Bank of Lafayette & Trust Co. v. Commercial Bank of Lafayette & Trust Co.
| Decision Date | 16 February 1948 |
| Docket Number | 38762. |
| Citation | 34 So.2d 400,213 La. 133 |
| Court | Louisiana Supreme Court |
| Parties | BANK OF LAFAYETTE & TRUST CO. v. COMMERCIAL BANK OF LAFAYETTE & TRUST CO. et al. |
Appeal from Fifteenth Judicial District Court, Parish of Lafayette Paul Debaillon, Judge.
Davidson & Davidson, of Lafayette, for plaintiff-appellant.
Welton P. Mouton and Voorhies & Labbe, all of Lafayette, for defendants-appellees.
Plaintiff-appellant Bank of Lafayette & Trust Company in liquidation represented by its liquidating commissioners, instituted this suit on February 19, 1944, against the Commercial Bank of Lafayette & Trust Company, also in liquidation, and Wilfred J. Begnaud, state bank commissioner, and F. L Gauthier, special agent in charge, for an accounting of the assets and liabilities which were acquired by the defendant bank from the plaintiff bank under and by virtue of a contract dated March 27, 1931, this account to be rendered as of February 7, 1944, and prayed that as a result of said accounting plaintiff bank be decree to be the owner of the funds and assets which resulted from a liquidation of assets acquired from the plaintiff bank by the defendant bank, such funds and assets to be transferred to the plaintiff bank for the use and benefit of its stockholders.
To plaintiff's petition defendants filed what they styled 'an exception of estoppel'. This exception was submitted to the lower court on an agreed statement of facts, and in due course the district judge rendered judgment maintaining the plea, rejecting plaintiff's demands, and dismissing its suit at its costs. From this judgment plaintiff has appealed to this court.
The Bank of Lafayette & Trust Company, by act of sale dated March 27, 1931, conveyed unto the Commercial Bank of Lafayette & Trust Company all its assets of every nature and description as they appeared on the books of the bank as of the close of business on that day. The consideration was the assumption by the Commercial Bank of Lafayette & Trust Company of all the obligations and liabilities of the seller as of that day, exclusive of the obligation of the selling bank to its won stockholders.
In connection with this sale, the parties thereto entered into the contract, likewise dated March 27, 1931, out of which this litigation arises. In this contract defendant, Commercial Bank of Lafayette & Trust Company, agreed that during a period of three years from and after the date of the sale it would proceed to collect and reduce to cash the assets acquired by it from the plaintiff bank, the method of so doing to rest in the uncontrolled discretion of the defendant bank, with full power to sell, compromise, substitute, etc.; that it would report annually in writing to the liquidating commissioners of the Bank of Lafayette & Trust Company (that bank being placed in voluntary liquidation thereafter by act of its stockholders on May 5, 1391) the results of the operations of these assets during the preceding year; that it would at the end of three years from the date of the sale render a final report to the liquidating commissioners of the result of its handling of the assets acquired by it. The defendant further agreed that at the end of the third year it would pay to the liquidating commissioners of the selling bank any sums realized by it in excess of the liabilities of the selling bank, assumed by it in the act of sale, less costs, charges, and expenses incurred in realization thereof, the purpose being to account for any residuum left in due course of administration of the assets in excess of the liabilities and expenses in handling such assets.
The selling bank graranteed that the assets conveyed to the purchaser would on liquidation produce and realize for the purchaser, Commercial Bank of Lafayette & Trust Company, a sum equal to the debts and liabilities assumed by it in the act of sale, including depositors' accounts, by obligating itself to indemnify the purchasing bank up to the amount of $150,000 against any loss which might be incurred in the liquidation of the assets and the assumption of the liabilities. Should the assets on liquidation prove unequal or insufficient to discharge the liabilities aforesaid, the Bank of Lafayette & Trust Company under its guarantee agreed to pay to the Commercial Bank of Lafayette & Trust Company upon demand the sum of $150,000, or so much thereof as might be necessary to make good any loss of the purchasing bank resulting from the liquidation of these assets for a sum less than the amount of the liabilities so assumed.
Eight individuals, who were actually officers and stockholders of the Bank of Lafayette & Trust Company, two of whom were named as liquidators, made themselves parties to this contract and agreement, obligating themselves individually and as sureties in various amounts up to the aggregate sum of $150,000, thus likewise guaranteeing the purchasing bank against loss as a result of its taking over the assets and liabilities of the Bank of Lafayette & Trust Company.
At the end of the three-year period the Commercial Bank of Lafayette & Trust Company rendered what it styled its final report, in compliance with the contract, showing a loss far in excess of $150,000, and demanded of the Bank of Lafayette & Trust Company and the indemnitors the full sum of $150,000 in accordance with their obligation in the contract.
The Bank of Lafayette & Trust Company denied all liability under the contract, and took the position that the Commercial Bank of Lafayette & Trust Company had breached the contract. After the Commercial Bank itself was placed in liquidation, it was compelled to institute suit on the claim. That suit was filed on June 11, 1934, for the full amount of $150,000, predicated on the contract of March 27, 1931, against each of the guarantors and the Bank of Lafayette & Trust Company in liquidation, plaintiff in the case now under consideration.
In answer to that suit defendants therein, denying liability, took the position that the Commercial Bank of Lafayette & Trust Company had failed to carry out the obligations imposed upon it by the contract of March 27, 1931, thereby breaching the contract; that this contract expired by its terms on March 27, 1934, and that, if such liability had existed, it ceased to exist on that date because of the prior failure of the Commercial Bank of Lafayette & Trust Company to comply with the obligations which it had assumed under this contract. Moreover, in its answer the Bank of Lafayette & Trust Company, one of the defendants therein, did not advance any claim against the plaintiff therein or ask for an accounting predicated on the contract.
Although many pleas and exceptions were filed and disposed of therein over a period of years, that suit was never tried on the merits, but was compromised on May 22, 1941, approximately seven years after it had been filed, and was dismissed as to all parties. In this compromise certain of the guarantors who had been named defendants paid to the Commercial Bank of Lafayette & Trust Company, in full satisfaction of the indemnity agreement, $15,000 in cash and transferred to the bank certain oil royalties and bank stock.
According to the stipulation of facts in the record, the liquidation of the assets of the Commercial Bank of Lafayette and Trust Company, as well as those acquired from the Bank of Lafayette & Trust Company pursuant to the contract dated March 27, 1931, continued up to February 9, 1944. On January 3, 1944, the state bank commissioner and the special agent caused to be inserted in a newspaper published in the Town of Lafayette a notice of a meeting of the stockholders of the Commercial Bank of Lafayette & Trust Company to be held on February 9, 1944, which notice stated that the Commercial Bank of Lafayette & Trust Company had paid all debts and charges, and that the state bank commissioner proposed to deliver to the stockholders all the assets remaining on hand after the payment of all debts and charges due by the bank. This was plaintiff's first knowledge that the liquidation of assets was sufficient to pay all debts and charges and leave a residue thereafter. The plaintiff instituted the present suit on February 19, 1944, praying for an accounting of the assets acquired from it by the defendant bank, and for any residue resulting from the liquidation of...
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