First Nat. Bank of Ruston v. Mercer

448 So. 2d 1369, 1984 La. App. LEXIS 8435
CourtLouisiana Court of Appeal
DecidedMarch 26, 1984
Docket16,099-CA
StatusPublished
Cited by19 cases

This text of 448 So. 2d 1369 (First Nat. Bank of Ruston v. Mercer) 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
First Nat. Bank of Ruston v. Mercer, 448 So. 2d 1369, 1984 La. App. LEXIS 8435 (La. Ct. App. 1984).

Opinion

448 So.2d 1369 (1984)

FIRST NATIONAL BANK OF RUSTON, Plaintiff-Appellee,
v.
Robert L. MERCER, et al., Defendant-Appellant.

No. 16,099-CA.

Court of Appeal of Louisiana, Second Circuit.

March 26, 1984.

*1371 Boles & Mounger by Charles H. Ryan, Monroe, for defendant-appellant.

Barham, Adkins & Tatum by Charles C. Barham, Ruston, Hudson, Potts & Bernstein by B. Roy Liuzza, Monroe, for plaintiff-appellee.

Before MARVIN, SEXTON and NORRIS, JJ.

NORRIS, Judge.

Robert L. Mercer appeals a judgment declaring purported sales of property in Lincoln Parish, Louisiana, to be null and void. For the reasons hereinafter assigned, we affirm.

FACTS

In December, 1974, the First National Bank of Ruston, Louisiana acquired certain immovable property located on West California Avenue in Ruston via a foreclosure proceeding. Sam Thomas, Jr., president of the Bank at the time, initiated plans to sell the property. According to the testimony of Thomas at trial, Thomas contacted Mercer, a business acquaintance with whom Thomas had had previous dealings, about purchasing the property. Thomas testified that Mercer did not want to purchase the property directly because it was an eating establishment located in the immediate vicinity of a restaurant belonging to the parents of his wife. Furthermore, Mercer was already indebted to the Bank for the maximum loan amount permitted by the Bank's supervising agency. Therefore, according to Thomas, Mercer procured Thomas W. Craig, his employee of many years, to take title to the property for Mercer's benefit.

Conversely, Mercer claimed that Thomas wanted the property for himself and requested that Mercer purchase the property in Mercer's name for Thomas' benefit. When Mercer indicated he could not, Thomas asked if there was someone in Mercer's organization who could accomplish this purpose, and Craig was selected. Although at trial Mercer disclaimed any arrangement wherein he would personally benefit from the contemplated purchase, by earlier deposition, he testified that he understood that subsequent to the contemplated purchase and when the existing lease on the property terminated, he would be given the opportunity to participate in the operation of the restaurant.

*1372 On the other hand, Craig testified that Mercer wanted him to meet with Thomas and admitted having such a meeting in the presence of Mercer. Craig finally stated that the result of that meeting was purportedly a decision to have the property transferred into his name for the benefit of Thomas although in an earlier deposition Craig stated that he was to hold the property in his name for the benefit of both Mercer and Thomas.

Mercer then arranged a meeting between himself, Thomas and Craig to discuss the transfer. As can be seen from the sample of the testimony adduced at trial and set forth above, the testimony concerning the terms of the purported transfer to Craig is conflicting to say the least and sometimes incredible—as will be shown hereafter.

The testimony of Sam Thomas was the most forthright and nonevasive. He testified that Mercer agreed to purchase the property from the Bank for $100,000 and that it was to be placed in the name of Craig for Mercer's benefit. The purchase price was to be loaned by the Bank to Craig and secured by a mortgage in favor of the Bank executed by Craig affecting the property. Thomas had renegotiated the terms of a lease with the present tenant of the property which was to be signed by the Bank and Craig and the monthly rentals from that lease were to be paid to the Bank and applied to the loan payment. According to Thomas, Mercer authorized the Bank (orally at least) to deduct from his bank account the difference between the monthly rental and the loan payment. Thomas also testified Mercer verbally agreed to guarantee Craig's loan.

At best, Mercer's version of the discussion surrounding the transaction is vague. At worst, it is incredible for a man with Mercer's education and business experience. While admitting he took Craig to meet with Thomas and remained during the entire meeting, he stated that Thomas explained the "deal" to Craig but did not think that a purchase price was discussed or ever "settled on". At trial, Mercer first admitted he allowed the debiting of his account for the balance of the note payment. However, he later denied knowledge of the debits until he belatedly discovered them, also characterized them as allowed under economic duress, and finally testified that the debits were actually a loan to Thomas. This is all in spite of his earlier deposition testimony to the effect that Craig was to purchase the property for $85,000, that Mercer was aware there was to be a lease on the property, and that Mercer authorized a debit from his bank account to supplement the rentals to meet the payment on the property. Obviously, at his earlier deposition, Mercer's recollection was much clearer than it was at the trial.

An even more fascinating version of the details of the transaction is recalled by Craig. At trial, Craig testified that Thomas offered to "transfer" a piece of property into his name until a later date without any discussion of the details or mechanics of the transaction. According to Craig, not only was no price, debt or note discussed, but also he was not to be obligated in any manner, much less sign a note for any purchase price amount. This is all despite the fact that by earlier deposition he had testified that the purchase price was to be $85,000 to be represented by his note; and in answers to interrogatories and admissions, he had admitted that he was to receive a loan from the bank.

After the meeting in Thomas' office, Mercer and Craig went to James Hall's office to complete the transaction. Authority to sell the property to Craig had been granted by the Bank's board of directors at the December 10, 1974 meeting. Hall was given a cash deed transferring the property from the Bank to Craig for $100,000 cash, the receipt of which was acknowledged; a collateral mortgage and note for $125,000; and a hand note for $100,000; and perhaps a collateral pledge agreement in order to close the contemplated transaction. Again, the testimony regarding the attempted "closing" of the purported sale strains the imagination.

*1373 Although Craig testified that no purchase price was agreed on, that he didn't agree to pay anything and that he didn't buy anything, he freely admitted signing the collateral mortgage and note although he testified he really didn't notice them. However, he admitted that he balked at signing the $100,000 hand note because there was a discrepancy between the amount of $85,000 and $100,000 which Mercer, at his side and reviewing the papers, called to his attention. Craig testified that at this point "we stopped right there" until the matter could be discussed with Thomas. However, Thomas had left the Bank. Thereafter, Mercer and Craig left and at trial Craig testified he received the keys to the property and went and signed a new lease on the premises that Thomas had negotiated. However, in his previous deposition, Craig testified that after Mercer called the discrepancy to his attention he did not sign any more papers, left the Bank, went back to Natchitoches, and never bought the property because he did not finish the transaction. In that deposition he testified he knew nothing about a lease on the premises.

At trial, Mercer finally admitted he told Craig at some point he did not think the documents represented what Craig was to sign because Craig was not to sign any note since he was not paying for the property.

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Bluebook (online)
448 So. 2d 1369, 1984 La. App. LEXIS 8435, Counsel Stack Legal Research, https://law.counselstack.com/opinion/first-nat-bank-of-ruston-v-mercer-lactapp-1984.