Bankers Trust Co v. Tonka Properties Inc

• Court: Court of Appeals for the Fifth Circuit
• Decided: August 6, 1999
• Docket: 98-31165
• Status: Unpublished

Opinion

IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

No. 98-31165 Summary Calendar

BANKERS TRUST CO. OF CALIFORNIA, N.A.,

Plaintiff,

versus

TONKA PROPERTIES, INC. ET AL,

Defendants,

TONKA PROPERTIES, INC.,

Defendant/Cross-Defendant/Appellant,

405 BOURBON ST., INC.,

Defendant/Cross-Claimant/Appellee.

Appeals from the United States District Court for the Eastern District of Louisiana (96-CV-3455-L)

August 4, 1999

Before HIGGINBOTHAM, JONES, and DENNIS, Circuit Judges.

PER CURIAM:*

This case stems from Bankers Trust’s foreclosure on a property

owned by 405 Bourbon St., Inc., that had been pledged as security

for a debt of $1,700,000 owed by Tonka Properties, Inc., to a

predecessor entity of Bankers Trust. The property was sold at

* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4. auction for $1,020,000. 405 Bourbon St. then sought judgment

against Tonka Properties in the amount of $1,020,000 plus interest

from the date of judgment. The district court granted summary

judgment in favor of 405 Bourbon St., entitling it to judgment in

the amount of $1,020,000 plus interest from the date of judgment.

For the reasons stated herein, we AFFIRM.

Under Louisiana law, a surety has the rights of subrogation

and reimbursement. See LA. CIV. CODE ANN. art. 3047. When a surety

pays a creditor for a principal obligation that is due, the surety

is entitled to reimbursement from the principal obligor. See LA.

CIV. CODE ANN. art. 3049.

In this case, the pertinent facts are that Tonka Properties

incurred the loan in question, that 405 Bourbon St. functioned as

a surety in pledging its property as security for that loan, and

that the United States Marshal seized and sold the property to

satisfy Tonka Properties’ debt. Thus, as a surety, 405 Bourbon St.

is entitled under Louisiana law to reimbursement for the loss it

suffered in satisfaction of Tonka Properties’ debt -- $1,020,000.

Tonka Properties’ principal argument to the contrary is that

the terms of a settlement agreement between the parties govern this

matter and dictate a different result. We are not persuaded by

this argument. Putting aside the dubious enforceablity of the

settlement agreement, there is no signature on the agreement

binding 405 Bourbon St. Tonka Properties’ attempt to cast the

signature of an individual signing in his individual capacity as

sufficient to bind 405 Bourbon St., a corporation, is unavailing.

2 Louisiana courts have consistently recognized that a corporation is

a separate and distinct legal entity apart from its shareholders.

See Phillips v. Wagner, 470 So. 2d 262, 267 (La. App. 5th Cir.

1985).

AFFIRMED.