author: WEBB, J.

text:
    No. 3775
    Second Circuit
    STEPHENS v. JONES
    (July 5, 1930. Opinion and Decree.)
    Poster, Hall, Barret & Smith, of Shreveport, attorneys for plaintiff, appellee.
    Wise, Rendall, Randolph & Preyer, of Shreveport, attorneys for defendant, appellant.
   WEBB, J.

Plaintiff, B. J. Stephens, alleged that he was the owner of a tract of land or lot, situated in the city of Shreveport, and that defendant, Matilda Jones, was the owner of an adjoining and contiguous tract of land or lot; that defendant had caused a board fence to be constructed which encroaches upon plaintiff’s land and is over the boundary line between the respective properties, and that the encroachment interferes with plaintiff’s right of enjoyment of his property, etc.; that plaintiff had been damaged to the extent of $100, and that he was entitled to a mandatory injunction ordering defendant to remove the fence; and plaintiff prayed for judgment accordingly.

The suit was filed in the city court of the city of Shreveport, and defendant excepted that the court was without jurisdiction and moved that the suit be dismissed; and the exception being overruled and motion refused, defendant answered, admitting the ownership of the respective properties as alleged by plaintiff; that she, defendant, had constructed a fence between the properties, and alleging that the fence was correctly located, and setting forth the cost of constructing the fence, and that she was entitled to recover judgment against plaintiff for one-half of the cost of the fence; defendant prayed that plaintiff’s demands be rejected and for judgment against plaintiff for one-half of the cost of the fence, and all costs of suit.

On trial judgment was rendered in favor of plaintiff ordering defendant to remove the fence. Defendant appeals, urging that the court erred in overruling the plea to the jurisdiction and in refusing to dismiss the suit, and, on the merits, that the court erred in ordering the fence removed, and in refusing to grant defendant judgment on her reconventional demand.

In support of the position that the city court of Shreveport was without jurisdiction, appellant cites Act No. 28 of 1921 (Ex. Sess.) under which the court is vested with concurrent original jurisdiction with the district court of suits when the amount in dispute or the value of the movable property involved does not exceed $300, exclusive of interest, and of actions by landlords for the possession of leased premises, where the monthly or yearly rental for the unexpired term of the lease does not exceed the amount of $300, but in which the court is declared to be without jurisdiction of certain actions, “or where the title to real estate is involved,” and appellant urges that the right to have the fence removed is in the nature of an action of boundary or accessory of the right of ownership in real estate, and is a real right and that the court was without jurisdiction.

There cannot be doubt that the right which plaintiff seeks to enforce is a real right as distinguished from a personal right, whether the demand has as its object the protection of plaintiff’s rights in the real estate owned by him, or whether the action is in the nature of an action of boundary (articles 11 and 12, C. P; Broussard v. Cormier et al., 154 La. 877, 98 So. 403; C. C. art. 823 et seq.), but appellee urges that the action does not involve the title of the respective parties to the properties, and that the provision in the statute, that the court has not jurisdiction of actions where the title to real estate is involved, should be construed as including only actions when the title to real estate is at issue. In support of the position, appellee cites the decisions in which it has been held that, certain courts vested with jurisdiction under the Constitution of actions in which the amount involved does not exceed $100, exclusive of interest, including actions for the ownership or possession of movables or actions by landlords, when the amount involved was within the limit fixed, had jurisdiction of an action to recognize and enforce a lien on real estate. Clade v. La Salle Realty Company, 144 La. 991, 81 So. 598; Demourelle & Sons v. Caraway, 3 La. App; 331.

There was not any provision in the law considered in the cited cases declaring that the court should not have jurisdiction of actions where the title to real estate is involved, and we do not think that the decisions cited are applicable in the present instance, whether the object of the suit is to protect the rights of plaintiff in real estate owned by him, or whether the action is in the nature of an action of boundary.

Plaintiff did not allege that the boundary between the properties had been established and defendant did not admit that the boundary had been established, nor does the evidence show any such fact, and it is obvious that the court was required to determine the boundary between the properties before it could be determined what was the relative position of the boundary and the fence, and, after determining that question, it was necessary for the court to determine whether any part of the fence should be located ,on the boundary line, or wholly on the land of the proprietor constructing the fence.

From any point of view, we think the action was in the nature of an action to fix the boundary between the properties, and it is not suggested that the court was vested with jurisdiction to fix the boundary, and we are of the opinion that the provision which declares that the court should not have jurisdiction of any action, when the title to real estate is involved, should be construed as including actions in which real rights or accessory rights of ownership in real estate are involved (see section 48, art. 7, Constitution; articles 12, 1062, 1063 C.P.; State ex rel. Fredericks v. Skinner, 33 La. Ann. 146; State ex rel. Buisson v. Judge, 33 La. Ann. 419; Manteris Co., Inc., v. Advertising Co., 125 So. 293),'and that the court was without jurisdiction.

It is therefore ordered that the judgment appealed from be avoided and reversed, and that the suit be dismissed at plaintiff’s cost.


source: Caselaw Access Project

license: Public Domain

text:
    No. 3614
    Second Circuit
    KIRBY ET AL. v. CRYSTAL OIL REFINING CORP.
    (July 5, 1930. Opinion and Decree.)
    Booth & Grafton, of Shreveport, attorneys for plaintiff in rule.
    A. M. Pyburn, of . Shreveport, and Spearing & Mabry, of New Orleans, attorneys for defendant in rule.
   WEBB, J.

On June 6, 1928, Oliver Kirby and Addie Kirby, father and sister, respectively, of J. C. Kirby, deceased, instituted suit against the Crystal Oil Refining Corporation to recover judgment for compensation for injuries resulting in the death of J. C. Kirby, which were sustained by J. C. Kirby while engaged in the service of the Crystal Oil Refining Corporation. On November 3, 1928, judgment was rendered in favor of Oliver Kirby awarding him compensation at the rate of $14.78 per week for a period of three hundred weeks, beginning May 15, 1928, and for $150 burial expenses, with interest and costs, and rejecting the demands of Addie Kirby, who applied for and. obtained orders of appeal. (See Kirby et al. v. Crystal Oil Refg. Coup., 11 La. App. 562', 123 So. 432.)

On January 2, 1929, Oliver Kirby filed the present proceedings, in which he set forth the above facts, and, further, that he had not been paid any amount on the judgment, and that defendant had failed to pay the amounts due each week under the judgment, and had allowed more than six consecutive payments to become due and unpaid since the rendition of the judgment, and obtained a rule on the Crystal Oil Refining Corporation to show cause why all the payments to become due under tlie judgment should not be declared due and exigible; and, on trial the rule being recalled and discharged, plaintiff appeals.

The proceeding was instituted under the provisions of section 33 of Act No. 20 of 1914, as amended by Act No. 38 of 1918, which provides:

“That in the event the employer against whom there has been rendered a judgment of Court awarding compensation in favor of any employee or his • dependent should become insolvent or fail to pay six successive installments as they become due, the installments not yet payable under said judgment shall immediately become due and exigible and the judgment shall become executory for the whole amount; provided, that if the employee or his dependent is adequately protected by insurance and receives payments thereunder this right shall not accrue.”

On trial of the rule it was shown that plaintiff Oliver Kirby had not demanded payment of either the amount due for compensation at the time the judgment was rendered, or at the time it became executory; or the amount awarded for funeral expenses, or which may have been due for costs of courts; or for the installments falling due after the date of the judgment; or after the judgment became executory; and it was also shown that defendant, Crystal Oil Refining Corporation, had not tendered or paid any amount on the judgment until the rule was filed, when counsel representing defendant offered to pay counsel representing plaintiff the amount due on the judgment, including costs of suit and installments due at that time, which offer was refused, and the amount was deposited in the registry of the court; and the evidence shows that the amount of the weekly installments falling due pending the hearing on the rule was tendered, refused, and deposited in the registry of the court.

We do- not understand plaintiff to contend that the failure of defendant to tender or pay the compensation due at the time the judgment was rendered or became ex-ecutory, or the amount which was awarded for funeral expenses incurred, or the cost of the suit, rendered the judgment executory for the installments to become due under the judgment; but that the sole contention is that, on the failure of defendant to pay or tender six consecutive installments falling due after the judgment became executory, all installments which were to become due became immediately due and payable and the judgment executory for all of said installments.

In Mason vs. Costanza, 166 La. 326, 117 So. 240, 241, the court said:

' “It is clear that the purpose of section 33 of Act 20 of 1914, in providing for the maturity of all installments not yet payable upon the failure of the employer to pay six successive installments, was to visit a penalty upon the employer who willfully refused to pay.”

And there is not anything in the record to indicate that defendant had any intention of not paying, much less refused to pay, and we are of the opinion that in the absence of any evidence showing a demand for payment by plaintiff, he could not demand that the judgment should be made executory for the payments to fall due thereunder.

The judgment recalling and discharging the rule was correct, and is affirmed, at appellant’s cost.


author: WESTERFIELD, J. JANVIER, J.

text:
    No. 13,195
    Orleans
    UNITED STATES FIDELITY & GUARANTY CO. v. THOMAS
    (June 6, 1930. Opinion and Decree.)
    (July 1, 1930. Rehearing Refused.)
    (July 19, 1930. Writ of Certiorari and Review Refused by Supreme Court.)
    Spearing & Mabry, of New Orleans, attorneys for plaintiff, appellant.
    Harold A. Moise, of New Orleans, attorney for defendant, appellee.
   WESTERFIELD, J.

The defendant 'in this case is one of several individuals against whom the present plaintiff has brought a similar suit. The issues here are the samé as appear in the case of U. S. Fidelity & Guaranty Company v. Gustave H. Crais, 13 La. App. 691, 127 So. 414, decided April 7, 1930, and now pending on application for rehearing. The correctness of our former decree is challenged and plaintiff’s right to recover in both instances is vigorously presented by the same able counsel.

• A short restatement of the facts is advisable. . .

J. E. Johnson, an employee of the Canal Commercial Trust & Savings Bank, defaulted for a considerable sum of money. The bank had taken out a bond or policy with the plaintiff company called a “Banker’s Blanket Bond.” This bond among other stipulations undertook to indemnify the bank against loss, caused by (a) “any dishonest act’’ committed by its employees “alone or in collusion with others”; (b) “through robbery, burglary, larceny, theft, hold-up, or destruction” of its property while on the bank’s premises or in possession of correspondent banks within the United States, etc.; and (c) “through robbery, larceny, theft, hold-up by whomsoever committed while the property is in transit within twenty miles of the insured’s office.” The limit of the assurer’s liability under the bond was placed at the sum of $200,000, and the consideration therefor was “an annual premium” in the sum of $13,500. Johnson being one of the bank’s employees, his defalcation obviously resulted in an obligation under the bond on the part of the plaintiff to make restitution of the shortage to the bank, which obligaiton it promptly and properly recognized.

It appears that Johnson was possessed of some property or effects and he was prevailed upon to transfer his assets to the plaintiff to partially indemnify it for its loss under its policy with the bank. In addition a number of Johnson’s friends, including the present defendant who signed ,for $2,000, entered into an agreement whereby each agreed:

“In consideration of the discharge by the United States Fidelity & Guaranty Company, of its liability to the Canal-Commercial Trust and Savings Bank of New Orleans, as surety for and on account of J. E. Johnson, Manager of the LeBreton Market Branch of the Canal-Commercial Trust & Savings Bank of New Orleans, the undersigned bind and obligate themselves to pay to the United States Fidelity & Guaranty Company the amounts set opposite their respective names, or so much thereof as may be necessary to refund to and reimburse the said company for any loss, damage or expense, resulting from and growing out of the bond hereinabove referred to, .subject, however, to the following conditions and provisions, to-wit:
“1. The amount of liability of the United States Fidelity & Guaranty Company shall be ascertained by an audit of the books of the said bank for a period not extending beyond the term of employment of the said Johnson, which audit is to be made in the presence of the said Johnson.’’

When called upon, defendant failed to pay, and this suit resulted.

Of the several defenses pleaded, want of consideration was mainly relied upon and prevailed below.

Judge Cage, in deciding this case in the district court, used the following language ■in his reasons for judgment:

“The contract was one of insurance, pure and simple and the loss incurred under paragraph “A”, which I quoted above and again quote “through any dishonest act committed by any employee, etc.” and the liability of the Insurance Company was the same as if the loss had arisen through robbery, burglary, larceny, theft, hold-up or destruction and had the bank been burglarized and had the burglar abstracted over Thirty Thousand dollars of the Bank’s cash and had the burglar been identified and-arrested, is it possible that any human being , would say that the insurance company was the surety for the burglar and it is plain, if it was not the surety for the burglar, neither was it the surety for the defaulter.
“Therefore, we find that all that the Insurance Company agreed to do was to pay the insurance loss which it had suffered and which, under its contract of insurance it was bound to pay.
“It is equally clear that it did nothing that it was not forced to do and it refrained from nothing.
“Counsel for the Insurance Company suggests to me that the Insurance Company could have compromised with the Bank. If so, what benefit whatever would Johnson have derived therefrom. Johnson was obligated to the bank ex delicto. His act was an offense denounced by the Criminal Law, but the amount of money he took by his derelict rendered him, by article 2315 of the Code, obliged to repair the damage.
. “Now, it is perfectly plain that when the Insurance Company .did pay to the bank the amount of Johnson’s defalcation, it thereby acquired no right as against Johnson any more than an insurance company which insures a house against fire has any claim against the arsonist who burns the house down, when it pays the obligation of its insurance.
“It is perfectly plain to me, therefore, that when Johnson robbed the bank he became, under Article 2315 of the Code, obligated to the Bank to repair the damage which he had caused and this obligation of Johnson, in my opinion, was in no respect discharged by the payment of the insurance money under the policy of insurance and it would have no right, notwithstanding the payment by the Insurance Company of the amount due under its policy, to have sued and recovered judgment against Johnson for the full amount of his defalcation and Johnson’s obligation, although barred against suit by the lapse of one year, is still an existing obligation bn his part to the bank.
“Therefore, it is plain to me that the defendant, Thomas, received no consideration whatsoever — certainly none to himself and certainly nothing for the benefit of a third person, to-wit, Johnson.
“I am, therefore, of the opinion that the defense of want of fconsideration is perfectly well taken and for these reasons there will he judgment in favor of the defendant, dismissing the plaintiff’s suit at its costs.”

Counsel criticises this conclusion of Judge Cage, with which our opinion in the Crais case was in accord, saying:

“The opinion of Judge Cage and the brief of the attorney for the defendants based entirely and exclusively on the opinion of Judge Cage, and with all due deference, the opinion of Your Honors in the Crais case at least intimates that the obligation of the surety company to the bank is one of insurance. Nothing could be further from the true facts and conditions. There is not, we earnestly urge, the first semblance of insurance any more than on any other contract of suretyship the surety insures the obligee. The contract between the bank and the surety company is one of indemnity or suretyship beyond any possibility of question or doubt.’’

The contention is that the bank’s contract with plaintiff was one of suretyship, and that, when the plaintiff paid Johnson’s shortage to the bank it was legally subrogated to the bank’s claim against Johnson, because of articles 2161 and 3052, R. C. C., to the effect that subrogation takes place by right “for the benefit of him who, being-bound with others, or for others, for the payment of the debt, had an interest in discharging it.” This is true, the argument proceeds, whether the surety has been given with or without the knowledge of the debt- or. Johnson being indebted to plaintiff, his indebtedness was sufficient consideration to support the agreement of his friends including defendant, because a promise to pay a debt of another is a sufficient consideration. Flood v. Thomas, 5 Mart. (N. S.) 560; New Orleans & Carrollton Railroad Company v. Chapman, 8 La. Ann. 97; Pothier, Traite des Obligations, 1st. volume, p. 367, “Du Pact Constitutaes Pecuniae.”

It is conceded, as indeed it must in view of the authorities referred to in our opinion in the former case particularly Carroll & Company v. New Orleans, Jackson & Great Northern R. R. Company, 26 La. Ann."447, that, if the contract between the plaintiff and the bank is one of insurance, there can be no recovery because an insurance company, which pays a loss to its assured, is not legally subrogated to its claim against the party who caused the loss. No conventional subrogation is alleged or proven, though a statement appears in counsel’s brief, we -take it entirely -by inadvertence, claiming a conventional subrogation. In any event, that question is not before us.

Plaintiff’s case rests 'solely upon the alleged legal subrogation to the bank’s claim against Johnson by reason of having paid the amount of Johnson’s defalcation to tne bank, for, if not subrogated to the bank’s claim against Johnson, there was no consideration for this contract with Johnson’s; friends, which is the basis of this suit. If' the plaintiff was Johnson’s surety and the contract one of suretyship, under the plain terms of the Civil Code plaintiff was subrogated, but if the contract was one of insurance there was no subrogation. The. issue depends upon the character of the contract with the bank.

We find the following definition of “insurance” in Ruling Case Law, vol. 13, p. 839:

“Insurance is a contract whereby one’ undertakes to indemnify another against loss, damage or liability, arising from an unknown or contingent event.”

In the instant case the bank paid $13,500' a year for indemnity against loss caused-by dishonesty of its employees, numbering three or four hundred men and women. The indemnity happened to be equal to the loss sustained by the bank, but the contract might just as well have provided for a double indemnity, or for a partial indemnity, or for any character of payment which might, be agreed upon. It does not appear from the record that Johnson was aware of the existence of the contract between the bank and the plaintiff, but, whether he was or not, he had nothing whatever to do with its terms and was under no obligation to the bank by reason of any stipulation in the bond. It is said that Johnson’s knowledge of the existence of the contract did not affect its character as one of surety-ship and that the liability of the plaintiff surety, company was secondary,- Johnson being the primary obligor. In .other words, the surety company was only bound for Johnson’s debt. It is difficult to see how Johnson owed any debt to the bank, the discharge of which the surety company guaranteed. Counsel says that his integrity was involved, that he owed the obligation of remaining honest, and it was this obligation which the surety company guaranteed. Even in this rather fanciful view the bond does not- guaranty the honesty of the employees of the bank, but simply undertakes to pay losses caused, by their dishonesty; consequently, if the bank is a guarantor, Johnson must be considered to have obligated himself to pay the bank damages caused by his own perfidy.

■ It will be noticed, however, that the obligation of the surety company is not secondary but primary, but even if Johnson and all the other employees of the bank had been called principals and the bonding company named as surety, the situation would not be different because the essential character of the contract is one of insurance and not of guarantyship or suretyship.

In the case of Southern Surety Company V:' Citizens’ State Bank of Hempstead, 212 S.- W. 556,' 557, the Court of Civil Appeals of Texas, in considering the same contention that is made here to the effect that the contract involved was one of suretyship and not of insurance, with respect to a bond in which the defaulting cashier of the bank was named in the bond as principal and the surety company as surety, said:

“In the first place, it is thought appellant misapprehends the meaning and effect of this bond as between the bank and itself. It is quite true that the cashier, or ‘officer,’ is at the beginning therein referred to as principal and appellant, or, ‘the company,’ as surety, under the recitation that ‘we’ are held and firmly bound to the bank in the penal sum of $5,000, but the context of the entire instrument clearly shows, we think, that this was merely a matter of description, or of convenience in designation, and that the plain purpose and intent was - to create a direct and primary obligation from the surety company to the bank to in that manner pay any loss the bank might sustain as a result of the cashier’s unfaithfulness.’’

In Laws on Insurance by Joyce (2d Ed.) p. 818, we find the following:

“Fidelity guaranty bonds or contracts constitute insurance. The bonds or contracts of those companies which guarantee the fidelity of employees and which make the business one for profit are essentially insurance contracts. This is well settled, not only by express adjudications but also inferentially by those decisions where these contracts are involved but where the point is not discussed as it is evidently conceded by the contract being dealt with as one of insurance. So a bond given to indemnify a county treasurer against loss occurring through acts of a deputy treasurer is to be treated as a contract of insurance and is to be construed against the insurer, as the rule stictissimi juris does not apply to a surety for hire. It is declared in a Georgia case that, under the Code there is a well recognized difference between a contract of suretyship and of guaranty, but it was not necessary to determine whether the contract 'involved 'Was one of suretyship or of fidelity insurance as it possessed some of the features of both and that point was not the real question in issue.
“In the Federal supreme court the rule of construction governing insurance contracts is applied to fidelity guaranty contracts. And in the lower Federal court a bond guarantying against loss and dishonesty of a cashier of a bank is in effect one of insurance although the attitude of a “surety” is assumed by the form, and it is also determined that the law of insurance applies by analogy. In Arkansas a bond insuring the fidelity of an employee issued by a paid surety is not an ordinary obligation given by a surety, but is an indemnity bond in the nature of a contract of insurance. It is also declared in Illinois that guaranty insurance by whatever name called is an insurance contract, and in that state guarantying the fidelity of officers and the performance of contract is insurance within a statute excepting insurance business from those for which corporations may be formed, although such insurance is of a kind not known at the time of the passage of the enactment and provision is made in another statute for corporations to transact all kinds of insurance then known. In Kentucky the contract expressed in a fidelity bond is but a form of insurance within the rule that ambiguities must be construed most strongly against the insurer. It is also decided in that state that such contracts are those of insurance, and are equally, as well as policies of life and fire insurance within a statute as to representations and warranties. Under a Michigan decision a bond for indemnity against loss through default of an employee makes the surety an insurer in all essential particulars and subject to the same rules as fire and life insurance companies in regard to a general agent’s authority. So in Missouri these companies are classed as insurers and their contracts interpreted by the rules applicable to ordinary insurance contracts. Under a North Carolina decision a fidelity indemnity bond, given by a surety company, which in its form and essence resembles an insurance contract and differs materially from the ordinary forms of bonds should be placed in the general class of insurance policies, at least so far as the same general principles of construction apply. In Tennessee employers’ indemnity or fidelity bonds are contracts of insurance and a fidelity corporation is 'an insurance company within the statute of that state imposing a privilege tax on insurance companies and a statute as to representations and warranties also applies to such fidelity bonds. In Texas^ the rule of construction against the insurer applies to fidelity indemnity contracts. So in Wisconsin bonds of this character have all the essential features of insurance contracts, so as to make the rule of construction against the insurer applicable.”

See, also, Laws of Guaranty Insurance, by Frost, sec. 1.

“A contract to indemnify an employer against any breach of fidelity on the part of an employee is regarded as a contract of insurance in Fidelity & Casualty Co. v. Eickhoff, 63 Minn. 170, 65 N. W. 351, 30 L. R. A. 586, 56 Am. St. Rep. 464, though the issue was not directly raised.' In People ex rel. Kasson v. Rose, 174 111. 310, 51 N. E. 246, 44 L. R. A. 124, the question was directly considered, however, and it was held that contracts to guaranty the fidelity of persons holding places of public or private trust are contracts of insurance.” Cooley’s Briefs on Insurance (2d Ed.) vol. 1, p. 17.
“The distinction between ordinary contracts of suretyship or guaranty and contracts of guaranty insurance has not been very clearly drawn. It would seem, however, that one line of distinction is that in most ordinary contracts of guaranty the guarantor obligates himself to do the act if the principal fails, while in guaranty insurance the guarantor — that is, the insurance company — agrees to indemnify the insured for any loss he may sustain due to the failure oí the principal to act. Weight-man v. Union Trust Co., 208 Pa. 449, 57 A. 879; Equitable Trust Co. v. National Surety Co., 214 Pa. 159, 63 A. 699, 6 Ann. Cas. 465. See, also, Southern Surety Company v. Citizens’ State Bank (Tex. Civ. App.) 212 S. W. 556.” Supra, p. 16.

The contract itself refers to the oaDk as the “insured” and the consideration as “an annual premium,” a fairly persuasive circumstance of how it was regarded by the parties at the time.

Moreover the expressed consideration mentioned in the agreement, upon which this suit is based, was ‘‘the discharge of the United States Fidelity & Guaranty Company of Its liability (not Johnson’s) to the Canal Commercial Bank of New Orleans.” It is doubtful whether the surety company would have been willing for the contract to provide for the payment of Johnson’s debt as a consideration for the obligation of his friends. The evidence in the case indicates very clearly that the purpose which animated Johnson’s friends in signing the obligation was to prevent a prosecution of Johnson. This, of course, was not agreed to by counsel who prepared the agreement for the surety company. All that he would say in that regard was that his client was not interested in the prosecution, but as to the requested assurance he testified that he answered ‘‘positively and definitely and 'unequivocally and unmistakably that we must not make any such terms directly or indirectly, and if that was the purpose of the meeting we cannot proceed.” As a matter of fact, however, Johnson was prosecuted.

It is apparent that the parties to the banker’s bond, the surety, and the bank regarded their contract as one of insurance, and that the parties to the contract between Johnson’s friends and the surety company agreed that the consideration for the payments to the surety company by Johnson’s friends was the payment of the surety company’s debt to the bank and not Johnson’s.

The contract between the surety company and the bank being one of insurance, the payment of the bank’s loss under the policy did not result in a legal subrogation of the right of the bank against Johnson, consequently Johnson was not indebted to the surety company, and his friends, including the defendant, who signed the agreement sued on in this case, did so without consideration because the only pretended consideration was the alleged debt of Johnson to the surety company. The contract, therefore, being without consideration, can have no effect, and this suit must fail.

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

JANVIER, J.

(dissenting). In addition to the reasons given in my dissenting opinion in U. S. Fidelity & Guaranty Co. v. Crais, 127 So. 414, I now desire to present what I consider further sound objections to a decree iii favor of defendant.

The surety company executed in favor of the bank an indemnity agreement under which it undertook to make good any loss sustained by the bank as a result of two different main classes of criminal acts: First, defalcations of employees; second, robberies, holdups, etc., by third persons. The bond thus partook of two characters. So far as it guaranteed against loss caused by criminal acts of employees, its purpose was to insure the bank against loss caused by persons known to, and connected with, the bank. Thus, so far as those persons, the employees, were concerned, it was an agreement that the surety would stand behind and be responsible for the acts of certain particular persons contemplated by the contracting parties. In the majority opinion it is held that the contract was one of insurance and that the subrogation in favor of the insurer and against Johnson, the defaulting employee, did not take place as a matter of right. It is my belief that my associates have fallen into error by their conclusion, that, because the text-writers and the authorities hold that such a contract is in its main features one of insurance, none of the rights which a surety usually has flow out of that contract. I readily concede that it is an insurance policy in the sense that it created a direct obligation which the insured was bound to discharge, regardless of any attempt by the bank to first collect from Johnson. In my opinion all of the cases cited in the brief of the defendant and in the majority opinion simply hold that the insured, in this case the bank, may proceed directly against the insurer, in this case the plaintiff, United States Fidelity & Guaranty Company, but none of them holds that there does not result from the payment by the surety a subrogation in its favor against the person who caused the loss. For instance, in the supplemental brief filed by. the defendant, we find cited the case of First National Bank v. U. S. Fidelity & Guaranty Co., 150 Wis. 601, 137 N. W. 742, in which the court held: A fidelity .bond indemnifying against dishonesty is essentially an insurance contract guaranteeing payment, and is not a mere guaranty of collection upon which the insured can recover only after exhausting his remedies against those primarily liable.

And in Southern Surety Co. v. Citizens’ State Bank of Hempstead (Tex. Civ. App.) 212 S. W. 556, 557, which is relied on in the majority opinion, the court said:

“The plain purpose and intent was to create a direct and primary obligation from the surety company to the bank.”

It is manifest that the question of the right to subrogation was in no way involved, but only the question of whether or not the insured must first attempt to collect his loss from the employee. The majority opinion relies on the text-writers and contains quotations from Joyce to the effect that a fidelity bond is an insurance contract. As I have already said, I find no fault with that statement, but I call attention also to the statement in Joyce on the Law of Insurance, vol. Y, p. 5927, that:

“In fidelity and guaranty insurance the obligation of the insurer to indemnify the insured employer is co-extensive with said insurer’s right to indemnity from the employee for payments made to insured by reason of the employee’s fraud or dishonesty.”

To the same effect we find, in Cooley’s Briefs on Insurance (2d Ed.) vol. VII, p. 6700:

“Although a surety issues a bond for the protection of an employer against the defalcation, etc., of an employee, and the signature of the employee does not appear thereon, the company is subrogated to all the rights of action against such employee which the employer would have, and any action against the defaulter would be as well founded as though brought on his express agreement to repay.”

To the same effect, see Corpus Juris, vol. 33, p. 43, sec. 714:

“Where, however, the contract is to be regarded as one of indemnity, the company, on payment of the loss, is subrogated to all of the rignts of insured against the person whose fault or negligence caused the loss.”

But whatever may be the jurisprudence in the other states, it seems very plain to me that the rights as between the surety and Johnson are governed by the Civil Code of Louisiana, which, in article 2161, grants the subrogation as a matter of right, as I shall hereafter show.

Therefore, whether he knew it or not— and from the nature of his employment (he being the manager of a branch department) I am convinced that he did know it —Johnson was in effect one of the principals in the blanket bond and the United States Fidelity & Guaranty Company was the surety.

Even if it be conceded that Johnson did not know that there was a surety who was responsible for his peculations, the United States Fidelity & Guaranty Company was none the less his surety, because Civ. Code, art. 3038, provides:

“A man may be surety without the order or even the knowledge of the person for whom he becomes surety.”

The surety company was, therefore, surety for Johnson.

There is no dispute over the fact that Johnson was guilty of criminally defrauding his employer, the bank, and that thus the surety company became liable to the bank for Johnson’s shortages. Therefore, when the surety paid the bank it had its recourse against Johnson because, under Civ. Code, art. 3052, “the surety who has paid the debt, has his remedy against the principal debtor, whether the surety has been given with or without the knowledge of the debtor.’’

See, also, C. C. art. 3053, “with regard to that remedy (3052), the surety has the same right of action and the same privilege of subrogation, which the law grants to co-debtors in solido.’’

Even if it be conceded that there was no conventional subrogation, since the evidence does not show a written subrogation by the bank to the surety company of the rights of the bank against Johnson, the surety was none the less fully subrogated to those rights against Johnson, because, by again referring, to that foundation stone of Louisiana law, the Civil Code, we find that in article 2161 it is provided:

“Subrogation takes place of right: * * *
“3. For the benefit of him, who, being-bound with others, or for others, for the payment of the debt, had an interest in discharging it.”

The surety (United States Fidelity & Guaranty Company) was bound with another (Johnson) for the payment of the debt created by Johnson when he stole the money. Thus, when the surety paid the debt it was subrogated as a matter of right to the claim of the bank against Johnson. I:! the surety thus obtained a claim against Johnson and the right to sue him civilly for the enforcement of that claim, its forbearance in the exercise of its said rights was full and complete consideration ?or the contract which is herein sued on, because our Supreme Court has said, in Commercial National Bank v. Richardson, 163 La. 933, 113 So. 152, 154:

“Moreover, under our law, ‘a debt due by another is a sufficient consideration to sup'port the promise of a third person to pay it.’ ”

Also, in Flood v. Thomas, 5 Mart. (N. S.) 560, we find:

“The debt of another is a sufficient consideration to support a contract of surety, or a promise to pay it.”

Again, in New Orleans & Carrollton R. R. v. Chapman, 8 La. Ann. 97, the Supreme Court said:

“To make a contract of this nature, a promise to pay the debt of another, valid, it is only requisite to show the pre-existence of the debt which pne has promised to pay to him who is the creditor. This is the pact constitutae pecuniae and requires no further consideration or foundation than the original debt. Pothier, Traite des Obligations, 1st vol., p. 367, ‘Du Pact Constitutae Pecuniae.’ ”

Thus one of the considerations which the defendant, along with the other signers of the contract, received, was the temporary forbearance of the surety company. The debt of Johnson was sufficient consideration to support the agreement of his friends to pay that debt in the future on condition that for the present no civil action would be resorted to.

An attack on this reasoning is based on the contention which I have already discussed, that the surety company was not a surety at all, but was in fact an insurer, and that, thus, subrogation di4 not take place as a matter of right, but could result only from a conventional assignment and that, since the record does not show a conventional assignment, no right in the surety against Johnson appears.

My answer to this is that where one person having in view a particular person or a particular group of persons agrees to stand responsible for their actions, that first person is a surety or guarantor of the actions of that other, or those other persons.

But I am of opinion that defendant here cannot raise the question as to whether or not Johnson became indebted to the surety when the surety paid the bank. Having agreed by his solemn obligation, together with the others, that, if the surety would pay the bank, they would pay the surety, can he now raise the question that no subrogation took place under which the surety could have sued Johnson? By the very terms of the agreement it appears that the surety could have sued Johnson and it was in order to avoid that result that they entered into the agreement. ■ It would be monstrous to allow them, having agreed that the surety could sue Johnson, to now contend that that is not a fact. When that agreement was entered into no question was raised as to the fact of the payment by the surety company to the bank. The whole tenor of the agreement shows that it was understood that, as soon as the payment was made by the surety to the bank, the surety had the right to sue Johnson. I cannot countenance an attempt by them now to dispute the right of the surety against Johnson and, as I have already said, the existence of that right against Johnson was full consideration for the agreement by Johnson’s friends to pay his debt and discharge his obligation.

I feel that where parties, by their solemn contracts, undertake obligations, the law does not and should not favor the abrogation of those contracts on purely technical grounds, and that those contracts should be enforced, unless to do so would do violence to real justice or to legal principles. Here no such result would follow a decree requiring that defendant do what he deliberately and solemnly agreed to do.

I respectfully dissent.


author: HIGGINS, J.

text:
    No. 13,208
    Orleans
    TRACY v. BIRI
    (July 1, 1930. Opinion and Decree.)
    (July 25, 1930. Rehearing Refused.)

      Edward R. Schowalter and Solomon S. Goldman, of New Orleans, attorneys for plaintiff, appellee.
    Martin H. Manion, John H. Hammel, Jr., and Thos. J. Dobbins, of New Orleans, attorneys for defendant, appellant.
   HIGGINS, J.

This is a suit to recover the sum of $1,400, commission alleged to be due as a result of the sale of a piece, of real estate in this city. The petition alleges that on September 30, 1926, plaintiff and defendant entered into a written contract whereby the defendant employed and designated the plaintiff as sole and exclusive agent to sell the premises No. 402 Hagan avenue and to pay 4 per cent, commission on the gross purchase price; that the contract was to endure for a period of 120 days from the date of its execution, and thereafter until terminated by 5 days’ written notice by the defendant to the plaintiff; that on March 30, 1928, the defendant sold the property to the Standard Oil Company for $35,000, which sale was effected during the term of the said contract of employment as a result of the direct and indirect efforts of plaintiff under his contract; that defendant did not give plaintiff, up .to and including the date of the sale, the 5 days’ written notice to terminate the contract as provided therein; that, after the contract of employment was entered into, plaintiff sought to obtain a purchaser of the property, and negotiated with several oil companies, including the Standard Oil Company, for the purchase of the property, and that plaintiff is not generally engaged in the real estate business.

Defendant admits that the agreement was entered into and that the property was sold for $35,000 to the Standard Oil Company, but denies liability on the following grounds, to-wit:

First. That the contract was to be only for a period of 120 days, and that any provision requiring 5 days’ written notice to terminate it was fraudulently placed in the contract.

Second. That during February, 1927, the contract sued upon was verbally canceled by mutual consent of the parties to it.

Third. That on March 15, 1927, written notice as required by the provisions of the contract for its termination was mailed to the plaintiff by the agent of defendant.

Fourth. That on February 16, 1928, defendant entered into a contract of employment with I. B. Rennyson, a duly qualified real estate agent in this city, who listed and sold the property on February 23, 1928, to the Standard Oil Company for the sum of $35,000, the act of sale being passed on March 30, 1928, and that the sale was made solely and only through the efforts of the office of I. B. Rennyson, and that the plaintiff did not directly or indirectly assist in procuring the said purchaser.

The defendant also filed an exception of no cause of action, which was urged when the plaintiff’s witness, Mr. Norman F. De Reyna, a real estate broker, testified that the plaintiff had enlisted his assistance in attempting to dispose of real estate on several occasions, on the ground that the plaintiff was not a licensed real estate salesman or broker, and that section 19 of Act No. 236 of 1920 prohibited plaintiff from recovering through the courts of this state the alleged commission. The exception was referred to the merits.

There was judgment in favor of the plaintiff as prayed for, and the defendant has appealed.

The contract sued upon reads as follows:

“I hereby employ James J. Tracy as my sole agent and give him the sole and exclusive right to sell or lease, as such agent, for the period of 120 days and thereafter until terminated by five days’ written notice from me, to sell, lease or assist in selling, or leasing the following described real estate, to-wit:
“Property located at 402 S. Hagan Ave. (Oil station complete).
“Said above described property to be sold for not less than $33,000.00, U. S. Currency, or leased at a monthly rental for a period of fifteen or more years, of $300.00, U. S. Currency.
“And I hereby agree and bind myself, on demand, to convey said real estate, by warranty deed, with merchantable title, free from all encumbrances to any purchaser therefor by said agent upon the price and terms above set forth; or, should the said agent secure a lessee on the terms aforesaid, I hereby agree and bind myself to execute a formal, written lease therefor.
“And I hereby agree and bind myself on demand to pay to said agent out of the first purchase money paid on said real
estate, on sale as above being effected directly or indirectly for the services in securing such a purchaser a commission of 4 per cent of the gross purchase price; or, should such above described property be leased a commission equal to five per centum of the rental to be realized from the entire lease.
“Signed in the presence of the witnesses whose names are hereto subscribed, this 30 day of September, 1926.
“Nicholas Biri “James J. Tracy
“Witnesses:
“A. S. Cain, Jr.
“John B. Murphy.
“Sale price $33,000.00
“Lease $300.00 per month.
“Will not sell for less than $33,000.00 Net to myself.”

The record shows that the contract' was entered into and signed on September 30, 1926, and that the plaintiff recorded it in the conveyance office of the parish of Orleans on December 9, 1926; that the plaintiff was not a licensed real estate salesman or broker, but was engaged in the general adjustment and collection business, and was attending law school; that he lived in the neighborhood where the defendant operated a gas and oil station on Banks street and Hagan avenue; -that the defendant is uneducated; that he bought the property in question some 15 years .ago, and was living on the premises and operating a gas service station in the front of it; that defendant desired to sell the property for $33,000 net to himself; and that the plaintiff agreed to sell it for defendant, and that the above contract was entered into between them.

The plaintiff says that he did not advertise the property for sale, and that this is the only transaction of its kind that he ever handled. His efforts to dispose of the property consist of a conversation he had with Mr. James, who was connected with the Gulf Refining Company in the Maison Blanche building. Nothing grew out of this meeting.

The plaintiff also enlisted the assistance of Norman F. De Reyna, a friend of his, to help him in disposing of the property. Mr. De Reyna is a real estate agent, and he testifies that he made several attempts to dispose of the property, taking ■the matter up with the representatives of several oil companies, including the Standard Oil Company, but did not advertise the property for sale and no definite offer resulted from his efforts to sell the property to any of the prospects.

The plaintiff testified that ne also asked the assistance of another real estate agent, Walter Reboul, but this party did not take the stand, and it appears nothing came of the negotiations that he might have had with reference to the sale of the property.

Plaintiff and .Mr. De Reyna both testified that, in the event De Reyna sold the property, he would receive the full commission, and that the plaintiff would not share in any portion of it, and that such was the relation he had with him on other pieces of property that he undertook to sell for plaintiff.

It appears that, during the early part of 1927, defendant desired, to remodel the gas station, and plaintiff admits having a conversation with the defendant concerning the remodeling of the station, and that plaintiff advised defendant that it would be a good idea, and suggested that the defendant buy a lot adjacent to the place of business, which the defendant did on February 25, 1927, when the act of sale was passed by which he acquired title to this lot for the sum of $4,000.

During February, 1927, it appears that the plaintiff, one Sunday, drove into' the defendant’s service station for the purpose of having a tire repaired, and that the defendant told the plaintiff that the 120-day period of the contract had expired, and, as he had not sold the property, and as defendant was going to remodel the place and operate the business himself, that the contract be considered at an end, and that the plaintiff agreed by saying: “That is fine.”

Just prior to the time of this conversation the plaintiff, who was engaged in the collection business, wrote the defendant two letters on the dates of January 25 and 27,1927, threatening to file suit against him in behalf of a client, the Victory Oil Company, for' $1,664.72, which amount, it appears, the defendant owed to this company, and suit was entered for this claim on January 29, 1927.

During March, 1927, H. J. Estrate, who is engaged in the contracting business, was asked by defendant to submit bids for the remodeling of his service station. During their conversation the defendant informed Estrate of the contract that he had made with the plaintiff, aüd Estrate suggested, in order that there could be no misunderstanding about the matter, that he would write to the plaintiff a letter canceling the contract, as defendant was going to remodel the place and would not be interested in selling it. Estrate testified that he wrote and mailed the letter on March 15, 1927, as follows:

“March 15, 1927.
“James J. Tracey, 3307 Banks.
“Dear Sir: You are hereby advised that the contract given you by Mr. Nick Biri dated Sept. 30, 1926, for the sale of property 402 S. Hagan Ave., has expired and you are hereby notified of expiration and cancellation of same to take effect immediately.
“Agt for Nick Biri
“H. J. Estrate.”

Plaintiff denies receiving this letter. Thereafter nothing further appears to have been done with reference to the contract, except that plaintiff says as late as. May, 1927, he was still trying to sell the property.

On February 16, 1928, the defendant entered into a contract of employment with I. B. Rennyson, a real estate broker, authorizing him to sell the property for $35,000, agreeing to pay 4 per cent, commission. On February 23, 1928, Rennyson’s office succeeded in signing the Standard Oil Company to a contract to purchase the property for $35,000 cash. This included the lot which was purchased by defendant on February 25, 1927, for $4,000. The act of sale by the defendant to the Standard Oil Company was passed on March 30, 1928. On March 30, 1928, the plaintiff wrote the defendant a letter advising that he had learned of the sale to the Standard Oil Company and calling defendant’s attention to the fact that his contract was still in existence and claimed commission of $1,400, further advising that suit would be entered if it were not paid. The plaintiff testified that this letter was delivered during the morning of March 30, 1928.

On March 31, 1928, the attorney who examined the title for the Standard Oil Company suggested that defendant write to the plaintiff that he had sold the property, in order to prevent any misunderstanding, because the contract still remained registered in the conveyance office uncanceled. This letter was written and sent to the defendant, as suggested.

It would seem that the evidence shows that the letter canceling the contract was written and mailed on March 15, 1927, because the testimony of one disinterested witness, which is corroborated by the defendant’s testimony, was introduced by . defendant, whereas the plaintiff simply denied that he ever received the letter. Of course, if this letter was written and received by the plaintiff, then clearly the plaintiff would not have any case.

It likewise appears from the record that the plaintiff did not directly or indirectly influence the procurement of the purchaser, the Standard Oil Company, as alleged in the petition, but that this sale was consummated entirely through the efforts of Simon Pelaunge, a representative of I. B. Rennyson’s office. The defendant paid the full commission of 4 per cent, or $1,400, to Mr. Rennyson.

Be that as it may, we find that the preponderance of the evidence shows that there was a verbal conversation between the plaintiff and the defendant concerning the cancellation of the contract on one Sunday during February, 1927. On this issue we have the testimony of Mr. W. E. Wiggins, a disinterested party, who was present on the occasion, as well as the defendant and his wife’s testimony to the same effect. The only evidence offered by the plaintiff to offset this testimony is his own denial that he agreed to cancel the contract. It is significant that, at the time of the alleged conversation concerning the agreement to verbally cancel the contract, the plaintiff had not sold the property, but had agreed to let Mr. De Reyna sell it, without in any way sharing in the commission, and had accepted a claim against the defendant and had written two letters threatening to sue him. If he regarded the contract, which could be terminated by a 5-day notice by the defendant, valuable, it would appear to us that he would not have agreed to let De Reyna have the whole commission, and certainly would not have written his client letters threatening to sue him.

Plaintiff’s only explanation of his position as to this incident was that, as a. friend of the defendant, he undertook to straighten out the matter, but, onee having accepted the claim, he could not do otherwise than to follow it up. But plaintiff’s evidence also shows that he had very little personal regard for the defendant, and' he surely was too intelligent to think that the defendant would let a contract remain in effect whereby the plaintiff might obtain a large commission for the sale of the [property under the circumstances.

It must also be remembered that the defendant had changed his mind about selling the place, as the record conclusively shows he bought an extra lot and had plans made for the remodeling, and was receiving bids for that purpose. It appears that he would not add on a $4,000 lot and some $10,000 of improvements to the premises and still sell the place for $83,000, net to him, the original price, which was at no time ever changed.

It is also to be noted that the $4,000 lot was included in the sale to the Standard Oil Company, which lot was purchased subsequent to the date of plaintiff’s contract, and therefore could not possibly be affected by the agreement. Still the «plaintiff sues the defendant for commission on the full amount of $35,000.

In the case of Harvey vs. Mouncou, 3 La. App. 231, this court held that a written contract containing a provision for a 30-day written notice for its cancellation could be canceled by a subsequent verbal agreement.

In the light of the foregoing discussion, we find it unnecessary to pass upon the other defenses raised, because we are of opinion that the preponderance of the evidence shows that the contract between the plaintiff and defendant sued upon was canceled by verbal agreement during February, 1927.

For the reasons assigned, the judgment of the district court is annulled, avoided, and reversed, and it is now ordered, adjudged, and decreed that plaintiff’s suit be dismissed, at his cost.


author: JANVIER, J.

text:
    No. 13,253
    Orleans
    PRETO v. CRAVEN & LANG
    (June 2, 1930. Opinion and Decree.)
    (July 1, 1930. Rehearing Refused.)
    (August 7, 1930. Writ of Certiorari and Review Refused by Supreme Court.)

      M. E. Scharf and M. E. Kranz, of New Orleans, attorneys for plaintiff, appellant.
    ■ Gordon Boswell, A. R. Christovich and Wm. A. Porteous, Jr., of New Orleans, attorneys for defendant, appellee.
   JANVIER, J.

Plaintiff seeks to recover damages for the death of her husband, who died as the result of being struck by a large piece of - old lumber as it was being removed by a mechanical shovel from the curbing of a sidewalk during the preparation of a street for repaving.

Decedent was over 82 years old and had practically retired from actual participation in his tinsmith business, which he had turned over to his son. He, however, made it a regular practice to spend a substantial portion of his time at or near the shop, which was located in the yard adjacent to the sidewalk on which he was standing at the time of the accident, and which yard opened upon the street through a large double gate, immediately in front of which the mechanical shovel was working.

Defendants, general contractors, were engaged in the carrying 'out of a contract for the repaving of Dauphine street, and in doing this were removing the old street surfacing and the wood curbing of the old gutters. They were using a mechanical digger, which consisted of a portable power plant, which operated a long arm or boom, to the end of which was attached a bucket, or scoop.

The gutter curbing consisted of heavy pieces of pecky cyrpress lumber of various lengths. In- removing these the operator of the machine forced the bucket or scoop under the loose end of each piece of lumber and then, by raising the bucket, caused the lumber to break away from the curbing and to stand in a semi-upright position, one end on the bucket and the other partially attached to the remaining portions of curbing. As each piece of’ lumber was placed in this position, the bucket would be allowed to slide quickly under the . lumber to about its middle and then, by. a sudden raising of the bucket, the lumber would be entirely broken away from its former position and would be lifted by the digger and placed utpon one of the waiting carts.

The machine had been working in that immediate vicinity for several weeks and during that time, on one or two occasions, curbing had broken away and had swung partially across the sidewalk.

No barriers were erected to prevent pedestrians from coming into dangerous proximity, and the decedent had made it a regular practice to stand and watch the operations.

Several different times he had been warned that it was dangerous to stand too close and, just prior to the accident, two persons employed in the work had cautioned him about the danger. As a result of these warnings he had stepped away from the danger zone, but at the last moment had taken a step or two back towards the machine and, unfortunately, just as he did so, a piece of curbing broke away from the remaining portion and struck him. He was taken to the hospital where he later died, after suffering considerable pain.

Plaintiff contends that to remove curbing in the manner adopted by the defendants was negligence and that, as there was at all times grave danger that some portion of the curbing or of the digger might suddenly swing over the sidewalk, barriers should have been erected to prevent pedestrians from entering the danger zone.

Defendants maintain that they were following the most approved method of doing the work; that it is not customary to barricade the sidewalk adjacent to such operations; that whenever there was danger to passers-by, warnings were given; that decedent had been cautioned several times and that the cause of the accident was his suddenly returning to a position of danger when it was too late to stop the machine or to otherwise avoid striking him.

We have experienced no difficulty in reaching a conclusion as to the law applicable. Manifestly, if a sidewalk adjacent to reconstruction work is left open, a pedestrian may assume that it is safe for him to pass, unless the nature of the work is such as to indicate to any normal person that there is danger. Smith v. Cumberland Telephone & Telegraph Co., 7 Orl. App. 371; Reilly v. Barber Asphalt Paving Co., 155 App. Div. 108, 140 N. Y. S. 16; Shalata v. Rodgers, 189 App. Div. 228, 178 N. Y. S. 494; Corpus Juris, vol. 43, “Municipal Corporations,” page 1113.

“The general rule applicable to cases of this character is that persons lawfully making use of the streets and sidewalks within the limits of municipal corporations have the right to assume that they are safe, and that, where one sustains injury by reason of the unsafe condition of such thoroughfares, the burden to show tliat he contributed to such injury by his own negligence rests upon the corporation. Robertson v. Town of Jennings, 128 La. 806, 55 So. 375; Buechner v. City of New Orleans, 112 La. 599, 36 So. 603, 66 L. R. A. 334, 104 Am. St. Rep. 455; McCormack v. Robin, 126 La. 694, 52 So. 779, 139 Am. St. Rep. 549.” Lemoine v. City of Alexandria, 151 La. 562, 92 So. 58, 59.

If the sidewalk is not barricaded, and pedestrians are thus given the right to assume that no unforeseen danger will attend their passage, extreme care must be taken to prevent injuring them and special warnings of unexpected dangers must be given them.

“Even an adult has the right to presume that a public passage way is safe, and is not negligent for not looking for -an unlawful obstruction.” Buechner et ux v. City of New Orleans, 112 La. 599, 36 So. 603, 605, 66 L. R. A. 334, 104 Am. St. Re. 455.

If persons are attracted by mechanical operations and stand in too close proximity, it is the duty of those conducting the operations, and who are familiar with the possible clangers, to caution those persons who are dangerously near to remove themselves to positions oí safety.

But where such warning is given and is heeded, no liability results if, suddenly, and without warning, the person warned returns to a dangerous place and is hurt before the other party has an opportunity to avoid the accident.

The only disputed question of fact is whether decedent placed himself in a position of danger when it was too late to avoid him. This question of fact has been decided by the trial judge in favor of defendant, and we believe that the record warrants his finding. Not being manifestly erroneous, it should not be reversed.

It is evident that the old gentleman was most anxious to secure for use as firewood the curbing which was being removed, and we are convinced that, as the timber in question was about to be lifted, he stepped towards it, possibly for the purpose of guiding it to his own sidewalk so that he might the more easily obtain possession of it.

At any rate it is certain that he was several times warned away from the machine and that, just prior to the accident, he had walked away from it and had assumed a position of safety. Defendants’ employees were justified in believing that they could safely proceed with the work, and they had no opportunity to avoid him after he returned. In fact the operator, though he had concentrated his attention on the work he was doing, stopped his machine as soon as he saw the old man in the dangerous position. But it was then too late.

Had the old gentleman been merely walking along the sidewalk when the accident occurred, we would have felt justified in holding that his presence there did not constitute contributory negligence. But such was not the case. He had been repeatedly warned to leave the danger zone and, by his apparent compliance with those warnings, he had allowed the operators to believe that, so far as he was concerned, there was no longer any danger in their continuing operations.

Counsel for plaintiff attack the credibility of several of the witnesses of defendants. A careful reading of the record leads us to the belief that we would not be warranted in reversing the finding of the trial judge, who saw and heard the witnesses to whom we have referred.

The judgment appealed from is affirmed.


text:
    No. 13,278
    Orleans
    FISSE v. TOYE BROS. AUTO & TAXICAB CO. ET AL.
    (June 16, 1930. Opinion and Decree.)
    (July 23, 1930. Rehearing Refused.)

      Weiss, Yarrut & Stick, of New Orleans, attorneys for plaintiff, appellee.
    John P. Sullivan and David Sessler, of New Orleans, attorneys for Toye Bros., defendants, appellants.
    Alex W. Swords, of New Orleans, attorney for Fred Roses.
   HIGGINS, J.

Plaintiff as a passenger in a taxicab brings this suit for damages for personal injuries alleged to have been sustained as a result of an intersectional collision between the taxicab and a Ford sedan at the corner of Dumaine street and North Claiborne avenue, this city, on January 4, 1927, at 7:30 p. m. The suit is against the owners of the taxicab and the Ford sedan.

There'-was judgment in favor of plaintiff against the defendants in solido in the sum of $2,500, and both defendants have appealed.

After carefully reviewing the record, we see no reason to change our views expressed in the case of Hortense Fisse v. Toye Bros. . et al. (La. App.) 127 So. 756, decided April 21, 1930, where the same issues and parties defendant were involved.

But counsel for the defendant Fred Roses, the driver and owner of the Ford car, contends that section 12 of article VIII, C. C. S. 7490, should be read in connection with subdivisions (c) and (d) of section 7 of article I, C. C. S. 7390.

Section 12 of article VIII provides:

“Drivers and operators of all vehicles are required to observe the instructions on the official traffic signs. These signs designate one way streets, open zones, quiet zones, speed limits, limits of parking space, dangerous street intersections, and other locations where caution should be observed.”

Subdivisions (c) and (d) of section VII of article I, 7490 C. C. S. read as follows:

“(c) At intersections of right of way streets with one another, all vehicles approaching intersecting streets from the left shall give right of way to vehicles approaching from the right.”
“(d) On streets and avenues having neutral grounds and carrying street car lines, vehicles crossing such neutral grounds shall have right of way to complete the crossing of the roadway of such street or avenue under the following conditions:
“Provided the vehicle shall come to a full stop when about to leave the neutral ground and enter the roadway, shall signal with horn, and give opportunity for approaching vehicles in the roadway-to come to a stop; it being the intention of this provision to require vehicles in said roadway to stop upon receiving reasonable warning in order that the vehicles standing on the neutral ground shall be permitted to complete the crossing or turning into the roadway.”

The legal , question thus presented is whether regulations instituted by the police department under section 12’ of article VIII, C. C. S. 7490, supersedes or suspends, at a particular intersection, the provisions of the general traffic ordinance, and particularly paragraphs (c) and (d) of section 7 of article I, 7490 C. C. S.

The record shows that the taxicab was traveling on North Claiborne avenue in the direction of Canal street, and the Ford sedan was being driven on Dumaine street in the direction of the lake, and that the collision occurred on the uptown lake corner of the intersection. North Claiborne avenue has a neutral ground with car tracks in the center. There are also car tracks on Dumaine street.

The traffic sign “stop” is painted in large white letters on the pavement of the lake thoroughfare of North Claiborne avenue, near the corner of Dumaine street.

It is argued by counsel for defendant Roses that, as the taxicab was obliged to stop in obedience to the painted traffic sign, there was no necessifljt for Roses to stop or blow his horn before leaving the neutral ground to cross the lake intersection of North Claiborne avenue, and that it was not the intention of the ordinanpe to require a driver under such circumstances to blow his horn before leaving the neutral ground, as he was relieved of that duty by the particular traffic sign painted in the roadway, that there would be no necessity for both drivers to stop, and that the general rule is superseded by the special one.

We are without any decision to guide us on this issue, as it appears to be raised for the first time. But an examination of the pertinent parts of the traffic ordinance in question do not indicate, that the provisions of section 12 of article VIII shall supersede or suspend the provisions of the general ordinance, and particularly subdivisions (c) and (d) of section 7 of article I, 7490 C. C. S., at particular street intersections, and we must therefore assume that the commission council did not intend that such should be the case.

It would appear to us that it was the intention and purpose of the framers of the ordinance to require extraordinary care and vigilance by drivers of vehicles at dangerous street intersections, so that chance^ of collision would be lessened, by requiring unusual precaution on the part of drivers approaching from both directions.

These provisions of the ordinance are not in conflict. Neither provision supersedes or suspends the other, and both are operative and should be obeyed.

The driver of the taxicab would have-as much right to presume that the driver of the Ford car would obey the traffic-ordinance as the driver of the Ford car would have a right to presume that the driver of the taxicab would obey the traffic sign. Since it is clearly established that neither driver obeyed the traffic law, we are still of the opinion originally expressed that the accident was caused, through the negligence of both drivers-

As to the damage sustained, the record! shows that the plaintiff, a white man, aged 64 years, had been suffering from diabetes and arteriosclerosis for several years prior to the date of the accident. His physician, Dr. Danna, had ordered him to the hospital because he was threatened" with gangrene of the right foot. He was on his way to the hospital with his foot bandaged when the accident occurred. The taxicab was overturned with considerable violence and force, and the plaintiff suffered general contusions and bruises as well as a severe contusion to the right thigh. He was knocked unconscious when his head struck one of the glasses which broke, bruising his head. The taxicab had to be righted with the occupants still in it, and the plaintiff was then removed to the Hotel Dieu. At first it was thought that his leg had been broken, but subsequently this was discovered to have been an error. It appears that he suffered severe pain for some period after the accident.

While it is contended that the diabetic and arteriosclerotic condition was aggravated and accelerated by the accident resulting in the amputation of some of the toes of the right foot on May 4, 1927, and then again on September 1, 1927, and in the amputation of the right foot between ■the knee and the ankle on December 5th 1927, the medical testimony does not warrant us in holding such to be the case. Dr. Danna, the attending physician, said that it is possible that the trauma aggravated the diabetic and arteriosclerotic condition, and resulted in the amputation of the foot sooner than it would otherwise have been necessary to do so, but he was not (positive that such was the case.

The defendants’ medical expert, Dr. Martin O. Miller, testified that in his opinion the threatened gangrene condition from ■which plaintiff was suffering at the time he was on his way to the hospital was the sole cause of the amputation, and that the accident was not responsible for the aggravation or acceleration or development of the disease. It was admitted ‘that, if Dr. Morrel W. Miller were placed on the stand, he would give corroborative testimony. We are therefore of the opinion that the amputation of the toes and the right leg was directly attributable to the diabetic and arteriosclerotic condition of plaintiff and the gangrene condition which had set in his foot.

The record shows that the plaintiff, on account of his sickness, had been unable to work for several years before the accident, and that he had spent a considerable (portion of his time in the hospital. We believe, however, that the plaintiff suffered more excruciating pain and for a greater period of time than an ordinary healthful person would have suffered under the circumstanced.

The trial court allowed the sum of $2,500, but, in view of the fact that the amputations were not caused by the injury received in the accident, we believe this amount to be excessive. We are of the opinion that $750 would be adequate compensation for the pain suffered resulting from the injury as a result of the accident.

Plaintiff owes Dr. Danna a bill for medical services, as a result of the accident, in the sum of $100, which we also will allow.

For the reasons assigned, it is therefore ordered, adjudged, and decreed that the judgment of the lower court be amended by reducing the amount awarded plaintiff from $2,500 to $850, and, as thus amended, it is affirmed,^at appellants’ cost.


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    No. 13,332
    Orleans
    DOOLEY v. LUCE ET AL.
    (June 16, 1930. Opinion and Decree.)
    (July 1, 1930. Rehearing Refused.)
    (August 7, 1930. Writ of Certiorari and Review Refused by Supreme Court.)

      W. W. Heard and Leslie Moses, of New Orleans, attorneys for plaintiff, appellee.
    Dart & Dart and Leo L. Dubourg, of New Orleans, attorneys for defendants, appellants.
   JANVIER, J.

Plaintiff, formerly landlord of defendants, sues for rent which she claims she is entitled to because.of the fact that her tenants, defendants here, persuaded her through misrepresentation and fraud tq return them the notes and cancel the • lease. The lease contained a stipulation reading as follows:

“The said lessor agrees to cancel said lease in the event said lessee is transferred on account of business to another city, said lessee giving a thirty day written notice.”

Plaintiff alleges that she was advised that Luce, one of the defendants, was ordered to another city, and that therefore, under the stipulation above quoted, she agreed to the cancellation of the lease, but that shortly thereafter she found that the said Luce was not transferred to another city and that the ground set forth in the stipulation for the cancellation of the lease did not in fact exist. This suit is the result. Judgment was rendered for plaintiff, and defendants have appealed.

We have carefully read the record and have come to the conclusion that the trial judge was not manifestly in error in deciding as he did for plaintiff. The evidence on behalf of defendants and that produced by plaintiff is sharply in conflict and cannot be reconciled. In such a situation, in view of the absence of 'clear error, we cannot do other than affirm the judgment appealed from.

The judgment appealed from is therefore affirméd.


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    No. 13,191
    Orleans
    PURNELL v. DUGUE
    (June 2, 1930. Opinion and Decree.)
    (July 1, 1930. Rehearing Refused.)
    (August 7, 1930. Writ of Certiorari and Review Refused by Supreme Court.)

      Sanders, Baldwin, Viosca & Haspel, of New Orleans, and Edward Dubuisson, of Opelousas, attorneys for plaintiff, appellee.
    Woodville & Woodville, of New Orleans, attorneys for defendant, appellant.
   JANVIER, J.

Plaintiff, owner of an apartment which was rented to and occupied by defendant, seeks to recover on twelve rent notes, each for the sum of $70.

Defendant had occupied the apartment for two years, under a written lease for the term of three years, when, during the early days of October, shortly after the commencement of the third year, he abandoned the premises.

He admits that he signed the notes and executed the lease, but refuses to pay them, and bases his refusal on the assertion that the heating system with which the apartment was provided was inadequate and that it was impossible, during the winter months, to raise the temperature sufficiently high to make the premises habitable.

Plaintiff denies 'that the heating system was inadequate and also denies that she, as the owner of the apartment, was under any obligation to provide a heating apparatus of any particular size or type and contends that, as the heating system, such as it was, was in proper working order, her duty as landlord was fully complied with, and that she did not guarantee, and that, as a matter of law, an owner is not called' upon to guarantee, that an apartment can be heated to any particular temperature.

It thus appears that two qúestions are presented:

One of fact, viz., Was the heating apparatus adequate and capable of heating the apartment to a reasonable temperature? And the other of law, viz., Is it the duty of a landlord who rents an apartment containing a heating system to see to it that the system will maintain a reasonable temperature?

The question of fact is the more easily disposed of, so we will consider that first.

The testimony of Mrs. Dugue, defendant’s wife, and of defendant himself, of their servant and of a gentleman who was a frequent visitor in the apartment and who later married defendant’s niece, is to the effect that, during the two winters the apartment was occupied, they were never able to maintain on cold days a reasonable temperature. A physician who treated Mrs. Dugue states that he, on one occasion when he called upon her professionally, found the rooms very cold and that he kept his overcoat on.

Various heating experts who examined the heaters testified that they were entirely inadequate and could not furnish sufficient heat for rooms so large as those composing the apartment and the figures given by one of these experts with reference to the cubic capacity of the rooms and the heating capacity of the heaters show that in order to heat the place in accordance with what is recognized in this climate as proper practice there would have been required heaters either almost double in size, or practically double in number.

Against this evidence we find but little testimony and that of a rather negative character.

Mrs. Poitevent, who occupied the premises after Mr. and Mrs. Dugue left, states that the heaters were sufficient for her needs, except that sometimes she had to employ oil heaters to supplement the regularly installed heating system. Mrs. Dugue, defendant’s wife, stated that she on several occasions had tried the use of oil heaters, hut that she was subject to headaches and that the effect of the oil heater increased her headaches to such an extent that she had to discontinue their use.

Other persons occupying various other apartments in the same building state that their respective heating systems are and were adequate, hut the fact is that only one of the other apartments was at all similar in size and arrangement to that involved here, and the tenant of that one demanded and received at least one additional heater.

We are thoroughly convinced from the evidence that the apartment could not be even reasonably comfortably heated because of the inadequate heating system, and that the defendant and his wife were most uncomfortable during the winters they occupied the place.

We now approach the question of law to which we have referred. Plaintiff maintains that a tenant who has the opportunity of seeing and examining the type of heaters or radiators contained in an apartment cannot complain if those heaters or radiators, when working properly and to their full capacity, are not able to heat the leased premises to a comfortable temperature; in other words, that a landlord does not warrant that his premises can be heated to any particular temperature, even to a reasonable temperature, hut merely that such heaters as he furnished have no mechanical defects and will operate. We are told of the far-reaching effects- which will attend a holding that a landlord warrants the efficiency of his heating system and that, if we so hold, all leases of houses containing only old-fashioned open grates may be immediately broken. We do not believe that any such dire result will follow a decision that a landlord, who furnishes a modern apartment without open fires, hut containing what seems to he a modern heating system, warrants to his tenant that that system is o.f sufficient size and efficiency to maintain a reasonably comfortable temperature.

In Scudder v. Marsh, 224 Ill. App. 355, we find a case involving facts strikingly similar to those presented here. The property leased was a two-story dwelling.

A heating system was contained in the dwelling but, as the court found:

“In November, when the weather became cold, the furnace failed to heat the dwelling although it was run properly with a good fire; the average temperature in the rooms was from 48 to 56 degrees. Defendant’s children became ill and a physician found the room so cold that his breath congealed in every room. He examined the furnace and describes it as in full blast; an experienced man in heating plants examined the furnace at this time and testified that it was only 60 per cent adequate to furnish sufficient heat for the building.”

The court said:

“The insufficiency of the furnace cannot be determined by merely looking at it, especially by one not expert in the matter- of furnaces, and its inadequacy in heating capacity can only be determined by an investigation by an expert and by an actual experience with it in cold weather. Do such circumstances amount to a constructive eviction by the landlord justifying the removal from the premises of the tenant and his discharge- from any obligation to pay rent thereafter?
“Plaintiff invokes the general rule of caveat emptor which throws upon the lessee the responsibility of examining as to the existence of defects and providing against their consequences. Experience, however, has shown that under circumstances like these under consideration, the strict application of this rule tends to work an injustice upon the tenant. Prom the very nature of the case, it would be almost impossible for a tenant by merely looking at a furnace in the summer time to have any informed judgment or opinion as to its heating sufficiency.”

We have quoted somewhat at length from the opinion in the above case because of its remarkable similarity both of fact and in legal principle.

In the case of the building containing only open grates, the tenant sees and knows just what he is leasing and it cannot be said that he is given any warranty as to the efficiency of open grates. But such is not the case where the lease covers a modern apartment containing a heating system, the efficiency of which the ordinary layman can tell nothing about except after actual use. In such case it is only reasonable in the tenant to suppose that that - system will not only operate, but will operate efficiently.

The various cases in which we and other courts have held that the abrogation of written leases is not favored meet with our entire approval, but in all such cases it was held that, where an abrogation is justified by the facts and the law, it should not be denied.

Here we think both the law and the facts warrant us in holding that defendant was within his rights in abandoning the premises.

Plaintiff complains that, as the written, lease makes no mention of a heating system, to allow evidence to be introduced showing that the system was insufficient, is to permit the varying of a written contract by parol. We do not think so. All modern apartments contain heating systems and it is contemplated in any such lease, whether actually written - into it or not, that, where , an apartment contains a heating system, as a matter of fact that system is included in the lease and the reasonable adequacy of that system is warranted. That even plaintiff .interpreted her lease as including a heating system is evidenced by her many promises that she would remedy the defect by the installation of additional heaters.

It was held in Bliss v. Clark, 104 Misc. Rep. 543, 172 N. Y. S. 112, that even in the absence of a covenant to furnish heat if “the means of furnishing the heat are in the control of the landlord, the lessee of a living apartment may, for failure of landlord to furnish proper heat, abandon the premises. * * *”

The court in discussing such covenants as are impliedly contained in certain leases, even, though not expressly set forth therein, said:

“An entirely different situation, however, arises where, as in the case at bar, there is a lease of the premises with no covenant on the part of the landlord to furnish heat, although the means of furnishing heat are within the control of the landlord. In such a case there is an implication created by the court that a failure to supply heat furnished sufficient reason for an abandonment of the premises by the tenant and a refusal to pay rent. Berlinger v. MacDonald, 149 App. Div. 6, 133 N. Y. S. 522; Tallman v. Murphy, 120 N. Y. 345, 24 N. E. 716. Originally the courts created an implication that in a lease there is implied a covenant for' quiet enjoyment. Coke’s case, 4 Coke R. 80b; Andrews’ case of Gray’s Inn, Croke, Eliz. 214, 674. 'Whatever may have given rise originally to the implication of this covenant by the court, the doctrine is now too well established to be doubted, either in this country or in England. Brady v. Cartwright, 22 L. J. Ex. 285; Budd-Scott v. Daniel, 2 K. B. 351; Mack v. Patchin, 42 N. Y. 171, 1 Am. Rep. 506. The implied covenant to supply heat is a part of the covenant of quiet enjoyment, and thus an implied covenant for quiet enjoyment has given rise to this implied covehant to furnish heat.’’

We think that the reasoning above set forth is sound and is applicable here and that, as we have stated, where a leased dwelling contains a supposedly modern heating system, there is implied a warranty, even if it be not expressed, that that system is reasonably adequate.

Plaintiff also contends that the installation of additional heaters would have cost only about $35 or $40 and that therefore defendant should have installed them himself and would have been entitled to deduct the cost thereof from the rent due or to become due. Civ. Code, art. 2694. We do not think that either the right or the duty of a tenant requires that he go so far as to tamper with the piping and fundamental structure of his landlord’s building; his right is limited to the making of repairs and, in our judgment, does not include the right to remedy defects which were in the building when he first went into possession of it.

If the repairs became necessary without fault on the part of the landlord and did not result from an original defect, possibly the tenant should make them under the article of the Code referred to, but here the defect is an original one and is due to the owner’s neglect. In Denman v. Lopez, 12 La. Ann. 824, the Supreme Court said:

“In the ease at bar there was no original or latent defect in the building.’’

In Caffin v. Redon, 6 La. Ann. 487, the controversy was decided in favor of the lessee because of an original defect in the construction of the building, and it was held that the lessee had the right to demand the dissolution of the lease.

The fact that the installation of additional heaters was not so simple a matter as is now suggested is evidenced by the fact that, though plaintiff undoubtedly ’ promised on many occasions to add the additional heaters necessary, she failed to do so, apparently considering it a matter more costly than she cared to undertake.

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 defendant and against plaintiff, dismissing this suit at her cost.