American Sec. Bank of Ville Platte, Inc. v. Vidrine, 3520

• Decision Date: 27 September 1971
• Docket Number: No. 3520,3520
• Citation: 255 So.2d 140
• Parties: AMERICAN SECURITY BANK OF VILLE PLATTE, INC., Plaintiff-Appellant, v. Clyde VIDRINE and Ramson K. Vidrine, Defendants-Appellees.
• Court: Court of Appeal of Louisiana — District of US

Page 140

255 So.2d 140

AMERICAN SECURITY BANK OF VILLE PLATTE, INC., Plaintiff-Appellant, v. Clyde VIDRINE and Ramson K. Vidrine, Defendants-Appellees.

No. 3520.

Court of Appeal of Louisiana, Third Circuit.

Sept. 27, 1971.

Rehearing Denied Oct. 27, 1971.

Jules R. Ashlock, Ville Platte, for plaintiff-appellant.

J. Wendel Fusilier, of Fusilier, Pucheu & Soileau, Ville Platte, for defendants-appellees.

Before SAVOY, HOOD and CULPEPPER, JJ.

HOOD, Judge.

This is a suit on a promissory note instituted by American Security Bank of Ville Platte against Clyde Vidrine Potato Shed, Inc ., Clyde Vidrine and Dr. Ramson K. Vidrine. A default judgment was rendered by the trial court on September 11, 1970, in favor of plaintiff against Clyde Vidrine Potato Shed, Inc., for the full amount claimed. The case was then tried as to the remaining defendants, Clyde Vidrine and Dr. Ramson K. Vidrine, and judgment was rendered on February 4, 1971, in favor of those defendants rejecting plaintiff's demands against them. Plaintiff has appealed from the last mentioned judgment.

The principal issue presented is whether the note on which the suit is based has been paid.

The note sued upon was executed by Clyde Vidrine Potato Shed, and is made payable to the order of American Security Bank of Ville Platte. It is dated May 15, 1969, payable one year after date, and it is for the principal sum of $5,000.00, with interest thereon at the rate of seven percent per annum from date until paid. The note is signed: 'Clyde Vidrine Potato Shed, By Clyde Vidrine,' and it is endorsed in blank by defendant, 'Ramson K. Vidrine, M.D.'

The following notation or endorsement also appears on the back of the note: 'This note to be identified with and secured by that certain special mortgage and collateral note in the principal sum of $5,000.00, dated 12--6--66,' and that endorsement also was signed: 'Clyde Vidrine Potato Shed, By Clyde Vidrine.'

The collateral note dated December 6, 1966, referred to in the above mentioned endorsement, is for the principal sum of $5,000.00. It is payable on demand to 'Holder or Holders,' and it was executed by 'Clyde Vidrine Potato Shed, Inc.' Clyde Vidrine and Kerrell Vidrine signed as agents for that corporation. The note is paraphed for identification with an act of Special Mortgage executed before Jack C. Fruge, Notary Public, on December 6, 1966. The act of mortgage which secures the last described collateral mortgage note covers and affects two tracts of land in Evangeline Parish.

This suit is based on the $5,000.00 note hereinabove first described, being the note dated May 15, 1969. That note is referred to by the parties as a 'hand note.' Although the hand note is not paraphed to identify it with a mortgage, plaintiff alleges that by virtue of the endorsement appearing on the back of the note it is secured by the 1966 collateral note and special mortgage. Plaintiff demands judgment against all defendants, in solido, for the full amount of principal, interest and attorney's fees provided on the face of the hand note, with recognition of plaintiff's special mortgage on the two tracts of land described in the mortgage. The judgment which was rendered on September 11, 1970, in favor of plaintiff and against Clyde Vidrine Potato Shed, Inc., is for the face amount of the note, plus interest and attorney's fees, and it recognizes plaintiff's special lien and mortgage on the two tracts of land described in the mortgage.

The hand note dated May 15, 1969, was executed by Clyde Vidrine Potato Shed, Inc., as a renewal of a prior indebtedness which that corporation owed to plaintiff. Initially, a loan of $5,000.00 was made to that corporation by plaintiff on December 9, 1966, and that loan was secured by the above described mortgage note. On January 7, 1967, one of the two mortgaged tracts of land was sold by the potato shed corporation for $2,000.00, and some time thereafter plaintiff bank authorized the release and cancellation of the mortgage insofar as it affected the tract of land which was sold.

The original note given by the potato shed corporation in December, 1966, was not paid when due, and thereafter renewal 'hand notes' were executed by the corporation from time to time to evidence the remaining indebtedness. Some payments were made on the notes, and some additional advances were made by plaintiff bank. On May 15, 1969, the indebtedness of the potato shed corporation to the bank was $5,000.00, and on that date the corporation executed the hand note on which this suit is based to evidence that indebtedness. To insure the payment of that hand note, the bank required that the note be endorsed in blank by defendant, Dr. Ramson K. Vidrine, and that the 1966 collateral mortgage note be pledged as security for it . The mortgage, of course, had been cancelled insofar as it affected one of the tracts of land therein described, but no endorsement or notation of any kind appeared on the mortgage note showing that such a partial cancellation had been made.

On December 30, 1970, after the September 11, 1970, default judgment against Clyde Vidrine Potato Shed, Inc., had been rendered, the remaining tract of land which had been mortgaged to secure that indebtedness was sold under a writ of fieri facias. That tract was purchased for $800.00, and the net proceeds of that sale, amounting to $614.35, was applied to the payment of the judgment.

While Clyde Vidrine Potato Shed, Inc., was indebted to plaintiff bank, that bank also made separate loans to the following borrowers: (1) Dr. Ramson K. Vidrine, individually; (2) Kerrell Vidrine; (3) Kerrell Vidrine & Sons, Inc.; and (4) Ramson, Kerrell and Clyde Vidrine, and Don McDaniel.

In December, 1969, the corporation known as Kerrell Vidrine & Sons, Inc., agreed to sell some land to Clyde Vidrine. In order that a clear title to the land could be conveyed, Mr. Jack Fruge, an attorney in Ville Platte, Louisiana, was employed by the interested parties to contact all creditors who held mortgages on property belonging to Kerrell Vidrine & Sons, Inc., and to see that these mortgages were paid and cancelled. Mr. Fruge testified that 'Kerrell Vidrine & Sons, Inc., owed quite a bit of money on that property and other debts,' and that he 'was requested to contact all the creditors that had mortgages on the property which belonged to Kerrell Vidrine & Sons, Inc.'

Mr. Fruge then, in February, 1970, contacted Mr. Jessie Johnson, the executive vice president of plaintiff bank, requesting that he be informed as to the amount of the indebtedness owed by: (1) Dr. Ramson K. Vidrine, individually; (2) Kerrell Vidrine & Sons, Inc.; (3) Clyde Vidrine; and (4) Kerrell Vidrine. He also asked for the amount due on 'any notes that Dr. Ramson Vidrine had endorsed on behalf of these * * * of the corporation and Kerrell and Clyde.' In response to this request, the vice president of plaintiff bank informed Mr. Fruge that as of March 2, 1970, the indebtedness of the above named parties amounted to the principal sum of $66,179.99, plus interest of $5,816.03, making a total of $71,996.02. Mr. Fruge thereupon presented to the bank his check for $71,996.02, as payment of that indebtedness. Upon receipt of that check, the bank handed to Mr. Fruge five hand notes, representing obligations owed by the above named parties. The bank, however, did not hand to Mr. Fruge either of the two notes which had been executed by Clyde Vidrine Potato Shed, Inc., and which form the basis for this suit. The two notes which were retained by the bank were the $5,000.00 hand note dated May 15, 1969, and the $5,000.00 mortgage note dated December 6, 1966.

Defendants contend that the payment made by Mr. Fruge satisfied the indebtedness of all of the above named parties, including that of Clyde Vidrine Potato Shed, Inc., and the indebtedness owed by Dr. Vidrine as the endorser of the notes of that corporation. Plaintiff contends that the payment made by Mr. Fruge did not satisfy the indebtedness due by the potato shed corporation, that Mr. Fruge never requested any information as to the indebtedness of that corporation, and that the parties did not intend for the payment made on March 2, 1970, to extinguish the indebtedness of Clyde Vidrine Potato Shed, Inc., or the liability of Dr. Ramson Vidrine as endorser on any note other than the ones specifically requested by Mr. Jack Fruge.

The trial judge concluded that defendant Clyde Vidrine had executed the notes on which this suit is based solely as president or agent of Clyde Vidrine Potato Shed, Inc., and that he is not personally liable for any indebtedness of that corporation. Judgment thus was rendered rejecting plaintiff's demands against that defendant. The court also concluded that the total obligation of the defendants, including Clyde Vidrine Potato Shed, Inc., and Dr . Ramson K. Vidrine, as endorser of the notes here at issue, amounted to the sum of $71,996.02, and that the debts of all said parties to plaintiff bank were extinguished by the payment made on March 2, 1970. Judgment thus was rendered rejecting plaintiff's demands as to Dr. Ramson K. Vidrine.

We agree with the trial judge that Clyde Vidrine signed the note on which this suit is based solely as an officer of and as agent for Clyde Vidrine Potato Shed, Inc., and that Clyde Vidrine thus is not personally liable for the indebtedness represented by those notes. For these reasons we affirm that part of the judgment appealed from which dismisses the suit as to defendant Clyde Vidrine.

We are unable to agree with the trial judge, however, that the payment made to plaintiff bank on March 2, 1970, extinguished the indebtedness of Clyde Vidrine Potato Shed, Inc., to that bank, or that it extinguished the indebtedness of Dr. Ramson K. Vidrine as the endorser of the notes of that corporation.

We have concluded that the payment made to plaintiff bank on March 2, 1970, was intended to pay and extinguish only the...