Case Name: SCHOENY v. LAKE
Court: Louisiana Court of Appeal
Jurisdiction: Louisiana
Decision Date: 1943-04-20
Citations: 13 So. 2d 109
Docket Number: No. 2498
Parties: SCHOENY v. LAKE.
Judges: Le BLANC, J., recused.
Reporter: Southern Reporter, Second Series
Volume: 13
Pages: 109–113

Head Matter:
SCHOENY v. LAKE.
No. 2498.
Court of Appeal of Louisiana. First Circuit.
April 20, 1943.
Titche & Titche, of New Orleans, for appellant.
Blum & LeBlanc, of Donaldsonville, for appellee.

Opinion:
L. W. BROOKS, Judge Ad Hoc.
Dr. Leo J. Schoeny has sued Dr. Spencer B. Lake for the alleged balance due on a contract entered into by and between them on July 11, 1930, whereby Dr. Schoeny sold to Dr. Lake, for the sum and price of $4,000, certain described fixtures, furniture, apparatus and instruments situated in the Palace Drug Store building in Donaldsonville, Louisiana. At that time Dr. Schoeny was practicing the profession of dentistry in Donaldsonville and desired to move to New Orleans. Dr. Lake was then living in New Orleans and wished to move to Donaldsonville to practice dentistry. Hence, on July 11, 1930 the two dentists entered into two contemporaneous contracts. In one of these contracts Dr. Schoeny sold to. Dr. Lake a quantity of fixtures, furniture, apparatus and instruments "now located in the office presently used ánd occupied by the vendor in the Palace Drug Store Building on Mississippi Street, in the City of Donaldsonville, Louisiana," for the sum of $4,000. Dr. Lake made a down payment of $500, and for the balance of the purchase price, to-wit, $3,500, he executed and delivered to Dr. Schoeny his twenty-three promissory notes, dated the day of the sale, numbered from 1 to 23, inclusive, each for the sum of $150 save note number 23, which was for the sum of $200, said notes being payable in their numerical order on the 15th day of each month beginning August 15, 1930 and stipulating to bear interest at the rate of 6% per annum from date until paid. These notes were secured by vendor's lien and mortgage on the personalty transferred, the act containing the usual and customary provisions and stipulations contained in credit sales. The twenty-three notes were paraphed by the officiating notary for identification with the sale. As a further consideration of the sale, on the same day the two dentists entered into another agreement, whereby, among other things, Dr. Schoeny transferred to Dr. Lake his practice in the City of Donaldson-ville and the good will of his business, and agreed to assist Dr. Lake in certain specified ways in establishing himself in Donaldsonville.
Shortly after consummating- the deal 'Dr. Lake paid Dr. Schoeny $150 on account of the purchase price. The next payment was made on or about July 7, 1932, and was for $20. Thereafter, Dr. Lake made payments to Dr. Schoeny on various dates in amounts ranging from $10 to $100, during the period commencing August 11, 1932 and ending February 14, 1939. Then Dr. Lake refused to make any further payments, and Dr. Schoeny filed suit against him to recover the sum of $1,140, being the alleged balance of the purchase price, with interest thereon at 5% per annum from July 11, 1930 until paid and with interest at the same rate on $2,860 from July 1, 1930 until December 31, 1935. However, at the beginning of the trial Dr. Schoeny reduced his claim to $1,090 with interest as aforesaid, acknowledging receipt of $50 more than was shown on his statement filed in evidence. The defendant ' resisted the suit on the grounds: first, that there was partial failure of consideration due to his being evicted from the possession of certain articles evaluated in the sale at $1,002.23; and, second, that subsequent to the consummation of the two contracts Dr. Schoeny had, for a valuable consideration, waived the accrued and accruing interest on the notes, and hence none was due.
The defendant filed in the District Court an exception of vagueness and exceptions of no cause and no right of action. The exception of vagueness was met by the filing of an amended and supplemental petition by the plaintiff, and the exceptions of no cause and no right of action were abandoned. On the day of the trial the defendant tendered to the plaintiff the sum of $87.77 plus 6% per annum interest thereon from the time that said $87.77 was due and payable which tender plaintiff refused. The case was then tried on its merits and resulted in judgment in favor of the plaintiff and against the defendant for the amount tendered with interest as aforesaid, otherwise rejecting the plaintiff's demands, costs to the time of tender to be paid by defendant and all other costs to be paid by plaintiff. The plaintiff has appealed from this judgment.
The defendant has filed in this court a plea of prescription of five years on the ground that this claim, being actually founded upon the last nine notes of the said series, being numbers 16 to 23, inclusive, has become prescribed and the defendant's obligation extinguished. The defendant also asks that the judgment appealed from be amended so as to decree that notes numbers 15 to 23, inclusive, be can-celled.
Plea of Prescription
We shall consider first the plea of prescription of five years. The plaintiff sued on the contract rather than on the promissory notes identified therewith on the theory that his suit on the unpaid promissory notes might be prescribed by five years under Article 3540 of our Revised Civil Code, whereas the suit for breach of contract would only be prescribed by ten years under Article 3544 of the said Code. He cited as his sole authority for this, procedure Boelte v. West, La.App., 185 So. 471. In that case the Court of Appeal for Orleans said that the holder of a note who is a party to the contract, may, at his. option, sue on the contract, if it is breached, or sue on the note if it is unpaid. Suit was brought on a note executed in connection with a contract between LaSalle Extension University, assignor of the plaintiff, Boelte, the note evidencing the amount to be paid under the contract for an extension course which West agreed to take. As suit was brought on the note in the Boelte case, obviously what the court said relative to the payee's right to elect to sue on the note or on the contract was obiter dictum. However, the court cited La Salle Extension University v. Thibodeaux, La.App., 155 So. 53, where suit on a similar -contract to the one in the Boelte case was upheld. We do not think these cases are applicable.
Articles 3284 and 3285 of our Revised Civil Code state:
Article 3284: "The mortgage is accessory to a principal obligation which it is designed to strengthen, and of which it is to secure the execution."
Article 3285:
"Consequently, it is essentially necessary to the existence of a mortgage, that there shall be a principal debt to serve as a foundation for it.
"Hence it happens, that in all cases where the principal debt is extinguished, the mortgage disappears with it.
"Hence also it happens that, when the principal obligation is void, the mortgage is likewise so; this, however, is to be understood with certain restrictions which are established hereafter."
In the cited case both the note and the contract were the primary obligations of the named defendant, whereas, in the instant case the principal obligation to pay the balance of the purchase price of the equipment was represented by the twenty-three promissory notes executed by Dr. Lake. The vendor's lien and mortgage are not "principal obligations"; they are accessory to the notes which evidence the principal obligation. R. C. C. Article 3284. If the principal debt is extinguished, the mortgage and vendor's lien "disappear" with it. R. C. C. Article 3285; State ex rel. Landry v. Broussard, La.App., 177 So. 403; Holland v. Gross et al., La.App., 195 So. 828, 835.
But we do not think that the amount due by Dr. Schoeny to Dr. Lake is prescribed. It is agreed that during the period commencing July 7, 1932 and ending February 14, 1939, monthly payments have been made by Dr. Lake to Dr. Schoeny .aggregating $2,410. It is also agreed that this amount has been applied on the principal and that nothing has been paid on the interest. Although the debt due by Dr. Lake to Dr. Schoeny was divided into twenty-three installment notes, there was only one debt. Eyle v. Roman Catholic Church, etc., et al., 36 La.Ann. 310; Vinet v. Bres et al., 48 La.Ann. 1254, 1260, 20 So. 693. See also comments in 14 T. L. R. 438. Each of the payments on the indebtedness interrupted prescription and the last payment having been made only about a year prior to the filing of this suit, the indebtedness is not prescribed, and accordingly the plea of prescription is overruled.