Roy O. Martin Lumber Co. v. Saint Denis Securities Co.

• Decision Date: 22 March 1954
• Docket Number: No. 40982,40982
• Citation: 225 La. 51,72 So.2d 257
• Parties: ROY O. MARTIN LUMBER CO., Inc. et al. v. SAINT DENIS SECURITIES CO., Inc.
• Court: Louisiana Supreme Court

Page 257

72 So.2d 257

225 La. 51

ROY O. MARTIN LUMBER CO., Inc. et al. v. SAINT DENIS SECURITIES CO., Inc.

No. 40982.

Supreme Court of Louisiana.

March 22, 1954.

Rehearing Denied April 26, 1954.

Maurice T. Mouton, Alexandria, for appellant.

J. S. Pickett, Many, James W. Jones, Jr., Natchitoches, for defendants-appellees.

McCALEB, Justice.

This is a suit for $29,066.30 damages for an alleged breach of an executory contract to sell real estate. Plaintiff avers that, beginning on March 8th 1951, it conducted negotiations with St. Denis Securities Co. Inc., which was represented by its President, James W. Jones, Jr., for the purchase of approximately 1400 acres of land owned by that company in Natchitoches Parish; that, as a result of these parleys, the defendant corporation, through Jones, submitted a written offer on March 26th 1951 to sell the property for $18,000; that this offer was accepted by it in writing on March 27th 1951, which acceptance was acknowledged in writing by defendant corporation through its President on March 28th 1951; that, thereafter, it contacted Jones several times in an effort to complete the sale, all without avail, and that the latter informed it that the directors of defendant corporation refused to consummate the transaction. It is further alleged that the defendant corporation is owned by said Jones and his immediate family and that, in the event the court should hold it blameless in the premises, then Jones is responsible for the damage as he promised to sell the property when he knew he did not have authority to do so.

As a further alternative, plaintiff pleads that, in the event the defendants should be held not liable for damages ex contractu, the said Jones, having proximately caused the damages, is responsible in tort.

Availing themselves of the privilege accorded by Article 175 of the Code of Practice, defendants appeared and prayed for oyer of the writings upon which plaintiff bases its claim. In response to this demand, plaintiff produced five letters and also an unsigned instrument styled 'Option to purchase'. Upon their production, defendants interposed separate exceptions of no right of action and no cause of action. And, alleging in their exception of no right of action that these documents, together with other evidence, written and verbal, would reveal that plaintiff was without right to sue because, among other things, Jones was not authorized by the St. Denis Securities Co. Inc. to sell the land, they prayed that a hearing be had for the purpose of receiving evidence in support of their contention.

In accordance with this request, the judge heard evidence on the so-called exception of no right of action, following which he maintained this exception and dismissed plaintiff's suit, being of the opinion that any offer made by Jones was ineffective as it had never been ratified or approved by the Board of Directors of St. Denis Securities Co. and that Jones was not responsible because, at the time he made the offer, plaintiff knew that he did not own the land. Wherefore this appeal.

At the outset, counsel for plaintiff complains that the trial judge was without authority to consider, on the hearing of the exception of no right of action, evidence showing that Jones was without power to offer to sell the real property belonging to defendant corporation for the reason that the question of Jones' authority, or his lack of it, was a matter for the merits of the case.

This contention is without merit because (1) the evidence, which was received at the hearing of the exception without objection, and the effect of enlarging the pleadings, Rheuark v. Terminal Mud & Chemical Co., 213 La. 732, 35 So.2d 592, compare Duplain v. Wiltz, La.App., 174 So. 652, and (2) the authority of Jones to bind the defendant corporation for the sale of its real estate without a mandate in writing was not merely a matter of defense but one vital to plaintiff's cause of action. Jones v. Shreveport Lodge No. 122 B.P.O.E., 221 La. 968, 60 So.2d 889 and cases there cited.

We say 'cause of action' as distinguished from 'right of action' for the reason that these two exceptions have been the subject of some confusion as they are invariably employed indiscriminately by members of the bar. Generally speaking, an exception of no right of action serves to question the right of a plaintiff to maintain his suit, i. e., his capacity to sue or his interest in the subject matter of the proceeding, whereas an exception of no cause of action addresses itself to the sufficiency in law of the petition and the exhibits attached thereto. Outdoor Electric Advertising v. Saurage, 207 La. 344, 21 So.2d 375; Termini v. McCormick, 208 La. 221, 23 So.2d 52 and Bartholomew v. Impastato, La.App., 12 So.2d 700. The latter is triable entirely on the face of the papers, while evidence may be received under an exception of no right of action for the purpose of showing that plaintiff does not possess the right he claims or that the right does not exist. Soniat v. White, 153 La. 424, 96 So. 19; Schmidt v. Conservative Homestead Association, 181 La. 369, 159 So. 587; Duplain v. Wiltz, supra and La Casse v. New Orleans, T. & M. R. Co., 135 La. 129, 64 So. 1012.

In the case at bar, the defendants make practically the same contentions under their exception of no cause of action as under their so-called exception of no right of action. Those contentions, substantially stated, are that Jones was not authorized by the Board of Directors of St. Denis Securities Co. to offer to sell the land and that the letters relied on by plaintiff evidence mere preliminary negotiations and do not establish a written promise of sale.

These points are properly presented under the exception of no cause of action, the legality of which is to be governed, not by plaintiff's allegations, but upon the documents which he has filed in response to the prayer for oyer. Noble v. Plouf, 154 La. 429, 97 So. 599. This is so because plaintiff's demand, being founded on a breach of contract to sell real estate, must be supported by written evidence of a sale or promise of sale, in order to be actionable. Articles 2275, 2440 and 2462 of the LSA-Civil Code; Davidson v. Midstates Oil Corporation, 211 La. 882, 31 So.2d 7 and Bordelon v. Crabtree, 216 La. 345, 43 So.2d 682.

Guild by these fundamental principles, we address our attention to the correspondence relied on by plaintiff for its cause of action. Mutual promises to sell and purchase are alleged to have resulted from three letters dated March 26th, 27th and 28th 1951, which are said to be the culmination of earlier negotiations.

The letter of March 26th 1951 was written by the defendant, Jones, at Natchitoches, addressed to Norman K. Martin, % Roy O. Martin Lumber Co., Alexandria. It states:

'Dear Sir:

'On my return home I find your letter of 15th, inst I just returned home on Friday, after spending more than ten days on a trip to Denver, Colorado.

'My previous offer to you for the approximate 1400 acres of land, were as follows----

'A warranty title to approximately 1200 acres for $15,000.00. 220 acres without warranty for $500.00. With full reservation of the rentals and royalties in the oil and gas lease now on the 1200 acre tract. You stated that you did not care for any reservations to be granted in the oil and gas lease. Then we will sell you the entire tract of lands, for a consideration of $18,000.00, transferring to you our entire interest in the oil and gas lease, which has three years yet to run. This offer is made, without warranty of title to the 220 acres tract. The purchaser to pay expenses of the sale and title investigation if such is desired. This offer includes all our holdings south of the Concrete Highway and west of the Gravel Highway.

'If you are still interested will be glad to give you a contract of sale within reasonable period of time. And, will be glad to hear from you in regard to the offer.

'Yours very truly,'

On the following day, March 27th 1951, Roy O. Martin, President of plaintiff corporation, wrote to Jones as follows 'Dear Mr. Jones:

'We wish to acknowledge receipt of your letter dated March 26th, addressed to my son, Norman. Norman had to go out of town this morning, and has asked that I reply thereto.

'Regarding your offer of $18,000.00 for the entire tract of land, consisting of...