Case ID: so2d_218/html/0621-01.html
Source: Caselaw Access Project
Author: {"author": "CHASEZ, Judge. REDMANN, Judge", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The WARREN REFRIGERATOR COMPANY, Inc. v. Vincent J. CAVALLINO, d/b/a Cavallino’s Super Market.
    No. 3264.
    Court of Appeal of Louisiana. Fourth Circuit.
    Jan. 6, 1969.
    Rehearing Denied Feb. 3, 1969.
    Wood Brown, III, Montgomery, Barnett, Brown & Read, New Orleans, for Warren Refrigerator Co., Inc., plaintiff-appellee.
    Goldman & Levin, New Orleans, for Vincent J. Cavallino, defendant-appellant.
    Before YARRUT, CHASEZ and RED-MANN, JJ.
   CHASEZ, Judge.

The plaintiff in this action, The Warren Refrigerator Company, Inc., filed this suit on October 11, 1966, against the defendant herein, Vincent J. Cavallino, d/b/a Caval-lino’s Super Market, for $62,583.00, plus interest and attorney’s fees, allegedly due on a certain promissory note secured by chattel mortgage.

In its petition the plaintiff prayed for and secured a writ of sequestration under which it seized refrigerating equipment owned by defendant subject to the chattel mortgage. The defendant answered the suit and denied that there was a past due balance on the note, averring that as of the time of the filing of the suit all installments which were due were paid and two additional installments had been in fact prepaid. He incorporated a reconventional demand in his answer for alleged damages sustained as a result of the sequestration and seizure. The defendant then filed a motion to have the writ of sequestration dissolved on a rule to show cause.

A lengthy hearing was held on this motion during which considerable testimony and evidence was introduced. The trial judge denied the motion and thereby dismissed the plea for dissolution of the writ.

The defendant applied for writs of cer-tiorari, prohibition and mandamus to this court, and asked that the decision which denied the motion for dissolution be reviewed. This application for writs was denied by this court, on the finding that the showing was insufficient to warrant the exercise of our supervisory jurisdiction.

Defendant then applied for these same writs to the Supreme Court of Louisiana. The Supreme Court denied the application for the stated reason that “There appears no error of law in the ruling complained of.” Warren Refrigerator Company, Inc. v. Cavallino d/b/a Cavallino’s Super Market, 250 La. 636, 197 So.2d 653 (1967).

The matter was then tried on its merits by the trial court. No further evidence or testimony was introduced, and the case was submitted on the record as formulated during the hearing on the motion for dissolution of the writ of sequestration. Judgment was then rendered in favor of plaintiff and against defendant in the full sum of $62,583.00 with six per cent (6%) per annum interest thereon, and fifteen per cent (15%) interest additional upon the aggregate sum of principal and interest with attorney’s fees and all costs of the suit. The writ of sequestration was maintained, the property ordered sold and the defendant’s reconventional demand was rejected. The defendant now prosecutes this appeal.

A full understanding of the chronological development of this case is essential to a correct decision herein. The record reveals that some time during the year 1964, the defendant’s super market was destroyed by fire. In April, 1965, the defendant purchased the refrigerating equipment in question from the plaintiff, for the purpose of opening his new super market. The sale price of this equipment was $79,127.22, of this $8,277.22 was paid in cash and the balance accepted in the form of a promissory note dated April 8, 1965 in face amount of $70,850.00. This note indicated maturity simply by reciting across its margin: “59 payments at $1,-181.00 each and one payment of $1,171.00.”

There was nothing on the note to designate the due date of the first installment. However, the note was paraphed for identification with a chattel mortgage of even date. This mortgage recited the note was payable as follows:

“ * * * in 60 installments 59 installments being'for the sum of $1,181.00 each and the last installment being for the sum of $1,171.00, the first installment being due on the 30 days after opening and one each of the remaining installments shall be due on the same day of each month thereafter until all are paid; * * (Emphasis ours.)

The defendant testified that at the time he purchased the refrigeration equipment and executed the promissory note and chattel mortgage he expected to open his store for business a week or two after the Labor Day Weekend in September 1965. However Hurricane Betsy intervened in early September and did considerable damage to his premises so he was unable to open at that time, and did not in fact open until April 28, 1966.

The defendant stated that some time during October 1965 in response to plaintiff’s inquiries for payment on the note he promised that he would make a payment during that month. Finally after repeated demands by plaintiff in the form of telephone calls and letters, on January 24, 1966 the defendant made his first payment of $1,181.00 on the note. He made a second payment of the same amount on January 28, 1966, a third on February 4, 1966, and a fourth on March 17, 1966. Some time thereafter he turned the matter over to his attorney, Mr. Nicholas Gagliano.

Mr. Gagliano testified at the hearing on the motion to dissolve the writ of sequestration. He stated that defendant told him of his problem regarding the note and chattel mortgage some time during the month of April, 1966. Gagliano read the chattel mortgage and advised defendant it was his opinion that no payments were due until 30 days after the super market opened for business, which had not at that time occurred. Gagliano then began to represent the defendant in his dealings with the plaintiff involving the chattle mortgage.

Gagliano testified he telephoned the attorney representing the plaintiff, Mr. Charles D. Viccellio, and advised him that defendant was not in arrears in his payments on the mortgage, but was in fact then prepaid by four installments. He received several letters from Viccellio demanding payment, in which the possibility of litigation and its consequences to defendant were mentioned.

On May 20, 1966 Gagliano wrote a letter to plaintiff’s attorney enclosing a check for $1,181.00. In this letter he stated:

“Enclosed herewith is a check in the sum of $1,181.00 payable to Warren Refrigeration to cover what you have designated as the April 22 payment in your recent letters. Within the next week or ten days I will be sending you another check in the same amount to cover the payment that you have designated as the May 22nd payment.
“Mr. Cavallino would rather make these payments as indicated above rather than expend the sum of $274.16 to bypass the so-called April 22nd Payment.
“I agree with you that it would be expensive for both parties to litigate this matter in court, but if, for some reason, your client decides to pursue their course, I can only suggest that we will defend it vigorously, and do our very best to establish that you have been paid in advance rather than in arrears.
“I hope we can put this matter at rest at least temporarily with the enclosed check and the one to immediately follow”

In response he received the following letter from Viccellio dated May 24, 1966.

“We were happy to receive your letter of May 20th and acknowledge First National Bank money order drawn on Ca-vallino’s Super Market, Inc. in the sum of $1,181.00 representing the April 22, 1966, payment. It is our understanding that in- the next week or ten days we may expect to receive the May 22nd payment of $1,181.00.
“We are accepting these payments in this manner with the distinct understanding that they are sent as an acknowledgment that the first installment on this contract fell due on December 22nd and payments have been made for December, 1965, and January, February and March, 1966, plus the April payment which you have now paid.
“Should this be improper understanding of the basis of this transmittal, please let me know.”

On June 8, 1966 Viccellio wrote Gagli-ano:

“Please advise us when we may expect the May 22nd payment on the note of Vincent J. Cavallino with The Warren Refrigerator Co., Inc. We received on the 23rd the April payment.
“Since you had indicated that we would receive the May payment in a week or ten days we felt sure by now we would have received the same. Please advise.”

On June 16, 1966 Viccellio sent Gagli-ano the following:

“We have received nothing in payment of the May 22 note, and it will shortly be June 22.
“Please advise.”

Finally on June 29th Gagliano wrote this letter to Viccellio and enclosed therein a check for $2,362.00:

“In confirmation of our long distance conversation of this date, I am enclosing herewith a check in the sum of $2,362.00, covering the installments due on May 22 and June 22, in the captioned matter.
“I have been assured that, due to new financing arrangements, all future payments on your contract will be made timely in accordance with the agreement. Please advise whether these payments should be made through your office or through your client.
“With kindest regards and anticipating your early reply, I am,”

Viccellio responded to this letter on July S, 1966 as follows:

“This will acknowledge receipt of check # 370 of Cavallino’s Super Market, Inc. payable to Warren Refrigeration in the sum of $2,362.00, representing the May and June payments on the Warren Refrigerator note.
“Future payments should be made directly to the Company, and by a copy of this letter, we are calling upon the Company to notify Cavallino’s Super Market, Inc. directly where the note should be paid.
“Should you require anything further, please let us know.”

No further payments were made by the defendant on the note. This suit was subsequently filed on October 11, 1966.

As stated earlier it is defendant’s contention that, as of the date the suit was filed, he was not delinquent in his payments on the note. He relies on the stipulation in the mortgage which states that the first payment was due 30 days after the opening of the store. Further as he established at the hearing on the motion to dissolve the writ of sequestration that the store was not opened until April 28, 1966, and as he did make seven payments, he contends he was thus current in his obligation on the note through November 28, 1966.

In support of this argument, citing LSA-C.C. art. 2048, defendant contends that the “30 days after opening” stipulation was a term of the contract, and under the express provisions of LSA-C.C. art. 2053 the payments were not due before this term expired.

Finally it is defendant’s contention that the payments which he made prior to the opening of his store April 28, 1966, did not constitute a waiver of the stipulated term. He stated they were merely prepayments made to ease the pressure caused by the plaintiff’s repeated demands and to forestall any possible litigation which would precipitate defendant into bankruptcy.

Plaintiff on the other hand makes two arguments in support of its position.

First it contends that the stipulation under consideration in this litigation was a condition rather than a term, and as such was waived by defendant’s voluntary prepayment on the mortgage prior to the opening of the store. Plaintiff relies on LSA-C.C. art. 2049 and Morrison v. Mioton, 163 La. 1065, 113 So. 456 (1927), and other jurisprudence.

Second, and we believe more important, plaintiff argues that some time after defendant’s store was opened for business, the attorneys for both parties renegotiated the terms of the chattel mortgage as to the time when payments were due. Plaintiff alleged in its petition that by agreement with the defendant the payments began to fall due on December 22, 1965 and continued to be due on the 22nd day of each month thereafter. Apparently it is its position that this agreement was made some time in June 1966 and was retroactive to the previous December.

Thus this second contention involves a factual determination as to whether there was an agreement between the parties through their attorneys to renegotiate the maturity date of the note.

On this point the trial judge made these statements in his reasons for judgment filed in connection with his decision on the motion to dissolve the writ of sequestration :

“It further appears that plaintiff was willing to and did re-negotiate a new due date under the contract for the purpose of preventing the defendant from being in default. The testimony, exhibits in the record, particularly the correspondence between the attorneys, and the payments subsequently made, satisfy the Court that the due date was re-negotiated and is in accordance with the allegations of plaintiff's petition.”

We accord great weight to these factual findings by the trial judge.

The letter written by Mr. Nicholas Gagliano, defendant’s attorney at the time, dated June 29, 1966 and quoted above, supports this factual conclusion. It is apparent from this correspondence that there was an agreement between both counsels acting for the parties herein, to treat the installment due dates as being on the 22nd of each month. And more important the check satisfying the sixth and seventh payments, was acknowledged to have made defendant current in his payments only through June 22, 1966. All future payments were to have been timely made monthly thereafter. As the defendant admits he made no additional payments after June 29, 1966, there can be little question but that defendant was delinquent on the note and mortgage on October 11, 1966 when this suit was filed.

As we have resolved this appeal on factual conclusions, we do not find it necessary to discuss at length the issues raised relative to the payment stipulation in the chattel mortgage as written.

Suffice it to say we cannot agree with appellant in his conclusion that the stipulation on the chattel mortgage was a term within the contemplation of LSA-C.C. art. 2049. The defendant's obligation to pay on the note was to hinge on an event, which was not certain within the contemplation of that article. While it was the intent of the defendant to open his store when he executed the mortgage, it was not an event which was “in the course of nature” bound to occur.

We find however that the question of the effect of this condition upon the obligation between the parties herein to he moot, for as stated above the record supports the trial judges decision that the parties through their attorneys renegotiated the payment provisions in the mortgage.

For the reasons hereinabove expressed the judgment rendered herein by the trial court on May 10, 1968 in favor of plaintiff, The Warren Refrigerator Company, Inc. and against defendant, Vincent J. Cavallino, d/b/a Cavallino’s Super Market, which likewise dismissed the recon-ventional demand of the defendant, is affirmed in all respects, appellant to pay all costs of this appeal.

Affirmed.

REDMANN, Judge

(dissenting).

The facts are established that defendant was not only unwilling but, to plaintiff’s knowledge, financially unable to commit himself to a firm date on which he would begin paying the $1,181 monthly installments ; he would not have the money until his store was open and producing income from which the payments could be made. He did not even have the $8,000 initial payment customarily required at the time of making the contract, and was therefore allowed by the contract to await delivery to pay about half this amount.

Plaintiff was fully aware of defendant’s distressed cash position, through its salesman, its New Orleans district manager, and its Beaumont office which, precisely because of defendant’s position, approved the altogether unusual stipulation in the contract prepared by plaintiff itself, that payments were to commence “30 days after opening.”

There is no justification in the record, under the facts recited, for construing the stipulation other than as written, except to imply a reasonable time within which to open. Plaintiff’s district manager himself testified on cross that plaintiff had approved the terms of the mortgage, drawn it up and had it signed, "On the assumption that this store was going to be open within a reasonable length of time(Emphasis supplied.)

Plaintiff did not show that defendant delayed opening beyond a reasonable time, under the circumstances of the Hurricane Betsy damage (and the commonly-known unavailability of sufficient labor force to make speedy repairs). To the contrary, plaintiff’s salesman testified defendant did not slow opening, and was “in good faith” in “his personal desire to open the store and wanting to get in business.”

In my opinion the proper conclusion on this point is that, insofar as the record shows, defendant did in fact open his store within a reasonable time under the circumstances.

Therefore, under the contract defendant’s first payment was not due until 30 days later, or May 28, 1966.

However, in spite of the unusual, specially bargained for and (because of defendant’s known financial position) indispensable stipulation that the first payment was due 30 days after opening, plaintiff’s Beaumont personnel had some clerical desire to place a firm date on its books, and, based on its New Orleans office’s advice that opening was expected September 1, 1965, the Beaumont bookkeeping department listed the first payment as due October 1, 1965, and shortly thereafter began to request and urge payment.

Meanwhile, back at the store, plaintiff’s other employees could not even complete the installation and make operative the equipment sold, because of the presence of other workers trying to fix up the store to be able to open, and it was not until November 22, 1965, that defendant accepted the installation as complete. (There was, of course, no claim by defendant that plaintiff breached its obligations because of the hurricane problem.)

Nevertheless, plaintiff continued to press for payment based not on the contract but on its October 1, 1965, book entry. Finally, on January 18, 1966, plaintiff threatened turning the account over to its legal department “for whatever action is necessary,” and defendant yielded to the threat and subsequently made four payments, at irregular times, in response to plaintiff’s persistent pressures.

In early April, 1966, defendant consulted an attorney, Mr. Gagliano, who advised him that under the contract no payment was due until 30 days after opening (which was then almost at hand). And, as late as April 1966, plaintiff was still acting on its bookkeeper’s conclusion the first payment was due October 1, 1965, and turned the matter over to a Louisiana attorney, Mr. Viccellio, and so instructed him. After Vic-cellio, discussed the matter with Gagliano, who pointed out the contractual language, plaintiff ultimately abandoned that untenable position. There was, however, no suggestion at that time that plaintiff and defendant had “renegotiated” their bargain.

However, plaintiff then adopted a new position, still finding their own contractual words unpalatable: they now insisted that the first payment was due 30 days after defendant accepted the installation as completed on November 22, 1966. In effect, they accepted the hurricane damage to the extent it delayed themselves, but not to the extent it delayed defendant.

On April 30, 1966, Viccellio wrote Gagli-ano about an unspecified “proposed compromise” stating they hesitated legal action “as it would no doubt, throw your client into bankruptcy.”

Gagliano testified he informed Viccellio on May 6 he had been busy with litigation and had been unable to discuss the matter with defendant.

By May 13, plaintiff’s counsel Viccellio writes about “the payment we claim was due on April 22”, offering to extend payments a month for $274. And the letter insisted “This would be with the definite understanding that the payments now made have all been paid in accordance with being due.” Defendant did not accept this “understanding” plaintiff sought to impose.

On May 18, a five-day ultimatum was delivered by Viccellio, threatening immediate lawsuit, noting

“We are sure you realize, as do we, that this would be expensive for both parties, but certainly your client is running the greatest risk under the circumstances, in view of his precarious financial shape.”

Again, there is no suggestion whatsoever of any “renegotiation" at this time, nor of any other reason why defendant was not entitled to the benefit of his bargain. It was simply might makes right.

At this time, of course, four payments having been made and the first having been due May 28, 1966, defendant had already prepaid through August 28, 1966.

Nevertheless, Viccellio was at least right in one thing: defendant could not afford to fight, not even if he won. So on May 20 Gagliano sent a check “to cover what you have designated as the April 22 payment” and promised another check for “the payment you have designated as the May 22 payment” rather than pay the proposed additional $274 to pacify plaintiff, still insisting, nevertheless, “you have been paid in advance rather than in arrears.”

Plaintiff’s attorney was apparently as disinclined to read the words of that letter as he was those of the contract, for on. May 24 he wrote

“We are accepting these payments in this manner with the distinct understanding that they are sent as an acknowledgment that the first installment on this contract fell due on December 22nd and payments have been made for December, 1965, and January, February and March, 1966, plus the April payment which you have now made.
“Should this be improper understanding of the basis of this transmittal, please let me know.”

Obviously, plaintiff could not unilaterally convert defendant’s perfectly intelligible letter of May 20 into the “understanding” recited in plaintiff’s May 24 letter. This was, of course, the same “understanding” plaintiff had been attempting to force on defendant ever since it came to understand the insupportability of its bookkeeper’s October 1 date.

There followed from Viccellio brief letters of June 8 and June 16, and a long distance conversation between Viccellio and Gagliano, on June 29, 1966.

Then on June 29, Gagliano wrote Viccel-lio, enclosing a check of a newly-formed corporation “covering the installments due on May 22 and June 22” adding

“I have been assured that, due to new financing arrangements, all future payments on your contract will be made timely in accordance with the agreement.” (Emphasis supplied.)

In my opinion the fact defendant’s attorney referred to “the installments due on May 22 and June 22”, rather than use a cumbersome expression such as “the installments you have designated as those of May 22 and June 22” cannot, in the light of all that had previously happened, be interpreted to mean “I agree for Mr. Caval-lino and with his authorization that the payments are due May 22 and June 22.”

Nor, in my opinion, can his recital that he had been assured, “due to new financing arrangements”, be interpreted as a “renegotiation” or a new promise by defendant, under the circumstances of his transmitting a check from a new corporation and the conversation he had with Viccellio even as reported by Viccellio.

Viccellio testified, in respect to the June 29 phone conversation

“ * * * on June 29th after I returned to my office I conversed with Mr. Gagli-ano and he assured me that someone else was coming into the business and that money would be available. And that we could expect that they were going to incorporate the super market and that we could expect no later than July 8th the May and June payments * *

Viccellio further testified that Gagliano’s June 29 letter “assured me that future payments would be made” (which of course it did not).

Then, on examination by plaintiff, Vic-cellio testified:

“Q. During that telephone conversation and in that letter is there any protest or any kind of a protest that payments weren’t due?
“A. Well, Mr. Brown, we were negotiating and we arrived as I un derstood the transaction at a definite payment date as of the 22nd of the month. And the payments were to begin on the contract as of December 22, 1965 in order to allow the payments made prior to my coming into the picture to carry the first four months of the contract. And he made to me one payment for April and then subsequently two payments, one for May and one for June, and this was at the very end of June.” (Emphasis supplied.)

This is the entirety of plaintiff’s case relative to any “renegotiation” or agreement to pay earlier than contracted for.

Gagliano, on the other hand, testified that the payment he sent on June 29 (which was not a check of defendant but of a newly formed corporation) was furnished by Mr. Neyrey, who was “becoming involved in the financial arrangements of the company” ; that Neyrey knew earlier payments had been made and that plaintiff wanted the continuance of payments; and that Neyrey told Gagliano

“That he felt that they could continue to make payments on that basis. But there was never any agreement or commitment by Mr. Cavallino or a corporate official that I knew of that they bound themselves to change the terms of the chattel mortgage.” (Emphasis supplied.)

It appears to me that plaintiff falls considerably short of proving that any “re^ negotiation”, or new promise by defendant to always pay early, ever occurred, and on that purely factual basis I would reverse the judgment appealed from.

There is, additionally, no legal basis for enforcing such a promise by defendant even if he made it, since there are no facts in the record to show there was ever any legal cause or consideration for his supposed new promise which, under LSA-C.C. art. 1893, would therefore be of no effect, and on that basis the judgment appealed from should in any case be reversed.

As of the June 29 payments, plaintiff had received a total of seven installments, the first of which was due May 28, 1966, and the last paid the obligation through November 28, 1966. This suit filed on October 11, 1966 to enforce the chattel mortgage was premature, and the sequestration and seizure should have been dissolved, and defendant’s demand for damages should now go to trial.

I respectfully dissent.

Rehearing denied.

REDMANN, J., is of the opinion that a rehearing should be granted. 
      
      . LSA-C.C. art. 2048 provides :
      “Art. 2048. The time given or limited for the performance of an obligation, is called its term.”
      
     
      
      . LSA-C.C. art. 2053 provides :
      “Art. 2053. The term is always presumed to be stipulated in favor of the debtor, unless it result from the stipulation, or from circumstances, that it was also agreed upon in favor of the creditor.”
     
      
      . LSA-C.C. art. 2049 provides :
      “Art. 2049. A term may not only consist of a determinate lapse of time, but also of an event, provided that event be in the course of nature, certain; if it be uncertain, it forms a condition.”
     
      
      . Plaintiff’s argument that “30 days after opening” is a “condition”, even if not irreconcilable with plaintiff’s strenuous preopening collection efforts hereafter dis-discussed, is insupportable. There is no evidence whatsoever in this record to suggest the intent of the parties was “If I open, I will pay,” meaning also if I never open I will never be obliged to pay. Nor does the circumstance exist that plaintiff’s obligation to deliver and install the equipment was suspended by the “30 days after opening” clause; yet in true condition cases in bilateral contracts, e. g., “If a loan can be had, I will buy and you will sell”, the obligation of both parties are usually suspended by the condition (although it may exist for the benefit of one only). The grammatically “conditional” expression of the parties’ intent as reflected by the record is “If I open within a reasonable time, I will pay the first installment 30 days thereafter and another in each of the following 59 months; and if I do not open within a reasonable time I will nevertheless pay the first installment 30 days after what would have been a reasonable time, etc.” This is, of course, an unconditional (“simple”) obligation to pay the first installment 30 days after the passage of a reasonable time within which to open. The passage of such reasonable time is, it need hardly be pointed out, “in the course of nature, certain”, LSA-C.C. art. 2049. See LSA-C.C. arts. 2051, 2050, 2027, 1950 and 1951; also Aubry & Itau, Obligations § 303.
     
      
      . Compare, analogously, LSA-C.C. art. 1933(2).
     
      
      . While under my conclusion the question does not arise, and was not raised by counsel, I believe the unearned part of the $16,350 discounted interest in this contract is remitted by acceleration of maturity by the creditor, and the majority should have in any case reduced the amount of the judgment to that extent; Berger v. DeSalvo, 156 So.2d 323 (La. App.1963), cert. denied.