Carmouche v. Sylvester House Moving, Inc.

244 So. 2d 361, 1971 La. App. LEXIS 6509
CourtLouisiana Court of Appeal
DecidedJanuary 20, 1971
DocketNo. 3271
StatusPublished
Cited by2 cases

This text of 244 So. 2d 361 (Carmouche v. Sylvester House Moving, Inc.) 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
Carmouche v. Sylvester House Moving, Inc., 244 So. 2d 361, 1971 La. App. LEXIS 6509 (La. Ct. App. 1971).

Opinions

HOOD, Judge.

This is an action primarily for judgment decreeing an act of sale to be a fraudulent conveyance and thus null and void. The plaintiffs are Mrs. Veatrice Mary Per-rault Parks Carmouche, Maxey Joseph Parks and Mrs. Geraldine Parks Ramirez. The suit was filed against Sylvester House Moving, Inc., Oscar Sylvester, Jr., James Warren Sylvester, Adam Vidrine, Jr., Maurice T. Manuel and Laurel Chapman. Upon application of plaintiffs, a receiver was appointed for the defendant corporation and a temporary restraining order was issued prohibiting defendants from disposing of the property which allegedly had been sold.

Defendants answered and filed a number of other pleadings, including a motion to vacate the order appointing a receiver, a motion to dissolve the temporary restraining order, and a petition for judgment condemning plaintiffs to pay damages for the wrongful issuance of such orders. The issues presented by these pleadings were referred to the merits, and after trial, judgment was rendered by the district court in favor of defendants and against plaintiffs, rejecting plaintiffs’ demands, condemning plaintiffs to pay damages in the sum of $3,700.00 to defendant Adam Vidrine, and condemning plaintiffs to pay damages in the sum of $500.00 to each of the defendants, Oscar Sylvester, Jr., and James Warren Sylvester. Plaintiffs have appealed.

The principal issue presented is whether an act of sale executed by Sylvester House Moving, Inc., on April 11, 1969, and purporting to convey several items of house moving equipment to James Warren Sylvester and Adam Vidrine, Jr., is null and void as being a fraudulent conveyance.

Sylvester House Moving, Inc., was incorporated in August, 1964, with 350 shares of authorized stock and with Oscar Sylvester being the principal stockholder. Sylvester owned 348 of those shares, his wife owned one share and an employee, Maurice T. Manuel, ownéd the remaining share. For about five years thereafter, the corporation was managed solely and completely by the principal stockholder, Oscar Sylvester. The other two shareholders took no part in the operation of the business, they received no dividends of any kind and each surrendered his share to Oscar Sylvester when requested to do so and without the payment of any consideration.

When the corporation was formed, Oscar Sylvester turned over to it some house moving equipment, including two tractors, a truck, some trailers and some house moving rollers, and this equipment was used thereafter in operating the business of the corporation. The corporation executed an unsecured promissory note, dated sometime in 1964, made payable to the order of Sylvester, for the sum of $17,500.00. Sylvester testified that this note evidenced the indebtedness of the corporation to him personally for the above-mentioned equipment. No payments were ever made on that note.

About two years later, on December 8, 1966, Sylvester caused the corporation to execute and to substitute for the unsecured note another promissory note for $17,500.00, made payable “on demand” to the order of “Holder or Holders,” and that note was secured by a chattel mortgage. The chat[364]*364tel mortgage was not introduced in evidence, so we are unable to determine what movable property was affected by it. Defendants argue, however, that it covered most of the house moving equipment which Oscar Sylvester had “sold” to the corporation more than two years prior thereto. Sylvester, of course, was still the principal stockholder and sole manager of the corporation at the time that mortgage note was executed, and he also became the holder of that note. The note was signed in behalf of the corporation by Laurel Chapman, secretary-treasurer, but Chapman testified that his one share “was given to me in the first place, and I just transferred it back.”

When asked why this mortgage note was executed, Sylvester explained, “I use mortgage notes as collateral when I want to borrow,” and that “the reason I have them made to Holder or Holders, then you can use that note to any individual or bank and use it as collateral * * * ” According to the evidence three payments were made on the 1966 mortgage note, all of which were made during the latter part of the year 1968. A payment of $1,000.00 was made on August 27, 1968; $1,000.00 was paid on November 12, 1968; and a payment of $1,100.00 was made on November 25, 1968. These appear to be the only payments which have been made on that note.

On August 10, 1967, while Sylvester House Moving, Inc., was engaged in moving a house for plaintiffs, the house was dropped and was damaged. Plaintiffs instituted a suit against Sylvester House Moving, Inc., in the 18th Judicial District Court, Parish of Pointe Coupee, to recover the damages they sustained as a result of that accident. That suit was filed on September 1, 1967, and it went to trial on May 6, 1968. Judgment was rendered by that court on January 6, 1969, in favor of plaintiffs and against Sylvester House Moving, Inc., for the sum of $7,950.00. The defendant corporation timely filed a motion for a new trial, and judgment was rendered by the trial court denying that motion on March 17, 1969.

A few days later, on April 11, 1969, an act of sale was executed by Sylvester House Moving, Inc., conveying to defendants, Adam Vidrine and James Warren Sylvester, “all equipment and machinery belonging to vendor,” including two tractors, one truck, several trailers, some house moving rollers, some house moving jacks, and “Certificate #5334-A issued by the Public Service Commission.” As the sale consideration for the property conveyed, the deed recited that:

“This sale is made and accepted for and in consideration of the purchasers assuming the payment of the mortgage for $17,500.00 plus 8% interest and 25% attorney fees dated Ville Platte, Louisiana, June 23, 1966, which has a balance of approximately $15,000.00 created by Act before Jack C. Frugé, Notary Public, on the 23rd day of June, 1966 in favor of Holder or Holders and which mortgage is recorded at the office of the Clerk of Court, Evangeline Parish, Louisiana.”

That deed, formally labeled as a “Cash Sale and Assumption,” was filed in the Conveyance Records of Evangeline Parish on April 14, 1969.

Defendants take the position that the “mortgage” which Vidrine and James Sylvester assumed as the purchase price of the equipment and machinery described in the deed dated April 11, 1969, was the same mortgage note which had been given to Oscar Sylvester in 1966 as a substitute for the original unsecured note. We observe, however, that the “mortgage” which was assumed in that deed was dated June 23, 1966, whereas the note, secured by a “chattel mortgage,” which the corporation gave to Oscar Sylvester as a substitute for the original note was dated December 8, 1966. We are unable to determine from the record, therefore, what indebtedness was actually assumed by the purchasers in that deed. It appears, however, that they did not assume the last-mentioned chattel mortgage note.

[365]*365On May 2, 1969, plaintiffs filed in the Mortgage Records of Evangeline Parish a certified copy of the judgment which had been rendered against Sylvester House Moving, Inc., by the court in Pointe Coupee Parish. A few months later, in September, plaintiffs learned that the assets of the corporation had been sold to Vidrine and James Sylvester. They then instituted the instant suit on October 15, 1969.

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Related

Kaufman & Enzer Joint v. v. BETHLAN PROD. CORP.
459 So. 2d 60 (Louisiana Court of Appeal, 1984)
Carmouche v. Sylvester's House Moving, Inc.
246 So. 2d 194 (Supreme Court of Louisiana, 1971)

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Bluebook (online)
244 So. 2d 361, 1971 La. App. LEXIS 6509, Counsel Stack Legal Research, https://law.counselstack.com/opinion/carmouche-v-sylvester-house-moving-inc-lactapp-1971.