Williams v. De Soto Bank & Trust Co.

• Citation: 189 So. 451,192 La. 848
• Decision Date: 01 May 1939
• Docket Number: 34018.
• Parties: WILLIAMS et al. v. DE SOTO BANK & TRUST CO. et al.
• Court: Louisiana Supreme Court

189 So. 451

192 La. 848

WILLIAMS et al. v. DE SOTO BANK & TRUST CO. et al.

No. 34018.

Supreme Court of Louisiana.

May 1, 1939

Rehearing Denied May 29, 1939.

Appeal from Eleventh Judicial District Court, Parish of De Soto; Hal A. Burgess, Judge.

Action by Mrs. Mabel C. Williams and others against De Soto Bank &amp Trust Company and others for an indebtedness resulting from the administration of the succession of Willis W. Williams by Bank of Commerce & Trust Company. From an adverse judgment plaintiffs appeal.

Affirmed.

Henry W. Bethard, Jr., of Coushatta, and Lal C Blanchard, of Shreveport, for appellants.

Wilkinson, Lewis & Wilkinson and Lee & Lee, all of Shreveport, and Craig, Bolin & Magee and R. S. Williams, all of Mansfield, for appellees.

LAND Justice.

The widow and heirs of Willis W. Williams brought suit against the De Soto Bank & Trust Company and other defendants, for an alleged indebtedness resulting from the following alleged facts:

1. That as a result of the administration of the succession of Willis W. Williams by Bank of Commerce & Trust Company, it became indebted unto plaintiffs in the sum alleged.

2. That the De Soto Bank & Trust Company purchased the assets of the Bank of Commerce & Trust Company and assumed all of its debts.

3. That prior to the purchase by the De Soto Bank & Trust Company, the other defendants herein became guarantors for the debts of the Bank of Commerce & Trust Company.

Plaintiffs prayed for judgment against the De Soto Bank & Trust Company for the full amount of the indebtedness, and against the other defendants jointly for the full amount.

All of the defendants in the suit filed exceptions of misjoinder of parties and causes of action, nonjoinder of parties defendant, and no cause of action. The exceptions as the defendants, other than the De Soto Bank & Trust Company, were sustained and plaintiffs' suit as to them dismissed. The exceptions were overruled as to the De Soto Bank & Trust Company. From this judgment the plaintiffs appealed and the suit is now pending in this court on appeal.

Subsequent to the rendition of the judgment in the District Court and the appeal to this court, the plaintiffs on the 23rd day of November, 1937, entered into a compromise agreement with De Soto Bank & Trust Company, whereby they settled all of their rights, titles and claims involved in these proceedings, released the De Soto Bank & Trust Company from all claims of indebtedness of every nature whatsoever arising out of the matters of fact and the law alleged in plaintiffs' petition in this suit, and thereafter dismissed the suit as to the De Soto Bank & Trust Company. (See Exhibit ‘ A’ attached to defendants' motion to dismiss.)

The decision of this court in Williams v. De Soto Bank & Trust Company, 189 La. 245, 179 So. 303, rendered on motion to dismiss, disposes of all of the exceptions, with the exception of no cause or right of action, which was sustained as to the individual defendants in the lower court.

In view of the compromise agreement between plaintiffs and the De Soto Bank & Trust Company by which that Bank has been dismissed from this suit, the individual defendants, who, of course, could not have done so in the court below-the matters now presented not having then occurred-have filed in this court, of date March 29, 1939, an exception of no cause or right of action based upon the record as now made up, including the compromise agreement which forms a part of the record of this court.

The record as made up shows:

1. That this was an action originally against the De Soto Bank & Trust Company, as principal, and against the other defendants solely as guarantors.

2. That the action insofar as it applies to the principal, De Soto Bank & Trust Company, has been compromised and settled and the Bank discharged from all liability by reason of the claim set up in the action.

3. That the action is now against the other defendants, as guarantors, or sureties.

It is clear that the guarantors were discharged by the compromise with the De Soto Bank & Trust Company, the principal debtor.

The first paragraph of Article 2205 of the Revised Civil Code provides:

‘ The remission or even conventional discharge granted to a principal debtor, discharges the sureties.’

In the case of Hopkins v. National Surety Co., 157 La. 1035, 1038, 103 So. 314, 315, this court said:

‘ Of course, where the creditor voluntarily compromises with the principal, or otherwise voluntarily discharges the debt, then the surety is entitled to his release.’

This necessarily follows, since the obligation of the surety is only an accessory to that of the principal debtor.

This being true, the record in this case, as now made up, discloses no cause or right of action against these defendants, and the exception of no right or cause of action filed in this court in this case should be sustained, and the judgment of the lower court, sustaining a like exception and dismissing plaintiffs' suit at their costs, should be affirmed.

Counsel for plaintiffs urge in their supplemental brief that the denial of defendants' motion to dismiss the appeal, as reported in Williams v. De Soto Bank & Trust Co., 189 La. 245, 179 So. 303, is res adjudicata of the points presented by defendants' exception of no cause or right of action. This exception is based upon two propositions:

1. The De Soto Bank & Trust Company was the ‘ reincarnation’ of the Bank of Commerce & Trust Company, and, therefore, the discharge and release of the principal debtor, De Soto Bank & Trust Company, under Article 2205 of the Louisiana Civil Code, operated to release the individual defendants from the alleged guaranty, and

2. If...