Abadie v. Gluck's Restaurant Corporation

121 So. 757, 168 La. 241, 1929 La. LEXIS 1771
CourtSupreme Court of Louisiana
DecidedMarch 25, 1929
DocketNo. 28132.
StatusPublished
Cited by7 cases

This text of 121 So. 757 (Abadie v. Gluck's Restaurant Corporation) is published on Counsel Stack Legal Research, covering Supreme Court of Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Abadie v. Gluck's Restaurant Corporation, 121 So. 757, 168 La. 241, 1929 La. LEXIS 1771 (La. 1929).

Opinion

LAND, J.

This is a suit to compel the specific performance by the defendant, Gluck’s Restaurant Corporation, of its obligation to hold petitioners harmless against any judgments that may be rendered against them in the matter of Janssen Catering Company v. L. A. Abadie, No. 129, 286 on the docket of the civil district court for the parish of Orleans. Petitioners also pray for all general and equitable relief.

Judgment was rendered in the lower court in favor of petitioners for the sum of $4,068.-50, the amount of the judgments recovered against them by Janssen Catering Company, with legal interest from November 13, 1919, until paid, subject to a credit of $100, and for all costs of that proceeding.

It is provided in this judgment that all amounts paid by or recovered from defendant, Gluck’s Restaurant Corporation, shall be deposited in the registry of the court and shall be used, under proper orders of the court, in satisfaction of the judgments in fa *244 vor of Janssen Catering Company against petitioners, Lawrence A. Abadie and Albert P. Frisch, and in paying the costs of that suit.

From this judgment defendant corporation has appealed.

1. The defense is an exception of no right or cause of action, and a denial of the allegations of the petition.

This exception was overruled in the court below, and judgment was rendered on the merits.

Whether the exception of no right or cause of action should prevail depends entirely on the nature of the obligation of defendant corporation, with reference to the judgments rendered in favor of Janssen Catering Company against petitioners.

The allegations of the petition, taken as true for the purpose of the exception, show:

That in suit No. 129,286 in the civil district court, judgment for $4,068.50, with legal interest, was rendered in favor of Janssen Catering Company against Lawrence A. Abadie, one of the petitioners, dnd that this judgment was signed March 29, 1921.

That on April 4, 1921, the defendant, Gluck’s Restaurant Corporation, purchased from petitioner Lawrence A. Abadie his restaurant and contents at 124 Royal street in the city of New Orleans, and that in the act of sale it is recited that: “This sale is made for and in consideration of the release by the vendor of all debts and obligations incurred by him for account of Abadie’s Restaurant, totalling —-dollars, a list of said creditors being annexed hereto and marked ‘Ne Varietur’ to identify herewith. (Including the obligation of vendee to hold harmless the said vendor and Albert P. Frisch against any judgments that may be rendered against them in the matter of Janssen Catering Company v. L. A. Abadie.)”

It is further shown by the allegations of the petition:

That a suspensive appeal was taken to the Supreme Court by Lawrence A. Abadie from the judgment rendered against him in the civil district court in favor of Janssen Catering Company; that a suspensive appeal bond for $7,000 was signed on April 5, 1921, by the petitioner Albert P. Frisch; and that on December 1, 1924, the judgment appealed from was affirmed by this court.

• That on January 16, 1925, a writ of fieri facias was issued against petitioner Lawrence A. Abadie, and was returned nulla bona; that on March 13, 1925, judgment was rendered against petitioner Albert P. Frisch, surety on the appeal bond, in the full amount 'of the judgment rendered against Lawrence A. Abadie, his principal; and that both of these judgments have been recorded in the mortgage office book in the parish of Orleans.

Petitioners have also alleged amicable demand in vain for the payment of these judgments by Gluck’s Restaurant Corporation.

The whole theory of defendant’s case is that its obligation to hold petitioners harmless against the judgments, rendered against them in favor of Janssen Catering Company, is one strictly of indemnity, and that petitioners cannot recover, since the' judgments had not been paid by them, before instituting the present suit against the indemnitor.

We do not concur in this view óf the case. In our opinion, the obligation of defendant corporation is one merely of indemnity against liability. As the judgments recovered against petitioners are final, they fixed such liability, and a right of action accrued in favor of petitioners against defendant corporation, as indemnitor.

The act of sale of the restaurant by Abadie to Gluck’s Restaurant Corporation shows that no money was paid at the time by the vendee to the vendor. The sole considera *246 tion of the sale was the release by the vendee, Gluck’s Restaurant Corporation, of Abadie, the vendor of his liability for debts and obligations due to his creditors, and “the obligation of vendee to hold harmless the said vendor and Albert P. Frisch against am/y judgments that may be rendered against them in the matter of Janssen’s Catering Company versus L. A. Abadie.”

This obligation to hold petitioners harmless is a part of the consideration of the sale of the restaurant by Abadie to defendant corporation, a part of the purchase price itself, which defendant corporation was bound to pay. Necessarily, the obligation assumed by defendant corporation is one of indemnity against liability on the part of Abadie, the vendor, as well as on the part of Frisch, the surety on Abadie’s appeal bond, who alleges that he would not have signed this bond without the protection of the indemnity in question.

The primary obligation of the vendee being .to pay the purchase price, it would be anomalous indeed in a case of this kind to shift the discharge of such obligation first upon the shoulders of the vendor, to whom the purchase price is legally due, through the mere pretext that the obligation in question is one of strict indemnity. Manifestly, this was not the intention of the parties to the contract of sale and indemnity.

It is apparent that the object of defendant corporation was not to serve or accommodate any third person, b.ut to subserve a distinct purpose of its own, and, by reason of the indemnity agreement, to obtain a pecuniary and business advantage, in that it did not have to pay in cash, at the time, that portion of the purchase price represented by these judgments, but could wait until final judgments were rendered against the indemnitees.

It is well settled that: “Where the indemnity is against liability, the cause of action is complete and thé indemnitee may recover upon the contract as soon as his liability has become fixed and established, even though he has sustained no actual loss or damage at the time he seeks to recover. Thus, under such a contract, a cause of action accrues to the indemnitee upon the recovery of a judgment against him, and he may recover from the indemnitor without proof of payment of .the judgment.” 33 Cyc. p. 438, par. 33.

The text quoted is supported by numerous authorities given in footnote No. 77 to above citation, including the case of Keane v. Goldsmith, Haber & Co., 12 La. Ann. 561. In that case it is said in part: “The defendants bound themselves to protect Hart fully against the consequences of his obligation as surety to Keane.

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Bluebook (online)
121 So. 757, 168 La. 241, 1929 La. LEXIS 1771, Counsel Stack Legal Research, https://law.counselstack.com/opinion/abadie-v-glucks-restaurant-corporation-la-1929.