Williams v. Natchitoches Recreational Ass'n

395 So. 2d 343, 1980 La. App. LEXIS 5055
CourtLouisiana Court of Appeal
DecidedNovember 12, 1980
DocketNo. 7885
StatusPublished
Cited by5 cases

This text of 395 So. 2d 343 (Williams v. Natchitoches Recreational Ass'n) 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
Williams v. Natchitoches Recreational Ass'n, 395 So. 2d 343, 1980 La. App. LEXIS 5055 (La. Ct. App. 1980).

Opinions

STOKER, Judge.

This litigation began as a suit by Louis Williams seeking reduction of the purchase price of property purchased by him for $150,000 from Natchitoches Recreational Association, a corporation. Louis Williams sought a reduction of $30,000. Natchitoch-es Recreational Association (hereinafter referred to as “Association”) answered and reconvened. In the reconventional demand the Association asserted that the price of the property sold by it to Louis Williams was $250,000, that Louis Williams had agreed to pay the price in the form of $150,000 in cash with the balance to be represented by a $100,000 mortgage note secured by a second mortgage on the property. The Association alleged that Louis Williams failed to execute the note and mortgage and therefore has not paid the full price agreed upon. The Association therefore demanded $100,000 from Louis Williams with interest and costs.1

The trial court denied the claims of both Louis Williams (the main demand) and of the Association (the reconventional demand). All costs were assessed to Williams. The Association appealed devolutively from the denial of its reconventional demand.

FACTS

Louis Williams was interested in locating a garment factory in Natchitoches, Louisiana, to be known as Mary-Lou Fashions. Williams negotiated with Ben D. Johnson, Sr., president of the Association which owned immovable property including a building suitable for the manufacturing operation. (Ben D. Johnson, Sr. is referred to in this opinion as Ben D. Johnson, or simply as Johnson without the designation of “Senior”.) On November 10, 1976, Mr. Johnson sold Mr. Williams certain garment factory equipment for $25,001. This equipment was apparently located within the building mentioned above. The equipment was conveyed by Johnson personally and not by the Association. Williams gave his promissory note for $25,000 of the purchase price. This note was secured by a reservation of a vendor’s privilege (lien) on the equipment and a chattel mortgage given by Williams. The note was payable in installments.

On May 25, 1978, a cash sale was executed before a notary public who was the attorney for Louis Williams. This instrument was recorded on June 6, 1978. This cash sale described the immovable property about which the parties had been negotiating. The property description consists of the legal description of the land together with all buildings and improvements situated thereon. The description also included the following words: “This sale includes all machinery, equipments [sic], supplies, etc. now located in or attached to the building and/or improvements on said tract of land.” The cash sale was signed on behalf of the Association by Ben D. Johnson as president pursuant to a resolution of the Board of Directors of the Association dated May 28, 1978. The instrument of cash sale recites that the resolution “is attached hereto and made a part hereof.” The resolution was in fact attached to the sale. Both of these [345]*345documents were introduced as the exhibit marked NRA-1. Tr. 6-S.2

ACTION TO REDUCE

According to the uncontradicted testimony of Ben D. Johnson the equipment sold to Louis Williams belonged to Johnson personally. This sale took place on November 10, 1976. The price paid for the equipment was $25,001 and the conveyance was in authentic form. Williams paid $1.00 in cash and gave his mortgage note payable in installments for the balance of $25,000. The sale and mortgage list Ben D. Johnson, Sr., as the vendor and the note was made payable to the order of Ben D. Johnson, Sr. On January 8, 1979, Natchitoches Collection, Inc., transferee of Johnson, instituted a suit for non-payment of the note. In his answer to the collection suit, Louis Williams alleges there was a verbal agreement that Williams would not have to pay the note if Williams obtained a loan to purchase the business known as Mary-Lou Fashions with all its machines, equipment and supplies from Natchitoches Recreational Association. Williams alleges that inasmuch as this was done, he did not owe the note and under the verbal agreement the note should have been cancelled. Judgment was rendered in Johnson’s favor on this note and his vendor’s lien and privilege was recognized on May 4, 1979.

In view of the factual conclusion we draw, that the equipment was the property of Ben D. Johnson, Sr., Natchitoches Recreational Association was a third party to any agreements between Williams and Johnson. Hence, Williams had no right of action against Natchitoches Recreational Association for reduction of the price paid for the immovable on account of the movable contents which had already been purchased from Johnson.

PAROL EVIDENCE

Both parties rely on the cash sale which indicates on its face a cash consideration of $150,000. Both offered as evidence the instrument of cash sale together with the accompanying resolution of the Association, and these documents were received in evidence as exhibits on behalf of both parties. Exhibits P-2 and NRA-1. When reconve-nor sought to show that the true consideration for the sale was $250,000, counsel for Williams strenuously objected on the [346]*346ground that the testimony and evidence violated the parol evidence rule. On behalf of Williams as defendant-in-reconvention counsel cited LSA-C.C. arts. 2275 and 2276 and the case of Johnson v. Compagna, 200 So.2d 150 (La.App. 1st Cir. 1967).3 In the brief filed before us on behalf of the defendants-in-reconvention, the additional cases of Durham v. Evans, 377 So.2d 423 (La.App. 2nd Cir. 1979) and Cordova v. Cordo va, 382 So.2d 1050 (La.App. 2nd Cir. 1980) are cited.

Objection was also made on the ground that evidence of an agreement at variance with the terms of the sale was outside the pleadings as the reconvenor had not pleaded facts in the nature of fraud or mistake.

In our opinion the facts of this case present circumstances justifying application of one of the recognized exceptions to the parol evidence rule. Parol evidence is admissible to clarify ambiguity in a written agreement to show the true intention of the parties. Smedes-Jardine & Co. v. Romero, 376 So.2d 333 (La.App. 3rd Cir. 1979); Renaudin v. Zapata Development Corp., 339 So.2d 942 (La.App. 4th Cir. 1976), writ refused, 341 So.2d 1123 (La.1977) and Gremillion v. Mouledous, 309 So.2d 897 (La.App. 3rd Cir. 1975), writ denied, 313 So.2d 826 (La.1975).

In view of the fact that the cash sale incorporates the Association’s resolution adopted by its Board of Directors and specifically makes the resolution a part of the instrument of sale, there is an ambiguity patent on the face of the whole instrument. Although the cash sale form as filled in purports to provide for a cash consideration of $150,000, it is clear that the Board of Directors of the Association intended that the consideration be $250,000. As a matter of fact the resolution indicates a second discrepancy, one relating to the contentions of the Association itself. It will be noted that the resolution provides for a cash payment of $127,000 and a second mortgage of $123,000. The Association's reconventional demand is specific in pleading that, although the resolution of the Association’s Board of Directors dated May 23, 1978, provided for cash of $127,000 and a credit of $123,000, when Louis Williams paid $150,000 in cash, the credit portion was to have been $100,000 secured by a second mortgage.

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395 So. 2d 343, 1980 La. App. LEXIS 5055, Counsel Stack Legal Research, https://law.counselstack.com/opinion/williams-v-natchitoches-recreational-assn-lactapp-1980.