text:
    No. 3854
    Second Circuit
    EMANUEL v. CENTRAL GRAND INDEPENDENT ORDER OF BROTHERS AND SISTERS OF LOVE AND CHARITY OF NORTH AND SOUTH AMERICA, LIBERIA AND ADJACENT ISLANDS
    (February 26, 1931. Opinion and Decree.)
    John T. Carpenter, of Shreveport, attorney for plaintiff, appellee.
    Sidney A. Marehand, of Donaldsonville, and Reynolds, Hamiter & Hendrick, of Shreveport, attorneys for defendant, appellant. •
   McGREGOR, J.

This is a suit by Emma Emanuel against the “Brothers and Sisters of Love and Charity of North and South America, Liberia and Adjacent Islands,’’ a fraternal organization operated under a charter granted under the laws of Louisiana, upon an endowment policy for $300 issued to Mariah Baker, her mother, a member of Mars Hill Tabernacle No. 22, a subordinate lodge of the defendant, naming the plaintiff as beneficiary. The defendant is very similar to all fraternal organizations, consisting of a grand lodge and subordinate or local lodges. One of its departments is known as the Endowment Bureau.

The insured died on August 22, 1927, and at the time of her death all her dues had been paid to the proper officer of the local lodge or tabernacle. The beneficiary has not been paid. There is no rule or by-law authorizing the beneficiary to take steps to make proof of the death of the insured and to collect the amount of the policy. The course to be pursued in case of the death of a member in good standing is set forth as follows in the by-laws of the order:

“Upon the death of a member in good ■ standing the Worthy Superior of the Tabernacle of which deceased was a member shall forward the General Grand Worthy Superior notice of the death certified by the attending physician, the undertaker and three members and signed by the Financial Secretary of said Tabernacle. Upon the reception of such, the General Grand Worthy Superior shall enter the name of the deceased member upon a book kept for that purpose, including date of death, name of the Tabernacle and location of same.
“At the expiration of ninety (90) days from the date required above as to the death of a member, provided always that priority of death shall always be first considered, the General Grand Worthy Superior shall cause a check of one half of amount due to be issued in favor of the widow, heirs or legal representatives of the deceased member; said check to be sent direct to the Worthy Superior of said Tabernacle and the same to be given to the widow, heirs or legal representatives of the deceased, in any manner as will best subserve the interest of the Tabernacle and beneficiary.”

As far as can be determined from the evidence no steps have been taken by the local lodge through its officers to collect the amount of this endowment policy. One witness says he saw the necessary blank filled out and sent into the Endowment Bureau, but the officers of the bureau deny that they ever got it. Consequently, since the local lodge or tabernacle appears not to have taken any steps to collect the amount of the policy, the plaintiff, beneficiary, has taken the only course left to her and has filed this suit to collect it. In her suit she demanded double the amount of the policy and attorney’s fees. On trial there was judgment for the plaintiff for the face of the policy only and her demand for attorney’s fee was rejected. The defendant has appealed and the plaintiff is asking for no increase of the judgment.

The defense urged by the defendant is that at the time of the death of the insured, Mars Hill Tabernacle No. 22 and the entire membership, including the insured, were dropped and suspended and remained so for several months. The fact is that it appears from the evidence that in the early part of September, 1927, some officer of Mars Hill Tabernacle made a remittance to the Endowment Bureau of $202.40. This remittance covered several months’ dues as follows: Balance on December, 1926, $6.00; January, $40.50; February, $37.20; March, $37.20; April, $37.20; May, $37.20; part of June, $.6.50. On December 6, 1927, the proper officer of the Endowment Bureau receipted the local lodge for $273.65. In this receipt it is stated that that sum paid the local lodge up to November. (Presumably including November.) There is nothing in the receipt to show how this money was applied but there is a letter in the record from the head officer of the Endowment Bureau accounting for only $244.60 of this money and showing that it was applied as follows: Balance on June, $30.70; July, $36.40; August, $36.40; September, $33.20; October, $33.20; November, $33.20; December, $33.20; January, special assessment, $8.30. This pays the local lodge up to January 1, 1928, with $29.05 to spare, so it would seem that it is not true that the local lodge was in bad standing as late as March, 1928, as is claimed by the defendant. It evidently was in arrears at all times during the year 1927 up to December 6th of that year, when the remittance of $273.65 paid them through December, 1927, with $29.05 to go as a credit on January, 1928. But this is not 'important except to show the loose and irregular manner in which the Endowment Bureau receipts for and handles its funds. The evidence shows conclusively that the insured, Mariah Baker, kept her dues paid up promptly and when she died on August 22, 1927, she was paid up in full and in .perfect standing with the local lodge, Mars Hill Tabernacle, No. 22. At that date it appears that the local lodge had not paid one cent to the Endowment Bureau during the year 1927' and did not pay anything until September 16, 1927, or nearly one month after the death pf the insured. The defense is that this condition of affairs ipso facto suspended the local lodge and its entire membership, including the insured. There seems to be no notice required to be sent to the local lodge or its members when this suspension takes place. On the trial of the case there was filed in evidence a so-called quarterly report of the Endowment Bureau covering the months of May, June and July of 1927. This shows Mars Hill Tabernacle blank during those months and clearly indicates that the dues for those months had not been paid, and that under the by-laws the local lodge was subject to suspension. But under the law this suspension could not have been effective until due or legal notice had been given to the proper officer of the lodge and even then it could not have the effect of suspending the individual members to the extent of voiding their policies and denying the beneficiary the right to collect on them in case members who had paid all dues to the local lodge died while the lodge was under suspension. Witnesses for the defendant testify that this report is sent to all loc.al lodges and that it constitutes the only notice of suspension ever sent to a local lodge. No notice of any kind is ever sent to the individual members so that it could easily happen that' a local lodge could be duly and legally suspended while all the members were in good standing and paid up in full. Unless some provision is made to notify these individual members and to give them an opportunity to protect themselves and their policies it would -be unjust and unreasonable for the Endowment Bureau to refuse to pay 6n a policy on which all dues had been paid to a proper officer, but who had failed and neglected to make his remittances in the time required. In this case the evidence is not convincing that this report filed herein was ever sent to or received by the local lodge or any of its officers or members. No officer or member of the lodge ever knew that it had been suspended. It is true that the officers sent several months’ dues at one time, but these were always received and the lodge continued to function as usual and was never suspended so far as its meetings and work, were concerned. None of the members appear to' have known of the alleged suspension.' The insured probably never even knew that the proper officer was holding back her dues and failing to send them to the head office each month as'she paid them. She paid promptly and when she died -she owed nothing. In this connection it must be remembered that the officers of the Mars Hill Tabernacle, No. 22, whose duty it was to collect and remit these dues, were under the law the agents of the Grand Lodge and of the Endowment Bureau. When the insured had paid her dues she had done all that' was required of her and it was not her duty or right to pursue these funds any further.

In their brief counsel for the defendant appellant quote from 45 Corpus Juris, p. 27, as follows •

“The statutes- under which a. beneficial society is formed and operates, and other pertinent statutes in force at the time the contract is entered into, the charter of incorporation or articles of association of such a society, and its constitution, bylaws, and rules, if they have been properly adopted and are not inconsistent with the terms of the certificate, or unreasonable or contrary to law, enter into and form a part of the contract of insurance evidenced by the certificate of membership, and accordingly such statutes, bylaws and rules must be looked to in determining the rights and liabilities of the parties.”

The citation just quoted contains the following: “* * * if they have been properly adopted and are not inconsistent with the terms of the certificate, or unreason,able or contrary to law, * * *.” To suspend a lodge for failure of its officers to remit dues that are regularly paid on them and to thus deprive a faithful member of rights already accrued in a policy and to deny the beneficiary in such case the right, to recover on such a policy would be “unreasonable and contrary to law.”

It is the duty of defendant to make proper provisions for the members of the local lodge who keep their dues paid up promptly. It would seem that upon a local lodge, being suspended on account of the failure of its officers, who are agents of the Grand Lodge, to remit the dues as collected, each individual member whose dues are paid in full should be held in good standing as to his insurance and should be given ample notice as well as opportunity to send his dues direct to the Grand Lodge or to join another local lodge that is in good standing. Anything less than that would be unreasonable and contrary to public policy. So, although the bylaws of the defendant may provide that a beneficiary of a member whose dues are paid up promptly and in full at the time of his death will be deprived of the right to collect under the policy carried by the insured if at the time of the death of the insured the local lodge was suspended because of the failure of the officers to remit the dues collected from its members, this provision is unreasonable and contrary to law.

Counsel also cite 45 Corpus Juris, p. 92, as follows:

“The constitution and by-laws of the society sometimes provide, however, that suspension of a subordinate lodge ipso facto works a suspension of its members, .and that to entitle them to benefits subsequently accruing they must apply to the society for reinstatement or transfer to another subordinate lodge. These provisions are binding on the members, and unless the prescribed conditions are complied with their right to benefits will be forfeited, although the suspension of the subordinate lodge occurred without fault .on their part, and although the society has given them no notice of the suspension of the subordinate lodge.”

A casual reading of this authority would seem to justify defendant’s, position in this ease, for it plainly says, “These provisions are binding on the members, and unless the prescribed conditiqns are complied with, their right to benefits will be forfeited, although the suspension of the subordinate lodge occurred without fault on their part, and although the society has given them no notice * * The editor of Corpus Juris cites two decisions on which this statement of the law is based, as follows:

(1) Sovereign Camp, W. O. W. v. Hicks, 37 Tex. Civ. App. 424, 84 S. W. 425. This is a case where a W. O. W. camp was dissolved and the members had ample time and instructions to join another camp. The local camp was officially dissolved on February 1st. On April 23rd of the same year the insured died without having paid his dues for January, February, March or April, although everything possible had been, done to get him to transfer his membership to some other camp or to the Sovereign Camp. He did neither. While he may have received no official notice of the dissolution of the local camp, he had the knowledge and every opportunity was given him to preserve his policy. He knew that his policy was lapsed, independently of the local camp being dissolved, as he had not paid his dues and he knew that failure to pay his dues for that period of time under the rules of the order necessarily lapsed his policy. The case is not analagous to the one under consideration and no fault can be found with its conclusion.

(2) Peet v. Great Camp of the Knights of Maccabees of the World, etc., 83 Mich. 92, 47 N. W. 119. This case holds with the defendant in the case at bar on the question as to whether it is necessary for the individual members of a local lodge to receive notice of the suspension of the local lodge. While this case thus supports the position of the defendant, since the weight of authority is the other way we are unable to accept the. position set forth in this case as the best expression of the law and, while the citation from Corpus Juris appears to support the position of the defendant, the sentence from the article quoted immediately following that part cited by counsel for defendant reads as follows: “But the defense that the subordinate lodge to which a member belonged had been suspended is a technical one which must be made out with literal exactness, and if the suspension is not in strict accordance with the laws of the society its members’ rights are not forfeited.” To support this statement of the law the editor of Corpus Juris cites District Grand Lodge No. 23, I. O. O. F., in America v. Hill, 3 Ala. App. 483, 57 So. 147, 150. In this case the Grand Lodge refused to pay on a policy because it was alleged that the local lodge was under suspension at the time of the death of the insured. The case is very much like the one at bar. There was no clear evidence that there had been a suspension. The local lodge was slow in making remittances of the dues as collected. The dues of insured were paid up in full at the time of death and the lodge was operating, although the proper officer had not remitted the dues that insured had paid, just as was the case with the insured in the case under consideration. The Court of Appeals of Alabama, in deciding the case in favor of the beneficiary, said:

“It is insisted by appellant that appellee was not entitled to recover because Hope Lodge, of which Pines was a member, was in arrears with the District Grand Lodge at the time of Pines’ death, and that his beneficiary, on that account, was not entitled to participate in its endowment fund. While appellant is a social organization engaged in the business, among other things, of furnishing a limited amount of ' insurance upon a professed nonremunerative basis to its members, nevertheless the purposes of its organization must not be lost sight of, and it must conduct its affairs under reasonable regulations and so enforce those regulations through its officers as to furnish at least reasonable security to its members, acting in good faith and meeting their obligations, against the negligence or inefficiency of those under whose control it places its affairs. Supreme Lodge Knights of Pythias v. Withers, 177 U. S. 260, 20 S. Ct. 611, 44 L. Ed. 762.
“The defense relied upon is an extremely technical one, and is opposed to that true sense of reason, right, and justice which should form the basis of every contract, by-law, or regulation affecting the obligations of the members of society to each other. When it is remembered ■that the appellant is a beneficial society, permitted by the law to exercise its various functions because of Its express purpose to minister to the needs of its members when they become the subjects of disease or misfortune and to furnish to each of them, at his death, a modest sum, in the form of life insurance, to be paid to his beneficiary, some person named by him in his certificate as the object of his care and solicitude, the hardship and oppression which would result from a rigid enforcement of the particular provision set up as a defense to this action become apparent: Such a provision could not be permitted in a life insurance policy issued by a purely business organization, and in such case such a defense could not, and would not, be tolerated. ' When interposed by a beneficial society1—a society of benevolence—the law will certainly not permit such a defense to prevail unless it is made out with literal exactness. Supreme Lodge Knights of Pythias v. Withers, 177 U. S. 260, 20 Sup. Ct. 611, 44 L. Ed. 762.”

In line with this decision, even if Mars Hill Tabernacle were in a state of suspension at the time of the death of insured, Mariah Baker, while she was fully paid up and owed nothing, even if this suspension should deny to the beneficiary her right to collect on the policy of the insured, the fact of the suspension of the said local tabernacle has not been proved with that degree of certainty that should always be required in cases of such highly technical defenses.

Counsel for defendant appellant cite Maginnis v. N. O. Cotton Exchange Mutual Aid Ass’n, 43 La. Ann. 1136, 10 So. 180. This case is not applicable. It deals with individual’s suspension and non-payment of dues. Daughtry v. Knights of Pythias, 48 La. Ann. 1203, 20 So. 712, 55 Am. St. Rep. 310, is also cited. The questions therein decided can have no relevance here. Counsel also cited the case of Edwards v. Grand Order of Wise Sons, etc., 6 La. App. 693, decided by this court when one of the defendant’s counsel was an honored member of the court. In a very able opinion the court in that case said:

“When money is paid to an agent duly authorized to receive it, it at once becomes the property of the principal and the debtor making the payment is fully discharged.
“Would the Grand United Order of Wise Sons and Daughters of America ‘have its pie and eat it too?’ ”

So, when Mariah Baker paid her dues, she had done all that was required of her. The money that she had paid at once became the property of the defendant, and the failure of the proper officer of Mars Hill Tabernacle to remit the same cannot be charged against her, nor can her beneficiary be made to suffer on that account. She could not follow this money to its destination, the Endowment Bureau. The only theory under which the defendant could hope to win is that the officers of the local lodge are agents of the local members and not of the Grand Lodge, but that point was decided adversely by this court in the above-cited case: •

“Ujider these rules of the defendant the question is to be decided whether or not the Grand Lodge can constitute the subordinate lodges its agents for the purpose of collecting and remitting the endowment and burial dues of the members and at the same time make the subordinate lodges the agents of their members and not agents of the Grand Lodge for the purpose of collecting and remitting such dues.
“In our opinion a principal cannot authorize an agent to collect money for him and at the same time make his representative the agent o.f his debtor for the purpose of transmitting the money to the principal.”

In support of our holding that the fact of the officers of the Mars Hill Tabernacle in failing to remit the dues of Mariah Baker and others to the Endowment Bureau does not ipso facto suspend niembers whose dues are fully paid up and that a by-law of the order to that effect, such as is relied on by the defendant, is unreasonable, we cite the following from 45 C. P. p. 120:

“But a by-law suspending a local lodge and all its members upon a local officer’s failure to remit assessments to the supreme body, without providing for notice of forfeiture, although providing for admission into another lodge upon such forfeiture and upon repayment of dues and assessments, is unreasonable and void.”

The Court of Appeal of New York has passed on this question in a well-considered opinion, Brown v. Supreme Court, I.O. O. F., 176 N. Y. 132, 68 N.E. 145, 146:

“In so far as the defendant attempted by the enactment of by-laws to make the default or misconduct of its own agent and officer the default and misconduct of the members, who had paid their dues and assessments precisely as the regulations required, its action was nugatory. No corporation can be deemed to possess the power to visit upon its members the consequences of a default in the payment of funds by its agent and officer to tl^e extent of excluding the members from all their rights, and virtually expelling them for such reason from the organization.”

We fully concur in the views expressed in the above case. The case is clear-cut and is analagous with the one under consideration here.

The plaintiff has asked for no increase in the judgment, so we do not examine or consider that part of plaintiff’s petition that asks for attorney’s fee, as well as a double of the amount of the face of the policy.

For the reasons assigned the judgment appealed from is affirmed, the appellant and defendant to pay all the costs' of both courts.


source: Caselaw Access Project

author: HIGGINS, J. PER CURIAM.

license: Public Domain

text:
    No. 13,530
    Orleans
    CARNAL v. W. B. THOMPSON & CO. ET AL.
    January 19, 1931. Opinion and Decree.)
    (February 16, 1931. Rehearing Granted.)
    (March 23, 1931. Opinion and Decree on Rehearing.)
    (April 27, 1931. Writs of Certiorari and Review Refused by Supreme Court.)

      Milling, Godchaux, Saal & Milling, of New Orleans, attorneys for plaintiff, appellant.
    McCloskey & Benedict, of New Orleans, attorneys for defendant, appellee.
   HIGGINS, J.

Plaintiff brings this suit against the late firm of W. B. Thompson & Company and its individual partners and the Hibernia Bank & Trust Company to obtain a judgment ordering the defendant to deliver to the plaintiff, as owner thereof, the possession of seventeen bales of cotton claimed to be illegally held by defendants, and, in the event that the said judgment be not complied with, that there be judgment in favor of the plaintiff and against the defendants, in solido, for the value of the cotton, namely $1,700, with legal interest thereon from judicial demand.

The petition alleges in substance that the plaintiff was a cotton farmer residing at Lecompte, Rapides parish, Louisiana; that during the years of 1926 and 1927 he shipped seventeen bales of cotton to Thompson & Company, a partnership domiciled in New Orleans and composed of W. B. Thompson and his sister, Mrs. Florence Thompson, with written instructions and under an agreement that Thompson & Company would not sell, or otherwise dispose of the cotton until ordered to do so by the plaintiff; that he never gave Thompson & Company instructions or authority to sell, or otherwise dispose of his cotton, but during August, 1928, when the firm of W. B. Thompson & Company had been dissolved by the death of W. B. Thompson, he was informed that the said partnership had stored his cotton and secured negotiable warehouse receipts for the same and had delivered and pledged these receipts to the Hibernia Bank & Trust Company as security for an indebtedness of the said firm to the bank and that, consequently, the partnership was unable to comply with plaintiff’s order to deliver the cotton to him; that 'thereupon plaintiff made demand for delivery of the. cotton upon the Hibernia Bank & Trust Company, which refused to comply therewith.

The petition further charged that Thompson & Company had no power, or ability, to convey title even to a purchaser in good faith and for value, either directly or by the warehouse receipts, and further that the said firm had no right, or authority, to dispose of his cotton, or to place it in a warehouse and secure receipts therefor that could be negotiated, and that, if such receipts were in fact negotiated, they were obtained and disposed of without the plaintiff’s knowledge or acquiescence, in bad faith and in fraud of his rights, and no title was conveyed thereby; that it was generally known to all banking institutions in New Orleans, and particularly within the knowledge of the Hibernia Bank & Trust Company, that the sole business of Thompson & Company was that of cotton factor and commission merchant and that the business and the practice of the said firm was at no time that of buying, selling, or handling cotton for its own account, but handling only the cotton shipped to it by planters and farm- • ers; that the Hibernia Bank well knew, when Thompson & Company presented the said warehouse receipts, that the said cotton and receipts did not belong to the said firm, but to some customer of the said firm, said bank being fully informed and placed on notice and inquiry as to the origin of the said receipts; and that the Hibernia Bank was, therefore, a possessor in bad faith, and acquired no right, title or interest to the cotton or warehouse receipts.

The petition further avers that Thompson & Company pledged the said warehouse receipts to the said bank, which-failed, to exact of Thompson & Company the affidavit required by Act No. 72 of the legislature of Louisiana of 1876, as amended by Act No. 176 of 1902.

Exceptions of no cause of action were filed by the defendants and overruled, and two of the defendants answered as follows:

(1) The sole defense of Mrs. Florence Thompson Fulton was that she was not a member of the partnership of W. B. Thompson & Company.

(2) The defense of the Hibernia Bank was that it had accepted and secured, as collateral security for monies advanced to Thompson & Company, the negotiable warehouse receipts covering the cotton in good faith and for value in due course from W. B. Thompson & Company and that, consequently, its pledge should- be upheld.

The firm of W. B. Thompson & Com-' pany interposed no defense whatever.

On the trial of the case on its merits the first time there was judgment in favor of the plaintiff, as prayed for, setting aside the alleged pledge of the Hibernia Bank and ordering the defendants to deliver the cotton to plaintiff, or to pay the value thereof. Mrs. Fulton and the bank filed motions for a new trial. A new trial was granted in favor of the bank, but refused with respect to Mrs. Fulton, and, therefore, the controversy as between plaintiff and defendants, Thompson & Company and Mrs. Fulton, is not before us, as neither of these defendants have appealed.

On the second trial between the plaintiff and the Hibernia Bank the issue was Whether the pledge of the warehouse receipts was valid or invalid. There was judgment in favor of the bank upholding the validity of the pledge and dismissing plaintiff’s suit as far as the defendant bank was concerned, and plaintiff has appealed from that judgment.

The pertinent facts of the case may be stated as follows:

Plaintiff is a young man living at Lecompte, Louisiana, and is rural mail carrier and operates a small farm. He had raised small crops of cotton and had been shipping several bales of cotton during the seasons of 1920, 1921, 1922 and 1923 to W. B. Thompson & Company at New Orleans. In the year of 1926 he shipped four bales and in 1927 he shipped thirteen bales. These seventeen bales are the ones over which the present controversy arose. On each occasion when the shipment was made on a straight bill of lading he wrote a letter to Thompson & Company containing positive instructions to hold the cotton until he gave them orders to sell it. He testifies that he did not know Mr. Thompson personally and had never been in his place of business in New Orleans, and believed that Thompson & Company owned its own warehouses and was storing his cotton there; that he did not authorize the storing of -the cotton in a pub-lie warehouse and the obtaining of negotiable warehouse receipts in Thompson & Company’s name. The four bales of cotton of the crop of 1926 were received by Thompson & Company about October 15, 1926, and placed in a public warehouse and negotiable warehouse receipts obtained in its name. These receipts were pledged to the New Orleans Bank & Trust Company to secure an individual debt of Thompson & Company. In 1927 this company paid its loan to the New Orleans Bank & Trust Company, which returned the warehouse receipts to it and thereupon, in December of 1927, these four receipts were pledged to the Hibernia Bank as collateral security for an individual loan to Thompson & Company.

Plaintiff’s crop of 1927 consisted of thirteen bales of cotton and were shipped to Thompson & Company in September of 1927. This cotton was likewise stored in a public warehouse and negotiable warehouse receipts obtained in Thompson & Company’s name and these receipts were pledged with the Hibernia Bank as securiity for its individual debts, or loans.

Plaintiff at no time received 'any .loans or ' advances from Thompson & Company against the cotton, and only the small items of insurance and storage were due by plaintiff and were to be liquidated when the cotton was sold, in accordance with the custom obtaining in this market. All of the cotton was to be held by Thompson & Company until plaintiff instructed that firm to sell it, and it is clear from the record that the plaintiff at no time, directly or indirectly, authorized Thompson & Company to sell or pledge the cotton to anyone.

The question for consideration is whether or not the pledge of the cotton to the Hibernia Bank is valid or invalid. The bank. claims that the pledge is valid because it is a bona fide holder for value in due course of negotiable warehouse receipts. The plaintiff contends that the pledge was null and void on the following grounds, to-wit: First, the Hibernia Bank & Trust Company was charged with notice and put upon inquiry that the cotton and the warehouse receipts therefor did not belong to Thompson & Company, but to the plaintiff or one of the customers of the said firm; second, that Thompson & Company did not have any title to the cotton or warehouse receipts and had no ability or authority to convey title to or otherwise dispose of the cotton of plaintiff, or to store it and secure negotiable warehouse receipts therefor, nor was possession or custody of the said receipts entrusted to Thompson & Company by the plaintiff; third, that the pledge of the negotiable warehouse receipts to the bank is invalid because, at the time of taking the pledge, the bank failed to exact of Thompson & Company the affidavit required by Act No. 72 of the General Assembly of 1876, as amended by Act No. 176' of 1902.

We shall discuss and decide these issues seriatim.

Section 47 of Act No. 221 of 1908, known as the Uniform Negotiable Warehouse Receipts Act, provides:

“When Negotiation not Impaired by Fraud, Mistake, or Duress.—The Validity of the negotiation of a receipt is not impaired by the fact that such negotiation was a breach of duty on the part of the person making the negotiation or by the fact that the owner of the receipt was induced by fraud, mistake or duress to entrust the possession or custody of the receipt to such person, if the person to whom the receipt was negotiated, or a person to whom the receipt was subsequently negotiated, paid value therefor, without notice of the breach of duty, or fraud, mistake, or duress.”

In the light of this section the person to whom a receipt has been negotiated takes nothing by the transfer, if he had notice of a breach of trust or duty on the part of the person making the negotiation.

Notice, in its accepted legal sense, means such information on the part of the pei'son -charged with notice as would put a prudent person on inquiry to ascertain the true or actual facts. See Words & Phrases, First, Second and Third Series, verbo “Notice.”

Did the Hibernia Bank, when it received these warehouse receipts from Thompson & Company, have in its possession such facts and information as would have put a prudent person upon inquiry to ascertain whether or not a breach of duty, or trust, was being perpetrated by Thompson & Company in pledging the receipts ?

The business of Thompson & Company was exclusively that of cotton factor and commission merchant. Their letterheads, billheads and other stationery announced that fact to the public and particularly to those who did business with it. This company had been doing business for years on a large scale with the Hibernia Bank and other banks in New Orleans. It was a large borrower from the banks. Its bills payable aggregated, at times, over three-quarters of a million dollars. This company’s account with the Hibernia Bank, while a valuable one to the bank, was one which, because of the size of the loans involved, must have called for close scrutiny by the officers of the bank of the business and affairs of this firm. The main security for its loans from the bank consisted of the pledge of negotiable warehouse receipts. The officials of the bank knew W. B. Thompson well and it appears that he enjoyed a high position in the civic and business affairs of the community, as well as being well regarded in financial circles for his honesty and fair dealing. But the bank, from time to time, required reports and statements of the firm’s business, which were submitted to the bank and critically examined and analyzed by the officers of the credit department of the bank. In March of every, year the firm submitted to the respective banks, with which it was doing business, a statement containing a trial balance from its books. These statements for the years of 1921, 1922, 1923, 1924, 1925, 1926, 1927 and 1928, show the assets and liabilities of the firm, but none of these statements show, as an asset owned by that firm, any cotton, except the statement of 1924. The balance sheet of 1924 shows that the firm owned 55 bales of cotton and held $675,-000 worth of cotton for its customers. The balance sheet of 1925 shows that the firm did not own any cotton, but held 1,500 bales for the account of its customers. The balance sheet of 1926 shows that the firm did not own any cotton, but held 10,067 bales of cotton valued at $877,000 belonging to its customers. The balance sheet for 1927 shows that the firm did not own any cotton, but held 7,285 bales of cotton belonging to its customers valued at $500,000.

It appears that Thompson & Company’s affairs, due mainly to the critical illness of Mr. Thompson, while in a solvent condition, were not what they should have been, and its assets were depreciating in value. The Canal Bank, which also advanced money to the firm, required an audit, which was furnished on May 11, 1927. This audit shows that the firm owned no cotton and held for the account of its customers 5,087 bales of cotton, of which 5,031 bales had been pledged to the banks to secure the personal indebtedness of that firm. The audit further revealed that Thompson & Company had substantially pledged all of its customers’ cotton, valued at $360,000, to the bank for loans to the firm of nearly $480,000, when the total amount advanced against the cotton was $214,462.30. The audit further showed that $50,000 worth of cotton belonging to customers, where the firm had not made any advances against the same, was also pledged. It is admitted that a certified copy of this audit was placed in the hands of the officials of the Hibernia Bank and carefully scrutinized by them. The same auditors were then directed to make a special report, exclusively upon the subject of cotton belonging to customers, and the manner in which this cotton had been handled by Thompson & Company with the banks. On June 11, 1927, this supplemental report was furnished and it showed that 738 bales of cotton, valued at $53,956, belonging to customers who owed Thompson & Company nothing, had been pledged by the firm to the banks to secure its loans or indebtedness. The concluding paragraph of the report reads as follows:

“From the above figures it will be readily observed that of the 5087 bales of cotton valued at $364,992.25, Messrs. W. B. Thompson & Company have a total equity of $187,333.87 against which they have borrowed from various banks a total of $284,-280.00 or $96,446.13 in excess of their equity.’’

The record shows that in September of 1927 the plaintiff shipped thirteen bales of cotton to Thompson & Company and that this cotton was immediately placed in the public warehouse and negotiable warehouse receipts obtained and then pledged to the Hibernia Bank as 'security for individual loans of Thompson & Company. The negotiable warehouse receipts covering the. other four bales of cotton had been previously pledged to the New Orleans Bank and, during December, 1927, Thompson & Company, having paid the loan to the New Orleans Bank, obtained possession of these receipts and, during December, 1927, likewise pledged them to the Hibernia Bank as security for a loan by the bank to the firm.

Thus it will be seen that the officers of the bank knew, or should have known, to what extent Thompson & Company had been misappropriating the cotton of its clients in brea-ch of its duty and the trust reposed in it. Consequently, when the-bank _ received in pledge from Thompson & Company the warehouse receipts covering the plaintiff’s cotton, it at least was bound to make inquiry concerning the -ownership of these receipts and the right of Thompson & Company to peldge them, because the audit and supplemental report clearly revealed that Thompson & Company was pledging warehouse receipts covering cotton valued far in excess of amounts of advances made by it to its customers and, further, was pledging warehouse receipts of cotton held for the account of customers to whom it had not made any advances whatsoever, and that Thompson & Company did not own any cotton in its own right.

We, therefore, find that the bank had sufficient information to charge it with notice that these receipts did not belong to Thompson & Company and were being negotiated in breach of its trust and duty to its customers, and therefore the batik is not an innocent holder in due co.urse within the meaning of section 47 of Act No. 221 of 1908, the Uniform Negotiable Warehouse Receipts Act.

In view of our conclusion upon the first issue, it is unnecessary to consider the other most interesting legal questions presented.

For the reasons assigned it is 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 William M. Carnal, plaintiff herein, and against the Hibernia Bank & Trust Company, defendant, decreeing the plaintiff to be the owner and entitled to possession of the seventeen bales of cotton and the negotiable warehouse receipts covering them, as follows:

TAG NUMBERS:
J. 336219 to J 336222, inch, 4 bales cotton,
J 421147 to J 421149, inch, 3 bales, cotton,
J 426127 to J 426128, inch, 2 bales cotton,
J 427209 to J 427210, inch, 2 bales cotton,
J 429495 to J 429498, inch, 4 bales cotton,
J 430103 to J 430104, inch, 2 bales cotton,

and ordering and condemning the said defendant, Hibernia Bank & Trust Company, to forthwith deliver, or cause to be delivered, the said cotton and negotiable warehouse receipts, and, in the alternative, if the said order- and decree of the court is not complied with, that there be judgment in favor of .plaintiff, William M. Carnal, and against the defendant, Hibernia Bank & Trust Company, for the value of the said cotton, namely, the sum of $1,700, with legal interest from judicial demand until paid. Defendant to pay the costs of both courts.

ON REHEARING

PER CURIAM.

We granted a rehearing in this case at the earnest insistence of counsel that the effect of our original opinion was to impugn the good faith of the officials of the defendant bank. The conclusion to this effect, it is said, is inevitable, because of section 58 of Act No. 221 of 1908, defining good faith as follows:

“A thing is done in good faith within the meaning of this act when it is, in fact, done honestly; whether it be done negligently or not.”

Having held that the negotiation of the receipts by Thompson & Company to the bank was illegal because the bank was charged with notice of the deficiency of Thompson’s title, it is argued that this conclusion necessarily involves some reflection upon the integrity of the bank’s executives. We certainly had no such intention and our appreciation of the situation does not require a discussion of the moral character of the bank’s action. . In our view; section 47 of the act is applicable and not section 48. Under section 47 all that is necessary to defeat the right of the alleged innocent, third holder is to show such'facts as would charge him with notice of the defect in the title of the person under or through whom he claims. It is only in section 48 which, in our judgment, has no application here, that the question of good faith becomes of importance.

For these reasons we have concluded to adhere to our former opinion, which is made the final decree of the court.


author: LeBLANC, J.

text:
    No. 724
    First Circuit
    GIBSON v. NEWPORT CO.
    (January 26, 1931. Opinion and Decree.)
    (March 3, 1931. Rehearing Refused.)
    (April 27, 1931. Writs of Certiorari and Review Refused by Supreme Court.)
    C. V. Pattison, of Lake Charles, attorney for plaintiff, appellant.
    Moss & Siess, of Lake Charles, attorneys for defendant, appellee.
   LeBLANC, J.

This, is a compensation suit brought by the plaintiff, an employee of the defendant, who claims to have been injured on October 11, 1929, while engaged in the performance of his work as a laborer, in helping to unload wood from a railroad box car standing on a private siding on defendant’s premises.

He alleges in his petition that a piece of wood struck him, causing him to slip and fall to the floor of the car, after which a “heap of wood,” some pieces weighing as much as forty pounds, fell upon him, causing his chest to cave in, and badly injuring his stomach. He avers that he received treatment at St. Patrick’s Sanitarium in Lake Charles, where he was confined for twenty-two days, but that after his discharge he continued to suffer and still suffers pain in his head, stomach, and chest. •

Claiming permanent injuries and total disability, he asks, for 400 weeks’ compensation at $9.74 per week and for medical service, less the sums paid him during nine weeks of disability by defendant.

The defendant admits that the plaintiff was injured, but that it was not a serious injury and its entire liability was discharged by payment of the compensation he admits, having received. It is further set out in defense that if there is any present disability, it is in no way connected with the injury of October 11, 1929, but arises solely from an infected gland in plaintiff’s right groin, which infection existed before the accident.

On the day of trial, the defendant consented to aiu amendment of the petition to show that the weekly payments demanded should have been stated to be $10.24 instead of $9.74.

The lower court, holding, in a written opinion, that plaintiff had entirely recovered from the injury after three weeks, and that the disability he complains- of had no relation to the accident, awarded him compensation only fór the difference as admitted by defendant in the weekly payments.

Plaintiff then appealed.

Although his petition recites an injury only to his chest and stomach, from plaintiff’s description according to his testimony, one would think that they were far more extensive and aggravated. He speaks of having been struck in the side, and that on applying iodine and -rubbing the sore spot it would seem that- the flesh had • been torn from his ribs. On cross-examination he adds that he was hit! also in three different parts of his head and points to two. places to indicate scars. He refers to scars on his hands also, apparently from further injuries, he claims to have received, and says that' he suffered with his eyes. In connection with these last injuries to his head and hands, it is rather significant that those who saw him immediately after the accident, including Dr. R. G. Holcombe who attended him at the hospital, saw no signs of any marks, bruises, or lacerations, and that plaintiff himself did not at that time complain of any such injuries. His testimony impresses us, like it did the learned district judge, as- being for the greater part, a tissue of exaggeration- from which it is impossible to conclude that the condition he complain^ of is attributable to the comparatively slight injuries he received at the time of the accident. His walking with a limp suggested to the trial judge intentional exaggeration, and two of the doctors who testified, Dr. Holcombe and Dr. McKinely, were positive, after conducting tests, that he was merely feigning the deafness he complained of.

The plaintiff no doubt is suffering from some physical infirmities and his general, health is impaired to a considerable extent, all caused, however, if we are to accept the weight of the medical testimony, by an infected gland in his right groin, which was discharging pus on the very day that he was taken to the hospital after the accident. In the opinion of these doctors, his system was. and had been absorbing pus from this infected gland, resulting in a general lowering of the patient’s vitality and producing some of the numerous symptoms he described in his testimony. That he was not entirely honest in his disclosure to the court will appear from the fact that he states that he had no gland or other trouble around the groin, whereas there is no doubt but that on the day of his injury there was- an open sore, running pus, right in that region. When confronted with the fact that he had that open sore and after admitting its presence only after the accident, he attempts to explain by stating that, it must have been caused from the lick he received. Yet that is the first mention he makes of any blow by the falling wood in the area of the right groin. It is almost inconceivable that a person could have an open sore of this kind, suppurating as- it was, without being aware of its presence. In the opinion of Dr. Watkins and Dr. Holcombe, this gland presented a chancroidal condition, the result of some form of venereal disease. Because of the stage it had reached, they were positive that there was no relation between the general condition of the plaintiff caused by it, and the injury resulting from the accident. It was as active oñ the day plaintiff was injured, and probably before, as it was. afterwards, and therefore the doctrine of the case of Behan v. John B. Honor Co., 143 La. 351, 78 So. 589, L. R. A. 1918F, 862, and those that followed it, of the awakening by the injury of a dormant disease in the body, does not apply.

The plaintiff spoke also of spitting blood and bleeding from the nose, and of having weak spells and experiencing various sensations under certain conditions, all of which symptoms it was endeavored to connect with what might have been a concussion of the brain that took place at the time of the accident. In the absence of any blow or injury to the head, it is impossible to conceive how a concussion of the brain could have been produced by the accident. Dr. Holcombe states that the hospital records show that he did spit blood, but that would be possible, he says, with the contusion of the right lung which showed on examination. The discharges of blood which plaintiff says continued after he left the hospital could not have been from concussion, caused by the accident, according to Dr. Holcombe, because, he says, “you don’t have concussion as a distant' sequel to trauma.”

Dr. L. Z. Kusliner and Dr. A. N. Pierce both testified as witnesses for the plaintiff. The latter is rather positive in his opinion that the injury is the cause of the plaintiff’s present physical condition. He, however, saw the plaintiff only once, as we read his testimony. That was nearly four months after the date of the accident, and he relied a great deal on the history as given by the patient in forming his opinion. He gave very little consideration to the gland infection, because he says he never saw a case that caused the condition the plaintiff was in. Dr. Kushner also treated the plaintiff after his return home from the hospital. He is not as positive ás Dr. Pierce in his views concerning the extent and result of the injury. He seems to think that the present trouble is to a large degree mental, brought about, probably, by the accident and its effect on the general system.

In the light of what difference of opinion exists, between the physicians, we believe that the district judge correctly accepted that of those who examined and treated the plaintiff immediately following the accident, and were positive that he had entirely recovered from the effects of the injury to his side, in preference to those who saw him after his discharge from the hospital and had not the same opportunities of observing him, and are not nearly as firm in their opinion concerning his present condition.

The judgment of the lower court properly rejected the claim for more than was admitted to be, due the plaintiff in the way of compensation, and it is therefore affirmed.


author: ELLIOTT, J.

text:
    No. 728
    First Circuit
    SINITIERE v. MORRIS
    (January 26, 1931. Opinion and Decree.)
    (March 3, 1931. Rehearing Refused.)
    Borah, Himel & Bloch, of Franklin, attorneys for plaintiff, appellant.
    Wilbur P. Kramer, of Franklin, and John A. Smith, Jr., of New Orleans, attorneys for defendant, appellee.
   ELLIOTT, J.

Jules Sinitiere, employed by Marvin Morris in cutting, carving, and polishing marble, alleges that on May 9, 1929, he received an injury while so employed by said Morris producing in him a temporary total disability to do work of any reasonable character for a time, the total of which was 40 weeks.

That he was receiving a weekly wage of $30 per week. He claims as compensation 65 per cent of his weekly wage, or $19.50 per week for a period of 40 weeks, and, in addition, $14.50 for his expenses on a trip to New Orleans, made at the request of the insurance company, $68 on account of fees of Dr. Kappel, $10 for Dr. Cazenavette, and $24.50 on account of expenses going to and from New Orleans, a total of $117. But judgment for $102.50 only is prayed for on said account.

He further prays that a fee of 20 per cent of the amount recovered be approved against himself as a fee in favor of his attorney.

The defendant denies liability.

The plaintiff’s demand was rejected in the lower court, and he has appealed.

The defendant filed an exception of no right and no cause of action. It was overruled in the lower court. Defendant urges that it should have been sustained.

The petition alleges.:

“That on the 9th of May, 1929, while cutting, carving and polishing marble for the defendant in defendant’s said plant under his said employment, he struck his right thumb on the marble and injured it to such an extent as to suffer temporary total disability to do work of any reasonable character. That immediately upon sustaining said injury, he notified his employer; that the said employer, besides, had personal knowledge of the accident. That the disability was incurred while performing services arising out of his work and incidental to his employment.”

The petition contains other averments, but we do not think it worthwhile to quote them.

We¡ understand defendant’s contention to be that the petition does not show that the alleged injury was wholly and accidentally received in defendant’s service.

The averments of the petition taken as a whole satisfies the requirements of the law, Act No. 20 of 1914, sec. 18, etc. (amended by Act No. 85 of 1926, p. 120).

The exception was properly overruled.

The defendant attacks the credibility of the plaintiff as a witness, and also urges that the testimony of a witness upon whom he depends is contradicted, by written statements previously made by the same witness, that plaintiff and his main witness are so discredited that the claim should not be regarded as proven. The district judge rejected plaintiff’s demand without assigning reasons.

The alleged ground of action is that plaintiff struck his right thumb on a piece of marble. As a witness, he testified that he was using the emery polisher polishing marble between 9 and 11 o’clock in the morning; that the emery slipped and he struck his thumb against the marble.

Asked whether his injury was caused by an air hammer or a blow, he said that it was caused by a blow. That after receiving the injury he continued his work, finishing the day, that he saw Mr. Morris the same evening and told him that he had struck his thumb on the marble and wanted to go to the doctor. He was then asked:

“Q. Did it pain you the day before?
“A. No, sir.”

Further questioned he stated that Dr. Geismar, physician of the insurance company, was the first specialist he went to in New Orleans:

“Q.. Tell the court what investigation he made of the injury?
“A. Dr. Geismar did not do anything at all for me. I went to his- office and he said he knew all about it and would not even listen to me. He never took the pains to even look at me.”

Further answering he said that Dr. Geismar did not examine him, did not make an X-ray picture of his thumb, did not give him a prescription, but sent him to Dr. Cazenavette. In another place he was asked:

“Q. Did you make any statements to any one about this alleged accident?
“A. No, I have never made any statement to any one.
“Q. Are you sure about that?
“A. Yes.
“Q. Can you read and write?
“A. Yes.”

He was then shown a statement and asked if he had signed it, and he admitted that he had, saying:

“I never made any statement, I only answered the questions that were asked me.”

Returning now to the difference in recollection between Mr. Morris and himself, Mr. Morris as a witness testifies that plaintiff did not tell him that he had struck his hand on the marble, but at the same time he admits that on or about May 8 or 9, 1929, plaintiff came to him during the evening, showed him' his hand and arm swollen, said he had been injured at his work and was going to a doctor. He quit work that day. It would be so natural for plaintiff to have told- the defendant, when showing him his hand and telling him that he had been injured at his work, to further tell him how it happened, that we consider it likely that plaintiff did tell him, as he claims to have done, and that defendant had forgotten it. But suppose he did not tell him that he had injured 'it by striking it on the marble he was polishing, that makes no difference, as regards the liability of defendant for compensation. The admission that plaintiff showed him his hand, and that it was injured, and that plaintiff informed him that it had been received in his employ, was sufficient for the purpose of claiming compensation.

Another matter urged against the (plaintiff is that he testifies that he went to New Orleans to see Dr. Geismar, physician of the insurance company, about his injury; that Dr. Geismar did not examine his hand and did not treat it, but sent him to Dr. Cazenavette, when as a matter of fact Dr. Geismar did examine his hand.

Dr. Geismar testifies that he did examine plaintiff’s hand. He was unable to state the exact time, but that it was some time in July, 1929. He gave it as his opinion as the result of his examination that plaintiff was suffering from traumatic neuritis of the muscles of the right thumb, caused by vibration. He stated that plaintiff informed him that he had been using an electric hammer. He therefore gave it as his opinion that plaintiff’s injury had been caused by the use of the electric, hammer, and that the condition of plaintiff’s thumb, in his opinion, could not have been produced by a single blow, but could have been brought about by the constant use of an electric hammer.

On this subject we are of the opinion that Dr. Geismar did examine plaintiff’s hand sufficiently to form an opinion of the injury received, based on a history of the case received from the plaintiff. Dr. Geismar does not claim to have treated plaintiff’s hand. We think it 'likely that plaintiff’s idea that Dr. Geismar did not examine his hand is based upon the theory that he did not do so, because he did not treat him. The testimony of Dr. Geismar, however, does not tend to negative plaintiff’s claim that he was injured while working for defendant- in his marble plant. It only tends to show that it was 'not sustained by striking his thumb on the marble, as plaintiff claims, but was caused by the use of the electric hammer. The evidence was received without objection, and the difference between injury received by the use of the electric hammer and in striking the thumb on the marble, is not so important as the defendant contends that it is.

Another matter urged against plaintiff’s credibility is that as a witness he denied that he had made any statement about the accident, and denied that he had felt any pain in his. thumb or hand on May 8, 1929.

He was then shown a written statement bearing his signature dated August 16, 1929, in which, among other matters, he states in a narrative way:

“On the day of May 9th, 1929, I- did not use the pneumatic hammer, but the day prior, which was May 8th, 1929, I used the hammer at irregular intervals all day. During the day of May 8th, 1929 I felt a little pain in the thumb, mostly. I did not pay any mind to it and I worked throughout the day, and at night of. that day the pain was still in my hand, and the following morning, which was May 9th, 1929, I found the hand a little swollen, but I went to work and the hand just kept getting worse and worse.’’

Not only that but as heretofore stated, referring to his testimony, he was asked:

“Q. Did it pain you thá day before?
“A. No, sir.’y

The plaintiff explains his denial that he had signed a statement,' saying that he had only answered questions. He was not asked to explain his testimony, as a witness, that he had not felt pain in his. hand on the previous day, admitted to have been felt in this statement.

This statement signed by plaintiff is in the handwriting of another party, the agent of the insurance company carrying defendant’s industrial insurance for any compensation he might be required, to pay plaintiff. The document is in narrative form. We are satisfied the agent could have asked plaintiff questions and could then , have put the matter about which he questioned the plaintiff in the narrative form in which the document is written. The agent was not produced as a witness. Plaintiff, as a witness, must be looked on as seriously discredited by the recitals contained in this document produced against him. It happens, however, that the document, instead of helping to defeat plaintiff’s claim, helps him in a very important way to recover.

The document in question was offered in evidence by the defendant without restriction as to any particular purpose, and was received in evidence without objection. Defendant produced and placed this evidence in the record. The document says nothing about an injury sustained by striking the thumb on marble being polished, but contains statements which, if true, justifies a conclusion that plaintiff received the injury which he suffered while using the electric hammer. So the effect is to confirm the fact that' plaintiff did receive the injury in question while working for the defendant and in the course of his employment. The injury is established with certainty. There is no doubt about the injury having been received in. the service of the defendant; that fact is not questioned. In the face of this certainty the fact that it is more likely to have been caused on May 8, 1929, by the use of an electric hammer, than on May 9, 1929, by striking the thumb on marble being polished, cannot defeat the recovery when the former way of injury is shown without objection.

Defendant also attacks the testimony of the local physician who treated plaintiff’s . hand on the evening of May 9, 1929.

This physician testifies that when he first examined plaintiff’s thumb he diagnosed the injury to have been of the tendon of the thumb and treated it accordingly. He admits that the injury to the tendon could have been caused by a shock from ■ a pneumatic hammer,; but he gave it as his opinion that the injury had been caused by a blow; that he treated plaintiff’s hand for some time, and, as it did not improve, he sent plaintiff to another doctor, who specialized in industrial injuries. This doctor, according to the local physician, diagnosed the injury as due to a nervous trouble. The local physician was called on by parties interested in the defense for a report of plaintiff’s condition. He reported to these parties that plaintiff’^ trouble was a nervous trouble, and signed another report in which he described plaintiff’s injury as paralysis of the thumb.

Asked to explain how he came to report in the way stated, when, according to his opinion expressed as a witness on the trial, the injury had been caused otherwise, he explained • that his first opinion and diagnosis of the injury was that the tendon of plaintiff’s thumb had been injured, btit that, when he got reports from certain other doctors who had examined him as experts and pronounced the trouble of nervous origin, etc., he yielded his opinion to theirs, and reported accordingly. That finally, upon receiving the report of the physician who last treated plaintiff and cured him by an operation, he found that his first diagnosis was correct.

Taking into consideration these explanations we do not give the matter the importance which" defendant claims for it. We admit, for the sake of argument, that the local physician should not have reported the opinion of other physicians as being his own, yet the testimony of none of the physicians tends to negative the fact of injury. The only difference between them is a matter of opinion, whether it was caused by vibration or a blow, and, as heretofore stated, the situation is such tliat in this case it makes no difference. The plaintiff is entitled to recover either way, the injury by vibration being shown without objection.

The plaintiff complains that a physician on whose testimony he relied wrote the local physician that the condition of plaintiff’s thumb was, in his opinion, of traumatic origin, but about a month and a half later, when his testimony was taken by commission, he was asked to express an opinion as to the origin of the ailment, and replied that he did not know the cause. We dismiss this contention as having no bearing on the result. The physician in question says nothing tending to negative the claim of the plaintiff that he was injured in the service of the defendant. The effect of the evidence is rather to confirm the fact.

We will now state in conclusion that all the evidence in the case, that introduced by the plaintiff as well as that introduced by defendant, proves beyond question that plaintiff received an accidental injury to his thumb, involving the use of his >hand, while working in the employ of the defendant and in the work in which he was engaged to do. And under the preponderance of the proof and the evidence, the most satisfactory and convincing on the subject received without objection, it was caused by. the use of the pneumatic hammer.

Under the evidence the plaintiff is entitled to recover on. account of said injury for the period of time claimed in the petition.

The plaintiff claims, in addition for the fees of his physicians, and under the law, Act No. 20 of 1914, section 8, subsection 5 (amended by Act No. 242 of 1928, p. 361), he is entitled to recover up to a certain extent on that" account. Dr. A. C. Cappel is due $68; Dr. L. L. Cazenavette has a hill for $25; but the plaintiff only claims for him $10, a total of $78.

The plaintiff urges further claims on account of expenses, but his claim in that respect has. not been satisfactorily established and will not be allowed.

The judgment rejecting plaintiff’s demand is erroneous and contrary to law and the evidence and will therefore be annulled, avoided, and judgment rendered in favor of plaintiff as prayed for.

For these reasons the judgment appealed from herein is now annulled, avoided, and set aside, and it is now ordered, adjudged, and decreed that there be judgment for compensation in favor of the plaintiff Jule Sinitiere and against the defendant Marvin Morris, for 65 per cent of a weekly wage, or $19.50 per week commencing on May 10, 1929, and to continue until October 24, 1929, and commencing on December 16, 1929, and continuing until April 7, 1930, a total of 40 weeks; the weekly installments to each draw interest at the rate of 5 per cent from the time due until it has been paid. That there be further judgment in favor of the plaintiff and against defendant for $78 for the services of physicians.

A fee of 20 per cent on the amount of this judgment is approved against the plaintiff in favor of his attorneys, as prayed for in his petition.

Defendant to pay the cost in both courts.


text:
    No. 748
    First Circuit
    HARRISON v. JOSEPH RATHBONE LBR. CO., INC.
    (March 3, 1931. Opinion and Decree.)

      R. A. Dowling, of New Orleans, attorney for plaintiff, ,-appellee.
    S. S. Reid, of Amite, attorney for defendant, appellant.
   ELLIOTT, J.

Adam Harrison, so called in his petition, but whose real name • is Adam Harris, claims of Joseph Rathbone Lumber Company, Inc., defendant, disability compensation at the rate of $16.-72 per week for a period of 400 weeks, subject to a credit of $11.70 per week for a period alleged to be about 106 weeks, received.

The injury for which compensation is claimed was received while cutting trees for defendant on November 23, 1926.

The defendant admits in its answer that plaintiff was injured in its service at the time alleged and having paid him compensation on. said account, but alleges that the injury received was in his right leg below the knee, and denies that his injury reached any other part of his. body. It denies that plaintiff was earning $18 per week, but alleges that it paid him compensation based on that amount from November 23, 1926, until January 8, 1928, a period of 111 weeks. That it has paid medical expenses on his account far in excess of $250. That it has paid plaintiff all the compensation to which he is entitled.

The lower court rendered judgment in favor of the plaintiff for $324.12 as representing back payments due December 4, 1929, and for the further sum of $14.62 a week, beginning December 4, 1929, not to exceed 300 weeks, from date of injury, November 23, 1926.

Defendant has appealed.

Plaintiff has answered the appeal praying that the judgment be increased.

The extent of plaintiff’s injuries received November 23, 1926, is in dispute.

Dr. Harrison, who treated plaintiff on account of his injuries received November 23, 1926, testified as follows:

“Interrogatory No. 7. Q. Are there any .other injuries to Harrison except to his leg below the knee?
“A. No.
“Interrogatory No. 8. Q. If Harrison’s leg 'had been amputated at any point below the knee, would there be any remaining part of his. body suffering from injuries received on November 23rd, 1926?
“A. No.”

There is' further testimony in the record about the condition of plaintiff’s, leg and other parts of his body, but nothing contradicting or denying the testimony of Dr. Harrison. Nothing that satisfies the showing required by Act No. 20 of 1914, section 18, par. 4 (amended Act No. 85- of 1926), which provides:

“The judge shall not be bound by technical rules of evidence or by technical rules or procedure other than as herein provided, but all findings of the fact must be based upon competent evidence, and all compensation payments provided for in this act, shall mean and be defined to be for injuries and only such injuries as are proven by eompeterit evidence, of which there are or have been objective conditions or symptoms proven, not within the physical or mental control of the injured employee himself.”

And the further requirements on the subject contained in section 38 (amended Act No. 38 of 1918).

It is therefore not established by satisfactory evidence that any of the ailments, except the injury to his leg which plaintiff was found to have while in the Charity Hospital, resulted from the injury received on November 23, 1926.

The Charity Hospital records were objected to when offered in evidence by the plaintiff, but the objection was only formal; no particular ground for objection was specified. The copy was certified to by the superintendent, under the seal of' the Charity Hospital. We think they were properly received in evidence. But no connection between the injury of November 23, 1926, and the other ailments mentioned in the records is thereby shown.

The testimony of Dr. Harrison being explicit and to the point, we hold that the evidence shows that plaintiff’s knee was not injured while in the service of defendant on November 23, 1926; that the injury on that occasion was below the knee, and that if plaintiff’s leg had been amputated below the knee there would have been no remaining part of his body suffering from the injury in question.

Such being the ease, it follows that under the law, Act No. 20 of 1914, sec. 8(d), pars, 7 and 13 (amended Act 85 of 1926), plaintiff cannot recover compensation beyond the amount' provided for the loss, of a foot, which is 65 per cent of his weekly wage for 125 weeks.

The amount of plaintiff’s average weekly earnings is disputed and the determination is a matter of some difficulty.

The plaintiff testifies that he received $3.75 a day when he was working by the day; that he worked six days ' in the week; and that when he worked cutting trees and was paid by the tree, he earned more than that.

■ But according to defendant’s auditor, called as a witness, testifying from defendant’s pay roll, plaintiff earned less than he claims. But we conclude, after considering all that has been said on the subject, that plaintiff must have earned on an average $3.75 a day and that he worked six days a week, making an average of $22.50 per week. That 65 per cent of his weekly wage amounted to $14.62. This sum per week for a period of 125 weeks amounts to $1,827.50. Plaintiff has received $1,298.70. Subtracting the sum received from the amount to which he is entitled leaves $528.80. We think this amount should draw legal interest commencing one week from date of last payment, which last payment was on January 8, 1929, and will render judgment accordingly.

The defendant calls our attention to the holding in Brunette v. Prutsman, 11 La. App. 305, 122 So. 870, in which the court said there could be no question as to rate of payment because plaintiff had accepted $9 per week, etc. But in that case the compensation referred to had been definitely fixed by the court.

In this case the compensation which plaintiff, has. been receiving was arbitrarily fixed by the defendant, and the fact that plaintiff received it without question- at the time does not, under the provisions of the Compensation Law, section 36, prevent plaintiff from recovering the true amount due him, as may be shown by the evidence on the trial.

Plaintiff’s request that the judgment in his favor be increased is refused.

For these reasons the judgment appealed from is amended so as to make the balance due the plaintiff on account of his said injury of November 23, 1926, at $528.80 with legal interest thereon from January 15, 1929, until paid, and as thus amended the judgment appealed from is affirmed.

Defendant and appellant to pay the cost in the lower court.

Plaintiff and appellee the cost of appeal.


author: JANVIER, J.

text:
    No. 13,577
    Orleans
    CAMPBELL v. N. O. PUBLIC SERVICE, INC.
    (March 23, 1931. Opinion and Decree.)
    Arthur B. Leopold and Gerald Netter, of New Orleans, attorneys for plaintiff, appellant.
    Ivy G. Kittredge, of New Orleans, attorney for defendant, appellee.
   JANVIER, J.

Plaintiff, who had been a ' passenger on one of defendant’s street cars, fell on alighting therefrom, and now claims reimbursement for injuries sustained, contending that her fall was caused by a hole in the ground, into which she placed her foot as- she descended from the step of the car, and that defendant failed to furnish her a safe place to disembark.

Defendant denies that it is liable for the damage sustained, admitting that there was a slight depression in the ground at or near the point at which , plaintiff alighted, but maintaining that such a depression did not and could not cause a fall to a person using ordinary prudence in stepping to the ground from the step of the car.

It is conceded by counsel for both parties that the car had not reached the regular place intended for passengers for use in boarding and alighting, but it is also agreed that the point at which plaintiff left the car had, by custom, been adopted to a considerable extent by the crews of the street cars and by passengers, and was, in fact, used quite as frequently as was the regularly provided place.

It is also conceded that plaintiff herself had, on many occasions, alighted at or very near the same spot, and it appears that no accident had theretofore taken place and that none has occurred there since, and the evidence shows that no repairs or changes have been made.

Various persons who examined the depression testified with regard to the extent thereof, and we are satisfied that it was approximately twenty-four inches by thirty inches in area, and that it sloped from the edges, which were level with the ground, to a maximum depth of less than two inches in the center.

It also appears that, in alighting from the car, plaintiff, though she was nearly sixty years of age, did so without making use of the handholds and rods provided for that purpose. This, in itself, was carelessness on her part.

There is some conflict in the evidence as to whether plaintiff was requested by the motorman to alight at the point in question, or was merely permitted to do so. ft is not necessary to decide just what is the truth in this regard, because, if the place at which a passenger alights is unsafe, the carrier is liable for resulting injuries sustained, regardless of whether the passenger was forced to disembark at that particular point, or was merely permitted to do so, and this is true whether the spot elected is the usual stopping place or not. As we said in Wagner v. N. O. Public Service, Inc., 9 La. App. 699, 120 So. 72:

“There is some conflict in the evidence as to whether the car had stopped at the usual point or had gone a short distance beyond it. We cannot see that it is necessary for us to settle this conflict, because in either case, if there was in fact a dangerous hole at the point at which the car stopped, whether in its usual place or elsewhere, defendant would be liable for any injuries, sustained by the alighting passenger. A railroad or street car company is responsible to a passenger for its failure to furnish a safe place to disembark or for stopping its car and allowing or inviting a passenger-, to disembark at an unsafe place.”

But, whether the spot at which the plaintiff alighted was usually used, and regardless of whether she was forced by the crew to disembark at that point, or was merely permitted to do so, we are of the opinion that that spot was not unsafe.

The evidence—and particularly the photographs which we find in the record— convince us that the point at which the car stopped was reasonably safe, and that an ordinarily prudent person could have alighted without danger, as had innumerable others on prior occasions, and as have many others since. In fact, at the identical spot and only a few seconds before plaintiff, another passenger is shown to have stepped off the car without falling and without inconvenience. Since the place provided was reasonably safe, the carrier is not liable.

“It is not negligence for a street car company to stop its car either short of or beyond the regular stopping place, although the place where the car is stopped is not precisely similar to that at the regular stopping place.” Clogher v. N. O. Railway & Light Co., 143 La. 85, 78 So. 247.
‘‘Street car company held not liable to passenger falling and sustaining injuries when alighting at point safe for ordinarily prudent person.” Wagner v. N. O. Public Service, Inc., supra.

See, also, Carroll v. N. O. Railway & Light Co. et al., 132 La. 683, 61 So. 752; Gaisser v. N. O. Public Service, Inc., 6 La. App. 139; Durieu v. N. O. Public Service, Inc., 7 La. App. 276.

Our brother below was correct in dismissing this suit.

The judgment appealed from is affirmed.


author: WESTERFIELD, J.

text:
    No. 13,567
    Orleans
    SANDERS v. INDEPENDENT NATL. LIFE INS. CO.
    (March 23, 1931. Opinion and Decree.)
    S. S. Goldman, of New Orleans, attorney for plaintiff, appellee.
    Normann, McMahon & Breckwoldt, of New Orleans, attorneys for defendant, appellant.
   WESTERFIELD, J.

The plaintiff, a beneficiary under a policy of industrial life insurance, brings this suit for $126, the face value of the policy. The case is defended upon the ground that the policy had lapsed because of the failure to pay premiums. Answering this contention plaintiff claims that an attempt was made to pay the premiums, but that the defendant insurance company refused to accept further payments because of the fact that someone living in the same house with her had contracted tuberculosis and the officials of the company were, unwilling to take-the risk of infection, which further transactions with her might involve.

Of course, if the premiums were tendered and arbitrarily refused the policy did not lapse. Newton v. National Life Ins. Co., 161 La. 357, 108 So. 769. The testimony of plaintiff and that of her daughter, who testified in her behalf, is in hopeless conflict with that of the manager and the cashier of defendant company, but Mr. Johnston Armstrong, a member of this bar, without any interest in the litigation, testified that the plaintiff called upon him and endeavored to have the company accept premiums and that he called at the office of defendant company for that purpose and was there informed that the premiums would not be accepted for a sufficient reason, and “the courts were open to him if he had any claim.” His testimony is sufficient to resolve the doubt created by the conflicting evidence in favor of the plaintiff. This was evidently the view of the trial court and we believe its judgment was correct.

For the reasons assigned the judgment appealed from is affirmed.


text:
    No. 13,505
    Orleans
    SOUTHERN COAL CO. v. R. & P. CONSTRUCTION CO., INC., ET AL.
    (March 30, 1931. Opinion and Decree.)
    Lemle, Moreno & Lemle, of New Orleans, attorneys for plaintiff, appellant.
    Spencer, Gidiere, Phelps & Dunbar, of New Orleans, and Jas. O’Niell, of New Orleans, of counsel, attorneys for d'efendants, appellees.
   WESTERFIELD, J.

The R. & P.' Construction Company, Inc., contracted to erect a switch track for the Texas & Pacific Railway Company. Plaintiff, the Southern Coal Company, sold coal to the R. & P. Construction Company, which was used as fuel in operating two locomotives which were employed for the purpose of conveying material needed in the construction of the switch .track. Plaintiff was not paid for its coal, and brought this suit for $350.02, the purchase price, against the R. & P. Construction Company, the Texas & Pacific Railway, and the Southern Surety Company; the latter being the surety on a bond given by the construction company to the Texas &’ Pacific Railway for the proper execution of the contract. No citation was effected upon the R. & P. Construction Company, and the claim as against the Southern Surety Company, is now abandoned. There was judgment below dismissing plaintiff’s suit, and plaintiff has appealed.

. In this court judgment is asked against the Texas & Pacific Railway, aione under the authority of Act No. 98 of 1916, 'which reads, in part, as follows:

“An act creating a lien and privilege upon road-beds, tracks, rights of way and franchises of all the railroads in the State of Louisiana, in favor of all persons, firms or corporations furnishing supplies or materials to such railroads or performing labor for account thereof; providing for the time for which such lien and privilege shall exist, and the conditions upon which it shall he good, and establishing its priority; and repealing all laws or parts of laws in conflict with the provisions, of this act.
“Section 1. Be it enacted by the General Assembly of the State of Louisiana, That a lien and privilege is hereby created and established upon the road-beds, tracks, rights of way and franchises of all the railroads .in the State of Louisiana, in favor of all persons, firms or corporations who have furnished supplies, materials or labor that entered into the construction, maintenance or repair of the permanent road bed and structures of such railroad, to secure the amount due for such supplies, material or labor.
“Section 2. Be it further enacted, etc., That such lien and privileges shall exist, without the necessity of recordation, and shall be good for a period of twelve months from the date upon which such materials or supplies were delivered, or such labor was performed; provided that in case of running account of twelve months shall be calculated from the date of the delivery or performance of the last item upon such account.”

The T. & P. Railway resists plaintiff’s claim upon two grounds: First, that the act relied on has no application because the coal, for the price of which this suit was instituted, was not furnished to the railroad, but to a contractor; and, second, if the act applies, coal is not material nor supplies which may be said to have “entered into the construction” of the switch track, which was the object of the contract.

Considering the first defense, we observe that the title of the act creates I a lien upon roadbeds, tracks, etc., of all railroads in the state “in favor of all persons, firms or corporations furnishing supplies or materials to such railroads,” and that in section 1 a lien and privilege is created and established upon the roadbeds, tracks, etc., of the railroads “in favor of all persons, firms or corporations who have furnished supplies, materials or labor that entered into the construction, maintenance or repair of the permanent roadbed and structures of such railroad, to secure the amount due for such supplies, material or labor.”

Plaintiff argues that the language of section 1 evidences an intention on the part of the Legislature to grant a lien in favor of all persons furnishing supplies and materials, etc., which entered into the construction of the roadbed, etc., without regard to whether they were supplied directly, or through a general contractor. This, view of the act is said to be supported by the theory of the lien laws to the effect that furnishers of supplies should be protected by those whose property has been enhanced by the incorporation of such material and supplies. The situation is likened to that which obtains under the building contract laws, where liens are created in favor of subcontractors, material-men, and others, against the owner.

On the other hand, counsel for defendant maintains that the construction contended for by plaintiff would result in the unconstitutionality of the statute under section 16 of article 3 and section 19 of article 19 of the Constitution of 1921, because, if the act be held to create a lien in favor of persons furnishing supplies to a contractor, it would be. broader than its title and in violation of section 16 of article 3 of the Constitution, which reads as. follows:

“Every law enacted by the Legislature shall embrace but one object, and shall have a title indicative of such object.”

And furthermore, since section 2 of the act dispenses the lienholder from the necessity of recordation, to hold that the act created a lien in favor of third persons would be in the teeth of section 19 of article 19 which reads as follows:

“No mortgage or privilege on immovable property, or debt for which preference may be granted by law, shall affect third persons, unless recorded or registered in the parish where the property is situated, in the manner and within ‘the time prescribed by law, except privileges for expenses of last illness, privileges arising upon the death of the owner of the property affected, and privileges for taxes, State, parish and municipal; provided such tax liens, mortgages and privileges, shall lapse in three years from the 31st day of December in the year in which the taxes .are levied, and whether now or hereafter recorded.
“Privileges on movable property shall exist without registration of same except in such cases as may be prescribed by law.”

Counsel for plaintiff counters with the suggestion that we cannot consider the constitutionality of the statute, for the reason that that point was not raised in the lower court, citing J. J. Clarke Co. v. Petivan, 161 La. 1095, 109 So. 913; Godchaux Sugars, Inc., v. Leon Boudreaux & Bros., 153 La. 685, 96 So. 532, and State ex rel. Mattern v. City of N. O. et al., 9 La. App. 95, 119 So. 94.

It is sufficient answer to this contention to say that defendant does not attack the constitutionality of the act, but, on the contrary, maintains that it is constitutional; when properly construed. The question, therefore, is whether the act is susceptible of a construction which will save -it from constitutional objection.

It is plain, we think, that, if the act be held to confer a lien in favor of one who supplies a contractor without recordation, it would be repugnant to section 19, but, unless that construction be unavoidable, it will not be adopted, because the act is presumed to have been validly enacted and to be in harmony with constitutional restrictions. The mere fact of the enactment of the statute raises a presumption of its constitutionality. Lionel’s Cigar Store et al. v. McFarland, 162 La. 956, 111 So. 341. One who attacks its constitutional validity carries the burden of proving the invalidity specifically and clearly. State v. Hudson, 162 La. 543, 110 So. 749. If it is reasonably possible, -therefore, to consider this, act as, free from objection under article 19 of the Constitution, and if it is susceptible of interpretation in conformity with that provision of the Constitution, it will be so held. In re Carter, 165 La. 1012, 116 So. 491; Shreveport v. Bayse et al., 166 La. 689, 117 So. 775.

Turning now to the act and construing it with reference to its title, because the title is an essential part of it (City of Gretna et al. v. Bailey, 141 La. 626, 75 So. 491, Ann. Cas. 1918E, 566), we find that the title limits the lien to those who supply materials, directly to the railroads, and, with that provision in mind, we read section 1, which grants to all persons who have furnished supplies, material, or labor that entered into the construction, maintenance, or repair of the permanent roadbed, etc., Us being qualified by the phrase “to such railroads.”

We believe this construction to be reasonable, and find it consistent with constitutional requirements, and therefore adopt it. It follows that plaintiff’s claim must be rejected.

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