author: ELLIOTT, J.

text:
    No. 591
    First Circuit
    CASSIDY ET AL. v. HOLLIMAN & SPIERS ET AL.
    (March 5, 1930. Opinion and Decree.)
    (April 14, 1930. Rehearing Refused.)
    (July 2, 1930. Writ of Certiorari and Review Refused by Supreme Court.)

      Bascom D. Talley, of Bogalusa, attorney for plaintiffs, appellees.
    Ott & Rich, of Bogalusa, attorneys for C. B. Dunn and Colonial Creosoting Company, defendants, appellants.
   ELLIOTT, J.

John H. Cassidy and Daniel E. Sheridan, owners of the E% of the WVz of section 20, headright 41, township 1 S, range 13 E, except 50 acres reserved by John Green on the north end, sold and delivered the pine timber on said land to C. H. Holliman and R. S. Spiers by written contract dated January 2, 1928. The ¡price of the sale was $7 per M, to be paid as the timber was cut and removed. The contract provided that Holliman & Spiers were to deliver all the lumber manufactured from the timber on said land to pie Colonial Creosoting Company, Inc., in Bogalusa, and the creosoting company was to hold out $7 per M for all the lumber shipped off the land and pay same to the plaintiffs, except as provided for in a clause, which reads as follows:

“Should the parties of the second part, at a later date, desire to ship lumber to other parties other than the Colonial Creosoting Co., Inc., at Bogalusa, La., they shall have the right to do so with the understanding that all bills of lading and invoices are to be put through the City Bank & Trust Co., of Bogalusa, La., for collection. Said bank to make all collections and deduct $7.00 per M feet from each invoice to be paid to the party of the first part, the balance to go to the party of the second part.”

Th.e plaintiffs allege that C. B. Dunn and the Colonial Creosoting Company, Inc., were parties to the contract, in that they were present when it was prepared, written, and signed, and familiar with all of its clauses.

That Colonial Creosoting Company, Inc., acting through C. B. Dunn, its manager and buyer, took cognizance of the contract the day it was executed and wrote plaintiffs agreeing to hold out $7 per M feet for all lumber delivered, to make settlement every two weeks and to furnish statement when each payment was made for all lumber delivered.

That Holliman & Spiers went on the land and started cutting the timber, under contract, when C. B. Dunn and Colonial Creosoting Company, Inc., through its officers and agents, acting in conspiracy with said Holliman and without the knowledge or consent of petitioner, bought out the interest of Spiers in the contract; paying him $500 in cash therefor, advanced by the creosoting company.

That the Colonial Creosoting Company, Inc., through its officers and agents and the said Dunn and Holliman, then entered into a conspiracy to cut the timber in question and ship it out in a way different from that contemplated and agreed on in said contract, and did, in conspiracy with each other, cut said timber, manufactured it into lumber, and caused it to be shipped out and sold to various parties putting the invoices for same through the Washington Bank & Trust Company instead of the City Bank & Trust Company, as required by the contract, and did not pay petitioners the $7 per M stumpage as provided for in said contract, thereby defrauding them of the stumpage.

The plaintiffs further aver that the defendants were all engaged in the sawmill business, and as such, were commercial partners and liable in solido for the amount due them on said account.

The defendants Holliman & Spiers and C. H. Holliman and R. S. Spiers answered personally, admitting all the important facts alleged in the petition of the plaintiffs. Spiers admits that during the month of August, 1928, he sold out his interest in the contract to C. B. Dunn for $500, receiving check of Colonial Creosoting Company, Inc., in payment. He further avers in his answer that Dunn took over and assumed his interest in the contract following the sale, and that thereafter he had nothing to do with the manufacture and sale of said lumber.

C. B. Dunn and Colonial Creosoting Company, Inc., appeared and excepted to plaintiff’s demand on the ground that it was vague and inconsistent and set forth no right or cause of action. They also moved that plaintiffs be required to elect whether they are attempting to hold defendants as partners in the firm of Holliman & Spiers, or as tort-feasors, by reason of the conspiracy in which they were alleged to have entered. The minutes of the lower court were not questioned in the lower court, and they do not show that the court ruled on any of these motions or exceptions. Appellants argue them in their brief, but their arguments cannot be considered, because there are no rulings on the subject to review. The plaintiffs, however, amended their petition following same, and allege in the amendment that defendants are all liable in solido as partners, and, if not as partners, then as conspirators in a conspiracy entered into for the purpose of defrauding petitioners, and whereby they were damaged, injured, and defrauded in the way and to the extent stated. This amendment and alternative prayer for judgment was allowed . without objection. Dunn and Colonial Creosoting Company, Inc., then answered separately. Colonial Creosoting Company, Inc., admits writing to plaintiffs as alleged in article 7 of their petition. Alleges that it did not know that Dunn had bought out the interest of Spiers in the contract with plaintiffs, and taken his place as a partner in the contract with Holliman. That it had been informed and believed that he had not done so, but that, if he did buy him out, it was done in his individual capacity and not as an agent or employee of this defendant. That it knew nothing about such a purchase and had nothing to do with it. That it does not know how much timber was cut by Holliman & Spiers from plaintiff’s land. That it has paid plaintiffs for air lumber received by it from said land. .The .conspiracy alleged against it is denied.

Dunn, in his answer, denied that he had bought out the interest of. Spiers in the .contract with petitioners. His answer is in all other respects similar to that of Colonial Creosoting Company, Inc.

The court rendered judgment in favor of the plaintiffs and against; all’the’defendants in solido-for $1,97-5, - ■■ ■„ -

Colonial Creosoting Company, Inc., and C. B. Dunn appealed.

On June 2, 1928, the day the contract was signed, Colonial Creosoting Company, Inc., wrote plaintiffs as follows:

“Bogalusa, La., June 2nd, 1928.
“Mr. J. H. Cassidy,
“Mr. D. E. Sheridan,
“Gentlemen: I have read over the contract made this day between yourselves and Mr. C. H. Holliman and R. S. Spiers, in reference to the purchase o.f a certain lot of timber located on the following described property: (Description not copied)
“According to the contract this lumber is to be shipped ' to the Colonial Creosoting Company and we are to hold out $7.00 per thousand feet for all lumber delivered to us. — This we agree to do and make settlement with you every two weeks. We will also furnish statement when each payment is made for all lumber that is delivered to us by the above named parties.
“Yours very truly,
“Colonial Creosoting Co.
“C. B. Dunn, buyer.”

Mr. Dunn had signed the contract between Cassidy and Sheridan on one side, and Holliman & Spiers on the other, as a witness. He was therefore already familiar with all its provisions. In this letter he says that he had read over the contract. Dunn thereby bound Colonial Creosoting Company to hold out $7 per M of the lumber delivered to it under the contract and pay it to the plaintiffs every two weeks, and to furnish statement with each payment, showing all lumber delivered. Dunn’s authority to do this is not questioned by Colonial Creosoting Company. In its answer the authoritative force of this letter Is conceded. ' It did purchase and ship most of the lumber that had been manufactured from the. timber cut from plaintiffs’ land.

' The averment in the answer of Colonial Creosoting Company, Inc.-, that it had been informed and believed that Dunn did not buy out the interest of Spiers in the contract with the petitioners, but that, if he did, it was done in his individual capacity and not as an agent or employee of Colonial Creosoting Company, Inc., and that it knew nothing about the purchase and had nothing to do with it, seems to be completely disproved. The subject-matter, due to its environment and to the fact that Dunn was the manager and only local agent of Colonial Creosoting Company, Inc., was peculiarly within their knowledge and should have been cleared up by them. But the fact is evident that one of them did it and acted as a partner with Holliman. Both Holliman and Spiers testify that one or the other of them did it and became a silent partner with Holliman, Dunn requesting that it be not known that he had done so. It appears in various ways. Spiers testifies that it took place in August, 1928, and identified a check for $550 dated August 18, 1928, signed, ‘“Colonial Creosoting Co., Inc.,” by C. B. Dunn, payable to Holliman & Spiers, the proceeds of which he received for his interest. Mr. Dunn sought to explain this check differently, but his explanation is unconvincing.

The evidence indicates that Spiers, after this date, took no further part in the cutting, manufacturing, and delivery of the lumber, but, pursuant to a conspiracy, allowed his name to be used as if no change had taken place. Checks were drawn after the sale payable to Holliman & Spiers, just as if Holliman & Spiers were carrying on the contract. The purpose of this was concealment, and it supports the statement of Holliman and Spiers that the fact was to be kept concealed. The evidence shows ‘that about this time Dunn became a weekly visitor to the sawmill engaged in cutting the timber on plaintiffs’ land. He was sometimes there oftener than once a week; and, in the absence of Holliman, gave orders to the sawyer as to the lumber that was to be manufactured. He became to a large extent the manager of the business.

The fact is further supported by a written agreement entered into between Holliman and Colonial Creosoting Company, Inc., the latter acting through Mr. Dunn, of date October 13, 1928. Prom the terms of this contract one might suppose Mr. Holliman to be the sole proprietor of the sawmill engaged in cutting the timber on plaintiffs’ land, and to have been the sole party contracting with them in the contract of June 2, 1928.

Mr. Holliman in terms borrows from Colonial Creosoting Co. $1,000 to pay operating expenses of the mill and to pay stump-age due Cassidy and Sheridan for timber purchased from them, and obligates him'self to deliver to Colonial Creosoting Company all the lumber manufactured from said timber as security for the amount advanced him for said purposes. This contract is consistent with the purchase exposed by Holliman & Spiers, and inconsistent with any other situation.

We are satisfied that Spiers sold his interest in the contract with plaintiffs to either Dunn or Colonial Creosoting Company. Mr. Dunn appears as the sole officer of Colonial Creosoting Company in the management of its local business, and ■acted for it as he saw proper. There is some reference in his testimony about personal acts; but the evidence indicates that he acted throughout as manager of Colonial Creosoting Company.

The evidence shows that Holliman, Dunn, and Colonial Creosoting Company, Inc., all 'acting together, the latter through Dunn, Shipped and sold 74,246 feet of lumber to a party in New Orleans, and 37,961 feet to another in Jackson, Miss., and, while there is claim that some of the timber which went into these shipments did not come from plaintiffs’ land, about 75,000 feet of it did, and the invoices for same were all put through Washington Bank & Trust Company, instead of the City Bank & Trust Company. They all knew that ■plaintiffs were entitled to $7 per M stump-age on same, but plaintiffs were not .credited with any stumpage on these shipments amounting to upwards of one hundred thousand feet. Mr. Dunn, questioned about these shipments, could not deny it, but tried to explain that he had acted in the matter at the request of and for the benefit of Mr. Holliman, but the proceeds of the lumber was credited by Washington Bank & Trust Company entirely to Dunn. He drew it out of the bank and turned over $1,224.25 of it to Holliman, but kept the balance, an amount which the evidence indicates was as large. But whether the sum retained was for his own benefit or that of Colonial Creosoting Company, Inc., the evidence does not show.

The evidence further shows that several thousand feet of lumber manufactured from timber cut on plaintiffs’ land was also sold to different parties in the neighborhood of the 'mill. Mr. Dunn knew it had been done, yet no credit was given plaintiffs for the stumpage.

The evidence shows that Dunn, Colonial Creosoting Company, and Holliman were taking timber from several tracts of land at the same time. The testimony of Mr. Dunn and of other witnesses as to how the amount of lumber delivered to Colonial Creosoting Company, Inc., that had been manufactured from timber cut on plaintiffs’ land, was kept account of indicates that proper care to do so was not taken. Mr. Dunn says that the checker on Colonial Creosoting Company yard would ask the truck driver, who brought loads, whose land the lumber came from. That the checker would'take the name and give credit to the proper party. Such a method made it easy to make, but difficult to rectify, a mistake and get the true amount.

Returning to the partnership between Holliman & Spiers, the evidence indicates with reasonable certainty that Spiers ceased to be a partner with Holliman on August 18, 1929, and after which time either Dunn or Colonial Creosoting Company, Inc., acting through him, one or both acted as partners with Holliman in operating the mill; but the fact was kept from being known to any, except those participating in the arrangement. But a partnership does not exist, except when created by an agreement. These parties may not have been partners in a legal sense, but the proper deduction and inference from all the evidence on the subject justifies the conclusion that Holliman, Spiers, Dunn, and Colonial Creosoting Company, Inc., were parties to a conspiracy whose object was to cut the timber from plaintiffs' land under the contract which • had been entered into between plaintiffs and Holliman & Spiers on June 2, 1928, and dispose of the lumber and to not pay plaintiffs the $7 per M stumpage which the contract provided for.

“The evidence in proof of conspiracy will generally, from the nature of the case, be circumstantial. Though the common design is the essence of the charge, it is not necessary to prove that the defendants came together and actually agreed in terms to have that design, and to pursue it by common means. If it be proved that the defendants pursued, by their acts, the same object, often by the same means, one performing one part and another, another part of the same, so as to complete 1 it, with a view to the attainment of the same object, the jury will be justified in the conclusion that they were engaged in a conspiracy to effect that object.” Green-leaf on Evidence (12th Ed.) vol. 3, sec. 93, p. 81.

And it is the same in proof of fraud:

“While fraud is never to be presumed, courts of justice recognize the cunning concealments in which it shrouds its devious practices and the difficulty of tracing it by direct proof. Hence they are warranted in giving due weight to all circumstances indicating its existence, and when such circumstances and the reasonable inferences, deductions and conclusions to be drawn from proven facts are of a character to force conviction on the mind, they' are justified in finding fraud.” Johnson vs. Mayer, 30 La. Ann. 1203; Grossman’s Sons vs. Chachere, 136 La. 672, 67 So. 545.

Spiers was a party to the conspiracy to defraud, because he permitted the drawing of checks to Holliman & Spiers after he had sold and received payment for his interest, for the purpose of keeping the fact. from the plaintiffs, to the end that Holliman and Dunn and Colonial Creosoting Company, Inc., might proceed under the contract as if no change had taken place, all the time being aware that the stumpage contract with plaintiffs was not being carried out.

It is ■ contended in behalf of Colonial Creosoting Company, Inc., that a corporation cannot be made, by its agent, a party to a conspiracy for the purpose of injuring and defrauding another, but this is a mistake. The purchase of lumber was the business in which Colonial Creosoting Company, Inc., was engaged. And the rule is that a corporation can be made a party to a conspiracy by its agent and manager just as fully as if it had been a natural person, provided the agent, in doing the act, is in the exercise of the functions in which he is employed.- Civil Code, arts. 2320 and 2324. Rabassa vs. Orleans Navigation Co., 5 La. 461, 25 Am. Dec. 200; Williams vs. Pullman Palace Car Co., 40 La. Ann. 87, 3 So. 631, 8 Am. St. Rep. 512; Bluefields S. S. Co. vs. Lala Ferreras Cangelosi S. S. Co., 133 La. 424, 63 So. 96.

Prom Ruling Case Law, vol. 7, subject Corporations, sec. 683, pp. 682 and 683, we quote as follows:

“At the present time it is universally recognized that ordinary private corporations may commit almost every kind of a tort and be held liable therefor, and this liability may be enforced in the same manner as if the wrong complained of had been committed- by an individual.”'

Same section:

“Of course the individual by whom the tortious act is committed cannot, himself, escape liability on the ground that he was acting for the corporation. Such individual and the corporation are jointly liable and may be joined as defendants.”

Then again, in section 687:

“A corporation may be held liable in an action of tort for fraud and deceit.” And “in its relations to the public it is represented by its officers and agents, and their fraud in the corporate course of dealing is in law, the fraud of the corporation.”

Prom Marshall on Private Corporations we take the following:

“On the contrary, it is well settled that a corporation may exceed the powers conferred upon it by its charter, and like a natural person, do wrong, and it may therefore be guilty of a tort. And the general rule is that a corporation is liable ‘for 4he tortious acts and omissions of its officers and agents, to the same extent as a natural person would be under like circumstances.” Chapter 7, sec. 104, p. 308.

--'-*Again:-

“An act done by an officer or agent of a corporation as such, and in the course of his employment, is in contemplation of law the act of the corporation, and the act is thus held to he the act of the corporation the intent with which it has been done may also be imputed to it.
“It is now well settled therefore, both in England and in this country, that fraud or deceit on the part of an officer or agent of a corporation in transactions which are within the scope of his authority, is imputable to the corporation, not only for the purpose of avoiding contracts and other transactions as against the corporation, but also for the purpose of an action of deceit against the corporation.” Section 105, p. 310.

The lower court properly held Holliman, Spiers, Dunn, and Colonial Creosoting Company, Inc., all liable in solido. Kernan vs. Humble, 51 La. Ann. 389, 25 So. 431.

The 198,832 feet of timber turned in by Colonial Creosoting Company, Inc., as the total amount cut from plaintiffs’ land, and on which it has paid stumpage, and, in addition, 2,183 linear feet of piling, cannot be accepted as correct under the facts of this case. The only way to arrive at the amount of loss sustained by the plaintiff is to take the estimate made of the timber on plaintiffs’ land, the lowest of which was 600,000 feet, all of which was to be cut and manufactured into' lumber and sold and stumpage deducted.

The contract contains the following clause:

“The parties of the first part are making a cash payment of $500.00 this day, the receipt of which is hereby acknowledged and it is understood that this $500.00 shall be held as a bonus or earnest money until the final completion of this contract, and it is also understood that the parties of the second part shall get credit for same on the last 100,000 feet of lumber they ship. In other words the basis of the contract is $7.00 per M for the total amount of pine lumber taken off of the above described lands.”

With reference to the above stipulation, the evidence shows that there remained, standing on the ground, logs cut and left in the woods, logs hauled to and left at the mill, lumber sawed from logs cut from plaintiffs’ land and stacked at the mill, altogether in excess of 100,000 feet at the time defendants ceased operations under the contract.

Defendants were responsible for this timber and same will be charged against the $500 which was paid in cash at the time the contract was signed and the return of which was provided for, as above stated.

Defendant Colonial Creosoting Company, Inc., accounted to and paid the plaintiffs for. less than 200,000 feet. There remains due the plaintiff under these figures a stumpage of 300,000 feet, and therefore justifies the amount which they were condemned to pay by the judgment appealed from.

The judgment appealed from is in our opinion correct. Judgment affirmed. All defendants to pay all the costs in the lower court. Appellants the cost of appeal.

LECHE, J., not participating.


source: Caselaw Access Project

author: MOUTON, J.

license: Public Domain

text:
    No. 650
    First Circuit
    STANDARD OIL CO. OF LA. v. BARTON
    (June 9, 1930. Opinion and Decree.)

      Gilbert & Gianelloni, of Napoleonville, attorneys for plaintiff, appellee.
    A. L. Talbot, of Napoleonville, attorney for defendant, appellant.
   MOUTON, J.

This is a suit on an open account which amounts to a total of $430.18.

Plaintiff alleges that defendant paid $238.-20 November 5, 1923, and on August 11, 1924, $25.63, a total of $263.83, leaving a balance due of $166.65, for the recovery of which this suit was brought.

Defendant admits the correctness of the credits carried on the account, but denies liability for the balance claimed. In connection with this denial defendant alleges that he is entitled to another credit of $179.55, which he avers overpays the account, leaving a credit against plaintiff in his favor amounting to $13.20, which he claims in reconvention.

Judgment was rendered for plaintiff as prayed for, denying the reconventional demand.

The sole question presented is one of fact. Henry Burgard, district supervisor of plaintiff company, says that he found at the oil station receipts for deliveries of oil to defendant, which represented the sale of 100 gallons of oil at eighteen cents, 300 gallons Polarine, $159, and 25 pounds Polarine cup grease, $2.55, totaling $179.55. An account comprising these items was made up on June 18, 1924, and was presented to defendant for payment by Burgard, and John Gazzo, local agent of the company, who had made these sales.

Burgard says lie exhibited those receipts to defendant, also the slips, which represented the sales of oil to defendant, who gave him a check of $179.55 to cover the amount. In that respect he is corroborated by Gazzo.

It was shown that these slips which are usually issued in duplicates, one for the company,. and one for the purchaser, were accidentally burned in a fire; their non-production being thus accounted for by the company.

Defendant claims that he thought he had paid all he owed the company with his check for $179.55 given June 19, the day the account was presented, and now claims that in fact he' has overpaid his debt by the sum of $13.20, claimed by him in re-convention.

The preponderance of the evidence shows that for some time before these sales for $179.55 had been made to defendant, the company had put him on a cash basis, not being desirous to allow him any more sales of its goods on credit. It also appears that the company had sent him statements, prior to his giving the check mentioned, showing that he owed a balance of $166.65, claimed on the account which carried items since October, 1923, antedating the date of the check by some eight or nine months. It is true that the items for which the company received the check for $179.55 did not appear ' on the old account, but this is accounted for by the fact that the sale of those items was for cash, had been made by Gazzo, tbe local agent of tbe company, against tbe instructions of tbe company, were represented by slips, were not reported to the company, and therefore did not appear on its books, and constituted no part of the account transmitted monthly to defendant.

When defendant handed the check for $179.55 to Burgard, he must have known that he was owing, at that time, a balance of $166.65 of which he had notice from the statements sent him. It is further singular, under such circumstances, that he should have given a check in excess of his debt. The fact is that he admits that when he gave the check, Burgard had some slips with him, but he contents himself with saying that he does not think he looked at them before making the payment. Such conduct as that, in a business man, indicates that he knew what he was paying. When examined as a witness, defendant says he does not remember if he was ever notified by the company that he had been put on a cash basis; does not remember if he made any cash purchases from January 28, 1924, to June 18, 1924, the latter, the date of his check; does not remember if Burgard showed him any slips when he gave him the check, although he had previously said he had some slips at that time but that he had made the payment without looking at them. Not remembering is no testimony, constituting a mere blank, which compels the court to resort to the recollection of those who testify affirmatively to the facts that are determinative of the issue involved.

Burgard and Gazzo have sworn positively to these facts hereinabove referred to, and which show that the check for $179.55 did not cover the balance of $166.65 of the account for which judgment was correctly rendered against defendant.


author: WESTERFIELD, J.

text:
    No. 13,129
    Orleans
    HORTMAN-SALMEN CO., INC., v. METROPOLITAN CASUALTY INS. CO. OF N. Y.
    (April 7, 1930. Opinion and Decree.)
    (May 5, 1930. Rehearing Refused.)
    (July 2, 1930. Writ of Certiorari and Review Refused by Supreme Court.)
    Edrington & Carmouche and D. Thomas Salsiccia, of New Orleans, attorneys for plaintiff, appellee.

      John C. Hollingsworth, of New Orleans, attorney for defendant, appellant.
   WESTERFIELD, J.

Plaintiff, a materialman, brings this suit for $977.40 under the provisions of Act 298 of 1926 against the Metropolitan Casualty Insurance Company of New York, as surety on a building contract in notarial form, dated August 15, 1927, between August G. Ehrhardt as owner and Isidore St. Amant as contractor. Defendant filed an exception of non-joinder upon the ground that St. Am-ant was a necessary party, and, this exception being overruled, answered, admitting the building contract sued on, but denying that St. Amant was indebted to plaintiff in any sum, alleging in substance that St. Amant, whose name appeared in the contract, was in reality a party interposed for plaintiff, referring to a certain contract alleged to have been entered into between plaintiff and St. Amant 'under date of July 13, 1927, the purport of which was alleged to be “the carrying on under said contract, thereafter, the construction of said building in the name of the individual contractor, but actually by plaintiff, and plaintiff to stand all loss and damage arising from said construction and the contractor or any one interested with said contractor, to be held free and harmless from any loss and damage, including liens and claimed privileges thereunder.”

On the trial of the case plaintiff sought to introduce this contract in evidence. An objection of irrelevancy was sustained and the contract excluded. The trial then proceeded, the evidence taking a very wide and, according to our view, unwarranted scope, with the result t¡hat judgment was finally rendered in plaintiff’s favor, as prayed for.

The exception of non-joinder was properly overruled. Plaintiff was under no obligation to join the contractor in the suit, for, under the express terms of Act 298 of 1926, it was privileged to sue the surety alone.

With reference to the ruling of the court excluding the contract of July 13th, it is difficult to see how anything in that agreement can affect the issues in this case. A copy of tbe contract is in the record, and it is plainly not admissible. It is called a “membership franchise.” The Hortman-Salmen Company, Inc., a dealer in building supplies, with the idea of increasing their sales, persuaded a number of contractors, among them Isidore St. Amant, to obtain a membership franchise in their “Service Plan Department.” This so-called franchise requires the contractor, in return for certain services supplied by the Horf;man-Salmen Company, Inc., such as the use of expert draftsmen in preparing plans and of competent estimators in preparing estimates of buildings, to agree to patronize the Hortman-Salmen Company, Inc., in the purchase of building materials handled by that company. We are of opinion that the contract was properly excluded from consideration by the trial court.

The evidence shows that the contractor, St. Amant, failed to pay plaintiff for certain materials which entered into the construction of the building erected under the building contract, upon which defendant was surety, and that the value of these materials amounted to the sum claimed in its petition. Much of the record and of counsel’s brief is taken up with a discussion of improper imputation of payments by plaintiff. St. Amant, a contractor of some experience, was, at the time the Ehrhardt building was under construction, engaged in the execution of a number of other building contracts. The building materials required in his several undertakings were purchased from the plaintiff and certain payments were made by him. The argument is that these payments, particularly a certain check for $700, were not properly applied by plaintiff, part of it only being attributed to the account representing materials sold and used on the Ehrhardt job, whereas it is claimed that the whole amount should be so applied. This defense is involved in much detail, and is difficult to follow; a difficulty, however, which we need not solve, since the issue to which it is responsive was not raised in the pleadings, and the administration of proof to that effect .timely objected to on the trial of the case.

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


author: WESTERFIELD, J. JANVIER, J.

text:
    No. 11,826
    Orleans
    ALEX F. DREYFUS CO., INC., v. BREEN
    (February 17, 1930. Opinion and Decree.)
    (March 10, 1930. Rehearing Refused.)
    (April 1, 1930. Writ of Certiorari and Review Granted by Supreme Court.)
    (July 2, 1930. Opinion and Decree Reversed in Supreme Court.)
    . Alfred D. Danziger, of New Orleans, attorney for plaintiff, appellee.
    David Sessler, of New Orleans, (Charles J. Rivet, of counsel), attorney for defendant, appellant.
   WESTERFIELD, J.

The plaintiff firm is engaged in' business' as a real estate agent. It brings this suit against the defendant for a commission in the sum of $1,200 and attorneys’ fees, alleging that on March 28, 1926, defendant entered into a written contract, employing plaintiff as an exclusive agent for a period of 30 days to sell or exchange the property of defendant No. 1037 Broadway street, for the sum of $32,-000 cash, or for any other price agreed upon, and to pay a commission of 4 per cent on the price of the sale made during the life of the contract, or the gross amount of any agreement made within 45 days after the expiration of the term of the contract with any one to whom the property had been quoted during the 30-day term of the contract; that Mrs. Breen, the defendant, on April 30, 1926, within 45 days after the expiration of the contract, accepted an offer of one Hochfelder with whom plaintiff’s salesman had been in negotiation during the term of the contract, to exchange the property for certain real estate owned by Hochfelder on terms mutually agreeable, and involving a valuation of defendant’s property on a basis of $30,000.

Answering plaintiff’s petition, Mrs. Breen admitted the execution of the contract set up in plaintiff’s petition, and also admitted the execution of an agreement to exchange her property for the property of Mr. Hochfelder as alleged. Further answering, she averred that her signature to her contract with plaintiff had been obtained by fraud and misrepresentation, and, in the alternative, averred that the contract between plaintiff and herself expired • within 30 days, or on April 27, 1926, several days prior to the agreement she entered into with Hochfelder. She denied all liability in the premises.

There was judgment below in favor of plaintiff, and defendant has appealed.

The contract sued on is a printed form, With certain parts interlined with ink in handwriting. It reads as follows:

“Standard Exclusive Agency Contract
“New Orleans Real Estate Agents Association
“March 28th 1926
“Alex F. Dreyfus Company,' Inc. (Agent)
“Dear Sir:—
“In consideration of your efforts to find a buyer for the property 1087 Broadway Cor. Zimple, ground measuring 1/2x120 in square of Freret & Audubon, I employ you or your successors, exclusively, to sell same for $82,000. Thirty-two thousand and- 00/ 100 cash, or on the following terms as cash, or for any other price, or terms hereafter agreed upon, and I agree to pay you or your successors, a commission- at the regular rate of 4%, as fixed by the New Orleans Real Estate Agents’ Association, on the gross amount of any agreement to sell or exchange bearing on said property (minimum commission to be $-) made dm> ing the existence of this contract, or on the gross amount of any such agreement made within forty-five days after the expiration or termination of this contract with anyone to whom said property has been quoted, during the term of this contract.
“I give you exclusive authority, to accept a non-interest bearing deposit of ten per cent of the sale price, when satisfactory offer to purchase said property is made, and to place said deposit in any bank you may select, without responsibility on your part in case of failure or suspension of said bank pending settlement with me, out of which deposit you may deduct your commission as above. , In case of employment of counsel to enforce this contract, I will pay twenty-five per cent additional as attorney’s fees, also all costs.
“As you are to act upon the fact of this employment and contract, it is to remain in full force and effect for a period of SO days.
“I agree to refer all applicants to you, and not to interfere in the sale of said property, during the term of this contract.
“Owners’ signature Anna Breen
“Address 1%06 St. Charles Ave.
“Listed By R. C. P.
“Expiration Date April 27, 1926.
“I accept the above employment.
“Agent’s Signature Alex .Dreyfus Go. Inc.
‘‘Reg. No. By Alex Dreyfus, Pres.”

(Handwritten provisions italicized.)

Pretermitting any discussion of the question of fraud, we will first notice defendant’s contention to the effect that this contract evidenced only an intention to confer a mandate upon plaintiff for a period of 30 days, authorizing it to sell her property for $32,000 cash. It is argued that, in contracts partially printed and partially written by hand, the handwritten portions, when in conflict with the printed provisions, must prevail. Hagan vs. Scottish Union & National Insurance Company, 186 U. S. 423, 22 S. Ct. 862, 864, 46 L. Ed. 1229. Therefore, it is said that the words “all cash” following the printed word “cash” and the words and figures in ink ■‘thirty days (.30),” emphasize the intention of the parties to create a contract of agency whereby plaintiff was exclusively authorized for 30 days only to sell defendant’s property for cash and not otherwise. These provisions in ink are said to be in conflict with the printed words “sell or exchange” and with the 45-day clause which also appears in print.

The term of the contract may be said to consist of two periods, one of -30 days and one of 45 days. It is not pretended that a cash buyer was obtained or that an exchange was effected during the 30-day period; hence we are not concerned with the alleged inconsistency of any provision of the contract relating to this feature of it.

As to the 45-day period defendant’s liability is made to rest upon her contracting with a prospect with whom plaintiff had been negotiating during the 30-day period. The only conflict that is claimed is an inconsistency with the ink-written term of 30 days, which, it is claimed, terminates all contractual relation between the parties. But as to this we believe the reasonable interpretation to be that the 30-day period was allowed plaintiff to consummate, his efforts to dispose of the property, and the 45-day period was intended only to prevent, the defendant from availing herself of an opportunity which plaintiff had discovered but not developed without compensating the plaintiff for his efforts. We find no inconsistency in these provisions.

Viewing the contract as a whole, and giving due effect to all of its provisions, it is plain that defendant’s liability must depend upon the effect which must be given her action in agreeing with Hochfelder to exchange the property within the 45-day period. If we had been called upon to decide this issue a year or so ago, our conclusion might have been different, for in a similar case involving a similar contract we held that an agent was entitled to his commission, but, when our opinion was reviewed by the Supreme Court, it was pronounced erroneous. The case to which we refer is that of Clesi vs. Cooney, 164 La. 658, 114 So. 584, 585. In that case the plaintiff, Clesi, a real estate agent, sued for a commission alleging that the defendant, Cooney, had given him an exclusive contract for 30 days to- sell certain property owned by Cooney for $60,000 or any other amount agreed upon — terms, all cash; that in said contract it was stipulated that, if plaintiff found a buyer, or proved instrumental in finding one, or if the property was sold by Cooney or any other person during the term of the contract, a commission of 3 per cent on the purchase price was to be paid plaintiff, “the amount being earned and payable when agreement to purchase is signed.” It was further alleged that during the term of the contract Cooney had been informed that plaintiff could sell the property for $55,500, but that Cooney declined to accept that amount; that, within 9 days after the signing of the exclusive contract of agency, the defendant, Cooney, entered into a contract agreeing to sell the property to a party by the name of Ferrara for the sum of $54,000. Cooney answered, admitting the contract, and also admitting that during its term he had agreed to sell the property to Ferrara for $54,000, of which $20,000 was to be paid in cash, and the balance on terms, and justified his refusal to pay the commission on the ground that his agreement with Fei’rara did not interfere with the execution of plaintiff’s contract to sell the property for $60,000 cash, which the plaintiff had failed to do.

The plaintiff filed a rule for judgment on the face of the pleadings which, after hearing, was made absolute, and judgment rendered in plaintiff’s favor as prayed for, which, on appeal to this court, was affirmed. Clesi vs. Cooney, 7 La. App. 182.

In reversing the district court and this court, the Supreme Court held that the mere fact that Cooney had agreed to sell the property during the life of his contract with Clesi did not render him liable for a commission, because his liability depended upon whether such action interfered with the performance of the contract, whereby Clesi for 30 days was exclusively authorized to sell the property for $60,000 cash.

With the light of the Clesi case before us, it must be held that the liability of the defendant in this case can only arise if it should appear that the action of the defendant was prejudicial to whatever efforts plaintiff may have made to execute his contract. In that aspect it must be conceded that, although Mrs. Breen contracted with Hochfelder, to whom an agent of plaintiff had spoken concerning Mrs. Breen’s property, she did not contract to sell or exchange for cash nor for $32,000, but for $30,000, .a fact which plaintiff recognized, for commission is claimed upon $30,000 and not upon $32,000.

It is true, as contended by counsel, that in the Cooney ease, unlike the' present case, the contract considered did not have a 45-day clause, nor was there any provision obligating the owner to refer all applicants to the agent, but this distinction is unimportant, because in the Cooney case the commission was due when a contract for purchase was entered into, but was disallowed because the provisions of the contract entered into by the owner were different from those under which the agent was authorized to sell, and in this case defendant agreed to pay a commission “upon the gross amount of any agreement to sell or exchange made within 45 days * * * with any one to whom said property had been quoted,” but the commission must be disallowed because the contract negotiated by the defendant here was different from that which the agent had undertaken to consummate. A reading of the opinion in the Cooney case plainly indicates that an agreement to sell the property without the interposition of the agent during the term of the exclusive contract of agency was not sufficient to render the owner liable for the commission, if the contract independently negotiated did not interfere with the agent in the performance of his agreement, and was upon terms and conditions different from those under which he had undertaken to dispose of the property. Our understanding of defendant’s obligation under the 45-day clause, in view of the Cooney case, is that she agreed to pay a commission if she made an agreement with a prospect of plaintiff during this period upon the terms which she authorized plaintiff to dispose of her property, and not otherwise.

We can find no distinction in principle between the case at bar and • the Cooney case; consequently, whatever opinion we may have held in the past must be subordinated to the view expressed by the Supreme Court.

For the reasons assigned, the judgment appealed from is annulled, avoided, and reversed, and it is now ordered that there be judgment in defendant’s favor, dismissing plaintiff’s demand.

JANVIER, J.

(dissenting). Although my associates came to the conclusion that the provision written into the contract that it should be limited to 30 days was not necessarily .inconsistent with the provision that the agent would be entitled to a commission on any deal made, during the second, or 45-day period, with any person with whom, during the 30-day period, the agent had been in negotiation they did not discuss the question of whether the written words “all cash” were necessarily inconsistent with the further stipulation for a commission “on the gross amount of any agreement to sell or exchange bearing on the property.”

I cannot understand their statement that “it is not pretended that a cash buyer was obtained, or that an exchange was effected during the thirty-day period, hence we are not concerned with the alleged inconsistency of any provision of the contract relating to this feature of it.” The reason I cannot understand the above language is that the entire case is based on the charge that the owner, during the second, or 45-day period, made a trade on an exchange basis with a person with whom the agent, during the first, or 30-day period, had been in negotiation looking to an exchange of the same properties which were concerned in the trade which the owner herself later made.

I think that it is absolutely essential to a decision of this case that a conclusion be reached as to whether or not the words “all cash” are necessarily inconsistent with the provision that a commission will be earned on an exchange satisfactorily negotiated by the agent.

I readily concede that, where a document contains both printed and written clauses, and where the written ones are necessarily inconsistent with those printed, the written ones must be accepted as expressing the true intention of the parties. Hagan vs. Scottish Union, etc., 186 U. S. 423, 22 S. Ct. 862, 864, 46 L. Ed. 1229. But I assume, on the other hand, that it will be as readily conceded that, if such a contract is susceptible of two interpretations, one of which will give effect to both sets of clauses, and the other of which requires the elimination of the printed clauses, that interpretation which gives effect to both sets, or, in other words, to the whole document, will be accepted, instead of the other, which requires the elimination of the printed portions as being inconsistent with those that are written.

“A construction which entirely neutralizes one provision of a written instrument should not be adopted if the contract is susceptible of another, which gives effect to all of the provisions.” Glassell vs. Richardson Oil Company, 150 La. 999, 91 So. 431, 434. See, also, Board of Trustees vs. Campbell, 48 La. Ann. 1543, 21 So. 184; Lozes vs. Segura Sugar Co., 52 La. Ann. 1844, 28 So. 249; Whited & Wheless vs. Calhoun, 122 La. 100, 47 So. 415.

If, then, the contract in question may, with reason, be interpreted so as to give effect to all the provisions, both the written and the printed, then that interpretation should be accepted.

Let us examine the clauses which are said to be inconsistent. In the blank sueceeding the printed words “or on the following terms” are written the words “all cash.” Following this we find a printed provision containing, among others, the stipulation for a commission “on the gross amount of any agreement to sell or exchange hearing on the property.”

It is said that the written words “all cash” are necessarily inconsistent with the stipulation permitting the agent to negotiate for an exchange. I do not agree with this view, and on this point my associates express no opinion. The words “all cash” can be and are often used to mean “not on terms,” “not on partial credit.” An exchange is equivalent to cash up to the value of the lower priced of the two properties concerned, and, if the balance is paid in cash, the whole transaction may be said to be a cash one, in the sense that none of the purchase price is paid in mortgage notes or on other credit. If A’s house is worth $5,000 and B’s is worth $10,000, and an exchange is made in which A gives B $5,000 in cash, it may be said that the transaction was made for cash, in the sense that no credit was involved. Therefore, since those provisions of the contract are not necessarily inconsistent, I believe that the document should be construed as having given to the agent authority to negotiate either for the sale or for the exchange of the property, provided only that the negotiation should not contemplate the granting of credit to the purchaser.

It might be important to note on this point that, in the exchange which was finally made, the present defendant, the owner of the property in question, took over a much more valuable piece of property, and therefore the question of her accepting a mortgage or granting credit was in no way involved.

It is also said that the written words “thirty days” in the blank following the printed words “as you are to act upon the faith of this employment and contract, it is to remain in full force and effect for a period of -” are necessarily repugnant to the stipulation that a commission will be paid to the agent if a deal is closed either during the 30-day period, or “within 45 days after the expiration or termination of this contract, with anyone to whom said property has been quoted, during the term of this contract.”

Here I again cannot agree with defendant, and here I am in accord with the views of my associates. The contract itself exists for 30 days, and, after that term, the agent is no longer authorized to initiate negotiations, but the said period of 45 days is given him so that he may close a trade already in the making, and so that the owner, just prior to the end of the first 30-day period, knowing of an interested prospect, may not delay until after the expiration of that period, and thus avoid paying the commission of the agent. The fact is, as I understood the argument of counsel for the defendant, that he does not seriously contend that this 45-day period, granted for the closing of a contract, should be written out of the document, but bases his contention almost entirely on the argument that the agent had no authority, at any time, to negotiate for an exchange, and that therefore, even if he did initiate such negotiations, the carrying over into the second, or 45-day, period of these negotiations, can be of no benefit to the agent.

Since full effect may be given to all the stipulations of the contract, it follows that under its terms the agent was authorized, during its existence, to negotiate for an exchange of the owner’s property. It is not denied that, during the 30-day period, the agent did so negotiate with Mr. Hochfelder, and it is admitted that, within a day or so after the termination of the first, or 30-day, period, the owner closed negotiations with Hochfelder for an exchange of the property.

In my opinion, the owner (defendant here) owes the commission for two reasons: First, because within the second, or 45-day, period, she closed a contract of exchange with a person with whom the agent had been in negotiation during the first, or 30-day, period; and, second, because she violated the provision of that portion of the contract under which she agreed that she would refer all applicants to the agent.

In regard to this second reason, it may be well to mention that, when she spoke to Hochfelder’s agent the first time, it was prior to the expiration of the 30-day period, and she did not, as she should have done, refer the matter to her agent, but, on the contrary, told Hochfelder’s agent to wait a few days, so that her other contract might expire, after which she would trade direct. She did not wait, however, until after the second, or 45-day, period, but closed her trade only a day or so after the 30-day period had ended.

My associates are of the opinion that Clesi vs. Cooney, supra, is controlling here. I believe that I see three fundamental differences between the facts of the Clesi case and those presented in this case:

First. In the Clesi case the agent seems to have been told, in effect: “I have made a contract to sell my property direct after your contract has expired, provided you have not found a buyer in the meantime.” The Supreme Court said with reference to this second contract:

“* * * The agreement with Ferrara did not in any way interfere with the plain.tiff’s authority to sell the property for $60,000 during the terms of his contract, and that the plaintiff was informed that the agreement which defendant had made with Ferrara did not affect plaintiff’s right or authority to sell the property during the term of his contract, and thereby earn his commission.”

Second. The contract in the Clesi case did not contain a stipulation to refer all prospects or applicants to the agent.

Third. In the Clesi case, according to the above language of the Supreme Court, the contract which the owner made direct was made conditionally upon the expiration of the authority of the agent, whereas here no conditions were involved, and the contract to sell was signed prior to the expiration of the final effective date of the contract with the agent.

If the contract here did not contain the stipulation providing for the referring of all applicants to the agent, the owner could have brought herself within the protection of the doctrine of the Clesi case by telling the prospect: “Wait until after the second, or the forty-five day period has expired and I will trade with you direct,” and by advising her agent: “Mr. Hochfelder is interested in the property. See if you can close a trade with him.” Under her contract, she was obligated to do both of these things: Advise her agent of the applicants, and wait until the final expiration of the second period before trading direct with any one with whom the agent had, during the 30-day period, been in negotiation. She did neither, and, under her contract, she is liable for the commission.

I cannot agree with my associates that, where a contract authorizes an agent to sell or negotiate for a trade of a .property at a particular price, or at such other price as may be agreed upon, the owner can avoid paying the commission because the price named in the contract with the agent is not the price for which the owner finally closes the trade initiated by the agent and I do not so interpret the language of the Supreme Court in the Clesi case.

It is interesting to note that, as a result of trading direct with Hochfelder, the owner (defendant here) not only avoided payment of the commission, but, in addition, seems to have been given by the other agent a wedding present of $150. Nor can I overlook the fact that this defendant was not an inexperienced' trader in real estate, but bore an enviable reputation as a most expert trader, and must have been thoroughly familiar with the effect of the clauses in her contract.

On the question of fraud, I think the evidence falls far short of being sufficient to sustain the charges made.

The judgment of the court below was based on the verdict of a jury, and, as I think it should be affirmed, I respectfully dissent.


author: HIGGINS, J.

text:
    No. 11,921
    Orleans
    SURPLUS LUMBER CO., INC., ET AL. v. HUET BOAT WORKS, INC. (E. J. GILLAN, Receiver)
    (April 7, 1930. Opinion and Decree.)
    H. W. Robinson, of New Orleans, attorney for plaintiff, appellee.
    Louis R. Hoover, of New Orleans, attorney for E. J. Gillan.
   HIGGINS, J.

This is an appeal by the first receiver from a judgment of the district court rejecting three items which he claims were due him from the receivership estate. These items are as follows: Salary per week for services as receiver, $40; receiver’s fee, $200; $446.68 cash advanced by receiver from his personal funds to the credit of the receivership estate, less $144.-55 paid to himself, making a balance claimed to be due for cash advanced of $302.13.

The judgment of the lower court dismissed or rejected these items from the account and homologated it in all other respects.

The record shows that the appellant was appointed and qualified as receiver of the Huet Boat Works, Inc., on March 18, 1926, and was authorized hy the court to operate the business as a going concern. He failed to voluntarily file a quarterly or any other kind of account during the time he was receiver. On November 12, 1926, a rule was taken to compel him to file an account and produce his bank books in court. On June 21, 1927, another rule was taken to revoke his appointment because he absented himself for long periods of time from the business and failed to pay current bills and also to file an account and produce his books.

On July 1, 1927, without producing his books or filing an account in court he resigned as receiver. Every effort was made to compel him to file an account, but without effect until September 26, 1927, when he was charged in a rule of having improperly paid himself a salary of $40 per week and having neglected to pay to the new receiver $144.55 cash and to deliver the books and accounts of the company to the new receiver. Later on a rule was filed against him to show cause why he should not be' punished for contempt for failure to render an account and deliver the books, papers, and cash to the new receiver. On December 1, 1927, appellant, as ex-receiver, filed an account. The account showed that he had paid himself $40 per week for twenty-three weeks and claimed $200 additional for services as receiver and $446.68 for cash advanced less a credit of $144.55 cash retained by him when he resigned, or a balance of $302.13. The account was opposed by the new receiver, and the opposition was maintained as hereinabove set forth. Nearly a year after the judgment maintaining the amended account, the appellant appealed devolutively therefrom.

The record clearly shows that the appellant was in no way authorized to pay himself a salary of $40 per week and such payment was clearly illegal and against the advice of his counsel.

The second item of salary as receiver was also properly rejected because the evidence shows that the appellant as receiver received $9,762.95 of assets when he assumed charge as receiver and in less than a year the estate was $4,000 deeper in- debt than when he took charge. He absented himself from the company’s business for long periods of time, but continued to draw $40 per week from March 18, 1926, until the first week of October, 1927. He made meager and incomplete accounts and records, and at first kept a bank account, but later abandoned that, and, from the manner in which he ran the business and kept the records, it was impossible to render an accurate and complete account.

In re Sheets Lumber Co., 52 La. Ann. 1337, 27 So. 809, it was said:

“Where a receiver shows want of capacity in th.e management of property intrusted to him, and a lack of appreciation of his obligations as receiver, his claim for compensation may be rejected or reduced.”

In Standard Cotton Seed Oil Co. vs. Excelsior Refining Co., 108 La. 74, 32 So. 221, it was held:

“In insolvent estates, there must be taken into consideration, in estimating fees, the practical results achieved in the way of moneys realized for creditors, and care is always to be had not too greatly to deplete by charges the small store of funds constituting the common stock out of which all are to be paid.”

In view of the above authorities and the record, we feel that the court a qua correctly refused to recognize any claim for receiver’s fee or the unauthorized salary of $40 per week.

As to the cash advanced, it is very difficult for one to believe that a receiver who has charge of an estate would advance his personal funds to pay debts of the estate when he knew that the business was being operated at a loss of approximately $4,000, during his administration. The record shows that the only evidence as to this cash item is the appellant’s testimony, which is unsupported by any canceled checks or records which he promised to produce but never did do so. We therefore feel that the lower court was correct in dismissing this item for lack of sufficient proof.

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


text:
    No. 12,013
    Orleans
    GIANGROSSO v. BERNARD, JR., ET AL.
    (April 7, 1930. Opinion and Decree.)
    (April 21, 1930. Rehearing Refused, Pltf. Petition.)
    (May 5, 1930. Rehearing Refused, Defts. Petition.)
    (July 2, 1930. Writ of Certiorari and Review Refused by Supreme Court.)
    Theo. Cotonio and Theo. Cotonio, Jr., of New Orleans, attorneys for plaintiff, appellant.
    Prowell, McBride & Ray, of New Orleans, attorneys for defendants, appellees.
   WESTERFIELD, J.

This is a suit for damages based upon an alleged illegal seizure.

Paul Giangrosso, plaintiff herein, obtained a writ of provisional seizure against his tenant, Martin J. Straub, and seized the contents of the leased premises, subsequently obtaining a judgment for rent in the sum of $15,375.

The Loubat Glassware & Cork Company, Limited, intervened and claimed a chattel mortgage on most of the property seized, which was recognized, with the result that Giangrosso realized little or nothing. On the day that Giangrosso obtained judgment against Straub, the defendant therein Jos. Bernard, Jr., obtained a writ of fi. fa. in execution of a judgment for $149.78 which he had obtained against Straub by confession and seized the right of occupancy of the leased premises for the unexpired term of the lease which had something like four years to run. Giangrosso enjoined the seizure. The lower court maintained the injunction, and- on appeal to the Supreme Court its judgment was affirmed.* Whereupon the present suit was brought by Giangrosso against Bernard and the Lou-bat Glassware & Cork Company, Limited, in solido, claiming damages in the sum of $507, for the illegal seizure of the right of occupancy. The damages claimed are itemized as follows:

Attorneys’ fees__________________________________________ 250.00
For loss of time “by petitioner in being called upon to defend his possession” _________________________________________ 250.00
Cost. of printing briefs in the Supreme Court ________________________________________ 7.00
$507.00

The trial court rendered judgment in favor of the defendants, dismissing plaintiff’s demand, and he has appealed.

The suit is defended in this court upon the ground that plaintiff has failed to prove any damages resulting from the seizure which, it is insisted, was resorted to without any malice on the part of Bernard.

In so far as the case against the Loubat Glassware & Cork Company, Limited, is concerned, it is based upon an alleged conspiracy between it and Bernard for the purpose of seizing Giangrosso’s property, or, as stated by counsel in his brief: “The sole and only object in Bernard’s securing the confession of judgment from Straub was to seize Giangrosso’s property. Bernard was not even a creditor of Straub.” The record is barren of any evidence in support of the allegations of conspiracy, and Bernard was held to be a bona fide judgment creditor. In so far as the defendant Loubat Glassware & Cork Company, Limited, is concerned, the judgment in its favor dismissing plaintiff’s suit must be affirmed.

The action of Bernard in resorting to the seizure of the right of occupancy is said to have been in the utmost good faith and in reliance upon a decision of this court in Loyacano vs. Villere et al., 6 La. App. 37, where the right of a judgment creditor of a tenant to seize the right of occupancy under somewhat similar circumstances was upheld. The case relied on was held to be correctly decided by our Supreme Court in declining to issue a writ of certiorari. However, the lease in the Loyacano case contained certain provisions which do not appear in the Straub lease, and the cases may be said to be distinguishable. Be that as it may, however, the seizure effected by the defendant Bernard, in this case, has been held to be without justification. Bernard vs. Straub, 166 La. 204, 116 So. 852. It follows that the defendant is liable for whatever damage he may have caused plaintiff by reason of his illegal seizure. White vs. Givens, 29 La. Ann. 571; Gilkerson-Sloss Commission Co. vs. Yale, 47 La. Ann. 690, 17 So. 244; and Marine Bank & Trust Co. vs. Shaffer, 166 La. 164, 116 So. 838.

The plaintiff has failed to prove any damages other than attorneys’ fees.- He testified that he lost some time in going to court, and that his earnings amounted to from $15 to $25 per day. He also testified that he lost some rent by reason of the seizure and that he spent $7 for briefs. We know of no authority, and none has been indicated, which would permit the allowance of the cost of printing briefs, nor have we been cited to any case which would permit plaintiff to recover for the value of his time spent on the witness stand while testifying in his own behalf, even if there were any satisfactory proof as to the value of his time, which we do not find in the record.

As to attorneys’ fees we find the rule to be as stated in Marine Bank & Trust Co. vs. Shaffer, supra, that the test of the amount of fee to be allowed is the value of the property illegally seized, the damage or inconvenience which might be sustained by plaintiff by reason of the illegal seizure if it should not be terminated, and the legal knowledge, skill, and labor required to secure plaintiff in his rights. In the case before us the services of counsel consisted in the trial in the district court of the injunction suit and the preparation for trial and argument in the Supreme Court. We do not find in this case any evidence of the value of the property seized nor of the damage or inconvenience which the plaintiff sustained by reason of the illegal seizure. In the Marine Bank case, supra, where much more important interests were involved and the labor of counsel was much more arduous, a fee of $500 was allowed. We believe an allowance in this case of $200 to be proper.

For the reasons assigned the judgment appealed from is reversed in so far as it dismisses plaintiff’s suit against Jos. Bernard, Jr., and it is now ordered that there be judgment in favor of Paul Giangrosso, plaintiff herein, and against Jos. Bernard, Jr., defendant herein, in the sum of $200 with legal interest thereon from judicial demand and ’all costs.


author: JANVIER, J.

text:
    No. 13,072
    Orleans
    HORTMAN-SALMEN CO., INC., v. RAYMOND ET AL.
    (April 7, 1930. Opinion and Decree.)
    (May 19, 1930. Rehearing Refused.)
    (July 2, 1930. Writ of Certiorari and Review Refused by Supreme Court.)

      Edrington & Carmouche, of New Orleans, attorneys for plaintiff, appellant.
    Max M. Schaumburger, of New Orleans, attorney for defendants, appellees.
   JANVIER, J.

Plaintiff is a furnisher of lumber, building material, and supplies. Raymond, one of the defendants, is a contractor, and Riviere, the other defendant, is the owner of the premises No. 212 Grenadine street in Jefferson parish, on which Raymond, as contractor, did certain repair and reconstruction work during the early part of 1927.

The contract between the owner, Riviere, and the contractor, Raymond, was verbal. It was not recorded in the office of the recorder of mortgages, and no bond was required of the contractor.

Plaintiff seeks a personal judgment against the owner and a lien on the property in the sum of $831.58 aá the balance due for materials and supplies delivered for use in the work, and in the sum of $1.50, the cost of recording the lien.

Certain preliminary defenses were set up by the owner by way of exception, but these have already been abandoned and the controversy, as it is now presented to us, involves only the question whether a materialman, seeking to hold liable the owner who has made a verbal agreement with his contractor, but has neither recorded the contract nor required a bond of the contractor, must establish the fact that every item sold by him actually went into the work.

The materialman, plaintiff here, contends that all it need do is prove that the materials were such as were customarily used, and were actually delivered on the premises on the order of the contractor.

The owner, on the other hand, maintains that, as against him, the furnisher of supplies is not entitled to a personal judgment, nor to a lien on his property, except upon an affirmative showing that every item of material sold and delivered was actually used in the work.

The statute which is applicable here is Act 298 of 1926, and the portion of that statute particularly designed to govern a situation such as existed here is section 12 thereof.

That section delineates the correlative rights and liabilities of the owner, the contractor, the laborer and the furnisher of material where no contract has been entered into, or where a contract, having been entered into, has not been recorded. Under such circumstances, the section in question provides that the materialman shall be entitled to a lien provided he complies with certain formalities, and that he shall be entitled to a personal judgment against the owner.

There is no gainsaying the fact that both these rights may be brought into existence in favor of the materialman, provided he complies with the formalities. The controversy here arises over the legal question of whether proof of actual use of the materials is one of the formalities with which the materialman must comply.

There is no question in our minds that the material sued for was delivered on the premises, except that we are not satisfied that the proof sustains the claim that the extras were delivered.

It is shown to our satisfaction that some of the materials so delivered were later removed by the contractor and used by him on other jobs in which he was engaged.

In two cases involving situations exactly identical with that presented here, with the sole exception that in both those cases the contracts were recorded and bonds were required of the contractor, our Supreme Court held that, in order to hold the surety, the materialman need only show delivery. on the premises, and was not required to go further and establish that the material had actually been used in the work. Graphic Arts Bldg. Co. vs. Union Indemnity Co., 163 La. 1, 111 So. 470, 472; Haynesville Lumber Co. vs. Casey, 165 La. 1065, 116 So. 559, 560. In the Graphic Arts case we find the following:

“It is undisputed that the materials in the amount stated were ordered by the contractor and delivered by the appellant for use in the building under contract. The materials were specially manufactured for use in that building.
“It is also undisputed that approximately one-third of the materials so ordered and 'received by the contractor were not used in the building, but were otherwise disposed of by the contractor.
“The evidence does not show, however, the particular materials that were not so used.
“We merely have the general statement of the witnesses that about one-third was not used.”

In the Haynesville Lumber Company case, the court said:

“The secretary and treasurer of the plaintiff company testified that he had control of the record, and was in charge of the sales made to the contractor, Casey; that he sold the bill of materials to Casey; and that said materials were sold and delivered for use in the construction of the school building.
“He testified that the account attached to the petition showing the various invoices of lumber sold at different dates and delivered to the drivers of defendant Casey was true and correct. He saw some of the lumber go into the construction of the building, but could not say that every foot was used in the building. This fully answered the rule that the plaintiff must make his case certain. It was not required of the plaintiff to show that every plank sold and delivered to the contractor for use in the school building was actually so used.”

If those cases went no further, we would find it very easy indeed to rest a decision here on the doctrine there enunciated. But we find in both of these decisions language which we cannot overlook. For instance, in the Graphic Arts case, the court said:

“The question might be different if this was a contest between the owner and the furnisher of materials, with the latter, claiming a privilege on the building.”

In the Haynesville Lumber Company case appears the following:

“In a case of the furnisher of materials, quoad the contractor and his surety, it is not required that the furnisher of materials should follow up every load of lumber sold to the contractor and delivered to his driver for use in the construction of a building and to see that all of such lumber actually went into the construction of the building.”

Then, too, in Shreveport Mutual Bldg. Association vs. Whittington, 141 La. page 41, 74 So. 591, 593, Mr. Justice Provosty, as the organ of the court in the opinion rendered on rehearing, said:

“The mistake which the learned counsel for the surety company make is in not distinguishing between the owner, between whom and the materialman there is no contractual relation, on whose part there is no liability except that created by law against, or without, his consent, and the surety company who has voluntarily entered into a contract to pay the material-men in case the contractor does not, and has received a consideration for thus engaging itself.”

There can be no doubt that there is a vast difference between the liability of the surety who, for a consideration, has assumed contractual obligations, and the responsibility of an owner who has no contractual relations with the materialman and whose liability is fixed solely by the statute.

But we believe that, running through all the statutes: 167 of 1912, 262 of 1916, 224 of 1918, 139 of 1922, 230 of 1924 and 298 of 1926, it is the purpose of the legislators to make available to the owner a method by which he may secure full protection and to provide that, in the event of his failure to do so, his liability shall be such as he might have placed upon the surety had he availed himself of his right to require a bond of his contractor. And throughout those enactments there stands out prominently, so that he who runs may readj the desire to afford to the materialman full protection.

If, then, in the cases to which we have referred, the surety was held liable for material delivered but not used, we find it difficult to understand why the owner, who has seen fit to dispense with a surety, should not be held obligated under similar circumstances. Especially does this view seem to be warranted by the language of section 12 of the act.

Under that section, as we read it, it is not required that the material should actually go into the work, it being provided that there shall be created a privilege in favor of any person who “shall have * * * delivered material in connection with the said improvement.” Furthermore, as between two innocent parties, one of whom must suffer loss, he who could more easily have protected himself should be called upon to bear that loss.

The materialman can protect himself only by not selling the material. This is no protection at all. If he is to be required to follow every plank and every nail, and to prove that each such item of material actually went into the work, then, whenever a bill of supplies is sold, a special watchman must be employed to proceed to the work and see that each item sold actually goes into the building.

The owner, on the other hand, can obtain full protection by requiring the bond provided for by the statute.

Furthermore, the materialman must necessarily sell to hundreds of contractors, and it would be an absurdity to say that he must send a watchman to the work being conducted by each contractor to see that all material sold is actually used.

The owner, on the other hand, usually has only one job going on at a time, and it would be a much easier matter for him to check up on his contractor than it would be for the materialman to do so.

As a matter of fact, it appears in the record here that the owner not only actually knew that some of the material delivered on his premises had been removed by the contractor, but assisted in that removal.

It is true that he did not realize that he was thus assisting in perpetrating an injustice upon the materialman and that such was not his intention, .but, as the result of his actions, if his present contentions could be upheld, the materialman would be prevented from recovering for supplies actually delivered on the owner’s premises and removed therefrom with the knowledge, consent, and assistance of the owner.

The testimony of the contractor convinces us that the material sold, with the exception of the extras, was actually delivered on the premises. There is no other admissible proof that the extras were delivered and, therefore, to this extent the claim of the materialman cannot be allowed.

It is our opinion that proof of delivery on the premises is all that can be required but, if we are wrong in this, we feel quite certain that proof of delivery at least places on the owner the burden of proving just what material was not actually used, and in this the owner has failed.

The extras amounted to $172.10 and this sum should be deducted from the amount of the claim, leaving a balance due, including the cost of recording the lien, of $660.98.

It is, therefore ordered, adjudged, and decreed that the judgment appealed from be, and it is, annulled, avoided, and reversed, and that there now be judgment in favor of plaintiff and against defehidant G. B. Riviere in the full sum of $660.98 with interest from July 30, 1927, and with recognition of a lien and privilege on the premises No. 212 Grenadine street, between Carrollton and Lake avenues, Metairie Ridge, and for all costs.


text:
    No. 13,197
    Orleans
    WILLIAMS v. FOREST PRODUCTS CHEMICAL CO.
    (May 19, 1930. Opinion and Decree.)
    N. Morgan Woods II, Johnson Armstrong, of New Orleans, attorneys for plaintiff, appellant.
    Legier, McEnerny & Waguespaek, of New Orleans, attorneys for defendant, appellee.
   WESTERFIELD, J.

This is a suit by a middle-aged negress, who seeks to recover under the Compensation Law for injuries to her hand which she claims resulted in a serious disability. Defendant admits that plaintiff was injured in the course of her employment, but claims that the injury was superficial, responded to treatment, and that her recovery was complete within a few days.

The trial judge was of the opinion that the evidence preponderated in defendant’s favor, and from our examination of the record we are unable to say that his conclusion was erroneous.

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


text:
    No. 13,152
    Orleans
    DERBES ET AL. v. TILL
    (May 5, 1930. Opinion and Decree.)
    Lemle, Moreno & Lemle, of New Orleans, attorneys for plaintiffs, appellants.
    E. M. Robbert, of New Orleans, attorney for defendant, appellee.
   JANVIER, J.

Plaintiffs allege that they' formerly composed a partnership which obtained a final judgment against a corporation and that when execution was attempted against the corporation it developed that an extrajudicial liquidation of the corporation had taken place; that, in spite of the fact that the said judgment was still unsatisfied, the assets of the corporation had been distributed among the stockholders; and that defendant Till, a former owner of more than one-half of the stock, had received, as a dividend in liquidation, a sum in excess of $2,000.

The judgment referred to is for the sum of $1,017.50, and the individual members of the former partnership seek to hold defendant Till liable for the said judgment debt of the former corporation by reason of his having illegally received from the corporation assets in excess of the amount claimed.

To the petition, which alleged the facts which we have above outlined, defendant filed exceptions of vagueness, and of no cause of action, and a plea of prescription.

Since neither- the plea of prescription nor the exception of vagueness was referred to either in the brief or in the oral argument, we assume that both have been abandoned, and will confine our discussion to the question of whether the petition sets forth a cause of action.

On behalf of the exceptor it is contended that the petition is fatally defective in two particulars:

First, that individual members of a partnership have no right to sue for a debt due the partnership and that they must bring such suit in the name of the partnership itself.

Second, that a creditor of a defunct corporation cannot maintain a direct action against a former stockholder to force him to account directly to the creditor for funds illegally drawn from the corporation, but must bring such suit in the name of or on behalf of the receiver or liquidator or legal representative of the defunct corporation.

The first ground urged appears to us to be totally without merit. If the partnership still existed, of course, the members thereof could not, as separate individuals, maintain a suit to collect a partnership debt. But the allegation that the partnership has been dissolved, made in a suit by the former members, implies that the former members have been placed in possession of the assets of the former firm. Included in those assets is the judgment debt referred to. Since all the members of the former partnership joined in the suit, there can be no question raised as to the share of each in the judgment, and the judgment debtor, if it still existed as a corporation, could not be heard to question the right of the three individuals to claim for themselves assets of the former partnership.

The second question presented is not so readily disposed of.

It seems to be conceded that if the allegations of the petition are true, and for the purpose of considering the exception now before us we must assume that they are true, then the distribution of the assets to the stockholders was without legal justification. But it is contended that even if the distribution should not have been made, nevertheless such illegal action does not create in each creditor a right to sue directly each or any stockholder, but that-such a proceeding must be brought for the benefit of the estate itself, and that then, after the successful termination of such suit or suits and after the return of the funds illegally withdrawn to the estate, the creditor or creditors must assert such rights as are claimed against the estate as thus re-created.

Counsel for plaintiff concedes his inability to find statutory provisions expressly authorizing such a suit as this, but maintains that the general provisions of article 21 of the Civil Code warrant our overruling the exception. That article reads as follows:

“In all civil matters, where there is no express law, the judge is bound to proceed and decide according to equity. To decide equitably, an appeal is to be made to natural law and reason, or received usages, where positive law is silent.”

He further suggests that it would be difficult to imagine a more equitable right than that sought to be enforced here since, under C. C. art. 3183:

“The property of the debtor is the common pledge of his creditors. * * *”

We agree that it would be most inequitable to allow a stockholder to benefit at the expense of a creditor, but we are unable to say that the same equitable result cannot be obtained by permitting a creditor to sue for the return of the diverted- property to the general estate.

We entertain no doubt that an individual creditor cannot maintain a direct action against an individual debtor of the former corporation if there is still a receiver or liquidator who can bring the necessary suit because in such case the creditor should, either by appropriate action, force the receiver or liquidator to act, or, in the alternative, should bring suit himself, not for his sole individual benefit but on behalf of the whole estate.

In Dilzell Engineering & Construction Co. vs. Lehmann, 120 La. 283, 45 So. 138, 142, we find a case in which a creditor for the benefit of the estate brought a suit against an individual stockholder to compel him to pay a subscription to stock. Among the defenses was the contention that an individual creditor had no cause of action to bring such a suit. The court said:

“In the case of New Orleans Gas Light Co. v. Bennett, 6 La. Ann. 456, the creditor sought to have the stockholders of the company account to himself directly for the amount of their subscriptions; and, very naturally, the court said that this could not be done. Nothing of that kind is attempted in the present case. The creditor does not seek to have the stockholders account directly to himself, but seeks to have them account to the receivership.”

In New Orleans Gas Light Co. vs. Bennet, 6 La. Ann. 456, referred to in the above quotation, we find a creditor attempting to 'do just what is sought to be done by plaintiff in the case before us, but in that case the representative of the estate, to-wit, the liquidator, still exercised his functions as such, and the court held that such action as might be necessary should be brought by or at least for the benefit of the liquidator, but in that opinion on page 459 the court said:

“Under the equity powers vested in this court, the liability of shareholders to creditors on account of unpaid stock was recognized by our predecessors in the case of Cucullu v. Union Insurance Company, 2 Rob. 577; and again, by this court, in the case of Brown against same defendants. 3 La. Ann. 177. In these cases the company had ceased to exist, and had had for years neither a known place of business, nor directors or other officers; and the action against the shareholders was maintained, as a last resort, and the only means of preventing a denial of justice.”

As we read the allegations of the petition now before us, the liquidation has been terminated, the funds distributed to former stockholders, and there is no one, receiver or liquidator, by whom or on whose behalf this suit could have been brought. It therefore seems that the matter should be allowed to go to trial “as a last resort, and the only means of preventing a denial of justice.”

The cases to which we have referred involved attempts to compel stock subscribers to pay the amounts for which they obligated themselves. We see no distinction in principle between the obligation to pay an amount subscribed for and the obligation to return liquidation dividends illegally withdrawn.

In a case almost identical with that before us (Wood et al. vs. Dummer et al., Fed. Cas. No. 17,944, 3 Mason, 308), the’ court held that each shareholder who had received a part of the assets of the corporation was liable for his proportionate share of the debt. As was said by our Supreme Court in New Orleans Gas Light Co. vs. Bennett, supra, in referring to Wood et al. vs. Dummer et al., supra:

“In that case the available assets of the company had been distributed among the shareholders as dividends of stock, and the company had been dissolved without provision being made for the payment of its debts. Some of the creditors sued part of the shareholders, alleging a fraudulent division of the capital stock to their prejudice.”

Our conclusion is that if the proof is available to show that the liquidation is terminated and that there is no representative of the former corporation by whom or on whose behalf this suit could have been brought, then the individual creditor may bring his direct action against the former shareholder for such amounts as have been illegally withdrawn.

We are therefore of the opinion that the exception of no cause of action should have been overruled.

It is therefore ordered, adjudged, and decreed that the judgment appealed from be and it is annulled, avoided, and reversed, and that this matter be remanded to the district court for further proceedings not inconsistent with this opinion and decree.

Reversed and remanded.

HIGGINS, J., takes no part.


author: MOUTON, J. ELLIOTT, J.

text:
    No. 518-659
    First Circuit
    FIRST NAT’L BANK OF SHREVEPORT v. CAPITAL CITY PETROLEUM PRODUCTS CO., INC.
    (December 3, 1929. Opinion and Decree.)
    (March 5, 1930. Rehearing Granted Restricted to the Right to Remand Case for Further Evidence.)
    (June 9, 1930. Opinion and Decree on Rehearing.)

      Taylor, Porter, Loret & Brooks, of Baton Rouge, attorneys for plaintiff, appellee.
    C. A. Battle, of Baton Rouge, attorney for defendant, appellant.
   MOUTON, J.

On September 11, 1928, the Brown-Mason Oil Company drew a draft or trade acceptance on the defendant, the Capital City Petroleum Products, Incorporated, payable 90 days after date. Embodied in the draft is the following line in print:

“The obligation of the acceptor of this bill arises out of the purchase of goods from the drawer.”

Across the face of the draft, dated September 11, 1928, appears the following:

“We accept this draft without qualifying conditions to be paid at maturity. Payable at Louisiana National Bank. Location of Bank, Baton Rouge, La.; Capital City Petroleum Products Company, Inc. By B. R. Carney, President.”

The Brown-Mason Oil, drawer of the draft, went into the hands of a receiver before its maturity. The draft was for the purchase of oil from the Brown-Mason Oil Company, as it is indicated by the line which is printed in the instrument, above reproduced. The oil was never delivered to the defendant company, purchaser of the oil, and the drawee.

This suit is brought against defendant, drawee, for $1,062.55, face value of the draft, with legal interest, by plaintiff bank, alleging itself to be the holder and owner thereof, in due course, for a valuable consideration, and before maturity. The defense of the Capital City Petroleum Company is that plaintiff is not holder and owner of the draft in due course. Judgment was rendered in favor of plaintiff for the amount claimed, from which defendant prosecutes this appeal.

Section 28, Act No. 64, of 1904, says that failure of consideration is a matter of defense against any person not a holder in due course. As the oil was never delivered, there was between the Brown-Mason Oil Company, vendor, and defendant, vendee, a total absence or failure of consideration, which, under the section of the statute referred to, is a legal defense, “against any person not a holder in' due course.” As against the defendant company, the title of the Brown-Mason Oil Company to the draft was defective, as there was no consideration for it.

To constitute notice of an infirmity or defect in the title of the person negotiating the instrument, section 56 of said act says:

“The person to whom it is negotiated, must have had actual knowledge of the infirmity or defect.”

The evidence does not show that plaintiff bank knew that the oil had not been delivered to defendant company, or had any knowledge of the defect or infirmity in the draft. It also appears that the instrument was complete and regular on its face, and had come into the hands of plaintiff bank before its maturity. There is nothing also to indicate that plaintiff did not come in possession of the draft in good faith. There is, however, another essential requirement under section 52 of said act to constitute a holder in due course, and that is, he must be a holder for value.

In this case, as it appears that the title of the Brown-Mason Oil Company, which negotiated the instrument, was defective under section '59 of said act, the burden was on plaintiff to show that it had acquired title to the instrument for value, as that is one of the sacramental and indispensable requisites to constitute the acquisition as one in due course.

The vital question here is therefore as to whether or not plaintiff acquired the draft in question, for value? If so acquired, there was a transmission or transfer of title to plaintiff from the Brown-Mason Oil Company, otherwise there was not, and plaintiff was not a holder or owner in due course as alleged in its petition.

P. A. Brown, vice-president of the Brown-Mason Oil Company at the time plaintiff came into possession of the draft, says he conducted the negotiations with the bank in reference to the instrument, that the amount of the draft was placed by the bank to the credit of the Brown-Mason Oil Company which he represented, and that he got value for it.

W. L. Young, vice-president of the bank, and R. B. McPherson, assistant vice-president, both testify to the same effect, and say that the draft was discounted at 8 per cent on September 12, 1928, and that on the same day credit was given to the Brown-Mason Oil Company which had been one of its regular customers for a period of seven or eight years. It would seem from the foregoing statement of these witnesses that the bank had' actually acquired title to the draft.

The record shows, as before stated, that the bank had had considerable business dealings with the Brown-Mason Oil Company. In testifying about the business relations between the bank and the Oil Company, McPherson, assistant vice-president of the bank, said it was the “habit” of the bank to charge the account of the oil company with the trade acceptances similar to the one in question, when they were returned, unpaid. The testimony of Young, vice-president of the bank, is to the same effect, though not so clearly stated. This reservation which gave the bank the privilege of charging the oil company with the drafts that were returned unpaid shows that it did not make, nor intend to effect, an outright purchase thereof when it gave credit therefor to the oil company. The amounts so credited to the oil company, its depositor, constituted a checking account. If it were shown that the oil company had drawn against the amount so credited on the trade acceptance under discussion, or to an amount which had included that item, the bank would have acquired title, and would have been invested with the ownership of the draft, notwithstanding the reservation to which we have referred.

It was so held by a majority of this court on rehearing in the case of Holmes & Barnes vs. Shawnee Milling Company, 5 La. App. 392, wherein a large number of authorities were reviewed. In that case the writer of this opinion dissented because of certain restrictions which the bank had placed on the handling of the draft contested therein, hut recognized the principle that the bank could have acquired the ownership of the draft by parting with its money to the amount or in excess of the draft.

In the instant case there is no proof whatsoever to show that any draft for any amount was drawn by the Brown-Mason Oil Company on the bank, after the credit had been placed on its books. It is therefore plain that the only consideration on the part of the bank was to place the credit on its hooks in favor of the oil company with the right reserved to charge the amount back to the oil company, if the draft was not paid. This simple process did not and could not transmit ownership.

The record shows that the oil company had been a. customer of the bank for several years, and was in debt to it for a sum exceeding $30,000. Hence there was here a pre-existing debt in favor of the bank. This pre-existing debt constituted value, and could have formed a consideration if the hank had applied the amount of the draft thereto. Act No. 64 of 1904, sec. 25. There was no contract between the parties to that effect, and no proof or claim by the bank that the credit given for the draft had been so applied. To the contrary, the proof shows that the draft in contest, like all similar drafts, in case it was returned unpaid, was to be charged back to the oil company. Such a reservation precludes the idea that the draft was applied to the pre-existing debt; and the fact is that there is no proof to that effect.

In passing on this issue of title, we do so with due consideration to the words incorporated in the draft that the obligation of the acceptor of the bill arose out of the purchase of oil, and to the acceptance by defendant company on the face of the. draft, which says, without disqualifying conditions to be paid at maturity. Whatever may be the legal effect of such stipulations, it cannot do away with the necessity of showing that plaintiff bank acquired the draft for value. This proof was absolutely necessary to establish ownership in the plaintiff, without which it is not a holder in due course, and its rights are therefore subject to all the equities between the drawer and the drawee of the instrument which show that there was no consideration for the draft, a defense which defendant, the drawee, had a right, under section 28 of said act, to urge against plaintiff not a holder in due course. This defense should have been upheld; plaintiff having no right to recover.

It is therefore ordered and decreed that the judgment appealed from be, and is hereby, avoided and reversed; and that the demand of the plaintiff be rejected at its cost in both courts.

ON REHEARING

ELLIOTT, J.

A rehearing was granted in this case for the purpose of determining whether the case should be remanded and re-opened for further evidence. We have decided that it must be done. The evidence does not make it clear what became of the proceeds of the draft and acceptance sued on.

It should be clearly shown whether Brown-Mason Oil Company, Inc., drew out of the bank all or part of said proceeds. And if all or part- was drawn out, the date, amount and means, that is, whether by check, draft or other method it was done. And each withdrawal should appear, duly verified by a copy of the instrument by which it was done. A sworn statement of the account of Brown-Mason Oil Company, Inc., with the plaintiff bank, commencing at the time the bank opened, on the morning of the day the acceptance was deposited, showing the state of its account, showing said deposit and all other deposits made that day and for three days thereafter, together with each withdrawal and the state of the account at the' end of said time should be produced.

We also desire information in addition to that first contemplated, as follows: We wish to know whether the term, “We accept this draft without qualifying conditions to be paid at maturity,” was a requirement of the bank or of Brown-Mason Oil Company, Inc., and whether the form in question is that generally used in the business of the bank or in that of Brown-Mason Oil Company, Inc., or was such form used only in certain cases, and if only in certain cases, explain in what cages.

• Was it the bank or Brown-Mason Oil Company, Inc,, that caused this form to be printed, and on whose stationery is it printed?

To the end that the further evidence above mentioned may be obtained and placed in the record for the lower court and this court, the judgment appealed from, as well as our former opinion and decree herein, are now annulled and set aside, and the case is remanded to the lower court for a new triál. The cost to abide the final determination of the suit.