Bunkie Bank & Trust Co. v. Johnston

• Decision Date: 25 June 1980
• Docket Number: No. 7485,7485
• Citation: 385 So.2d 1264
• Parties: BUNKIE BANK & TRUST COMPANY, Plaintiff-Appellant, v. Mark A. JOHNSTON et al., Defendants-Appellees.
• Court: Court of Appeal of Louisiana — District of US

Page 1264

385 So.2d 1264

BUNKIE BANK & TRUST COMPANY, Plaintiff-Appellant, v. Mark A. JOHNSTON et al., Defendants-Appellees.

No. 7485.

Court of Appeal of Louisiana, Third Circuit.

June 25, 1980.

Boatner & Luke, Peter John Lemoine, Bunkie, for plaintiff-appellant.

David F. Townsend, Bunkie, for defendants-appellees.

Before CULPEPPER, SWIFT and STOKER, JJ.

CULPEPPER, Judge.

This is a suit for damages caused by fraudulent misrepresentation. Plaintiff, Bunkie Bank & Trust Company, alleges that defendant, Mark Johnston, while a minor, made fraudulent misrepresentations to plaintiff in securing a loan of $12,585 to produce a soybean crop. Also made a defendant is Johnston's mother, Eleanor Johnston White, as the parent with whom the minor was living. Defendants filed Exceptions of No Cause of Action and No Right of Action. The trial judge sustained the Exception of No Cause of Action, holding plaintiff's damages did not arise from a tort but instead from a breach of contract, for which neither the minor nor his parent could be held liable. Plaintiff appealed.

The substantial issue is whether under the facts alleged, the Bank has a cause of action in tort against the minor and/or his parent.

Plaintiff's petition contains the following allegations:

"Petitioner shows that on or about April 14, 1978, defendant, MARK A. JOHNSTON, did submit an application to petitioner, through its Executive Vice-President, H. L. Kelley, Jr., for collateral credit in the sum of FIFTEEN " THOUSAND AND NO/100 ($15,000.00) DOLLARS, which was to be paid in December of 1978. Upon submitting his application, defendant, MARK A. JOHNSTON, deliberately, fraudulently and with intent to permanently deprive petitioner of cash money, misrepresented the following, to wit:

"(1) That he was a person of the full age, having been born August 3, 1959; when in fact said defendant was born August 3, 1960,

"(2) That he was leasing approximately 700 acres of land located in St. Landry Parish, LA for the crop year 1978 for the purpose of growing soybeans; when in fact he had no lease whatsoever regarding said properties, and in fact grew no crops in 1978.

"(3) That he would pledge all crops grown or to be grown for the 1978 growing season, and in particularly, soybeans, on approximately 700 acres of land located in St. Landry Parish, LA, in return for petitioner granting said defendant collateral security in the sum of FIFTEEN THOUSAND AND NO/100 ($15,000.00) DOLLARS,

"(4) That on at least four (4) subsequent occasions, i. e.,; April 27, 1978, June 1, 1978, June 12, 1978 and July 5, 1978, defendant, MARK A. JOHNSTON, represented to petitioner that the funds received from petitioner were for the purposes of purchasing soybean seeds and/or fertilizers and/or operating expenses for making the 1978 soybean crop."

Plaintiff further alleged Mark Johnston received from plaintiff the total of $12,585 on the above dates, when he was residing with his mother.

In written reasons, the trial court found, in part, as follows:

"In this petition, the contractual obligation and the alleged tort liability are so interwoven and connected that for this court to hold these defendants liable would result in giving full force and effect to a contract which cannot legally be enforced.

"It is well settled that the parent of an unemancipated minor cannot be held responsible for damages arising ex contractu and that the unemancipated minor is simply incapable of contracting.

"Also, there exists a legal distinction between a simple tort and a tort which occurs as a result of, or which may be the cause of, a breach of contract.

"Reading the Plaintiff's petition and considering the demand as one for damages arising ex contractu, Plaintiff cannot recover against the unemancipated minor or the mother for the breach of contract by the son.

"Reading the Plaintiff's petition and considering the demand as one arising ex delicto, in connection with a contract, still there can be no recovery, for the added reason that to recognize the asserted right to recover would be to permit Plaintiff to profit by an alleged tort wrong to which it voluntarily was a party."

Plaintiff contends it does not seek to recover against either the minor or his mother for breach of contract. Therefore, we do not consider this issue. Plaintiff's sole contention is that it alleges a cause of action for fraud against the minor and his mother.

It is well settled that a cause of action for intentional fraudulent misrepresentation as to present or past facts exists in Louisiana. Wilder v. Wilder, 263 So.2d 730 (La.App. 1st Cir. 1972); Swann v. Magouirk, 157 So.2d 749 (La.App. 2d Cir. 1963). It has further been established that in the case of a contract confected under circumstances involving such fraud, a plaintiff may elect to pursue an action for damages for fraud rather than breach of contract. Maniscalco v. Shell Petroleum Corporation, 176 La. 492, 146 So. 33 (1933).

The trial judge concluded the action in contract was barred by Johnston's minority, and the action in tort barred because it would indirectly give effect to the contract and make the parent liable for the minor's breach of contract. From the language of the trial judge's opinion, he apparently relied on Maloney v. Goelz, 12 La.App. 31, 124 So. 606 (Orl.App.1929) where the court stated:

"It is true that, under the codal provision, the parent is responsible for the torts of a minor, but it seems to us that there is a distinction between a simple tort and a tort which occurs as a result of or which may be the cause of a breach of contract. When the Rent-A-Car Company allowed young Goelz to take out a car, it entered into a contract which required him to safely return it. His failure to do so constituted a breach of that contract. Conceding that his negligent act in driving the car was the cause of the breach, still the contractual obligation and the tort liability are so inseparably connected that, if we could hold that the father is liable in this case, we would in effect be holding the father liable for the breach of the contract of the minor."

In Ohio Casualty Insurance Company v. Nunez, 134 So.2d 309 (La.App. 3rd Cir. 1961) this Court approved of Maloney in the following discussion:

"Counsel for plaintiff argues that the Maloney case is not sound in making a distinction between a 'simple tort' and a 'tort * * * which may be the cause of a breach of contract.' We think, however, that the reasoning in that case is sound, and that the conclusions reached are supported by Doumeing v. Haydel, supra (9 La. 446), and by Overhultz v. Row, 152 La. 9, 92 So. 716; and Jackson Cookie Company v. Burks, La.App. 2 Cir., 45 So.2d 226.

"In the instant suit, according to the allegations contained in the petition, the McFillens allowed young Nunez to use an airplane under a rental agreement which required Nunez to return it undamaged. The plane was damaged through the negligence of Nunez, and because of that damage there was a breach of contract in his failure to return the plane in good condition. Under those circumstances, it appears to us that the McFillens would have a cause of action against young Nunez for damages either in tort or for breach of contract. Under the jurisprudence hereinabove cited, however, the McFillens, as the owners of the plane would not have a cause of action against the father of young Nunez, under LSA-R.C.C. Art. 2318, because the contractual obligation and the tort liability are so inseparably connected that the father could not be held liable for the tort without also in effect holding him liable for his son's breach of contract."

We distinguish the above cases by the alleged presence of actionable...