Kenneth G. TALLEY v. John R. BLAKE and Patrick G. Simms.
No. 10498.
Court of Appeal of Louisiana, First Circuit.
November 24, 1975.
322 So. 2d 877
Before ELLIS, BLANCHE and LOTTINGER, JJ.
David A. Waguespack, Baton Rouge, for appellee.
BLANCHE, Judge.
Defendants-appellants, John R. Blake and Patrick G. Simms, appeal a judgment of the Nineteenth Judicial District Court ordering them to pay, in solido, the balance of $2,700 due on a promissory note, together with interest thereon at the rate of 8 percent per annum from March 18, 1972, until paid, and 10 percent of principal and interest as attorney‘s fees and all costs of
On March 17, 1970, defendants purchased the plaintiff‘s one-third interest in Blake, Talley and Associates, Employment Consultants, Inc., resulting in the defendants gaining complete ownership of the corporation. The purchase price of $3,600 was represented by a promissory note dated that same date, payable in equal monthly installments of $150 each, the first of which was due and payable on or before April 18, 1970. There is no dispute that the sale actually took place, nor is there any dispute that the defendants signed the promissory note in favor of the plaintiff.
After paying $900 on the obligation, the corporation failed and no further payments were made. Subsequently, the plaintiff sued Blake and Simms individually for the balance of $2,700. The defendants reconvened for the plaintiff‘s one-third share of the debts of the corporation, which debts totaled $15,464.31.
The defendants, at the trial and on appeal, have attempted to controvert the clear and unambiguous wording of the act of sale1 by asserting that they erroneously thought the corporation was the purchaser of the stock and not them individually. They contend this error vitiated their consent and invalidated the sale. Accordingly, they argue that because the sale was invalid for lack of their consent, the note sued upon is uncollectible for failure of its underlying consideration.
To substantiate their allegation of error, both defendants testified that they conferred via telephone with their attorney, Harris D. Copenhaver, concerning the sale, and pursuant thereto both concluded that they were incurring no personal liability thereunder. We note in this regard that Copenhaver could not remember advising the defendants concerning their personal liability under the sale, and the defendants offered no other proof except their own testimony to substantiate their contention.
On the other hand, the plaintiff offered into evidence a power of attorney prepared by Copenhaver on the day of the sale. It read, in pertinent part, as follows:
“BEFORE ME, the undersigned Notary Public, personally came and appeared KENNETH G. TALLEY, who did depose and say that as part of the consideration of the sale of his stock in Blake, Talley and Associates, Employment Consultants, Inc., to John R. Blake and Patrick G. Simms, that he does hereby irrevocably, constitute and appoint the said John R. Blake as his attorney to transfer the said shares of stock, certificate number one (1), consisting of fifty (50) shares of the aforementioned corporation on the books of the said corporation with full power of substitution in the premises.” (Exhibit P-3)
Considering the clear wording of the foregoing instrument, we conclude that Copenhaver was of the opinion that the defendants were the purchasers of the stock. Therefore, in spite of the defendants’ contention to the contrary, it is unlikely that he would have advised them otherwise.
Mark J. Harrison, C.P.A. for the corporation, could not recall specifically advising the defendants to have the corporation buy the stock, but he did say that would have been his normal advice.
The plaintiff testified at trial and also maintains on appeal that it was well understood
The trial court allowed recovery on the note, concluding that even if the defendants were in error concerning their liability for the purchase price, such error was not the principal cause of the agreement and, therefore, under Civil Code Articles 1823 and 1846 the contract could not be set aside. The defendants’ reconventional demand was denied, based upon a hold-harm-less clause in the act of sale. The denial of the reconventional demand has not been appealed and, therefore, the only issue before this Court is the validity of the promissory note.
The defendants bear the burden of proving their consent was vitiated by error,
As previously noted, the only proof offered by the defendants to substantiate their claim is their own uncorroborated testimony. This contention was not substantiated by either Copenhaver or Harrison, both of whom testified at the trial of the matter. It is obvious that defendants desired to buy plaintiff‘s share of the corporation and the act clearly accomplished that goal. However, we are of the opinion that any other motive which might have been incidental to the transfer of the stock has not been proven by the defendants, and, therefore, they are not entitled to have the sale set aside for error.
Additionally, we note that even had defendants proved their purported motive, they, nevertheless, cannot escape liability on the note. This is so in view of the fact that it is not every error, whether of fact or law, that will invalidate a contract. To do so it must be in some point which was a principal cause for making the contract, such as the motive therefor,
The defendants’ purported motive was not communicated to the plaintiff prior to the sale, and from the facts and circumstances surrounding the sale, we cannot conclude that the plaintiff should have presumed that the defendants’ principal motive was to purchase his stock without incurring personal liability therefor.
All of the cases relied upon by the defendants in support of their position involved errors, the essence of which was either communicated to the other party or should have been presumed from the nature of the contract. Therefore, they are not controlling in the instant case.
For the above reasons, the judgment of the trial court is affirmed, at appellants’ cost.
Affirmed.
Notes
The act of sale sets forth the following:
“SELLER: KENNETH G. TALLEY, who by this sale does hereby resign his position as officer (Secretary-Treasurer), Director, and any other official capacity with the corporation known as Blake, Talley and Associates, Employment Consultants, Inc., 5700 Florida Boulevard, Baton Rouge, Louisiana 70806; and
“BUYERS: JOHN R. BLAKE AND PATRICK G. SIMMS, who are the remaining stockholders of the above corporation, and in their capacity as stockholders, officers and directors of the corporation accept the resignation of Kenneth G. Talley, Seller, from all affairs of the corporation as of this date.” (Exhibit P-2)