author: BOUTALL, Judge.

text:
    Buster Jos. CHIVOLETTO v. JOHNS-MANVILLE PRODUCTS CORPORATION.
    No. 6974.
    Court of Appeal of Louisiana, Fourth Circuit.
    Aug. 5, 1975.
    Rehearings Denied Sept. 9, 1975.
    Writ Granted Nov. 14, 1975.

      Joseph M. Singerman, David Gertler, New Orleans, for Buster Joseph Chivolet-to, plaintiff-appellee.
    Baldwin, Haspel, Molony, Rainold & Meyer, Bruce A. North, New Orleans, for Johns-Manville Products Corp., defendant-appellant.
    Before SAMUEL, BOUTALL and BEER, JJ.
   BOUTALL, Judge.

This suit involves a claim for total and permanent disability under the Occupational Disease section of our workmen’s compensation law, LSA R.S. 23:1031.1. After trial on the merits plaintiff, Buster Chivo-letto, was awarded $49.00 a week not to exceed 100 weeks for loss of a bodily function. Defendant, Johns-Manville, has appealed that judgment assigning as error the fact that the trial court did not make a finding of factual disability. Plaintiff has also appealed contending that the trial court erred in not granting a total and permanent disability award and in not granting the statutory penalties and attorney’s fees. On appeal defendant has filed an exception of prescription.

The facts of this case are best summarized in the trial court’s Reasons for Judgment :

“Plaintiff, Buster J. Chivoletto was employed by Johns-Manville Products Corporation, the defendant, for approximately 22 years. Johns-Manville is in the business of making asbestos products. During his 22 years in defendant’s employ, the plaintiff was exposed to varying degrees of asbestos and silica particles, particularly during the latter stages of his work as a lathe operator. His duties consisted of cutting and shaping asbestos pipe with power equipment, a procedure which filled the air with asbestos fiber.

“In 1970, while plaintiff was satisfactorily performing his duties without undue discomfort or pain, the plant in which he worked was closed down for economic reasons. The plaintiff and many others found themselves unemployed.

“The plaintiff subsequently found work with Hydril, Inc. as a laborer. He left there to work at Hunt-Wesson Foods at a higher rate of pay, again as a laborer. Finally, he obtained a job with the Parish of Jefferson as a sewerage plant operator, a semi-skilled position at which he is presently working at a higher rate of pay than he earned at Johns-Manville. His past and present employers have nothing but praise for his work. He experienced shortness of breath when his work became strenuous but attributed it to ‘growing old’ and nevertheless managed to perform his duties satisfactorily. He was not made aware that he had contracted asbestosis until March, 1973.

“The bulk of the testimony in this trial concerned the medical evaluation of the plaintiff’s physical condition. Dr. Hans Weil, professor of medicine at Tulane University and a specialist on occupational diseases, and Dr. Morton Brown, the treating physician and a specialist on lung diseases, each testified for approximately four hours. The deposition of Dr. Hurst Hatch of Ochsner Foundation Hospital was introduced in lieu of his testimony.

“All three doctors agreed that the fine, hair-thin lines that were apparent in EPA (Erect, Posterior-Anterior) x-rays of the plaintiff’s chest and lungs were characteristic of interstitial fibrosis. Interstitial fibrosis is a scarring of the lungs. In cases of asbestosis, microscopic bits of asbestos fiber are inhaled into the deepest recesses of the lungs and entrapped. The body reacts to this foreign substance by creating scar tissue around the asbestos particles, and this scar tissue eventually reduces lung efficiency and creates shortness of breath. This scar tissue is visible on x-rays as a fine line. Drs. Weil and Hatch stated that a positive diagnosis that the lines actually were interstitial fibrosis could only be made after a biopsy had been performed on the lung tissue. Dr. Brown stated that there was no doubt in his mind that interstitial fibrosis was present, given the plaintiff’s occupational background.

“All nails in plaintiff’s upper extremities were clubbed. Clubbing is a condition in which the nails arch upward at the base. It is a sign of asbestosis as well as other diseases. The plaintiff also suffers from an acute hyperventilation syndrome, which is compatible with asbestosis as well as other causes.

“All of the doctors agreed that plaintiff’s condition was abnormal. The defendant’s doctors, Weil and Hatch, attempted to show that the plaintiff’s condition could possibly have been caused by something other than asbestosis, but did not offer any suggestions as to what that cause might be. Neither confirmed that the plaintiff was suffering from asbestosis, nor did either deny the possibility. Dr. Weil himself stated that, given the plaintiff’s x-rays and medical history of exposure to asbestos dust he would make ‘a presumptive diagnosis of asbestosis’.

“Dr. Brown was insistent that plaintiff had contracted asbestosis as a result of his work with Johns-Manville. He stated that there was ‘no doubt whatsoever’ in his mind. This Court agrees with the conclusion of Dr. Brown for two primary reasons. First, Dr. Brown was the treating physician of the plaintiff and as such, was able to give a more detailed examination and to observe the plaintiff at greater length. Secondly, and more importantly, Dr. Brown had access to two ‘oblique view’ x-rays of plaintiff’s lungs which demonstrate conclusively, in the opinion of this Court, that plaintiff has asbestosis.

“All three doctors are eminently qualified. Their achievements form a part of the record, and are, to say the least, impressive. But Dr. Weil had never examined the plaintiff before or even met him personally. His diagnosis was based on a study taken of some 900 Johns-Manville plant workers in 1970, of which he was the director. The pulmonary function studies which he relied upon were taken almost four years ago, and it was stated that asbestosis is often a progressively worsening disease. Dr. Hatch examined the plaintiff twice, once in 1973 and again in 1974, and his results were inconclusive. But not once did either Dr. Weil or Dr. Harch deny the possibility that plaintiff had asbestosis and their testimony, taken as a whole, practically admits the probability of asbestosis.

“Dr. Brown has been plaintiff’s treating physician since March 2, 1973 when he first saw him at the request of his family physician. He ordered plaintiff hospitalized the next day, during which four-day period of hospitalization he had oblique-angle x-rays of the lungs taken.

“According to Dr. Brown, an oblique-angle view enables one to better see the fine lines that are characteristic of interstitial fibrosis on the edges and surfaces of the lungs. When fibrosis is present, the scarring in effect pushes the lung away from the rib cage, and the thickened ‘pleural line’ can be plainly seen on an oblique-angle x-ray.

“This pleural line was plainly visible on the x-rays of the plaintiff which were introduced into evidence. Dr. Brown stated that sometimes this is the only true sign of asbestosis, that it is an extremely reliable sign, and that he would be hard pressed to find another explanation for the appearance of such a sign. The only other cause that he could think of was a rare case of bilateral pneumonia, which is inconsistent with the plaintiff’s medical history.”

We agree with the finding of the trial judge that plaintiff had contracted asbestosis and that this condition was caused by his employment at Johns-Manville as a result of the nature of the work performed. Asbestosis is one of the listed occupation diseases for which a workman may recover. R.S. 23:1031.1. We now turn our attention to the issues of prescription and the extent of disability.

The facts of this case plainly invalidate defendant’s exception of prescription. LSA R.S. 23:1031.1 (D) reads as follows:

“D. All claims for disablement arising from an occupational disease are forever barred unless the employee files a claim with his employer within four months of the date of his contraction of the disease or within four months of the date that the disease first manifested itself. Notice filed with the compensation insurer of such employer shall constitute a claim as required herein.”

The facts and jurisprudence make it clear that a disease such as asbestosis does not manifest itself until the claimant becomes aware that he has contracted the disease. Mr. Chivoletto was sent to Dr. Brown in March of 1973 and it was not until after the x-rays of that visit were taken that Chivoletto was informed that he had asbestosis. Suit was filed in May of 1973 clearly within the four month period set out in the statute.

We next turn to Johns-Manville’s contention that the trial court erred on the issue of Mr. Chivoletto’s disability. Defendant contends that Chivoletto is presently working in a semi-skilled job and is able to carry out all the duties of his employment, therefore, he is not factually disabled, which is requirement of the Occupational Disease Act. Plaintiff presents the more appealing argument. While it is true that Chivoletto has a job and fulfills its duties, the evidence shows that he must work in some degree of pain, due to his shortness of breath. He lives in fear that he will no longer be able to work due to his lung condition. This fact was pointed up when Mr. Chivoletto testified that he continues to work because he feels he is forced to in order to eat and live.

Johns-Manville points out that the above facts do not characterize “disability” within any of the commonly accepted definitions of that term. It further points out that the trial court found that Mr. Chivo-letto was not disabled. We agree that such a finding was made, however, we feel that it was made in relation to plaintiff’s claim for total and permanent disability benfits. We agree that plaintiff is not entitled to total and permanent disability benefits because he is factually not disabled to that extent. We find that plaintiff has lost the full function of his lungs, thus handicapping him in the pursuit of employment in the flexible labor market. Charleston v. Veri-Fresh Poultry Company, Inc., 273 So.2d 712 (La.App. 1st Cir. 1972).

This disability stems from the fact that all three experts agreed that plaintiff could not return to the Johns-Manville plant, were it still operating. He is further handicapped in that he cannot accept any employment which would expose him to asbestos dust or other agents causing pneu-moconiosis.

This court is always mindful of the fact that the purpose of the workmen’s compensation law is to provide injured workers with a means of support and reparation for their injuries. And because the Act is a compromise between industry and labor our courts have given it a liberal construction to better effectuate its purpose. Danielsen v. Security Van Lines, Inc., 245 La. 450, 158 So.2d 609 (1964); Compton v. North River Insurance Co., 281 So.2d 848 (La.App. 1st Cir. 1973).

Plaintiff’s plea for penalties and attorney’s fees under the provisions of LSA R.S. 23:1201.2 were rejected by the trial court and we affirm. Although the facts were clear to all that Mr. Chivoletto has asbestosis it was not clear that he was suffering a disability. We affirm the trial court’s decision that defendant did not act in an arbitrary and capricious manner in refusing plaintiff benefits.

For the foregoing reasons we affirm the judgment of the trial court. Defendant, Johns-Manville Products Corporation, is to pay all costs.

Affirmed.

BEER, Judge (concurs).

I concur in the affirmation of the judgment. However, I do not agree that Plaintiff-Appellee Buster Jos. Chivoletto is working in some degree of pain as stated in the majority opinion.

Though I would have concluded otherwise, I find no manifest error in the conclusion of the trial judge that Mr. Chivo-letto contracted asbestosis as a result of his work with Johns-Manville.

I agree that Mr. Chivoletto has experienced some loss of lung function but do not believe that the extent of this loss materially affects his way of life in any important respect. I agree that it is proper to recognize this loss of physical function in some amount, assuming it to be employment connected. Making this assumption, I would be inclined to award $25.00 per week for 100 weeks.

However, I do not believe that the trial judge’s award of $49.00 per week for 100 weeks is manifestly erroneous. Thus, I concur.


source: Caselaw Access Project

author: BEER, Judge.

license: Public Domain

text:
    STATE of Louisiana In the Interest of Leonard CORTEZ.
    No. 6959.
    Court of Appeal of Louisiana, Fourth Circuit.
    Sept. 9, 1975.
    Rehearing Denied Oct. 9, 1975.
    Writ Refused Nov. 21, 1975.
    Melvin P. Barre, New Orleans, Victor E. Bradley, Jr., Norco, and Abbott J. Reeves, Gretna, for appellee State of Louisiana.
    William D. O’Regan, LaPlace, for appellant Leonard Cortez.
    Before LEMMON, GULOTTA and BEER, JJ.
   BEER, Judge.

Appellant, Leonard Cortez, a child under seventeen years of age, was adjudged a delinquent child for violationg LSA-R.S. 14:37 (aggravated assault). He now appeals.

Leonard was a student at Edgard High School on October 18, 1974. Shortly before noon recess he was accused of misconduct and sent to the principal, Mr. Gerald Keller. Mr. Keller ordered him to leave the school campus. He refused and Mr. Keller began to physically eject him by grabbing the seat of his pants. Leonard said “Let me down — I’m leaving.” The principal let go. Leonard took two or three steps, turned, and then dug into his pocket, taking out a “Barlow” knife and opening the blade which is about 4 inches long. With the knife in his hand and his hand at his side he began walking in a direction which would eventually take him off the school grounds. Mr. Keller followed him until he actually left the school campus. During this time, the opened knife remained in Leonard’s hand although he made no specific threatening gesture nor any oral comment. Leonard walked off the campus followed by Mr. Keller who felt obliged to see that he did, in fact, leave the school grounds.

Standing on the levee across the River Road which divides the levee from the campus itself, Leonard called to Mr. Keller who was standing on the campus side of the River Road. He said: “You’re going to be a dead mother fucker when I catch you. Your ass is dead. You’re going to be a dead son of a bitch.” The opened knife remained in his hand.

Shortly thereafter Leonard was apprehended by Deputy Sheriff Granier who had been previously summoned, at Mr. Keller’s request, by one of the school teachers on the staff.

We have examined the Barlow knife which was placed in evidence. There is no doubt that it is a “dangerous weapon” within the definition of LSA-R.S. 14:37 and appellant’s counsel has, in oral argument, conceded this. Thus, the correctness of the trial court’s judgment turns upon a finding that Mr. Keller was, at some point during the confrontation, in reasonable apprehension of receiving a battery.

We believe that he was. It is difficult to say whether it was more reasonable for Mr. Keller to be apprehensive when Leonard first took out his knife and opened it standing two or three steps away or when the actual threat of physical violence was made with the knife still opened but with a greater distance between the individuals.

Mr. Keller’s testimony indicates that he didn’t know what Leonard was going to do with the knife. Appellant’s able counsel strongly urges that this constitutes an admission on Mr. Keller’s part that he was not clearly apprehensive, thus creating a reasonable doubt with respect to one of the essential elements of the crime of aggravated assault.

We agree completely with appellant’s contention that every element of the crime must be proven beyond a reasonable doubt to support a judgment of delinquency by reason of a violation of LSA-R.S. 14:37. However, we also conclude that all of the facts existent at the moment the knife was originally opened by Leonard and, again, all the facts existent at the moment the verbal threat was made, constitute, in each instance, a proper and valid basis for “reasonable apprehension” on the part of Mr. Keller within the definition contemplated by the statute.

The judgment of the trial court is affirmed at appellant’s cost.

Affirmed.

       Leonard was fifteen years old at the time of the incident and sixteen years old at the time of trial.


author: BEER, Judge. LEMMON, Judge

text:
    Bessie A. BYRD v. HIGHLAND’S INSURANCE COMPANY.
    No. 6955.
    Court of Appeal of Louisiana, Fourth Circuit.
    Sept. 9, 1975.
    Rehearing Denied Oct. 9, 1975.
    Writ Refused Nov. 25, 1975.

      Frank S. Bruno, New Orleans, for plaintiff-appellant.
    Robert E. Peyton, New Orleans, for defendant-appellee.
    Before LEMMON, GULOTTA and BEER, JJ.
   BEER, Judge.

This workmen’s compensation suit arises ■from an accident occasioned to appellant, Bessie A. Byrd, on May 9, 1972. She had been employed for about six weeks at Con-ti Steak House as a kitchen helper and was earning $1.00 an hour. While using a lettuce slicing machine appellant suffered lacerations to her middle and little fingers and partial amputation of the distal phalanx of her ring finger on her right hand. She was taken to Methodist Hospital where Dr. C. Edward Foti completed the amputation of the distal phalanx and treated the lacerations. She remained in the hospital for two days and continued as Dr. Foti’s patient until he discharged her on June 15, 1972.

Subsequently she was examined by Dr. Eugene Dabezies and Dr. Kenneth Vogel.

Although she had some complaints referable to all three injured fingers, appellant’s principal complaint is with respect to the site of the amputation of the distal phalanx of her ring finger. The trial court concluded that the testimony of the three physicians formed a proper basis for considering the injury as one affecting appellant’s entire hand and not related only to the fingers involved. We agree with this conclusion.

Although there was some minor difference of opinion as to the percentage of disability of the hand, the trial court’s finding of six percent disability of the hand as a whole is clearly supported by the evidence and the expert medical testimony.

Separate and distinct from the determination of percentage of disability referable to her hand, plaintiff-appellant urges that she is permanently and totally disabled by reason of the pain which she now experiences in her partially amputated finger when she attempts to perform general restaurant work. In support of this subjective complaint plaintiff testified in her own behalf and also called Mrs. Mary Brown and Mrs. Maggie Shaw who both testified that Bessie Byrd had dropped dishes quite often and had complained about her finger during the short time that they worked with her as a kitchen employee at Maison Blanche department store.

The trial judge who heard and observed the witnesses determined that plaintiff’s evidence in support of her claim for permanent and total disability caused by sensitivity at the amputation site was insufficient and concluded that she had not carried the requisite burden of proof. We believe that the record supports this conclusion. Pain, discomfort and sensitivity are difficult for a court to determine and even more difficult for a court to measure. Trial and appellate judges struggle to reach objective conclusions regarding these subjective contentions. We believe that lay testimony is properly considered (along with medical expert testimony) in attempting to resolve this difficult problem. However, we are unable to make any sort of apportionment between the weight to be accorded lay and expert witnesses, nor can-we conceive of any finite guidelines that can be set out by us to direct the trial court in such matters. In this case the trial judge heard and observed all of the witnesses—lay, medical expert and treating medical—and concluded that the sensitivity plaintiff experienced in her finger (or fingers), did not reach that degree of pain or discomfort which would render her permanently and totally disabled within the provisions of the workmen’s compensation laws of this state. We find no manifest error in that conclusion particularly in view of the appellant’s own testimony regarding her continuous failure to seek any treatment for her alleged problem simply because she had no transportation easily available.

The trial court having reached conclusions both with respect to percentage of disability of the hand as a whole and appellant’s alleged inability to return to work of a similar nature because of pain, made an award of $12.50 per week for 150 weeks less compensation previously paid. This was based upon the determination that appellant had experienced a six percent disability of the right hand in the course of employment where her weekly earnings were rated at an average of $53.00 per week. The trial court made the necessary mathematical computations (6% x $53.00 x 65%) and determined that the statutory minimum was not reached. Thus the court concluded that the weekly payments should be set at $12.50. 150 weeks is, of course, the figure set by statute to cover the specific loss-disability period in connection with hand injuries. We find no error in the court’s statutory interpretations nor in its computations.

Finally, we turn to the appellant’s claim for statutory penalties and attorney’s fees:

Although various medical and hospital bills were paid in her behalf, 72 days passed from the date of Bessie Byrd’s injury to her first compensation payment. Appellant’s able counsel strongly urges the invoking of statutory penalties on the face of this finding particularly in view of the fact that Bessie Byrd’s injury was clearly known to her employer as soon as it took place. Counsel correctly contends that notice to the insured of the occurrence of the injury is notice to the insurer. See LSA-R.S. 23:1162 Subd. C. However, notice to the insurer is not the equivalent of the demand for payment which LSA-R.S. 22:658 requires in order to recover penalties and attorney’s fees, Moore v. St. Paul Fire and Marine Ins. Co., 251 La. 201, 203 So.2d 548, Antoine v. Houston Fire and Casualty Co., 232 So.2d 588 (La.App. 3rd Cir. 1970). These cases expressly hold that notice of disability (and even admission of liability) does not obviate the statutory prerequisite of demand for payment.

The record shows that constructive demand was made on June 16, 1972 in the form of insured’s first report to its insurer. This was followed by insurer’s payments commencing on July 26, 1972. Accordingly) payment of compensation benefits to Bessie Byrd did commence within 60 days of constructive demand for payment (although it should be noted that no actual demand for payment was made by appellant or her attorney until June 28). The trial court’s determination that defendant-appellee was neither arbitrary nor capricious in the circumstance existent here was correct in view of the above cited cases and we find no error in their application.

Accordingly, the judgment of the trial court is affirmed at appellant’s cost.

Affirmed.

LEMMON, Judge

(concurring).

Acknowledging the controlling authority of the Supreme Court decision in Moore v. St. Paul Fire & Marine Ins. Co., supra, I express my disagreement with the theory that knowledge or notice of disability should not obviate the statutory prerequisite of a demand for payment.

R.S. 22:658 requires the insurer to pay any claim due “within sixty days after receipt of satisfactory proofs of loss from the insured, employee or any party in interest” and further provides that “(f)ailure to make such payment within sixty days after receipt of such proofs and demand therefor, when such failure is found to be arbitrary, capricious or without probable cause, shall subject the insurer to a penalty. . .."

The statute thus provides for a penalty in order to insure prompt payment of benefits to workers who are disabled from earning a living, but allows the insurer adequate time to investigate the circumstances before the penalty is imposed. The overall legislative purpose is to guarantee benefits promptly while not unfairly penalizing the insurer, and the overall scheme contemplates that the employer will notify its insurer promptly of the occurrence of an injury.

In the present case the insurer’s claims manager testified that his company did not receive the employer’s first report of the May 9 injury until June 16.

The legislature, foreseeing that some employers would not promptly notify the insurer of accidents, enacted R.S. 23:1162, subd. C, which in effect imputes the employer’s knowledge of the occurrence of the injury to the insurer. Thus, in those situations where the employer’s tardiness creates a hardship, the legislature chose to place the hardship on the insurer, rather than on the employee.

In my opinion the Moore decision defeats the legislative purpose by delaying the commencement of the 60-day period until demand has been made, irrespective of knowledge of the disability by the employer or its insured. I have difficulty perceiving the purpose of a proof of loss or a demand where the insurer has knowledge of the disability.

In this case the employer had immediate knowledge of the obvious disability, and its insurer failed to commence benefits within 60 days thereafter or to show at trial any reason for the failure except the employer’s delay. In my opinion the statutory penalty should be imposed.

      . Plaintiff obviously was temporarily and totally disabled when she lost her finger in the accident, and the insured’s manager took her to the hospital. Thus, the insured had immediate knowledge of the disability.
      Furthermore, the hospital wrote to the insured on May 10, and defendant’s agent who wrote the policy received the letter on May 15 and accepted liability. (The record does not show when the hospital bill was paid.)

      . R.S. 23 ¡1102, subd. C provides :
      “All policies insuring the payment of compensation must contain a clause to the effect that as between the employee and the insurer, the notice of the insured or the knowledge of the occurrence of the injury on the part of the insured, shall be deemed to be notice or knowledge on the part of the insurer, as the case may be.”


author: SAMUEL, Judge.

text:
    Ronald J. BIANCHI and Richard C. Larison v. PATTISON PONTIAC CO., INC.
    No. 6942.
    Court of Appeal of Louisiana, Fourth Circuit.
    Sept. 9, 1975.
    Rehearing Denied Oct. 9, 1975.
    Writ Refused Nov. 18, 1975.

      Karno, Lockhart & Brainis, Jacob L. Karno, Metairie, Henican, James & Cleveland, C. Ellis Henican, Jr., New Orleans, for plaintiffs-appellants.
    Smith & Stampley, Gilbert E. Stampley, New Orleans, for defendant-appellee.
    Before SAMUEL, BOUTALL and BEER, JJ.
   SAMUEL, Judge.

Plaintiffs, Ronald J. Bianchi and Richard C. Larison, filed this suit against Pat-tison Pontiac Co., Inc. to compel specific performance of an oral contract by which the defendant allegedly agreed to compensate plaintiffs for obtaining a Mazda automobile dealership in New Orleans. Plaintiffs alternatively seek damages in the amount of $2,500,000. Defendant’s answer generally denies the allegations of the petition.

Only the two plaintiffs testified at the trial; they also placed various exhibits in evidence. The defendant rested without presenting any evidence. Following trial there was judgment in favor of the defendant, dismissing plaintiffs’ suit. Plaintiffs have appealed.

Plaintiff Bianchi testified as follows: He met George P. Pattison, president and owner of the defendant corporation, a successful New Orleans Pontiac dealership for many years, while the former was engaged in the sale of motivation systems used by businesses having large staffs of salesmen. Mr. Pattison indicated an interest in the sale of foreign automobiles. As Bianchi had been offered a distributorship covering seven southern states for an Italian vehicle called the Otas, Pattison sent him to California to purchase an Otas for inspection. While in California, Bianchi renewed an acquaintance with the other plaintiff, Lari-son, who had been attempting unsuccessfully to obtain an interest in a distributorship for a Japanese automobile known as the Mazda. On his return to New Orleans, Bianchi gave Pattison Mazda literature furnished him by Larison.

Mr. Pattison’s interest changed from the Otas to the Mazda and he requested Bianchi to go to Houston to obtain a Mazda dealership for the defendant corporation in New Orleans and in several other Louisiana cities. Arrangements were made for Bian-chi to fly from New Orleans and Larison from California, both at defendant’s expense, to meet with Mazda’s representative in Houston. Larison’s services were engaged because he had a working relationship with a Mr. Hanno, a Japanese national formerly employed by Mazda’s factory representative and employed at the time by the Mazda manufacturing company itself. A meeting was arranged for October 27, 1970 with Hanno, then known to Bianchi only as “a representative of Mazda”. Hanno’s status in the Mazda organization was unclear to Bianchi at the time of the meeting.

Bianchi and Larison met with Hanno for approximately one and one-half to two hours. Hanno assured them they could inform Pattison “he had a dealership.” Nothing was reduced to writing because Hanno was unwilling to attempt to consummate a Louisiana dealership before February, 1971 due to the fact that the Mazda organization desired to develop the Texas market first, its permanent offices had not been established, and dealer application forms had not yet been printed. Hanno committed Mazda to grant defendant a dealership, without furnishing evidence of defendant’s financial or other status, solely on the strength of plaintiffs’ oral presentation and representations, documented only by a photogravure fold-out advertisement from a local newspaper advertising and explaining the defendant’s operation as a Pontiac dealership.

Both Bianchi and Larison came to New Orleans and met with Pattison the next day. They assured him they had obtained a Mazda dealership. After much negotiations Pattison agreed to compensate them for obtaining the dealership by paying them 25% of the “variable gross” profit from the sale of each Mazda automobile sold for 10 years from the New Orleans dealership and 10% of the profit on each automobile sold from five other contemplated dealerships. In addition, Bianchi was to work full time with the new dealership “while the thing got into motion” at a monthly salary of $2,000 or $2,500.

Mr. Pattison refused to reduce this agreement to writing until he was awarded the dealership. It was agreed Bianchi would wait until the dealership was obtained and then join the Pattison operation on salary. He was obliged to do nothing more until Hanno furnished the application forms to Larison, at which time Larison was to send the forms to Bianchi, who was then to bring them to Pattison for completion. When Bianchi received the forms he attempted to contact Mr. Pattison to have them executed but the latter avoided contact until after Bianchi learned Mazda had granted Pattison a dealership without proceeding through Bianchi or Larison. That dealership was granted in March of 1971 and Bianchi and Pattison had seen Hanno on October 27, 1970. Pattison then repudiated the oral agreement, and this suit followed.

On cross examination, defendant attempted to establish the mission of Bianchi and Larison was to obtain a distributorship for defendant rather than a mere dealership. On cross, Bianchi testified he and Pattison could not have discussed a Mazda distributorship because he knew none was available. When it was pointed out to him he had said on direct examination that he did not know Hanno was a representative of the Mazda distributorship for the southern region (as testified by Larison), he summarily stated he could not have discussed distributorships with Pattison, but offered little explanation for this statement.

Larison’s testimony was essentially the same as Bianchi’s. He stated he knew no distributorships were available because previously he had tried to participate in a joint venture distributorship for seven southern states, including Louisiana, with the manufacturer of the Mazda automobile and the manufacturer’s representative (trading company) in the United States. Eventually the distributorship was'formed as a joint venture between the manufacturer and its trading company as Mazda Motors of Texas, Inc. Larison was excluded for reasons unknown to him. He further insisted he informed Hanno he sought the dealership for himself, Bianchi and Pattison, that Hanno orally granted the dealership on the basis of their long standing association and friendship, and that the grant of the dealership was made without any specific information on Patti-son’s financial condition or proof of experience.

On cross examination, Larison could not explain why Pattison was able to obtain the dealership by negotiating with Hanno directly without the assistance of or even reference to plaintiffs, in spite of the contention plaintiffs had obtained the dealership from Hanno at the Houston meeting. Larison could not explain Hanno’s action in granting the dealership to Pattison without him in view of their supposed long personal and business relationship.

The exhibits offered in evidence by the plaintiffs include the newspaper photogra-vure fold-out allegedly used in plaintiffs’ conversation with Hanno, the correspondence between George P. Pattison and representatives of Mazda, particularly Hanno, concerning the Mazda dealership awarded to the defendant, literature relative to the Mazda which Bianchi allegedly gave Pattison following the former’s return to New Orleans from Houston, and various defendant sales records.

Plaintiffs make much of the defendant’s failure to offer evidence in its own behalf and argue strenuously that once a plaintiff makes out a prima facie case, the defendant must meet the burden of going forward with the evidence or suffer judgment against it. While we do not disagree with this principle, our examination of the record satisfies us that plaintiffs failed to prove a prima facie case.

If plaintiffs’ mission was to obtain a distributorship, they obviously failed. However, without affirmative evidence that plaintiffs’ mission was to obtain a distributorship, and not a dealership as they contend, we must assume only a dealership was desired by the defendant. Relative thereto, the correspondence between Mr. Pattison and Mazda clearly shows the dealership was granted only after proof of defendant’s financial and business ability and experience, and after a personal visit to New Orleans by Hanno and other Mazda representatives to interview defendant’s principals and inspect its premises.

Assuming plaintiffs were assured by Hanno in Houston they would be granted a dealership, the meeting and intent of Hanno’s statements were known only to him and any testimony to the effect that plaintiffs were sure they obtained a dealership on the strength of Larison’s relationship to Hanno was at best self-serving and a subjective evaluation on their part of what could have been proved only by Hanno himself. We note plaintiffs did not call Hanno as a witness and did not take his deposition. By plaintiffs’ own admission, the meeting in Houston lasted for less than two hours, plaintiffs presented Hanno with no evidence of defendant’s financial strength, no applications or other documents were executed, and Hanno gave plaintiffs no written commitment of a Mazda dealership for the defendant.

Under these circumstances, especially in light of the contrary indications of Hanno’s intent as shown by his correspondence and dealings directly with Pattison, plaintiffs’ own uncorroborated evaluation of Hanno’s statements to them cannot serve as sufficient proof upon which to base a judgment against the defendant. It is more probable plaintiffs were given vague and ambiguous oral assurances by Hanno to effect their removal from his office with Oriental politeness than it is probable Hanno would grant a dealership with no detailed knowledge of the financial condition and business strength and experience of the potential dealer.

In addition, the terms of the oral contract upon which plaintiffs base this suit is suspect. It appears to us the amounts to be received by the plaintiffs for the dealership in suit, 25% of the “variable gross” profit on the sale of each car for 10 years plus a monthly salary of $2,000 or $2,500 for Bianchi, were excess-sive to the point of being prohibitive from the standpoint of the dealer which would be required to pay all of its many other operating costs and expenses. In this connection, a noteworthy fact is that, at the time the alleged contract was entered into, the defendant’s president and owner had operated a successful automobile dealership for many years, a background making it highly improbable he would entertain taking a dealership likely to result in a loss. We do not say those amounts are so unreasonable as to cause us to conclude no contract was entered into on the basis of those amounts alone. We are not experts in the field and cannot reach that conclusion in the absence of supporting evidence. However, the amounts are sufficiently great as to require some explanation of reasonableness and no such explanation is contained in the record.

For the reasons assigned, the judgment appealed from is affirmed.

Affirmed.

      . Apparently in common practice Japanese industries are represented in foreign countries by organizations referred to as “Trading Companies” which offer services from merchandizing and financing to investment advice and equity participation.

      . Variable gross profit is defined as the remainder after deducting the cost of an automobile from its sale price.

      . See Tolar v. K & G Contractors, La.App., 214 So.2d 176; 29 Am.Jur.2d § 126.


text:
    Gregory J. M. BURGUIERES v. The J. M. BURGUIERES COMPANY, LTD., et al.
    No. 6679.
    Court of Appeal of Louisiana, Fourth Circuit.
    May 15, 1975.
    Rehearing Denied Oct. 9, 1975.
    Writ Refused Sept. 26, 1975.

      Gregory J. M. Burguieres, in pro per.
    Doyle, Smith & Doyle, Donald W. Doyle, New Orleans, for Edward E. Bur-guieres, Samuel T. Burguieres and Mrs. Marion Christ Clerc, defendants-appellees.
    Clay, Coleman, Dutrey & Thomson, Jack W. Thomson and Louis J. Dutrey, New Orleans, for Mrs. Marie Louise Syme Ver Beck, defendant-appellee.
    Pilie, Pilie & Landry, Robert J. Landry, New Orleans, for Abner E. Hughes, defendant-appellee.
    Sydney J. Parlongue, New Orleans, for Ernest A. Burguieres, Jr., defendant-appel-lee.
    Milling, Benson, Woodward, Hillyer & Pierson, G. Henry Pierson, Jr., New Orleans, for The J. M. Burguieres Co., Ltd., defendant-appellee.
    Before SAMUEL, REDMANN and MORIAL, JJ.
   SAMUEL, Judge.

On April 10, 1967 plaintiff filed this suit against The J. M. Burguieres Company, Ltd. and six of its seven directors, for allegedly illegal and negligent action of the directors in compromising certain indebted-nesses owed the corporation by three family groups related to its stockholders and/or directors, and in failing to recover certain corporate real estate allegedly lost or diverted to others.

The defendants filed exceptions of no right of action, no cause of action, and vagueness, and the trial court rendered judgment maintaining these exceptions but permitting plaintiff to amend his petition in the following respects: (1) to allege the date on which he acquired his stock in the defendant company; (2) to allege, if he could, he took no action to obtain the assistance of other stockholders in requiring the directors to take the action sued upon because such effort would have been vain and useless; (3) to limit his action to a derivative action against the directors for damages to the defendant corporation resulting from their negligence in releasing alleged outstanding debts of stockholders and directors; and (4) to allege with definiteness the legal description of the lands he claims have been lost, the alleged adverse claimant of each parcel of land, and the particular acts of negligence of the directors as they may relate to each tract of land.

Plaintiff filed an amended petition. However, he made no attempt to cure the original petition’s defects relating to the lands; in his amended petition he requested that the matters concerning the missing lands be continued to a future date. In response to that request, the issues concerning the lands were dismissed without prejudice.

The amended petition was filed in proper person. A short time after that filing his attorney withdrew and thereafter, both in the trial court and in this court, plaintiff has appeared in proper person. The amended petition is quite lengthy and does not separate the issues as an attorney’s pleadings would. Consequently, after entering into a review of the pleadings with plaintiff and counsel for defendants, the trial judge isolated four issues to be decided.

After a trial on these four issues, judgment was rendered in favor of the defendants on the merits and on various exceptions, dismissing plaintiff’s suit. Plaintiff has appealed.

One of the issues so isolated was whether Denis P. J. Burguieres or his heirs would be liable to the corporation solely by virtue of his signing, while president of the defendant corporation, a promissory note for the corporation upon which he indicated his official capacity as treasurer. Plaintiff contends that since Denis P. J. Burguieres was president and not treasurer, he had not signed the note in his proper representative capacity and was therefore personally liable thereon. He further argues that one of the defendants, Edward E. Burguieres, is liable on the note as an heir of Denis P. J. Burguieres.

The note is dated January 13, 1934, payable to the order of Jules M. Burguieres, in the principal amount of $178,313.04 and due on March 1, 1934. Plaintiff admits in his petition that the defendant corporation always recognized Denis P. J. Burguieres’ authority to execute the note and that it honored the note by payment. There is no evidence to indicate that Denis P. J. Bur-guieres ever made any payment on the note or acknowledged liability thereon, nor is there any indication in the record that any demand had ever been made on him or his heirs for its payment. The record is devoid of any evidence relative to the validity, consideration given, demand or any other matter regarding the note; no evidence of any sort was introduced other than a photocopy of the face of the note. To the claim against him personally, Edward E. Burguieres filed an exception of prescription.

Clearly, no cause of action was stated or proved by plaintiff on the note issue. Moreover, more than 33 years having passed since the due date of the note without suit having been filed, and with no evidence showing interruption or suspension of prescription, we find the trial court was correct in dismissing plaintiff’s suit against all defendants on this issue and in maintaining Edward E. Burguieres’ exception of prescription (C.C. Art. 3544).

The second issue isolated by the trial court was whether plaintiff had standing or the legal right to raise the issue of whether his father, C. Patout Burguieres, should have received the identical number of shares as those shareholders who organized the corporation and were issued shares in 1901. Plaintiff’s father received his stock in 1910, and the evidence on the merits tends to show the stock was issued to plaintiff’s father at its value as of 1910. An exception of no cause or right of action was filed by defendants on the basis that only plaintiff’s father, C. Patout Burguieres, had the right to claim he should have been issued more shares that he was in fact issued. Plaintiff’s father is still alive and testified at the trial. Plaintiff neither alleged nor proved that he was acting as agent for his father, and his father was never joined as a party plaintiff. Consequently, the trial court was correct in dismissing plaintiff’s claim since he had no right to assert his father’s cause of action under these circumstances.

Third, the trial court isolated the issue of whether the shares of stock of the defendant company issued in 1901 had been paid for and legally issued. Plaintiff offered no evidence on this point in the presentation of his case. During the course of the trial, the defendants offered, for the sake of expediting the matter, to prove the facts concerning payment for the original issue of stock. The trial court noted that while he was reversing the order of proof, he was not reversing the burden thereof. The defense produced Samuel T. Bur-guieres, the secretary of the corporation, who identified the minutes of the organizational meeting. The minutes showed the identity of the original stock subscribers and the authorization to purchase at a partition sale of certain plantations named therein in the succession of Jules M. Bur-guieres (their father). Defendants offered in evidence a certified copy of the sheriff’s sale showing purchase of the land by the corporation on March 16, 1901 for $310,000; a certified copy of an act of partition among the heirs of Jules M. Bur-guieres dated June, S, 1901, showing the mode of division of assets of his succession; and a certified copy of a transfer and assignment to the corporation by the adult heirs of.Jules M. Burguieres of assets which they had received as a result of the above partition of his succession for 4,310 shares of stock of the defendant corporation in return for $431,050.20. Attached to the transfer was a copy of the minutes of the meeting of the board of directors of the defendant corporation of June 8, 1901, wherein the directors agreed to accept the transfer from Denis P. Bur-guieres, Joseph E. Burguieres, Mrs. Louise M. Burguieres, Miss Florence M. Bur-guieres, and Jules M. Burguieres, the original stockholders, of their share from the partition of the succession of their father at the price of $431,050.20 in exchange for 4,310 shares of stock in the defendant corporation having a par value of $131,000.

In addition, defendants offered the testimony of Roland Breaux, certified public accountant, who had handled the corporation’s accounting affairs since 1962. Mr. Breaux testified he was familiar with the records of the corporation and had been requested to make an examination of its books to determine the propriety of the issuance of its stock. He had prepared a report dated November 21, 1974, which showed in part that a journal entry made on June 15, 1901 showed a total of $431,000 transferred from the shareholders in exchange for their stock. Breaux further testified he obtained the information from the original corporate records and also that the corporate records were present in the court at the time of his testimony for the plaintiff’s inspection.

The record therefore contains much evidence by the defendants to show that the stock issued in 1901 to the original shareholders was paid for. The record is devoid of any evidence sustaining plaintiff's position. Consequently, the plaintiff having failed to carry his burden of proof, the trial court correctly found for the defendants on the third issue involving the stock.

The final issue defined and stipulated for trial was whether the corporation’s directors behaved illegally and negligently in compromising certain indebted-nesses owed to the corporation. The evidence shows the debts compromised were open accounts arising from advances by the corporation and payments made by it many years prior to the trial for various living costs incurred by the then stockholders, such as bills for doctors and nurses services, medicine bills, church pew rentals, and other such personal expenses. These open accounts had been shown on the yearly statements of the corporation for numerous years but there is no evidence that a statement had ever been given to any of the stockholders other than Jules and Ernest Burguieres, who were then the officers of the corporation.

In 1931 the treasurer of the defendant corporation wrote to Denis P. J. Bur-guieres, Ernest A. Burguieres, Mrs. Louise Burguieres Syme, and Mr. Henry I. Bur-guieres, acknowledging receipt of certain shares of stock owned by them in the corporation and stating that this stock would be held by the defendant corporation until the open accounts had been paid. There is no evidence of any writing by the individuals who owned the stock acknowledging the indebtedness. In 1962, pursuant to a motion by plaintiff’s father, the stock in question was returned to its registered owners, with the proviso that such return would not be construed as a release of liability of the indebtedness. In 1964, at an annual shareholders’ meeting, a question was raised concerning the “family debts” still carried on the corporate books. At that meeting it was suggested it would be appropriate to establish if the debts had any actual legal validity, because of their age, lack of detailed corporate records over the past 50 years, and other problems involved therein.

One family group acknowledged its liability and paid $3,700 to the corporation. Attorneys for the two other family groups contended the corporation never furnished statements of account until recent years and these statements, when issued, gave only totals without any itemization describing what the debts stood for. They also contended that prescription had run and the corporation would be guilty of laches for not having provided the family members with sufficient information at a time when they could have investigated and determined the accuracy of the debts.

Subsequent to these discussions, the attorneys proposed a compromise of 20% of the alleged indebtednesses shown on the books. The attorney for the corporation testified he considered an attempt to collect these debts quite difficult and such an attempt would result in expensive litigation. He presented these opinions to the board of directors on January 13, 1967. A special meeting of the board of directors was held on January 25, 1967 to consider the question of these indebtednesses. As a result of that meeting, the board agreed to recommend to the stockholders the compromise of the indebtedness on the basis of 20% of the amounts shown on the corporate books (with the proviso that 80% of the $3,700 paid by one family group would be reimbursed to it in order to effect equality among the family groups). At the annual meeting of the shareholders on January 30, 1967, the board of directors’ proposal for the compromise was read to the stockholders and the proposed settlement was approved by all shareholders except plaintiff and his father.

The corporate attorney testified that at both the meeting of the board of directors and at the stockholders meeting of January 30, 1967, he advised those present that in his opinion the obligations asserted by the corporation against the three family groups were invalid because substantial defenses existed, including prescription, laches and the absence of statements being given to any of the individuals detailing the charges on the accounts. He also outlined the substantial expense involved in connection with any such suit. The corporation’s counsel testified that all of these factors were weighed by the directors and the stockholders and they acted on the basis of his legal advice.

At the shareholders meeting in question, 5,770.834 shares were present or represented of a total of 6,000 corporate shares. This represented 96% of the total stock of the corporation. Plaintiff and his father owned slightly more than 11% of the total shares of the corporation between them. Their votes were negative, while all of the remaining voting shares were affirmative, with the result that after deducting the votes from the affirmative votes, slightly more than 84% of the total shares of stock were voted in favor of the compromise. The debtors themselves or their heirs owned approximately 45.15% of the total 6,000 corporate shares. Their votes must be disregarded because we do not feel a shareholder can validly vote to forgive a corporate indebtedness owed by him. However, even disregarding those votes, the measure nonetheless carried because out of the remaining 38% of the shares eligible to vote a majority of 26% of that figure voted affirmatively while 12% voted negatively.

On the basis of the recommendation by the board of directors and the action of the stockholders, the compromise agreement on the open account indebtednesses was executed, and this compromise was made known at the board of directors meeting of May 26, 1967. The trial court found as a fact the compromise agreement was authorized by the stockholders, no fraudulent practices were involved, and that, considering the probability that the indebtednesses had prescribed, the compromise was reasonable and proper under all of the facts.

Under the circumstances, there can be no liability on the part of the defendant directors or the corporate officers resulting from effecting the compromise by the board and approved in advance of its execution by a majority of the stockholders. If a director can be relieved from liability for negligent acts when such acts are approved by all of the stockholders,’ it can hardly be said that directors’ action taken only after due consideration by both the board of directors and the stockholders, both approving said action in advance by majorities, can subject a director of a corporation to liability in a stockholders’ derivative suit. Revised Statute 12:91 imposes upon officers and directors of a corporation a fiduciary relationship to the corporation and to its shareholders; it requires that they discharge their duties in good faith and with such diligence as an ordinarily prudent man would exercise under similar circumstances. In this case, the directors, having first openly proposed the compromise and then having openly submitted it to the shareholders for their approval, did not breach this fiduciary relationship. In effecting a compromise, the directors and officers merely effected the will of the shareholders for whom they acted after making complete disclosure of the proposed settlement agreement. Under the circumstances, the actions of the officers and directors in compromising the claims against the three family groups were in effect the actions of the shareholders. Plaintiff and his father were overwhelmingly outvoted on the proposition, and under the circumstances presented in the record, merely being outvoted gives them no cause of action against the directors.

For the reasons assigned, the judgment appealed from is affirmed.

Affirmed.

      . Those six directors are Mrs. Marie Louise Syme Ver Beck, Abner E. Hughes, Ernest A. Burguieres, Jr., Edward E. Burguieres, Samuel T. Burguieres and Mrs. Marion Christ Clerc. The seventh director, who was not named a defendant, was O. Patout Burguieres, the jdaintiff’s father.

      . See Articles 681 and 094, Louisiana Code of Civil Procedure.

      . The groups consisted of the families of Henry I. Burguieres, Mrs. Louise Burguieres Syme, and Ernest Burguieres, the latter having paid the amounts previously.

      . This, as well as following percentage figures, is an approximation within 1% or less.

      . See Crichton v. Webb Press Co., 113 La. 167, 36 So. 926, 931-932.

      . Defendants cite as authority for this proposition 3 Fletcher, Corporations, § 998 at page 542.

      . See Alexander v. Lindsay, La.App., 152 So.2d 261.


author: HALL, Judge.

text:
    SOUTHERN EQUIPMENT & TRACTOR COMPANY OF SHREVEPORT, INC., Plaintiff-Appellee, v. A. D. McCULLEN and L. T. Brown et al., Defendants-Appellants.
    Nos. 12667, 12668.
    Court of Appeal of Louisiana, Second Circuit.
    Sept. 3, 1975.

      Campbell, Campbell & Johnson by John T. Campbell, Minden, for defendants-appellants.
    Bodenheimer, Jones, Klotz & Simmons by C. Gary Mitchell, Shreveport, for plaintiff-appellee.
    Before BOLIN, HALL and DENNIS, JJ-
   HALL, Judge.

These appeals are from summary judgments rendered in favor of plaintiff, Southern Equipment & Tractor Company of Shreveport, Inc., against defendants, A. D. McCullen and L. T. Brown, in two suits on a promissory note and two open accounts. The principle issues on appeal relate to (1) finance or service charges of 1%% per month charged pursuant to Act 313 of 1970 (formerly LSA-R.S. 9:3509; repealed by Act 454 of 1972, the Louisiana Consumer Credit Law, effective January 1, 1973) and included in the amount of the judgments on the open accounts; and (2) the manner in which a dation en paiement made by the defendant Brown should be credited to the accounts and to the note.

Both suits were brought against Mc-Cullen and Brown, alleged to be a commercial partnership, and against the two individuals, seeking judgment in solido against all defendants.

In one suit, No. 12,667 qn the docket of this Court, plaintiff sued for (1) $14,309.-44, the amount of a note signed by Mc-Cullen and Brown, together with 8% interest from the date of the note until maturity and 10% interest after maturity, as stipulated in the note; and (2) $24,711.28, the balance allegedly due for goods, merchandise and services sold by plaintiff to defendants from November 20, 1970 to December 10, 1971, which amount included $8,467.84 for finance charges of 1 y%% per month, compounded monthly, to August 1, 1973, plus 1^2% per month interest thereon from August 1, 1973 until paid.

In the other suit, No. 12,668 on the docket of this Court, plaintiff sued for $31,652.-95, the balance allegedly due for goods, merchandise and services sold by plaintiff to defendants from November 10, 1970 to August 18, 1971, which amount included $16,826.37 for finance charges of 1%% per month, compounded monthly to August 1, 1973, plus 1%% per month interest thereon from August 1, 1973 until paid.

Defendants filed answers in both suits, generally denying the allegations of plaintiff’s petitions.

Plaintiff filed motions for summary judgment, supported by the pleadings, attached exhibits including the note, statements of account, and invoices, affidavits of its officers, and depositions of Brown, McCullen and their bookkeeper, Reese Hood. In its motion for summary judgment, plaintiff stipulated that McCullen and Brown operated as a joint venture or ordinary partnership and each was liable for only his virile share (%) of the indebtedness.

After hearing, the district court granted summary judgments in favor of plaintiff as follows:

(1) In suit No. 12,667, (a) on the note for $14,309.44, with 8% interest from April 19, 1971 (the date of the note) until paid, and (b) on the account for $22,366.68 with 7% interest from January 1, 1973 until paid;
(2) In suit No. 12,668, on the account for $28,675.84 with 7% interest from January 1, 1973 until paid;

with each defendant’s liability limited to one-half of the stated amounts. The judgment on each account included service or finance charges of 1%% per month, compounded monthly, to January 1, 1973, the date of repeal of Act 313 of 1970, and legal interest thereafter. The amount of service charges included in the judgments was $6,123.24 on one account and $13,849.-26 on the other account.

Defendants perfected devolutive appeals. On appeal defendants make the following arguments:

(1) Act 313 of 1970 was superseded or impliedly repealed by Act 315 of 1970 amending LSA-C.C. Arts. 1938 and 2924 fixing legal interest at 7% and maximum conventional interest at 8%. Therefore, the 1%% per month -finance charge was not authorized by law and was usurious, resulting in the forfeiture of all interest under LSA-R.S. 9 :3501.

(2) If Act 313 of 1970 was not repealed, it nevertheless is inapplicable here because the Act applies only to sellers or issuers of credit cards and the sales involved here were not credit card transactions.

(3) The terms used in the Act are unconstitutionally vague.

(4) By adding the 1%% charge to the account each month and then charging 1%% each subsequent month on the princi-pie balance plus accrued finance charges, plaintiff charged an amount in excess of that authorized by the statute, amounting to interest upon interest contrary to LSA-C.C. Art. 1939, and thereby forfeited all interest under the provisions of Section 2 of Act 313 of 1970 and LSA-R.S. 9:3501.

(5)The credit of $32,541.94 resulting from Brown’s conveyance of a tract of land to plaintiff should have been applied to payment of Brown’s one-half of the indebtedness rather than to the total indebtedness owed by McCullen and Brown, thereby discharging in full Brown’s share of the two accounts (if the finance charges are forfeited) and giving him a small credit on his part of the note.

Except for the claim of a small credit against the amount due on the note, defendants do not contest the correctness of the judgment on the note.

Act 313 of 1970 provides in pertinent part as follows:

“Section 1. Notwithstanding the provisions of any other law, any seller or issuer of a credit card honored by a seller engaged in the extension of consumer credit in connection with the sale of goods, merchandise and services of the seller, under an open-end credit or similar account under which no time-price differential, finance charge, service charge, or other similar charge is imposed upon the consumer purchaser or holder of a credit card honored by the seller if the initial billing is paid within a period of not less than twenty-five days from hilling day, may charge and collect and an assignee of such seller or of the issuer of a credit card honored by such seller may collect, a time-price differential, finance charge, service charge, or other similar charge computed at a rate not to exceed one and one-half per-centum per month on all amounts unpaid on such account from month to month, which need not be a calendar month, or other regular period. A minimum time-price differential, finance charge, service charge, or other similar charge, not in excess of twenty-five cents per month, may be charged and collected. Notwithstanding any provision of this act, no interest charge, finance charge or other handling charge may be charged or imposed until thirty (30) days after the date on which the initial bill is mailed.
“Section 2. Where a time-price differential, finance charge, service charge, or other similar charge is made by a seller, or an issuer of a credit card honored by such seller, or an assignee of such seller or issuer collects or attempts to collect same, in excess of that permitted under Section 1 of this Act, such seller, issuer, or assignee shall not be entitled to any time-price differential, finance charge, service charge, or other similar charge, or any interest whatsoever, except legal interest from the date of judicial demand, as provided by law.
« * * *
“Section 4. Except as provided in Section 1 of this Act, anything herein contained to the contrary notwithstanding, specifically Section S of this Act, the provisions of Article 2924 of the Louisiana Civil Code, as amended and LSA-R.S. 9:3501 of the Louisiana Revised Statutes of 1950, shall remain in full force and effect.
“ * * *

Effect of Act 315 on Act 313 of 1970

At the same session of the Legislature in which Act 313 of 1970 was enacted, LSA-C.C. Art. 1938 establishing the interest rate on all debts and LSA-C.C. Art. 2924 establishing legal and conventional interest rates were amended and reenacted by Act 315 to change the interest on debts and legal interest from 5% per annum to 7% per an-num. Appellants contend Act 315, being the later act, and being inconsistent with Act 313, superseded or impliedly repealed Act 313.

This contention is without merit. The purpose and effect of Act 315 was to change the rate of interest on debts generally and the legal rate of interest from 5% to 7%. Nothing in Act 315 indicates an intent on the part of the Legislature to repeal any special statute then in existence and especially any statute adopted in the same session establishing or permitting, in connection with certain transactions, the charging of interest or finance charges in excess of the rates established by the Civil Code articles. Act 313 was adopted as an exception to the rule of the Code articles. This is evidenced by the language of the Act itself in Section 4 thereof which provides that except as provided in Section 1 of the Act, the provisions of LSA-C.C. Art. 2924 and LSA-R.S. 9:3501 shall remain in full force and effect.

LSA-C.C. Art. 1938 establishes the interest on debts at 7% “unless otherwise stipulated” which means unless otherwise stipulated conventionally or by law.

We hold Act 313 of 1970 was not superseded or repealed by Act 315 of the same year.

Applicability of Act 313 of 1970

Appellants contend Act 313 applies only to sellers or issuers of credit cards in connection with credit card transactions. The language of the statute does not support this contention. The statute permits the charging and collection of a finance charge by a seller engaged in the extension of consumer credit in connection with the sale of goods, merchandise and services under an open-end credit or similar account, which is exactly the kind of seller and transaction involved in these cases. The statute also permits the charging of a finance charge by the issuer of a credit card honored by a seller, but this clause does not limit the applicability of the statute solely to credit card transactions.

We hold that Act 313 of 1970 is applicable to the transactions involved in these cases and authorizes the plaintiff here to charge and collect a finance charge pursuant to and in accordance with the terms of the statute.

Vagueness of Terms

Appellants contend the terms used in tne statute such as “extension of consumer credit,” “consumer purchaser,” and “open-end credit or similar account” are so vague as to be meaningless. To the contrary, all of these phrases employ words of common usage and need no interpretation beyond their plain meaning.

Excessive Finance Charge—Interest Upon Interest

The statements of account in the record disclose that on both of the accounts plaintiff charged 1%% per month finance charge on the first month’s balance for goods sold and thereafter charged lYz% per month finance charge on the principle balance due plus accrued finance charges. Appellants contend Act 313 of 1970 does not authorize compounding the finance charges and, therefore, the amount plaintiff charged and attempts to collect is in excess of the charges authorized by the statute. Appellants further contend the compounding of the finance charges a'mounts to charging interest upon interest in violation of LSA-C.C. Art. 1939 which prior to its amendment in 1972 provided:

“Interest upon interest cannot be recovered unless it be added to the principal, and by another contract made a new debt. No stipulation to that affect in the original contract is valid. The provisions of this Article shall be held to apply to all persons, partnerships and corporations irrespective of custom or of the character of business in which they are engaged.”

Act 313 authorizes a seller “in connection with the sale of goods, merchandise and services of the seller, under an open-end credit or similar account” to charge and collect a time-price differential, finance charge, service charge, or other similar charge computed at a rate not to exceed one and one-half percentum per month “on all amounts unpaid on such account from month to month.” “Such account” refers to the account mentioned at the beginning of the sentence, that is, an open-end credit or similar account in connection with the sale of goods, merchandise or services. We interpret “all amounts unpaid on such account” as meaning all a'mounts unpaid on the account for goods, merchandise and services. The statute does not authorize the charging of a finance charge on previously charged and unpaid finance charges.

The charging of a finance charge on a finance charge is the equivalent of charging interest upon interest, the prohibition of which has remained constant through the history of Civil Law. In the Code of Justinian, Bk. IV, tit. 32, law 28, “anatocisme” as compound interest was then termed, was prohibited absolutely. Plainol, in his Civil Law Treatise, Vol. 2, Part 2, Chapter 3, § 2098 says such an interest charge upon debtors “ . . . tends to crush them rapidly under the weight of their debts.” The recovery of interest upon interest has been prohibited in Louisiana at least since the Civil Code of 1825.

If it had been intended that Act 313 authorize the charging of interest upon interest, the statute would- have made such intent clear by specific language, particularly in view of the historic codal prohibition against such practice. The statute does not contain such specific language. LSA-C.C. Art. 1939 remained intact and unamended during the time Act 313 was in effect. It was only with the adoption of the Louisiana Consumer Credit Law, effective in 1973, that Article 1939 was amended to except from its prohibition the provisions of the Consumer Credit Law.

We hold that Act 313 of 1970 did not authorize the charging of a 1%% finance charge on previously accrued and unpaid finance charges. It follows that the amounts charged by plaintiff and which plaintiff is attempting to collect are in excess of that permitted under the Act. Under the express provisions of Section 2 of the Act, plaintiff is, therefore, not entitled to any finance charge or any interest whatsoever, except legal interest from date of judicial demand, as provided by law.

Credit for Dation en Paiement

The statement of the account sued on in suit No. 12,668 shows a credit of $32,541.94 applied to that account on April 13, 1972. In the deposition of L. T. Brown, filed by plaintiff in support of its motion for summary judgment, Brown testified he conveyed property owned by him to plaintiff for a price of $42,000, out-of which plaintiff was to pay an indebtedness owed to another company and the balance ($32,541.94) was to be applied to Brown’s part of the accounts owed plaintiff. Brown’s “part” of the two accounts, excluding finance charges, was slightly less than that amount. If applied in accordance with Brown’s understanding, the credit would be sufficient to discharge Brown’s indebtedness on the accounts and leave him a small credit on the note.

Plaintiff urges the credit resulting from the dation en paiement should be applied against the total indebtedness owed jointly by McCullen and Brown in the same manner as other payments made from time to time were applied.

McCullen and Brown were engaged in the contracting business either as an ordinary partnership or as a joint venture. The accounts with plaintiff were carried in the name of McCullen and Brown, the name under which defendants conducted their enterprise, whether a partnership or joint venture. Under these circumstances, ordinarily any payment made on the account would properly be applied to or imputed to payment of the entire account. However, where one of the joint obligors makes payment with his own funds or property and designates that it is to be applied only to his share of the debt, or an agreement to that effect is made between the creditor and the debtor, the creditor must apply the payment accordingly. See Phillips v. Ray, 1 La.App. 584 (2d Cir. 1925). See also LSA-C.C. Art. 2163.

Brown’s testimony raises a genuine issue of material fact as to the parties’ understanding and agreement, if any, concerning the application of this credit. The resolution of this disputed issue in turn bears on the extent of each defendant’s liability on the accounts and the note. There being a genuine issue of material fact, plaintiff is not entitled to summary judgments. LSA-C.C.P. Art. 966. The issue of how the credit resulting from the dation en paiement should be applied can only be determined by trial of that issue on the merits.

Decree

For the reasons assigned, the judgments of the district court in both suits are reversed and set aside, and both suits are remanded to the Twenty-Sixth Judicial District Court for further proceedings consistent with the views expressed in this opinion, and in accordance with law. Assessment of costs shall await final determination of the litigation.

Reversed and remanded.


author: ELLIS, Judge.

text:
    STATE PARKS AND RECREATION COMMISSION v. Earl E. WALKER.
    No. 10222.
    Court of Appeal of Louisiana, First Circuit.
    Feb. 10, 1975.
    Writ Refused Oct. 10, 1975.
    P. Michael Maneille, Lake Charles, for appellant.
    Frank P. Trosclair, Jr., Opelousas, for appellee.
    Before SARTAIN, ELLIS and de la HOUSSAYE, JJ.
   ELLIS, Judge.

Final opinion herein was filed by the Civil Service Commission on October 11, 1974. Notice thereof was mailed to all parties on October 15, 1974. A motion for appeal was filed by Earl E. Walker on November 14, 1974. The State Parks and Recreation Commission has filed this motion to dismiss the appeal on the ground that it was not timely filed.

Rule XVI, Section 2 of the Uniform Rules of the Courts of Appeal provides:

“An application for an appeal shall be made to the respective Commission in writing within thirty (30) days after the date of filing of the Commission’s final decision with the Director of Personnel or the Secretary. The Director of Personnel or the Secretary shall, within twenty-four (24) hours, notify all parties to the controversy by U.S. Mail at the last known address of each of the filing of the Commission’s decisions.”

The motion for appeal was filed more than thirty days after the opinion of the Civil Service Commission was filed, but within thirty days of the date of the notice of its filing.

The Commission claims that the first sentence of the above rule requires that the delay for filing an appeal begins to run when the final decision is filed, regardless of when the notice is sent. Mr. Walker contends that the delay can only begin to run when the notice of filing is mailed, to prevent the loss of appeal rights in the event no notice is sent until more than thirty days after the final decision is filed.

Although both of the provisions in Rule XVI, Section 2, are couched in mandatory terms, we are of the opinion that an appellant is bound by the first provision only if the Director observes the second. , Taking the rule as a whole, we find it evidences an intent to grant a delay of thirty days from the mailing of notice of the filing of a final decision, if the notice is not sent within twenty-four hours as required by the rule. Since the Director failed to follow the rule insofar as it requires notice be sent within twenty-four hours, we do not think that Mr. Walker can be held to the strict provisions thereof as to the commencement of the delay for filing his application for appeal.

The motion to dismiss is therefore denied.


author: PER CURIAM.

text:
    John J. LANDRY, Jr. v. Henry M. LAMBERT et al.
    No. 7339.
    Court of Appeal of Louisiana, Fourth Circuit.
    Sept. 19, 1975.
    Ronald F. Plaisance, Matthew F. Belm, New Orleans, for plaintiff-appellant.
    Kronlage, Dittmann & Caswell, Charles A. Kronlage, Jr., New Orleans, for defendant-appellee, Henry M. Lambert.
    Before SAMUEL, REDMANN, LEM-MON, GULOTTA, STOULIG, BOU-TALL, SCHOTT, MORIAL and BEER, JJ.
   PER CURIAM.

This is a suit to disqualify a candidate for the House of Representatives from District 99. Plaintiff filed suit more than five days after the closing of the period for qualifying. The district court dismissed plaintiff’s action.

This case is governed by LSA-R.S. 18:396. Accordingly, for the reasons assigned in Heaslip v. Treen, La.App. 4 Cir., 318 So.2d 95; writ refused, La., 320 So.2d 547; the judgment is affirmed.

Affirmed.