Blue Bonnet Creamery, Inc. v. Gulf Milk Ass'n

• Decision Date: 01 February 1965
• Docket Number: No. 6279,6279
• Citation: 172 So.2d 133
• Parties: BLUE BONNET CREAMERY, INC. v. GULF MILK ASSOCIATION, Inc.
• Court: Court of Appeal of Louisiana — District of US

Page 133

172 So.2d 133

BLUE BONNET CREAMERY, INC. v. GULF MILK ASSOCIATION, Inc.

No. 6279.

Court of Appeal of Louisiana, First Circuit.

Feb. 1, 1965.

Rehearing Denied March 8, 1965.

A. Clayton James, Jr., of Johnson & James, Franklinton, for appellant.

Henry A. Mentz, Jr., of Mentz & Ford, Hammond, for appellee.

Before ELLIS, LOTTINGER, HERGET, LANDRY and REID, JJ. ^*

LANDRY, Judge.

The appeal herein is by Denis E. Simon, Jr., debtor, from the decree of the lower court rendered in a garnishment proceeding instituted by his judgment creditor, Blue Bonnet Creamery, Inc., against said debtor's employer, Gulf Milk Association, Inc., wherein it was adjudged the sum of $3,857.85 due said creditor by appellant was held not to have been discharged by appellant's bankruptcy because of fraud and misrepresentation practiced by appellant in the purchase of milk from Blue Bonnet Creamery, Inc. (sometimes hereinafter referred to simply as 'Blue Bonnet').

The present garnishment proceeding was initially consolidated with the case in which the aforesaid judgment creditor originally obtained the default judgment on which the subsequent garnishment proceeding is predicated and by which enforcement of the judgment is sought by appellee. See Blue Bonnet Creamery, Inc. v. Simon, La.App ., 136 So.2d 443 and Blue Bonnet Creamery, Inc. v. Gulf Milk Association, Inc., La.App., 136 So.2d 445. The Supreme Court granted writs in these consolidated cases and rendered judgment remanding this garnishment proceeding to the trial court for the taking of additional evidence. The judgment now on appeal is that rendered by the trial court pursuant to the Supreme Court's order of remand.

A detailed statement of this matter was set forth by the Supreme Court in Blue Bonnet Creamery, Inc. v. Simon, 243 La. 683, 146 So.2d 162, as follows:

'Pertinent facts of record are to the effect that between December 9, 1958 and February 18, 1959, plaintiff Blue Bonnet Creamery, Inc. (hereinafter referred to as Blue Bonnet), accepted sixteen checks from Simon in payment of purchases made. The checks, drawn on the Commercial Bank & Trust Co., Covington, Louisiana, were deposited by Blue Bonnet in the Guaranty Bank & Trust Company, Hammond, Louisiana . They were not honored; they were charged to Blue Bonnet's account by the Guaranty Bank and returned to Blue Bonnet with the notation, 'Not Sufficient Funds'; upon redeposit, the checks were again returned to Blue Bonnet with the same notation.

'On June 18, 1959, Blue Bonnet wrote to Simon, stating that it was still holding the above checks and requesting that the checks be made good within ten days after receipt of its letter. Simon failed to pay, and on August 28, 1959, Blue Bonnet filed suit in the 22nd Judicial District Court, Parish of St. Tammany, praying for the total amount of the checks ($9,074.68), plus an additional sum of $1,081.88 it alleged was due by Simon for cartons and containers furnished from March 1, through April 30, 1959, as per the account attached to the petition. The petition contained the following allegation:

"That your petitioner alleges that defendant knew at the time of issuance of said checks that he did not have sufficient credit with the Commercial Bank and Trust Company of Covington, Louisiana, for the payment of said checks in full upon their presentation.'

'On November 6, 1959, the district court, Parish of St. Tammany, rendered a judgment by default in favor of Blue Bonnet and against Simon in the full amount of $10,156.56. On confirmation of the default, James Eugene Reno, Manager and Secretary-Treasurer of Blue Bonnet, identified the sixteen checks herein involved and the letter demanding that they be paid; he stated that the checks were in payment of milk received by Simon from the creamery; he also testified with respect to the cartons and containers furnished Simon. Reno concluded his testimony by stating that the checks were returned by Simon's bank unpaid, and that Simon had never paid for the cartons and containers. Mrs. Edna Heintz, a deputy clerk of court, testified that neither answer nor pleadings were filed by Simon in the matter.

'On November 7, 1960, Simon filed a petition for a devolutive appeal from said judgment of the 22nd Judicial District Court, Parish of St. Tammany. The Court of Appeal stated, however, that the appeal was taken to that portion of the judgment of the lower court where it was found, 'that defendant had issued to petitioner $9,074.68 total of worthless checks during the period from December 9, 1958, through February 17, 1959, in the exchange for goods and merchandise delivered to defendant at the same time.'

'On April 4, 1960 (before the devolutive appeal, supra, was taken), Blue Bonnet filed a petition in the 21st Judicial District Court, Parish of Tangipahoe (sic), making Simon's employer, Gulf Milk Association, Inc. (hereinafter referred to as Gulf Milk), a garnishee. * * *'

Answers to interrogatories revealed that Simon was employed by the garnishee, Gulf Milk Association, Inc.

The Supreme Court opinion further shows:

'On June 20, 1960, the Judge of the 21st Judicial District Court, Parish of Tangipahoa, rendered a judgment on Blue Bonnet's petition for the garnishment of Gulf Milk as to Simon's salary. The Judge observed in said judgment that on April 13, 1960, the Bankruptcy Division of the United States District Court at New Orleans issued a Stay Order, subject to hearing on April 18, 1960; he ordered that the garnishment under fieri facias issued against Gulf Milk remain in effect pending further proceedings by Simon to obtain his discharge, and that the question of whether or not Simon's discharge in bankruptcy would effect this particular debt be taken up in due course by said 21st Judicial District Court, Parish of Tangipahoa. This judgment further ordered that Gulf Milk deduct from the wages of Simon an amount equal to twenty per cent. of his earnings, said deduction to continue until the matter of the dischargeability of the above judgment be finally determined, and that said funds be held by Gulf Milk subject to further orders of the Tangipahoa Parish District Court.

'On February 24, 1960, Simon was adjudged a bankrupt on a petition filed by him on February 24, 1960.

'On September 4, 1960, the Referee in Bankruptcy (presumably as a result of the hearing on April 18, 1960) rendered an order to the effect that Simon was discharged from all debts and claims which were made provable by the Act against his estate, except such debts as were, by said Act, excepted from the operation of a discharge in bankruptcy.

'After the order of September 4, 1960, Simon brought a rule to show cause why the garnishment under writ of fieri facias should not be set aside and annulled, and why Gulf Milk should not be ordered to tender him the monies withdrawn from his salary and held in escrow. Blue Bonnet prayed for recall of the rule, alleging that its judgment was based on a debt for money obtained by false pretenses or false representation (U.S.C.A. Title 11, Sec. 35), which was not a dischargeable debt.

'The trial court, in written reasons, stated that Blue Bonnet's original judgment was taken by default against Simon who apparently did not make any appearance or defense whatsoever; that the judgment contained a finding that Simon had issued $9,074.68 total of worthless checks for goods and merchandise delivered to him at the same time. It ruled that it was of the opinion that the sum of $9,074.68, which was shown on the face of the judgment to be represented by worthless checks, Was not discharged, but that the sum of $1,081.88 shown in said judgment Was discharged by the discharge in bankruptcy. The court then rendered judgment on October 28, 1960, in favor of Blue Bonnet and against Simon and Gulf Milk, decreeing that Blue Bonnet's judgment obtained in St. Tammany Parish was not a dischargeable debt within the Federal Bankruptcy Act up to the amount of $9,074.68, plus interest; it further decreed that the writ of fieri facias was valid up to $9,074.68; it ordered that Gulf Milk deliver to Blue Bonnet twenty per cent. of Simon's salary from the date of service of the original writ through October 28, 1960, recalled and vacated the rule issued, and ordered the garnishment to proceed according to law.'

The judgment hereinabove lastly mentioned was also appealed by the judgment debtor, Simon. The two appeals thus taken from different judicial districts were consolidated for hearing before this Court.

In the garnishment proceeding counsel for Simon introduced in evidence the discharge in bankruptcy issued appellant September 4, 1960, in Federal Court. Counsel for Blue Bonnet offered in evidence the record in the suit from the 22nd Judicial District Court, St. Tammany Parish (wherein the default judgment was rendered against appellant in favor of Blue Bonnet) including the checks attached to the petition filed therein.

On appeal, this Court reversed the judgment of the St. Tammany Parish Court insofar as it held, 'that defendant had issued to petitioner $9,074.68 total of worthless checks during the period from December 9, 1958, through February 17, 1959, in exchange for goods and merchandise delivered to defendant at the same time,' and affirmed the judgment as to the other decrees rendered therein. In the garnishment proceeding appealed from the Tangipahoa Parish Court, this Court reversed the judgment and ordered all funds held in escrow by the garnishee, Gulf Milk Association, Inc., be paid to appellant, Simon.

Upon issuance of writs by the Supreme Court, the creditor, Blue Bonnet, contended before said tribunal that fraud had been established in the St. Tammany Parish suit wherein judgment was obtained against appellant and therefore the debt was not discharged by Simon's subsequent discharge in bankruptcy. On the other hand, appellant, Simon, maintained this Court correctly found the fraud alleged had not been established by...