Busby v. Walker

• Decision Date: 29 November 1955
• Docket Number: No. 8397,8397
• Citation: 84 So.2d 304
• Parties: Lewis BUSBY, d/b/a Natchez Finance Company, Plaintiff-Appellee, v. Charlie WALKER, Defendant-Appellant.
• Court: Court of Appeal of Louisiana — District of US

Page 304

84 So.2d 304

Lewis BUSBY, d/b/a Natchez Finance Company, Plaintiff-Appellee, v. Charlie WALKER, Defendant-Appellant.

No. 8397.

Court of Appeal of Louisiana, Second Circuit.

Nov. 29, 1955.

Rehearing Denied Jan. 9, 1956.

Writ of Certiorari Denied Feb. 23, 1956.

Nathan M. Calhoun, Vidalia, for appellant.

Lloyd F. Love, Ferriday, for appellee.

AYRES, Judge.

This is an action on a promissory note. From a judgment in plaintiff's favor for $258.45, with 8 percent per annum interest thereon from December 4, 1953, together with 25 percent of said amounts as attorney's fees, and for all costs, defendant prosecutes this appeal.

The defendant purchased from H & J Used Car Company on October 4, 1952, a used automobile. For the credit portion of the purchase price he executed his promissory note payable in 18 consecutive monthly installments of $51.69, the first payment being due on November 4, 1952. This note was negotiated to plaintiff. On alleging there was a principal balance due of $258.45, plaintiff instituted this action February 5, 1954, to recover judgment therefor, plus interest and attorney's fees.

In answer to plaintiff's demands, defendant alleged that prior to June 6, 1953, he paid $514.79 on said note to the H & J Used Car Company, which he allegedly believed to be the duly authorized agent of plaintiff for the collection of said note; that plaintiff had full knowledge of the fact that respondent was paying said installments to the said H & J Used Car Company, notwithstanding which knowledge plaintiff made no protest as to the manner of said payments but tacitly consented and approved the same without in any way indicating a desire that payments be made direct to plaintiff; and that upon plaintff notifying defendant on June 6, 1953, that future payments were to be made to plaintiff, defendant paid plaintiff installments aggregating $277.02 on or prior to November 3, 1953, leaving a balance due of $138.51, which had been erroneously calculated to be $155.07. This amount defendant offered and tendered to plaintiff in full settlement on December 1, 1953. With his answer defendant tendered $138.51 as the balance due on the note.

The defense is one of payment of the note sued upon. Defendant contends that the H & J Used Car Company was the duly authorized agent of plaintiff for the collection of said note, and, in the alternative, averred that plaintiff ratified and profited by the payments made by defendant to the H & J Used Car Company and is, therefore, estopped to deny its agency. The controversy arises as to payments of February 4 and March 7, 1953, aggregating $119.94, paid by defendant to the said H & J Used Car Company, which amount was not remitted to plaintiff. All other sums so collected were in due course and properly remitted to plaintiff.

The question presented is whether or not the payment of these two installments was to a person authorized to receive it for the creditor, or, if not, whether the creditor had ratified it or profited by it so as to discharge the defendant under the provisions of LSA-C.C. art. 2140 and LSA-R.S. 7:119. The latter statute provides:

'A negotiable instrument is discharged:

'(1) By payment in due course by or on behalf of the principal debtor;

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'(4) By any other act which will discharge a simple contract for the payment of money'.

The Codal provision states:

'The payment must be made to the creditor, or to some person having a power from him to receive it, or who is authorized by a court, or by law, to receive it for him.

'Payment made to a person, not having power to receive it for the creditor, is valid, if the creditor has ratified it, or has profited by it.'

We are led, therefore, to a discussion of the question of agency to determine if such a relationship existed between plaintiff and the H & J Used Car Company. The H & J Used Car Company in connection with its business acquired installment notes representing the credit portion of car sales made by it. These notes were negotiated to plaintiff. Mr. J. T. Jacobs, Jr., one of the former partners in the H & J Used Car Company, testified that, as a working arrangement and as a matter of practice, his Company collected the installments payable on at least half of the obligations negotiated by it to plaintiff; however, plaintiff was unwilling to admit that the Car Company collected installments on all the notes negotiated to it but did admit that such was done in a substantial number of cases and on a substantial percentage of the notes acquired by it from said concern. In the instant case nine of the installments of defendant's note, covering a period of nine months, were handled in that manner. Collections from seven of these installments were duly remitted to plaintiff. The record leaves no doubt but that plaintiff had full knowledge of the manner in which these installments were collected, which was no different from the manner in which installments on various other notes were collected by H & J Used Car Company. The manner of defendant's payment and the general practice of the H & J Used Car Company collecting notes negotiated to plaintiff, as well as the authority of said concern to make collection of the notes, were never questioned. No objection was made or conveyed to the makers of any of the notes that the H & J Used Car Company was not authorized to make the collections for plaintiff. While plaintiff was unable to testify that any notice of his ownership of defendant's note or any instruction as to the payment of the installments was given defendant, defendant was positive that no such notice was received by him. It was only after the H & J Used Car Company ceased operation in May, 1953, that plaintiff instructed defendant under date of June 6, 1953, to make the monthly payments on his note to plaintiff's office in Natchez, Mississippi. After such notice defend...