author: BOWES, Judge.

text:
    JOHN JAY ESTHETIC SALON, INC. v. Frances WOODS and Neubie Culver.
    No. 5-117.
    Court of Appeal of Louisiana, Fifth Circuit.
    June 6, 1983.
    Writ Denied Sept. 30,1983.
    Anthony J. Russo, New Orleans, for plaintiff-appellee.
    Richard J. Boutall, Metairie, for defendants-appellants.
    Before CHEHARDY, BOWES and GRISBAUM, JJ.
   BOWES, Judge.

This case was remanded to us by the Supreme Court, on writs taken by plaintiff, “to consider judgment of the trial court on the merits.” It was the original opinion of this Court considering the transcript and the entire record, including correspondence from the trial judge, copies of the minute entries, and dialogue between the court and plaintiff’s counsel on the morning of November 26, 1980, that the defendant justifiably relied on a written stay order; and that such could not, and had not, been “impliedly rescinded.”

The matter was originally tried and appealed to the Fourth Circuit, on a claim that defendants violated certain noncompetitive and “no solicitation” clauses in their employment contracts. In deciding that each defendant (Woods and Culver) was liable for damages for breach of contract, the Court declined the award of $25,-000.00 in damages, specified in the contract to be liquidated damages, stating:

True liquidated damages represent an amount, arrived at in a good faith effort by the parties at the time of contracting, to reasonably estimate the monetary loss which will probably be sustained in the event of a breach. In the two contracts in the present case, however, one cannot reasonably conclude the contracting parties reasonably contemplated that a breach by the employee of the clause prohibiting solicitation of or association with another employee would cause the employer damages to the extent of $25,-000.00. That figure is so unrealistic and unreasonable that it cannot be considered a good faith pre-estimate of probable damages, but must be deemed a penalty clause, imposed by an employer with vastly superior bargaining power, as a deterrent to prevent a breach....
No matter how clearly such penalty clauses are written, courts as a matter of public policy should decline to enforce an agreement which clearly is not one for true liquidated damages. John Jay Esthetic Salon, Inc. v. Woods, 877 So.2d 1363 ([La.App.] 4th Circuit 1979).

The court, considering the measure of damages, concluded:

Thus, the only damage sustained by plaintiff was the loss of one licensed hair dresser with three years experience and some additional training provided by the corporation. The value of this loss appears to be the amount of net income that would have been earned during a reasonable time necessary to replace a licensed hair dresser with three years experience and perhaps the cost of locating and providing minimum training for the replacement.

(The Court here found that the portion of the contracts of both defendants Culver and Woods relating to solicitation of Jay’s customers was valid and enforceable. Woods and Culver had violated this agreement, as proven in the first trial. However, the measure of damages was limited to the loss of profits occasioned by Woods’ departure since Culver had legally terminated his actual employment contract.)

In view of the clear language of the Fourth Circuit quoted hereinabove (in the first appeal), we are puzzled at the amount of damages awarded in the present case. After a careful examination of the entire record, we are obliged to find that the trial judge was manifestly erroneous in granting damages based on the evidence presented at trial. We reverse that portion of the judgment awarding damages for loss of income, but affirm the $3,600.00 award for training costs.

Our original opinion in this case (at 422 So.2d 456 (La.App. 4th Cir.1982)) set out details of the chain of events culminating in the trial court having rendered judgment in favor of plaintiff for $91,872.00, plus $3,600 in “training” costs. Essentially, the trial was conducted only partially with benefit of the presence of defendant’s counsel and that being during the early stages of the trial. Very little defense was presented to plaintiff’s evidence concerning damages, loss of income or training expense because, after defense counsel had only partially completed his cross-examination of Mr. Le-Blanc, the trial was recessed because the trial judge, understandably, had to keep an appointment with his doctor. When the trial resumed several months later, on November 26, the great misunderstanding occurred concerning the stay order. At that time, defense counsel left the courtroom to seek supervisory writs while the court chose to continue with the trial (after refusing to stay the proceedings or grant a continuance).

Plaintiff’s chief witness at the trial was Rodney LeBlanc, an accountant whose firm handled the books for John Jay Esthetic Salons, Inc.

Testimony of Mr. LeBlanc, brought out during the limited cross-examination that defense counsel did have, clearly reveals (partially through his own admission) that the method used by LeBlanc to compute damages herein is erroneous. Mr. LeBlanc stated that plaintiff’s damages, or loss of profit attributable to Mrs. Woods departure, amounted to $91,872.00, arriving at that figure in the following manner:

Initially, he computed the gross revenue of the salon where the defendants were assigned, for the years 1975-1977, a period during which both were employed. He concluded that for that period revenue increased by roughly 33.5% each year. Then, for the fiscal year beginning in July 1977 (when defendant Woods was no longer employed by Jay) through 1980, Mr. LeBlanc computed a decrease in income of 15%. The gross figures for those three years (1978-80) was then “projected” by the witness at a steady 33.5% to claim a loss of $990,500 (the amount the witness claimed the salon would have earned at the steady 33.5% increase). That figure was set off against the actual amount of sales, and further against a 52% actual costs amount, to total $235,200 in lost gross profits for 1978-80.

Then, Mr. LeBlanc assigned 36% of that loss to the absence of defendant Woods. He based that percentage on a comparison of the relative earnings of Woods and Cul-ver, the other defendant. Essentially, he arbitrarily decided that Culver, more experienced and with a greater following of clientele, would have earned almost twice as much income as Woods. Therefore, 64% of the entire loss of profits was assessed against Culver; and the remaining 36% assessed against Woods. 100% of the total lost profits from the Clearview Salon for the three-year period was attributable, in Mr. LeBlanc’s unverified testimony, to Woods and Culver. The judgment of $91,-872.00 represented Woods’ “assigned” portion (36%) of that loss. We note here that no earnings records of Mrs. Woods or Mr. Culver were ever introduced to support this method of allotted percentages. LeBlanc testified, partially, as follows:

THE WITNESS:

Her and Mr. Culver, I couldn’t attribute this whole loss of Two Hundred Thirty-five Thousand Two Hundred to just her, because she was not the only one that left. Mr. Culver left at the same time; so—
MR. BOUTALL:
Q. So these figures are false. They’re based on two persons—
THE COURT:
Wait, let him finish, Mr. Boutall.
THE WITNESS:
That exactly. That’s right. So why jeopardize your client for Two Hundred and Thirty-five Thousand Two Hundred when there were two people? ...
MR. BOUTALL:
Q. You adjusted these for both employees—
A. I adjusted it for known facts.
Q. What facts?
A. The facts were that two people left, one made higher earnings than the other, so I took that into consideration and based on the two people’s earnings, that is one gross figure, Miss Woods represented thirty-six per cent of the gross earnings and Mr. Culver represented sixty-four per cent; so based on that percentage of known facts, I allocated of the percentage of lost sales and net profit, only thirty-six per cent.
Q. But doesn’t thirty-six and sixty-four add up to a hundred per cent?
A. If that was attributable — it was the reason that those two people left was the reason that we experienced those losses. Q. How do you know that?
A. It was stated in this case that they left.
A. Who stated that? Who stated that all loss is attributable to those two leaving? [emphasis ours]
A. Even if it wasn’t, why did this salon — wait a minute. Why did this salon not show a steady increase as all the other salons did?

To say that the figure designated by plaintiff, and the method by which it was computed, is speculative would be an understatement. To begin with, gross sales at salon in question as at any such salon, consist not only of services performed by hairdressers but also of sales of beauty products and other services (there was at least one manicurist, for example, at the salon). According to the deposition of Mrs. Woods in the earlier proceeding, there were at least two other hairdressers in the store at the time she left. There is no information as to exactly how many hairdressers were employed at the store at any given period of time. Yet Mr. LeBlanc arbitrarily assigned 36% of the lost profits to Mrs. Woods, and 64% to Mr. Culver, for a total of 100%. The defendants were held solely liable for the entire loss of profit for a three-year period. That reasoning is indeed questionable; yet, according to the testimony, it is precisely the basis for Mr. LeBlanc’s figures (Transcript p. 52).

Despite the admissions by Mr. LeBlanc that he did not know any other employees at the salon, or their positions; that he had no idea who was actually making what amount of money; that he had no idea what anyone employed by John Jay earned, and that the figures were based on two people (Transcript p. 50), he staunchly clung to his estimates. An additional problem inherent in the accounting method used is that the (so-called) loss of profits was a figure “projected” by Mr. LeBlanc and based not on actual losses but on an “expected” increase in business. We cannot accept such speculative numbers when considering damages for breach of contract. Damages in breach of contract cases must be proven with reasonable certainty. A claim for loss of profits will not be supported by mere estimates of loss. See F & F Transfer, Inc. v. Tardo, 425 So.2d 874 (La.App. 4th Cir.1983). Loss of profit awards may not rest on speculation or conjecture unless direct evidence is not available to establish this element of damage. Al Smith’s Plumbing v. River Crest, Inc., 365 So.2d 1122 (La.App. 4th Cir.1978). The latter case discussed damages for lost profits in a contract situation, where records which should have shown actual losses were available but not produced by the plaintiff.

This Court feels that more detailed records could and should have been produced to show a reasonable foundation for damages in the present case, i.e., actual pecuniary loss caused by the departure of Mrs. Woods. Documents verifying such elements as the actual monetary loss at the Clearview Salon, operating without the services of Mrs. Woods, the number of hairdressers at the salon and their sales for the periods before and after Mrs. Woods left; and Mrs. Woods’ income tax records for the years in question, are some of the indicators which were certainly available to plaintiff by subpoena, or in his own records. That counsel chose not to introduce any such evidence does not allow us to ignore the rule requiring a plaintiff to establish proof of his demand with at least sufficient evidence of the particular loss he claims.

Mr. LeBlanc testified from his charts, and from Mr. Jay’s income tax records, which reflected plaintiff’s entire income and did not specify it salon by salon. We are unable to believe that such information was not available. The witness did give a figure of a 15% decrease in overall sales; however, the basis of his figure for lost profits was a projected increase based on the prior three years. Actual losses could have been established with much more reasonable certainty. There was absolutely no proof that defendants were answerable for any substantial portion of any loss, if indeed, there was any at all suffered by the plaintiff. It is beyond credulity that defendants were responsible for the entire loss. There is nothing in the record which would permit this Court to assess a percentage of loss against the defendants.

Therefore, we are obliged to annul that portion of the trial court’s judgment awarding damages for loss of profits in the amount of $91,872.00.

However, we find that plaintiff’s income tax records for the years in question did verify to a reasonable degree the amounts required to train an employee. While we question the necessity of the three-year time period used (since there was no showing that plaintiff could not and did not hire experienced hairdressers to replace Mrs. Woods), we find from the record that plaintiff maintained a standard of education for his employees by which all were continuously being instructed. The tax forms show acceptable (and specific) sums expended, and Mr. LeBlanc’s testimony satisfactorily explained those sums. Therefore, we affirm that portion of the trial court’s judgment awarding plaintiff $3,600.00 for training costs for a replacement.

AFFIRMED IN PART, ANNULLED IN PART, AND RENDERED.


source: Caselaw Access Project

author: GARRISON, Judge. SCHOTT, Judge,

license: Public Domain

text:
    UNITED CREDIT PLAN OF GRETNA, INC. v. Richard PULLEN and Bobalin Duhe Pullen.
    No. 12247.
    Court of Appeal of Louisiana, Fourth Circuit.
    June 22, 1983.
    Rehearing Denied Aug. 23, 1983.

      Irl R. Silverstein, Gretna, for plaintiff-appellant.
    Marcel Gueniot, Asst. Dist. Atty., Chal-mette, for defendants-appellees.
    William H. Egan, Chalmette, for appellee, Sheriff Ralph McDougall.
    Richard K. Dimitry, New Orleans, for intervenor-appellee.
    Before SCHOTT, GARRISON and KLEES, JJ.
   GARRISON, Judge.

This appeal arises out of a dispute between two creditors over the proceeds of a seizure and sale by executory process. The original suit, by United Credit Plan of Gret-na, Inc., (appellant) was to foreclose on the mortgage it held on property owned by Mrs. Bobalin Pullen and located at 2204 Farmsite Road in Violet, Louisiana. Bobalin Pullen and husband, Richard Pullen, had executed a promissory note in the sum of $31,900.00 and had given the mortgage as security for the loan. The mortgage in favor of United Credit was recorded on April 6, 1979.

After foreclosure on December 13, 1979, the property was seized by the sheriff and sold on March 5, 1980 to United Credit for $28,334.00 subject to a judicial mortgage in favor of Southern Baptist Hospital (appel-lee) in the amount of $1,445.06 plus interest and costs. La.C.C.P. Art. 2372. The Baptist Hospital mortgage had been recorded on August 11,1978, pursuant to a judgment rendered in First City Court in favor of the hospital and against Richard Pullen, as head and master of the community existing between him and Bobalin Pullen, for medical services rendered to Bobalin Pullen and their child.

Southern Baptist Hospital intervened in the suit when United Credit failed to pay it the amount of its judicial mortgage, and petitioned to either have the sheriff’s sale set aside under La.C.C.P. Art. 2337 or be paid by United Credit the amount of the judgment. United Credit responded with a writ of mandamus to order the inscription of the hospital’s judgment cancelled insofar as it applied to the Farmsite Road property. United Credit based its petition on its contention that the property which was the subject of the seizure and sale was the separate property of Bobalin Pullen, and the judgment made the basis of the hospital’s mortgage was one for a community debt and was obtained against the husband only.

The district court denied United Credit’s petition for writ of mandamus, dismissed the hospital’s rule to set aside the sheriff’s sale, and ordered United Credit to pay Southern Baptist Hospital the amount of its judicial mortgage against Richard Pullen. From that judgment, which we affirm, United Credit has appealed.

The issue raised on appeal is this: whether the property in question was the separate property of Bobalin Pullen or community property, and if separate, whether the seizing creditor and purchaser, United Credit, was required to pay Southern Baptist Hospital the amount of its judgment against Richard Pullen.

Appellant argues that the Farmsite Road property, which Bobalin Pullen had inherited, was her separate property, and that the execution of a mortgage in favor of United Credit by both Bobalin and Richard Pullen did not transform the property into community property. Appellant cites Lazaro v. Lazaro, 92 So.2d 402 (La.App. Orleans 1957) to illustrate the proposition that sale-resale transactions involving a homestead association generally do not change the character of property from separate to community; such transactions are merely devices to secure a loan made by a homestead to the mortgagors by means of a vendor’s privilege. We note that the courts have also held that a sale-resale involving a person other than a homestead does not affect the status of the property. N.O. Federal Savings and Loan Assn. v. Pharr, 377 So.2d 387 (La.App. 4th Circuit 1979); Succession of Lewis, 157 So.2d 321 (La.App. 4th Circuit 1963). Under some circumstances the courts have concluded that the character of property in sale-resale transactions has changed; however, this appears to be the case only where the court has found evidence of a clear intent to donate.

In the instant case we find no donative intent, nor was there any conveyance of the property; the execution of a mortgage in favor of appellant was simply the placing of an encumbrance on the property with the husband acting as accommodation maker. Therefore, the giving of a mortgage to secure the Pullens’ obligation on the promissory note in no way changed the character of the property. The property remained the separate property of Bobalin Pullen.

Appellant additionally argues that because the property in question is Bobalin Pullen’s separate property, it may not be used to satisfy the debt incurred at Southern Baptist Hospital, which is a community obligation. Appellant cites former Article 2403 of the Louisiana Civil Code, which provides:

“In the same manner, the debts contracted during marriage enter into the partnership or community of gains, and must be acquitted out of the common fund, whilst the debts of both husband and wife, anterior to the marriage, must be acquitted out of their own personal and individual effects.”

Appellant also asserts that jurisprudence interpreting Art. 2403 has held that a community debt is owed by the community estate, and a creditor cannot claim payment out of the wife’s separate property and assets. Succ. of Clark, 27 La.Ann. 269; Brock Furniture Company v. Carroll, 86 So.2d 715 (La.App. 1st Cir.1956). Appellant argues that under Article 2403, debts contracted during marriage are community debts for which the wife is not responsible, so that a judgment in such a case should be rendered only against the husband.

Appellant’s point is well taken; Article 2403 was, in fact, in effect at the time both Southern Baptist Hospital and United Credit recorded their judgments against the Pul-lens. What appellant fails to consider, however, is that Article 2403 was repealed effective January 1,1980. On that date Article 2345 took effect, and controls:

“A separate or community obligation may be satisfied during the community property regime from community property and from the separate property of the spouse who incurred the obligation.”

The date of the sheriff’s sale was March 5,1980, some two months after Article 2345 went into effect. Although the obligation of the Pullens to Southern Baptist Hospital had been incurred and judicially decreed in 1978, that obligation had not been satisfied when Article 2345 became effective. On March 5, 1980, therefore, there existed an outstanding community obligation which was susceptible of being satisfied from the separate property of Bobalin Pullen, the spouse who incurred the debt.

Based on the facts and the applicable law as stated above, we conclude that Southern Baptist Hospital had a judicial mortgage against the Pullens which on March 5,1980 was superior to the mortgage of the seizing creditor. Because the property was sold to appellant subject to the superior lien, the hospital should have been paid the amount of its mortgage by United Credit as purchaser of the seized property.

We therefore affirm the judgment of the district court.

AFFIRMED.

SCHOTT, J., dissents with written reasons.

SCHOTT, Judge,

dissenting:

In April, 1979, United Credit took a mortgage on Mrs. Pullen’s separate property. At that time the law as found in C.C. Art. 2403 provided that the community debt incurred to the Baptist Hospital was payable out of community property. In January, 1980, when Act 709 of 1979 took effect, United Credit had a vested right to be paid from Mrs. Pullen’s mortgaged separate property without regard to Baptist Hospital’s judgment which had no effect on her separate property.

A statute will not be given retroactive effect so as to disturb vested rights. C.C. Art. 8, Succession of Lambert, 210 La. 636, 28 So.2d 1 (1946).

I would reverse the judgment of the trial court.

      . The record indicates that this property was acquired by Bobalin Duhe Pullen in the Succession of Barbara Duhe, recorded COB 137, Folio 567 in St. Bernard Parish.

      . See Succession of Daste, 254 La. 403, 223 So.2d 848 (La. 1969); Succession of Russo, 246 So.2d 26 (La.App. 4th Cir. 1971).

      . Appellant suggests that even if Art. 2345 is found to be the applicable law, the obligation to the hospital was incurred by Richard Pullen, not by his wife, and that the debt could not, therefore, be satisfied out of her separate property. This argument must fail because the obligation to pay the hospital clearly arose after Bobalin Pullen was admitted to Baptist for the delivery of the couple’s child and received medical services there.


author: CARTER, Judge:

text:
    ASIAN INTERNATIONAL, LTD. v. MERRILL LYNCH, PIERCE, FENNER AND SMITH, INC., et al.
    No. 83 CA 0216.
    Court of Appeal of Louisiana, First Circuit.
    June 28, 1983.

      Floyd J. Falcon, Jr., Baton Rouge, for plaintiff-appellant Asian Intern., Ltd.
    Lee C. Kantrow, Baton Rouge, for defendant, third party plaintiff, plaintiff-in-reconvention-appellee Merrill Lynch, Pierce, Fenner & Smith, Inc.
    John S. Thibaut, Baton Rouge, for defendant-third party defendant-appellee H. Grady Smith, Jr.
    Michael O. Heese, St. Francisville, for defendant-third party defendant-appellee Ben F. Fort, Jr.
    Before LOTTINGER, COLE and CARTER, JJ.
   CARTER, Judge:

This is an appeal by Asian International, Ltd. from a summary judgment in favor of Merrill Lynch, Pierce, Fenner and Smith, Inc.

On March 30, 1982, Asian International, Ltd. (Asian) filed suit against Merrill Lynch, Pierce, Fenner and Smith, Inc. (Merrill Lynch), Ben F. Fort, Jr. (Fort), and H. Grady Smith, Jr. (Smith) alleging defendants’ liability, individually and in solido, for tortious conversion of a $200,000.00 check and for damages for the loss of corporate opportunity resulting from such tortious conversion.

The dispute among the parties arises from the following facts. On or about July 28,1981, Cathay Trading Corporation delivered to Asian a check made payable to Asian International, Ltd. in the amount of $200,000.00, in full payment for ten separators sold by Asian to Cathay. Smith, the president of Asian, and Edmund C. McCal-lum, treasurer of Asian, subsequently endorsed said check to the order of Fort, in payment of an alleged loan obligation owed by Asian to Fort. Fort then deposited the endorsed check in his account with Merrill Lynch. Merrill Lynch credited the funds to Fort’s account and received payment from the payor bank.

Merrill Lynch filed a motion for summary judgment claiming it was a holder in due course of the check and asserting that, as such, it took the instrument free from all claims, including those asserted by Asian.

The trial court granted the motion for summary judgment in favor of Merrill Lynch and dismissed Asian’s suit. The trial court based its judgment upon finding that there were no genuine issues of material fact and that Merrill Lynch was a holder in due course as a matter of law.

Asian appeals with the following specifications of error:

(1) The trial court erred in holding, as a matter of law, that Merrill Lynch sustained the burden of proving its status as a holder in due course; and
(2) The trial court erred in finding that there were no genuine issues of material fact.

SPECIFICATION OF ERROR NO. 1 The first issue is whether Merrill Lynch sustained its burden of proving its status as a holder in due course as a matter of law.

La.R.S. 10:3-302(1) defines a holder in due course as:

“. .. a holder who takes the instrument
(a) for value; and
(b) in good faith; and
(c) without notice that it is overdue or has been dishonored or any defense against or claim to it on the part of any person.”

The status of a holder in due course is significant to the extent that as such he takes the instrument free from all claims to it on the part of any person and all defenses of any party to the instrument with whom the holder has not dealt, with minor exceptions. La.R.S. 10:3-305.

In order for one to enjoy the status of a holder in due course, the four elements of La.R.S. 10:3-302(1) must exist simultaneously during possession of the negotiable instrument. La.R.S. 10:3-307(3) and the corresponding comments in the Uniform Commercial Code (UCC) indicate that the person claiming the rights of a holder in due course must sustain his burden by affirmative proof of all elements.

HOLDER

Any person who asserts rights of a holder in due course must first prove that he is a “holder”. A holder is a person who is in possession of ... an instrument ... drawn, issued, or endorsed to him or to his order or to bearer or in blank. La.R.S. 10:1-201.

Negotiation is the process by which the transferee of an instrument becomes a holder. La.R.S. 10:3-202(1). The comments to that article in the UCC indicate that negotiation is a special form of transfer, the importance of which lies in the fact that it makes the transferee a holder. Stated another way, an endorsement by a holder of an instrument payable to order is necessary for a negotiation of the instrument, for only by a negotiation may a third party become a holder of the instrument. “Developments in the Law, 1980-1981: Banking Law,” 42 LLR 330 (1982).

In the present case, the $200,000.00 check was delivered to Fort with the following endorsement:

“Asian International, Ltd. s/n H. Grady Smith, Jr. s/n Edmund C. McCallum for deposit to order of Ben F. Fort, Jr.”

In order for Merrill Lynch to become a holder of the instrument, the instrument had to be negotiated. Negotiation required an endorsement by Fort.

When Fort presented the check for deposit to his Merrill Lynch account, a Merrill Lynch employee wrote “pay to: Merrill Lynch, Pierce, Fenner and Smith” on the instrument. The endorsement on the check prior to deposit appeared as follows:

“Asian International, Ltd. s/n H. Grady Smith, Jr. s/n Edmund C. McCallum pay to: Merrill Lynch, Pierce, Fenner and Smith for deposit to order of Ben F. Fort, Jr.”

The check was then deposited into Fort’s account.

Under La.R.S. 10:4r-205(l), a depositary bank which has taken an item for collection may supply any endorsement of the customer which is necessary to title unless the item contains the words “payee’s endorsement required” or the like. In the absence of such a requirement, a statement placed on the item by the depositary bank to the effect that the item was deposited by a customer or credited to his account is effective as the customer’s endorsement. This provision was designed to speed up collections by eliminating any necessity to return to a non-bank depositor any items he may have failed to endorse.

La.R.S. 10:1-201 defines a bank as any person engaged in the business of banking. The receiving of deposits and issuing bills and notes has been defined as engaging in the banking business. (See Rosenblum v. Anglim, 135 F.2d 512, 9th Cir.1943). It was also held in the above cited case that although the banking business involves more than the accepting and paying out of deposits, an institution which exercises only these two functions may be carrying on a “banking business”, if these things are done as a regular business. Under this definition, we find La.R.S. 10:4-205(1) applicable to Merrill Lynch, even though Merrill Lynch is not a bank incorporated under the provisions of Title 6 of the Louisiana Revised Statutes. Since Merrill Lynch provided Fort with a general securities and a checking account, much like that provided by a depositary bank to its depositing customer, the relationship between Merrill Lynch and Fort is analogous to that of a bank and its customer.

Merrill Lynch supplied the required endorsement which was effective as the customer's endorsement, and the check was thereby negotiated to Merrill Lynch. Therefore, we find that Merrill Lynch was a holder as envisioned by La.R.S. 10:3-302(1).

VALUE

A person gives “value” for rights if he acquires them in return for the extension of immediately available credit. La. R.S. 10:1-201. Although appellant does not assert that Merrill Lynch did not take the instrument for value, the facts of the case affirmatively show that upon deposit of the check Fort was given immediate credit for $200,000.00, the full amount of the check. Therefore, we find that Merrill Lynch gave value for the instrument.

GOOD FAITH

Good faith is defined as honesty in fact in the conduct or transaction concerned. La.R.S. 10:1-201. Good faith is determined on a reasonableness standard, in that the facts must be such as would necessarily put a reasonable person on inquiry to ascertain the true facts. Commercial National Bank in Shreveport v. Calk, 207 So.2d 578 (La.App. 3d Cir.1968).

Appellant contends that Merrill Lynch was not in good faith when it took the instrument because of the questionable corporate authority of Smith and McCallum to endorse the check on behalf of Asian. Although these allegations may be pertinent as between the immediate parties (Smith, McCallum, and Asian), they do not affect third parties who take the instrument because the signatures are presumed to be authorized. La.R.S. 10:3-307(l)(b). Appellant, however, offered no facts to prove that Merrill Lynch lacked the requisite good faith at the time it took the instrument. The deposition of a Merrill Lynch employee, however, reveals that the check was taken by Merrill Lynch in good faith, and there is no controverting evidence in the record. Therefore, we find that Merrill Lynch took the instrument in good faith.

WITHOUT NOTICE OF CLAIMS OR DEFENSES

La.R.S. 10:1-201 provides that:

“A person has ‘notice’ of a fact when
(a) he has actual knowledge of it; or
(b) he had received notice or notification of it; or
(c) from all the facts and circumstances known to him at the time in question he has reason to know that it exists.”

Appellant alleges no particular facts, other than lack of authority of Smith and McCal-lum as officers of Asian to endorse checks, that Merrill Lynch had notice of existing claims or defenses. However, when the effectiveness of a signature is put at issue, the signature is presumed to be authorized and does not affect third parties who take the instrument. La.R.S. 10:3-307(l)(b); La.R.S. 10:3-403. Appellant asserted no other facts to prove that Merrill Lynch knew or should have known that a claim or defense existed. Merrill Lynch established by uncontroverted testimony that it took the $200,000.00 check with no notice of any claim or defense. Therefore, we find that Merrill Lynch took the check without notice of any claim or defense to the check on the part of any person.

The trial court held, and we agree, that Merrill Lynch took the instrument as a good faith holder, for value, and without notice of any claim to it and that Merrill Lynch is a holder in due course, entitled to judgment as a matter of law.

SPECIFICATION OF ERROR NO. 2

The second issue on appeal is whether certain disputed facts are material as contemplated by LSA-C.C.P. art. 966, so as to preclude summary judgment.

A motion for summary judgment should be granted if, and only if, the pleadings, depositions, answers to interrogatories, admissions on file, together with affidavits, if any, show that there is no genuine issue as to material fact, and that mover is entitled to judgment as a matter of law. LSA-C.C.P. art. 966. Only when reasonable minds must inevitably conclude that the mover is entitled to judgment as a matter of law on the facts before the court is a summary judgment warranted. Munson v. Safeco Ins. Co., 411 So.2d 578 (La. App. 1st Cir.1982). The burden of proving that there is no genuine issue of material fact in dispute is upon the mover of summary judgment. Munson v. Safeco Ins. Co., supra.

Appellant contends that the matter was not ripe for summary judgment in that certain material facts are in dispute.

We agree that some facts remain in dispute; however, they are not material to the determination of Merrill Lynch’s status as a holder in due course.

The trial court found that there was no genuine issue of material fact and granted the motion for summary judgment in favor of Merrill Lynch. We agree that summary judgment was properly granted since, on the uncontested material facts before the trial court, defendant Merrill Lynch was a holder in due course and was entitled to judgment as a matter of law.

For the above reasons, the judgment of the trial court is affirmed at appellants’ costs.

AFFIRMED.

      . A related appeal pending in this suit, bearing Docket Number 82 CA 0614, questions the right of Merrill Lynch to invoke a concursus and place the funds it holds on deposit into the registry of the court.

      . In response to this suit, Merrill Lynch, in addition to seeking to invoke a concursus, filed a third party demand against Fort, Smith, and McCallum. The third party demand is not before us on this appeal.

      .The trial court, in dismissing Asian’s suit against Merrill Lynch, stated that such dismissal would not affect Asian’s rights, if any existed, against Smith, McCallum, or Fort.

      . La.R.S. 10:3-305 provides:
      “To the extent that a holder is a holder in due course he takes the instrument free from
      (1) all claims to it on the party of any person; and
      (2) all defenses of any party to the instrument with whom the holder has not dealt except
      (a) minority, to the extent that it is a defense to a simple contract; and
      (b) such other incapacity, or duress, or illegality of the transaction, as renders the obligation an absolute nullity; and
      (c) such misrepresentation as has induced the party to sign the instrument with neither knowledge nor reasonable opportunity to obtain knowledge of its character or its essential terms; and
      (d) discharge in insolvency proceedings; and
      (e) any other discharge of which the holder has notice when he takes the instrument.”

      . La.R.S. 10:3-202(1) provides:
      “Negotiation is the transfer of an instrument in such form that the transferee becomes a holder. If the instrument is payable to order it is negotiated by delivery with any necessary endorsement; if payable to bearer it is negotiated by delivery.”

      . See La.R.S. 6:231 et seq.

      . Appellant argues that presentment of the check to Merrill Lynch without an accompanying corporate resolution, in light of the fact that such was standard practice in the industry, adversely affected Merrill Lynch’s good faith. However, Title 10 of the Louisiana Revised Statutes imposes no such duty.

      .Asian contends that contradictory evidence exists as to the following facts:
      1. Asian did not owe Fort $200,000.00. (Barrett affidavit)
      2. Neither Smith nor McCallum wrote “pay to” on the back of the check. (Smith deposition, Barrett affidavit)
      3. Fort was not authorized by Asian to deposit Asian’s check to his personal account. (Barrett affidavit)
      4. Neither Smith nor McCallum were authorized to deliver the check made payable to Asian to Fort. (Barrett affidavit)
      5. McCallum was unaware that Smith intended to deliver the check to Fort for deposit to Fort’s personal account. (Barrett affidavit)
      6. The minutes of Asian contain no authorization to anyone to endorse and/or deliver the $200,000 check to Fort. (Barrett affidavit)
      7. Standard practice and procedure requires that all three parties to a three party transaction be dearly identified — and only after checking the documentation supporting such a transaction will the big brokerage firms honor a third party check. As a minimum, it is required that any corporate endorsement clearly show on the face thereof the capacity of the individual making the endorsement. It is also required that proper corporate resolutions establishing the officer’s authority to act be presented and examined. (Jordan affidavit)
      8. Smith did not specify his corporate capacity, if any, on the back of the check. (See check, Smith deposition, P. 31)
      9. McCallum did not specify his corporate capacity, if any, on the back of the check. (See check, Smith deposition, P. 31)
      10. No corporate resolution was delivered to Fort with the check. (Smith deposition, P. 31)
      11. Neither Smith, nor McCallum went to Merrill, Lynch with Fort. (Smith deposition, P. 31 and 32) Neither were present to clarify their alleged corporate capacity.
      12. Smith assumes that a Merrill, Lynch employee wrote “pay to” on the back of the check. (Smith deposition, P. 33)


author: CARTER, Judge.

text:
    ASIAN INTERNATIONAL, LTD. v. MERRILL LYNCH, PIERCE, FENNER AND SMITH, INC., et al.
    No. 82 CA 0614.
    Court of Appeal of Louisiana, First Circuit.
    June 28, 1983.
    Rehearing Denied Aug. 23, 1983.

      Floyd J. Falcon, Jr., Baton Rouge, for plaintiff-appellee Asian Intern., Inc.
    Michael 0. Hesse, St. Francisville, and Donald Beckner, Baton Rouge, for defendant-appellee Ben F. Fort, Jr.
    John S. Thibaut, Jr., Baton Rouge, for defendant-appellee H. Grady Smith, Jr.
    Lee C. Kantrow, Baton Rouge, for defendant-appellant Merrill Lynch, Pierce, Fenner and Smith, Inc.
    Ronald Mason, Jr., Lafayette, for defendant-appellee Edward C. McCallum.
    Before LOTTINGER, COLE and CARTER, JJ.
   CARTER, Judge.

This is a suit by Asian International, Ltd. (Asian) against Merrill Lynch, Pierce, Fen-ner & Smith, Inc. (Merrill Lynch), Ben F. Fort, Jr. (Fort) and H. Grady Smith, Jr. (Smith), claiming ownership of certain accounts in the name of Fort with Merrill Lynch and seeking relief for tortious conversion of a $200,000.00 check, together with additional damages for the loss of corporate opportunity. Merrill Lynch filed various reconventional and third party demands and then filed a rule to show cause why a concursus proceeding should not be invoked.

Pursuant to the hearing to show cause, the rule was denied, and the trial court held that Merrill Lynch was not entitled to invoke a concursus under the circumstances then existing.

Merrill Lynch appealed this decision and subsequently filed a motion for summary judgment, which was granted by the trial court. The trial court dismissed Merrill Lynch as a defendant from the suit, after finding that Merrill Lynch was a holder in due course of the instrument and that as such it took the cheek free from all claims and defenses on the part of any person. Fort then filed a motion to dismiss Merrill Lynch’s appeal concerning the concursus.

MOTION TO DISMISS APPEAL

Fort’s motion to dismiss the appeal was referred to the merits. The basis of the motion to dismiss is essentially that Merrill Lynch’s right to appeal the trial court’s refusal to invoke a concursus proceeding has become moot because Merrill Lynch has been dismissed, as a defendant, from the suit pursuant to summary judgment granted in its favor.

A motion to dismiss an appeal must be based on alleged irregularities in proceedings related to the appeal, occurring either in the trial court or in the appellate court, or on want of jurisdiction in one or both courts. It should not be based on matters relating to the merits of the controversy. McConnell v. Pasley, 39 La.Ann. 1097, 3 So. 484 (1887); Town of Kinder v. Beauregard Elec. Co-op., Inc., 339 So.2d 891 (La.App. 3rd Cir.1976). When a motion to dismiss an appeal is based on issues which go to the merits of the case, those issues should not be determined on such a motion, but instead they should be resolved on appeal. Gulf States Utilities Co. v. Dixie Elec. Mem. Corp., 248 La. 458, 179 So.2d 637 (1965); State v. Home Realty Inv. Co., 214 La. 45, 36 So.2d 633 (1948); Town of Kinder v. Beauregard Co-op., Inc., supra; Mares v. Louisiana Wildlife and Fisheries Com’n., 228 So.2d 694 (La.App. 4th Cir.1969).

Fort’s motion to dismiss is based on issues which relate to the merits, and accordingly, the motion is denied.

MOTION FOR SUMMARY JUDGMENT

In a related appeal, bearing Docket No. 82 CA 0216, Asian strenuously opposed the trial court’s granting of summary judgment in favor of Merrill Lynch.

The trial court granted summary judgment based on its finding that Merrill Lynch had proved its status as a holder in due course, which allowed it to take the check free of all claims and defenses, and that there were no genuine issues of material fact with reference to Merrill Lynch’s status as a holder in due course. On appeal, we affirmed the trial court’s ruling. Asian International, Ltd. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., et al., 435 So.2d 1058 (La.App. 1st Cir.1983).

CONCURSUS PROCEEDING

Merrill Lynch, as plaintiff-in-recon-vention and third party plaintiff, filed a rule to show cause why certain property held by Merrill Lynch in an account for Ben F. Fort, Jr. and his wife, Allyne E. Fort, should not be deposited into the registry of the court pursuant to a concursus proceeding. From a procedural standpoint, a con-cursus proceeding can be invoked by means of a reconventional demand, if the substantive requirements of a concursus proceeding are otherwise present, vis., two or more conflicting claims of ownership of property sought to be deposited into the registry of the court, a grant of relief to a stakeholder from further or multiple liability, and a single judgment adjudicating all issues between the parties.

A concursus proceeding is defined in LSA-C.C.P. art. 4651, which provides that:

“A concursus proceeding is one in which two or more persons having competing or conflicting claims to money, property, or mortgages or privileges on property are impleaded and required to assert their respective claims contradictorily against all other parties to the proceeding.”

The property held by Merrill Lynch, presently in the name of Fort, includes:

(1) $27,683.82 in CMA Money Fund; and
(2) $70,000.00 principal amount of Inter-mountain Power Agency Utah Power Supply Revenue Bonds (14%) due July 1,2021.

Merrill Lynch argues that the required “conflicting claims of ownership” necessary to invoke a concursus proceeding have been asserted with respect to the above described property. Merrill Lynch contends that Asian claims ownership of the $200,000.00 check deposited with Merrill Lynch or proceeds derived therefrom and, therefore, claims the balance of monies currently on deposit in the name of Fort at Merrill Lynch.

Asian claims two items of damages from Merrill Lynch, Smith, and Fort. Asian is seeking $200,000.00 for tortious conversion of a $200,000.00 check payable to Asian, but endorsed and negotiated by Smith to Fort and renegotiated to Merrill Lynch. As part of this claim, Asian contends that the converted funds were utilized and deposited in the various accounts with Merrill Lynch, said accounts standing in the name of Fort, and that in fact these accounts “properly belong” to Asian. Fort has made repeated requests on Merrill Lynch to return the monies he placed on deposit, specifically the CM A Money Fund and the Revenue Bonds.Despite these requests, Merrill Lynch has refused to release the contested funds.

Since Asian and Fort are each claiming ownership of the $27,688.82 CMA Money Fund and the $70,000.00 Revenue Bonds (Asian at least claims the funds are identifiable as having been purchased with converted funds), the requirement of competing or conflicting claims of ownership necessary to invoke a concursus proceeding is clearly present in the case sub judice.

LSA-C.C.P. art. 4658 provides that:

“With leave of court, the plaintiff may deposit into the registry of the court money which is claimed by the defendants, and which plaintiff admits is due one or more of the defendants.
“When sums of money due one or more of the defendants accrue from time to time in the hands of the plaintiff after the institution of the proceeding, with leave of court he may deposit the money as it accrues into the registry of the court.
“After the deposit of money into the registry of the court, the plaintiff is relieved of all liability to all of the defendants for the money so deposited.”

The primary purpose of this remedial proceeding is to protect the stakeholder from multiple liability, from conflicting claims, and from the vexation attending involvement in multiple litigation in which the stakeholder may have no direct interest. LSA-C.C.P. arts. 4651-4662; Louisiana Intrastate Gas Corporation v. Muller, 290 So.2d 888 (La.1974). Concursus contemplates a proceeding which leads to a single judgment adjudicating all issues between the parties. Johnson v. Lemons, 157 So.2d 752 (La.App. 2d Cir.1963). In a concursus proceeding, the jurisdiction of the court is limited to disposing of the funds on deposit and relieving the stakeholder from further liability to the impleaded claimants arising out of or as a result of the stakeholder’s ownership or possession of the fund. LSA-C.C.P. arts. 4651-4662.

The articles of the Louisiana Code of Civil Procedure governing concursus suits are to be construed liberally and given a broad application. Damson Oil Corp. v. Sarver, 346 So.2d 1304 (La.App. 3rd Cir. 1971), writ refused, 350 So.2d 896 (La.1977); Placid Oil Company v. Young, 246 So.2d 306 (La.App. 3rd Cir.1971).

The purposes of a properly invoked concursus proceeding, viz., relief from further liability to impleaded claimants, avoidance of double or multiple liability, and relief from vexation of multiple litigation are properly served in the instant case. Although Merrill Lynch is no longer a party defendant in this proceeding and is relieved from liability to Asian as a result of the summary judgment granted in its favor, Merrill Lynch remains liable to someone (Asian or Fort) for the funds on deposit. Asian International, Ltd. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., et al., supra. Furthermore, Merrill Lynch’s liability to the impleaded claimants as to the funds on deposit will cease upon depositing the money into the registry of the court pursuant to a concursus proceeding, wherein the proper owner of the deposited funds will be determined.

Fort argues in brief that the “approval of the requested proceeding will not avoid the vexation of involvement in multiple litigation on the part of Merrill Lynch since it will remain a party defendant in the lawsuit against it by Fort for damages for Merrill Lynch’s refusal to release the funds on account in his name to him.” However, an exhaustive examination of all pleadings in the record does not reveal any such pleading wherein Fort is asking for damages from Merrill Lynch, and in fact Fort has not made Merrill Lynch a defendant in any capacity.

Fort relies upon Landry & Passman Rlty., Inc. v. Beadle, S., W. & A., Inc., 303 So.2d 761 (La.App. 1st Cir.1974), writ refused 307 So.2d 631 (La.1975), in support of its contention that a concursus is inappropriate in the instant case. We disagree and find that Fort’s reliance on this case is misplaced for several reasons. First, any allowance of the concursus in the instant case does not violate Louisiana Code of Civil Procedure articles pertaining to venue. In Landry & Passman, supra, this court stated at p. 764: Secondly, in Landry & Passman, supra, one of the claimants to the proceeds sought to be deposited in the concursus merely asserted an unliquidated claim as an unsecured creditor arising out of a transaction foreign to that which generated the concursus fund. In the ease sub judice, all claims arise out of the original negotiation of a single $200,000.00 check and each of the competing claimants claims ownership of the funds that are the object of the concur-sus proceedings. All matters in litigation and all claims arise from one source, the $200,000.00 check.

“Admittedly a claimant to a fund may be impleaded in a concursus proceeding in any court of competent jurisdiction, irrespective of which court may be the proper venue for bringing an ordinary action against him. However, to allow assertion of a claim of this nature against a claimant in a concursus proceeding, in a court which would not ordinarily be the proper venue for prosecution of the claim, would do violence to our general venue laws. In this instance, for example BS&W would, without its consent and over its express objection, be required to defend an action against it on a claim totally unrealted to the concursus fund or the matter out of which the fund arose, in a court which would ordinarily not be the proper venue.”

Summarizing, Merrill Lynch properly and appropriately sought to invoke this concur-sus proceeding so as to be protected from multiple liability from conflicting claims and from the vexation attending involvement in multiple litigation in which the stakeholder has no direct interest. We have previously determined that Merrill Lynch (stakeholder) is an innocent third party possessing funds, admittedly belonging to or owned by another. The funds are claimed by both Asian and Fort. The conflicting claims, although not required to have a common origin, in the instant case do have a common origin and arise from one source.

For the above and foregoing reasons, the judgment of the trial court is reversed and the case is remanded to allow Merrill Lynch to deposit the contested accounts into the registry of the court to be held until the respective claims of Asian and Fort are determined and a final judgment rendered.

REVERSED AND RENDERED.

      . For some unexplained reason, Edmund C. McCallum, Secretary-Treasurer of Asian and co-endorser of the check, was not made a defendant in the original suit filed by Asian.

      . Paragraphs 6 and 7 of Asian’s petition allege: Paragraph 6: On information and belief, plaintiff avers that defendant Fort received all or part of the funds into a securities, checking or trading account under the control of Merrill Lynch in the name of Fort or one of his companies or related entities.

        Paragraph 7: Defendant Fort accepted and received the benefit of the funds credited to such securities, checking or trading account and is currently holding and utilizing, or has utilized, these funds properly belonging to Asian.

      . Fort did assert a claim for damages against Asian for Merrill Lynch’s refusal to release the funds in his account; however, Merrill Lynch was not made a defendant.

      . In the Landry & Passman case, supra, a real estate salesman employed by Beadle, Swart-wood, Wall, & Associates (B.S. & W.) was claiming two real estate commissions from two sales of different properties by Landry & Pass-man. Landry & Passman and B.S. & W. had agreed to split the sales commission 50-50, and B.S. & W. had agreed to pay its salesman (Carson Davis) 30% of its fifty percent commission on each transaction.
      Landry & Passman and B.S. & W. split the commission on the first sale, and before the commission was divided on the second sale, the B.S. & W. salesman made a claim against Landry & Passman for the commission allegedly due him on both transactions. Landry & Pass-man sought to invoke a concursus proceeding, impleading B.S. & W., its salesman, and a third party, who subsequently disclaimed any interest in the funds.
      B.S. & W. answered conceding its indebtedness to its salesman as concerns the second transaction (the funds Landry & Passman held and which had not been distributed to B.S. & W.). B.S. & W. contested its salesman’s right to litigate in the concursus proceeding the claim relating to the prior and totally unrelated sale of property. This court affirmed the trial court’s dismissal of the concursus proceeding of this prior unrelated claim since it arose from a source different in origin from the transaction which generated the deposited funds.
      Claimant was asserting an unliquidated claim as an unsecured creditor, which claim arose out of a transaction completely foreign to that which generated the funds involved in the con-cursus proceeding.

      .See Footnote 2.


author: CRAIN, Judge.

text:
    Abe MILLER, et al. v. AGUILAR/WILSON, INC. AGUILAR/WILSON, INC. v. Abe MILLER, et al.
    Nos. 82 CA 0800, 82 CA 0801.
    Court of Appeal of Louisiana, First Circuit.
    June 28, 1983.
    Rehearing Denied Aug. 23, 1983.
    Stephen M. Irving, Allen W. Helm, III, Baton Rouge, for Abe Miller, et al.
    Winston Riddick, Baton Rouge, for Miller Timber.
    Dale M. Maas, Cornelius J. Hyde, III, Baton Rouge, for Aguilar/Wilson, Inc.
    Before PONDER, SAVOIE and CRAIN, JJ.
   CRAIN, Judge.

This is an appeal of a judgment of the trial court which dismissed plaintiffs’ suit for declaratory judgment to void a real estate listing agreement, and in a companion suit granted a realtor’s commission.

On or about March 7, 1980, Abe Miller and Paul L. Miller (the Millers), appellants herein, executed a series of five (5) exclusive realty listing agreements with Aguilar/Wilson, Inc. (A/W). These agreements were for a one year period and provided a 10% commission for sale by A/W of property belonging to Miller Timber Company, Inc. The corporation was having serious cash flow problems and was unable to meet its obligations. In order to do so it became necessary to attempt to sell corporate assets in an effort to generate revenue. The Millers individually signed the listing agreements with A/W. The urgency of the situation and the need for fast action from A/W in their efforts to sell land owned by the corporation were stressed. However, the Millers were advised that it would take time to market their property and agreements were signed by Sarah Carter, (Carter) an agent for A/W and a personal friend of the Millers, with a one year term.

The record reflects efforts by A/W to market the property. The efforts produced one offer from Robert E. Richardson on June 17, 1980. The offer proposed to pay $1,000,000.00 for all of the 1,312 listed acres and mineral rights to all acreage except that already in production. This offer was for less than lh of the listing price of $2,332,800.00. The Millers rejected the offer and made no counter offer.

Relations between the Millers and A/W and Carter deteriorated rapidly, and Abe Miller began to think about cancelling the listings because he felt Dr. Rudolfo Aguilar, president of A/W, was not taking an active enough role in the efforts to sell the corporate assets. Several conversations and a meeting followed, but the listing was not cancelled.

On June 10,1980, Abe Miller submitted to Carter a list of large landowners owning property in the vicinity of the property of Miller Timber Co., Inc. in Claiborne Parish who might be prospective purchasers. By June 24, 1980, the prospects had not been contacted by A/W. On that date the Millers sent a letter to A/W cancelling the exclusive listing agreement and substituting a non-exclusive listing agreement. Abe Miller then began contacting these parties and eventually began negotiations with one of those named on the list, Justiss Mears Oil Company, Inc. (Justiss Mears).

On August 29, 1980, the Millers filed suit to cancel the listings on the ground that A/W breached their obligation by failing to diligently try to market the Millers’ land.

In October, 1980, Miller Timber Co., Inc. was placed in voluntary liquidation and, on October 23, 1980, the liquidator sold all lands, mineral rights, standing timber and lumber inventory to Justiss Mears for $1,278,697.40. On May 12, 1981, A/W filed suit to collect a 10% commission on the sale price to Justiss Mears.

The suit filed by Millers was consolidated with the suit filed by A/W. After trial, the court rendered judgment in favor of A/W’s claim for a 10% commission, awarding $127,869.74 plus legal interest, and against Millers’ suit for declaratory relief.

Although Millers’ original suit sought to have the listings cancelled alleging four alternative theories, the only error complained of in this appeal is that the trial court erred in holding that a disobedient agent is entitled to a commission.

Specifically, the Millers contend on appeal that a broker has a duty to execute the orders of a principal, and, where it fails or refuses to do so, the broker is not entitled to a commission. Assuming this to be a correct statement of the law, the trial court found the realtor made diligent efforts to produce a buyer and ordered the commission paid. We agree. The record contains ample evidence of diligent efforts on the part of A/W. Under an exclusive listing agreement, the broker is entitled to his commission on a sale made during the term of the agreement whether or not his efforts contribute to the sale. Burr v. Leguin, 365 So.2d 1156 (La.App. 3rd Cir.1978), writ denied 367 So.2d 862 (La.1979).

The trial judge found that the list of prospective buyers was furnished to A/W by the Millers. This finding is disputed by A/W and Carter, but we find no manifest error in the ruling of the trial judge. However, we also find no failure or refusal on the part of A/W to follow the Millers’ orders. The record reflects that the list was given to A/W on June 10, 1980, and that the Millers attempted to cancel A/W’s exclusive listing on June 24,1980, substituting a non-exclusive listing. We conclude A/W did not have ample time to follow the leads even if aware of them. The cases cited by appellants in support of their contention that the exclusive listing agreement should be cancelled because of the broker’s failure or refusal to carry out the seller’s instructions are thus distinguishable from the instant case. In Latter & Blum v. Ocean Drilling & Exploration Co., 272 So.2d 53 (La.App. 4th Cir.1973), the realtor had an exclusive rental listing, but intentionally diverted prospective tenants to another lease area which the realtor also had listed. We have no such intentional breach of duty in the instant case. In Robert N. Samuels, Inc. v. Michaels, 315 So.2d 63 (La.App. 4th Cir.1975), the realtor had a client interested in leasing either of two properties exclusively listed with the realtor. The realtor informed his client that he had a conflict and would negotiate on the other property. When the rental did not materialize and the client subsequently leased the property without the aid of the realtor the court found that the broker had intentionally refused to perform the contract.

Consequently, in both of the above cases there was a clear intentional refusal to market the seller’s property. The evidence presented in this case will not support a similar conclusion.

The Millers also allege that the commission due to A/W in the amount of $127,-869.74 is excessive since $350,000.00 of the purchase price was for lumber inventory not included in the listing agreements. We agree. A/W contends that payment on the lumber inventory is compelled by the following language in the listing agreements:

“We agree to pay the REALTOR’S fee amounting to ten percent (10%) of the selling price.”

However, the language of the listing agreements is limited specifically to a description of the acreage to be sold, minerals and standing timber thereon. No mention is made of the sale of, or commission related to the sale of lumber inventory on the properties listed. “Selling price” as used in the listing agreements, does not refer to the sale of anything not specifically listed in the agreements. Since the sale to Justiss Mears netted $928,697.40 for the land, minerals and standing timber listed in the agreements, the commission should be reduced to the sum of $92,869.74.

For the reasons assigned, the judgment of the trial court is affirmed insofar as it dismisses Millers’ suit for declaratory relief and awards a 10% commission to A/W in 82 CA 0800. The judgment is amended to award the sum of $92,869.74 to A/W as their commission on the sale of the listed properties in suit number 82 CA 0801. Costs of this appeal are to be borne equally by the parties.

AFFIRMED IN PART AND AMENDED IN PART.

      . In the trial court the listing agreements were attacked as invalid because there was lack of proper authority for the Millers to bind the corporation to the listing agreements. This contention has been abandoned on appeal.


text:
    SUCCESSION OF Madeline Joyce Watts Lacour LEMOINE. SUCCESSION OF Riley C. LEMOINE.
    Nos. 82 CA 0873, 82 CA 0874.
    Court of Appeal of Louisiana, First Circuit.
    June 28, 1983.
    Rehearing Denied Aug. 23, 1983.

      Kenneth L. Riche, Baton Rouge, for ap-pellees, Heirs of Riley C. Lemoine.
    Carey Holliday, Baton Rouge, for appellants, Heirs of Madeline Joyce Watts Lac-our Lemoine.
    Before PONDER, SAVOIE and CRAIN, JJ.
   CRAIN, Judge.

This is an appeal of the trial court’s denial of a motion to traverse the detailed descriptive list of the Succession of Riley C. Lemoine (Mr. Lemoine) and of a motion to reopen the Succession of Madeline Joyce Watts LaCour Lemoine (Mrs. Lemoine), for the purpose of reclassifying a piece of property as community property of Mr. and Mrs. Lemoine rather than Mr. Lemoine’s separate property.

Mrs. Lemoine died in 1980, and Mr. Lem-oine died on February 22, 1981. Each had children of prior marriages. When Mr. Lemoine’s succession was opened a claim was filed therein by Mrs. Lemoine’s heirs. The claim concerned ownership and inheritance rights to the family home of Mr. and Mrs. Lemoine on Plank Road in Baton Rouge, Louisiana. The issue was whether the property was the community property of Mr. and Mrs. Lemoine, or the separate property of Mr. Lemoine. The property in question was purchased on September 11, 1974, by Mr. Lemoine. Mrs. Lemoine was not a party thereto, although Mr. Lemoine stated that he was married to and living with her. The dispute arises due to the uncertainty of the date of the marriage of Mr. and Mrs. Lemoine.

The record reflects that Mr. and Mrs. Lemoine, then neighbors, took a trip together to Arkansas in June of 1973. Before leaving they announced their intention of getting married while on their trip. Upon their return, they both wore bands on their ring fingers, announced that they had been married, and began living together as husband and wife. However, subsequent to Mrs. Lemoine’s death in 1980, it was alleged for the first time by Mr. Lemoine that they had not in fact been married until January, 1975. This 1975 marriage date first came to be known when one of Mrs. Lemoine’s heirs was questioning the succession attorney, Mr. Guy Módica, about the exclusion of the Plank Road property in Mrs. Lemoine’s succession. Mr. Módica informed the heirs of Mrs. Lemoine of the 1975 marriage and that, since the Plank Road property was purchased prior thereto, it was Mr. Lem-oine’s separate property. In support of this contention Mr. Lemoine provided an Arkansas marriage license dated January, 1975. He indicated they had wanted to conceal the 1975 marriage date from the children. Mrs. Lemoine’s heirs signed the sworn descriptive list without listing the Plank Road property, and only raised the issue again after the death of Mr. Lemoine in 1981. Mrs. Lemoine’s heirs filed their claim in the Succession of Riley C. Lemoine, and subsequently filed the motions which- are the subject of this appeal.

The errors alleged by Mrs. Lemoine’s heirs, the appellants, center around the trial court’s finding that Mr. and Mrs. Lemoine were not married until January, 1975, as evidenced by the marriage license.

Appellants allege that Mr. and Mrs. Lemoine were married in June, 1973. They assert the presumption that the Lemoine’s union was legitimate and lawful as of the time they began living together. Succession of Rossi, 214 So.2d 223 (La.App. 4th Cir., 1968), writ refused, 253 La. 66, 216 So.2d 309, (La.1968). However, a marriage license is the best evidence of a marriage, and the courts look to other evidence only in the absence of the license. Allen v. Anderson, 55 So.2d 596 (La.App.Orl.1951), amended 57 So.2d 50, (La.App.Orl.1952); Succession of McEntyre, 390 So.2d 923 (La. App. 2d Cir.1980). In this case there is a marriage license, dated 1975. The record reflects testimony to the effect that Mr. Lemoine ordered this license when he lost the first one, but common sense dictates that the Arkansas officials would send a duplicate of the original license which would be dated June 6, 1973, when the Lemoines were first allegedly married, not January of 1975. The trial court was correct in relying on the marriage license over the testimony concerning the earlier date of the marriage.

Since the trial court correctly determined the marriage to have been in 1975, the Plank Road property purchased prior to then was Mr. Lemoine’s separate property. Mrs. Lemoine’s heirs have no claim thereto. Also, since the trial court found no marriage in 1973, either valid or null, there is no merit in the claim of a putative marriage.

For the reasons assigned hereinabove, the judgment of the trial court is affirmed. Costs of this appeal are to be paid by appellants.

AFFIRMED.


text:
    Elizabeth Foy BROWN v. Edwin EDWARDS, As Governor, etc. Laurence SMITH, et ux. v. Edwin EDWARDS, As Governor, etc.
    Nos. 82 CA 0882, 82 CA 0883.
    Court of Appeal of Louisiana, First Circuit.
    June 28, 1983.
    Rehearing Denied Aug. 23, 1983.

      Murphy W. Bell, R. Judge Eames, Robert C. Williams, Baton Rouge, for plaintiffs-appellants Elizabeth Foy Brown in No. 82 CA 0882 and Laurence Smith and Irma Smith in No. 82 CA 0883.
    William H. Cooper, Jr., Brent E. Kinchen, J. Marvin Montgomery, Daniel Dziuba, Baton Rouge, for defendants-appellees Edwin Edwards, etc., et al.
    Before PONDER, SAVOIE and CRAIN, JJ.
   CRAIN, Judge.

This is an appeal from the judgment of the trial court denying the plaintiffs’ motion to set aside the dismissal of plaintiffs’ suits against defendants, Edwin Edwards, and others, for lack of prosecution over a period of five years under La.C.C.P. Art. 561.

This case arose on November 16, 1972, when the sons of the petitioners were killed during a civil disturbance on the campus of Southern University. The petitioners each filed suit seeking damages for the death of their respective sons. Named as defendants were Edwin Edwards, former governor of Louisiana, and various other public officials and peace officers of the state.

A motion for summary judgment was granted in favor of defendant, Fireman’s Fund Insurance Company, on February 14, 1975, by the trial judge. The plaintiffs subsequently appealed that judgment, which appeal was dismissed by this Court on February 27,1976, due to plaintiffs’ failure to prosecute their appeal.' Also pertinent to the present appeal is the fact that plaintiffs’ counsel filed an ex parte motion and order to withdraw as counsel of record on November 17, 1977, stating that he had moved to California and no longer was a practicing attorney in Louisiana. That order was signed the following day.

On February 24, 1982, the defendants herein, filed a motion to dismiss these suits on the grounds of abandonment pursuant to La.C.C.P. Art. 561. This motion was granted and signed ex parte. Thereafter, an order was signed enrolling as attorneys of record plaintiffs’ present attorneys. The plaintiffs then filed a motion to set aside the order of dismissal and an evidentiary hearing was held. The judge subsequently denied their motion, assigning oral reasons for judgment on July 30, 1982.

On appeal, the appellants first argue that the trial court erred in granting defendants’ ex parte motion to dismiss. They claim that the clerk’s certificate reflects that November 17,1977, was the last date in which action had been taken in their cases. The motion to dismiss was signed on March 2, 1982, less than five years after November 17, 1977 and the appellants allege that, therefore, the motion to dismiss was made prematurely.

La.C.C.P. Art. 561 provides for the dismissal of a suit when no action has been taken in the suit over a period of five years. In Prater v. Schuylkill Products Co., Inc., 281 So.2d 829 (La.App. 1st Cir. 1973) writ, refused 282 So.2d 719 (La.1973), this court stated:

“It is well-settled law that enrolling or substituting counsel is not a step in the prosecution of an action which will interrupt the five year period.” (citations omitted)

If enrolling or substituting counsel is not a step in the prosecution that interrupts the five year period, then certainly withdrawing as counsel of record is not.

Therefore, for purposes of Art. 561, November 15, 1976, was the date that the last action was taken in these suits. Consequently, dismissal of the suits on March 2, 1982, was proper since there had been a period of inaction of at least five years. The clerk’s certificate in giving the date of the last action in the suit as November 17, 1977, does not affect a dismissal under La. C.C.P. Art. 561.

Appellants complain in their next assignment of error that the trial court’s granting of plaintiffs’ original counsel’s motion to withdraw as counsel of record, deprived the plaintiffs of notice and an opportunity to be heard. In support of their argument, the appellants cite Rule X of the Rules of Court for the 19th Judicial District Court which provides in pertinent part:

RULE X. WITHDRAWAL OF REPRESENTATION BY COUNSEL

“Section 1. With the consent of all parties or their counsel, or prior to any adverse party filing a pleading or making an appearance, an attorney may, by ex parte order of the judge of the Division in which the case is pending, be permitted to withdraw his representation of a litigant. Otherwise, an attorney may withdraw his representation of a party litigant only upon contradictory motion and hearing and for good cause shown. All opposing counsel are to be served with a copy of the motion and order to show cause why mover should not be permitted to withdraw. The Court shall not grant the motion if to do so would necessitate the reassignment of the cause for trial. Section 2. An attorney who has been permitted by ex parte order to withdraw prior to an adverse pleading or appearance, shall give notice of same to all counsel who may thereafter plead in the case. In all cases of withdrawal, he shall advise the party he was previously representing, by certified mail, that he is no longer of counsel to him and shall further advise him of the status of the case on the Court’s docket.”

The appellants claim that because they were not notified of the withdrawal of their former counsel, their subsequent failure to prosecute was beyond their control and, therefore, the period provided for in Art. 561 should not run against them. We disagree.

In Pounds v. Yancy, 224 So.2d 1 (La.App. 1st Cir.1969), writ, refused 254 La. 810, 227 So.2d 145 (1969), a case cited by the plaintiff, the court did state that fault must be attributable to plaintiff to warrant dismissal for failure to prosecute for five years. However, under circumstances very similar to those in this case, the court found that:

“It is always within the power of a litigant to discharge an attorney who neglects or refuses to act and replace him with another counselor. ‘Circumstances beyond the control of the litigant’, as pertains to the issue at hand, contemplates events making it impossible for the litigant to act in his own behalf such as service in the armed forces making it impossible for the litigant to be present. Zatarain v. Portera, La.App., 63 So.2d 477. A similar circumstance, in our view, would be confinement to a mental institution.”

The court held that the fact that plaintiffs’ attorney refused or neglected to act for five years, did not constitute circumstances beyond the control of the parties.

In this case, it is evident from the record that, despite the fact that the plaintiffs did not receive notice on the actual date that their attorney withdrew as counsel of record, they did receive notice in federal court in July of 1980 that their attorney had withdrawn and were advised to get another lawyer. Miss Brown also indicated in her testimony that she had received notice from her attorney as early as 1977 that he was moving to California and would no longer be handling her case. Considering this testimony along with the fact that neither of the plaintiffs attempted to retain a new attorney after being advised in federal court to do so, we find that the cause of their failure to prosecute was not beyond their control and the five year period of Art. 561 ran against them without interruption.

Appellants next argue that the ex parte granting of the defendant’s motion to dismiss without notice or hearing deprived the appellants of due process. Appellants claim alternatively that Art. 561 is unconstitutional, since it operates without formal hearing or notice.

Although Art. 561 does not make provision for a hearing, plaintiffs did have a remedy which they in fact took advantage of, that is, filing of a motion to set aside the dismissal, followed by an evidentiary hearing. In Wicker, et al. v. The Coca-Cola Bottling Co., 418 So.2d 1378 (La.App. 5th Cir.1982), writ, denied 423 So.2d 1148 (1982), the court stated:

“Appellants also contend they were denied due process because no evidentiary hearing was held on the motion to dismiss. We note, however, that there were no contested issues of fact. The record shows the plaintiffs took no procedural steps against the particular defendant within the five year period. Further notwithstanding the trial judge’s authority by statute to proceed ex parte, the appellant was given an opportunity to file a brief in opposition to the motion to dismiss. Hence, he was not denied due process by a dismissal without an evidentiary hearing.”

We, therefore, find no merit to these last assignments of error and find the trial judge properly granted defendants’ motion for dismissal based on abandonment under La.C.C.P. Art. 561.

For the reasons assigned, the judgment of the trial court is affirmed. Appellants are to pay the costs equally.

AFFIRMED.

      . La.C.C.P. Art. 561 read prior to amendment in 1982:
      “Art. 561. Abandonment in trial and appellate court
      An action is abandoned when the parties fail to take any step in its prosecution or defense in the trial court for a period of five years. This provision shall be operative without formal order, but on ex parte motion of any party or other interested person, the trial court shall enter a formal order of dismissal as of the date of its abandonment.
      An appeal is 'abandoned when the parties fail to take any step in its prosecution or disposition for the period provided in the rules of the appellate court not to be less than one year.”


author: ALFORD, Judge.

text:
    Wayne CARTER, Individually and as Administrator of the Estate of his Minor Child, Kelli Carter v. SAFECO INSURANCE CO., et al., Louisiana Farm Bureau Mutual Insurance Co. and State Farm Automobile Insurance Company.
    No. 82 CA 0919.
    Court of Appeal of Louisiana, First Circuit.
    June 28, 1983.
    Rehearing Denied Aug. 23, 1983.

      William J. Knight, Franklinton, E. Gordon Schaefer, Jr., Metairie, for plaintiff.
    James E. Moore, Baton Rouge, for defendant.
    Before COVINGTON, LANIER and ALFORD, JJ.
   ALFORD, Judge.

The disposition of this case on appeal involves the resolution of two questions presented the trial judge: (1) Did Safeco Insurance Company act unreasonably and in bad faith when settling the claims arising out of the automobile accident involved herein, and (2) Was the trial judge correct when he denied plaintiffs request to amend his petition after judgment. Because we agree with the determination of the trial judge on both counts, we affirm his decision and dismiss these appeals at plaintiff’s costs.

On December 27, 1979, Glenda Lott, the minor daughter of Glen Lott, was driving her father’s car with his permission. In the automobile with Glenda were three guest passengers: Anthony Bruce Moore, Richard Talley and Kelli Carter, the minor daughter of plaintiff Wayne Carter. As Glenda Lott was proceeding along the Sie Jenkins Road in Washington Parish, a vehicle driven by Nora Wallace was heading in the opposite direction. In the car with Mrs. Wallace were her children, Tommy Wallace, Jr. and Danica Wallace. Additionally, Mrs. Wallace’s cousin Jim Paul Wallace was in the Wallace vehicle. As the two vehicles approached one another, Glenda Lott apparently lost control of her car, crossed the center line and struck the Wallace vehicle head-on. Major and/or minor injuries resulted to all parties. Unfortunately, Glenda Lott was fatally injured.

In February, 1980, Jim Paul Wallace settled his claim against Glen Lott and Lott’s insurer, Safeco Insurance Company [hereinafter cited as Safeco] for I125.00. In April, 1980, Nora Wallace filed suit against Lott and Safeco, individually, and on behalf of her minor children Tommy Wallace, Jr. and Danica Wallace. Similarly, in June, 1980, Anthony Bruce Moore filed suit against Safeco and on the same date Richard Talley also filed a separate but similar suit against Safeco. It is significant to note that in each of the above three lawsuits, the petition alleged damages in an amount exceeding the $100,000 liability limit in the policy Safeco issued to Lott.

Various negotiations ensued. As a result of these negotiations, in October of 1980 the Wallace, Moore and Talley lawsuits were settled. Nora Wallace received $50,000.00 for release of all claims against Lott and Safeco. Likewise, her children received a total of $375.00 for their injuries. Finally, in settlement of their claims against Safeco, Anthony Bruce Moore and Richard Talley received $18,500.00 and $28,000.00, respectively. Thus, when the $125.00 paid in settlement of Jim Paul Wallace’s claim is added to these amounts, one finds that $97,-000.00 of the $100,000.00 liability limit was expended in compromise of these claims.

Subsequent to the negotiations and settlements, on December 17, 1980, Wayne Carter filed the present suit individually and on behalf of his minor daughter Kelli against Safeco Insurance Company, Lott’s liability insurer, Louisiana Farm Bureau Liability Insurance Company, Carter’s UM carrier, and State Farm [Mutual] Automobile Insurance Company, Mrs. Wayne Carter’s UM carrier. Although the petition alleges acts of negligence on the part of Glenda Lott, nevertheless, the suit does not name Glen Lott as a defendant. Rather, Safeco is named as a defendant along the two UM carriers of Carter. In January, 1981, Safeco answered Carter’s suit denying all liability and pleading credit for the settlements made of the other claims.

On May 12, 1981, by way of a motion, Safeco deposited the remaining $3,000.00, plus costs, into the registry of the court inviting the plaintiff to withdraw the funds without condition. The plaintiff later accepted the invitation. Ón November 6, 1981, plaintiff amended his petition to allege that Safeco had been in bad faith when settling the other claims because, supposedly, plaintiff was never contacted and given the opportunity to participate in settlement negotiations. Plaintiff asserted it was bad faith to settle the multiple claims to the extent that Kelli did not receive her full share of the proceeds based upon her injury. In November, 1981, Safeco answered this amended petition countering with Safeco’s responsibility to secure the best “deal” for Lott.

A trial on the merits was conducted, the purpose of which was to determine whether Safeco was in bad faith. The issue of liability for Glenda Lott’s negligence was never questioned by Safeco. Indeed, oral argument of counsel indicates that liability was stipulated at the pre-trial conference in this litigation. Such was the impression of the trial judge. In his reasons for judgment, the trial judge states:

This matter started out as a suit for damages brought by the plaintiff and ended up as a suit by a tort claimant against the liability insurer for alleged bad faith.

After the hearing, the trial judge ruled in favor of Safeco. Judgment was signed May 13,1981, dismissing all claims made by plaintiff with prejudice.

On July 15,1982, plaintiff filed a petition for appeal from the judgment of the lower court dated May 13,1982. On the same day plaintiff filed another amending petition wherein Carter named the original defendant and also Glen Lott individually and as the administrator of the estate of Glenda Lott. Other than to assert that Glen is responsible for the acts of Glenda, the original petition was left unchanged. Although the amended petition was filed with leave of court, nevertheless, after Lott and Safe-co filed appropriate motions, the judge vacated his order permitting the filing of this second amending petition. From the judgment dated October 6, 1982, relative to the motion to vacate, plaintiff filed another petition for appeal on October 12,1982. Both petitions for appeal were made returnable to this court on November 1, 1982.

As we noted at the outset, these appeals involve only two issues: (1) Whether Safeco was in bad faith in settling the claims arising out of the auto accident without the participation of plaintiff, and (2) Was the trial judge correct in refusing to allow plaintiff to amend his petition after judgment. We shall address these questions in numerical order.

In his written reasons for judgment in favor of Safeco, the trial court was influenced by Mr. Carter’s procrastination in seeking legal representation even after he had been advised of the necessity for such assistance. The trial judge stated:

There is no evidence whatsoever that the insurance company took advantage of Mr. Carter, but the Court must find that Mr. Carter failed to properly and timely prosecute his claim against this insurance company. He neither retained a lawyer nor presented the claim himself to the insurance company and cannot be heard to complain when the insurance company proceeded to protect its insured and settle all claims actively pending before it within its policy limits.

Additionally, the trial judge was swayed by the nature of Mr. Carter’s conduct throughout most of this time frame. Because plaintiff was a friend of Glen Lott, plaintiff did not wish to sue Lott personally and expressed these sympathies many times. This fact, together with plaintiff’s acknowledged self-assurance that his U.M. coverage would be adequate to compensate Kelli for her injuries, gave Safeco the impression that plaintiff was not interested in the method Safeco disposed of the various interests. Thus, it was the trial judge’s opinion that the evidence in this case demonstrated conclusively that Safeco did not act in bad faith, and “at all times acted to protect its insured and to be fair to the claimants involved in this matter.”

In Manieri v. Horace Mann Mutual Insurance Company, 350 So.2d 1247, 1248 (La.App. 4th Cir.1977), Judge (now Justice) Lemmon stated as follows:

A liability insurer faced with multiple claims to inadequate proceeds is generally not required to prorate, but may enter into compromise agreements with one or several claimants to the exclusion of others, even to the extent of exhausting the entire fund, as long as the compromises are reasonable and are made in good faith, (emphasis in original)

As authority for this proposition, Judge Lemmon cited the Supreme Court case of Richard v. Southern Farm Bureau Casualty Insurance Company, 254 La. 429, 223 So.2d 858 (1969). We note that the holding in Richard was expressly affirmed in the case of Holtzclaw v. Falco, Inc. 355 So.2d 1279 (La.1978). Thus, it is well-settled law in Louisiana that an insurer may enter into reasonable, good faith settlements even though such settlements exhaust or diminish the proceeds available to other claimants. • Merritt v. New Orleans Public Service, 421 So.2d 1000 (La.App. 4th Cir.1982).

In order to determine what constitutes acting “reasonably” and in “good faith” in negotiating settlements with a claimant, one must look to the facts of the individual case. The trial judge set out the facts which led to his decision and we do not find any manifest error in his reasoning.

In reviewing the lower court’s conclusion, . we start with the axiom that a liability insurer’s primary obligation is to its insured. Although it has been posited that liability insurance is a fund for the protection of injured claimants, nevertheless, we perceive such insurance to be chiefly for the defense of the insured against liability. Indeed, we have recently held that a liability insurer has an obligation to its insured not to arbitrarily refuse reasonable offers of settlement with policy limits, when, as here, its insured faces liability in excess of the policy limits. Domangue v. Henry, 394 So.2d 638 (La.App. 1st Cir.1980). In the final analysis, a liability insurer’s foremost obligation is to its insured and not to the claimants.

We would be remiss if we attempted to analyze Safeco’s performance in a vacuum. One simply cannot deny the fact that Wayne Carter’s role in the intricacies of this lawsuit is paramount and determinative. The record indicates that Carter was simply not concerned with whatever settlements the other claimants effectuated with Safeco. Rather, he was looking exclusively to' his own U.M. carriers as a source of funds to compensate Kelli Carter for her injuries.

Though overworked, the old aphorism that hindsight is always “20-20” is nevertheless applicable in this case. From our current perspective it is easy to say what Safeco should have done to make the settlements in this case more reasonable. Yet, such would be an injustice to Safeco in light of the facts. Because Carter essentially told Safeco not to worry about his claim, then Safeco justifiably assumed it could proceed with negotiations with the other parties. In short, the transcript demonstrates that Safeco’s actions were based, in part, upon what Carter told them to do. Surely plaintiff cannot be now heard complaining because Safeco followed his advice! To fault Safeco now because it attempted to weigh everyone’s interest, including Kelli’s, would be to turn logic on its ear.

At the time negotiations with the other claimants were proceeding, and later when they were concluded, Carter had still not filed suit. More importantly, to all involved it appeared he was not interested in filing suit, but was simply going to collect from his U.M. carriers. In reliance upon Carter’s actions, and in conformity with the moral and legal responsibility of an insurer to its insured, Safeco proceeded to gain for Glen Lott very favorable settlements of all claims filed at the time.

In conclusion, it is our opinion that plaintiff has failed to carry his burden of proof to show bad faith on the part of Safeco. As such, the trial court’s judgment in.favor of Safeco and against Carter dismissing all claims made by plaintiff was not manifestly erroneous. Arceneaux v. Domingue, 865 So.2d 1330 (La.1978). Appellant has simply failed to produce any evidence to prove bad faith or unreasonableness on the part of Safeco. Accordingly, we affirm the trial court’s decision on this issue.

The second issue presented to the court for our review is whether or not the trial court erred in not allowing plaintiff to amend his petition to name Glen Lott as a defendant. After trial on the merits, judgment was signed dismissing all claims made by plaintiff with prejudice. Thereafter, plaintiff sought to amend his petition on July 15, 1982, but was thwarted in his efforts. Plaintiff then sought review of this decision.

Amendment of pleadings after an answer has been filed requires leave of court. La.C.C.P. art. 1151. The decision to allow an amendment is within the sound discretion of the trial judge and his ruling should not be disturbed on appeal unless there has been an abuse of the broad discretion vested in him. White v. Cumis Insurance Society, 415 So. 574 (La.App. 3rd Cir. 1982).

Under our modern procedural scheme, the legislature has expressly directed that the procedural rules are to be construed liberally with due regard for the fact that these rules are not an end in themselves, but rather implement the substantive law. La. C.C.P. art. 5051; McMahon, The Louisiana Code of Civil Procedure, 21 La.L.Rev. 1 (1960); see also Giron v. Housing Authority of City of Opelousas, 393 So.2d 1267 (La. 1981). In commenting on the rules in the Code of Civil Procedure, the late Dean McMahon noted: From Tate, Amendment of Pleadings in Louisiana, 43 Tul.L.Rev. 211, 211 (1969).

The new code embodies procedural rules designed to permit the trial of a case to serve as a search for the truth, and to have its decision based on the substantive law applicable, rather than upon technical rules of procedure.

Although liberal amendment of pleadings is the policy in Louisiana, nevertheless, there exist limits on the extent to which this court will allow amendment. In this case, plaintiff did not originally name Lott as a defendant. It was only after a trial on the merits and a complete rejection of all of plaintiffs claims that he attempts to name Lott. This was two and one-half years after the accident.

Similarly, this is not a case of a closely related but incorrectly identified defendant, nor is this a case of a suit brought in the wrong capacity. Rather, plaintiff knew who Lott was, he knew where to find him, and he knew Lott’s daughter was involved in the accident. In short, the search for the truth Dean McMahon talks about would not be furthered by allowing plaintiff to amend to name Lott. Amendment at this time would not serve any legitimate purpose other than to give plaintiff access to an additional source of funds that plaintiff delayed seeking from the beginning.

Under the facts in this case, we feel that permitting appellant to amend to name Lott after final judgment, in a situation where he could have been cited since the inception of the case, would work substantial prejudice to Glen Lott. Thus, we feel the trial judge did not abuse his discretion in rejecting the amendment and we therefore affirm his decision.

For the above and foregoing reasons, the combined appeals of appellant are rejected at his costs and the decision of the trial court is affirmed.

AFFIRMED.

      . Jim Paul Wallace was a minor at the time of this accident. The claim was settled on behalf of Jim Paul by his tutor ad hoc Tommy Lee Wallace without suit being filed.

      . Suit was also filed against Lumberman’s Mutual Casualty Company, the Wallace’s U.M. carrier.

      . Moore & Talley also filed suit against their U.M. carriers.

      . Kelli Carter has now obtained majority and has been properly joined in this lawsuit.

      . The record reflects these U.M. carriers were later dismissed from the lawsuit after settlement of Carter’s claim.

      . The refusal by the trial court to allow plaintiff to amend his petition is an interlocutory judgment (La.C.C.P. art. 1841), which will not cause irreparable injury. As such, this judgment is not appealable. La.C.C.P. art. 2083. However, defendants neither filed a motion to dismiss (Uniform Rules—Courts of Appeal, Rule 2-8) nor did they object to this Court considering this as an appeal. Therefore, we will address this issue on appeal.