Commercial Nat. Bank v. Smith , 150 La. 233 ( 1922 )

Statement of the Case.

MONROE, C. J.

Plaintiff has appealed from a judgment maintaining an exception of no cause of action and dismissing this suit.

The petition alleges:

That R. B. Smith and Nelson L. Barnes, nonresidents, but temporarily within the jurisdiction, are indebted to it in the sum of $20,000, “represented by six notes, signed by the Tex-La-Homa Oil Corporation, less a credit of $273.65, of date February 13, 1920; all of said notes being dated at Tulsa, Okl., due 90 days after their date and payable at the Union National Bank of Tulsa, Old., with 8 per cent, per annum interest thereon, and $500 additional, if placed in the hands of an attorney for collection, the payment of which is guaranteed by the said B. B. Smith and * * * Nelson L. Barnes. (2) Also, in the additional sum of $30,000, represented by six notes, each for the sum of $5,000, signed by the Tex-La-Homa Oil Corporation, dated March 12, 1920, due 90 days after their date, to their own' order, with 8 per cent, per annum interest from maturity, payable -at the Commercial National Bank of Shreveport, La., with 10 per cent, additional as attorney’s fees on the amount collected, if placed in the hands of an attorney for collection, the payment of which notes was guaranteed by the said Smith and the said Barnes. (3) Also the additional sum of $25,000, represented by one note of Tex-La-Homa Oil Corporation, dated February 18, 1920, due 60 days after date, less a credit of $6,000 on March 2, 1920, and a credit of $2,148.51 on April 15, 1920, with 8 per cent, per annum interest from maturity, and 10 per cent, additional on said amount as attorney’s fees, the payment of which was duly guaranteed by the said Smith and * * * Barnes, by their indorsement and guaranty on the reverse thereof, but which note was duly protested at maturity. (4) That said R. R. Smith m indebted to it in the additional sum of $37,500, represented by a note dated January 28, 1920, and due March 28, 1920, for the payment of which it holds 500 shares of the preferred, and 500 shares of the common, stock of the said Tex-La-Homa Corporation. (5) Your petition further shows that the said parties are due. said amount to it in solido, and that they have demanded payment of the same in vain. Wherefore they pray,” etc.

It appears from the record that on June 9, 1920, defendants appeared through their attorneys of record, moved to set aside the default which had been entered against them, and prayed for oyer of the notes sued on. On June 19 they filed exceptions of prematurity and no cause of action. On June 21 plaintiff, with leave of the court and without prejudice to the rights of defendants, filed a supplemental petition, in which it is alleged:

That in its original petition, setting forth “that the indebtedness [averred in paragraph 1] was represented by six notes, whereas * * » said indebtedness was represented by four notes due your petitioner [of] all of which it is the holder and owner, each for the sum of $5,000, copies of which are hereto annexed and made part hereof, all of said notes were duly protested for nonpayment and notice of dishonor was given to the said parties, though they were the guarantors of the payment thereof; that it also annexes hereto and makes part hereof the remaining notes sued on in said cause, all of which have been duly protested for nonpayment and notice of dishonor given to the said defendants, though, under the law, no such notice was necessary. Wherefore, it prays that this supplemental petition be allowed, and that service thereof be made on said defendants, or their attorney of record, J. L. Atkinson, and for judgment,” etc.

On July 7 there was judgment maintaining the exception, after which followed a motion for new. trial, the overruling of the same, and the appeal.

Opinion.

Plaintiff’s allegations that defendants owe it certain debts, represented by certain described notes made by a third person, and its failure to connect itself with the notes by alleging either ownership or possession of them, constitute a failure, in our opinion, to disclose a cause of action for the recovery of the alleged debt, since it would not be entitled to prove what it has not alleged, and, without proving that it is either the holder or owner of the notes alleged to represent the debt, there could be no recovery.

Counsel for plaintiff cite Butler v. Stewart, 18 La. Ann. 555, where, in disposing of a similar exception, it was said:

“The statement that the defendant is indebted to the plaintiff on the note virtually and substantially carries with it the idea that plaintiff is the holder and owner of the note; for if the plaintiff did not hold the note, the defendant would not and could not be indebted to him on that note.”

And so the defendants herein say, 'i. e., that, unless plaintiff be the holder or owner of the notes sued on, they owe him nothing merely because they exist, and hence that it should allege, in order to be able to prove, that it has some interest in them. The courts have no authority to indulge in any presumption on the subject, and plaintiff is entitled to none.

In its supplemental petition, filed two days after the submission of the exception (as we understand the record), plaintiff prayed that the service of the same be made on defendants, or their attorney of record, J. L. Atkinson, and the judge a quo, in maintaining the exception, held that there had been no legal service, and declined to consider the petition.

[3] In so doing he perhaps overlooked (as he does not mention) section 16 of Act 179 of 1918, which reads:

“After suit has been brought and the defendant has appeared, through counsel, service of all other process in the suit, except garnishment process, but including supplemental petitions, should the same be allowed by the court may be accepted, by, or service made upon, the attorney of record, and the right so to serve shall remain until the attorney shall have formally withdrawn from the case under order of court; and this rule shall also apply to the plaintiff and his attorney, after suit filed.”

In Mitreaud v. Delassize, 13 La. 417, plaintiff having sued for damages for alleged slander, and having failed to allege that the language complained of. was false, defendant filed an exception of no cause of action, which was maintained by the trial judge, and plaintiff appealed. It was said in this court, by Eustis, J.:

“The article 419 of the Code of Practice allows amendments, under leave of the court, even after issue joined, ‘provided the amendment does not alter the substance of the demand, by making it different from the one originally brought.’ The amendments sought to be made in this case certainly did not alter the substance of the demand; the allegations of falsity and malice are necessarily implied in the claim for damages.”

In Petitpain v. Frey et al., 15 La. 199, it was said;

“The object of article 419, of the Code of Practice was to prevent new causes of action from being put in a petition which might vary and change entirely the nature of the issue joined. * ,i: * One of the tests for ascertaining whether the substance of a demand is changed by an amendment is to inquire whether the matter set forth in the two petitions could have been cumulated in one,” etc.

[1] The question of the right to amend a petition prior to the appearance of a defendant, by way either of exception or answer, appears to be left entirely at large, and, since the law is silent upon the subject, we know of no reason wliy a plaintiff should not be allowed to amend in any respect that the judge finds that the interests of justice may require, whether it be to supply a cause of action where none has been alleged in the original petition, or otherwise. The law intervenes only after issue is joined and declares that thenceforward an amendment may be made, “with leave of the court,” provided “it does not alter the substance of the demand by making it different from the one originally brought.” And the Code of Practice further declares:

.“Art. 357. The cause is at issue when the defendant has answered, either by confessing or denying the facts set forth in the petition, or by pleading such dilatory or peremptory exceptions as he is bound to plead in limine litis, pursuant to the provisions of this Code.”

[2] The exception of no cause of action is a peremptory exception which may be filed at any time, and its filing does not put the ease at issue, and the same is true of the declinatory exceptions (C. P. 358); hence there are -few, if any, cases to be found in which applications to amend have ever been denied because of the mere filing of an'exception of no cause of action, and equally few where such applications have been granted when made after the exceptions have been maintained. Burbank v. Harris, 32 La. Ann. 395; Hart v. Bowie, 34 La. Ann. 324; Raymond v. Palmer, 35 La. Ann. 276. We are'therefore of opinion that the supplemental petition was properly allowed.

The remaining question (i. e., whether defendants are bound by the service on their attorney of record of the supplemental petition, with citation addressed to him), has also, as we think, been properly decided, although we are unable to concur in the reasons assigned for that ruling, which are: That, though the counsel of record had the right to accept service, yet, having appeared solely for the purpose of filing certain exceptions, and there being no pretence that they had accepted service, the service as made was no service at all, for according to the provisions of the act of 1918 (supra), the defendants having previously appeared through their counsel of record; service of all other process in the suit (save that of garnishment), and especially of supplemental petitions, could lawfully be accepted by, or made on, them, until they should have formally withdrawn from the case, under order of the court, which they had not done when the supplemental petition was served. It is true that the exception of prematurity and no cause of action filed by counsel on June 19 opens with the statement:

“Now into court come the defendants in the above-entitled cause, solely and only for the purposes of these exceptions, and except to the plaintiff’s petition on the ground,” etc.

And the pleading is signed by the attorneys of record. But, even if that were not the appearance contemplated by the statute, they had appeared in the suit, ten days before, and moved to set aside the default that had been entered against them and (by separate motion) that they be granted oyer of the notes sued on, and both motions read in part:

“Now into court, through their undersigned counsel, come * * * defendants. * * * Wherefore (they) pray,” etc.

And both motions are signed by their attorneys of record, without reservation in either of them to the effect that defendants were appearing otherwise than for all the purposes of this suit, nor does there appear to have been any withdrawal by the counsel of-record, and no order of court authorizing such withdrawal.

The objection that we find to the service upon the counsel is that in the supplemental petition plaintiff prays “that service thereof be made on said defendants, or their attorney of record, J. L. Atkinson”; that the citation was addressed “to J. L. Atkinson, attorney of record,” and returned as having been served on him, together with a copy of the supplemental petition; and that the act of 1918, does not, in our opinion, authorize that course, its provisions going no further than to authorize service of process, directed to, and intended for, defendants, to be accepted by, or made on, their attorneys of record, and not going to the extent of authorizing citations or other process to be issued in the names of such attorneys, or of one attorney where the record shows the employment of two who are not partners. We all know that firms and corporations must be cited through individuals, but we also know that the citation must be addressed to defendants in suits and not to their agents. State ex rel. Railroad Co. v. Justice, 48 La. Ann. 1417, 20 South. 911; McFaddin v. Sheriff, 49 La. Ann. 1319, 22 South. 358; Jacobs v. Frere, 28 La. Ann. 625; White Hall Agricultural College v. Police Jury, 127 La. 1027, 54 South. 337. We may remark, in conclusion, that defendants had no opportunity, in the district court, to object to the filing of the supplemental petition, since it was filed ex parte and after the hearing and submission of the exception of no cause of action. Defendants (and the judge himself) were, however, fully protected by the terms of the order permitting the supplemental petition to be filed, and defendants have availed themselves in this court of their reserved right.

Judgment affirmed.