author: MARVIN, Judge. FRED W. JONES, Jr., Judge,

text:
    Ray BAMBURG, Plaintiff-Appellant, v. Delores G. LAVIGNE, Defendant-Appellee.
    No. 14609.
    Court of Appeal of Louisiana, Second Circuit.
    Aug. 25, 1981.

      James E. Franklin, Jr., Shreveport, for plaintiff-appellant.
    Wiener, Weiss, Madison & Howell by John M. Madison, Jr., Shreveport, for defendant-appellee.
    Before PRICE, HALL, MARVIN, JASPER E. JONES and FRED W. JONES, Jr., JJ.
   MARVIN, Judge.

Plaintiff appeals a judgment rejecting in part his demands under the usury law, LRS 9:3501, to recover all interest paid defendant under a 1977 credit deed of an immovable. The deed and note provided for a rate of interest payable annually,

“. . . equal to the prime rate of [a New York bank] . . ., plus one-half ... of one . . . percent on each principal payment date ...”

The annual interest that was paid and accepted in 1978 did not exceed the maximum conventional interest rate. LRS 9:3503. The annual interest that was paid and accepted in 1979 and in 1980, when the note was paid in full, exceeded the maximum conventional interest rate and was usurious.

The trial court found that neither party intended the rate to become usurious, that forfeiture of the entire interest would not be declared, and that defendant should return to plaintiff the amount of interest paid above the maximum rate in 1979 and in 1980 ($2,418). Plaintiff contends that all interest paid in 1978, 1979, and 1980 ($24,-093), should be forfeited and returned to him. In answer to the appeal, defendant contends that plaintiff’s demands should be totally rejected because the contract is not usurious on its face. The litigants differ as to the effect of Paulat v. Pirello, 353 So.2d 1307 (La.1977). We amend to allow recovery of all interest paid in 1979-80.

Plaintiff is not seeking to avoid the contract and defendant is not seeking to enforce. The issue is the applicability of the forfeiture of § 3501 to this contract, not per se usurious on its face in 1977, but which, when applied in 1979 and 1980, became usurious and interest above the maximum allowable was paid and accepted under this contract.

In Paulat, the holder of the note argued, as the defendant-former holder argues here, that the note was not usurious on its face and that payments of usurious interest made and accepted after the execution of the note, without the advice of counsel or intent to violate the law, should not be deemed a contract subject to the § 3501 forfeiture. The Paulat holder relied on Grunewald v. Bartholomew, 269 So.2d 274 (La.App. 4th Cir. 1972), in which the appellate court reiterated the principle that “usury is determinable from the face of the instrument.” The Supreme Court answered:

“Grünewald under its facts is a correct statement of principle. It does not, however, purport to legitimize, as non-usurious, payments exacted after execution of a note not usurious on its face, when such payments in fact and by agreement of the parties constitute usurious interest. And that is the issue before us in this litigation.” 353 So.2d at p. 1310 Emphasis supplied.

In Paulat and in Grunewald, interest exceeding the allowable rate had been legitimately capitalized in the note which was discounted. The note in each instance provided for interest at the then allowable rate of eight percent from maturity. Because the Grunewald note was payable on demand, the court held that the note was mature the date it was written and the interest charged (the 8% from date with the capitalized interest) was effective the date the note was written and was usurious without a time interval between the date of the note and the maturity of the note. Grunewald said:

“As maturity in a demand note is the date of the instrument, there is no interval of time between date and maturity; they occur at the same time. Nor can the holder of the note in suit unilaterally change the annual interest provision from the date of the note to one year or more from date and thus cure the usurious nature of the instrument. Usury is determinable from the face of the instrument, from the time that interest is due on its face and not from the time when payment of interest may be demanded. The holder can no more change the usurious nature of this instrument than can the holder of a note calling for 25% annual interest change such a note from usurious to legal by offering to accept the legal rate of interest. Accordingly, we hold the note in suit is usurious, the penalty for which is forfeiture of the entire interest contracted, here the forfeiture of both capitalized and annual interest.” 269 So.2d at p. 277 Footnote omitted.

The Paulat note included 18% capitalized interest and was payable six months after date. Between 1964 and 1968 the borrower paid the 18% capitalized interest and executed a new note, also bearing the 18% capitalized interest, at six months intervals. From 1969 to 1972, the borrower simply paid the 18% capitalized interest every six months without executing a new note as he had in the past. When the borrower refused to execute a new note in 1973, the lender sued on the 1969 note(s). The court observed:

“Succinctly, by so doing, the borrower paid and the lender accepted interest at the usurious rate of 18% annually on each of the notes, even though the notes were stated to bear interest only at the allowable rate of 8% annually from maturity.
“These payments were apparently made and received without the benefit of advice from a lawyer. The issue of their usuriousness arose in 1978, when the borrower retained counsel in connection with the lender’s demand that he re-execute notes on these two loans in order to secure extensions of them. These notes were to include capitalized interest at the rate of 18% for post-1973 periods during which the borrower was delinquent in his (18%) interest payments.
“Upon the borrower’s refusal to execute these new notes, the lender brought suit on the two 1969 notes. However, in his suit the lender credited each $900 payment partly to interest at the maximum 8% conventional rate allowable, and the remainder to principal.” 353 So.2d at p. 1309 Emphasis supplied.

Defendant’s argument that the formula by which the annual interest is to be computed should be reformed to make it subject to the ceiling imposed by Louisiana law, appears to have considerable equitable appeal. In effect, this argument was adopted by the trial court as the rationale for ordering the return of only the usurious interest. Additionally, the defendant argues that the note here was not matured or past due on its face as was the Paulat note and that because of this distinction, the Paulat rationale should not apply to compel § 3501 forfeiture of the entire interest. Notwithstanding the Supreme Court’s repeated use of the term after maturity in Paulat, we do not perceive the distinction as requiring a different result in the instant circumstances.

In Paulat, the rate which became usurious derived from the 18% discount of the note that was legitimately capitalized initially into the note. 353 So.2d at p. 1309. Here, the rate derived from the application of the written formula which became usurious in 1979. In both instances, and as the Supreme Court observed in Paulat, the interest later paid and accepted and which became usurious,

“. . . [was] thus made ... by virtue of the contract or agreement . . . that interest would be paid in that manner and at that rate.
“Since the interest payments so made by virtue of the agreement(s) are usurious, the ‘entire interest so contracted’ ... is forfeited ...” 353 So.2d at p 1310.

Here, as in Paulat, the agreement between, and as consummated by, the parties shows that the usurious interest was not erroneously or mistakenly computed, paid, and accepted, but was computed, paid, and accepted in purposeful following of the agreement, admittedly in ignorance of the law. The agreement(s) in Paulat were written as well as verbal and the verbal agreement to pay the 18% interest derived from the written agreement. Here, we do not have the problem of a discounted note and of the date of maturity as was posed in Grunewald and in Paulat.

Here, we have one written contract which has been fully carried out and completed and under which usurious interest was computed, paid, and accepted. The statute clearly expresses that any contract for the payment of [usurious] interest shall result in the forfeiture of the entire interest contracted (§ 3501), and not simply the usurious interest (Karmgard v. Southland Mtg. & Title Co., 341 So.2d 1109 (La.1977), Paulat, supra, at p. 1311). After execution of a note or contract, not per se usurious on its face, usurious interest purposefully paid and accepted by virtue of the agreement or contract of the parties, will result in the forfeiture of the entire interest. See Paulat, Karmgard, and Grunewald, cited supra. We are obliged to follow these policy dictates of the legislature as interpreted and applied by our highest court. The fact that the contract was not initially usurious is not a defense to the application of § 3501 where it is shown that the interest paid and accepted under that contract as implemented and consummated by the parties became usurious. Paulat, supra. Parol evidence may be admitted to show that usurious interest was paid and accepted. Karmgard, supra.

The argument that usury is determinable solely from the face of the contract, made in Grunewald, in Paulat, and made here, was squarely rejected by the Supreme Court in Paulat, when the court said that the argument was correct in principle, but that

“[it] does not . . . legitimize, as non-usurious, payments exacted after execution of a note not usurious on its face, when such payments in fact and by agreement of the parties constitute usurious interest.” 353 So.2d at p. 1310.

We follow the Paulat declaration, fully realizing that the parties were in ignorance of the legal effect of their agreement to pay and receive interest according to a formula based on the prime rate. Paulat allowed recovery of the entire interest paid after the note, not usurious on its face, became usurious after execution. Also see Kin-Ark Corp. v. Boyles, 593 F.2d 361 (10 C.A., 1979) reaching the same result under Texas law. Under the authority of Paulat, we pronounce the same result to order forfeiture of the entire interest paid after the interest became usurious.

The judgment is amended to increase the amount awarded plaintiff to $17,818.75, with legal interest on $8,268.75 from February 4, 1979, and on $9,450 from February 4, 1980, at defendant’s cost.

As amended, the judgment is AFFIRMED.

FRED W. JONES, Jr., Judge,

dissenting.

The Louisiana Usury Law (La.R.S. 9:3501) penalizes the party who receives interest under a usurious contract by providing for the forfeiture of the “entire interest so contracted.”

Contracting for the payment of interest in excess of the legal maximum is considered so opprobrious, because of the statutorily expressed state public policy, that all interest owed under the contract, including capitalized interest incorporated in the face amount of the note, is forfeited. Thrift Funds of Baton Rouge, Inc. v. Jones, 274 So.2d 150 (La.1973).

As pointed out in Tarver v. Winn, 18 La.Ann. 557 (1866), “the agreement to pay greater interest than that allowed by law to be contracted for, makes that part of the contract null and void, and produces no legal effect between the parties contracting, and is the same as if no agreement had been entered into relative to interest.”

Since this interest forfeiture provision is penal in nature, it has been strictly construed. For example, the court in Unity Plan Finance Co. v. Green, 179 La. 1070, 155 So. 900 (1934) cited with approval the following statement found in a California case:

“It is also elementary that the contract must in its inception require a payment of usury or it will not be held a violation of the statute and it may not be judged after some default of the borrower, which default alone authorizes penalties or forfeiture which, if exacted in the beginning, would have been a violation of the statute.”

It is significant that even in Paulat, upon which the majority places such heavy reliance, the court found a usurious contract. It was conceded that the notes sued upon were not contracts for the payment of usurious interest, since the excessive interest was capitalized. However, the court then proceeded to hold:

“By mutual agreement of the two parties following maturity of the notes, payments of interest were made and received at the rate of 18% per annum. These payments were thus made and received by virtue of the contract or agreement, express or implied, entered into by the parties after maturity of the notes that interest would be paid in that manner and at that rate.” (Emphasis added)

In the case at bar, unlike Paulat, the 1979 and 1980 usurious interest payments were not made pursuant to some agreement entered into subsequent to the execution of the original note in 1977. Consequently, the central issue in our case is whether the 1977 contract, with the interest rate indexed to the prime rate of a New York bank, was a contract for the payment of usurious interest.

The following pertinent summary of factors to consider in determining whether a contract is usurious is found in 45 Am.Jur.2d, Interest and Usury, § 111, pp. 97, 98:

“Usury . . . imports the existence of several essential elements . . . generally enumerated as (1) a loan or forbearance, either express or implied, of money, or of something circulating as such; (2) an understanding between the parties that the principal shall be repayable absolutely; (3) the exaction of a greater profit than is allowed by law; and (4) an intention to violate the law. (Emphasis added) The presence of these elements infallibly indicates usury irrespective of the form in which the parties put the transaction, but the absence of any one of them conclusively refutes a claim of usury. These elements must exist at the inception of the contract, since a contract which in its inception is unaffected by usury cannot be invalidated by a subsequent usurious transaction, nor, as a general rule, may a transaction that is usurious in its inception be subsequently cured. It is the agreement to exact and pay usurious interest, and not the performance of the agreement, which renders it usurious. The test to be applied in any given case is whether the contract, if performed according to its terms, will result in producing to the lender a rate of interest greater than is allowed by law, and whether such result is intended.”

At the time the contract in question was executed in 1977, the prime interest rate to which the interest clause was indexed was 6.25%. The maximum legal rate was then 10%. However, because of the congruence of economic tides over which the parties had no control nor reason to anticipate when they contracted, the prime interest rate escalated in 1979 and 1980 to heights above the Louisiana legal maximum.

Was the 1977 contract usurious simply because of the possibility that the index prime interest rate would rise above the legal maximum? Obviously not, and the majority does not so hold. On the other hand, it does find that the contract in question was usurious because “we have one written contract which has been fully carried out and completed and under which usurious interest was computed, paid, and accepted.” To carry this reasoning to its logical conclusion, if the prime interest rate had fallen after 1979 and only that interest payment was usurious, the original 1977 contract would still be considered as usurious by the majority. Consequently, under the rationale of Thrift Funds of Baton Rouge, Inc. v. Jones, supra, all interest paid under this contract, whether in excess of the legal maximum or not, would have to be forfeited. I do not believe that this result was ever envisioned by the enactors of our usury statute.

In summary, the majority seems to hold that, although not usurious on its face, the 1977 contract became usurious when interest payments made thereunder proved to be usurious. If this is correct, as previously pointed out, all interest paid under the 1977 contract should have been forfeited since the contract itself was usurious. However, I cannot agree that the 1977 contract was usurious under the required strict construction of our usury statute.

Usury laws in general were designed to protect needy borrowers from unscrupulous moneylenders, since it was recognized that in the power of the lender to relieve the wants of the borrower lay the germ of oppression. Because of his inferior economic position, the borrower frequently was powerless to resist the oppressive exaction of interest. 45 Am.Jur.2d, § 4, p. 18.

Since the object of usury legislation is to protect borrowers from unconscionable demands of lenders, that view of the law should be adopted which will accomplish this purpose. The statutes should not be converted from “shields of protection into swords of offense.” 45 Am.Jur.2d, § 8, p. 22.

Our usury law restricts its harsh forfeiture sanctions to a contract for the payment of excessive interest. This contemplates proof by a preponderance of the evidence that at the time of execution of the contract the lender intended to charge usurious interest. Such evidence is totally lacking in this case. Neither party had reason to anticipate the forthcoming skyrocketing prime interest rates. However, under the majority’s reasoning, at the time that the indexed prime rate (plus V2%) exceeded the legal maximum, the 1977 contract was retroactively tainted with usuriousness.

It does not seem to me that the Louisiana usury law was intended to impose its harsh penalty upon a hapless lender in these fortuitous circumstances. Viewed in the historical context of usury laws in general, it is obvious that the statute in question had as its restricted goal the penalizing of lenders who deliberately and intentionally charged borrowers interest rates in excess of the legal maximum. That did not occur here.

However, even though I would not find the interest clause of the 1977 contract to be usurious, it is obvious that interest payments made by plaintiff in 1979 and 1980 were actually in excess of the legal maximum. Rather than reforming the original contract, as did the trial judge, I would permit recovery by plaintiff of the excess payments by characterizing his action as one in quasi-contract under La.C.C.Art. 2294—for the return of money paid which was not legally due. It is upon this basis that I agree with the judgment of the trial court.

For these reasons I respectfully dissent.

      . This case was reargued before a five-judge panel after one judge on original hearing dissented from the modification of the judgment appealed. La.Const., Art. 5, § 8(B).

      . “Any contract for the payment of interest in excess of that authorized by law shall result in the forfeiture of the entire interest so contracted.”

      . This note was fully paid on February 4, 1980. These interest payments (with principal) were made on the dates shown:

      The maximum conventional interest rate applicable to this transaction was raised from 10 percent to 12 percent by Act 205 of 1979, amending § 3503, effective September 7, 1979. The interest paid and received in 1979 and 1980 exceeded the maximum allowable rate of interest respectively then in effect. The 1978 payment was below the maximum allowable rate.

      . The majority refers to Kin-Ark Corp. v. Boyles, 593 F.2d 361, as “reaching the same result under Texas law.” The penalty provision of the Texas statute covers “any person who contracts for, charges or receives interest which is greater than the amount authorized.(emphasis added) See Art. 5069-1.-06(1), Vernon’s Tex.Rev.Civ.Stat.Ann. Our Louisiana usury law is not that broad.

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


source: Caselaw Access Project

author: MARVIN, Judge.

license: Public Domain

text:
    Stephen E. LANGFORD, Plaintiff-Appellant, v. CAHN ELECTRIC CO., INC., Defendant-Appellee.
    No. 14610.
    Court of Appeal of Louisiana, Second Circuit.
    Aug. 25, 1981.

      Frederic L. Miller, Shreveport, for plaintiff-appellant.
    Wiener, Weiss, Madison & Howell by John M. Madison, Jr. and James R. Madison, Shreveport, for defendant-appellee.
    Before PRICE, MARVIN and FRED W. JONES, Jr., JJ.
   MARVIN, Judge.

In this action seeking to enforce LRS 23:634 against an alleged forfeiture of “wages”, the plaintiff appeals a judgment rejecting his demands. We reverse.

Plaintiff sued only the employer to recover a portion of bonuses paid that plaintiff then contributed to an employee retirement investment fund created by a written contract between the employer and several employees who were selected by the employer to receive the bonuses that made up the fund. The employees who participated in the retirement investment fund (called a joint venture by defendant employer) were made defendants by the employer and in our view, correctly so, because we deem them indispensable parties. CCP 641.

Plaintiff contends the contract creating the retirement investment fund contravenes the public policy of § 634 and is void. Defendant contends that we should uphold the contract and affirm the trial court’s judgment because the bonuses paid were not earned until the participating employee either retired at age 65, or before that time, died or became disabled. Both litigants rely on the recent pronouncement on the subject by the Supreme Court in Morse v. J. Ray McDermott & Co., Inc., 344 So.2d 1353 (La. 1976).

There are no real credibility issues and we are called on to interpret this contract in the light of the statute and of Morse, supra.

THE INVESTMENT FUND CONTRACT

The contract was written in 1967 by the employer’s CPA. The CPA and the executive officer of the corporation wanted to encourage, to make it more desirable, to be sure, that the participants stayed in the employ of the company until their retirement. Only selected employees were invited by the employer to participate in the fund and these employees were required to agree to contribute to the fund 70 percent of the bonuses paid them as a condition of receiving the bonuses. The bonuses paid were considered by the CPA and the corporate executive to be remuneration, something extra, to the employee, and, as the contract and invitation state, in appreciation for loyal service of the employee. The fund created by employee contributions is managed and invested by an administrative committee comprised of three persons who were named in contract. The committee members are not elected for a term. Any vacancy on the committee is to be filled by appointment by the fund participants who are not members of the committee.

Plaintiff became a party to the contract and a participant in the fund in January 1973 and received an initial bonus of $880 which he reported on his 1972 income tax as instructed by the letter of invitation. As of December 31, 1978, plaintiff’s proportionate share of the fund was valued at $10,483. Plaintiff terminated his employment on October 5, 1979, and instituted this action in February 1980.

Pertinent provisions of the contract read:

“AGREEMENT . . . [between] Cahn Electric Company, Inc., hereinafter called the Corporation, and J.A. Brocato, J.A. Brown, G.A. Burton, Abry S. Cahn, Jr., T.H. Chiles and R.C. Jackson, . . . called the joint venturers.
“Whereas Cahn Electric Company, Inc., in appreciation for loyal service and to provide security for certain deserving employees, will pay special bonuses from time to time as profits warrant to certain employees . . . with the understanding that seventy percent (70%) of such bonuses are to be deposited to the joint venture herein set up. The company will include the amount of this bonus on the employees W-2 form for such year. The amount of the bonus not deposited to the joint venture (thirty percent) shall be retained by the employee to apply to the payment of income tax on this special bonus. The company may pay this bonus in two checks to each employee to facilitate endorsement to the Joint Venture account.
“(1) The joint venturers of the corporation hereby form this joint venture to serve as a retirement investment fund for the participants.
* * * * * *
“(2) Contributions to the venture will be paid by Cahn Electric Company Inc. in the manner stated above. Such contribution will be irrevocable and cannot revert to Cahn Electric Company, Inc.
“(3) The funds will be totally vested at such time as the employees retire at or after the age of 65; becomes totally disabled in which he is incapable of performing employment with the company or upon death. Should an employee terminate his employment for any reason other than those stated above, he will forfeit his entire interest in the fund to the remaining joint venturers.
* * * * *
“(6) Should a member withdraw before retirement and forfeit his share, the value of such member’s share will be prorated among the other members on the percentage of their ownership.
% sfc :Jc * * sjt
“(8) This agreement shall terminate and funds in the joint venture distributed to the joint venturers on the basis of their percentages to the total value of the fund on the happening of any of the following events:
“(a) All joint venturers have retired, deceased, or left the employment of Cahn Electric Company, Inc.
“(b) Cahn Electric Company, Inc. desires to discontinue contributions to the retirement fund and ask[s] that the joint venture be terminated.
“(c) Dissolution of Cahn Electric Company, Inc. or sale of its assets or stock to another company.
“(d) By mutual agreement of all parties to this agreement.
“(9) Additional members may become a party to this joint venture from time to time at the discretion of the corporation.
“(10) Nothing in this agreement contained shall be construed as giving any person whomsoever any legal or equitable right against the Committee, Cahn Electric Company, Inc., its stockholders, officers or directors, except as the same shall be specifically provided for in this agreement. Nor shall anything in this agreement give any participant or other employee the right to be retained in the service of Cahn Electric Company, Inc. and the employment of all persons by Cahn Electric Company, Inc. shall remain subject to termination by them to the same extent as if this agreement had never been executed.
“(11) No member of this agreement shall have the right to assign or transfer his interest hereunder nor shall his interest be subject to claims of his creditors, it being understood that all provisions of this agreement shall be for the exclusive benefit of those designated herein.
* *

Plaintiff accepted this invitation of January 1, 1973, to become a participant in the fund:

“Attached hereto is a copy of the CAHN ELECTRIC COMPANY INC. RETIREMENT INVESTMENT FUND (A Joint Venture) . . .
“In accordance with paragraph 9 the management would like to invite you to participate with the other executives in this venture. To become a party to this agreement you should sign one copy of this letter and return same to me. By so doing you indicate that you agree to all of the rules as set forth in the attached agreement and make yourself a party to that agreement.
“Should you become a party to the joint venture we will give you a special bonus this year of $880.00 of which $600.00 will be invested in the fund and you will retain $280.00. You should declare the $880.00 as income for 1972. The $280.00 retained is to help defray the tax you will probably have to pay.
“Although there is no guarantee, we plan to make additional investment in your behalf in the future. By so doing we hope to build a significant retirement benefit for your family. This is one way we have to show our appreciation of your loyal service.”

The employer’s CPA explained that the plan in question was not an IRS qualified retirement plan under which the employer contributes money directly to a fund or trustee to provide retirement benefits to most or all of the employer’s employees who earn credits which periodically vest in the employee. The employee is not taxed by IRS until the benefits are paid upon the employee’s death, disability, or retirement. The testimony indicated that Cahn Electric Co., Inc. has a qualified retirement plan for its employees. The unqualified plan in question, however, included only 7 of 38 employees when it was created. It was also explained that an employee who resigns his employment before retirement does not forfeit retirement credits which have vested in him under a qualified plan even though the vested benefits do not have to be paid the resigned employee until he reaches retirement age.

Morse observes that deferred vesting and resulting forfeiture exists in many of the retirement plans affecting public employees who resign their employment before retirement. 344 So.2d at pp. 1366, 1369-1370. We observe that under such plans, an employee who resigns his employment before retirement age does not forfeit the amounts that he has contributed toward his retirement benefit. Compare Morse, 344 So.2d at p. 1366.

It is true that Morse emphasized the fact that Morse’s employer fired him, preventing him from continuing his employment and causing the forfeiture of future annual installments of a sum which had previously vested in Morse, not as a gratuity, but in the nature of delayed or deferred compensation for services previously rendered the employer. The crux of the Morse holding, as we understand it, is that the strong public policy of LRS 23:634 will be applied to avoid a forfeiture of deferred or vested compensation paid or credited to an employee for services previously rendered when the employee’s employment is terminated before retirement.

On rehearing Morse said that

“. . . [A]ll of what we said in our original opinion is correct and applicable to the controverted provisions of the supplemental compensation plan.” 344 So.2d at p. 1368.

Morse originally said that

“The provisions [of LRS 23:623, 640] together apply literally only to wages payable under written contracts of employment and to fringe benefits payable under collective bargaining agreements. Nevertheless, the public policy so expressed includes, within its scope . . . clauses ... to cause forfeiture or to prevent vesting of deferred compensation credits otherwise earned by the employee.” 344 So.2d at p. 1359. Emphasis supplied.

Here the contract in question is between the employer and the employees whom the employer selects at its discretion. The employee who is selected is effectively told that if he agrees to sign the contract containing the forfeiture clause the employer will pay him a special bonus, for services which he has rendered, but he will be required to contribute 70 percent of the bonus to a common investment fund, which some other employees, receiving a like bonus and also contributing to the fund, will invest and manage, and which will eventually be paid as directed upon the earlier occurrence of either his death, disability, or retirement. In summary, the bonus is paid by the employer to the employee for past services upon the condition that the employee agrees to contribute 70 percent of that bonus to the investment fund and to forfeit that contribution and whatever it earns if the employee terminates his employment for any reason other than death, disability, or retirement at age 65. These conditions are imposed by the employer in the contract.

There is no prohibition against an employer paying a bonus to an employee conditioned upon that employee’s long and faithful service. Knight v. Oden, 282 So.2d 612 (La.App.1st Cir. 1973). A resigning employee, however, apparently cannot compel an employer to continue to pay a bonus which is conditioned upon continued employment. See Knight, supra, and case note, 52 Tulane L.R. 427 (1978). Similarly, an employer apparently may not recover a bonus paid an employee and earned under an agreement that the employee would share in the employer’s gross sales above a stated ceiling. See United Shoe Stores Co. v. Dryer, 16 La.App. 605, 135 So. 50 (2d Cir. 1931).

This plaintiff employee is not seeking to compel the employer to pay a bonus and is not seeking to enforce a monetary right to deferred compensation directly set aside by the employer under a retirement plan which contains contractual conditions for the periodical earning and vesting of credits toward the retirement of the employee. It has been observed that almost uniformly, courts have limited receipt of this type deferred compensation to the retirement plan and have denied recovery of these unvested credits to an employee whose employment is terminated before meeting the contractual terms of the retirement plan, whether or not the termination is attributable to the employee’s fault. See 52 Tulane L.R., supra, at p. 429 and cases cited.

Here, plaintiff is seeking to recover the contribution he has made from bonuses periodically paid him by his employer to a retirement fund. The bonus was paid annually between 1973 and 1979 for the employee’s faithful service to the employer during the year before. The employer required the employee, as a condition of receiving the bonus, to agree that he would contribute 70 percent of the bonus to the common fund and that he would forfeit the amount contributed to the common fund if he resigns his employment before retirement at age 65. Under these circumstances, the bonuses paid the employee for past services, like the awards earned under the Morse circumstances, are earned compensation akin to wages protected by the strong policy of § 634. A contractual provision, exacted from the employee by the employer, which results in the employee forfeiting the contribution he has made under the exacted contract, falls squarely within the prohibition of § 634 and cannot be enforced against this plaintiff. Morse, supra. See and compare cases cited and discussed in annotation: “Rights and liabilities as between employer and employee with respect to general bonus or profit sharing plan,” 81 A.L.R. 2d 1063, as supplemented.

Nothing we have said here prevents an employer from designing and contributing directly to an employee retirement plan which contains the scheme of deferring compensation and vesting of credits based on longevity and continuity of service. We hold only that an employer may not pay an employee a bonus, which is taxable to the employee, and is for past services rendered, and contractually require that employee to contribute a portion of that bonus to a common fund and to forfeit that contribution if the employee terminates his employment for any reason other than death, disability, or retirement before a stated age.

The judgment appealed is reversed and, accordingly, judgment is hereby rendered in favor of plaintiff, Stephen E. Langford, and against defendant, Cahn Electric Company Inc. Retirement Fund, for the full amount of contributions made to the defendant fund by the plaintiff during the time of his employment with Cahn Electric Company, Inc., together with all earnings respectively accruing from such contributions by plaintiff to the date of judicial demand, plus legal interest on the value of plaintiff’s proportionate interest in the fund from date of judicial demand, and for all costs of these proceedings in the district court and in this court.

REVERSED and RENDERED.

      . “No person, acting either for himself or as agent or otherwise, shall require any of his employees to sign contracts by which the employees shall forfeit their wages if discharged before the contract is completed or if the employees resign their employment before the contract is completed; but in all such cases the employees shall be entitled to the wages actually earned up to the time of their discharge or resignation.”

      . Contributions to the venture were not paid by the employer. The employer paid bonuses to the selected employee and the employee, as a condition of receiving the bonus, contributed to the venture.

      . Again, the employer did not directly invest in the fund on behalf of the employee. The employee was required by the contract to invest a portion of the bonus paid directly to him by the employer.


author: FRED W. JONES, Jr., Judge.

text:
    Dillard McCOY and Gloria McCoy, Plaintiffs-Appellants, v. Milton CHAMBERS, Linda W. Spearman and Southeastern Fidelity Insurance Company, Defendants-Appellees.
    No. 14613.
    Court of Appeal of Louisiana, Second Circuit.
    Aug. 25, 1981.

      Rothell & Cohn, Ltd. (a Professional Law Corp.) by David A. Rothell and David M. Cohn, Mansfield, for plaintiffs-appellants.
    Lunn, Irion, Switzer, Johnson & Salley by Jack E. Carlisle, Jr., Shreveport, for defendants-appellees.
    Before PRICE, MARVIN and FRED W. JONES, Jr., JJ.
   FRED W. JONES, Jr., Judge.

A wife-driver and her husband filed suit for damages allegedly resulting from a collision with another vehicle at an intersection in Mansfield. Defendants, driver of the other car, its owner and his insurer, reconvened for damages. The trial judge rejected both plaintiffs’ demands and those of the reconvenors. Plaintiffs appealed the dismissal of their suit. We reverse.

The record shows that Washington Avenue is a four lane thoroughfare running generally north and south through Mansfield. Gibbs Street, which intersects with Washington Avenue, runs generally east and west. At the time of the accident, traffic at this intersection was controlled by an electric semaphore signal.

At about 4:30 p. m. on March 11, 1978, Gloria McCoy was driving a car, owned by the community existing between her and Dillard McCoy, north on Washington Avenue in the outside lane, approaching the intersection with Gibbs Street from the south. At the same time Linda Spearman was driving a car belonging to Milton Chambers west on Gibbs Street, approaching the intersection with Washington Avenue from the east. As both cars neared the described intersection, a heavy rain started falling. There was considerable traffic in the vicinity of the intersection.

Mrs. McCoy testified that she was traveling toward the intersection at a speed of 20 to 25 miles per hour. She observed that the traffic light facing her was red, and braked slightly. Before reaching the intersection she noted that the light changed to green and gave her car “a little gas,” proceeding into the intersection. At that instant she observed that the Spearman vehicle (thus described herein for sake of clarity, though owned by Chambers) was stopped a few feet away, projecting out into the intersection, partially blocking her traffic lane. Mrs. McCoy sounded her horn and applied pressure to her brakes. The latter locked and the McCoy vehicle slid into the Spear-man car, striking it on the left front side. Mrs. McCoy explained that she did not attempt to turn to her left because traffic occupied that lane.

The testimony of Mary Hives, a passenger in the McCoy automobile, was substantially the same as that of Mrs. McCoy, particularly with reference to the protrusion of the Spearman vehicle into the intersection at a time when the McCoy car was just entering the intersection.

Linda Spearman admitted in her testimony that just before the collision she had stopped her car on Gibbs Street, in obedience to a red traffic light, prior to entering the intersection with Washington Avenue. She denied that any part of her car extended out into the intersection. Miss Spear-man further stated that she did not see the McCoy automobile before it struck her car. Asked how long she had been stopped on Gibbs Street before the collision, Miss Spearman replied: “The light changed as I was coming up to the light, it changed to red, and I sit there. It was one (1), two (2), three (3) seconds.”

The Spearman denial that her car was obstructing any part of the McCoy vehicle’s traffic lane was corroborated by the testimony of Charlie Mayberry, a passenger in the Spearman car. However, one variance in their testimony was Mayberry’s assertion that the Spearman vehicle had been stopped one or two minutes rather than seconds before the collision.

Garner Short testified that, just prior to the accident, he was traveling south on Washington Avenue in the inner traffic lane, approaching the intersection with Gibbs Street from the north. When about 50 yards from the intersection Short noticed the Spearman car “kind of drifting forward” into the intersection. As he reached a point approximately 40 yards from the intersection, Short observed that the Spear-man vehicle was stopped on Gibbs Street, with the front of the car protruding out into the intersection. Short stated that he also witnessed the approach of the McCoy vehicle. Asked to estimate the distance of that car from the intersection when the Spearman automobile came to a stop, Short replied: “I could not. She was closer than I was to it.”

Officer Adams of the Mansfield Police Department, who investigated the accident, testified that upon his arrival at the scene the front end of the Spearman vehicle (entire hood portion) extended into the intersection. Damage to the automobile, where it was struck by the McCoy car, ran from the rear of the left headlight back to the driver’s door. The Spearman vehicle had been hurled, by the force of the impact, against a telephone pole situated at the northeast corner of the intersection near the edge of Washington Avenue.

Based upon his assessment of witness credibility, viewed in the context of the physical evidence (particularly the location of the telephone pole against which the Spearman car was thrown), the trial judge made the fact-finding that, at the time of the collision, the front end of the Spearman vehicle was protruding into the intersection, partially blocking the traffic lane of the McCoy automobile. He correctly applied the law to hold that Miss Spearman was guilty of negligence.

The trial judge, in his written reasons, then proceeded to find that Mrs. McCoy could have avoided the accident had she kept a proper lookout to the front and observed the Spearman car in her lane of traffic when she should and could have done so. Calculating the distance in which Mrs. McCoy should have stopped, the trial judge resorted to use of a “stopping distance chart” published in a law review article. This chart had not been received in evidence at the trial. The trial judge concluded that Mrs. McCoy’s contributory negligence barred recovery by plaintiffs. The latter argue that he erred in this ruling, thus posing the primary issue for consideration on appeal.

A party who pleads contributory negligence bears the burden of establishing facts which will support and prove that affirmative defense by a preponderance of the evidence. Bass v. Aetna Insurance Co., 370 So.2d 511 (La.1979); Billeaudeau v. Travelers Insurance Co., 232 So.2d 590 (La.App.3rd Cir. 1970).

Addressing generally the duty of a motorist approaching an intersection controlled by a semaphore signal, when the light facing him is green, the court in Champagne v. McDonald, 355 So.2d 1335 (La.App.3rd Cir. 1978) stated:

“A motorist approaching an intersection controlled by semaphore signals, who is favored by a green light, is entitled to assume that traffic approaching the intersection from either side on a red light will comply with the red light and respect his right-of-way. Bourgeois v. Francois, 245 La. 875, 161 So.2d 750 (La.1964); Carter v. New Orleans Public Service, Inc., 305 So.2d 481 (La.1974). The favored motorist is not obligated to look to his left or right before entering the intersection. Correge v. Webb, 284 So.2d 355 (La.App. 4th Cir. 1973, writ refused); Bradley v. Allstate Insurance Co., 307 So.2d 132, supra; Keyser v. Triplett, 322 So.2d 294 (La.App. 1st Cir. 1975, writ refused); Welton v. Falcon, 341 So.2d 564 (La.App. 4th Cir. 1976, writs refused), and will be held accountable only if he could have avoided the accident with the exercise of the slightest degree of care and fails to do so. Bradley v. Allstate Insurance Co., supra; Bourgeois v. Francois, supra. All that is required is that the favored motorist maintain a general observation of the controlled intersection. Jordan v. Great American Insurance Company, 248 So.2d 363 (La.App. 4th Cir. 1971); Modica v. Manchester Insurance & Indemnity Co., 284 So.2d 791 (La.App. 4th Cir. 1973).”

Though a motorist on a favored street has the right to assume that a driver approaching on a less favored street will yield the right of way, once he sees or should have seen that the other car will not observe the law, he must exercise reasonable care to avoid a collision. Burns v. Dominique, 354 So.2d 763 (La.App. 4th Cir. 1978).

The critical factual question in this case (determinative of the issue of Mrs. McCoy’s contributory negligence) is the distance between the Spearman car when it stopped, extending into the intersection, and the oncoming McCoy vehicle. In finding that the distance was sufficient to give Mrs. McCoy adequate time to stop her automobile and avoid the accident, the trial judge emphasized that there was “no reason why plaintiff driver could not have seen the stopped vehicle in her traffic lane from at least forty-fifty (40-50) yards away, as Garner Short did.” (Emphasis added) He appeared to overlook Short’s testimony that he could not state the distance Mrs. McCoy’s car was from the intersection when the Spearman vehicle stopped there, but that it was closer than his automobile. Furthermore, although Mayberry related that the Spearman vehicle had been stopped one or two minutes prior to the collision, there was the unequivocal testimony of Miss Spearman that only seconds had elapsed.

In summary, our careful review of the record reveals inadequate evidentiary support for the trial judge’s finding that Mrs. McCoy was far enough away from the Spearman car when it stopped in the intersection to avoid the collision. Therefore, the trial judge was clearly wrong in this fact-finding, upon which was based his conclusion that Mrs. McCoy was contributorily negligent. We note, parenthetically, that he also erred in considering a “stopping distance chart” which had not been received in evidence. See Cole v. Maryland Casualty Co., 205 So.2d 863 (La.App.3rd Cir. 1968); Picard v. Joffrion, 202 So.2d 372 (La.App.1st Cir. 1967); Guidry v. Grain Dealers Mutual Ins. Co., 193 So.2d 873 (La.App.3rd Cir. 1967).

As previously noted, the trial judge found that Miss Spearman was guilty of negligence. Defendants did not appeal. However, there is nothing in the record which would impute the negligence of Miss Spearman to Milton Chambers, the owner of the car she was driving. See Martin v. Brown, 240 La. 674, 124 So.2d 904 (1960); Williams v. Sharlow, 388 So.2d 809 (La.App.4th Cir. 1980). Therefore, Chambers is not liable to plaintiffs for their damages.

As a result of the accident Mrs. McCoy received relatively minor injuries, including contusions, a broken tooth, a burst lip and back muscle sprains. She was not hospitalized and missed only one day from work. Medical bills amounted to $341.20. Under the circumstances we conclude that the sum of $2,000 will adequately compensate for her general damages. She also lost $10.40 in wages. Since the insurance deductible on the policy covering their car was $100, McCoy paid this amount on his property damage and is entitled to recover that.

For the reasons set forth, the judgment of the district court dismissing the suit of the McCoys is reversed. Accordingly, it is ordered, adjudged and decreed that there be judgment in favor of Dillard McCoy against Linda W. Spearman and Southeastern Fidelity Insurance Company, in solido, for the sum of $441.20, with legal interest from date of judicial demand. It is also ordered, adjudged and decreed that there be judgment in favor of Gloria McCoy against Linda W. Spearman and Southeastern Fidelity Insurance Company, in solido, for the sum of $2,010.40, with legal interest from date of judicial demand. Linda W. Spearman and Southeastern Fidelity Insurance Company are cast for all costs of court, both in the district court and on appeal.


author: HALL, Judge.

text:
    Walter E. WILLIAMS, et al., Plaintiff-Defendants in Reconvention-Appellees, v. The CITY OF WEST MONROE, Defendant-Plaintiff in Reconvention-Appellant.
    No. 14615.
    Court of Appeal of Louisiana, Second Circuit.
    Aug. 25, 1981.
    James A. Norris, Jr., West Monroe, for defendant-plaintiff in reconvention-appel-lant.
    Avant, Wall, Thomas, Riche & Falcon by Floyd J. Falcon, Jr., Baton Rouge, for plaintiffs-defendants in reconvention-appellees.

      Before HALL, MARVIN and JASPER E. JONES, JJ.
   HALL, Judge.

This is a dispute over the proper method of calculating holiday pay, overtime pay, and longevity pay for firefighters employed by the defendant-municipality. Plaintiffs, 17 full-time, salaried firemen employed by the defendant, filed suit seeking longevity, overtime, and holiday pay allegedly due each plaintiff because of the city’s erroneous calculation of such benefits. The city answered the suit denying that it owed the plaintiffs any back pay and reconvened seeking reimbursement for overpayment made because of the miscalculation of holiday and overtime pay. The trial court rendered judgment in favor of plaintiffs and the city appealed.

Plaintiffs contend state supplemental pay should be included in the calculation of overtime pay, holiday pay, and longevity increases, and that accrued longevity pay should be included in the calculation of overtime and holiday pay. The city’s contentions are to the contrary.

After thoroughly reviewing the pertinent statutes, the trial court concluded that “salary” for purposes of calculating longevity pay includes state supplemental pay. For purposes of calculating overtime and holiday pay, “usual salary” includes state supplemental pay and longevity pay. The conclusions reached by the trial court are correct and we affirm the judgment.

No factual issues are presented, the parties having stipulated all pertinent facts to the trial court. It was stipulated that all claims for wages earned prior to September 8, 1976 (one year prior to the date suit was filed) have prescribed. See LSA-C.C. Art. 3534 and Devillier v. City of Opelousas, 247 So.2d 412 (La.App.3d Cir. 1971). At all times pertinent to this suit, the city included longevity pay but not state supplemental pay in calculating holiday pay; the city included both supplemental pay and longevity pay in calculating overtime pay. The city has never included state supplemental pay in computing longevity pay.

A determination of the issues presented in this case depends on construction of the statutes governing longevity, overtime, and holiday pay for employees of a municipal fire department.

LSA-R.S. 33:1992 establishes a schedule of minimum salaries which must be paid to members of certain municipal fire departments and contains the following language concerning longevity pay:

“From and after the first day of August, 1962, each member of the fire department who has had three years continuous service shall receive an increase in salary of two percent and shall thereafter receive an increase in salary of two percent for each year of additional service up to and including twenty years. Both the base pay and accrued longevity shall be used in computing such longevity pay.”

LSA-R.S. 33:1994 governs payment of overtime wages:

“A. The maximum hours of work required of firemen covered by this Sub-part in cities having a population of thirteen thousand or more and that of all parish and fire protection district paid firemen in any calendar week shall be sixty hours. However, in case of emergencies, they may be required to work in excess of the maximum hours. For each hour so worked in excess of sixty hours in any calendar week a fireman shall be paid at the rate of one and one-half times his usual salary, to be determined by reducing his average monthly salary to an hourly scale

The rate of pay for firemen required to work on certain legal holidays is governed by LSA-R.S. 33:1999:

“Firemen in municipalities, parishes and fire protection districts who are required to work on any or all of certain legal holidays, namely Christmas, New Year’s Day, July 4, Labor Day, Thanksgiving Day, and National Memorial Day, shall receive in addition to the compensation to which such employee would be under laws and pay plans now in effect, compensation at the rate of one times his usual salary, to be determined by reducing his average monthly salary to an hourly scale; provided that in lieu of additional compensation, governing authorities, at their option, may grant fire department employees time off from work for which such additional compensation would be due and payable to said employees.”

LSA-R.S. 33:2002, et seq. provides for payment of extra compensation (supplemental pay) by the state to be used to supplement the salaries of employees of municipal fire departments. LSA-R.S. 33:2004D indicates the manner in which state supplemental pay is to affect other employee benefits:

“D. The additional compensation paid by the state to municipal or parish fire department employees as provided by this Subpart shall be included in the calculation and computation of the total wages paid to the employee in the determination of employer contributions to any retirement system or pension fund of which such employee may be a member as well as in the determination of retirement eligibility and benefits which may accrue to the employee under any retirement system or pension fund, as well as in the determination of any other employee benefits, sick leave, or disability pay to which the employee might be entitled.”

The city contends that state supplemental pay does not form part of a fireman’s “salary” as that term is used in LSA-R.S. 33:1992 or part of a fireman’s “usual salary” as that term is used in LSA-R.S. 33:1994 and 1999.

The regular and usual monthly salary of a fireman consists of: (1) a salary paid by the employing municipality which must be at least the statutory minimum and may include any additional amount set by the municipality, and which must include the statutorily required accrued longevity increases; and (2) a supplemental salary paid by the state.

LSA-R.S. 33:2004D provides that the additional compensation paid by the state shall be included in the calculation and computation of total wages paid to the employee in the determination of any employee benefits. Because the state supplemental pay is part of the fireman’s regular and usual monthly salary, and because Section 2004D requires that state supplemental pay be considered as part of the employee’s total wages or salary, state supplemental pay must be taken into account in calculating longevity pay, holiday pay and overtime pay, all of which are to be calculated on the basis of the employee’s salary.

In Hebbler v. New Orleans Fire Department, 310 So.2d 113 (La.1975), the court construed the term “salaries and wages” as used in a statute providing for restoration of salaries withheld during a period of illegal separation to include state supplemental pay provided for firemen in LSA-R.S. 33:2002 et seq.

The court in Latino v. City of Bogalusa, 295 So.2d 560 (La.App. 1st Cir. 1974) determined that “usual salary” as used in LSA-R.S. 33:2213, providing for overtime pay for police officers in language almost identical to that contained in LSA-R.S. 33:1994, clearly included the extra compensation paid to policemen by the state. In Maes v. City of New Orleans, 97 So.2d 856 (Orl.App. 1957), the term “salaries” as used in a statute requiring that a percentage of the salaries of employees of the New Orleans Police Department be deducted from the salaries and paid into the police pension fund, was held to include state supplemental pay. The decisions in these cases lend clear support to the conclusions reached in this case.

The city argues that state supplemental pay should not be considered in calculating longevity pay because LSA-R.S. 33:1992 provides that both “base pay and accrued longevity shall be used in computing such longevity pay.” It is the city’s contention that base pay means only the salary paid firemen by the city and not the salary paid by the state.

There is no basis for the city’s restrictive definition of “base pay” as used in the longevity statute. Prior to 1968, this section provided for an annual increase in salary of two percent. The language quoted above was added in 1968 to provide that accrued longevity be taken into account as part of the employee’s salary when each annual increase is calculated. The term “base pay” is used to distinguish salary otherwise payable from accrued longevity. The provision, in effect, makes accrued longevity a part of the employee’s total salary and was designed to increase longevity pay, not to limit it. The term “base pay” is in no way used to distinguish city pay from state pay or to exclude state pay from the calculation of longevity pay based on the employee’s total salary. “Base pay” as used in this statute means base salary and includes the base salary paid by both the city and the state.

When calculating holiday and overtime pay, accrued longevity must be taken into account as part of a fireman’s “usual salary.” As noted above, the provision of LSA-R.S. 33:1992 which was added in 1968 makes accrued longevity part of a fireman’s total salary. The statute requires that a fireman with over three years continuous service receive annual increases in salary and these increases must be considered to be a part of the employee’s regular and usual salary.

We conclude that the trial court was correct in determining that city pay, state pay, and accrued longevity must be taken into account in calculating longevity pay. Additionally, the court was correct in concluding that “usual salary” as used in the statutes providing for overtime and holiday pay includes state supplemental pay and longevity pay.

For the reasons expressed in this opinion, the judgment of the trial court awarding each plaintiff a money sum based on the proper calculation of longevity pay, holiday pay, and overtime pay is affirmed. Costs of this appeal are assessed to the defendant, City of West Monroe.

Affirmed.


author: JASPER E. JONES, Judge.

text:
    M. C. ROBERSON, Plaintiff-Appellee, v. Morelle HOLLIS, et al., Defendants-Appellants.
    No. 14616.
    Court of Appeal of Louisiana, Second Circuit.
    Aug. 25, 1981.

      Robert W. Levy, Ruston, for plaintiff-ap-pellee.
    Blanchard, Walker, O’Quinn & Roberts by William Paul Lawrence, II, Shreveport, for defendants-appellants.
    Before HALL, MARVIN and JASPER E. JONES, JJ.
   JASPER E. JONES, Judge.

Morelle Hollis and Burl Hollis, defendants, appeal a judgment which enforced an agreement to partition in kind approximately 200 acres of land which had been executed between plaintiff, M. C. Roberson, and the vendors from whom appellants acquired their undivided 142.2 acres in the 200 acre tract.

The description of the land involved in this partition suit is:

SW-!4 of SE-Vi and the S-V2 of the SW-Vi, Section 35, T 22 N, R 3 W and the N-V2 of the NW-Vi of Section 2, T 21 N, R 3 W all in Union Parish, Louisiana, containing 200 acres more or less.

On August 4, 1975 Joseph Ruffin Beaird, his wife Lois Byrom Beaird, and M. C. Roberson executed an agreement to partition in kind which provided:

“. .. Melton C. Roberson is in the process of attempting to purchase a sixty acre interest in the following described property, to-wit:
SouthWest Quarter of SouthEast Quarter and South Half of SouthWest Quarter and the SouthWest Quarter of SouthEast Quarter of Section 35 Township 22 North, Range 3 West and the North Half of NorthWest Quarter of Section 2 Township 22 North, Range 3 West.

It being agreed and understood that Joseph Ruffin Beaird and Lois Lucille Beaird are the owners of the remainder of the hereinabove described tract. All the parties to this act agreed in the event Melton C. Roberson is successful in obtaining the sixty acre interest, the parties will partition and divide the property as follows:

Melton C. Roberson shall take all of the Southwest Quarter of SouthEast Quarter east of the public road traversing said forty, plus a strip wide enough across the North side of South Half of SouthWest Quarter and SouthWest Quarter of SouthEast Quarter to make sixty acres in all.
In turn Melton C. Roberson will transfer unto Joseph Ruffin Beaird and Lois Lucille Beaird the balance of the above described tracts . . . . ”

This agreement was recorded in the conveyance records of Union Parish on the date of its execution.

On August 2, 1976, Joseph Ruffin Beaird and Lois Byrom Beaird sold their undivided interest in the 200 acre tract to appellants. The deed was recorded on August 4, 1976. This deed contained an error in the description, but it was corrected in the judgment appealed from in response to a reconven-tional demand and a third party demand that was filed by appellants against their vendors who were made third party defendants in this action. Neither the third party defendants nor M. C. Roberson has appealed the judgment or answered the appeal.

The vendors testified they did not discuss with appellants their agreement with Roberson to partition the land, and their deed to appellants contained no reference to it.

On April 19, 1978, Mr. and Mrs. Beaird and M. C. Roberson executed a correction document entitled “Act of Correction and Reformation” wherein they corrected typographical errors in the description of the 200 acres reflected in their agreement to partition. This correction instrument acknowledged that the Beairds owned an undivided 142.2 acres in the tract (140 owned by Mr. and Mrs. Beaird, and 2.2 owned by Mrs. Beaird) and that Roberson was attempting to acquire from the heirs of Till-mon G. Barrett and Martha Burdette Barrett the remaining undivided 57.8 acres in the tract rather than 60 acres as was initially set forth in the agreement to partition.

At the time of the correction document M. C. Roberson had acquired the 57.8 undivided acres from 33 Barrett heirs, and the reason why he couldn’t acquire the remaining 2.2 acres to make the full 60 acres, which the parties initially contemplated, was that 2.2 undivided acres had been inherited by Mrs. Beaird who was also an heir to Tillmon and Martha Barrett, and she had earlier sold it along with the undivided 140 acres owned by her and her husband to appellants on August 2, 1976.

On the same date that the act of correction was executed Mr. and Mrs. Beaird executed a quit claim deed to M. C. Roberson conveying the 57.8 acres that he was to have received by the terms of their corrected agreement to partition.

Plaintiff sued appellant seeking to be recognized as owner of the 57.8 acre tract praying:

“that there be judgment. . . decreeing petitioner to be the owner of that. . . parcel of land as set forth in that certain Act of Partition and Division dated August 4, 1975... as amended by the Act of Correction. . .and in accordance with the quit claim deed...”

Appellants denied plaintiff was entitled to the partition in kind and reconvened for a partition by licitation.

The trial court found that by the terms of the partition agreement that M. C. Roberson was to acquire all the undivided interest of the co-owners, other than the interest owned by the Beairds, and “that M. C. Roberson satisfied the suspensive condition.” The trial court held the property should then be partitioned in accordance with the partition agreement which was recorded at the time appellants acquired the property from Mr. and Mrs. Beaird.

The quit claim deed adds no strength to plaintiff’s claim for partition in kind because the grantors had sold their interest in the property to appellants 20 months before it was executed.

In some of the deeds wherein Roberson acquire the 57.8 acres the vendors reserved part of the minerals, and the parties stipulated that he did not acquire approximately 15 acres of the minerals in the 57.8 acres that he acquired in his attempt to comply with the agreement to partition.

In the judgment which partitioned the property in kind the minerals were expressly left undivided:

“That this judgment shall not affect the mineral ownership of any party to this suit or proceeding or the mineral ownership of any person who has any such mineral ownership interest in all or any portion of the property described herein.”

Appellants’ only assignment of error is that Roberson was not entitled to the partition in kind as set forth in the agreement of August 4, 1975 because he failed to comply with the conditions of that agreement for the reason that he did not acquire perfect ownership to the 57.8 acres because of the numerous mineral reservations contained in his deeds of acquisition.

We agree with appellants’ contentions because the agreement to partition contemplated that the parties to the partition would each receive a good title to the tract of property he was to receive in the partition.

In the decision of Foster v. Spann, 170 La. 1019, 129 So. 622 (1930), the court recognized that warranty applies in an Act of Partition:

“In an act of partition, each party thereto warrants to the other the interest in the property conveyed by him, whether reference be made to warranty or not. Rev.Civ.Code Arts. 1384, 1385, and 1387.” Id. 129 So. at 626.

See also the recent supreme court case of Cheramie v. Cheramie, 391 So.2d 1126 (La.1980), where in footnote two the court stated:

“In a partition, the coheirs warrant to each other the property falling to each against disturbance and eviction from a cause arising before the partition. La.Civil Code Art. 1384.” Id. at 1127.

In Succession of Ramp, 252 La. 660, 212 So.2d 419 (1968), the court explained the purpose of a partition as follows:

“The purpose of partition is to do away with fractional ownership and to make perfect each co-owner’s title or ownership in individual physical shares.” Id. 212 So.2d at 422.

In Roemer v. Caplis, 369 So.2d 1186 (La.App.2d Cir.1979), we said:

“It is a fundamental rule of law that a conveyance of land carries with it all of the incidents of ownership, including miner ai rights, except such rights as may be expressly reserved. Dillon v. Morgan, 362 So.2d 1130 (La.App.2d Cir.1978); Herring v. Price, 4 So.2d 17 (La.App.2d Cir.1941), writ denied (1941); Powell v. Roy, 14 La.App. 663, 130 So. 629 (2d Cir. 1930).” Id. at 1193.

See also George v. Manhatten Land & Fruit Co., 51 F.2d 28 (5th Cir. 1931).

A review of the August 4, 1975 agreement to partition reflects that it contains no provision for a reservation of minerals in the partition in kind which the parties there agreed upon. The agreement under the cited jurisprudence required the parties to convey perfect ownership of the tract to be received by each because it contained no express agreement that the minerals were to be excluded from the partition in kind and that only the surface was to be partitioned.

Appellants acquired the interest of the Beairds subject to the agreement to partition which was upon the public records, and were entitled to rely upon the provisions of that agreement. Roemer, supra, and cases cited therein.

Appellants are not required to accept the 142.2 acres which they would receive in the partition in kind subject to the numerous mineral servitudes that have been created in the deeds where Roberson acquired the undivided 57.8 acres.

We also note that the trial court’s judgment which divided the surface and left the minerals between the surface’s co-owners undivided created a mineral servitude co-owned by Roberson and appellants. See GMB Gas Corp. v. Cox, 340 So.2d 638 (La.App.2d Cir.1976). In order for appellants to utilize their interest in the servitude they would be required by LSA-R.S. 31:175 to obtain the consent of their co-owner Roberson unless their actions could be justified to prevent waste or destruction of the servitude under the provisions of LSA-R.S. 31:176.

Appellants are correct in their contention that the agreement to partition required them to receive the minerals under the surface acres which they would acquire in the partition. Roberson cannot comply with conditions of the agreement because he failed to acquire perfect ownership to the undivided 57.8 acres that he was to have received in the partition, and he is not entitled to demand performance of the agreement to partition in kind.

The parties stipulated that if the agreement to partition in kind was unenforceable, that there should be a judgment ordering the partition of the tract by licitation pursuant to appellants’ reconventional demand.

We amend the judgment to reverse and set aside the following provisions thereof:

“IT IS ORDERED, ADJUDGED AND DECREED that there be judgment herein in favor of the original plaintiff, M. C. ROBERSON, and against the defendants, MORELLE HOLLIS and BURL HOLLIS, decreeing plaintiff, M. C. ROBERSON, to be the owner of the following described property, to-wit:
All of the Southwest Quarter of the Southeast Quarter (SW/4 of SE/4) of Section 35, Township 22 North, Range 3 West, lying and situated East of Union Parish Road No. 9301, plus a strip wide enough across the North side of the South Half of the Southwest Quarter (S/2 of SW/4) and the Southwest Quarter of the Southeast Quarter (SW/4 of SE/4) of Section 35, Township 22 North, Range 3 West, so as to comprise a total of 57.8 acres more or less.

IT IS FURTHER ORDERED, ADJUDGED and DECREED that there be judgment herein in favor of the defendant in reconvention, M. C. Roberson, and against the plaintiffs in reconvention, Morelle Hollis and Burl Hollis, rejecting their demand for a partition by licitation.

IT IS FURTHER ORDERED, ADJUDGED and DECREED that this judgment shall not affect the mineral ownership of any party to this suit or proceeding or the mineral ownership of any person who has any such mineral interest in all or any portion of the property described herein.”

We order that the following described property be partitioned by licitation in accordance with law:

The Southwest Quarter of the Southeast Quarter (SW/4 of SE/4) and the South Half of the Southwest Quarter (S/2 of SW/4), Section 35, Township 22 North, Range 3 West, and the North Half of the Northwest Quarter (N/2 of NW/4) of Section 2, Township 21 North, Range 3 West, all in Union Parish, Louisiana, containing 200 acres, more or less.

As AMENDED we AFFIRM the judgment and assess costs on appeal equally to the litigants.


text:
    Charles B. GIDDINGS, Plaintiff-Appellant, v. JOHN HEARNSBERGER COMPANY a/k/a Hearnsberger Service Company, Defendant-Appellee.
    No. 14618.
    Court of Appeal of Louisiana, Second Circuit.
    Aug. 25, 1981.

      Domengeaux & Wright by William P. Rutledge, Lafayette, for plaintiff-appellant.
    Charles E. McConnell & Assoc, by Charles E. McConnell, Springhill, Bodenheimer, Jones, Klotz & Simmons by G. M. Boden-heimer, Shreveport, for defendant-appellee.
    Before HALL, MARVIN and JASPER E. JONES, JJ.
   MARVIN, Judge.

In this action for damages arising out of a motor vehicle collision, the trial court granted a motion for summary judgment made by the individual owner-president of the defendant corporation that owned the truck and employed the truck driver involved in the accident with plaintiff. Plaintiff appeals the summary judgment dismissing his demands against the individual defendant. We reverse and remand.

The motion for summary judgment was filed in late 1980. Before that time, plaintiff, in a supplemental petition, had added the corporate owner as a defendant, generally alleging that the corporation was thin, undercapitalized, underinsured, and was the alter ego of the corporate owner. The corporate owner supported his motion for summary judgment with affidavits and documents establishing that the corporation had been chartered, had filed an initial report, had done business as a corporation, and had filed income tax returns for the years 1975 through 1980. Plaintiff did not file counter affidavits, but was allowed to file another supplemental and amending petition on the date the motion for summary judgment was heard and before the motion was granted.

Plaintiff’s supplemental and amending petition alleged specific facts to the effect that regular director’s meetings were not held, minutes were not kept, proper resolutions were not passed to conduct corporate business, annual reports were not filed, corporate funds were not separated and were comingled with personal funds, and that the individual defendant treated corporate funds as his own.

A genuine issue of fact exists where factual allegations are made, either in original or in supplemental pleadings, and are not answered by the mover for summary judgment. See Montgomery v. Vantiger, 340 So.2d 390 (La.App. 2d Cir. 1976). The determination in summary judgment cases does not concern how the factual merits might eventually be resolved, but whether the factual issue exists. Page v. American Motorist Ins. Co., Ltd., 381 So.2d 889 (La.App. 2d Cir. 1980). Plaintiff’s supplemental specific allegations raise factual issues which are genuine and which are not addressed by the motion for summary judgment. Under these circumstances, the trial court erred in granting the motion for summary judgment. CCP 966. See Brinkley v. Murrell Enterprises, Inc., 389 So.2d 435 (La.App. 2d Cir. 1980).

At appellee’s cost, summary judgment is reversed and this case is remanded for further proceedings.


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    Ralph H. ALLOR, Plaintiff-Appellant, v. William Edzard Bell LOCKRIDGE, Jr., et al, Defendants-Appellees.
    No. 14622.
    Court of Appeal of Louisiana, Second Circuit.
    Aug. 25, 1981.

      Ralph H. Allor, in pro. per.
    Joel M. Sermons, Shreveport, for William B. Lockridge.
    Lunn, Irion, Switzer, Johnson & Salley by Jack E. Carlisle, Jr., Shreveport, for Brent-wood Hospital.
    Mayer, Smith & Roberts by Alex F. Smith, Jr. and Walter 0. Hunter, Shreveport, for Dr. Robert Braswell.
   MARVIN, Judge.

Plaintiff appeals from the rejection of his demands, made in proper person, for malicious prosecution and wrongful detention arising out of his commitment under LRS 28:52 by the defendants, Dr. Braswell, the Caddo Parish coroner, Brentwood Hospital, a psychiatric hospital in Shreveport, and William E. Lockridge, a clinical psychologist and former friend of plaintiff. We affirm.

Plaintiff correctly contends that he has a cause of action for damages where he is detained even under legal process maliciously obtained upon grounds, the truth of which is either recklessly disregarded or known to be false. Plaintiff incorrectly contends that the trial court erred in not finding that plaintiff had proved his allegations at the trial. The record shows no manifest error or clearly erroneous findings and fully supports the judgment and reasons for judgment assigned by the trial court.

Plaintiff testified that he stayed home on December 20, 1976, because of an attack of indigestion and that he informed his employees of his intentions and his availability if he was needed in his business. He says he then fell asleep in an easy chair and was awakened later that afternoon by two policemen who took him into custody under the coroner’s order and transported him to Brentwood Hospital, all without any cause or threat by him to harm himself or others at any time.

Plaintiff’s testimony greatly conflicts with that of other witnesses whose version of the events of that day, which seem more logical and reasonable to us, were accepted by the trial court. Plaintiff himself refers to Lockridge as his long time and close friend. Lockridge testified that over the course of years plaintiff had demonstrated and had confided to him psychological despondency and suicidal tendencies to such an extent that Lockridge, concerned for his friend’s welfare and in accord with the ethics and practices of his profession, persuaded plaintiff to make a suicide pact with him to the effect that plaintiff would not attempt to take his own life without first contacting Lockridge.

Lockridge testified that about 8:00 a. m. on December 20, 1976, plaintiff telephoned him to say that he was breaking the agreement, and that he was going to get his business in order in the next few days and then go to a nearby fishing lake and put a bullet in his head. Lockridge became alarmed that plaintiff had stated somewhat definitely the time and place he was planning to take his life and that plaintiff had dismissed Lockridge’s attempts to lead plaintiff into further discussion of his despondency.

Plaintiff’s daughter confirmed that plaintiff did have a telephone conversation about 8:00 a. m. on that morning with Lockridge. Plaintiff’s son, Ralph testified that his mother had taken the younger daughters from the family home on that day because she was afraid of what plaintiff might do. Plaintiff’s son Jonathan, testified that his mother told him on that day of plaintiff’s expressed intention “. . . to try and harm himself.” Plaintiff’s wife and plaintiff’s office manager talked to Lockridge on that day, essentially relating that plaintiff had indicated to each of them his intent. Before going to the coroner, Lockridge consulted with a Shreveport psychiatrist and obtained his agreement to treat plaintiff at Brentwood Hospital. Plaintiff’s family declined to execute affidavits or institute commitment proceedings essentially because they feared plaintiff’s retaliation because of plaintiff’s history and his alcoholism. Plaintiff was then 6'5" tall, weighed 280 pounds, and was described as violent.

In summary, the record shows that Lock-ridge attempted to verify plaintiff’s recitation of the situation by discussing the matter with plaintiff’s wife and with plaintiff’s business manager and that Lockridge then sought and obtained psychiatric advice, before going to the Coroner. Lockridge executed the affidavit required by the law then in effect (Act 614 of 1976).

The record strongly supports the lower court’s conclusion that plaintiff “. . . suffered some type of mental breakdown on the day in question and . . . Lockridge was acting in good faith in signing the affidavit to commit [plaintiff] for observation.” Brentwood Hospital received plaintiff and the commitment papers which stated that plaintiff was believed to be dangerous to himself or others, that plaintiff was suicidal and violent and may have a gun, and which stated plaintiff’s size. Brentwood temporarily confined plaintiff under reasonable conditions but did not accept plaintiff as a patient because no family member assumed financial responsibility or attested to insurance coverage. The Coroner was again contacted and made arrangements for plaintiff to be transferred to a public hospital (then Confederate Memorial) where plaintiff was seen by a psychiatrist who was also a deputy coroner. The deputy coroner’s report, dated the next day, recommended plaintiff’s continued commitment and observation for a short time.

The law then in effect authorized the Coroner to commit a person into protective custody even though the Coroner had not personally seen or examined the person committed. That law required the committed person to be examined within 48 hours after arrival at a commitment facility. The Coroner acted upon the affidavit of a clinical psychologist and long-time friend of plaintiff and upon the statement of the psychiatrist contacted by Lockridge that this psychiatrist would meet plaintiff at the private psychiatric hospital. Like Lock-ridge, the Coroner acted in good faith, upon sufficient and reasonable grounds, without negligent or reckless disregard for truth and without resulting liability to plaintiff. See former LRS 28:52 A, B, and E. Humphrey v. Feazel, 367 So.2d 897 (La.App. 2d Cir. 1979).

Similarly, it is not shown that Brent-wood Hospital violated any duty owed to plaintiff. See Hunt v. Bogalusa Community Medical Center, 303 So.2d 745 (La.1974). The hospital acted in response to the Coroner’s orders and confined plaintiff under reasonable circumstances for only two hours. Under these circumstances the hospital was not required to conduct a psychiatric or other examination to validate or verify the Coroner’s orders. Plaintiff was examined by a psychiatrist within the 48-hour period required by the statute.

For detailed reasons given by the trial court and summarized here, we affirm the judgment appealed at the plaintiff’s cost.


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    William HOEFLY and Joann C. Hoefly, Plaintiffs-Appellants, v. GOVERNMENT EMPLOYEES INSURANCE COMPANY, et al, Defendants-Appellees.
    No. 14623.
    Court of Appeal of Louisiana, Second Circuit.
    Aug. 25, 1981.
    En Banc Rehearing Denied Oct. 1, 1981.
    Fayard & Snell by A.R. Snell, Bossier City, for plaintiffs-appellants.
    Cook, Yancey, King & Galloway by Samuel W. Caverlee, Shreveport, for defendants-appellees, Margaret C. Lewiston and Government Emp. Ins. Co.
    Nelson & Achee, Ltd. by Roland J. Achee, Shreveport, for defendant-appellee, Allstate Ins. Co.
    Before HALL, MARVIN and JASPER E. JONES, JJ.
   HALL, Judge.

This suit arises out of an automobile accident which occurred on November 1, 1976 when plaintiff’s automobile was struck by another automobile while plaintiff was getting out of her own car, resulting in serious injuries to the plaintiff. On October 12, 1977 plaintiffs filed suit against the owner of the other automobile, the mother of the minor driver of that automobile, and the mother’s liability insurer, Government Employees Insurance Company. On September 5, 1980, almost four years after the accident and almost three years after suit was originally filed, plaintiffs filed an amended and supplemental petition naming Allstate Insurance Company, their uninsured motorist carrier, as a defendant and alleging that the owner of the other automobile was uninsured and that the insurance provided by Government Employees was insufficient to pay for all of the damages sustained by plaintiffs. Allstate filed a peremptory exception of prescription which was sustained by the trial court on the basis of LSA-R.S. 9:5629 and this court’s decision in Powell v. Allstate Insurance Company, 233 So.2d 38 (La.App. 2d Cir. 1970). From a judgment dismissing their suit against Allstate plaintiffs appealed. We affirm.

On appeal plaintiffs make the following assignments of error: (1) the trial court erred in failing to hold that an uninsured motorist carrier and a tort-feasor are soli-darily liable unto the plaintiff-insured; therefore, the trial court erred in holding that prescription had not been interrupted by the timely filing of suit against the tort-feasor; and (2) the trial court erred in applying LSA-R.S. 9:5629 retroactively.

Plaintiffs argue that just as a tort-feasor and his liability insurer are solidarily liable unto the injured party, so too is the uninsured motorist insurer of the injured party solidarily liable with the tort-feasor. Because a suit brought against one of the debtors in solido interrupts prescription as to all, LSA-C.C. Art. 2097, plaintiffs argue that the filing of the suit against the tort-feasors interrupted prescription with regard to Allstate; therefore, the exception of prescription should have been overruled by the trial court.

Plaintiffs’ argument has no merit. In Powell v. Allstate Insurance Company, supra, this court held that Allstate, the uninsured motorist carrier for the plaintiff, was liable to the plaintiff only in contract and was not considered to be liable in solido with the other defendants. Our holding in Powell was based upon the holding in Booth v. Fireman’s Fund Insurance Company, 253 La. 521, 218 So.2d 580 (1968). The plaintiffs in that case filed suit against their own insurer under the uninsured motorist provision of their contract of liability insurance to recover damages resulting from a collision with an uninsured automobile which occurred two and one-half years before the petition was filed. In holding that the plaintiffs’ cause of action against the uninsured motorist carrier was one arising in contract and not in tort the court made the following statements which are pertinent to the issues presented in this case:

. .The uninsured motorist provision closely resembles the policies of insurance which reimburse an insured for medical expenses or property damage resulting from an automobile accident. This action cannot be compared to that arising under our direct action statute by which suit may be brought directly against the insurer (indemnifier) of the tort feasor without making the tort feasor a defendant. The uninsured motorist provision is not insurance or indemnification for the uninsured motorist, and the insurer does not stand in the shoes of the uninsured motorist who is the tort feasor 9. .. .
“. . . The obligation of the uninsured motorist is not the obligation of the insurer under its insurance contract, and the tort feasor’s right to claim extinguishment of the tort obligation through a plea of prescription does not inure to the benefit of the insurer. The ex delicto prescriptive period is personal to the tort feasor and those who derive their status from him. As previously noted, neither the law nor the policy intends to provide insurance for the uninsured tort feasor. Both the statute and the policy require the insured to act in a number of ways to preserve the tort feasor’s obligation for the benefit of the insurer11 and therefore reflect the inimical interests of the insurer and the tort feasor. Sharing no interest in common and having no contractual or other relationship with the tort feasor, the insurer cannot urge the defense of one year’s prescription.
“Plaintiffs’ action against their own insurer under this policy provision is ex contractu and subject only to a plea of prescription of 10 years.” (Footnotes omitted).

Although the court in Booth did not directly hold that the uninsured motorist carrier for an injured party is not liable in solido with the tort-feasor, we think the portions of the Booth opinion quoted above amply support that holding in Powell. An uninsured motorist carrier is not liable in solido with the tort-feasor; therefore, the filing of suit against the tort-feasor and/or his liability insurer does not interrupt prescription against the uninsured motorist carrier of the injured party.

By their second assignment of error, plaintiffs argue that LSA-R.S. 9:5629 cannot be retroactively applied in this case because to do so would deprive plaintiffs of their vested property rights without due process of law since under prior law, plaintiffs would have had 10 years to bring suit against their uninsured motorist carrier. See Booth, supra. This statute, which was added by Act 444 of 1977, reads as follows:

“Actions for the recovery of damages sustained in motor vehicle accidents brought pursuant to uninsured motorist provisions in motor vehicle insurance policies are prescribed by two years reckoning from the date of the accident in which the damage was sustained.”

Although Act 444 was enacted in 1977, the statute did not become effective until July 1, 1978. In support of their argument, plaintiffs rely on Johnson v. Fournet, 387 So.2d 1336 (La.App. 1st Cir. 1980), which held under the peculiar circumstances of that case that the statute creating the two-year prescriptive period could not be retroactively applied. Defendant Allstate, on the other hand, cites us to the recent Third Circuit case of Tilley v. Government Employees Insurance Company, 396 So.2d 525 (La.App. 3d Cir. 1981), which held that LSA-R.S. 9:5629 could be applied retroactively.

The courts in both Johnson and Tilley based their holdings upon the Supreme Court decision in Lott v. Haley, 370 So.2d 521 (La.1979). In Lott, the court held that LSA-R.S. 9:5628, which provides the statute of limitations on medical malpractice actions, was not to be applied retroactively. The court in Johnson found that LSA-R.S. 9:5629 was not substantially different from the statute confronting the court in Lott; therefore, the same rules regarding retroac-tivity applied and the same conclusion as reached by the court in Lott was mandated. The court in Tilley, on the other hand, found that the passage of Act 444 of 1977, enacting LSA-R.S. 9:5629, was substantially different from the act by which LSA-R.S. 9:5628 was enacted and that the basis upon which the court in Lott determined that LSA-R.S. 9:5628 should not be applied retroactively was not present in the Tilley case.

In Lott the court was dealing with a statute which was passed by the legislature in the summer session of 1975 and became effective on September 12 of that year. In holding that that statute could not be retroactively applied because to do so would divest an injured party of his vested property rights, the court made the following statements:

“It is well established that statutes of limitation are remedial in nature and as such are generally accorded retroactive application. State v. Alden Mills, 202 La. 416, 12 So.2d 204 (1943); Shreveport Long Leaf Lumber Co. v. Wilson [195 La. 814, 197 So. 566] supra; DeArmas v. DeArmas, 3 La.Ann. 526 (1848). However, statutes of limitation, like any other procedural or remedial law, cannot consistently with state and federal constitutions apply retroactively to disturb a person of a preexisting right.3 Orleans Parish School Board v. Pittman Construction Co. [261 La. 665, 260 So.2d 661] supra. Nonetheless, a newly-created statute of limitation or one which shortens existing periods of limitation will not violate the constitutional prohibition against divesting a vested right provided it allows a reasonable time for those affected by the act to assert their rights. Cooper v. Lykes, 218 La. 251, 49 So.2d 3 (1950); State v. Recorder of Mortgages, 186 La. 661, 173 So. 139 (1937). Moreover the legislature is the judge of the reasonableness of the time and the courts will not interfere except where the time is so short as to amount to a denial of justice. Cooper v. Lykes, supra. Finally, where an injury has occurred for which the injured party has a cause of action, such cause of action is a vested property right which is protected by the guarantee of due process. Burmaster v. Gravity Drainage District No. 2 of the Parish of St. Charles, 366 So.2d 1381 (La.1978). .. . ” (Footnote omitted).

The court would not allow the retroactive application of LSA—R.S. 9:5628 because it operated to eliminate the plaintiff’s vested right to sue on his preexisting cause of action without providing a reasonable period following its enactment to assert his claim.

Unlike the statute in the Lott case, LSA-R.S. 9:5629 did provide a period of time following the enactment of the statute in which an injured party could have asserted his claim against his uninsured motorist carrier. Act 444 of 1977 was passed during the summer session of the legislature but did not become effective until July 1, 1978. Like the court in the Tilley case, it is our view that the time period allowed by the legislature within which persons affected by LSA—R.S. 9:5629 could assert their otherwise divested contractual cause of action was adequate and reasonable and was not in violation of the due process guarantees of the state or federal constitutions. Accordingly, we hold that LSA-R.S. 9:5629 may be applied retroactively and, therefore, the trial court was correct in sustaining Allstate’s exception of prescription on the basis of that statute. The views expressed in this opinion are in accord with the decision of the Supreme Court in Lott v. Haley, supra. Under the terms of the statute, plaintiffs’ suit would have been timely if it had been filed on November 1, 1978. Plaintiffs had approximately nine months from the date the statute was enacted until the date it became effective in which they could have asserted their rights against their uninsured motorist carrier. Suit was not filed until more than two years after the effective date of the act. Plaintiffs failed to timely assert their rights against Allstate and, therefore, the judgment of the trial court must be affirmed.

For the reasons expressed in this opinion, the judgment of the trial court sustaining the peremptory exception of prescription is affirmed at the cost of plaintiffs-appellants.

Affirmed.