
    NO. 8005
    COURT OF APPEAL PARISH OF ORLEANS.
    NEW ORLEANS TERMINAL CO. VERSUS HAMPTON REYNOLDS.
    J. By Dinkelspiel;
   By Dinkelspiel; «J

Plaintiff instituted, this suit averring defendant was indebted -onto plaintiff in the sum of Three Hundred Twenty One end 98/100 Dollars, together with interest at seven per cent from November 1st, 1914, until paid.

The substantial part of plaintiff's petition sets forth that under an agreement with defendant, of date August 16th, 1913, and sundry letters up to end including October 36th, 1912, it was agreed and understood in accordance with letter of October 30th, 1913, written by defendant, addressed to plaintiffs' General Manager and reeding as follows:

"Hew Orleans, La.
Oot. 30th, 1913.
Mr. E. A. Kelly,
General Manager, N.O.T. Co., City.
Dear Sir:
Tours letters August 16th, September 19th and October 26th received.
Your proposition of August 16th, in which you state that you will rent me second hand sixty pound rail and angle bars on an interest oharge of 7$ per year, I to furnish necessary spikes, bolts, oross and switch ties and all other material and labor required; I to take care of the expense of loading up and movement to the Canal of the rail as well* as taking up the rail, loading and unloading same after it has served its purpose, the Terminel Co. to furnish the frog end switch complete, is acceptable to me.
Thanking you for your courtesy in this matter, I am.
Yours truly,
(Sgd) Hampton Rejoiolds."

Plaintiff avers that upon termination of the .defendant /-said le:-se/returned to petitioner rails and bars, and deducting the amount returned from the amount furnished by plaintiff to the said defendant leaves a balance of rails and angle burs due by defendant to plaintiff as follows:

Deducting the amount returned from the amount furnished by your petitioner to the said Hampton Reynolds leaves a balance of rails and angle bars due by said Reynolds to your petitioner, as follows, to-wit:

33 - 60# Rail 301 lengths, and 119 pairs 60# Angle Bars.

And averring further that the value of saidr rail not returned amounts to $338.68, based on weight of 8.84 tons at $37.00 per gross ton and the value of said angle bar6 is $83.30 based on 119 pr. at 70 Ct. per pair, making a total of rail and angle bars of $331.98, which plaintiff claims to be due by defendant together with Interest at seven per cent from ITovember 1st, 1914, until paid and finally concludes with a prayor for judgment in favor of plaintiff and against the defendant in the full sum of $331.98 with interest at seven per cent from November 1st, 1914.

To this petition defendant admits the indebtedness alleged in full, together with interest claimed but because he does not know the value of sc id rail and angle bars denies that he is indebted in the amount claimed by plaintiff and finally claims that plaintiff is indebted to him in the sum of $3385.31, together with legal interest from Uovember 33nd, 1914, until paid.

That defendant Is unable to file a reconventional before demand beoause/ai the Institution of the present suit defendant entered a suit against plaintiff and one John Riese, claiming that they are indebted unto defendant Jointly, severally and in solido in the sum of $3385.21, all of whioh claim is referred to in another suit of defendant versus Riese and others, being Humber 114817, Division "E" of the Civil Distriot Court and whioh said petition and exhibits, together v/ith citation and returns thereon are made part of this answer and as an exception and defense to the demand heroin for principal, interest and oosts, defendant shows that so muoh of his demand in said suit in Division "E" of this Court against the plaintiff herein as would eque.1 the amount this plaintiff would reoeover against this defendant in this oause in prinoipal, interest and oosts, is a bar to any suoh recovery^ and wherefore he praps for Judgment in his favor.

To this answer, a reoonventional demand, as it may be termed, plaintiff plead against the plxxs plea of compensation made by defendant herein, the prescription of one year.

And further that prior to the institution of the present suit, defendant instituted suit against the K. 0. Terminal Company and John Riese, a suit in this Court under the number 114817, upon the same oause of action whioh forms the basis of the plea of compensation made be the defendant herein and alleges said suit was dismissed and subsequently affirmed on appeal, by th#e Supreme Court of this State, and therefore the Judgment has beoome final and has acquired the force of the thing adjudged as between the parties to this suit.

Wherefore plaintiff prays that this plea of prescription and res adjudicata as to the plea of compensation made by the defendant be sustained. Anexed to the petition are itemized bills for the amount claimed.

On the trial of this cause the amount claimed was abundantly proved and the question presented to the Judge of the Court aquo and to this Court is whether or not the plesaof prescription of one year and pompensation can be or cannot be plead in this case.

An examination of the authorities satisfies us that a demand in reoonvention, must show by his pleadings, that it is connected with, and incident®,l to, the principal demand.

A demand not equally liquidated with that sued upon oannot serve as a set-off or in compensation.

.A demand not incidental to, and connected with, the principal demand, oannot be plead in reconvention.

The plea of compensation admits the debt sued upon, and even where the counter-demand is of such a nature as to serve for either compensation or reconvention, and defendant esoapes the confession involved in the one by advancing his claim in the shape of reoonvention alone, he cannot, without amendment, and after having forced plaintiff to his proof, have his plea in reoonvention considered-as one of compensation. Flavius B. Godbold vs'. W. C. Harrison; McGlointls Reports, page 31, Vol. 1., and otl^er authorities cited in the above cause. Alao see same case reported .in same volume at page 178, where the doctrine was reaffirmed.

Art. 3309, C.C. Debts Compensable. "Compensation takes place only between two debts, having equally for their object a sum of money, or a certain quantity of consumable things of one and the same kind, end which are equally liquide.ted and demandable.

The days of grace are no obstacle to the compensation.11 "It i3 obvious that the debts oannot be equally liquidated when one or both of them is an unliquidated claim for damages." Reynaud vs. His Creditors, 4 Rob. 514, Pike Lapeyre & Bro. vs. J. M. Wells, 24 Ann. 208.

We have oarefülly examined, the brief of defendant and appellant in this oause and the maxim of the law quoted by him "qua temporalia sunt ad agendum sunt perpetua ad exoipiendta" does not apply in this particular oase.

The demand of plaintiff is a liquidated demand, henoe we are constrained of the opinion that both the maxim and the authorities asserted by the learned counsel of the defendant in this oase has no application to same.

Our brother of the Court aquo in an able written opinion, whioh^adopt and quote in full has done justioe to all parties in Interest.

"Hampton Reynolds is a general contractor, and a oontraot whioh had been awarded to him made it necessary that he have a switoh or spur traok oonneoted with the tracks of the Hew Orleans Terminal Company. He obtained permission from the Terminal Company to build a switoh to oonneot with its tracks. He realsed the roadbed neoessary, laid the ties and having neither rails nor angle bars neoes-sary for the work, leased these from the Terminal Company, under a oontraot evidenced by an exohange of letters. When he had finished the oontraot whioh was served by this switbh or spur traok, another oontraot by a public board, known as Contract 67-D, was advertised and Reynolds bid upon it, as did another contractor, John Reiss, end the latter being the lowest bidder the oontraot was awarded to him.

Reynolds then offered to sell to Reiss the switoh traok as it stood, but no agreement was reached and the next thing that Reynolds knew of the matter was that the Terminal Company had turned the traok as it stood over to Reiss, that Reiss had taken possession of it and was making use of it in oarrying out his oontraot with the publio board. Thereupon Reynolds brought suit against Reiss and the Hew Orleans Terminal Company, it being Ho. 114,817 of the docket of the Civil Dlstrlot Court for the Parish of Orleans, Division "E", in whioh he olaimed from Reiss and the Terminal Company, in solido, damages in the sum of $3,385.SI, which he alleged was the value of the spur track.

This suit was brought more than a year afteT the Terminal Company and Reiss had taken possession of the scur track and the defendants interposed a plea of prescription of one year. The lower Court maintained the exception and dismissed the petition. An appeal was taken to the Supreme Court end thet tribunal decided thet the action of Reynolds was one ex delicto, sounding damages, and affirmed the judgment of the lower court. See case No. 31,916, Reynolds vs. Reiss et als of the docket of the Supreme Court, reported in Vol.81-13, So. Rep., page 884, et seej.

After the deoision of that case, the New Orleans Terminal Company brought suit against Reynolds in which it alleged the leasing of the rails and angle bars to Reynolds, as stated above, and alleged that Reynolds had failed to return 33 60 lb. rails of 30 foot lengths, and 119 pairs of 60 lbs. angle bars, which it alleged were worth together the sum of $331.98, and asked judgment for that amount with interest at 7 per cent, under the contract, from November 1, 1914, the date they should have been returned, until final payment.

The answer of the defendant admits everything alleged in the petition, except, of course, the conclusion of law that the amount was due and the price of the material not returned. In other words, the only thing which is not admitted in the petition is the price of the artioles. She loss of them, the failure to return the obligation to return are all admitted.

However, the answer goes on and alleges that the plaintiff, the New Orleans Terminal Company, is indebted to him, Reynolds, in the sum of $3,385.31, for the reasons and causes set up in the case decided by Division "E” and the Supreme Court, hereinabove referred to, and the pleadings themselves allege the debt in compensation ^o the extent of whatever sum the Court might find due by the defendant to the plaintiff on the cause of action alleged in the plaintiff's petition.

To this plea in compensation the Hew Orleans Terminal Company1 filed pleas of prescription and res adjudicate, setting up the prescription of one year and the judgment of the Civil District Court and of the Supreme Court, as hereinabove related; and the case coming up on these pleas was argued and submitted to the Court for adjudiod&ion.

The Court does not consider either of these eíbsbb pleas good. The principle of Irani law expressed by the maxim,

"Quae sunt temporalia ad agendum sunt perpetua ad excipiendum" applies

It is true that Art. 3130 of the Civil Code under the heading "Of the manner in whioh obligations may be extinguished" enumerates nine manners. The article reading "obligations are extinguished, then follows eight methods, the ninth and last read "By prescription'which shall be treated of in a separate title."

But in my opinion this is not a oorrect statement. Obligations are not extinguished by prescription. Prescription only has the effect of barring an notion to enforce the obligation; the obligation remains. The obligation whioh, before the running of prescription, was a perfeot or civil obligation, becomes by the accruing of the prescriptive bar a natural obligation. The character of the obligation is changed, but the obligation remains. That whioh had been previously a civil or perfeot obligation, beoomes then a natural obligation unenforoible in law, and enforoible only in the form of oonclence and good morals. The proof that the obligation remains is patent in the language of the Code.

Art, 175? of the Code declares that obligations are of three kinds: Imperfect obligations, natural obligations and civil or perfeot obligations. This ártiole defines a oivil obligetion to be, "A legal tie which gives the party, with whom it is contracted, the right of enforcing its performance by law". It defines a natural obligation to be one, "Which cannot be enforoed by action but which is binding on the party who makes it, in conscience and according to natural justice."

Art. 1758 of the Code declares that natural obligations are of four kinds, the third kind of whioh it declares to be "When the action is barred by prescription, a natural obligation still subsists, although the ci-ril obligation is extinguished. "

And the succeeding Art. 1759, deolares "That no suit will lie to recover what has been pai$, or given in compliance with a natural obligation." and that a "HaMral obligation is a sufficient consideration for a new contract."

Therefore, where the action to enforce the recover is barred by prescription, the obligation yet remains as a natural obligation, and under the principle of law above quoted, cuae temporaria, etc., it is forever effective as an exception or defense.

For these reasons the plea of prescription as herein pleaded against the use of this natural obligation as an exception or defense is not well taken.

As to the plea of res adjudicate, there has been no judgment rendered against Reynolds, except the one’ herein-above detailed, in whioh it has been judicially deolared that this prescriptive period had run at the time his suit was filed, and that he was thereby barred from recovery, and this judgment coyild only be plead as res ad.iudlcata against Reynolds in the event that he should oome by direot action to enforce the natural obligation which yet remained.

But Reynolds seeks to oppose this natural obligation in compensation and, in my opinion, he cannot successfully do so. Art. 2209 of the Code declares: "Compensation takes place only between two debts, having equally for their objeot a sum of money, or a oertain quantity of oonsumable things of one and the same kind, anói whloh are equally liquidated and demandable.11

It is plain from this language that a debt which is not liquidated oan never serve as a defense by way of compensation "liquidate. Raw

To determine by agreement or by litigation the preoise amount of (indebtedness or damages): to make the amount of (indebtedness or damages) ol'ear and certain, or to settle the date from which it may be calculated."
Webster's Dictionary.
"A debt or demand is liquidated whenever the a— mount is agreed on by the parties, or fixed by operation of law."
15 Ga. Rep. 331.

The Supreme Court has' decided, as between these litigants, that the claim of Reynolds is one arising ex delict and sounding in damages, and nothing is better settled than that suoh an obligation or debt is never liquidated until it be done by agreement of the parties or by judgment of a court of competent jurisdiction.

It would be useless to say that the plaintiff's claim is equally HKfctasnda unliquidated. As a matter of fact it is far nearer liquidation. All the facts set up by the plaintiff are admitted except only that the value plaoed upon the un-re-turned articles is left at large by the pleadings. It is plain

from this statement that the olaim of the plaintiff is far nearer liquidation than the defendant's, and the law is well settled that a debt offered in compensation must be equally as liquidated as that of the plaintiff. Se La Digest, Vo. 3, p 181, par 15:

(1829) Lacoste v. Bordere, 7 Mart. (N.S.) 517; (1832) Curtis v. Young, 4 La. 441; (1835)Blanchard v. Cole, 8 La., 153, 159; (1835) Hoffman v. Pontohartrain R. Co. 9 La., 20, 22; (1842) Jonau v. Ferrand, 2 Rob. 216; (1842) Jonau v Ferrand, 3 Rob. 364; (1844) Copley v Lambeth, 9 Rob. 137; (1848) Phelps v Stone 3 La Ann. 617; (1850) Piv Vidal, 5 La. Ann. 303; (1851) Bristow v Erwin, 6 La. Ann, 102; (1854) Owen v Vanderslice, 9 La Ann 189; (1854) Coleman v. Marble, 9 La Ann 576; (1859) State v Leckie, 14 La. Ann 636; (1876) Berens v Ker, 28 La Ann 96; (1881) Godbold v Harrison, 1 McGloin 31; (1881) Baldwin v Handy, 1 McGloin 189; (1884) Garrett v Todd, 2 McGloin 57; (1909) Monroe Grocer Co v Perdue, 123 La. 375, 48 So 1002.

June 4, 1920.

For these reasons the pleas of prescription and. res adjudicate will be over-ruled and when the case comes up for trial on the merits the compensation pleaded will be disallowed, and judgment will be rendered in favor of the plaintiff for whatever sum it succeeds in proving is a just value for its unreturned rails and angle bars.

Hew Orleans,

(Sgd.) H. 0. Cage Judge."

For the reasons assigned, it is ordered, adjudged and decreed, that the judgment of the lower Court be and it is hereby affirmed, with oosts of both Courts to be paid by the defendant-appellant.

Judgment affirmed.  