Louisiana National Leasing Corp. v. Family Pools, Inc.

338 So. 2d 1156, 1976 La. App. LEXIS 3921
CourtLouisiana Court of Appeal
DecidedMay 18, 1976
DocketNos. 7416 to 7420
StatusPublished

This text of 338 So. 2d 1156 (Louisiana National Leasing Corp. v. Family Pools, 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
Louisiana National Leasing Corp. v. Family Pools, Inc., 338 So. 2d 1156, 1976 La. App. LEXIS 3921 (La. Ct. App. 1976).

Opinions

BEER, Judge.

These five suits, consolidated for trial, deal with five separate agreements, each of which is labeled “Lease” even though each bears striking resemblance to a conditional sales agreement. Nevertheless, for the purposes of this opinion, the agreements will be treated as leases in accordance with Executive Car Lease Co. of New Orleans v. Alodex Corp., 279 So.2d 169 (La., 1973). In all of the agreements, the “lessee” of certain construction or automotive equipment is Family Pools, Inc., represented by its president, J. Stanley Middleton, Jr. The “lessor” in each instance is Louisiana National Leasing Corporation (hereafter “National Leasing”).

Each “lease” contains a “surety agreement,” the contents of which we shall discuss more fully hereafter. That surety agreement, in each instance, was executed by J. Stanley Middleton, Jr., individually, Sherard Fabacher, individually, and Peter Fabacher, individually.

Family Pools, Inc. failed, in all five separate instances, to make the timely installment payments (termed “rent”) which the various instruments required. Therefore, consecutively numbered suits were filed by National Leasing against the lessee and the sureties in the 24th Judicial District Court for the Parish of Jefferson, consolidated for trial, and, in all instances but one (docket number 160-297), decided in favor of plaintiff, National Leasing, and against Family Pools, Inc. and J. Stanley Middleton, Jr., individually. In all instances, National Leasing’s claim against Sherard Fabacher, individually, and Peter Fabacher, individually, was dismissed, as was National Leasing’s claim against all defendants in the case bearing docket number 160-297.

From those judgments, National Leasing has devolutively appealed, contending that the trial court erred in the dismissal of the claims against the Fabachers in all suits and further erred in the dismissal of that case bearing docket number 160-297.1

Apparent from its written reasons for judgment is a finding on the part of the trial court that the “lease,” which forms the basis for the suit bearing docket number 160 — 297, was terminated on January 19, 1973. That particular “lease” agreement contains a stipulation not found in the other four agreements. It provides that:

“Notwithstanding any action taken by Lessor, including taking possession of any or all of the equipment, Lessee shall [1159]*1159remain liable for the full performance of all its obligations hereunder, but if Lessor terminates this lease in writing, as to any item of equipment, Lessee shall not be liable for rent for such item accruing after the date of such termination.”

Although the “lease” which is the threshold document for consideration of docket number 160-297 is not identical to the “leases” in the other four cases, the question of termination vel non is material to a full consideration of the legal issues raised in the other cases and is critical in docket number 160-297.

Expectedly, under the circumstances existent in this matter, there were considerable exchanges of correspondence and discussions between the various parties at interest which arose from the failure of Family Pools, Inc. to meet the payment schedule provided for in each particular “lease.”

However, notwithstanding those exchanges and various threats of termination of the agreements, the practical result of all the machinations between the parties was a Mexican stand-off. The terms of this armed truce, though never reduced to a formal agreement, amounted to a tacitly acceptable procedure whereby Family Pools, Inc., despite its default, continued to use the “leased” equipment and, contemporaneous with this, made some payments of “rent” to National Leasing when money was available. In other words, they kept using the “leased” equipment to try to make a profit from which additional “rent” payments could be made. All of the parties whose various interests are now being resolved by this litigation tacitly went along with this procedure. Thus, there was existent, in effect, a sort of continuing calculated gamble on the part of all concerned that Family Pools, Inc. would, if allowed to continue using the equipment, make some money, and, eventually, pay off the balance due under the “leases.” This describes the actual situation as of January 19, 1973 (and, incidentally, still the situation), even though certain letters admitted into evidence can, on their face, be construed differently. Thus, the trial court’s finding in docket number 160-297 that there was “no liability after termination — i. e., after January 19, 1973” is partially in error. Though we certainly agree with the trial court’s conclusion that liability for “rent” ceases after the date of termination of the “lease,” we must reject any conclusion that actual termination has ever, in fact, taken place.

All of the parties to the agreements, in one way or another, have tacitly acquiesced in the continuation of the relationships generally established by the original contracts. All parties to the agreements, at least to some perceptible extent, have continued to indulge in that most human desire to have one’s cake and eat it too. To visit the sting of literal interpretation on only one of those participants because of the form used in a letter warning of certain consequences if payment was not timely received, when the actual facts indicate that an arrangement, however temporary, improvised and fragile, had been worked out, would not be just. See Southern Fleet Leasing Corp. v. McAndrew, 219 So.2d 215 (La.App., 1st Cir., 1969). The record does not indicate to us that any of the parties, including the sureties, so conducted themselves as to be in a position to insist upon positive literal interpretation of any of the documents here involved, including the letter threatening termination, without any consideration of the actual facts which, as we have indicated, materially vary the verbiage of the documents.

We conclude that none of the “leases,” including the one that is involved in docket number 160-297, have been terminated in such manner as to extinguish the “lessee’s” liability for “rent.” Furthermore, that liability must also exist with respect to the sureties in all five agreements if we conclude that their general defensive contentions — sustained thus far by the trial court — are without merit.

[1160]*1160Accordingly, we turn now to a consideration of the correctness of the trial court’s determination that Messrs. Fabacher are to be excused from their obligation as sureties.

Messrs. Fabacher were signatories, as “guarantors,” along with J. Stanley Middleton, Jr., of a “surety agreement” that forms a part of each “lease.” That agreement reads as follows:

“In consideration of the Lessor entering into this lease with the Lessee, the undersigned hereby guarantees and becomes surety for the Lessee in favor of the Lessor for the full and faithful performance of all Lessee’s obligations under this lease. This obligation of the undersigned surety is joint, several and in solido with the Lessee. The undersigned shall be bound as if principal obligors for all amounts due under this lease, both for the basic term and for the continued month to month basis thereafter, and consents in advance to all extensions.

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Related

EXECUTIVE CAR LEASING COMPANY OF NEW ORLEANS, INC. v. Alodex Corporation
279 So. 2d 169 (Supreme Court of Louisiana, 1973)
Invest, Incorporated v. State
247 So. 2d 175 (Louisiana Court of Appeal, 1971)
Southern Fleet Leasing Corp. v. McAndrew
219 So. 2d 215 (Louisiana Court of Appeal, 1969)

Cite This Page — Counsel Stack

Bluebook (online)
338 So. 2d 1156, 1976 La. App. LEXIS 3921, Counsel Stack Legal Research, https://law.counselstack.com/opinion/louisiana-national-leasing-corp-v-family-pools-inc-lactapp-1976.