Dugas v. Lewis-Chambers Const. Co., Inc.

• Decision Date: 13 March 1939
• Docket Number: 17015
• Citation: 187 So. 117
• Court: Court of Appeal of Louisiana — District of US
• Parties: DUGAS v. LEWIS-CHAMBERS CONST. CO., Inc.[*]

187 So. 117

DUGAS v. LEWIS-CHAMBERS CONST. CO., Inc.^[*]

No. 17015

Court of Appeal of Louisiana, Orleans.

March 13, 1939

Appeal from Civil District Court, Parish of Orleans; Wm. H. Byrnes Jr., Judge.

On rehearing.

Original decree recalled and annulled, judgment of trial court reversed, and case remanded for further proceedings.

For former opinion, see 185 So. 59.

WESTERFIELD, J., dissenting.

Monroe & Lemann, of New Orleans (Walter J. Suthon, Jr., of New Orleans, of counsel), for appellant.

Carville & Carville, of Plaquemine, de Lesseps Story Morrison, of New Orleans, for appellee.

JANVIER Judge.

This rather involved litigation results from two claims-one originally held by Jumonville Pipe & Machinery Company, Inc. domiciled in the Parish of Iberville, against the Lewis-Chambers Construction Company, Inc., domiciled in the Parish of Orleans, and which claim plaintiff, Dugas, alleges was assigned to him for a cash consideration and which claim was for the purchase price of certain steel plates; the other claim being held by the Lewis-Chambers Construction Company Inc., against the Jumonville Pipe & Machinery Company, Inc., for damages for the tortious appropriation by that company of a steel boom which the Lewis-Chambers Company claims was its property.

The Lewis-Chambers Company has at all times admitted its indebtedness in the sum claimed, to-wit, $698.30, for the price of the steel plates, but it has also at all times asserted its right to use its counter-claim for $4,500, either in reconvention or as an offset pro tanto, and it contends that the purported assignment by which Dugas, plaintiff, alleges he acquired the claim of the Jumonville Company, is not real, but is a simulation, and was executed solely for the purpose of interposing Dugas as party-plaintiff so that the defendant, Lewis-Chambers Company, might not be able to avail of its counterclaim against the Jumonville Company either as an offset pro tanto, or in reconvention.

The Lewis-Chambers Company maintains further that, even if the assignment be given effect, there cannot be transferred thereby any greater rights than were possessed by the assignor, and that, since the assignor-had it brought suit in the Parish of Orleans-must have submitted to the presentation in that suit of the reconventional demand, likewise its transferee, or assignee, must so submit.

Plaintiff argues, however, that, if he bought the said claim in good faith and without knowledge of any infirmity, or of any personal counter-right as against the assignor, he is not affected by any such right.

Defendant also declares that, regardless of whether the assignment is a real one, at the time it was executed there already had been effected, by the operation of law, compensation which had extinguished it because of the effect of Arts. 2208, 2209 of the Civil Code, under which compensation takes place automatically between two debts which are equally due and liquidated, and that, therefore, when the transfer was attempted to be made, the smaller debt-the subject of the transfer-had already been extinguished by the effect of such compensation.

Dugas counters with the argument that, conceding that such compensation is automatic and takes place at once between two debts equally due and liquidated, it has not taken place here because the debt claimed by defendant is based on tortious wrongful conversion, and, therefore, is not liquidated.

While no replication or rejoinder is permitted under our practice, a further contention of the Jumonville Company is that, even if it be held that the assignment is not a real one, still the claim of the Lewis-Chambers Company cannot be asserted here because that claim-the Jumonville Company declares-is properly against the Jumonville Motor Company, another corporation, and not against the Jumonville Pipe & Machinery Company, Inc., the assignor of the claim herein sued on.

In the court below there was judgment for Dugas, as prayed for, sustaining the reality and validity of the assignment, dismissing the reconventional demand of the Lewis-Chambers Company, and rejecting its alternative attempt to use its said claim as an offset pro tanto, the court holding that, in the face of a valid assignment, the debtor could not, as against the assignee, either as an offset or as a reconventional demand, present a claim against the assignor, and refusing to consider the counter-claim at all.

On appeal by the Lewis-Chambers Company, we, on first hearing, held that the evidence justified the holding that the assignment was genuine, and we further held that, since the assignment was genuine and not a simulation, Dugas became the owner of the claim against the Lewis-Chambers Company, and that that company could not assert against him any claim which it might have had against the Jumonville Company. On application for rehearing it was said that we had not given consideration to the fact that certain evidence tendered by defendant and tending to cast suspicion on the reality of the assignment had been excluded, and we concluded to reopen the matter in order to consider whether the facts already shown are sufficient to justify the belief that there was, in fact, no true assignment; whether, in other words, the purported assignment was not in reality merely an agreement that Dugas might bring the suit in order to avoid the possibility of defenses which, it was known, would be immediately availed of should the Jumonville Company appear as plaintiff in Orleans Parish, and, if the record, in its present condition, did not justify such a conclusion, then to consider whether the excluded evidence should not have been admitted.

We think it advisable to again set forth the facts and to note, particularly, the chronological order of certain occurrences.

In the first place, the Jumonville Company and Dugas are domiciled in the Parish of Iberville, while the Lewis-Chambers Company is domiciled in the Parish of Orleans. We state this fact because it has significance in that, had the Jumonville Company, in its own name, gone into the Parish of Orleans to bring this suit, it would have subjected itself to that venue so far as might be concerned any counter-claim which the Lewis-Chambers Company might have had against it, for Art. 375 of our Code of Practice provides that: " ** when the plaintiff resides *** in the State, but in a different parish from the defendant, said defendant may institute a demand in reconvention against him for any cause, although such demand be not necessarily connected with, or incidental to the main cause of action; ***" .

That the Jumonville Company well knew that there was more than grave danger that such a counter-claim would be asserted is not open to question, for, only a very short time before the purported assignment was executed, and only a little more than a month before the suit was filed, the Jumonville Company, through its attorneys, was so advised by counsel for the Lewis-Chambers Company. We attribute significance to the following events and dates:

On March 15, 1937, counsel for the Jumonville Company, at that time obviously still the owners of the claim sued on, wrote to the Lewis-Chambers Company demanding payment of that claim.

On March 18, counsel for the Lewis-Chambers Company answered stating that payment would not be made because of the counter-claim. The final statement in that letter reads as follows: " If a suit is filed by you, we will of course file a counter-claim on behalf of our client" . That letter was not answered. But, on April 28, 1937, the document relied upon as an assignment was executed and, on May 10, 1937, the assignee, Dugas, went into the parish of the domicile of the Lewis-Chambers Company and filed this suit.

Had the Jumonville Company itself filed the suit, its officials well knew that the counter-claim would have at once been presented, because, as we have shown, they had been so advised and because the matter was in the hands of their attorneys, who, of course, well knew of the provisions of the codal articles cited and who, therefore, were aware that though the two claims were not related, or " necessarily connected" -since the...