Darby v. Doucet
| Decision Date | 05 February 1986 |
| Docket Number | No. 84-1014,84-1014 |
| Citation | 482 So.2d 986 |
| Parties | Susette B. DARBY, Plaintiff-Appellee, v. Terry J. DOUCET, Sr., Defendant-Appellant. 482 So.2d 986, 1 UCC Rep.Serv.2d 145 |
| Court | Court of Appeal of Louisiana — District of US |
Gauthier & Cedars, Chester R. Cedars, Breaux Bridge, for defendant -appellant.
McHugh & Guidry, George W. McHugh, Jr., St. Martinville, for plaintiff-appellee.
Before DOMENGEAUX, LABORDE and KING, JJ.
The issues presented by this appeal are whether or not the trial court erred in: (1) denying defendant's exception of prescription on an action to recover money lent; (2) failing to find that this was an action for contribution as between co-debtors in solido; (3) allowing the introduction of evidence, over the objection of the defendant, resulting in an expansion of the pleadings; (4) refusing to allow defendant an offset of $1,045.50 for money he allegedly paid on behalf of plaintiff on plaintiff's separate obligation; and (5) failing to award plaintiff attorney's fees as provided for in the promissory note sued on.
Susette B. Darby (hereinafter plaintiff) brought suit against Terry J. Doucet, Sr. (hereinafter defendant) as the assignee of a promissory note made by defendant. After a hearing the trial court rendered judgment in favor of plaintiff and against the defendant in the sum of $8,044.18, together with judicial interest from the date of judicial demand, until paid, subject to a credit of $2,646.00, and for all costs of the proceedings but rejected plaintiff's demand for attorney's fees. A judgment was read and signed and defendant timely appealed. The plaintiff neither appealed nor answered the appeal.
We affirm.
Defendant, Terry J. Doucet, borrowed money from St. Martin Bank & Trust Company of St. Martinville, Louisiana and gave his unsecured promissory note to evidence the debt. The defendant's original loan from the Bank was made for the purpose of paying off debts owed by defendant. The promissory note evidencing his indebtedness to the Bank became due. The Bank, however, refused to renew the defendant's promissory note without first obtaining some type of security for the loan. The Bank, agreed to renew the defendant's promissory note if plaintiff, Susette B. Darby, with whom the defendant was then living without benefit of marriage, would co-sign the note and pledge as security a $7,500.00 certificate of deposit standing in her name. On January 8, 1980, plaintiff accommodated the defendant and he signed a renewal promissory note (hereinafter the note) to the Bank and plaintiff signed the defendant's promissory note in the space designated for the signature of a co-maker.
At the time the note was executed the principal amount of money owed by the defendant to the Bank on his original note was $7,733.14. The renewal note signed by both defendant and plaintiff and given to the Bank was for $11,380.32, the principal amount owed by the defendant on his original promissory note and the pre-computed interest on this principal amount. The terms of the renewal note provided for payment in 48 monthly installments in the amount of $237.09 each. The first installment was due on February 23, 1980.
No payment was ever made on this promissory note by the defendant and the Bank called upon plaintiff to pay off the note. On April 24, 1980, plaintiff paid off the note subject to a credit for unearned interest. The net payoff made by plaintiff was $8,044.18. The Bank assigned the note to plaintiff. Plaintiff attempted to collect on the note from defendant, but was unsuccessful. On September 6, 1983, plaintiff filed this suit against defendant on the note assigned to her by the Bank, seeking recovery of the full face value of the note, $11,380.32, plus interest thereon from maturity, until paid. A trial was held on June 26, 1984, and the trial court awarded plaintiff only $8,044.18, the amount she actually paid to the Bank to pay off the note, together with judicial interest from date of judicial demand, until paid, subject to a credit or offset in the amount of $2,646.00 representing money paid by defendant, from the proceeds of a workmen's compensation settlement, to plaintiff for credit on his obligation on the note. The trial court did not award attorney's fees as provided by the note but did tax the cost of the proceeding against defendant.
Defendant appeals devolutively alleging that the trial court erred in:
(1) denying defendant's exception of prescription on an action to recover money lent;
(2) failing to find that this was an action for contribution as between co-debtors in solido and thus awarding plaintiff recovery in excess of one-half of the sum actually paid by plaintiff;
(3) allowing the introduction of evidence resulting in the expansion of the pleadings over the objections of the defendant; and
(4) refusing to allow defendant an offset of $1,045.50 for money he paid on behalf of plaintiff on plaintiff's separate obligation.
Plaintiff has not appealed or answered the appeal to contest the trial court's failure to award her attorney's fees as provided in the note.
In his first assignment of error, defendant avers that the trial court erred in denying his exception of prescription. Defendant maintains that this is in reality a suit for recovery of money lent, for which the prescriptive period is three years, instead of a suit on a promissory note, for which there is a five year prescriptive period. See LSA-C.C. Articles 3494 and 3498. Defendant thus argues that since three years passed between the date on which plaintiff paid off the note, April 24, 1980, and the date plaintiff filed this suit, September 6, 1983, plaintiff's cause of action has prescribed. The trial court overruled defendant's exception, holding that this was a cause of action based on a promissory note for which a five year prescriptive period applied and that plaintiff's cause of action had not yet prescribed.
In his brief, defendant, contending that this is an action for money lent, quotes only a limited portion of plaintiff's testimony under cross-examination. Defendant maintains that plaintiff has admitted that she actually loaned money to defendant. However, careful review of the record reveals that plaintiff only loaned her name to defendant so that he could renew his original promissory note, rather than loaning the defendant any money, and that she never received any proceeds of the loan from the Bank. Plaintiff's suit, as assignee of the note, for collection of the note was a suit on an instrument that is subject to the five year prescriptive period provided in LSA-C.C. Art. 3498. We therefore find no merit to defendant's first assignment of error.
In his second assignment of error, defendant avers that the trial court erred in failing to recognize that this was an action for contribution from a solidary obligor, thus allowing plaintiff to recover more than one-half of the sum actually paid by plaintiff to retire the debt owed in solido by both the plaintiff and defendant. Defendant contends that he and plaintiff were co-debtors on the note and were bound in solido, and, as such, under the codal provisions governing solidary obligations plaintiff was only a solidary obligor who has rendered the whole performance, and though subrogated to the right of the obligee, the Bank, could only claim from him no more than his virile portion of the debt, citing LSA-C.C. Article 2104 and Aiavolasiti v. Versailles Gardens Land Dev. Co., 371 So.2d 755 (La.1979). Thus, defendant contends that the most he could owe the plaintiff is $4,022.09, which is one-half ( 1/2) of the $8,044.18 she paid the Bank.
The Louisiana laws of obligations in general would apply unless in this instance there is a particular provision in Title 10, Commercial Laws, which would apply.
(2) When the instrument has been taken for value before it is due the accommodation party is liable in the capacity in which he has signed even though the taker knows of the accommodation.
(3) As against a holder in due course and without notice of the accommodation oral proof of the accommodation is not admissible to give the accommodation party the benefit of discharges dependent on his character as such. In other cases the accommodation character may be shown by oral proof.
(4) An indorsement which shows that it is not in the chain of title is notice of its accommodation character.
(5) An accommodation party is not liable to the party accommodated, and if he pays the instrument has a right of recourse on the instrument against such party."
Thus, the Louisiana laws of obligation in general, and LSA-C.C. Art. 2104 in particular, do not apply as the particular provisions of LSA-R.S. 10:3-415 apply to the facts of this case.
In this case, the trial court found that notwithstanding the fact that plaintiff signed the note in the space provided for in the capacity as a co-maker, she was in fact only an accommodation party to the note. Since defendant was not a holder in due course, but instead a party to the instrument, oral proof of the accommodation character of plaintiff's signature was admissible. Evidence of the accommodation presented at trial was ample to support the trial court's finding of fact that plaintiff was only an accommodation party to the note. The original loan and renewal were used to pay off defendant's debts. Plaintiff co-signed the note for the sole benefit of defendant, who without plaintiff's assistance, would not have been able to renew his pre-existing loan. Plaintiff never received any of the proceeds of the loan, nor any...
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