Credit Indus. Co. v. Jewell

Decision Date24 March 1952
Docket NumberNo. 3515,3515
Citation58 So.2d 239
PartiesCREDIT INDUSTRIAL CO. v. JEWELL.
CourtCourt of Appeal of Louisiana — District of US

Huckabay, Seale & Kelton, Baton Rouge, for appellant.

W. Frank Gladney, Baton Rouge, for appellee.

LOTTINGER, Judge.

This is a suit by Credit Industrial Company against Jack Jewell alleging that defendant is indebted unto petitioner in the sum of $840, represented by three trade acceptances in the sum of $280 each. From judgment below in favor of petitioner, the defendant has taken this appeal.

The trade acceptances were issued by defendant to Sterling Materials Company, Inc., on March 16, 1950. They were issued in payment of a certain quantity of Asbesoline, a brand of water-proofing material, which by contract between defendant and Sterling Materials Company, were to be shipped to defendant. As part of the contract, the seller undertook certain obligations, one of which was to supply defendant with a representative, at the factory's expense, in order to solicit sales of the material and to instruct purchasers in the sale and application of the material. On March 27th, 1950, according to deposition of Samuel S. Salitan, a partner in the petitioner firm, the trade acceptances were negotiated to petitioner by Sterling Materials Company. The material was shipped to defendant and proved defective. The defendant refused to pay the trade acceptances, and this suit resulted.

Defendant filed certain exceptions to pertitioner's petition, all of which were overruled. On trial of the merits, judgment was rendered in favor of petitioner in the full amount of their claim, and defendant has taken this appeal.

The first exception filed by defendant was that of vagueness. This exception is based upon the fact that the petition sets forth that petitioner is a 'financial partnership'. Defendant claims that such is unknown under the law of Louisiana, and that the petition should set forth the legal status so as to determine whether it is able to sue in the courts of our state.

In its written opinion, the lower court said: 'In 40 Am.Jur., Partnership, Sections 11 and 12, we find partnerships divided generally into two classes: commercial or trading partnerships on the one hand, and noncommercial, nontrading or ordinary partnerships on the other hand. What it does classifies it--if it buys and sells even as a mere incident of its business it is a commercial or trading partnership. Here the partnership alleges that it bought, and while there is no allegation of selling, there is a suit to enforce collection. Clearly the plaintiff is a trading or commercial partnership, and the word 'financial' as used in the petition is surplusage. It follows, therefore, that the legal status and the rights and liabilities of plaintiff partnership are those common to trading or commercial partnerships, and it would not seem possible that any amendatory allegation could add to or take from its status as such.'

We believe that the lower court was correct in its conclusions. The petition, taken as a whole, shows that the petitioner was a commercial partnership. Use of the term 'Financial Partnership', which we assume is a New York term, would not defeat the clear intent and purpose of the petition.

The exception of vagueness is further aimed at a provision in each of the three trade acceptances reading as follows: 'The transaction which gives rise to this instrument is the purchase of goods by the acceptor from the drawer.' Defendant claims that such provision renders the instruments non-negotiable. Such provision would not be such as to make the instruments conditional obligations, as is claimed by defendant, and, thereby, render the instruments non-negotiable. In disposing of this objection, the lower court cited 7 Am. Jur., Bills and Notes, Section 223, as follows: 'Trade acceptances.--In the modern commercial world, trade acceptances are fast becoming an important form of contract, ranking with notes, checks, drafts, and other mediums of trade. The fact that an acceptance contains matter other than an order for the payment of money does not, in itself, render it non-negotiable.' (Citing McCornick & Company v. Gem State Oil & Products Company 222 P. 286, 34 A.L.R. 867) 'But if, by such matter, the obligation of the instrument becomes conditional, it is rendered non-negotiable.' Citing Westlake Mercantile Finance Corporation v. Merritt, , 269 P. 620, 61 A.L.R. 811.

According to LSA-R.S. 7:3, a statement of the transaction which gives rise to the instrument does not render the instrument non-negotiable. We, therefore, are of the opinion that the lower court was correct in its conclusions on the subject.

A further objection raised by the defendant was that the petition failed to itemize the goods purchased and to allege whether the goods were delivered and accepted and if so, when. Considering that petitioner was a holder in good faith and was not a party to the transaction between defendant and Sterling Materials Company, we find no basis for requiring petitioner to give the details of the transaction out of which the trade acceptances were...

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