American Acceptance Corp. v. Saturn Motor Hotel Corp.

174 So. 2d 222, 1965 La. App. LEXIS 4513
CourtLouisiana Court of Appeal
DecidedApril 5, 1965
DocketNo. 1790
StatusPublished
Cited by1 cases

This text of 174 So. 2d 222 (American Acceptance Corp. v. Saturn Motor Hotel Corp.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
American Acceptance Corp. v. Saturn Motor Hotel Corp., 174 So. 2d 222, 1965 La. App. LEXIS 4513 (La. Ct. App. 1965).

Opinion

BARNETTE, Judge pro tem.

This case is before us on appeal by Congress International, Inc., from a judgment of the Civil District Court for the Parish of Orleans, rejecting its intervention and claim of ownership of certain motel furniture, rescinding and recalling a temporary restraining order, and rejecting its application for a preliminary writ of injunction. The real issue in the case is whether Congress International, Inc., is the owner of the furniture in question. The right to the in-junctive relief prayed for is wholly dependent on an affirmative answer to that question.

On May 16, 1962, William B. Eller of New Orleans entered into a contract of lease with Congress New Orleans East, Inc., a Florida corporation, for the rental of a motel to be constructed on Chef Menteur Highway in New Orleans, to be operated as a “Congress Motel”. The term of the lease was fixed at twenty years at an annual rental of $115,000.00 for the first year and $125,000.00 for each year thereafter, payable monthly in advance. The rentals were to commence after completion of the construction of the motel, which was to begin after the lessor exercised its option to purchase certain property upon which the motel was to be built according to certain specifications.

The lease contract recited the understanding that Eller, lessee, was a party interposed and that he would assign the lease to a corporation to be organized under Louisiana law composed of himself, Fred Jellin, William E. Carter, and Andrew J. Pincon. Accordingly said parties did organize Saturn Motor Hotel Corporation, hereinafter referred to as Saturn, to which the lease was assigned by Eller on June 1, 1962.

On April 2, 1963, Congress New Orleans East, Inc., transferred all its assets to Congress International, Inc., also a Florida corporation, which then became the lessor. On June 24, 1963, the original lease was amended by Congress International, Inc., and Saturn to fix the commencement date of the lease to be June 24, 1963, and to increase the rental $3,100.00 per year, on account of certain additions and changes in the building specifications.

During the little more than thirteen months from the execution of the original lease contract May 16, 1962, and the commencement of the lease June 24, 1963 (the date the motel was ready for occupancy), several other contractural negotiations had taken place which we find unnecessary to discuss in view of the findings upon which this opinion is based.

Saturn purchased something over $200,-000.00 worth of furniture and equipment necessary to the operation of its motel and gave certain notes in payment thereof. One of the notes in the principal sum of $233,-587.00 given to The Maxwell Company, Inc., the seller of the furniture, and personally endorsed by the incorporators of Saturn, namely, William B. Eller, William E.Carter, Jr., Andrew J. Pincon, and Fred Jellin, was endorsed and discounted by The Maxwell Company, Inc., to American Acceptance Corporation, who became the holder in due course.

Saturn defaulted in payment of rentals due under the lease contract of May 16, 1962, as amended June 24, 1963, and was evicted on March 13, 1964, by the lessor, Congress International, Inc., who on that date took over the operation of the motel.

Saturn having paid only $10,000,00 on the aforesaid note, American Acceptance Corporation, the holder in due course, brought suit for the balance against Saturn and its endorsers, William B. Eller, William E. Carter, Jr., Andrew J. Pincon, and Fred Jellin. Judgment by default was granted against Saturn and Jellin.

[224]*224A writ of fieri facias was ordered for the seizure of the property of the judgment debtor, Saturn, whereupon Congress International, Inc., intervened claiming ownership of the furniture and equipment located in the “Congress Inn” on Chef Men-teur Highway. This is the motel formerly operated by Saturn as lessee and from which it was evicted as aforesaid. A temporary restraining order was issued restraining the sheriff from seizing the furniture in question. Upon hearing the rule for a preliminary injunction, judgment was granted in favor of American Acceptance Corporation, defendant in the rule and against Congress International, Inc., plaintiff in tlie rule, rescinding and recalling the temporary restraining order and rejecting the application for a preliminary writ of injunction. Judgment was granted American Acceptance Corporation, in reconvention, in the amount of $100.00 for attorney’s fees. Congress International, Inc., inter-venor, has appealed suspensively.

Intervenor’s claim of ownership of the furniture is based upon an alleged act of sale dated April 2, 1963, whereby Congress New Orleans East, Inc., a separate corporation, purported to “sell, grant, assign and convey” to Congress International, Inc., “all of its real property, personal property and ass-ets of every other kind and description owned by it, and wheresoever located; all as shown on the attached sheet known as Schedule ‘A’, attached hereto and made part hereof.” (Emphasis added.) Schedule “A” is as follows:

“LIST OF ASSETS SOLD BY CONGRESS NEW ORLEANS EAST, INC. TO CONGRESS INTERNATIONAL, INC. APRIL 2, 1963
ASSETS SOLD
Petty Cash Fund (in Custody of Richard Flink) $ 500.00
Land Costs 172,738.30
Construction in Progress — Motel 480,014.83
Option Fee For Land Adjoining New Orleans Motel 10,750.00
Interim- Financing Commitment Fee 6,750.00
$670,753.13
LESS LIABILITY ASSUMED
Construction Loans Payable — National Bank of Commerce 464,254.20
NET ASSETS SOLD $206,498.93
SCHEDULE A”

Much of the record before us relates to the disputed claim of Congress New Orleans East, Inc., of having acquired the ownership of the furniture in question from Saturn. As above stated, we find it unnecessary to decide that issue. Congress International, Inc., bases its claim of ownership on the alleged act of sale of April 2, 1962. That act is clear and free of all ambiguity. It clearly reveals the intention of the seller and the buyer to convey all of seller’s real and personal property and assets of every kind and description, “all as shown on the attached sheet known as Schedule ‘A’ * * *” which was made a part of the contract. The statement of intent in the body of the act to sell all of its property and assets must be read in connection with Sched[225]*225ule “A” which is captioned “LIST OF ASSETS SOLD BY CONGRESS NEW ORLEANS EAST, INC. TO CONGRESS INTERNATIONAL, INC. APRIL 2, 1963”. It should be noted that the total value of all the assets sold was $206,498.93. This was no more (if anything less) than the value of the furniture and fixtures alone. Evidently the contracting parties did not consider this furniture to be among the assets owned by Congress New Orleans East, Inc.

There is no claim of error and no testimony tending to show that the furniture was inadvertently omitted from Schedule “A”. Indeed it would be unreasonable to assume that an oversight of more than $200,000.00 of tangible assets would not evoke some explanation or attempt toward correction.

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Related

American Acceptance Corp. v. Saturn Motor Hotel Corp.
176 So. 2d 144 (Supreme Court of Louisiana, 1965)

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Bluebook (online)
174 So. 2d 222, 1965 La. App. LEXIS 4513, Counsel Stack Legal Research, https://law.counselstack.com/opinion/american-acceptance-corp-v-saturn-motor-hotel-corp-lactapp-1965.