Avegno v. Byrd

• Decision Date: 01 November 1979
• Docket Number: No. 64385,64385
• Parties: Giacomina AVEGNO v. Emory BYRD, Jr.
• Court: Louisiana Supreme Court

Page 268

377 So.2d 268

Giacomina AVEGNO v. Emory BYRD, Jr.

No. 64385.

Supreme Court of Louisiana.

Nov. 1, 1979.

Rehearing Denied Dec. 13, 1979.

Roy L. Price, Metairie, for plaintiff-applicant Doris Hebert.

Guy W. Olano, Jr., Kenner, for defendant-respondent.

SUMMERS, Chief Justice.

On July 14, 1975 Giacomina Avegno, also known as Jennie P. Avegno, entered into an agreement with Emory Byrd, Jr., whereby she was to sell to him four parcels of immovable property located in the City of Kenner, Louisiana, and three parcels of immovable property located in the City of New Orleans, Louisiana. Two employees of Doris Hebert Realtor acted in the transaction, Mary Elinor Dominque "Jinx" Sloan as agent for Mrs. Avegno and her two daughters-co-owners and Emory Byrd, Sr., as agent for Emory Byrd, Jr.

The agreement, upon a standard form provided by the realtor, stipulated in pertinent part that the seven parcels were to be sold:

"for the sum of one hundred four thousand Dollars and no/100 ($104,000-) Dollars, on the terms of 26,000 cash Balance to be carried by owner at his option.

"This sale is conditioned upon the ability of purchaser to borrow upon this property as security the sum of $78,000 by a mortgage loan or loans at a rate of interest not to exceed 83/4% Per annum, interest and principal payable on or before 20 years in equal (monthly) (annual) installments.

"Should purchaser, seller or agent be unable to obtain the loan stipulated above within 30 days from acceptance hereof, this contract shall then become null and void and the agent is hereby authorized to return the purchaser's deposit in full.

". . .

"Act of sale at expense of purchaser to be passed before Lendors Notary, on or prior to Sept. 1st 1975, provided that if bona fide curative work in connection with title is required, parties herewith agree to and do extend the time for passing of act of sale by forty-five days.

"Upon acceptance of this offer, vendor and purchaser shall be bound by all its terms and conditions, and purchaser becomes obligated to deposit with seller's agent immediately 10% Of the purchase price amounting to $10,400 Demand Note payable at act of sale . . . ."

The agreement was signed by Emory Byrd, Jr., and Jennie P. Avegno.

As deposit on this purchase and sale agreement Emory Byrd, Jr., executed a demand note in the sum of $10,400 payable to Doris Hebert Realtor and delivered to the agent for deposit in escrow.

Byrd apparently experienced difficulties in obtaining the $78,000 financing required; in addition, he had surveys made which revealed that one of the New Orleans houses had steps which encroached on the City's property and that another had a neighboring lot's fence encroaching on it. In mid or late August 1975 it became known to Jinx Sloan that Byrd would probably decline to take title to the properties. On August 25, 1975 the realtor's attorney and notary dispatched a letter to Mr. Byrd which contained the following language:

"As you know, the agreement to purchase signed by you on July 14, 1975 calls for your taking title to the property owned by Mrs. Avegno and her two daughters by September 1, 1975 . . . I have discussed with Mrs. Avegno's representative the question of the alleged survey encroachments and have been advised that these encroachments do not exist and do not constitute any cloud on the title. The so-called stoop encroachment on Mistletoe Street of the property fronting on Apple Street can easily be removed by simply providing a one step ladder into the residence. The sellers have indicated they are willing to do this.

"Accordingly, I must advise you that the sale of this property has been set for passage in my office on Friday, August 29, 1975 at 4:00 P. M. The Avegno family has instructed me to advise you that your failure to appear at the act of sale will result in your being in default under the contract and they are by this letter making a formal tender of title to you. Under the circumstances, your refusal to accept title will result in the penalty provisions of the contract being invoked."

On the evening before or on the morning of the day set for passage of the act of sale, the notary, vendors and agents received telegrams or mailgrams from Byrd which stated:

"Pursuant to the purchase agreement entered into and accepted on July 14, 1975 . . . and pursuant to the condition of the ability of the purchaser to borrow upon this property the sum of $78,000 by mortgage loan within 30 days upon acceptance, and since no written commitment has been issued from any lendor purchase agreement has become null and void and of no effect. Further the property is unmerchantable because of encroachments which are suggestive of litigation, demand is hereby made for the return of the demand note placed on deposit.

Emory A. Byrd Jr."

On February 20, 1976 Mrs. Avegno's attorney wrote Doris Hebert Realtors demanding the endorsement of the note over to Mrs. Avegno as a necessary step in her preparing to sue Mr. Byrd and at some unspecified time the reverse of the note was endorsed: "Without Recourse, pay to the order of Mrs. Giacomina Avegno (s/) Doris Hebert, Realtor Doris Hebert".

On March 31, 1976 Mrs. Avegno filed a petition in the 24th Judicial District Court, Parish of Jefferson. Emory Byrd, Jr., was made defendant. The petition alleged that Mrs. Avegno was the holder of a promissory note made by Byrd, payable to the order of Doris Hebert Realtor and subsequently endorsed without recourse to Mrs. Avegno. The petition recited that Byrd had executed the purchase and sale agreement, annexed and incorporated a copy of that agreement, and claimed that the agreement had required a 10% Deposit amounting to $10,400. Mrs. Avegno alleged that on August 29, 1975, with due notice, the sellers appeared and stood ready, willing and able to pass a merchantable title to the defendant and that the defendant failed to appear. The petition then recited a second time that Doris Hebert Realtor was named payee on the promissory note and had endorsed the note to Mrs. Avegno and that the note was made in a principal amount of $10,400 with interest and attorney's fees, that no payments had been made on the note despite amicable demand and then prayed for judgment against Byrd in the principal sum of $10,400 with interest, attorney's fees and costs.

On June 10, 1976 Emory Byrd, Jr., filed an answer, third party demand and reconventional demand. In substance, the answer denied the allegations of the petition. It then recited the condition that financing be available to the purchaser and alleged that Byrd had made a good faith effort to obtain financing and further that the title was unmerchantable and the agreement therefore void. The answer concluded by alleging that the note was defective for want of consideration, that the rate of interest stated thereon was usurious, and that demand had been made for the return of the note.

As a petition in reconvention, the answer alleged that Giacomina Avegno had breached the contract to sell because encroachments rendered the titles unmerchantable and claimed the return of the deposit together with additional damages specified in the agreement to amount to a total of twice the amount of the deposit. Over and above the punitive damages specified in the agreement, Byrd prayed for various special and general damages alleged to have accrued out of Mrs. Avegno's breach.

As a third-party petition agaisnt Doris Hebert Realtor the answer alleged that the realtor had negotiated the note to Mrs. Avegno in bad faith and without authority and then prayed for various items of special and general damages.

Mrs. Avegno answered the reconventional demand with a general denial and then supplemented and amended her original petition to add Jinx Sloan and Doris Hebert Realtor as alternative defendants In solido. To this Jinx Sloan and Doris Hebert Realtor interposed a dilatory exception of vagueness; after hearing, the exception was overruled.

On October 6, 1977, Emory Byrd, Jr., moved for summary judgment on the ground that there was no issue as to material fact; the matter came on for hearing on October 21, 1977, and after hearing the motion was denied.

On January 18, 1978 the case was tried on the merits. The trial court found as matters of fact that the fence on one lot constituted an encroachment suggestive of litigation, that the encroachment justified Byrd's withdrawal from the sale, and that notice was given of his withdrawal upon that ground. The court went on to find the purchase and sale agreement indivisible so that the defect in the Apple Street parcel abrogated the entire transaction. Because the title was unmerchantable, the trial court pretermitted consideration of Mrs. Avegno's willingness to finance the transaction and her demand against Byrd was dismissed.

Having found that the defective title avoided the purchase and sale agreement, the court held that the double-damages provision for breach did not apply and dismissed Byrd's reconventional demand against Mrs. Avegno.

In ruling upon Byrd's third-party demand against Doris Hebert Realtors, the trial court referred to the Louisiana Real Estate Commission regulations established under the authority of La.Rev.Stat. 37:1436(E) as it stood at the time of the confection of the purchase and sale agreement; (the statutory authorization is now found at La.Rev.Stat. 37:1435(F)):

"14. Escrow Accounts Immediately upon becoming licensed, each broker shall open and maintain an escrow (trust) account into which they shall deposit all monies, including rentals, or other things of value received in trust on behalf of clients.

". . .

"E. Monies received and deposited in escrow (trust) accounts shall be removed and/or disbursed therefrom only upon:

"1. Mutual consent of buyer(s) and seller(s) When any funds which are held in escrow (trust) are designated to be compensation to the broker or cooperating broker, such funds shall be disbursed...