that plaintiff had complained of feeling pain in his side the day before the alleged accident.

The trial judge observed plaintiff and Aclise when they testified and was therefore in the best position to determine the credibility of each of these witnesses. He apparently was convinced by the testimony of Aclise that plaintiff was not injured while working for defendant’s insured. We cannot find any manifest error in his decision and therefore affirm.

All costs in this court and in the court below are to be paid by plaintiff-appellant.

Affirmed.


author: DENNIS, Judge.

text:
    Joyce Carolyn Eller COOPER, Plaintiff-Appellee, v. Kenneth D. COOPER, Defendant-Appellant.
    No. 12709.
    Court of Appeal of Louisiana, Second Circuit.
    Dec. 10, 1975.
    En Banc. Rehearing Denied Jan. 6, 1976.

      Mecom, Scott & Woods by Leroy H. Scott, Jr., Shreveport, for defendant-appellant.
    Charles E. Welsh, Bossier City, for plaintiff-appellee.
    Before PRICE, DENNIS and MARVIN, JJ.
   DENNIS, Judge.

This appeal presents a question of fact. Did the trial court abuse its discretion by refusing to reduce the amount of child support previously established in a judgment of separation from bed and board ?

The parties were judicially separated by a judgment dated September 21, 1973, in which Mrs. Cooper was awarded custody of their three minor children, $250 per month child support, and $25 per month alimony. The judgment expressly provided that the alimony decree was based on evidence that Mrs. Cooper worked two days a week for wages of $2.50 per hour.

In August, 1974, Mrs. Cooper and her children moved to Florida, where she obtained full time employment in a large grocery store at a salary of about $125 per week. Several weeks later she filed a rule to show cause why Mr. Cooper should not be held in contempt of court for failure to pay child support and alimony as ordered. Mr. Cooper responded by filing a rule to show cause why the child support should not be reduced and the alimony terminated. After a hearing on Oct. 17, 1974, the trial court terminated the alimony but refused to reduce the child support award or to hold Mr. Cooper in contempt.

Mr. Cooper appealed contending that changes in the parties’ circumstances justified a reduction of the child support award as well as termination of alimony for his wife. Mrs. Cooper did not appeal or answer Mr. Cooper’s appeal.

There is no evidence of a change in the needs of the children or in Mr. Cooper’s income since the September 21, 1973 judgment establishing the child support payments. However, appellant argues that the substantial increase in Mrs. Cooper’s income required a reduction of the child support because she also owes an obligation to support the children. If there had been no other evidence to support the decision below, perhaps we would agree. But Mrs. Cooper testified without contradiction that she was forced to move from Louisiana to Florida in order to obtain full time employment because the support and alimony payments were not sufficient to" provide sustenance for her and the children. She also testified that she and the children could no longer receive the medical benefits to which they were entitled previously as dependents of an air force retiree. Mr. Cooper testified that he was financially unable to pay any more than the amounts originally ordered by the court. All of the evidence indicates that the separation judgment fixed a small alimony award for Mrs. Cooper in deference to Mr. Cooper’s lack of income and that it did not reflect the full extent of her need for financial assistance.

The trial judge, in a colloquy with one of counsel, indicated his view that the basic needs of Mrs. Cooper and the children were at least equal to the aggregate of Mrs. Cooper’s salary and the child support award. Therefore, he reasoned, the increase in Mrs. Cooper’s income, although substantial, would not provide any excess money which could be used to grant Mr. Cooper any relief from his obligation to support the children. We find no error or abuse of discretion in the trial judge’s determination.

The judgment of the district court is affirmed at the cost of the appellant.

Affirmed.


text:
    Anoncial TARVER, Plaintiff-Appellant, v. GARAN, INC. and Insurance Company of North America, Defendants-Appellees.
    No. 5291.
    Court of Appeal of Louisiana, Third Circuit.
    Dec. 24, 1975.
    Shelton & Cline, by Jack Derrick Miller, Rayne, for plaintiff-appellant.
    Davidson, Meaux, Onebane & Donohoe, by Edward C. Abell, Jr., Lafayette, for defendants-appellees.
    Before MILLER, WATSON, and CU-TRER, JJ.
   MILLER, Judge.

Plaintiff Anoncial Tarver appeals the dismissal of her workmen’s compensation claim against her employer defendant Gar-an, Inc. and its insurer. The trial court held she failed to establish a connection between the second degree burn and the hernia of old scar tissue which was repaired nine months later. We affirm.

Mrs. Tarver was 45 years old and classified as obese. At the time of the accident, she had two surgical scars resulting from surgeries — one about seventeen years before and the other about five years before. One surgical scar was in the area- (three inch by three inch) burned while Mrs. Tarver was working as a presser with a steam press. She reported the accident and was treated by Dr. Wilson Manceaux the same day. Dr. Manceaux diagnosed second degree burns and treated her from January 31, 1974, the date of the accident, until April 11, 1974 when he discharged her as able to return to work. Workmen’s compensation benefits and medical expenses were paid for that period.

Dr. Manceaux was not called to testify. His reports were offered in evidence in lieu of his testimony. These reports establish second degree burns which disabled Mrs. Tarver from January 31, 1974 until April 11, 1974 at which time Mrs. Tarver was returned to full duty as a presser. Mrs. Tarver did not return to work and has not worked since the accident.

On May 15, 1974, Mrs. Tarver consulted Dr. Alfred E. Harmon of Crowley. He concluded Mrs. Tarver had sustained “apparently minor burns to the abdomen.” He found her condition complicated by a superficial yeast infection present over her entire abdomen. Dr. Harmon’s report was addressed to Mrs. Tarver’s counsel and was introduced in evidence in lieu of his testimony.

Dr. Marion J. Trahan was the only physician to testify for Mrs. Tarver. On November 19, 1974, Dr. Trahan corrected an incisional hernia caused by fascia weakness of an old scar. Dr. Trahan first treated Mrs. Tarver on July 31, 1974. In his opinion she had suffered third degree burns and these burns aggravated the condition of the old scars and were responsible for the hernia he diagnosed. He admitted the hernia could be related to her obese condition and other factors.

Defendant had Mrs. Tarver examined by Dr. F. H. Davis, Sr., dermatologist of Lafayette, in October of 1974. He concluded she had suffered only second degree burns which were not related to her alleged weakness in the abdominal wall.

We fail to find manifest error in the trial court’s rejection of Dr. Trahan’s opinion that the January 31st accident aggravated her condition or was related to the condition he diagnosed and corrected.

Mrs. Tarver relies on Roberson v. Liberty Mutual Insurance Company, 316 So.2d 22 (La.App. 3 Cir. 1975) which acknowledged the presumption that disability results from an accident when the injured claimant was in good health before, but the disabling conditions appeared at the time of the accident and continuously manifested themselves afterwards. She argues the medical evidence establishes a reasonable possibility of causal connection between the accident and the disabling condition.

We distinguish Roberson. There the medical evidence showed a reasonable possibility of causal connection between the accident and the disabling condition. Here the evidence does not.

To establish a connection between the accident and the surgery, Dr. Trahan admitted it would have to be established that Mrs. Tarver suffered third degree burns. The doctors in the best position to determine whether she suffered second or third degree burns agreed she suffered second degree or minor burns and not third degree burns.

The trial court judgment is affirmed at appellant’s costs.

Affirmed.


author: BEER, Judge. LEMMON, Judge LEMMON, Judge

text:
    CAJUN ELECTRIC POWER COOPERATIVE, INC. v. LOUISIANA POWER AND LIGHT COMPANY.
    No. 7204.
    Court of Appeal of Louisiana, Fourth Circuit.
    Dec. 15, 1975.
    Rehearing Denied Jan. 13, 1976.
    John Schwab, Baton Rouge, for plaintiff-appellant.
    Monroe & Lemann, Andrew P. Carter, New Orleans, for defendant-appellee.
    Before LEMMON, BOUTALL and BEER, JJ.
   BEER, Judge.

Cajun Electric Power Cooperative, Inc., (hereafter, Cajun), plaintiff-appellant, filed an original petition in the Civil District Court for the Parish of Orleans seeking to compel Louisiana Power & Light Company (hereafter, LP&L), defendant-appellee, to arbitrate a dispute which arises in the dealings between them covered by a contract dated May 29, 1970. The contract affirmatively provides that certain particularized disputes which arise will be arbitra-ble. In response to the petition seeking to compel arbitration, LP&L filed an exception of no right of action which was augmented, ex proprio motu on the part of the trial judge, by an exception of no cause of action. Cajun now appeals from the maintaining of that exception of no cause of action by the trial court.

The record is composed of the various pleadings, memoranda in support thereof, and certain exhibits in the form of the contract between the parties, letters and other pertinent documents. It is sufficiently complete for us to deal with the correctness of the trial court’s ruling on the exception but not with the main point in controversy — Cajun’s right to arbitration of the dispute which has arisen regarding interpretation of a particular section of the contract.

We reverse the judgment of the district court, overrule the exception of no cause of action and remand.

LP&L and Cajun confected a contract under which LP&L would supply Cajun with designated quantities of electrical power at various points of delivery". Sections 1.02 , 1.03 , and 1.05 of the contract contain provisions for determining the quantity of power to be delivered to existing and newly designated delivery points. Section 1.04 provides for arbitration of disputes which arise under certain conditions described in portions of Sections 1.02 and 1.-03.

Cajun characterizes the request which precipitates this controversy as one seeking delivery of electrical power to a new delivery point in the Gallion-Bastrop area as contemplated by Sections 1.02 and 1.03. In the correspondence attached as exhibits to plaintiff’s petition both parties treat the demand in terms of it being with respect to a new delivery point. There is, however, rather clear indication from the exchanges of correspondence that the creation of such new delivery point in the Gallion-Bastrop area could, for various technical and economic reasons, be directly related to a reduction in power delivered to another point also covered by the contract. This latter circumstance is dealt with under Section 1.05, and the method of dealing with controversies arising under this section is clearly beyond the express scope of the arbitration provision in Section 1.04. Thus, while an arbitrable controversy appears to arise in the course of Cajun’s quest for a new point of delivery as contemplated by Sections 1.02, and 1.03, it also, by implication, appears to arise as a result of the additional request that there be corresponding reduction in power from an existing point of delivery — a nonarbitrable controversy.

On the basis of the record now before us, we do not find the request for the new delivery point sought by Cajun, and the irreconcilable differences directly generated thereby, so inextricably intertwined with the requested reduction of capacity at the existing Gallion-Bastrop delivery point to cause each contention to lose its specific identity. And, since issue identity is, thus, maintained intact, so too should be the method of controversy resolution which is ascribable, contractually, to each issue.

We perceive that both parties have heretofore attempted to deal with each other in good faith and understand, we think, the strength of conviction on both sides. Nevertheless, Cajun’s contended right to arbitrate the irreconcilable differences that have been generated by its request for a new delivery point has been unwittingly combined with its other request. LP&L has made a yeoman effort to articulate that the two are thereby inextricably intertwined and, accordingly contends that the right to arbitrate the controversies arising therefrom cannot be subject to arbitration.

We agree that an intractable and insistent combining of nonarbitrable issues with those which are arbitrable must be held to have cracked the somewhat fragile vessel of arbitrability. We also agree with able counsel for LP&L that controversies arising under Section 1.05 are not arbitrable and contractual willingness to arbitrate expressly with respect to Section 1.02 and Section 1.03 cannot be implied to exist with respect to Section 1.05.

The issues appear to be related but separable. Almost all the matters dealt with in the extensive contract are, to a degree, correlated. It seems unnecessary to observe that the very nature of a contract such as this between parties such as these is, essentially, a document containing correlated provisions. The two contentions appear sufficiently different—on their face —to allow for the separate treatment thereof.

We therefore conclude that the petition does state a cause of action to arbitrate the controversy arising under the last sentence of Section 1.02, and Section 1.03. We will, therefore, overrule the exception. The state of the record precludes our ordering the arbitration at this time. LSA-R.S. 9:4203 provides that the court shall order arbitration if it is “satisfied that the making of the agreement for arbitration or the failure to comply therewith is not an issue.”

In Bartley, Inc. v. Jefferson Parish School Board, 302 So.2d 280 (La.1974) the Supreme Court considered exceptions of no cause of action, prematurity and waiver. The only point of distinction between Bar-tley and the present case is the status of the record. In Bartlev the court stated:

“In this case, there is no denial that the general contract between Bartley and the School Board included an agreement to arbitrate. It is clear that neither the School Board nor American has submitted to arbitration, although Bartley has requested it.”

In the case before us the contract had been placed in evidence and is conceded by the parties to be a contract containing an agreement to arbitrate in a particular instance. The difference that exists between the two cases is that here the record does not disclose an unconditional refusal of LP&L to arbitrate, but rather a conditional refusal based upon its interpretation that such must necessarily involve unarbitrable issues.

LP&L should be given an opportunity to agree to the proposed arbitration or refuse. We remand this matter to the district court (overruling the exception) solely for the purpose of determining if LP&L will refuse to arbitrate.

The law favors an interpretive effort toward upholding arbitration. The purpose of the Louisiana Arbitration Law, LSA-R.S. 9:4201 et seq., had been discussed as follows:

“ * * * The act may prove useful in making certain that contráete providing for arbitration are carried out and may deter those who, having provided for arbitration, would later prefer to evade this provision and burden the court with matters which might better be settled through arbitration with time and trouble saved for all parties concerned.”

And this court has recently observed that:

“The parties have entered into an enforceable agreement which provides for arbitration, and between them it is binding as the law. The court will not permit the evasion of this provision.” Wright v. Round the Corner Restaurants, 252 So.2d 341 (La.App. 4th Cir. 1971)

Where there is doubt, the general rule is that it should be resolved in favor of, not against, arbitration. See: Southern Bell Tel. & Tel. Co. v. Louisiana Power & Light Co., 221 F.Supp. 364 (EDLa., 1963); Texas Gas Transmission Corp. v. International Chemical Workers Local Union No. 187, AFL-CIO, 200 F.Supp. 521 (WDLa., 1962).

We do not, in any event, gainsay LP&L’s clear right to litigate — if necessary — any dispute regarding the reduction of capacity at the Gallion-Bastrop delivery point.

Accordingly, the judgment of the Civil District Court for the Parish of Orleans dated April 18, 1975 maintaining the exception of no cause of action to the petition to compel arbitration is reversed and that exception is overruled; the matter is remanded for further proceedings not inconsistent with this opinion. Cost of this appeal to be paid by appellee.

Reversed and remanded.

LEMMON, J., concurring.

LEMMON, Judge

(concurring).

For different reasons, I agree that the exception of no cause of action should have been overruled. I therefore concur in the result.

The crucial issue in my opinion is whether the question of arbitrability of this particular contractual dispute should be decided by the court or by the arbitrator.

As to what issues of a demand for arbitration are triable by the court, R.S. 9:4203 provides in pertinent part:

“The court shall hear the parties, and upon being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not an issue, the court shall issue an order directing the parties to proceed to arbitration in accordance'with the terms of the agreement. If the making of the arbitration agreement or the failure or refusal to perform is an issue, the court shall proceed summarily to the trial thereof.”

In the Bartley case, the contract provided for arbitration of “[a]ll claims, disputes and other matters in question arising out of, or relating to, this Contract or the breach thereof.” It was apparent from the contract that the making of an agreement for arbitration was not an issue.

The parties in the present case, however, agreed to submit to arbitration only those disputes over certain limited areas of the contract. In cases in which the arbitration provision restricts arbitration to disputes relating to specified matters, arbitrability is generally to be determined by the court. Domke, Commercial Arbitration § 8.01 (1968). Since the arbitrator derives his authority solely from the contract, his right to arbitrate the dispute must be clearly established by the contract. See generally, Domke § 12.01. Any question as to whether the parties intended to submit a specific dispute to arbitration should be determined by the court. Otherwise, the arbitrator would be called upon to determine his own authority.

The arbitration provision contained in paragraph 1.04 provided for arbitration only of those disputes arising under the last sentence of paragraph 1.02 or the first sentence of paragraph 1.03, both of which refer to providing new capacity in excess of normal load growths or to establishing new points of delivery. Paragraphs 1.02 and 1.03 differ principally as to which party shall pay initially for the construction, and the standard for determining which paragraph applies (and therefore who advances construction funds) is whether “sound engineering and economic principles would dictate the installation of such additional capacity or (sic) new Points of delivery”. Thus, it appears the parties clearly intended to use arbitration principally for determining this objective standard in case of dispute.

The dispute arose over the following request by Cajun:

“Cajun Electric Power Cooperative, Inc., requests that Louisiana Power and Light Company provide Northeast Louisiana Power Cooperative with a 13.8 KV point of delivery in the vicinity of Gallion, Louisiana. An in-service date of June 1, 1975, is intended with an estimated load of 2000 KW being carried by the delivery point initially. Said arrangement would reduce the load on the existing Bastrop delivery point to an estimated 2000 KW demand also.”

LP&L proposed to establish the delivery point upon Cajun’s advancing $25,000.-00 on a refundable basis to pay the cost of constructing a line to the metering point, but also observed that the establishment of the delivery point “will accelerate approximately $200,000 of additional facilities in the Gallion Substantion for a period of approximately three years” and requested payment on a non-refundable basis “for the carrying charges on the $200,000 investment”.

Cajun notified LP&L of its desire to arbitrate the dispute, but LP&L replied that the request was one for substitution of delivery points, not falling within paragraphs 1.02 or 1.03. Cajun then filed this suit.

The case was set for trial as a summary matter, but the matter never proceeded to trial because the trial court maintained an exception of no cause of action. In this respect I agree with the majority that the trial court erred. I cannot determine from the petition and exhibits, without additional evidence, whether Cajun’s request was one to establish a new delivery point under either paragraph 1.02 or 1.03, or was a request to reduce capacity at one delivery point with delivery of the abandoned capacity to the same customer at another delivery point under paragraph 1.05. In my opinion the trial court should not have decided the issue of arbitrability on an exception without evidence, since the court could not be “satisfied (on this record) that the making of the agreement for arbitration ... is not an issue”. The court should have “proceed(ed) summarily to the trial thereof.” R.S. 9:4203.

I would therefore remand and order a trial on the merits of the issue of arbitra-bility, at which evidence may be adduced in explanation of the technical terms necessary for the intelligent interpretation of the contract and of the request and for the determination based on this evidence as to whether the parties in their contract intended the particular dispute as one subject to arbitration.

LEMMON, Judge

(dissenting from the denial of application for rehearing).

I have reconsidered the majority and concurring opinions on original hearing and am now convinced that both opinions went beyond the scope of the appellate issues before the court.

The trial court judgment maintained an exception of no cause of action. The record then contained only a petition to compel arbitration (with the contract and some correspondence attached) and an exception of no cause of action. Since the trial judge maintained the exception, no evidence was taken at the summary hearing. Therefore, the only thing before us on appeal was the correctness of the judgment maintaining the exception. All three members of the panel agreed (and LP&L virtually concedes in its application for rehearing) that the exception should have been overruled; the members of the panel, however, disagreed as to the action to be taken on remand.

I am now convinced that the suggested action on remand (in both opinions) constituted pure dicta. The issue as to what the trial court should do on remand was not before us, and our suggestions cannot constitute an authoritative holding as to the trial judge or any future panel of this court.

I therefore vote to grant a rehearing in order to delete any portion of the opinion and decree which goes beyond the issue of overruling the exception.

      . “1.02 Company will supply the present power requirements of Customer’s Member Cooperatives as defined in the exhibits attached. Upon reasonable advance written notice from Customer, Company will provide additional capacity at the Points of Delivery specified as Member Cooperatives Normal Load Growth warrants such additions. Normal Load Growth shall mean growth in kilowatts of maximum 15-minute demands not in excess of 15% above the highest such demand established at that Point of Delivery during the preceding calendar year. Upon reasonable advance written notice the Company will provide additional capacity for growth over and above the Normal Load Growth at existing Points of Delivery to the extent that, and will establish new Points of Delivery at swell points where, sound engineering and economic principles would dictate the installation of such additional capacity of new Points of Delivery if all facilities required to provide service for the affected loads belonged to one supplier.”

      . “1.03 In addition, the Company will, when requested by Customer, provide additional capacity, over and above Normal Load Growth at an existing Point of Delivery or establish a new Point of Delivery where the facilities necessary for such additional capacity or additional Delivery Point cannot be justified under the standards of the last sentence of paragraph 1.02, provided that Customer gives assurance of revenue necessary to justify the investment required for the facilities or makes a cash advance equal to the total cost of such facilities, or a combination of revenue assurance and cash advance. Any such cash advance shall be refunded by the Company at the rate of JJoth °f the amount of such advance each year until total refund is completed or until said facilities are, at the election of Customer, no longer utilized to provide service to Customer, whichever is sooner. The ownership of said facilities shall remain with the Company.”

      . “1.05 Upon reasonable advance written notice to Company, Customer may abandon any Point of Delivery or may reduce the amount of capacity previously specified under this Agreement for any Point of Delivery, provided the capacity so abandoned or reduced is to be delivered to Customer from another Point of Delivery supplied by Company for the same Member Cooperative. Such abandonment or reduction in capacity shall become effective on the date specified by Customer in the notice, but not sooner than 12 months after the date such notice is received by Company; provided that in calculating Minimum Billing Demand under the provision of the applicable Rate Schedule such Point of Delivery shall be billed as though such abandonment or reduction in capacity had not taken place until the thirteenth month following the month in which notice of the reduction in capacity or abandonment is given.”

      . '‘1.04 If disputes arise under the last sentence of paragraph 1.02, or the first sentence of paragraph 1.08, of this Article I, they shall he resolved hy arbitration as follows. The issue in dispute shall be certified in writing by the parties and submitted to a Board of three arbitrators for decision, after notice and hearing. One arbitrator shall be selected by each party and the third presiding member of the Board of Arbitration shall be selected by the two arbitrators. In the event they are unable to choose a third arbitrator, either party, or both, may apply to the American Arbitration Association for a list of five persons, each qualified to act as a neutral arbitrator. Promptly after this list is received the Company and Customer shall determine by lot the order in which they will strike names and thereafter, each shall in that order, alternately eliminate one name until only one remains on the list, and that person whose name remains on the list shall become the impartial arbitrator. The Board of Arbitration shall convene as expeditiously as possible to render a decision and the written decision of the Board of Arbitration shall be final and binding upon the parties hereto. The expenses incident to the arbitration shall be shared equally by Company and Customer. If a dispute relates to the first sentence of paragraph 1.03, the Company shall proceed to add the additional capacity and/or establish the requested new Points of Delivery pending the arbitration proceeding.” (Emphasis ours.)

      . From “Comments by Harriet S. Daggett” prefacing provisions of LSA-R.S. 9:4201 et seq., Volume 4, West’s LSA Revised Statutes at page 137.

      . While the request at first blush seems to fit better under paragraph 1.05, the answer to this dispute was not sufficiently apparent (without evidence explaining the economic factors bearing upon Cajun’s request) to deny Cajun its day in court to prove its request fell under paragraph 1.02 or 1.03.


text:
    LIBERTY LOAN CORPORATION OF EUNICE, INC., Plaintiff-Appellant, v. Paul LAVINE et al., Defendant-Appellee.
    No. 5208.
    Court of Appeal of Louisiana, Third Circuit.
    Dec. 24, 1975.

      Tate & McManus, by Vernon C. Mc-Manus, Eunice, for plaintiff-appellant.
    Sandoz, Sandoz & Schiff, by Gerald H. Schiff, Opelousas, for defendant-appellee.
    Before HOOD, HUMPHRIES and PETERS, JJ.
   HUMPHRIES, Judge.

This is an appeal from an adverse judgment rendered in an action on a promissory note. We reverse.

Liberty Loan Corporation of Eunice, Inc. (Liberty Loan) brought an action against Paul and Antee Lavine for the unpaid balance on a promissory note executed by these two defendants. The defendants resisted the claim on the contention that the plaintiff was not a holder in due course and that there was a partial failure of consideration.

In November of 1968, the plaintiff entered into a contract with Long’s Siding and Remodeling Company whereby the latter was to install aluminum insulation and siding on the defendants’ house. The defendants desired to add an addition to their house, and it was agreed in the contract that after this addition was completed, the contractor was to place siding on the new addition. The amount of the contract was $4,860.00. The contract price was to be represented by a promissory note payable monthly over a 5 year span.

In addition to the amount of the contract, the defendants needed $2,000.00 additional money to pay off other obligations and $500 to add to the house. The need for these sums and the other incidentals of making the loan ran the note to $7,596.60. The note was dated November 6, 1968 and was signed by Paul and Antee Lavine as makers. It was made payable to the order of “ourselves” and endorsed in blank. It provided for 60 consecutive monthly payments of $121.61 each. The first' payment was due on January 4, 1969. This note was endorsed by Long to Securities Investment Company of St. Louis. Securities Investment Company sent the money to the makers.

In April of 1969 Securities Investment Company of St. Louis wrote the makers and advised them that it had an “affiliate office” near the makers residence, whose corporate name was Liberty Loan Corporation. The letter stated that because of the nearness of that corporation to the defendants it was assigning the account to that office. Securities Investment Company, without endorsement, sent the note to Liberty Loan Corporation of Eunice. The makers paid on the note until there was only $1,384.22 remaining due and payable. The last payment was in May of 1973.

The trial judge held that Securites Investment was not a holder in due course because it was an “actual party to the original transaction.” The mere fact that an investment company is a party to or knowledgeable of the initial transaction does not deprive it of subsequently becoming a holder in due course when a homeowner executes a note. Many lending institutions are in on the original transaction or knowledgeable of the original transaction for various reasons. They try to protect the dignity of the subsequent mortgage or they try to see that a competent and reputable contractor is being used by the borrower and for other reasons that we need not discuss here.

A holder in due course is defined in R.S. 7:52 (The law in effect at the time of these transactions.)

“A holder in due course is a holder who has taken the instrument under the following conditions:
(1) That it is complete and regular upon its face; '
(2) That he became the holder of it before it was overdue and without notice that it had been previously dishonored, if such was the fact;
(3) That he took it in good faith and for value;
(4) That at the time that it was negotiated to him he had no notice of any infirmity in the instrument or defect in the title of the person negotiating it.”

The record reflects that all of the conditions are met by Securities Investment.

We are of the opinion that Liberty Loan Corporation is a holder in due course even though there was no endorsement by Securities Investment, Inc. to Liberty Loan. The note was originally made to ourselves and endorsed in blank by the makers and thus became bearer paper. R. S. 7:40 stands for the proposition that if the instrument is originally bearer paper it forever remains bearer paper, in spite of special endorsements.

“Where an instrument, payable to bearer, is indorsed specially, it may nevertheless be further negotiated by delivery; but the person indorsing specially is liable as indorser to only such holder as make the title through his indorsement.”

In Coltharp v. Calcasieu-Marine National Bank, 199 So.2d 568 (La.App., 3rd Cir. 1967) the Court recognized the distinction between instruments that were originally bearer paper and instruments that are originally order paper but subsequently become bearer paper by blank endorsement and are then specially endorsed. In the latter case the instrument is converted from bearer paper back to order paper by the special endorsement.

We think the result would be the same even if Liberty Loan Corporation had not been a holder in due course. Liberty Loan has proven that it is a transferee and therefore is vested with such title as the transferor had, plus the right to have the transferor’s endorsement on the note. Wilson v. Levin, 127 So.2d 247 (La.App. 4th Cir. 1961); Gleason v. Barrileaux, 292 So.2d 804 (La.App., 1st Cir. 1974). Also Preferred Investment Corporation v. Denson, 251 So.2d 455 (La.App., 1st Cir. 1971).

A transferee, as distinguished from a holder in due course, is subject to the same defenses by the maker as if the note were non-negotiable. In Re: Clover Ridge Planting and Manufacturing Company, 178 La. 302, 151 So. 212 (1933).

After the testimony of the last witness the defendants filed an exception of no right and/or no cause of action because Liberty Loan is not an endorsee, which was not acted upon by the trial judge.

The exception is without merit as this plaintiff has the right to bring an action on this note even as transferee.

While the defendants assert failure of consideration there is no proof in the record as to the amount of the failure of consideration. No attempt was made to show the value of the material and labor that would be necessary to place aluminum siding on the addition to the defendants’ house if they constructed the addition. Since the defendants failed to sustain this burden of proof this defense must fail under any classification of Liberty Loan.

There is judgment herein in favor of Liberty Loan of Eunice, Inc.' in the sum of $1,384.22 with 8% per annum interest thereon from May 31, 1973 until paid and attorneys fees of 25% of the principal and interest due. The defendants are cast for all costs in both courts.

Reversed.