Ford Motor Credit Co. v. Soileau

• Decision Date: 07 March 1978
• Docket Number: No. 6348,6348
• Citation: 357 So.2d 563
• Parties: FORD MOTOR CREDIT COMPANY et al., Plaintiffs-Appellants, v. Jenston SOILEAU, Defendant-Appellee.
• Court: Court of Appeal of Louisiana — District of US

Page 563

357 So.2d 563

FORD MOTOR CREDIT COMPANY et al., Plaintiffs-Appellants, v. Jenston SOILEAU, Defendant-Appellee.

No. 6348.

Court of Appeal of Louisiana, Third Circuit.

March 7, 1978.

Guy O. Mitchell, III, Ville Platte, for plaintiffs-appellants.

Preston N. Aucoin, Ville Platte, for defendant-appellee.

Before DOMENGEAUX, WATSON and GUIDRY, JJ.

DOMENGEAUX, Judge.

The present appeal is from a judgment dismissing a suit on a promissory note. This case was before us once before on a different issue in Ford Motor Credit Company v. Soileau, 323 So.2d 221 (La.App. 3rd Cir. 1975).

The following facts set the background to this appeal. In June of 1973 defendant's son, Terrell B. Soileau, purchased a 1973 Ford automobile from Elin Pitre, d/b/a Pitre Ford Company, in Evangeline Parish. A promissory note, used to finance part of the purchase price, was signed by the father, Jenston Soileau, and his son.

The note was made payable to bearer and was secured by a chattel mortgage on the automobile. Pitre Ford sold the note to the Ford Motor Credit Company.

The younger Soileau defaulted in payments on the note and Ford Motor Credit Company instituted executory proceedings to have the car seized and sold. After the sale Ford Motor Credit filed these proceedings against the father, as co-maker of the note, for a deficiency judgment. The father raised the exception of no cause of action contending that he could not be sued because he was not made a party in the prior executory proceedings. This was granted by the trial court, and Ford Motor Credit appealed. This court reversed the judgment and remanded the case back to the trial court. Ford Motor Credit Company v. Soileau, supra.

After remand, but before trial, Pitre Ford Company paid the amount outstanding on the note to Ford Motor Credit, pursuant to a repurchase agreement whereby Pitre Ford would be required to buy back notes it sold to Ford Motor Credit if there was a default in payments. This transaction was revealed at trial. Defendant's counsel, with the Court's permission, immediately amended his answer in order to specially plead the defense of payment. Plaintiff's counsel, also with the Court's permission, amended his petition to join Elin Pitre, d/b/a Pitre Ford Company, as an additional plaintiff.

After the amendments¹ defendant raised the exceptions of no cause and no right of action to plaintiff's supplemental petition. He also entered a plea of estoppel. The trial judge rejected the plea of estoppel, but granted the exceptions of no right and no cause of action and dismissed the suit. It is from this judgment that plaintiffs have perfected a devolutive appeal.

The sole issue raised on appeal is whether the amended petition states a cause of action and whether Pitre, d/b/a Pitre Ford Company, is a proper party to sue and, therefore, has a right of action.

We have reviewed the record and find that the trial court erred in not overruling the exceptions.

The law in this area is clear. The purpose of the exception of no cause of action is to test the legal sufficiency of the pleadings. Well pleaded facts alleged in the petition are taken as true. If any reasonable construction of the alleged facts could lead to possible legal recovery, the exception must be overruled. Normally, evidence may not be considered for the purposes of sustaining an exception of no cause of action.² The exception can be sustained only when the allegations, as stated in the petition, affirmatively establish that no relief can be granted under the law. E. g., Hero Lands Company v. Texaco, Inc., 310 So.2d 93 (La.1975); Landry v. Guillory, 344 So.2d 1138 (La.App. 3rd Cir. 1977); Wahlder v. Roy O. Martin Lumber Company, Inc., 337 So.2d 669 (La.App. 3rd Cir. 1976); Guillory v. Nicklos Oil & Gas Company, 315 So.2d 878 (La.App. 3rd Cir. 1975); Succession of Lambright v. Lambright, 252 So.2d 349 (La.App. 3rd Cir. 1971), appeal after remand, 264 So.2d 796 (La.App. 3rd Cir. 1972); Bielkiewicz v. Rudisill, 201 So.2d 136 (La.App. 3rd Cir. 1967).

The purpose of the exception of no right of action is to determine if the suit is being filed by one with a legal interest in the litigation, assuming that a valid cause of action is pleaded in the petition. It is a threshold device used to terminate suit brought by a plaintiff who has no legal interest to do so. Evidence is admissable on the in limine trial of this exception for the purpose of determining the validity of the objection pleaded by it; however, the exception is not to be used to urge a defense to the effect that a plaintiff is without interest simply because a defendant has a defense to plaintiff's action. E. g., Babineaux v. Pernie-Bailey Drilling Company,261 La. 1080, 262 So.2d 328 (1972); Guillory v. Nicklos Oil & Gas Company, supra; All State Credit Plan Houma, Inc. v. Weidenbacher, 234 So.2d 774 (La.App. 1st Cir. 1970), application denied 256 La. 378, 236 So.2d 504 (1970), appeal after remand, 290 So.2d 695 (La.App. 1st Cir. 1974), writ denied 293 So.2d 193 (La.1974); Bielkiewicz v. Rudisill, supra.

The original petition in this case alleged that Ford Motor Credit was the holder of a promissory note drawn by defendant which had remained unpaid to the extent of $2,374.40. There is no question that this petition set forth a cause of action and that Ford Motor Credit had a legal interest to sue. This was our holding in the prior appeal.

The amending and supplemental petition made the following allegations and prayer for relief:

"1.

In the above entitled matter, Elin Pitre, d/b/a Pitre Ford Company, assigned the note in controversy to Ford Motor Credit with the following stipulation:

'ASSIGNMENT

'The Seller (Pitre) named on the face of this contract sells, assigns, and transfers to Ford Motor Credit Company (hereinafter called 'FMCC') his, its, or their entire right, title and interest in and to the within contract and the Property described therein and authorizes FMCC to do every act and thing necessary to collect and discharge obligations arising out of or incident to said contract and assignment. In order to induce FMCC to accept assignment of the contract, the Seller warrants that: the contract, and guaranty if any, are genuine, legally valid and enforceable and arose from the sale of said Property; said Property is as represented to the Buyer named therein who was quoted both a time price and a lesser cash price; the within contract was complete in all respects and Seller made all disclosures required by law prior to the execution thereof by Buyer; the Buyer is not a minor, has capacity to contract and paid the down payment stated in the contract with his own funds; all statements made by or on behalf of the Buyer and furnished to FMCC by the Seller are true to the best of the Seller's knowledge and belief, and the Seller has no knowledge of any fact that would impair the validity or value of the contract; title to said Property is vested in the Seller free of all liens and encumbrances and the Seller has the right to assign said title; and a certificate of title to said Property showing a lien or encumbrance for the benefit of FMCC or the Seller has been or will be applied for forthwith if permitted by law.

'If there is any breach of any of the foregoing warranties, without regard to the Seller's knowledge or lack of knowledge with respect thereto or FMCC's reliance thereon, the Seller hereby agrees unconditionally to purchase said contract from FMCC, upon demand, for the...