Gulf Nat. Bank at Lake Charles v. Ryan

• Decision Date: 25 May 1983
• Docket Number: No. 82-833,82-833
• Citation: 432 So.2d 1122
• Parties: GULF NATIONAL BANK AT LAKE CHARLES, Plaintiff-Appellee, v. Loretta RYAN and W.E. Ryan, Defendant-Appellant.
• Court: Court of Appeal of Louisiana — District of US

Page 1122

432 So.2d 1122

GULF NATIONAL BANK AT LAKE CHARLES, Plaintiff-Appellee, v. Loretta RYAN and W.E. Ryan, Defendant-Appellant.

No. 82-833.

Court of Appeal of Louisiana Third Circuit.

May 25, 1983.

Newman, Thibodeaux & Marshall, H. Gayle Marshall, Lake Charles, for defendant-appellant.

Jones, Tete, Nolen, Hanchey, Swift & Spears, David Dwight, Lake Charles, for plaintiff-appellee.

Before GUIDRY, STOKER and LABORDE, JJ.

LABORDE, Judge.

This is a suit for a deficiency judgment. Plaintiff, Gulf National Bank at Lake Charles, is suing defendant--co-maker of the note, William E. Ryan, for the balance owed on the note.

Ryan filed an exception of no cause of action alleging as a basis for the exception that he was named as a party in the original petition for executory process but was not served with notice of the executory proceedings. Ryan alleges that Gulf's failure to serve him with notice of the executory proceedings releases him from liability for the deficiency due on the note.

The trial court found that Ryan signed the note as an accommodation maker and that he owned no interest in the property seized in the executory proceedings. Therefore, the lower court, relying on our decision in Ford Motor Credit Company v. Soileau, 323 So.2d 221 (La.App. 3rd Cir.1975), held that Ryan was not required to be served with notice of the executory proceedings since he was not entitled to the protection afforded by the Deficiency Judgment Act. ¹ Thus, the trial court rendered judgment in favor of Gulf and against Ryan for the balance due on the note, plus finance charges and attorney's fees. Ryan appeals. We affirm.

The issues presented on appeal are as follows:

(1) Whether or not Ryan was an accommodation maker of the note or was he an owner or co-owner of the property seized.

(2) If Ryan was only an accommodation maker, is he released from liability on the note by the failure of Gulf to serve him with notice of the executory proceedings?

The record reveals that on May 22, 1981, William E. Ryan and Loretta Ryan signed a promissory note made payable to the order of bearer at Gulf National Bank at Lake Charles for the purchase of a 1979 Pontiac Trans-Am. To secure payment of the note, William and Loretta executed a chattel mortgage against the Trans-Am in favor of Collins Toyota. The note signed by Loretta and William was paraphed "Ne Varietur" for identification with the Act of Chattel Mortgage and said note was subsequently assigned to Gulf National Bank at Lake Charles.

The testimony contained in the record shows that the Trans-Am was purchased for Loretta and William's daughter, Tammy. Tammy made the down payment on the car and she also paid the installments on the note as they came due.

The record shows that the Certificate of Title issued by the Motor Vehicle Division of the State of Louisiana named Loretta Ryan as the sole owner of the Trans-Am.

When payments on the note became delinquent, the entire debt became due according to the terms of the note. Gulf National Bank instituted executory proceedings naming Loretta and William as defendants therein. In the Petition for Executory Process, Gulf National Bank alleged that William was a nonresident or absentee. They requested that an attorney at law be appointed to represent William. The trial court ordered that an attorney be appointed to represent William and the court further ordered that executory process be issued immediately in accordance with law.

On January 20, 1982, the sheriff sold the Trans-Am with appraisement to the highest bidder, Gulf National Bank. The proceeds from the sale were insufficient to completely satisfy payment of the note.

On February 26, 1982, Gulf National Bank filed the present suit for a deficiency judgment against William and Loretta Ryan. On May 4, 1982, Gulf National Bank confirmed a default judgment against Loretta for the deficiency owed on the note, reserving its rights against William.

On March 26, 1982, William filed an exception of no cause of action. He alleged that he was named as a defendant in the original petition for executory process, but was not served with a notice of seizure although he resided in Calcasieu Parish. The exception was referred to the merits and on October 1, 1982, trial of this matter was held.

After reviewing the record, we conclude, as did the trial court, that William was only an accommodation maker of the note and he did not own or ever intend to own an interest in the automobile purchased.

William testified at trial that the automobile was supposed to be his daughter's automobile. The car was to be paid for by Tammy. William testified further that he did not make the down payment on the automobile nor did he ever pay an installment due on the note.

The record shows that all negotiations for the purchase of the Trans-Am were conducted by Tammy. William never entered into a discussion with a salesman regarding purchase of the car. At the time William signed the note and mortgage, he had never seen the car.

The record further shows that William owned no interest in the car. The Certificate of Title introduced into evidence shows that Loretta was the sole owner of the Trans-Am. While the Certificate of Title is not conclusive proof of ownership, no evidence is contained in the record to show that William owned any interest in the automobile.

After concluding that William was an accommodation maker of the note and that he owned no interest in the property mortgaged and seized, the trial court concluded that William, as an accommodation maker of the note, was not entitled to the protection of the Deficiency Judgment Act. Therefore, the trial court held that "... service of process of a notice of seizure upon this defendant was not sacramental to his liability for a deficiency judgment".

In Ford Motor Credit Company v. Soileau, supra, this court reviewed the purpose and application of the ...