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(100 So.) to Grace that they would go alone to see the chase, but at a price less than defendants agent of defendant company on the after- asked. The latter rejected the offer and disnoon of November 20, as putting an end to charged the broker, but, shortly after, the services of Grace, as far as he was con- through another agent, sold the property to cerned. But no express notice of the ter- the person whose name was communicated mination of Grace's agency was given to by plaintiff and for the price originally ofhim by Robert on that occasion.

fered by him. It was held in that case that [1] The state of facts, therefore, with defendants could not, by discharging the which we have to deal, is one where the plaintiff and consummating the negotiation principal has sold the property, at a price through another, deprive him of his right of purporting to be less than that originally compensation for services which eventually offered, to a prospective buyer procured by inured to their benefit. This court said in the agent, while negotiations were pending the Gottschalk Case: between the principal and the agent, and without any notice to the agent by the prin from

the services of Gottschalk, and they ought

"The defendants have received an advantage cipal. It is well settled that where à bro- to pay for them. The general rule of law as to ker, who is employed to sell property at a

commissions is, that the whole service or duty given price, and for an agreed commission, must be performed, before the right to any has opened negotiations with a purchaser, commission attaches; for an agent must comand the principal, without terminating the plete the thing required of him before he is agency or negotiations so commenced, takes entitled to charge for it. But cases may ocit into his own hands, and concludes a sale cur, in which an agent may be entitled to a refor a less sum than the price fixed, the bro- muneration for his services, in proportion to ker is entitled, at least, to a ratable propor- what he has done, although he has not comtion of the agreed commission.

See Story on Agency, pleted the business.

333; Hammond v. Holiday, 1 Carrington & This rule is supported by numerous au

Payne, 429. We consider this such a case. thorities, upon the ground that the broker Here the entire performance by plaintiff was is, in such case, real the moving cause prevented by the act of the defendants (prinof the sale, as he has brought the parties cipals). They took the business out of his together and thereby procured a purchaser honds, intrusted it to others, and soon after and performed his contract which was con- the bargain with Mercer was closed.” (Italics tingent upon his success.

Hoadley V. Sav- ours.) ings Bank of Danbury, 71 Conn. 599, 42 Atl. 667, 41 L. R. A. 350, 351, note, citing numer

We said in the case of Taylor* v. Martin, ous authorities.

109 La. 137, 33 South. 112, that In the case of Hovey v. Aaron, 133 Mo.

"Where no time for the continuance of a App. 573, 113 S. W. 718, it is held that contract of brokerage is fixed, either party is

"If defendant, while plaintiffs' authority to at liberty to terminate it at will, subject only sell stood uprevoked, chose to sell the property, to the ordinary requirements of good faith.either in person or through another agent, to a (Italics ours.) customer procured by the efforts of plaintiffs for a less price than that which plaintiffs were We distinctly held in the Gottschalk Case authorized to offer, that was his privilege, but that the discharge of the agent who had prohe will not be permitted to reap the fruits of cured a purchaser, and the closing of the plaintiffs

' labor and then deny them their just deal with the same purchaser a short time reward."

afterwards, through another agent, was an See, also, Paschall v. Gilliss, 113 Va. 643, act of bad faith. 75 S. E. 220, Ann. Cas. 1913E, 783; Lawson It would be equally an act of bad faith v. Black Diamond Coal Min. Co., 53 Wash. upon the part of the principal in such a case, 614, 102 Pac, 759; Martin v. Silliman, 53 N. if the sale should be made personally by

him. If brokers could be legally discharged The decisions above quoted, when consid- by their principals, shortly after prospective ered as a whole, are based, not only upon the purchasers were found, and the sale could principle that in such cases the agent is con- be effected directly by such principals, or sidered as the proximate or procuring cause through the medium of another agent, to of the sale, but also upon the equitable max- the same purchaser, then Othello's occupaim that the principal shall not be permitted tion would be gone there would be no more to enrich himself at the expense of the agent commissions collected; more realtors. or broker, whose services have inured to his Counsel for defendant company cite the case

Y. 615.

no

of Ford v. Shaffer, 143 La. 635, 79 South. We expressly adopted this principle into 172. In that case, the owner sold the propthe jurisprudence of this state at an early erty to the prospective buyer, long after the date. In the case of Gottschalk y. Jennings, broker had tried and failed to effect a sale. 1 La. Ann. 5, 45 Am. Dec. 70, the defendants It is stated in the opinion in that case that employed plaintiff, a broker, to sell certain more than ten months had elapsed and that property. Plaintiff communicated to them the broker did not aid at all in the transthe name of a person who offered to pur- action. Such is the purport of the decisions

benefit.

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in Lewis v. Manson, 132 La, 817, 61 South. of $82,400, which included the agent's com-
835, and Hauch v. Bonnabel, 134 La. 847, 64 mission:
South, 795, upon which the Ford Case is Judgment affirmed.
predicated.

Rehearing refused by Division c, com-
[2] The prospective purchaser in the case posed of Justices OVERTON, ST. PAUL
before us had nothing to do with the pay- and THOMPSON.
ment of the commissions. He was in no way
bound for them, and it was not in his power
to terminate his relations with plaintiffs on
the very eve of the consummation of the

(156 La.) sale, in order to protect defendant company

No. 26143. by a discharge of the broker, against "the requirements of ordinary good faith" and CONTINENTAL SUPPLY CO. v. FISHER the imperative demands of fair business

QIL CO. dealing. The defendant company itself made no at. (Supreme Court of Louisiana. March 24, 1924.

Rehearing Denied by Division 0 tempt whatever to sever its relationship with

May 5, 1924.) the agent in this case before the sale was effected. If it had done so, in the very face

(Syllabus by Editorial Staff.) of the sale, or shortly afterwards, would | 1, Action Am70_Plea of prescription and have incurred the same liability for the com

prayer for dismissal held to waive abandonmission as was imposed upon the defend ment of suit for want of prosecution. ant in the Gottschalk Case, cited in this Where judgment on note was taken in opinion.

2

solido against defendant as maker and against [3] It is true that a principal may reserve the indorser, although no preliminary default his right to sell his property at a fixed net had been entered against maker, defendant, price, and may deny to a broker the exclu- by plea of prescription of four and five years sive right of sale. The principal, in such and prayer for dismissal filed because of necesevent, may sell his property either directly to be followed by judgment, and being in effect

sity of preventing entry of preliminary default or through any agent to a third person; but an answer, waived right to claim abandonment he cannot, in any case, dispose of the prop- of suit for want of prosecution for five years erty to a prospective purchaser introduced under Civ, Code, art. 3519. by an agent and deprive the agent of his commission, either by discharging him short-2. Limitation of actions Owo 126—Prescription; ly before or after the sale, or by silently ig

legal citation of one solidary debtor inter

rupts prescription as to all during pendency noring his rights in the premises.

of suit. The principal, in order to relieve him

Legal citation of one of several solidary self of liability in such a contingency, must debtors interrupts prescription as to all dureither notify the agent of the offer and give ing pendency of suit, in view of Civ. Code, arts. him a reasonable time to protect his commis- 3518, 3551, 3552. sion, or he must decline the sale. Good faith and fair methods of trade require such 3. Action am 70Demand in reconvention by

plaintiff in answer to demand in nullity held a course of conduct, and nothing short of

reinstitution of suit as against claim of abanthis will shield a principal against the pay donment. ment of the commissions of the agent, un

Where defendant in suit on note filed deless there is a bona fide discharge of the mand in nullity to judgment in solido against agent, or such length of time has elapsed as defendant and indorser, demand in reconvention to show that the effort of the agent was not by plaintiff in answer to demand in nullity held a contributing cause of the sale.

reinstatement and reinstitution of suit against While the agent and the prospective pur- defendant and constituted prosecution of suit chaser testify that the movables, in addition as against claim of abandonment. to the plantation, included in the sale, were in the nature of concessions, authorized by Appeal from Twelfth Judicial District the controlling stockholders of defendant Court, Parish of De Soto; John H. Boone, company, we are not inclined to accept such | Judge. concessions as a good reason for a diminu Action by the Continental Supply Company tion of the purchase price of the sale of the against the Fisher Oil Company. Judgment plantation, We regard these concessions, for plaintiff, and defendant appeals.

Alnot in the light of actual deductions from firmed. the purchase price, but rather as "langniappe," or gratuitous additions to the sale,

Modisette & Adams, of Jennings, for apas said sale was made for the sum of $50,

pellant. 000, the amount of the net purchase price,

Lee & Bell, of Mansfield, and J. S. Atkinnotwithstanding these concessions. The real son, of Shreveport, for appellee. less price at which the property was sold in By Division A, composed of O’NIELL O. the case was $80,000, instead of the price J., and ROGERS and BRUNOT, JJ.

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

hogy

1

(100 So.) ROGERS, J. The history of this litiga On February 19, 1923, plaintic answered tion is as follows:

the demand in nullity, averring that by its On June 27, 1916, plaintiff sued the Fisher plea of prescription of four and five years the Oil Company, as maker, and G. B. Zigler, as Fisher Oil Company had waived its right to indorser, on a certain promissory note for claim the abandonment of the suit against $11,682.25, with interest and attorney's fees. it for want of prosecution for five years. By Zigler answered. His codefendant did not. way of reconvention, plaintiff prayed for

'The case was tried, and on April 12, 1917, judgment against said oil company for the the district court gave judgment against both | amount of the note, interest, attorney's fees, defendants in solido, notwithstanding no pre- and protest fees, declared on in the original liminary default had been entered against suit. the Fisher Oil Company.

On June 20, 1922, the Fisher Oil Company On April 25, 1917, defendant Zigler ap- filed a “Plea of Prescription and Abandonpealed devolutively to this court.

ment” to plaintiff's answer and reconventionOn November 30, 1919, the Fisher Oil Com- al demand, in which it again urged the pleas pany answered the appeal, praying to have of prescription and abandonment under the the indgment against it annulled. Appearer provisions of article 3519 of the Civil Code. not having appealed from the original judg On the issues as thus made up, judgment ment, this court found itself powerless to was rendered in favor of plaintiffs as prayed grant the relief prayed for, and, accordingly, for in its said reconventional demand. The affirmed the judgment. See 150 La. 890, 91 Fisher Oil Company appealed from the judgSouth. 287. The opinion and decree was filed ment. in the district court on March 25, 1922.

In its so-called “Plea of Estoppel," filed The Fisher Oil Company, on May 24, 1922, May 24, 1922, the Fisher Oil Company alleges filed a motion, styling it a "plea of estoppel,” that the "note sued on as well as the cause in the court below, in which it set forth that of action" has been prescribed by the prethe note sued on was extinguished by the scription of four and five years under the prescriptions of four and five years, and that laws of Texas and Louisiana, and the prayer the suit had been abandoned and was barred | is for the maintenance of the plea of preby the prescription of five years, during scription, the nullity of the judgment, and which period no action therein had been the dismissal of plaintiff's suit. taken as against mover. The prayer was In its so-called "Demand in Nullity," filed that the plea of prescription be sustained, on June 20, 1922, said company prayed for and that the judgment in so far as it pre- the dismissal of plaintiff's suit on the ground tended to be "against your respondent bA that the action had abated and become barred annulled and declared absolutely void, and for want of prosecution by the prescription plaintiff's demands as to respondent be re- of five years. jected and its suit dismissed at its cost."

Plaintiff, on the other hand, urges that On June 20, 1922, the same pleader filed the citation of defendant in the original suit another motion, styled a "Demand in Nul- had the effect of interrupting prescription on lity,” in which the nullity of the judgment the obligation sued on until it became merged against it was alleged, because rendered into a valid judgment, or until the suit had without issue joined by a preliminary default, been declared abandoned ; that the judgment and further averring that the suit had abated in its favor, though invalid, prevented the and become barred by the prescription of five running of the term necessary for abandonyears for want of prosecution.

ment, which remained suspended until said In opposition to these pleadings by the judgment was set aside; that the resistance Fisher Oil Company, plaintiff on November offered in this court by plaintiff to defend27, 1922, interposed a plea, denominated as ant's attempt to reverse the judgment was an an “Exception to the Jurisdiction, Plea of Es- act in prosecution of the suit; and that the toppel, Res Adjudicata, and Motion to Strike plea of prescription filed by defendant more Out.” In this plea, plaintiff alleged want of than five years after the last step of prosejurisdiction because of the appearance by the cution by the plaintiff constituted a waiver Fisher Oil Company in this court by its an- of any right to claim an abandonment of the swer to the appeal of its codefendant, hold- suit. ing said appearance to be an acquiescence in [1] It is unnecessary for us to pass upon said appeal, and as divesting the district all the points of law raised by plaintiff, court of jurisdiction in the cause; that the since we have reached the conclusion that demánd in nullity as made was unauthorized defendant by its plea of prescription of four by law, the correct procedure being a direct and five years to the note and cause of action, action to annul against all parties to the orig- and its prayer for the dismissal of plaintiff's inal suit; that the judgment of April 12, action, waived its right to claim the abandon1917

, afirmed on appeal, was res judicata, ment of the suit. The plea was filed under and could only be annulled, if at all, by a di- the stress of necessity created by plaintiff to rect action in nullity. The plea was over- prevent the entering of a preliminary default, ruled on December 12, 1922.

to be followed by a judgment rendered on 100 SO.-5

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confirmation thereof. It was, in effect, an (1923, to the demand in nullity instituted by
answer to plaintiff's demands. An answer said oil company.
to the merits waives the objection that the We see no error in the judgment appealed
suit has been abandoned for want of prose from.
cution for five years. Geisenberger v. Cot Judgment affirmed.
ton, 116 La. 651, 40 South, 929.

Rehearing refused by Division C, composed The case of Lips v. Royal Insurance Co., of OVERTON, ST. PAUL, and THOMP149 La. 359, 89 South. 213 to which we have

SON, JJ. been referred, does not parallel the case at bar. In the cited case, the appearance by the plaintiff was unnecessary, and the answer was filed before the expiration of the five

(156 La.)

No. 26140. year period, when there was nothing to waive.

[2] The prescriptions pleaded by defendant CITY SAVINGS BANK & TRUST CO. V. are untenable. The running of prescription

GOODMAN et al. was interrupted and suspended by the filing of the suit, and the service of citation on

(Supreme Court of Louisiana. April 21, 1924.) both the Fisher Oil Company and G. B. Zig

(Syllabus by Editorial Staff.) ler. The law is that legal citation of one of

1. Bills and notes em 370—Absence or fallure several solidary debtors interrupts prescription as to all. The interruption of prescrip

of consideration not defense against bona fide

holder in due course, tion by a suit works a suspension of prescrip

In view of Act No. 64 of 1904, 88 28, 57, - tion as to every one affected by the interrup- absence or failure of consideration is no detion during the pendency of the suit. Civil fense against bona fide holder in due course. Code, arts. 3518, 3551, 3552; Turner, Wilson & Co. v. McMain, 29 La. Ann. 298; Woodcock 2, Bills and notes 489(3) - Maker must v. Baldwin, 110 La. 277, 34 South. 440; South

challenge holder's good faith before proving Arkansas Lumber Co. v. Tremont Lumber

fraud or want or failure of consideration. Co., 146 La. 66, 83 South. 378.

Maker must affirmatively and specifically The case of Britton v. Bush, 31 La. Ann. suing upon note, before he can offer proof of

challenge good faith of holder in due course, 264, does not hold 'to the contrary. The facts fraud or want of interest in holder or for failin that case were entirely different. The suit

ure of consideration. against Miss Bush was instituted more than seven years after the judgment had been ren. 3. Bills and notes Om489(3)—Answer held indered against her co-obligor. So that, grant

sufficient to admit evidence of defects in prop

erty for which note sued on given. ing that prescription was suspended as to Miss Bush up to the time of the rendition of in due course, answer failing to allege bad faith

In suit on note brought by bona fide holder the judgment, it began to run again from that date, and more than five years elapsed before not in fact legal holder for value before ma

or want of consideration, or that plaintiff was she was again sued on the obligation. The / turity, held insufficient to warrant admission real issue involved in the case arose from the of testimony of latent defects in property for attempt of the plaintiff to substitute the pre- which note was given and of misrepresentations scription applicable to judgments for the pre-on part of seller's agents. scription applicable to promissory notes. The 4. Bills and notes' 365(1)-Defenses avalla. contention was there made that a judgment

ble against original payer cannot be urged constitutes a perpetual acknowledgment on

against bona fide holder for value. the part of the judgment debtor, and there

Defenses available against original payee fore the acknowledgment of the debtor inter- cannot be urged against. bona fide holder for rupted prescription as to his solidary debtors. value. The court held against the contention in the 5. Contracts @m88_Burden

proving failure following language:

or want of consideration rests upon party "The fallacy is exposed by saying that if the

alleging it. premise was true there would be no prescrip Burden of proving failure or want of contion of judgments."

sideration rests upon party alleging it. The court also declined to accede to the 6. Sales Om 124-No rescission without restor. proposition that the rendition of the judg

ation of status quo. ment against one of the solidary obligors Purchaser of trucks and storage tanks could from the nature of things created a common

not rescind the sale without offering to restore term of prescription for all.

vendor to the situation he was in at the time of

the contract. [3] The original suit herein was not disposed of by this court until March 20, 1922, and plaintiff's suit was, in effect, reinstated

Appeal from First Judicial District Court, and reinstituted against the Fisher Oil Com- Parish of Caddo; T. F. Bell, Judge. pany by its demand in reconvention incorpo Suit by the City Savings Bank & Trust rated in its answer, filed on February 19, Company against W. S. Goodman and an

Om For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

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1

La.)
CITY SAVINGS BANK & TRUST CO. v. GOODMAN

67 (100 So.) other. Judgment for plaintiff, and defend- ; failure is an ascertained and liquidated amount ants appeal. Affirmed.

or otherwise." Section 28, Act 64 of 1904.

"A holder in due course holds the instrument Foster, Looney & Wilkinson and Dimick & free from any defect of title of prior parties, Hamilton, all of Shreveport, for appellants. and free from defenses available to prior par

E. W. & P. N. Browne, of New Orleans, ties among themselves, and may enforce payfor appellee.

ment of the instrument for the full amount By Division A, composed of O'NIELL, O. thereof against all parties liable thereon." Sec

tion 57, Act 64 of 1904. J., and ROGERş and BRUNOT, JJ.

[2] The maker of a note must affirmativeBRUNOT, J. This is a suit upon a prom-ly and specifically challenge the good faith issory note for $3,000, with interest thereon of the holder in due course, suing upon it, at the rate of 8 per cent. per annum from before he can offer proof of fraud, or want December 30, 1921, and 10 per cent. on the of interest in the holder, or for failure of principal and interest as attorneys' fees. consideration for the note. Banks v. Eastin, The note is secured by a chattel mortgage on

3 Mart. (N. S.) 291; McKinney v. Beeson, 14 an automobile and a pledge and pawn of La. 254; Citizens' Bank of Louisiana v. J. 35 shares of stock in the Pelican Corporation Strauss, 26 La. Ann. 736; 8 Corpus Juris, of Shreveport, La.

966, 983, 911. The petition alleges that plaintiff is the

The note sued upon was made payable to holder and owner of the note for value be- the vendees or their order, and was indorsed fore maturity. Plaintiff obtained an order by them in blank. It was paraphed “Ne Varof court and sequestered the automobile. ietur” to identify it with a chattel mortgage. Defendants filed their answer to the suit, The note represented the purchase price of and also filed a motion to dissolve the se

two automobile trucks, each truck being questration. The motion to dissolve the se equipped with a 750-gallon gasoline tank, questration was referred to the merits, the and one storage tank of 10,880 gallons cacase was tried, and judgment was rendered pacity, situated at Cedar Gr

ve, Caddo parin the words and figures as follows, to wit:

ish. The defendants acquired the property "It is ordered, adjudged, and decreed that from T. M. Hall, representing the Hall oil there be judgment herein'in plaintif's favor Company, Inc., and the note was acquired and against defendants, W. S. Goodman and J. by the plaintiff from T. M. Hall, in due R. Hollingsworth, individually and in solido, in course, before maturity, and for value. the sum of $3,000 with interest thereon at the [3] During the course of the trial the derate of 8 per cent. per annum from December fendants offered proof of latent defects in 30, 1921, until paid together with attorney's the trucks and storage tank and of misrepfees of 10 per cent. on principal and interest. resentations on the part of the agents of the "It is further ordered, adjudged, and decreed Hall Oil Company, Inc., with respect to the that plaintiff's first lien and privilege as mort- original cost and condition of the trucks and gage creditor on one Haynes automobile No. 34,921, with coupé body, and 35 shares of stock tank prior to the sale to them. Plaintiff obin the Pelican Corporation of Shreveport, La., jected to the testimony, and reserving all of a par value of $100, each be recognized and rights thereunder he now urges the objection enforced, maintaining the sequestration sued here. We think the lower court erred in out berein, and that said property be sold at overruling plaintiff's objection. The answer public auction and according to law, and that does not allege facts warranting the admisplaintiff be paid out of the proceeds thereof by sion of the testimony. There is no allegapreference and priority over all other creditors tion that the plaintiff acquired the note in of said defendants."

bad faith or without consideration, or that From this judgment the defendants have it was not in fact the legal holder and ownappealed.

er thereof for value before maturity. It is The answer filed by defendants in the true that paragraph 1 of the answer concourt below admits the signatures to the tains a mere denial of six paragraphs of note

, the execution of the chattel mortgage plaintiff's petition, as follows: and pledge of Pelican Corporation stock, and "They admit that they signed a note attached that the note is past due and unpaid. There to plaintiff's petition and the act of mortgage is no specific allegation in the answer chal- mentioned therein, which speak for themselves, lenging the good faith of plaintiff

as the hold- but in every other respect and every other parer of the note in due course, as indorsee, for ticular they deny the statements made and alvalue. The defense relied upon is the al- legations contained in articles 1, 2, 3, 4, 5, and leged failure of consideration for the note.

6 of plaintiff's petition.” [1] Absence or failure of consideration is Article 1 of the petition alleges the innot a defense against a bona fide holder in debtedness of defendants; article 2, the

plaintiff's ownership of the note for value Absence or failure of consideration is a mat- before maturity; article 3, the execution of ter of defense as against any person not a hold the mortgage; article 4, the paraph of the ei in due course; and partial failure of con- note; article 5, the stipulations and agree sideration is a defense pro tanto, whether the ments in the act of mortgage and its recor

due course.

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