International Harvester Credit Corp. v. American Troubleshooters, Inc.

338 So. 2d 708, 1976 La. App. LEXIS 3548
CourtLouisiana Court of Appeal
DecidedOctober 13, 1976
DocketNo. 7632
StatusPublished
Cited by3 cases

This text of 338 So. 2d 708 (International Harvester Credit Corp. v. American Troubleshooters, 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
International Harvester Credit Corp. v. American Troubleshooters, Inc., 338 So. 2d 708, 1976 La. App. LEXIS 3548 (La. Ct. App. 1976).

Opinion

SCHOTT, Judge.

Plaintiff has appealed from a judgment dismissing its suit to collect the balance on a note made by defendant and to enforce a chattel mortgage given to secure payment of the note.

On April 3, 1972, defendant purchased a pickup truck and executed the note for the purchase price and to refinance the balance defendant owed on a stump-cutter machine purchased in 1971. The chattel mortgage covered both pieces of equipment. Regular monthly payments were made on the note through December, 1972, but thereafter the account became delinquent. Over the ensuing months plaintiff’s representatives attempted to collect the arrearages from defendant and the evidence is in conflict as to why no payments were made.

Plaintiff’s contract representative, William Sigler, testified from his notes that defendant’s only complaint was relative to excessive charges to the account for insurance on the equipment, while defendant’s president, Carmelo Graffagnini, testified that the problem arose because the stump-cutter never functioned properly. Finally, by May, 1973, Sigler became convinced that defendant was simply having financial problems and recommended to his superiors that defendant be given a release in exchange for a surrender of the two vehicles. According to Sigler, he contacted Graffag-nini and asked him to store the equipment at plaintiff’s outlet. As to why Sigler asked Graffagnini to return the equipment, he said:

“Because in our business it is normal if a customer does not pay to ask him to store the equipment to keep it from further depreciating.”

Sigler said that he was waiting for a decision from his superiors whether to take legal action or release defendant, but he denied that he ever mentioned to Graffag-nini the possibility of a complete release.

On May 21, 1973, the stump-cutter and pickup truck were delivered to plaintiff by defendant’s employee. Graffagnini’s wife testified that she received a call from Sigler in which he requested that the equipment be brought in to plaintiff’s facility and that she relayed that message to her husband.

Graffagnini testified that his surrender of the equipment came about after he had had numerous conversations with Si-gler and a Mr. Duncan, one of Sigler’s superiors. In these conversations Graffagnini had threatened plaintiff with a lawsuit because of its failure to refund allegedly excessive insurance premiums charged to defendant and had complained about the failure of the stump-cutter to perform properly. He stoutly maintained that he would not have surrendered the equipment unless the release was forthcoming because of the equity he had already built up in the equipment. An agreement was finally made between him and plaintiff’s representative that he would buy from International Harvester Company (an entity separate from but close to plaintiff in its operation), another vehicle if a release were given on the first two pieces of equipment. When he delivered the equipment he was under the impression that a settlement had been made, including a full release on the note sued on. He testified that one month following the surrender of the equipment he ordered another vehicle for $29,000, pursuant to the agreement that he had made.

Thus, it can be seen from Graffagnini’s testimony that there might have been an informal compromise of the difference between the parties aiming toward a dation en paiement, or there might have been a novation consisting of plaintiff’s agreement to release and discharge defendant of the existing obligation in exchange for defendant’s giving up of the equipment and agreeing to purchase another vehicle.

The trial judge in his reasons for judgment stated that the evidence did not sup[710]*710port a conclusion that there was “a definite accord and settlement between the parties.” However, the trial judge found that plaintiff was equitably estopped from collecting the balance on the account.

We agree that the evidence does not support the theory that the obligation was extinguished by any sort of release agreement, be it a dation en paiement (which was specially pleaded by defendant in its answer to plaintiff’s petition), accord and satisfaction, or a transaction or compromise, under LSA-C.C. Art. 3071, because were any of these to apply there must be a contract between the parties based upon a meeting of the minds and consent of both parties, and the compromise must be reduced to writing. There is no evidence in this record to show that plaintiff ever made such an agreement even though the evidence is persuasive that the defendant did intend such a result.

The trial judge makes no reference to Graffagnini’s testimony which tends to support a theory that the original debt was extinguished by a novation between the parties. In all probability, the trial judge was not impressed with this testimony, nor are we, because while Graffagnini testified that he ordered the new vehicle shortly after surrendering the old equipment, convincing documentary evidence shows that Graffagnini did not order the new vehicle until February of 1974, long after the suit and defendant’s answer were filed.

The crucial question is whether the law and evidence support the trial judge’s decision that plaintiff was equitably es-topped from the enforcement of the balance of its claim. The trial judge gave two reasons for this conclusion. First, plaintiff had kept the equipment while negotiating a settlement with defendant and “[A]t this late stage they now ask defendant to accept a credit for the truck which is in a highly depreciated condition;”1 and second, the faulty performance of the equipment demonstrated that defendant was entitled to file suit for redhibition. Had defendant done so it might have prevailed, but because of plaintiff’s actions the prescriptive period ran against the filing of such a suit.

In American Bank & Trust Co. v. Trinity Universal Ins. Co., 251 La. 445, 205 So.2d 35 (1967) the Supreme Court said:

“Equitable estoppel may be defined as the effect of the voluntary conduct of a party whereby he is precluded from asserting rights against another who has justifiably relied upon such conduct and changed his position so that he will suffer injury if the former is allowed to repudiate the conduct. Founded upon good faith, the doctrine is designed to prevent injustice by barring a party, under special circumstances, from taking a position contrary to his prior acts, admissions, representations, or silence.”

The record does not support the trial judge’s application of estoppel on the theory that defendant was deprived of an action in redhibition because it relied on plaintiff’s action. The note was given for the purchase of the truck but only to refinance the stump-cutter. The stump-cutter had been purchased sometime in 1971, perhaps as long as two years before it was surrendered to plaintiff, and the alleged defects were known to plaintiff more than a year before the surrender and more than a year since the seller’s last attempt to remedy the defects. All of the testimony regarding de[711]*711fects was confined to the stump-cutter but there is no such testimony with respect to the truck. The action in redhibition as to the stump-cutter had prescribed long before the surrender was made, so that plaintiff lost nothing in this regard.

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Related

International Harvester Credit Corp. v. Richard
457 So. 2d 296 (Louisiana Court of Appeal, 1984)
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Bluebook (online)
338 So. 2d 708, 1976 La. App. LEXIS 3548, Counsel Stack Legal Research, https://law.counselstack.com/opinion/international-harvester-credit-corp-v-american-troubleshooters-inc-lactapp-1976.