Cadle Co. v. Dumesnil, 91-1295

CourtCourt of Appeal of Louisiana (US)
Writing for the CourtBefore DOMENGEAUX; KNOLL
Citation610 So.2d 1063
PartiesThe CADLE COMPANY, Plaintiff-Appellant, v. Millard P. DUMESNIL, Jr., Defendant-Appellee.
Docket NumberNo. 91-1295,91-1295
Decision Date09 December 1992

Robert L. Atkinson, Baton Rouge, for plaintiff/appellant.

Perrin, Landry, deLaunay & Durand, Gerald deLaunay, Lafayette, for defendant/appellee.


KNOLL, Judge.

Plaintiff, The Cadle Company, appeals the trial court's denial of its claim for a declaratory judgment recognizing its security interest in certain life insurance policies allegedly pledged or assigned as security for a note issued to Capital Bank & Trust Company by Millard P. Dumesnil, Jr. The trial court held that Cadle, as an assignee of the note, failed to establish its rights in the policies because the evidence failed to show that the policies in question were actually delivered to Capital Bank as required by the Louisiana Civil Code.

Cadle appeals, contending that the trial court erred by: (1) failing to find that Cadle established, by a preponderance of the evidence, delivery of the life insurance policies; (2) failing to bind the defendant, Dumesnil, to a previous admission because Cadle justifiably and detrimentally relied on the admission; and, (3) failing to recognize a perfected assignment of the life insurance policies. We affirm.


Cadle filed suit, seeking a declaratory judgment recognizing its security interest in eight life insurance policies allegedly either pledged or assigned to Capital Bank as security on a note. The note evidences a debt of Dumesnil to Capital Bank. Capital Bank was placed in liquidation by the Federal Deposit Insurance Corporation (FDIC).

In February of 1987, Cadle purchased a package of loans from FDIC which included the Dumesnil note. Testimony of Timothy J. Taber, vice-president and general counsel of Cadle, and documentary evidence indicate that Cadle has title to the note. As he admitted at trial, Dumesnil executed a collateral pledge agreement in favor of Capital Bank and eight assignments, each assigning, transferring, and setting over one of the policies at issue to Capital Bank.

On September 14, 1988, Dumesnil filed a Chapter 11 bankruptcy proceeding in the bankruptcy court of the Western District of Louisiana. Dumesnil listed neither the debt to Capital Bank as a liability nor the policies as assets on the bankruptcy schedules. Subsequently, Cadle filed a proof of claim in the proceeding, asserting its claim as a secured creditor. Then, Cadle moved the bankruptcy court to lift the automatic stay and abandon the insurance policies so that it could pursue its rights in the policies in state court. The bankruptcy court granted this motion on July 11, 1990.

Cadle attempted to cash in the insurance policies but, pursuant to Dumesnil's conflicting demand, Prudential Insurance Company of America refused to cash the policies absent a court order. After the policies were abandoned from the bankruptcy estate, Dumesnil argued that he could recover the cash value of the policies in preference to Cadle and other creditors who were not paid from the bankruptcy. Cadle then filed this suit for declaratory judgment on August 16, 1990. Dumesnil answered, claiming rights as owner of the policies and denying Cadle's security interests in the policies.

After a trial on the merits on May 31, 1991, the trial court took the matter under advisement and rendered a written judgment on August 29, 1991, conforming to its prior written ruling. It held that Cadle failed to prove that the policies were delivered to Capital Bank; thus, Cadle failed to prove that it, as transferee of Dumesnil's note, had any security rights in the life insurance policies.

Initially we note that Dumesnil argues that the trial court erred in admitting, over his timely objection, the asset sale agreement (Plaintiff's exhibit 2) between Cadle and the FDIC, under the business record exception, LSA-C.E. Art. 803(6). Dumesnil cannot initiate this issue since he did not cross appeal requesting this relief; therefore, we cannot address this issue.


As the trial court realized, the issue of delivery is the crux of this case. The trial court recognized that the Louisiana Civil Code requires proof of actual delivery of the pledged item to establish a valid pledge. LSA-C.C. Art. 3152 reads:

"It is essential to the contract of pledge that the creditor be put in possession of the thing given to him in pledge, and consequently that actual delivery of it be made to him, unless he has possession of it already by some other right."

Article 3158 provides in pertinent part:

"B.(1) When a debtor wishes to pledge ... policies of life insurance, ... he shall deliver to the creditor the ... policies of life insurance ... so pledged, and such pledge so made, except as hereinafter provided with regard to life insurance policies, shall without further formalities be valid as well against third persons as against the pledgor thereof, if made in good faith...."

As these two codal articles illustrate, delivery of the policies is an essential requirement of creating a valid pledge.

Cadle cites a few isolated cases involving unusual fact situations in which the courts have found that a third party or even the pledgor held the pledged asset as an agent pro hac vice for the pledgee. In these cases, the courts found that because the third party or pledgor retained possession of the thing pledged "precariously and clearly for the account of the creditor" the requirement of delivery was fulfilled, creating a valid pledge. See, e.g., Scott v. Corkern, 231 La. 368, 91 So.2d 569 (1956); Central Bank v. Bishop, 353 So.2d 1109 (La.App. 2nd Cir.1977), writ denied, 355 So.2d 549 (La.1978); First National Bank of Shreveport v. Querbes, 253 So.2d 123 (La.App. 2nd Cir.1971).

In the cited cases, the pledged instruments were first delivered to the pledgee before returning to the pledgor's possession, or the instrument was actually delivered to the third party agent pro hac vice. In the case presently before us, as we will later examine more completely, the record does not support, by a preponderance of the evidence, a determination that any delivery of the pledged instrument whatsoever occurred. Furthermore, no evidence was presented tending to show that Dumesnil or any one else was retaining possession of the policies precariously or for the benefit of Capital Bank, the creditor. We do not find that the facts of the case sub judice justify an exception from the clear and unambiguous requirement of actual delivery in LSA-C.C. Art. 3152 and 3158.


Before addressing the issue of whether Cadle proved delivery of the pledged note by a preponderance of the evidence, we must first resolve preliminary evidentiary issues. First, Cadle submits as evidence of the policies' delivery to Capital Bank a statement of Dumesnil contained in a memorandum in support of a motion to continue in the earlier bankruptcy proceeding. The memorandum provides in pertinent part:

"As it turns out, these policies were owned by [Dumesnil], and had been pledged by him in 1986 to secure a debt due to Capital Bank & Trust Company. Because the policies had been delivered to Capital Bank & Trust Company in Baton Rouge, the debtor did not think to mention them to the undersigned at the time the original schedules were filed herein."

Because the statement was made in a different proceeding, the statement does not constitute a judicial confession under LSA-C.C. Art. 1853. However, the statement may be an extrajudicial admission. Extrajudicial admissions, admissions made in prior proceedings, are admissible into evidence, but do not create conclusive presumptions or operate as estoppel against the party making them, unless there is a showing of deception or prejudice. Financial Corp. v. Estate of Cooley, 447 So.2d 594 (La.App. 3rd Cir.1984); Douglas Oil Tools, Inc. v. Demesnil, 552 So.2d 77 (La.App. 3rd Cir.1989).

Dumesnil argues that the statement written in the memorandum in the bankruptcy proceedings should not be considered at all in this case. We interpret his argument as being that the statement lacks evidentiary value because it does not qualify even as an extrajudicial admission. He cites Howard Trucking Co., Inc. v. Stassi, 474 So.2d 955 (La.App. 5th Cir.1985), aff'd, 485 So.2d 915 (La.1986), cert. denied, 479 U.S. 948, 107 S.Ct. 432, 93 L.Ed.2d 382 (1986), as authority. In Howard, a party to an earlier bankruptcy proceeding made several references in exhibits, witness testimony, and an application to compel adoption or rejection of leases which implied that the arrangement in question in the civil court case was a lease rather than a sale. The court found that the plaintiff in the civil case did not detrimentally rely on the judicial confessions made by the defendants during the bankruptcy proceeding; thus, it found that the trial court was correct in not recognizing the judicial confessions as full proof against the defendants.

In our view, Howard does not prohibit admission of the prior statement in the memorandum which the court may consider as evidence. We find that the statement in the memorandum in support of the motion to continue filed in the previous bankruptcy proceedings is not conclusive of the fact of delivery, but does constitute evidence to be accorded some weight.

Cadle next argues that the trial court erred in refusing to consider Dumesnil's extrajudicial admission of delivery in the bankruptcy proceeding as a conclusive presumption or as an estoppel. The trial court so ruled because it found no evidence presented showed that Cadle relied to its detriment on these statements in purchasing the package of assets from the FDIC. Cadle argues that the trial court...

To continue reading

Request your trial
7 cases
  • Gloria's Ranch, L.L.C. v. Tauren Exploration, Inc.
    • United States
    • Court of Appeal of Louisiana (US)
    • June 2, 2017
    ...a court should look to the intent of the parties to determine the nature of the transaction. See Hoover, supra ; Cadle Co. v. Dumesnil , 610 So.2d 1063, 1069 (La. App. 3 Cir. 1992), writ denied , 613 So.2d 992 (La.1993) ; ColonialFin. Serv., Inc. v. Stewart , 481 So.2d 186, 189 (La. App. 1 ......
  • Gloria's Ranch v. Tauren Exploration, Inc., 51,077-CA
    • United States
    • Court of Appeal of Louisiana (US)
    • June 2, 2017
    ...a court should look to the intent of the parties to determine the nature of the transaction. See Hoover, supra; Cadle Co. v. Dumesnil, 610 So. 2d 1063, 1069 (La. App. 3 Cir. 1992), writ denied, 613 So.2d 992 (La.1993); ColonialPage 31 Fin. Serv., Inc. v. Stewart, 481 So. 2d 186, 189 (La. Ap......
  • 31,521 La.App. 2 Cir. 2/24/99, Steed v. St. Paul's United Methodist Church
    • United States
    • Court of Appeal of Louisiana (US)
    • February 24, 1999
    ...... Since she argues this issue for the first time on appeal, it is deemed abandoned. See, Cadle Co. v. [31,522 La.App. 2 Cir. 13] Dumesnil, 610 So.2d 1063 (La.App. 3d Cir.1992), writ denied 613 So.2d 992 (1993); Smith v. Boothe, 28,065 ......
    • United States
    • Court of Appeal of Louisiana (US)
    • February 24, 1999
    ......Since she argues this issue for the first time on appeal, it is deemed abandoned. See, Cadle Co. v. Dumesnil, 610 So.2d 1063 (La.App. 3d Cir.1992), writ denied 613 So.2d 992 (1993) ; Smith v. Boothe, 28,065 (La. App.2d Cir.2/28/96), ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT