author: PONDER, Judge.

text:
    REPUBLIC OF TEXAS SAVINGS ASSOCIATION v. FIRST REPUBLIC LIFE INSURANCE COMPANY.
    No. 14892.
    Court of Appeal of Louisiana, First Circuit.
    June 29, 1982.
    Amended on Denial of Rehearing Aug. 24, 1982.

      G. T. Owen, III, Judith Atkinson Chevalier, Baton Rouge, Charles Moore, James McGraw, Houston, Tex., for plaintiff-appellant Republic of Texas Sav. Ass’n.
    Donn Moss, Baton Rouge, for defendant-appellee Sherman A. Bernard, Com’r of Ins., State of La., Receiver for First Republic Life Ins. Co.
    Jay M. Vogelson, Dallas, Tex., for defendant-appellee First Republic Life Ins. Co.
    Before ELLIS, PONDER and SAVOIE, JJ.
   PONDER, Judge.

This is an executory proceeding seeking to foreclose on a mortgage, to which the rehabilitator for a life insurance company has objected. Plaintiff has appealed from the judgment denying the petition for exec-utory process and granting a permanent injunction.

First Republic Life Insurance Company, formed in March, 1976, became the owner of the NALICO Building in Baton Rouge in September, 1976, and of Fidelity Mortgage Company of Jackson, Mississippi, in October, 1976.

To help raise money for the purchase of another insurance company, First Republic executed a collateral note and mortgage for $1,250,000.00 on the NALICO Building. On December 3, 1976, First Republic issued a hand note for $900,000.00 to Fidelity Mortgage and pledged the collateral note as security. In turn Fidelity Mortgage borrowed $1,800,000.00 from the First National Bank of Jackson and assigned the collateral note as part of the security.

In January, 1977, Fidelity Mortgage and Republic of Texas Savings and Loan Association, organized in Texas, with Port Arthur as its home office, executed a loan participation agreement under which ROTSA would purchase portions of loans made by Fidelity Mortgage. Thereafter, ROTSA paid for several loans among them one on the NALICO Building under the following circumstances.

On January 28, 1977, First Republic issued another hand note in the amount of $900,000.00 payable to Fidelity Mortgage. ROTSA paid $810,000.00 for a 90% participating interest. Evidently, First Republic intended to pay a substantial amount to First National Bank of Jackson and get the collateral note on the NALICO Building loan reassigned to Fidelity Mortgage, whereupon ROTSA would have an interest in the then unencumbered mortgage. However, First National refused to give a partial release.

While there is suggestion that ROTSA may have informally learned of the situation, which we find not sufficiently proved, it was not until April 20, 1977 that Fidelity Mortgage formally informed ROTSA that the $1,250,000 collateral mortgage had not been released by First National Bank of Jackson. There was a flurry of activity, since the transactions were violations of Federal requirements, State requirements and the loan participation agreement. This activity culminated in the purchase by ROTSA of the loan made by First National Bank to Fidelity Mortgage and the assignment of the security to ROTSA. Only thereafter, however, did ROTSA learn that the hand note delivered to it by the bank was not the one in which it had purchased a participation and that the latter was also not in Fidelity Mortgage’s possession in Jackson. Mr. Jordan, for ROTSA, was given what purported to be a copy. He then went to New Orleans to make claim against the title policy issued in connection with the loan. He learned of further difficulties but received a telephone call to the effect that the January 28, 1977, hand note was at the office of First Republic in Baton Rouge. When he arrived there, he was given a $900,000 note, purported to be the original January 28 note, in exchange for the December 3 note received by Jordan from the First National Bank. ROTSA also secured the remaining 10% of the loan, making it the sole owner of the mortgage.

Monthly payments were made first by First Republic and then by the rehabilitator after First Republic was placed in rehabilitation. However, payments were halted after the August, 1978, installment. Fidelity Mortgage went into bankruptcy.

ROTSA filed a petition for executory process. The rehabilitator opposed and sought an injunction on the basis that the hand note to Fidelity Mortgage was without consideration, that the hand note ultimately obtained by ROTSA was a backdated one, given without corporate authority and in violation of a court injunction, and that ROTSA did not receive the note in good faith and without notice of defense.

The trial court held that First Republic had received consideration but that ROTSA was not a holder in due course without notice of defenses because it received a backdated hand note under circumstances that would put a reasonable man on notice; and that the hand note was issued without corporate authority and in violation of a court order.

Appellant asserts fifteen specifications of error, which, however, may be grouped as follows:

1. The court failed to apply estoppel and equitable relief;
2. The court used the reasonable man test in determining holder in due course status;
3. The court found that ROTSA was not a holder in due course; and
4. The court found that the defenses of lack of corporate authority and the barring of the backdated note were available to the rehabilitator.

ROTSA argues that the court’s failure to apply the doctrines of estoppel and equitable relief allows First Republic to benefit from its own misrepresentations. Although we might agree that those theories may apply to First Republic, the defendant in this case is actually the Commissioner of Insurance, in his position as rehabilitator.

The rehabilitator is vested with title to all property, contracts and rights of action of the insurer as of the date of the order directing rehabilitation. La.R.S. 22:735. He has the responsibility of protecting the interests of the policyholders, creditors and the insurer; he has the authority to void transfers or liens upon the property of the insurer which any creditor, stockholder or member of the insurer might have avoided. La.R.S. 22:736 and 745(D). These powers and responsibilities indicate that the rehabilitator does not stand precisely in the shoes of First Republic. While a party to the instrument may be estopped from asserting defenses based on previous misrepresentations, this restriction does not extend to the rehabilitator.

ROTSA next argues that the trial court erred in applying a “reasonable man test” to determine good faith and notice of defenses for holder in due course status, relying on Commercial National Bank in Shreveport v. Calk, 207 So.2d 578 (3rd Cir.1968), which stated that notice of facts barring holder in due course status could be presumed from circumstances if they would necessarily put a reasonable person on inquiry to ascertain the true facts, but held that a few prior sales of defective merchandise were insufficient to put a bank, furnishing financing for the dealer of the merchandise, on notice that the merchandise was defective.

Calk interpreted provisions of the Negotiable Instruments Law (NIL). Other cases interpreting the NIL held that actual knowledge of a defect was necessary to preclude holder-in-due-course status. White System of New Orleans, Inc. v. Hall, 219 La. 440, 53 So.2d 227 (La.1951); Ford Motor Credit Company v. T. S. Williams, 225 So.2d 717 (1st Cir. 1969).

The NIL has been partially replaced by the provisions of the Uniform Commercial Code adopted by Louisiana and we have had no cases on this point. However, other jurisdictions have interpreted the UCC to say that mere negligence or failure to make inquiries which a reasonable man would make, does not amount to bad faith so long as the party does not refuse to inquire in order to remain ignorant of facts which he fears would disclose a defect in the transaction. Community Bank v. Ell, 278 Or. 417, 564 P.2d 685 (1977). Though a holder may have been negligent in taking the paper and omitted precautions which a prudent man would take, unless he has acted male fide, his title will prevail. Third National Bank in Nashville v. Hardi-Gardens Supply of Illinois, Inc., 380 F.Supp. 930 (M.D.Tenn. 1974); McConnico v. Third National Bank in Nashville, 499 S.W.2d 874 (Tenn.1973).

We believe our statutory provisions lead to the same conclusions. The current UCC provisions are more specific in the requirements of holder in due course status than the former NIL. A holder in due course must take possession of a note in good faith, for value, and without notice of any defense or claim to it on the part of any person. La.R.S. 10:3-302. A purchaser has notice of a claim or defense if he has notice that the obligation of any party is voidable in whole or in part. La.R.S. 10:3-304(l)(b). Notice of a fact is defined as actual knowledge, receipt of notice or notification of the fact, or from all facts and circumstances known to a person at the time in question, he has reason to know that the fact exists. La.R.S. 10:1-201. A person knows or has knowledge of a fact when he has actual knowledge of it. La.R.S. 10:1-201.

Good faith is defined as honesty in fact in the conduct or transaction concerned. La.R.S. 10:1-201. It requires a subjective inquiry into ROTSA’s actions.

The “reasonable man test” is not the standard to be applied in determining notice of a defense or good faith. Both determinations require a more subjective test, with the determination of good faith being totally subjective. Corporacion Venezolana de Fomento v. Vintero Sales, 452 F.Supp. 1108 (S.D., N.Y.1978). The “reason to know” portion of the notice requirement guards against an intentional or wilful ignorance.

The next inquiry is whether ROTSA was a holder in due course. Although it is clear that ROTSA did not understand the workings of a Louisiana collateral mortgage, we do not find evidence to support a finding that ROTSA did not act “honestly in fact.” The good faith requirement is satisfied.

The final requirement is that ROTSA took the note without notice that it was overdue, dishonored or of any defense against it. Even if it be accepted that ROTSA was actually suing on an antedated note issued in May, and that ROTSA knew that it did not intially have a first lien position, and that the original January 28, 1977, note was not in the collateral mortgage file acquired from First National, the question to be answered is: do these facts give ROTSA reason to know that a defense existed.

The defenses found by the trial judge were lack of corporate authority because the resolution passed gave authority only for the January 28,1977 note and that there could be no corporate authority for the May note due to the injunction issued when the company was placed in rehabilitation.

A corporate resolution was passed on January 27,1977 authorizing the execution of a $900,000.00 note secured by the collateral mortgage on the NALICO Building. No date was given for the execution and the resolution gave the power to sign and execute any and all documents necessary to effect the execution of the note and carry out the purposes of the resolution.

In May of 1977, the secretary of First Republic signed and dated a copy of the January resolution, certifying that the resolution was in full force and that the officers had full power to execute the note. The facts indicate that the authority used to issue the note, was that given by the January resolution.

The facts known to ROTSA in May of 1977 did not put them on notice that there may be a defense of lack of corporate authority. Statutorily, the fact that a note is antedated is not sufficient to put the purchaser on notice of a defense. La.R.S. 10:3-304(4)(a).

La.R.S. 22:745(D) gives the rehabilitator the power to avoid any transfer or lien upon the property of an insurer which any creditor, stockholder or member of such insurer might have avoided unless the person to whom it was transferred was a bona fide holder for value prior to the date of the entry of the order for liquidation. While there is some suggestion that ROTSA knew of the injunction we find that far from proved. Since ROTSA did not have notice of the injunction or knowledge of facts giving them reason to know that the injunction had been issued, they were not on notice of any possible infirmity and were holders in due course.

The court has the power to undo or destroy actions done in violation of an injunction. La.C.C.P.Art. 3611. However, those actions are not absolute nullities under La.R.S. 10:3-305(2)(b).

The injunction issued in the conservation proceedings later converted into rehabilitation proceedings, was against “alienating, selling, mortgaging and/or otherwise dispensing of its assets.” Even assuming that the note given in May was a backdated one, it was given in lieu of one that was executed in January. The first indebtedness to Fidelity Mortgage was created in December, the collateral note and mortgage had been executed at that time, the second indebtedness to Fidelity Mortgage was created and ninety per cent thereof assigned to ROTSA in January. There was no alienation, selling, mortgaging and/or otherwise disposing of assets in the execution of the backdated note, if in fact there was a backdating.

For these reasons, we find that the judgment of the trial court should be reversed. ROTSA’s petition for executory process is granted and the rehabilitator’s petition for injunction is denied.

REVERSED.

      . La.R.S. 22:735:
      “On the return of such order to show cause and after a full hearing, which shall be held by the court without delay, the court shall enter an order either dismissing the petition or finding that sufficient cause exists for rehabilitation or liquidation and directing the commissioner of insurance to take possession of the property, business and affairs of such insurer and to rehabilitate or liquidate the same as the case may be. The commissioner of insurance shall be responsible on his official bond for all assets coming into his possession. The commissioner of insurance and his successor and successors in office shall be vested by operation of law with the title to all property, contracts and rights of action of the insurer as of the date of the order directing rehabilitation or liquidation.”

      . La.R.S. 22:736 and 745(D):
      “A. Upon the entry of an order directing rehabilitation, the commissioner of insurance shall immediately proceed to conduct the business of the insurer and take such steps towards removal of the causes and conditions which have made such proceedings necessary as may be expedient.
      B.If at any time the commissioner of insurance shall find that it is to the best interests of policyholders, creditors and the insurer to effect a plan of mutualization or rehabilitation, he may submit such plan to the court for its approval. Such plan, in addition to any other terms and provisions as may, by the commissioner of insurance be deemed necessary or advisable, may include a provision imposing liens upon the net equities of policyholders of the insurer, and in the case of life insurers, a provision imposing a moratorium upon the loan or cash surrender values of the policies, for such period and to such an extent as may be necessary. Notice of the hearing upon any such plan shall be given in the manner as may be fixed by the court and upon such hearing the court may either approve or disapprove the plan or modify it in such manner and to such extent as to the court shall seem appropriate.
      C. If at any time the commissioner of insurance shall find that further efforts to rehabilitate the insurer would be futile and would result in loss to the creditors, policyholders, stockholders or any other persons interested, he may apply to the court in the same proceeding for an order directing the liquidation of the property, business and affairs of such insurer.
      D. If at any time the commission of insurance shall find that the causes and conditions which made such proceeding necessary have been removed he may petition the court for an order terminating the conduct of the business by said commissioner of insurance and permitting such insurer to resume possession of its property and the conduct of its business and for a full discharge of all liability and responsibility of such commissioner of insurance. No order for the return to such insurer of its property and business shall be granted unless the court after a full hearing shall determine that the purposes of the proceeding have been fully accomplished.”
      R.S. 22:745(D):
      “D. The commissioner of insurance as reha-bilitator, liquidator, or conservator may avoid any transfer of or lien upon the property of an insurer which any creditor, stockholder or member of such insurer might have avoided and may recover the property so transferred or its value from the person to whom it was transferred unless he was a bona fide holder for value prior to the date of the entry of the order of liquidation. Such property may be recovered or its value collected from whoever may have received it except a bona fide holder for value.”

      . C.C.P.Art. 3611:
      “Disobedience of or resistance to a temporary restraining order or preliminary or final injunction is punishable as a contempt of court. The court may cause to be undone or destroyed whatever may be done in violation of an injunction, and the person aggrieved thereby may recover the damages sustained as a result of the violation.”

      . La.R.S. 10:3-305(2)(b):
      “To the extent that a holder is a holder in due course he takes the instrument free from
      ****** (2) all defenses of any party to the instrument with whom the holder has not dealt except
      (b) such other incapacity, or duress, or illegality of the transaction, as renders the obligation an absolute nullity; and ****>»

      .There was some testimony that another note was executed just prior to the arrival of Jordan, ROTSA’s agent, in Baton Rouge. This was denied by other testimony. The discrepancies between the purported copy and the one given to ROTSA as the purported original was explained by one witness: the purported copy was a copy of the first draft of the original before some amendments were made.
      Because of our finding we need not consider appellants’ questioning of the March injunction because of the court’s holding of unconstitutionality in May.


source: Caselaw Access Project

author: SAVOIE, Judge.

license: Public Domain

text:
    A. J. MEMBRENO v. L. B. PONDER, Jr.
    No. 14902.
    Court of Appeal of Louisiana, First Circuit.
    June 29, 1982.
    Rehearing Denied Aug. 24, 1982.

      Ronald A. Curet, Hammond, for plaintiff. J. Lynn Ponder, Amite, for defendant.
    Before ELLIS, PONDER and SAVOIE, JJ.
   SAVOIE, Judge.

In this case Mr. Agustín Membreno contracted to buy from Mr. L. B. Ponder, Jr. a certain parcel of land. The contract, styled “Agreement to Purchase or Sell” and signed by both these gentlemen on April 14, 1979, provides as follows:

“We offer and agree to purchase/sell property located in 8th Ward, Tangipahoa Parish, La. in Sec. 38-T 7 S R 9 E on Community Center Road. Borders Creek in rear. On grounds measuring about 8 acres more or less or as per title.”

The described property was to be sold for $26,000.00 with reservation of all mineral rights to the seller. The Act of Sale was to be passed on or before June 19, 1979. Mr. Ponder maintains that he holds title to 12.-96 acres of land in a single tract in the area described, of which he intended to sell only eight. He has offered to transfer the over-plus to Mr. Membreno at the rate of $3,000.00 per acre. Mr. Membreno says that he has the right, under the contract mentioned above, to purchase the whole tract for $26,000.00. Because of this disagreement, Mr. Ponder did not present himself in the notary’s office on the day specified for passing the act of sale, and this lawsuit resulted.

The trial judge found that Mr. Ponder contracted to sell the entire tract at the stated price and ordered specific performance of that contract, from which ruling Mr. Ponder has taken this appeal, complaining of five distinct errors in the judgment below. Finding no merit in any of appellant’s arguments, we affirm the judgment of the trial court.

ERROR I

Under this head, appellant lists five different errors, labeled “a” through “e”, which have it in common that they are all objections to the binding force of the “Agreement to Purchase or Sell”.

According to “a” the description of the property in the contract is too vague and indefinite to give rise to a binding agreement. We agree with the trial judge that the description already quoted evinces the intent to sell all the land the seller owned under a single title at the location specified. The description understates the area of the tract intended to be sold, but considering the irregular shape of the tract, particularly the fact that it is bordered on one side by a meandering creek, uncertainty about its area alone is not enough to create a fatal uncertainty as to the object of the contract. Especially is this so when we consider that the tract sold is described as lying “On grounds measuring about 8 acres more or less or as per title” (emphasis ours). The title referred to exists and gives an exact description of the land in question.

Objection “b” reiterates the claim that since the contract in question specifically calls for the sale of 8 acres of land, the seller cannot be bound thereunder to deliver 12.96 acres. The answer to this is to repeat that the language of the agreement does not call for the transfer of eight acres of land; rather, it calls for the transfer of a tract of land “On grounds measuring about 8 acres more or less or as per title” (emphasis again ours) so that if the title in question covers 12.96 acres of land, the plain language of the contract obliges the seller to deliver all of it.

Objection “c” states “The agreement provided for the payment of $6,000.00 cash and the balance secured by a mortgage”. Exactly what difficulty appellant has with this provision is not expanded upon. Clearly, he has no room to complain that it was not fulfilled, since it was he who stayed away from the place where the act of sale was to be passed on the day set for that purpose. The agreement provides that there will be “no penalty for prepayment”. Plaintiff’s exhibit 3 is Agustín Membreno’s cheek for the full purchase price of $26,-000.00 drawn to his attorneys, Curet & Cu-ret, dated June 19,1979, the date set for the closing, and showing that Mr. Membreno was prepared to pay the entire sum due on that date.

Objection “d” notes that the cash deed prepared by Curet & Curet in anticipation of the closing (Defense Exhibit 1) does not contain the contracted-for reservation of all mineral rights to the seller. This is true, but there is no evidence, aside from this, that Mr. Membreno ever claimed a right to the minerals on this property. The reservation of rights could have been added to the deed in a few seconds at the closing, had Mr. Ponder lived up to his obligation to appear there.

Objection “e” complains that the contractually stipulated deposit of $2,600.00 was never paid by Mr. Membreno. It is sufficient answer to this that the contractual language which calls for immediate deposit of 10% of the purchase price also provides that “failure to do so [to make the deposit] shall not void this agreement”. Besides, there is no evidence that the deposit was ever demanded.

ERROR II

Here, the appellant objects that the description of the property in the buy /sell agreement is too vague to permit specific performance. We are not persuaded that this is a different argument than the one already made to the effect that the alleged vagueness of the description destroyed the obligation of the contract. Exxon Corp. v. Barry, 384 So.2d 826 (La.App. 4th Cir. 1980) is cited for the proposition that courts will not order specific performance of a contract absent a specific description of the object of the contract. In that case the defendants had contractually agreed to grant a servitude on the southwestern corner of their land. The land in question, however, formed a sort of polygon with no point which could be said to be the southwestern corner. Therefore, the contract was held to be void. Here, despite appellant’s strenuous efforts to show otherwise, it is perfectly plain what property was intended to be sold.

ERROR III

Here, the appellant complains of the trial judge’s alleged finding that this sale was “per aversionem”, that is, a sale “when the object is designated by the adjoining tenements, and sold from boundary to boundary” as set out in Civil Code Article 2495. The cases of Adams v. Spillman, 290 So.2d 726 (La.App. 1st Cir. 1974), Writs refused, 293 So.2d 191 (La.1974), and Office Center, Inc. v. Tanenbaum, 225 So.2d 740 (La.App. 4th Cir. 1969) are cited to support appellant’s argument. We agree with the appellant that this sale, where there was only one boundary (the creek) specified in the contract of sale, was not one “per aver-sionem”. Instead, since the contract before us stipulates a lump sum for the whole tract, it is reasonably clear that this sale is governed by Civil Code Article 2494, i.e., it is a sale of a specific immovable for a lump sum. In such cases, the article specifies “... the expression of the measure gives no room to any supplement of price, in favor of the seller, for the overplus of the measure”. It is just such an overplus that concerns us in this case, and the appellant’s attempt to obtain a supplement of the price is made in the teeth of Article 2494.

ERROR IV

Under this head are combined several objections to the judgment below which are not clearly distinguished from one another.

First, it is again repeated that the written buy/sell agreement calls for the transfer of only 8 acres of land, not 12.96 acres. This has already been answered.

Then, it is suggested that the trial court was improperly influenced by the testimony of real estate agent, Stella Delatte; and that her testimony constitutes parol evidence which should not be permitted to alter the plain meaning of the written contract. It is true that the sworn testimony of Mrs. Delatte flatly contradicts that of Mr. Ponder. She says that he authorized her to sell the entire tract owned by him on Community Center Road, believed by him to consist of eight acres of land:

“We were selling a piece of land for $26,000.00. It was not surveyed, and we didn’t know how much it was but he thought it was, we thought it was about eight acres of land. Because of the creek in the back you couldn’t really determine how much it was.” (Tr. page 30)

Mr. Ponder says he always knew he had more than eight acres there and always intended to sell only a portion of the tract:

“Mrs. Delatte approached me and said she had a party who was interested in purchasing some land at Bedico Community. And I told her that I had this property there 12.96 acres. And she said she had a purchaser for eight acres ...” (Tr. page 35)

Fortunately, it is unnecessary to discuss which of these stories is the more credible, because the buy/sell agreement is in writing and plainly transfers the land held by Mr. Ponder at the described location as per title.

Finally, the case of Harries v. Harang, 23 So.2d 786 (La.App. 1st Cir. 1945) is cited for the proposition that a buyer cannot claim more land than is specified in the contract of sale. But in that case there was really no discrepancy between the title given in the act of sale and the quantity of land expressly stated therein. There, the contract specified 12 acres and the title described a twelve acre tract. The buyer claimed a right to nearly twenty acres, saying that he was led to believe he was buying all the land enclosed by certain fences. This claim was properly rejected. That case has no application here.

ERROR V

It is expremely difficult to get a clear understanding of appellant’s argument here. Apparently, he is contending that the buyer defaulted on the agreement in one or several respects. We reject this contention, noting, as before, that the buyer was prepared to pay the whole price stipulated in the contract on the date therein established for transferring title. The case of Lindsay Realty Corporation v. Bellina, 320 So.2d 572 (La.App. 4th Cir. 1975) cited by appellant, concerns a sale never consummated because the prospective buyer and the sellers were unable to agree upon the terms. It does not have any bearing on the present case.

For reasons assigned, the judgment below is affirmed. Appellant is to pay all costs.

AFFIRMED.


author: COVINGTON, Judge. WATKINS, Judge,

text:
    In the Matter of the SUCCESSION OF Tracy E. BAKER.
    No. 14941.
    Court of Appeal of Louisiana, First Circuit.
    June 29, 1982.
    Rehearing Denied Aug. 24, 1982.

      Carlos G. Spaht, Baton Rouge, for plaintiff-appellee Ruth Addie Baker McQuillon.
    Robert C. Williams, Baton Rouge, for defendant-appellant Murphy W. Bell, Trustee.
    Before COVINGTON, COLE and WATKINS, JJ.
   COVINGTON, Judge.

The Trustee, Murphy W. Bell, has appealed the judgment of the district court which held the trust created by Tracy E. Baker, the Settlor, terminated by its terms on the death of the Settlor, and that all properties held by the Trustee belong to and are a part of the succession of Tracy E. Baker, who died intestate on January 19, 1979.

Ruth Addie Baker McQuillon, a sister of the decedent, alleging that she is the closest living relative and sole heir of the decedent, opposes the trust. The basis for her contention is the failure of the trust instrument to comply with the requirements of the Louisiana Trust Code, and, in particular, the failure of the Settlor to designate or identify the beneficiaries in the trust instrument.

At issue in the instant case is the legal efficacy of a purported revocable inter vi-vos trust executed by Tracy E. Baker, as Settlor, on December 20, 1967.

The trial court, in a well-reasoned written opinion, held that the trust was valid, but that it terminated or failed at the death of the Settlor since it failed to name a principal or income beneficiary after the death of Miss Baker. In his written reasons for judgment the trial judge stated:

“On December 20, 1967, Miss Tracy E. Baker, as Settlor, executed a Revocable Inter Vivos Trust. In this proceeding, the administratrix of the Succession of Tracy E. Baker, Ruth Addie Baker McQuillon, seeks a declaration that the trust instrument is invalid and without force and effect. Alternatively, she seeks to have the trust instrument declared as having failed at the death of Miss Tracy E. Baker, and that the properties transferred to the trustee, Mr. Murphy W. Bell, belong to and form part of the estate of the decedent.
“The matter now before the Court involves only a matter of law. The trust instrument in question is in the record, and there is no dispute as to its authenticity. The dispute centers around the interpretation of the trust instrument as it relates to the requirements for a Revocable Inter Vivos Trust as set out in the Louisiana Trust Code. As there are no questions of fact for the Court to determine, it was agreed by and between counsel that the case would be submitted to the Court for decision by briefs filed on behalf of the Administratrix, and on behalf of the Trust and Murphy W. Bell, Trustee. The Court has received said briefs and has given them careful consideration in the formation of its decision in this matter.
“The Administratrix bases her argument that the purported Trust is invalid, or in the alternative that it failed on the death of the Settlor, on three provisions of the Louisiana Trust Code: La.R.S. 9:1802, La. R.S. 9:1803, and La.R.S. 9:1971. These three provisions provide that a beneficiary must be designated in the trust instrument, that said beneficiary must be in being and ascertainable on the date of the creation of the trust, and that the interest of a principal beneficiary is acquired immediately upon the creation of the trust.
“It is the position of the Administratrix that the Trust executed by Tracy E. Baker fails to state a principal beneficiary, and therefore, under the above cited statutes, is in contravention of the Trust Code of Louisiana. The Administratrix argues that the Settlor is identified as the sole income beneficiary during her lifetime, but that no principal beneficiary is clearly named. In the alternative, the administratrix argues that even if the Trust could be interpreted to provide that the Settlor intended herself to be both income and principal beneficiary during her lifetime, and that this ■ interest as principal beneficiary would shift at her death, such a provision would be invalid as the Trust Code prohibits the substitution of principal beneficiaries.
“In response, the Trust and Murphy W. Bell, Trustee, argue that the Trust executed by Miss Baker conforms to the provisions of the Louisiana Trust Code, and more particularly, to the requirements of La.R.S. 9:1802, La.R.S. 9:1803 and La.R.S. 9:1971 that the beneficiary be designated, in being and ascertainable by standards stated in the trust instrument. Further, the Trust and Mr. Bell, as Trustee, assert that the trust instrument affects a disposition of the trust property as it imposes upon the trustee the obligation of making certain dispositions.
“It is clear from the trust instrument itself that no specific principal beneficiary was named by the Settlor during her lifetime. It is equally clear from the language of the trust instrument itself that the Settlor names herself as the sole income beneficiary during her lifetime. (Paragraph 4.1 of the trust instrument) The Court does not accept the argument of counsel for the Trust and Mr. Bell, Trustee, that the instrument names the Israel Universal Divine Spiritual Churches of Christ as the principal beneficiary during the lifetime of the Settlor. The Court is of the opinion that the language of the trust instrument is not clear enough to establish that it was the intent of the Settlor to name said religious organization as the principal beneficiary during her lifetime.
“Having found that the trust instrument names the Settlor herself as the income beneficiary during her lifetime and that there is no principal beneficiary during her lifetime designated, the Court now reaches the question of whether the trust instrument fails ab initio in the absence of a named principal beneficiary during the lifetime of the Settlor. It is the opinion of the Court that the trust instrument executed by Miss Tracy E. Baker on December 20, 1967, and entitled Revocable Inter Vivos Trust is not invalid, illegal, null, and void and of no force or effect for failure to specifically name a principal beneficiary during the lifetime of the Settlor.
“La.R.S. 9:1802 requires that a beneficiary be designated in the trust instrument. It does not require that both a principal beneficiary and income beneficiary be named. As pointed out by counsel for the Trust and Mr. Bell, as Trustee, Comment (c) of the Louisiana Civil Law Institute under said statute states that if the trust instrument designates either a beneficiary of income or of principal, the trust does not fail.
“The Court must now address the contention of the Administratrix that the trust failed at the death of Miss Baker because of a failure of the trust instrument to name an income beneficiary after the death of the Settlor. It is the opinion of the Court that the language of the trust instrument which purports to establish certain income and/or principal beneficiaries after the death of the Settlor is not sufficient to make a disposition of the property included in the trust instrument. It is further the opinion of the Court that the language of Paragraph 5.1 is merely a precatory suggestion on the part of the Settlor and is not legally enforceable. “The Court agrees with counsel for the Administratrix that the trust instrument attempts to transfer certain property upon the death of the Settlor to a trustee who is not bound as to the use of the principal and income or the beneficiaries of said principal and income. Such a disposition is prohibited by Louisiana Law, specifically by Louisiana Civil Code Article 1573.
“Accordingly, for these written reasons assigned, it is the judgment of the Court that although the Revocable Inter Vivos Trust executed by Miss Tracy E. Baker on December 20, 1967 was valid and enforceable ab initio, said trust failed at the death of the Settlor as it did not properly name either a principal or income beneficiary after the death of the Settlor. “Judgment will be signed accordingly. “Baton Rouge, Louisiana, this 23rd day of June, 1981.
“/s/ Steve A. Alford. Jr.
“STEVE A. ALFORD, JR.,
JUDGE”

A beneficiary must be designated in the trust instrument. LSA-R.S. 9:1802; Op-penheim and Ingram, 11 Louisiana Civil Law Treatise, Trusts § 152, p. 208. If either a beneficiary of income or principal is designated, the trust does not fail. Comment (c) under LSA-R.S. 9:1802. Thus, the trial court was correct in holding that the trust instrument was not invalid from its inception. We also agree with the trial court that the trust terminated or failed upon the death of the Settlor. The trust does not name an income or principal beneficiary at the Settlor’s death. The pertinent provision of the trust instrument (paragraph 5.1) reads as follows:

“At the death of the Settlor, the net income of the property donated herein, or the principal thereof, or any part or portion of both, in the discretion of the trustee, may be used in the following manner:
“(a) Annual donation of cash or property to the ISRAEL UNIVERSAL DIVINE SPIRITUAL CHURCHES OF CHRIST in amounts and at times discretionary with the Trustee, to assist in the maintenance, beautification and upkeep, solely, of the Saint Philip DIVINE SPIRITUAL CHURCH OF CHRIST, THE GEORGIANA GUEST HOUSE, and THE TRACY E. BAKER EDUCATIONAL AND RECREATIONAL CENTER. These institutions are located in Baton Rouge, Louisiana on a tract of land donated by separate instrument to ISRAEL UNIVERSAL DIVINE SPIRITUAL CHURCHES OF CHRIST.
“(b) A portion of the income from said trust fund, or of the principal, in the discretion of the Trustee, may be used to establish grants for deserving boys and girls, preferably members of SAINT PHILIP DIVINE SPIRITUAL CHURCH OF CHRIST, but not exclusively, who desire to go to college, or to further their education. The Trustee is given the right, in his discretion, to designate the criteria used in making said grants, or fixing the amount thereof; he may create or change, from time to time, and as often as he may deem wise, the criteria for selecting the beneficiaries for this particular class, eligible to receive grants under this section. These grants shall be known as THE TRACY E. BAKER SCHOLARSHIPS.
(c) Annual donations of cash or property, in amounts and manner discretionary . with the Trustee, may be given to those organizations, local or national, who work in the area of civil rights, voter registration of Negroes, civic betterment and political education of Negro citizens.”

This language is a precatory suggestion to the Trustee. Precatory suggestions are not dispositive; they merely address the conscience of the person to whom directed and are treated as not written, or are not binding in law. Succession of Barry, 250 La. 435, 196 So.2d 265 (1967).

The present case is distinguishable from Succession of Tatum, 347 So.2d 79 (La.App.2 Cir. 1977), writ refused, 350 So.2d 896 (La.1977), where the trust expressly provided that it was to be administered for the benefit of the testator’s son and that all funds from the trust would be payable to the son. Under such circumstances, the court properly found the designation of the beneficiary to be adequate. The Tatum situation is not present in the case at bar.

LSA-R.S. 9:1964 provides for the termination of an interest in income upon the death of the designated beneficiary. See Oppenheim and Ingram, supra at § 174, p. 219. In the present case, the trust instrument does not provide to any person the right to receive the corpus itself at a future time. Thus, the trust terminated upon the death of the Settlor, and the trust property passes to the succession of Tracy E. Baker, free of the trust.

Moreover, we find that this trust failed at the death of the Settlor, because what she tried to do in this inter vivos trust was to transfer certain property to a trustee who was in no manner bound as to the use of the principal or income. She was in effect attempting to vest her properties in a third person who was accorded unlimited discretion in the disposition of her property upon her death, which is prohibited by LSA-C.C. art. 1573.

For the assigned reasons, the judgment appealed is affirmed at appellant’s costs.

AFFIRMED.

WATKINS, Judge,

dissenting.

This case involves a classic trust for mixed private and charitable purposes, which is specifically permitted by the language of the Louisiana Trust Code. See LSA-R.S. 9:1951. Those provisions of such a trust that are charitable or religious in nature are not subject to the Trust Code but rather are governed by LSA-R.S. 9:2271 through 9:2337, which governs charitable trusts. The charitable trust is of very ancient vintage in Louisiana. See, e.g. Girard v. City of New Orleans, 2 La.Ann. 897 (1847); State v. McDonogh’s Executors, 8 La.Ann. 171 (1853). For obvious reasons, the beneficiaries of a charitable or religious trust need not be designated with the precision and clarity required in the case of a private express trust. McDonogh, supra; Comments of Louisiana State Law Institute under LSA-R.S. 9:1951. It should further be noted that Comment (b) of the Louisiana State Law Institute under LSA-R.S. 9:1803 specifically excepts trusts for mixed private and charitable purposes from the requirement that the beneficiary be “living and ascertainable” on the date of creation of the trust. Hence, the charitable or religious beneficiaries are sufficiently provided for under the requirements set for those beneficiaries in the case of a mixed trust.

As to the holding that the designation of the religious or charitable beneficiaries is merely precatory, it should be noted that use of the word “may” or “wish” is disposi-tive in certain contexts. See Succession of Jones, 377 So.2d 881 (La.App.4th Cir. 1979). Clearly providing that the trust property “in the discretion of the trustee, may be used” for alternate charitable purposes is a dispositive not a precatory clause, as it means the property shall be used for one charitable purpose or the other.

Accordingly, I find the charitable provisions of the trust do not fail, but are fully valid.

I respectfully dissent.

      . Israel Universal Divine Spiritual Churches of Christ was named a defendant in the lawsuit, but has not appealed. The judgment insofar as it is concerned is thus final.

      . LSA-C.C.art. 1573 provides:
      “The custom of willing by testament, by the intervention of a commissary or attorney in fact is abolished.
      “Thus the institution of heir and all other testamentary dispositions committed to the choice of a third person are null, even should that choice have been limited to a certain number of persons designated by the testator.”


author: LANIER, Judge.

text:
    Ross CAMPESI v. MARGARET PLANTATION, a Partnership, et al.
    No. 14948.
    Court of Appeal of Louisiana, First Circuit.
    June 29, 1982.
    Rehearing Denied Aug. 24, 1982.

      Ashton L. Stewart, Stewart & Preis, Baton Rouge, for plaintiff, appellee.
    Mack E. Barham, M. Lizabeth Talbott, Barham & Churchill, New Orleans, for defendants, appellants.
    Before LEAR, CARTER and LANIER, JJ.
   LANIER, Judge.

This is a suit on a written agricultural lease instituted by the lessee, Ross Campesi, against the lessor, Margaret Plantation, a partnership, composed of Frank Carruth, III, and the Margaret Best Trust, for the value of the plant and stubble sugar cane owned by him which was left on the leased premises after the 1975 crop was harvested. The lessor reconvened and sought various credits and counterclaims. The trial court rendered judgment in favor of Campesi on the main demand for $228,580.30, and rendered judgment on the reconventional demand in favor of Margaret Plantation for $41,670.79. Margaret Plantation appealed suspensively.

I. FACTS

Commencing with the 1969 crop year (March 1, 1969 to February 28, 1970), Margaret Plantation orally leased through Frank Carruth, III, various agricultural lands in West Baton Rouge Parish to Ross Campesi for the purpose of raising sugar cane and soybeans. Effective March 1, 1969, Margaret Plantation also sold various pieces of farm equipment (valued at $60,-000.00) and the plant cane and first and second year cane stubble (valued at $60,-000.00) to Campesi. For tax purposes all operations were continued in the name of Margaret Plantation with Margaret Plantation reporting the income and losses of the operations in its partnership tax returns. Campesi did not include such income and expenses on his tax returns and paid rental to Margaret Plantation of Vs of the crops produced. The title to the growing crops and the farm equipment was transferred to Campesi in 1973. Commencing with the 1974 crop year, the rental due under the verbal lease was reduced to Vs.

Apparently, toward the end of the 1974 crop year or at the beginning of the 1975 crop year, a dispute arose between the parties to the lease. Margaret Plantation filed a suit for a declaratory judgment against Campesi alleging that the relationship between the parties was that of employer-employee, and that Campesi was an overseer and not a tenant. Campesi resisted the suit claiming that a lessor-lessee relationship existed between the parties and asserting that he acquired the ownership of the farm equipment and the plant cane and first and second year stubble.

Because Margaret Plantation was claiming he was not a tenant, Campesi refused to advance the cost of or perform the fallow plowing and planting in 1975 for the 1976 crop. Margaret Plantation made written demand upon him to do so. Campesi yielded to this demand and thereafter submitted a demand to Margaret Plantation for $97,-752.18 for the cost of the fallow plowing and planting and $66,114.36 for his ownership interest in the first and second year cane stubble, for a total of $163,866.54. The parties then entered into negotiations for the settlement of their disputes and for the harvesting of the 1976 crop. These negotiations culminated in a written agricultural lease for the 1976 crop year, with each side reserving all rights and claims in the pending lawsuit. Campesi apparently completed the 1976 crop year and terminated his relationship with Margaret Plantation. On May 11, 1977, judgment was signed in favor of Campesi establishing the legal relationship between the parties as set out in the first paragraph under FACTS above. Apparently, no appeal was taken from this judgment and it became final.

Armed with this judgment, Campesi invoked the provisions of paragraph (c) of the written agreement which provides as follows:

“(c) In the event said final judgment in said suit decrees that Ross Campesi owns the rights/or claims to said stubble and plant cane as of December 31, 1975, then and only in such event, when Campesi determines the acreage containing such plant and stubble sugar cane he will so utilize, which will be not later than June 1,1976, he shall give Margaret Plantation written notice of the number of acres of plant cane, first year stubble and second year stubble utilized by him, and Margaret Plantation shall then pay to Campesi an amount equal to the value thereof as of December 31, 1975 as fixed by said County Agent; such payment to be due five days after the said value thereof has been fixed by said County Agent, together with interest of 8% per annum thereon from January 1, 1976, until paid; no payment shall be required for any stubble or plant cane which is not utilized by Campesi.”

(Emphasis Added).

Campesi advised Carruth that as of December 31,1975, he utilized 364.3 acres of plant cane, 462.9 acres of first year stubble, and 370.6 acres of second year stubble. The County Agent for West Baton Rouge Parish, I. R. Creel, fixed the value as of December 31, 1975, of plant cane at $218.00 per acre, of first year stubble at $275.00 per acre, and of second year stubble at $59.00 per acre. Thus, the value of the plant cane was 364.3 X $218 or $79,417.40; the value of the first year stubble was 462.9 X $275 or $127,297.50; and the value of the second year stubble was 370.6 X '$59 or $21,865.40, for a total value of $228,580.30. Campesi made demand, on Margaret Plantation for this amount and it was rejected. This suit followed.

II. PROPER INTERPRETATION OF PARAGRAPH (c)

The appellants contend that the trial court’s “judgment is contrary to law and evidence due to the trial court’s failure to apply the general principles governing the law of contracts.”

Agreements legally entered into have the effect of laws on those who have formed them. La.C.C. art. 1901. It is not the province of the courts to relieve a party of a bad bargain, no matter how harsh. Maloney v. Oak Builders, Inc., 256 La. 85, 235 So.2d 386 (La.1970); Louisiana Power & Light Co. v. Mecom, 357 So.2d 596 (La.App. 1st Cir. 1978). The courts are bound to give legal effect to all contracts according to the true intent of all the parties, and the intent is to be determined by the words of the contract when these are clear and explicit and lead to no absurd consequences. La. C.C. art. 1945.

In his very lucid reasons for judgment, the learned trial judge interpreted paragraphs (a), (b) and (c) as follows:

“Paragraphs (a) and (b) by their terms would become operative if Margaret Plantation were declared owner of the stubble and plant cane. Paragraph (c) was to become operative if Campesi were declared owner.
“An argument was made that paragraph (b) contained an error in that it was to become operative if Campesi was declared owner of the plant and stubble cane rather than if Margaret Plantation was so decreed. This would mean that paragraphs (b) and (c) would come into simultaneous operation rather than (a) and (b). An examination of these provisions however easily shows that (b) and
(c) could not be intended to operate together, because under paragraph (c) Margaret Plantation would be required to pay for the plant and stubble cane the value thereof as of December 31, 1975, and under paragraph (b) Margaret Plantation would have had to pay again for at least some of the plant cane and stubble at a fixed value as of June 1, 1977. In effect Margaret Plantation would be paying twice for the same cane.
“In the opinion of the Court there is no apparent error in the contract.
“Read together these paragraphs provide that if Margaret Plantation was declared owner Campesi under (a) would pay Margaret Plantation in effect for Margaret’s stubble and plant cane which he intended to use in the year 1976, and at the end of the year under (b) Margaret Plantation would repay him at the same rates (with certain exceptions pertaining to overages and shortages discussed hereinafter), when he returned to Margaret Plantation the possession of the land, for equal acreages of plant cane and stubble. On the other hand if Campesi were declared owner of the plant cane and stubble, Margaret was to pay him under (c) as of the outset, i.e. December 31, 1975. “Considering the contention that the parties contemplated that the County Agent was only to determine acreage, the Court has concluded the contrary.
“The contract in paragraph (a) provides that Campesi was to determine the acreage he would utilize the first year and no payment was to be made for any stubble cane he did not utilize. No mention is made of determination or measurement of acreage by the County Agent. In paragraph (b) it is provided that Margaret Plantation was to determine the acreage it would utilize the following year and no payment was to be made for any stubble cane which Margaret Plantation did not utilize. This paragraph also provides that, in the event of differences in acreage as of the beginning of the first year as compared to the end, certain payments would be due from one to the other of the parties depending on whether the differences represented shortages or overages. The phrase used is ‘an amount equal to the value of such differences as fixed by the County Agent.’ In paragraph (c), which became operable as explained above the references to the County Agent are as follows: ‘an amount equal to the value thereof as of December 31, 1975 as fixed by said County Agent; such payment to be due five days after the said value thereof has been fixed by said County Agent.’ Nothing in these paragraphs suggests that the County Agent was to measure the acreage designated by the parties respectively at the beginning and end of 1976. (Margaret Plantation apparently does not contest Campesi’s acreage figures. It is not clear what defendants would have the County Agent do if his function under the provisions of the applicable paragraph was to determine acreage.)”
“The arbitrary $100-$50-$25 formula adopted in paragraphs (a) and (b) in the event the land owner was declared owner of the plant cane and stubble is a ‘washout’ figure since one party would repay an identical sum to the other in the event acreages remained the same on redelivery -”

The language of paragraphs (a), (b) and (c) of the contract is clear, explicit, unambiguous and leads to no absurd consequences. The interpretation given by the trial judge to these contractual provisions is the only one that is rational and consistent considering the language in question, and in our opinion is imminently correct.

III. LACK OF COMMON INTENT OF PARTIES FOR PARAGRAPH (c)

Appellants contend that “The trial court’s failure to consider the proffered evidence regarding the true intent of the parties has led to a result which is manifestly erroneous and contrary to law.” In arguing this assignment of error, the appellants acknowledge that “The trial court never explicitly ruled on the admissibility of this testimony, although the judgment clearly indicates that the depositions were filed into the record. Appellants presumed that this evidence was not considered by the lower court, because the court indicated a belief that the contract was unambiguous, and because the judgment rendered is violative of the true intent of the parties as revealed by the excluded evidence.” Appellants then observed that “If the lower court did consider the testimony adduced at the depositions, then appellants respectfully submit that the judgment rendered is contrary to the evidence and should be modified.”

It is well settled that when the terms of a written contract are clear and unambiguous, the contract cannot be varied, explained or contradicted by parol evidence. In such eases, the meaning or intent of the parties to the contract must be sought within the four corners of the instrument. La.C.C. art. 2276; White v. Rimmer & Garrett, Inc., 340 So.2d 283 (La. 1976); Breaux v. May, 392 So.2d 1089 (La.App. 3rd Cir. 1980); Mathieu v. Nettles, 383 So.2d 1337 (La.App. 3rd Cir. 1980). How ever, even if the parol evidence is considered, and apparently it was by the trial judge, the appellants cannot prevail. Error or mistake as to the principal motive of a contract (lack of common intent) is a vice of consent and is an affirmative defense that must be specifically pleaded. La.C.C.P. art. 1005; Layne-Louisiana Division of Singer Company v. Green Acres Sewerage and Water Corporation, 347 So.2d 1222 (La.App. 1st Cir. 1977). The party alleging a vice of consent bears the burden of proving it. Talley v. Blake, 322 So.2d 877 (La.App. 1st Cir. 1975).

The evidence of record shows that on the date that the contract was executed, March 4, 1976, Frank Carruth, III, was in the law offices of Ashton L. Stewart, the attorney for Campesi. Stewart drafted the final version of paragraph (c) and gave it to Carruth. Carruth telephoned his attorney, Ben R. Miller, Jr., and read paragraph (c) to him. Miller required Stewart to attach an addendum dated March 4, 1976 to the lease agreement with additional terms. The third paragraph of this addendum provides as follows:

“It is my understanding that paragraph ‘C’ on page 4 of the agreement will constitute a full settlement of the claim of Campesi for seed cane, labor, materials and profit for planting and fallow plowing in the fall of 1975 in the event said paragraph becomes effective.”

At the bottom of the addendum in Car-ruth’s handwriting, then appears the following:

“On the basis of the foregoing representations, I execute the attached agreements.
“/s/ Frank Carruth, III”

This evidence shows that Carruth reviewed paragraph (c) individually and with his attorney prior to executing the contract. This evidence further demonstrates that it was Carruth’s intention that paragraph (c), if it became effective, would be a full settlement of Campesi’s claims for the value of the stubble and plant cane and for costs of the planting and fallow plowing for the 1976 crop. In commenting on the intention of the parties to paragraph (c), the trial judge observed that “The Court is satisfied that the parties knew that this method would be used by the County Agent.” Under all of these circumstances, the trial judge was not clearly wrong in determining as a matter of fact that paragraph (c) reflected the true intent of the parties in the instant case. Arceneaux v. Domingue, 365 So.2d 1330 (La.1978).

IV. VALUE OF PLANT CANE AND STUBBLE

The appellants contend that the trial court committed error by interpreting the term value in paragraph (c) to mean the cost of placing the seed cane in the ground.

In his excellent reasons for judgment, the trial judge observed as follows:

* * * * * *
‘Value as fixed by the County Agent’ is a figure related to cost or investment and not to market value. It is the defendant’s alternative contention that if the County Agent was expected to determine the value of the plant cane and stubble, he should have determined the market value.
“In considering this question it should be noted what specifically was being valued because it appears that some confusion arose in terminology used by counsel (and the Court) in questioning witnesses. Various times witnesses were asked questions as to the value of ‘crops’ or ‘standing crops,’ but at least two witnesses indicated there is a difference between standing crops and stubble or plant cane. (See testimony of Mr. Carville, transcript 176-177 and testimony of Dr. Wegenhoft, transcript 203-206.) Stubble and plant cane are what remains in the fields after harvest. They are the basis or (figuratively) the seed for the future crop. (In the sugar cane industry the term seed has a special meaning not equivalent to the botanical sense of the word or to our use in this (figurative sense.)
“Plant cane is newly planted cane which has never made a crop. First year stubble is the remains of sugar cane after harvest of the first year’s crop. Second year stubble is the remains of sugar cane after it has yielded two crops. The confusion continues in defendant’s brief on page 16 where the testimony of Mr. Car-ville is interpreted as a statement of the difference between cost and value. Actually Mr. Carville was making a distinction between the cost of stubble and the value of a standing crop. The entire testimony of this witness and others should be read. “The defendants have cited a number of cases on the meaning of value and the method to be used in determining the value of crops. It is important to note that in one of the cases cited, to-wit: State, Department of Highways v. Black (La.App. 3d Cir. 1968) 207 So.2d 583, while the issue was whether or not compensation was due for a crop which defendant had been permitted to harvest and to retain sale proceeds therefrom (answered in the negative), the district court had allowed compensation as a separate item for the stubble, and this award was not contested. (It would have been interesting to see what method the district court had used in fixing the value of the stubble.)
“The contract in this case called for valuation as of the end of the year, i.e. after the crop was made and harvested, and before any cultivation was done to start the next year’s crop.
While normally the term value refers to market value, the evidence is clear that in evaluating stubble and plant cane the County Agent customarily uses average regional cost figures. The Court is satisfied that the parties knew that this method would be used by the County Agent. The County Agent indicated he knew of no other way to determine value of stubble and plant cane. Indeed the Court would be hard put to arrive at any other method. On May 24, 1976 Mr. Carville wrote a letter (D-5) unrelated to this case in which he suggested a valuation for growing crops would logically be based on income potential. Mr. Carville indicated, in a letter dated June 7, 1976 (marked D-6) unrelated to the present case, that in order to evaluate stubble according to income potential it would be necessary for the parties to agree on certain historical average yield data as a future estimated yield and they would have to establish an acceptable future price. On November 24, 1975 he had parenthetically suggested in a letter (D-3) a difference between cost of stubble and value. Nevertheless on December 5, 1975 in a letter (Campesi # 3) addressed to all men agents in the sugar area he suggested value could be based on cost figures adjusted for stand, price and yield expectations. The value he thus proposed was based on future variables and estimates as he suggested in D-6 in which he warned of the hazards of such evaluation, which in fact amounted to speculation. It is virtually impossible to determine value of stubble and plant cane based on expected profit, since profits depend on many future variables, such as the effects of weather on yield, sucrose content and eventual price of the harvested crops through the three-year life span of the cane.
“Market value, of course, is not determined by figuring future profit, although such considerations motivate those who buy and sell, but market value depends on the existence of a market or trade in the type of property to be appraised. An attempt was made to show that some sales had occurred, but in actual fact there is no market for stubble and plant cane separate from leasehold rights. The evidence indicates that in some cases leases provide agreed arbitrary figures in the eventuality of termination of the lease. The examples of sales given by defendants were isolated family transactions and could in no way be considered comparable sales.
“It is also virtually impossible to determine value of stubble and plant cane based on expected profits, since profits depend on numerous future variables, such as the effects of weather on yield, sucrose content, and eventual price of harvested sugar cane at the mill. The fact that sugar prices dropped in 1975 would not reduce the value of stubble and plant cane in December 1975 unless one had the means of predicting the price of sugar at the end of the crop year in 1976. The contract was entered into March 4,
1976 at the beginning of the crop year. “In the opinion of the Court the parties, having provided that the County Agent should fix the values, are bound by the valuations made by him according to regular procedures of his office. Moreover, defendants have not shown that the County Agent’s valuations would be unreasonable under the circumstances. Stubble and plant cane have no value except as an investment with hope or expectation of future profit depending on the uncertainties of the future. While it is not the function of the Court to delve into motivations of the parties in entering into such a contract, it does not appear, given the implications of the May 11,
1977 judgment concerning the ownership of the stubble and plant cane and the investment that went into them, that it would have been unreasonable for the parties to agree that Campesi should be paid or reimbursed for that investment on a cost-based value.”

(Emphasis Added).

The testimony of Floyd Carville, Farm Management Specialist with the Louisiana State University Cooperative Extension Service, and Dr. Kenneth N. Wegenhoft, Farm Management Specialist with the Louisiana State University Cooperative Extension Service, support the trial judge’s conclusion that the method and procedure used by the County Agent of West Baton Rouge Parish, I. R. Creel, was the proper method of determining the value of the plant cane and stubble pursuant to paragraph (c) of the lease agreement. The trial judge did not commit error in this holding. Arcen-eaux v. Domingue, supra.

V. CONCLUSION

For the foregoing reasons, the judgment of the trial court is correct and it is affirmed at the appellants’ costs.

AFFIRMED.

APPENDIX NO. 1

******

“And, under said reservation, the parties agree:

“(a) During the term of this agreement, it is contemplated that Campesi will utilize and produce that plant and certain stubble sugar cane left in the ground, the rights and/or claims of said plant and stubble are, as of December 31, 1975, at issue in said suit, or reserved above. In the event final judgment in suit decrees that Margaret Plantation owns the rights and/or claims to said stubble and plant cane, then and only in such event, when Campesi determines the acreage containing such plant and stubble sugar cane that he will so utilize, which shall be not later than June 1,1976, Campe-si shall then give to Margaret Plantation written notice of the number of acres of plant and first year stubble, and the number of acres of second year stubble, and simultaneously therewith shall pay to Margaret Plantation the sum of $100.00 per acre for plant cane, $50.00 per acre for first year stubble, and $25.00 per acre for second year stubble; together with interest at 8% per annum from January 1, 1976 until date paid; no payment shall be required for any stubble cane which is not utilized by Cam-pesi.

“(b) On the expiration of the term of this agreement, it is contemplated that Margaret Plantation will utilize and produce the plant and stubble sugar cane left in the ground by Campesi; and in the event said final judgment in said suit decrees that Margaret Plantation owns the rights/or claims to said stubble and plant cane, then and only in such event, when Margaret Plantation determines the acreage containing such plant and stubble sugar cane it will so utilize, which will be not later than June 1,1977, Margaret Plantation then shall give to Campesi written notice of the number of acres of plant cane, first year stubble and the number of acres of second year stubble, and simultaneously therewith shall pay to Campesi the sum of $100.00 per acre for plant cane, $50.00 per acre for first year stubble and $25.00 per acre for second year stubble, together with interest at 8% per annum from January 1, 1977 until paid, provided that in the event the acreage in plant cane, and/or first year stubble and/or second year stubble shall be less, as of June 1, 1977 than the amount thereof as of June 1, 1976, Campesi shall pay to Margaret Plantation an amount equal to the value of such differences as fixed by the County Agent for the Parish of West Baton Rouge, and in the event the acreage in plant cane and/or first year stubble and/or second year stubble shall be greater as of June 1, 1977 than the amount thereof as of June 1, 1976, Margaret Plantation shall pay Campe-si an additional amount equal to the value of such difference as fixed by the said County Agent; no payment shall be required for any stubble cane which is not utilized by Margaret Plantation.

“(c) In the event said final judgment in said suit decrees that Ross Campesi owns the rights/or claims to said stubble and plant cane as of December 31, 1975, then and only in such event, when Campesi determines the acreage containing such plant and stubble sugar cane he will so utilize, which will be not later than June 1,1976, he shall give Margaret Plantation written notice of the number of acres of plant cane, first year stubble and second year stubble utilized by him, and Margaret Plantation shall then pay to Campesi an amount equal to the value thereof as of December 31, 1975 as fixed by said County Agent; such payment to be due five days after the said value thereof has been fixed by said County Agent, together with interest of 8% per annum thereon from January 1, 1976, until paid; no payment shall be required for any stubble or plant cane which is not utilized by Campesi,...”

      . In 1974 the average price of sugar was 40.52<t per pound. In 1973 it was 13.81$ per pound and in 1975, 15.32$ per pound.

      . The pertinent provisions of this lease are attached to this opinion as Appendix No. 1.

      . Sugar cane is a unique crop because it can be harvested annually for three years from one planting.


author: LOTTINGER, Judge.

text:
    Margie Gladden BROADWAY v. James L. BROADWAY.
    No. 14958.
    Court of Appeal of Louisiana, First Circuit.
    June 29, 1982.
    Rehearing Denied Aug. 24, 1982.

      John Cornish, Baton Rouge, for plaintiff-appellee Margie Gladden Broadway.
    Ralph W. Brewer, Baton Rouge, for defendant-appellant James L. Broadway.
    Before LOTTINGER, EDWARDS and SHORTESS, JJ.
   LOTTINGER, Judge.

This is a suit for partition by licitation of a ten-acre tract of land located in East Baton Rouge Parish. Margie Gladden Broadway filed suit against James L. Broadway, alleging that she and defendant were each owners of an undivided one-half interest in the tract, and demanding partition of the tract by licitation. From judgment of the trial court in favor of plaintiff, defendant has appealed.

FACTS

At trial, plaintiff attempted to prove her co-ownership of the tract of land by introducing into evidence an authentic act of sale dated July 8, 1967, of the tract from Gerald W. Sides and Leland N. Stockwell to, “James L. Broadway and Margie Gladden Broadway, born Gladden, husband and wife, married to and living with each other in community.”

On cross-examination, defense counsel sought to elicit plaintiff’s testimony that she and the defendant were never legally married, that their relationship was one of concubine and paramour, and that no regime of community property ever existed between the parties. This line of questioning was met with a general objection on the ground that same was inadmissible parol evidence. The trial judge noted the general objection and allowed cross-examination to continue. After all evidence was in, the trial judge asked counsel to prepare memo-randa on the admissibility of the parol evidence and took the entire suit under advisement. Subsequently, the trial judge found that the cross-examination of plaintiff did violate the parol evidence rule, held evidence adduced therein to be inadmissible, and rendered judgment in favor of plaintiff on the basis of the authentic act of sale.

Defendant moved for a suspensive appeal, or a devolutive appeal in the alternative. The trial court granted a suspensive appeal, but because no suspensive appeal bond was timely filed, the appeal is in fact devolutive.

ISSUES

The specifications of error assigned by defendant-appellant can be crystallized into two issues:

1) Was the cross-examination of plaintiff as to her marital status violative of the parol evidence rule?

2) Does plaintiff have any ownership interest in the subject property?

PAROL EVIDENCE

Defendant-appellant argues that the trial judge committed error in his application of the parol evidence rule. The trial judge held that testimony of the plaintiff as to her marital status could not be admitted to refute the recitation in the authentic act that the plaintiff and defendant were married at the time of the sale.

The following articles of the Louisiana Civil Code are applicable:

“Art. 2236. The authentic act is full proof of the agreement contained in it, against the contracting parties and their heirs or assigns, unless it be declared and proved a forgery.
“Art. 2238. An act, whether authentic or under private signature, is proof between the parties, even of what is there expressed only in enunciative terms, provided the enunciation have a direct reference to the disposition.
“Enunciations foreign to the disposition, can serve only as a commencement of proof.
“Art. 2276. Neither shall parol evidence be admitted against or beyond what is contained in the acts, nor on what may have been said before, or at the time of making them, or since.” (emphasis supplied)

A reading of these codal provisions indicates that parol evidence cannot be introduced to vary or contradict the terms of a written agreement.

However, the clear import of these articles is that the parol evidence rule applies only where the enforcement of an obligation created by the writing is essentially the cause of action. The parol evidence rule does not apply where the controversy is between those parties to the act of sale who were on the same side and whose interest was identical. Richard v. Cain, 168 La. 608, 122 So. 866 (1929). Nor does the rule apply when the writing is collateral to the issue involved and the action is not based on the writing. Wampler v. Wampler, 239 La. 315, 118 So.2d 423 (1960).

The parol evidence argument raised by plaintiff is essentially the same as that presented in Tucker v. Joseph, 292 So.2d 357 (La.App. 1st Cir. 1974). Tucker involved an action for partition by licitation of immovable property brought by the heirs of one co-owner against the surviving co-owner. At issue was the marital status of the deceased co-owner, Carrie Tucker Washington, also known as “Carrie Anderson.” The credit deed contained the following recitation, “. .. the property herein conveyed unto ... Carrie Anderson, once married, and then to W. M. Anderson, now residing with him.” The heirs of Carrie Tucker Washington sought to prove by parol evidence that Carrie Tucker was lawfully married but once, and then to Willie Washington, and that Carrie Tucker left her lawful husband without dissolving their marriage and subsequently cohabited with one Willie Williams, also known as “Willie Anderson.” The defendant argued that this evidence could not be admitted to vary or contradict the recitation in the credit deed that Carrie Tucker (Carrie Anderson) had once married and then to W. M. Anderson; that to do so would violate the parol evidence rule. The trial court overruled defendant’s objection, and this court found no error, holding that the parol evidence was properly admitted.

The instant action is not one to enforce an obligation created by the authentic act of sale. This suit involves an issue totally collateral to the act of sale. This action is between parties who were originally on the same side of the act of sale. Accordingly, the parol evidence rule has no application to the instant case. Wampler, supra. We hold that the exclusion of plaintiff’s cross-examination testimony as to her marital status at the time of the act of sale was erroneous.

Because of this holding, we consider plaintiff’s answers on cross-examination to be a proper part of the record. This evidence reveals conclusively that plaintiff and defendant were never legally married, and that their relationship was that of concubine and paramour. Thus, plaintiff’s claim of co-ownership in the subject tract must be evaluated within the context of concubinage.

CONCUBINAGE

The fact that a man and a woman live together as concubines does not create a community of acquets and gains between them. See La.Civ.Code arts. 87 and 88. Additionally, in Sparrow v. Sparrow, 231 La. 966, 93 So.2d 232 (1957), the Supreme Court held that where the initial motive for a man and a woman to live together is concubinage, and such relationship continues, the concubine is not entitled to recover assets of the joint entity under any theory of partnership. The court based its ruling on La.Civ.Code Art. 2804, which stated at that time:

“All partnerships are null and void which are formed for any purpose forbidden by law or good morals. ... ”

In Sparrow, the concubine, after the paramour’s demise, sought to be declared a one-half owner of certain realty obtained by the deceased during the concubinage, or in the alternative, sought a money judgment for services rendered. The court noted that the evidence did not reveal that the concubine invested her money into any of the subjefct property. The court expressly distinguished the following cases:

“1. In Delamour v. Roger, 7 La.Ann. 152, the doctrine of equitable ownership was upheld, but there the court found that the concubinage was merely an incident of a business to which the plaintiff concubine had contributed capital.
“2. In Malady v. Malady, 25 La.Ann. 448, the concubine proved that she contributed a large amount of the capital employed to buy real estate, and the property was all bought in her name.
“3. In Lagarde v. Dabon, 155 La. 25, 98 So. 744, this court merely permitted the concubine to recover money which she had advanced.” 93 So.2d at 234.

In Heatwole v. Stansbury, 212 La. 685, 33 So.2d 196 (1947), the Supreme Court, while noting that concubinage did not establish a community of gains or a partnership, stated:

“It is to be noted that concubines, although under certain disabilities, in the interest of good morals, are not prevented from asserting claims arising out of business transactions between themselves, independent of the concubinage. But the claimant must produce strict and conclusive proof before he can be afforded relief.” 33 So.2d at 197.

The court held that the paramour had utterly failed to prove that he had contributed to the savings account held in the name of the concubine.

Thus, the jurisprudence has established certain exceptions to the general prohibition of concubines’ acquiring property jointly. If the acquisition is a part of a business venture independent of the concubinage, then the concubines are not prevented from co-ownership, Heatwole v. Stansbury, supra; Delamour v. Roger, 7 La.Ann. 152 (1852). In Malady v. Malady, 25 La.Ann. 448 (1873), the concubine was allowed to retain one-half of the assets of the joint entity where it was proven that her capital and industry was responsible in great part for the acquisition. In Lagarde v. Dabon, 155 La. 25, 98 So. 744 (1924), the court refused to enforce a verbal agreement between concubines that they would share equally property acquired through their joint efforts and industry; however, the concubine had stated a cause of action to recover the amounts she had actually expended. The court in Lagarde cited Delam-our, supra for the following proposition:

“There is a manifest difference between * * * the wages or reward promised in consideration of concubinage, which cannot be maintained, and a suit for property, the result of capital, industry, labor and economy. * * * The reasonable effect of article 2804 [now 2833] of the Civil Code, is to render the participator in concubinage incapable of recovering, as a universal partner, one half of the property acquired, although her labor may have contributed nothing toward its accumulation; but, when her capital and labor has contributed a full share towards the result, equity entitles her to half the property acquired.” 98 So. 744, 745; citing 7 La.Ann. 152, 155.

An assimilation of the above authorities reveals the proper rule of law to be applied in cases such as the one sub judice : if the concubine can furnish strict and conclusive proof that her capital and industry, obtained independent of the concubinage, contributed a full share to the acquisition of the subject property, then equity dictates she be declared a one-half owner.

As stated above, parol evidence admitted at trial revealed that the recitation in the act of sale that the parties were married was false. Thus, this recitation is to be ignored in deciding ownership of the subject tract. In so doing, the fact remains that the parties herein are listed as co-vendees of the immovable property.

In Manning v. Harrell, 59 So.2d 389 (La.App. 2nd Cir. 1952), the situation was almost identical to the facts in the instant case. The concubine, after having left the paramour, demanded a partition of real property acquired during the concubinage. Both parties appeared as vendees on the act of sale, which falsely described them as man and wife. The plaintiff introduced a certified copy of the deed into evidence. The Second Circuit stated:

“Our jurisprudence recognizes that when property is acquired by several vendees and their specific shares are not stipulated in the act of conveyance a presumption arises that such interest shall be considered equal. This presumption is rebut-table to the extent that the court will decree ownership in proportion to the amount and consideration contributed by the respective vendees.” 59 So.2d 389, 390.

The court went on to hold that neither side adequately proved that he was entitled to more than a one-half share, and rendered judgment in favor of the concubine, decreeing her a one-half owner of the subject property. The court cited Oxford v. Barrow, 48 La.Ann. 863, 9 So. 479 (1891) (erroneously cited as “Walker v. Barrow”) for the proposition that where a deed conveys land to several persons by name without stating the interest of each, it is presumed that their interests are equal.

The Fourth Circuit applied Manning in Succession of Washington, 140 So.2d 906 (La.App. 4th Cir. 1962), where a concubine sued the succession of her late paramour, asking to be recognized as one-half owner of certain realty purchased during the concubinage. The Fourth Circuit held that the concubine’s introduction of a deed purporting her as a co-vendee created a rebuttable presumption that the concubine was an owner of an undivided one-half interest in the subject property. The Fourth Circuit found the exclusion of evidence (under the parol evidence rule) involving the amount of the purchase price paid by each to have been erroneous, and remanded the cause to the district court for further evidence.

In Jackson v. Hampton, 153 So.2d 187 (La.App. 2nd Cir. 1963), app. den. 244 La. 1013, 156 So.2d 223 (1963), the Second Circuit again held that the concubine’s introduction into evidence of an authentic act listing her as a vendee created a presumption that she was a one-half owner of the property. The court placed the burden of proof that the concubine had furnished none of the consideration for the property on the plaintiffs, heirs of the deceased paramour, and finding that they failed to meet this burden, rendered judgment recognizing the concubine as co-owner of the subject property.

In Chambers v. Crawford, 150 So.2d 61 (La.App. 2nd Cir. 1963) the concubine was not listed as a vendee on the deed, but was merely listed as the “wife” of the vendee-paramour. The Second Circuit rejected her claim for a one-half interest in certain immovable property. The court found that in the absence of a deed listing her as a co-vendee, she enjoyed no presumption that payments by her were not derived from the illicit relationship. Manning and Washington were expressly distinguished. Where the concubine was not named as a co-vendee, the rule of Sparrow prevailed and the court held that because concubinage was the initial motive of the parties in acquiring the property, the concubine could not claim co-ownership or recover amounts expended during the concubinage.

It is undisputed that plaintiff is a co-vendee in the act of sale. We are of the opinion that she should thereby enjoy a rebuttable presumption that her contribution was by funds obtained independent of the concubinage, following Manning, Washington and Jackson, supra. The defendant failed to rebut this presumption by showing that whatever contribution plaintiff made to the acquisition of the subject property was derived from the illicit relationship. On the contrary, evidence adduced at trial revealed that plaintiff was the operator of three beauty parlors, that revenues from the parlors went into a joint account in the name of both parties, that the subject property was paid for with a check drawn on the same account, and that plaintiff was the person who actually signed this check. This evidence, combined with the presumption accorded plaintiff as a named co-vendee, carries the burden of strict and conclusive proof that plaintiff’s contribution was by independently-obtained funds which did not derive from the illicit relationship. Heatwoie, supra. Thus, plaintiff is entitled to be declared a one-half owner in the subject property, under the doctrine of equitable ownership.

We are aware that this court in Keller v. Keller, 220 So.2d 745 (La.App. 1st Cir. 1969), stated that, “... a concubine ... may only recover those funds that she had contributed to the actual purchase of assets which she now claims to be an owner in indivisión with her paramour.” 220 So.2d at 750. In Keller, the “wife” was a named co-vendee, and she demanded partition or, in the alternative, reimbursement of her contribution. The trial court denied a partition, but rendered a judgment of $375.00 in favor of plaintiff, representing her contribution. Plaintiff moved for a new trial, which was denied, and plaintiff subsequently filed for and was granted an appeal. However, plaintiff’s brief on appeal urged that the sole issue before the appellate court was the propriety of the trial judge’s refusal to grant a new trial. The defendant answered the appeal, urging reversal of the money judgment as well as other collateral issues. This court noted that the jurisprudence was well-settled that any relief available to an appellant which is not urged in brief or oral argument is deemed waived; accordingly, the court held, after resolving the issue of a new trial unfavorably to the appellant, that the only remaining issues on appeal were those raised by appellee in his answer to the appeal. For these reasons, the issue of whether partition is an available remedy in this type of case was not actually before this court in Keller, and the broad assertion made therein that a concubine who affords strict and conclusive proof that her contribution was derived independent of the concubinage may nonetheless recover only those amounts actually expended is but dictum, since same was not essential to the holding in Keller. Therefore, Keller does not conflict with our ruling in the case sub judiee that plaintiff is entitled to be recognized as the owner of a one-half interest in the subject tract.

Therefore, for the above and foregoing reasons, the judgment of the trial court is hereby affirmed, all costs going to defendant-appellant.

AFFIRMED.