text:
    No. 7866.
    Eugster & Co. vs. Joseph West & Co.
    The rule, that no damages can be recovered for the inexeoution of a contract when its non* performance was prevented by a fortuitous event or irresistible force, has two exceptions, one of which is when there has been some fault of the party contracting which preceded the fortuitous event, and without which the loss would not have happened; and the other when he has expressly or impliedly taken the risk of such event or force.
    The non.performance of a contract for the delivery of corn is not excused by a freeze of a river, when it may be executed in another.way than that first in the contemplation of the parties. If the freezing of a river be a fortuitous event, it is the duty of the party con* tracting to provide other means of transportation, and especially is this so when he is warned of the impending freeze, and knows the necessity of the party with whom he has contracted to have the corn delivered for reshipment.
    "When the circumstances shew that the term was fixed in favor of the creditor, and the con* tract was made to enable him to fill another engagement by a stipulated time, the debtor or party contracting waits until the last day of the term at his peril, and takes the risk of % weather changes which impede the execution of the contract in the manner least onerous to himself. A contract can be passively violated by not doing what was covenanted to be done at the time and in the manner implied from the nature of the contract.
    APPEAL from the Fifth District Court for the Parish of Orleans. Bogers, J.

      Blane & Butler for Plaintiffs and Appellants.

      Singleton & Browne for Defendants and Appellees.
   The opinion of the Court was delivered by

Manning, J.

Eugster & Co. bought 50,000 bushels of corn on December 14, 1878, from the defendants who contracted to ship it from the Ohio river within twenty days from the date of purchase, and to deliver at New Orleans alongside ship. Plaintiffs bought the corn for shipment to Europe, and had ..chartered the steamship Minnie Irwin in Europe to carry the cargo. The defendants failed to ship the corn from the Ohio river within twenty days from the date of the contract. It was not shipped until the latter part of January, 1879, and not delivered to the Minnie Irwin at.New .Orleans until February 8 following. That ship arrived at that port early in January and her lay days expired on 20th of that month, from which day she wag entitled to. demurrage at the rate of £30 sterling per day. The delay was prolonged until her demurrage was swelled to £600, or twenty-nine hundred and twenty-eight dollars in our • currency, which the plaintiffs were compelled to pay.

This suit is for the recovery of that sum from the defendants.

They admit that they agreed to ship the corn from Mount Vernon on the Ohio liver within twenty days from the date of their contract, but aver that the shipment was to be by the steam tug Garrett and barges, and that such shipment and any shipment was prevented by the freezing of the Ohio river on or about December 22, by reason whereof that river was closed to navigation.' They allege that the corn was at Mount Vernon within the twenty days ready for shipment, and would' have been shipped within that" time but for the suspension of navigation,which suspension lasted until about January 25th, when the tug proceeded to Mount Vernon, took the corn in her barges, and delivered it at New Orleans as soon thereafter as was possible.

They claim to be discharged fróin liability by the freezing of the river which they insist was a fortuitous event.

The testimony satisfactorily shews that the shipment by the tug Garrett was not stipulated in the contract, and formed no part thereof. It was not material to the plaintiffs by what boats the corn was transported down the river, and if the. defendants’ allegation be true that no boat whatever could then navigate it, it should seem unimportant' to their defense, if it be good in other respects, whether the transportation was to be by a particular tug or not. Is then the defendants’ noncompliance with their contract excused by the Code under the circumstances of this case on the ground alleged by them

Where by a fortuitous event or irresistible force the debtor is hindered from giving or doing what he has'Contracted to give or tó do, or is from the same causes compelled to do What the contract'.bound him not to do, no damages can be recovered for the inexecution of the contract. ' ■ '

■ ■ There are two exceptions to this rule: 1st, when the party in default has by his contract expressly or impliedly undertaken the risk of the fortuitous event, or of the irresistible force 5 2d, if the fortuitous event, or case of force, was preceded by some fault of the debtor, without which the loss would not have happened. Rev. Civil Code, Art. 1933, paragraphs 2 and 3.

■ The Code defines a fortuitous event to be that which happens by a cause which we cannot resist, and those accidents are said to he caused by superior force which human prudence, can neither foresee nor prevent, Art. 3556. The Pandectes Francoises teach that on eniend par cas fortvits les accidens qu’on n'a pu ni prévoi/r ni empéeher. So Emerigon on Insurances, 285, by accident (cas fortuit) is meant a superior force which cannot be foreseen nor resisted. In its legal sense, fortuitous event is synonymous with “act of God” in the common law. It is not imperative in this case to say whether or not the freezing of the Ohio river in mid-winter is a fortuitous event as defined by the Code. It would seem such an event might reasonably be expected in that latitude at that time—that it was probable and seasonable.

The proof is that the cold set in about December 20th, and attracted Eugster’s notice, who expressed to the defendants his apprehensions of a freeze, warned them of the danger, and urged them to forward the corn. Prados, a member of the defendant firm, did not share this apprehension because the river was very full and, as he said, could not freeze then, howTever intense the cold. The river did freeze on the 25th, and navigation was not resumed until January 15th. For eleven days after the contract was made the river was unobstructed, and the corn could have been shipped without hindrance. A steam tug and barge left a point on the river opposite Mount Vernon as late as the eleventh day. The defendants neglected to ship—indeed made no effort to ship—while the river was in this favorable condition, and thus committed a fault, thereby coming within the terms of one of the exceptions just cited from the Code.

But they are equally within the terms of the other exception. They were to deliver the corn from the Ohio river between December 14th and January 3d, the season when severe cold is usual, and a frozen river an event that might be foreseen. It w;as a contingency so probable and so seasonable that it ought to have entered into their calculation of the time for the execution of the contract, and no doubt would, but for their confidence in the impossibility of its occurrence in the then stage of the river. In either case they must be presumed to have contracted with reference to it. The assumption of the risk of the freeze is implied from the nature of the contract and the time and manner of its execution. If then wrn concede the principle that the defendants7 counsel contend for, and admit, nay even decide, that the freezing of the river is a fortuitous event within the meaning of the Code, the defendants are expressly excluded from immunity from liability for damages for the inexecution of their contract, by. the qualifications which the Code makes of the rule they invoke.

The modifications of that rule, which are a part of Art. 1933, seem to have escaped the notice of the counsel. They quote the rule in their brief alone, and ignore the exceptions, which have suoli important bearing on the ease.

But was it a fault to have failed to ship within eleven days when the contract expressly stipulated twenty 9 The defendants claim they had the full term in which to ship, and could wait if they pleased until sunset of the last day. Rev. Civ. Code, Art. 2057. A contract may be passively violated by not doing- what was covenanted to be done at the time, or in the manner implied from the nature of the contract, as well as that stipulated in it. Idem,, Art. 1931. If the defendants had shipped on the last day of the term, they would doubtless have pleaded that as a literal fulfillment of their contract, with, what success it is needless to inquire, but when they chose to wait until that time, with the impending danger of a freeze of the river in mid-winter, they must be held to have taken the risk of such occurrence. It was implied from the nature of the contract, and the time and manner of its execution.

The term is always presumed to be 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. Idem, Art. 2053. The circumstances of this casé shew that the term was fixed with' reference to the plaintiffs’ need to have the corn here to meet the ship ordered from Europe. She reached this port about January 4th, but was not entitled to demurrage until the 20th. Had the shipment been made as prudence, and a due regard to the probability of obstruction to navigation by ice demanded, the corn would have reached here before the demur-rage began. The defendants were guilty of negligence and want of proper forecast, and these are expressly stated by Mr. Story to entail liability for losses occasioned by the identical event occurring in this case. 2 Contracts, 5 752 c..

In enumerating the causes which would relieve a freighter from liability for demurrage on the one hand, and impose that, liability on him^on the other hand, a writer on this special subject lays down rules supported by authorities, among which are these: The freighter does not become liable to further demurrage if, after having sailed, the ship be driven back to port by adverse winds and be by them detained, as for instance by frost or bad weather. * * * But the freighter is not excused from the payment of demurrage for not loading or unloading the vessel within the lay-days because the port of loading, or the river by which the goods were to be conveyed to that port, was frozen up. 1 Kay’s Shipmasters and Seamen, 154-5.

So where- peas Were shipped from Canada to be carried to New York, but owing to the carrier’s neglect and inexcusable delay they were stopped on the way by the freezing of the lakes, and the carrier refused to transport them by rail, it was held that damages were recoverable. Field’s Law of Damages, § 386.

There cannot be any doubt if the defendants had not persisted in the attempt to ship by the tug Garrett and barges and in no other way, the corn could and would have been delivered before the demurrage began, notwithstanding the freeze. The fact that that tug and her barges belonged to them explains their persistence, but does not excuse it. Mr. Parsons states the rule to be—the non-performance of a contract is not excused by the act of God where it may be substantially carried into effect, although the act of God makes a literal and precise performance of it impossible. 2 Contracts, 185. So in a case where a defendant had contracted to carry a man from New York to San Francisco, that part of the voyage from San Juan del Sur to be made in a particular vessel, which was lost, it was held—if the loss or wrecking of the vessel was -the act of God, it was the duty of the defendant to exercise diligence in providing another vessel for the carriage of the plaintiff. He was bound to use all the means, in endeavoring to supply another vessel, which a diligent, careful man exercises in his own affairs. The main thing the defendant agreed to do was to carry the plaintiff from New York to San Francisco. His promise to carry him in a particular vessel from San Juan del Sur to the latter place was a minor part of the contract. Williams vs. Vanderbilt, 28 N. Y. 217.

The defendants’ counsel admit the force of these authorities in the common law, but deny' their applicability, because the rights of parties in this case must be determined by our own law, to-wit: Art. 1933 of the Code. We readily grant it. It could not be otherwise. But the whole of that Article is our law, and not a part only. The modifications of the rule relax and temper it, and are equally binding with it.

■ It is significant that the corresponding Article of the Napoleon Code has not the important modifications that have been added to our own. It reads thus:

II n’y a lieu a aucuns dommages et interéts lorsqne, par suite d’une force majeure on d’un cas fortuit, le debiteur a été empéché de donner ou de faire ce a quoi il etait oblige, ou a fait ce qui lui etait interdit. Code Nap. Art. 1148.

It cannot reasonably be doubted that the rule of the French law was modified in the redaction of our Code with the purpose of bringing it more in accord with that system from which we derive our commercial law, and the authorities from the common law we have cited therefore derive additional force from that circumstance. They are thus made safe guides in construing the provision of our Code upon the subject in hand.

But the counsel for the defendants insist that the decisions of this Court sustain their interpretation of this Article of our Code, and cite four eases as apposite and conclusive. It is needful therefore that these be examined critically that their real import and force be ascertained.

The first is White vs. Kearney, 9 Rob. 495, where there was a con • tract for the delivery of lime, the discussion in the opinion being- of features of the case wholly disconnected with that of time, and upon that, the Court merely remarking, “ the fact of the vessel not clearing on or before the day stipulated, we do not consider of much importance as it was not necessary, when it was evident she could not go to sea. The clearance could be effected in a very short time, the proposed voyage being a coasting one, and the cargo consisting of one article consigned to the same persons, to-wit: the defendants.” The vessel was ready to go to sea on the day stipulated, and was prevented by adverse winds, but the Court considered that unimportant, as the clearance could be made in a very short time, and the voyage being a coasting one with but one article in cargo, deliverable at the end of the voyage, there was no delay en route, and therefore the loss did not ensue in consequence of not sailing on a given day.

The next is Police Jury vs. Taylor, 2 Ann. 272, which was a suit on a bond to keep a bridge in good and safe condition for five years. The bridge was carried away by a freshet within that time, and the defendant pleaded it as a fortuitous event and irresistible force. The Court say: “ whether the freshet was an irresistible force is a matter of conjecture. The witnesses think it was not, and that the bridge might have been built so as to withstand it. Fresliets seem to be of frequent occurrence on that river.” There was judgment agaiust the defendant for the amount of the bond.

In that case, as in the case atbar, the question whether the freshet or the freeze was a fortuitous event, or an irresistible force is pretermitted, but freshets being of frequent occurrence on the river in that case, and freezes in this, the decision is manifestly authority for the construction of the law we now make.

In Lagrave vs. Fowler, 4 Ann. 243, marble buildings were to be finished by a specified time, but the quarry was inundated by the floods of the Mississippi and Missouri rivers. The materials were delivered after the term and the defendant accepted them, and the court held him bound to pay for them because he accepted them. This is the language : “the condition of time became impossible, and the defendant, by permitting the plaintiffs to furnish their labor and materials afterwards, bound himself to pay for them.”

The last case is Bietry vs. New Orleans, 22 Ann. 149, where the plaintiff contracted to fill the batture in front of a part of the City, and was prevented by high water from completing it by the time specified, Held : if overpowering force or unusual liigb water prevented the completion of the work within the term, the contractor was entitled to pay for so much as he had done.

We do not think these cases sustain the interpretation of our law claimed by the defendants’ counsel.

The defendants did not attempt to provide any other means of transportation than their own tug and barges. They were confident of the inability of the elements to create the very obstruction which, not without warning, was interposed, and distrusted and disbelieved the possibility of the freeze, aud refused and neglected to use such means as were, or might have been at hand, to make the shipment in time to avoid the hindrance, or to surmount it. Through their non-fulfillment of their obligation, the plaintiffs suffered loss in fulfilling theirs.

Judgment affirmed.

On Application por Rehearing.

In the opinion of the Court heretofore read, we remarked the quotation by the. defendants’ counsel of a part only of Art. 1933, omitting the exceptions in par. 3 which follow immediately that part of the text quoted. Our decision was based upon those exceptions,

The brief for rehearing reiterates the argument of the first brief— again ignores the vital modifications of the rule, regulating the consequences of the inexecution of a contract because of a fortuitous event or irresistible force, by abstaining from any allusion to them, notwithstanding those modifications are the pivot upon which the case turns—• and in the teeth of the unambiguous and positive provision of the Code asserts, the happening of any fortuitous event, which prevents the performing a contract, shields the party from all damages.”

The Code says otherwise. It enacts that a fortuitous event or irresistible force, which prevents the execution of a contract, shall not shield a party from damages, when that party has either expressly or impliedly undertaken the risk of the event or the force; nor shall if shield him if the event or the force was preceded by some fault of his own, without which the loss would not have happened. Rev. Civ. Code, Art. 1933, par. 3.

.The brief proceeds:

“ The framers of our Code seemed determined that no court should deprive any party, by construction, of the benefit of this wise and humane provision of our law ; the absence of which had ruihedso many-worthy men under the common law system which requires that a party, to have its benefit, must specially stipulate for it in his contract. No one who has read the common law reports, could have failed to see how often wise, noble and humane judges have been grevionsly pained by the necessity of enforcing this barbarous provision.”

And yet the framers of our Code of 1825 had the hardihood to insert this barbarous provision which until then was unknown to our law. The Code of 1808 did not have it. The Art. 1148 of the Code Napoleon ■ is literally transcribed in the Code of 1808 without addition or modification, tit. 3, c. 3, sec. 4, art. 48, and is transplanted into our Code of 1825 and forms par. 2 of Art. 1927. (Art. 1933 of the Revised Code of 1870.) Then follows par. 3 which, as we observed in our former opinion, was without doubt inserted to bring our law more in conformity to that of other States, and to infuse into the law governing contracts some of the principles of a system which is the outgrowth of the developments of modern trade and enterprise. It may be deplorable that1 this contrivance for the ruin of worthy men, the enforcement of which has grievously paiued wise, noble, and humane judges, was imported into onr Code by the ruthless innovators of 1825, but so long as it remains tliere, we shall not have to resort to judicial construction to deprive any litigant of fancied rights, which this modification of onr law, made near three score years ago, denies him.

The defendants had contracted to ship within twenty days. Having failed to perform their contract, they were liable for its inexecution unless they established legal excuse. To say that they were hindered by a “fortuitous event or irresistible force” is not sufficient unless it also appears: I, that they had not, expressly or impliedly, undertaken the risk; 2, that the event was preceded by no fault on their part contributing to the loss. The risk of a fortuitous event, so regular and periodical in its character as the freezing of the Ohio river in December, ; might possibly he considered as impliedly assumed by the obligor in such a contract. :

But it is not necessary so to hold in the present case. When its happening was indicated, and they were expressly warned of the danger, their failure to ship during the ten or eleven days during which it was possible, was a fault which they have not excused under the evidence in this case. They have not shewn that the corn was not, or might not have been ready for shipment daring that time, or that ves- ' seis could not have been procured to carry it. The evidence indicates the contrary. The admission that the Garrett, and her barges, was the first vessel that got out after the freeze has no bearing. The question is, could shipment have been made before the freeze 1

The rehearing is refused.


source: Caselaw Access Project

author: Boché, J.

license: Public Domain

text:
    No. 8597.
    Succession of Mrs. Theresa Baumgarden.
    A testamentary executor lias the legal right to take and prosecute an appeal, in his official capacity, from a judgment placing the heirs in possession of the property of the succession, for which said executor had been appointed and qualified.
    A bond of appeal signed by him in his capacity of executor is valid. The appearance of an appellee and urging other grounds of dismissal before that of want of citation, cures the defect of such want of citation of appeal on him.
    In a succession where the deceased has left heirs of age and a minor heir, and in which he left a will, making special legacies of movable and immovable property, and appointed testamentary executors, the heirs of age cannot dispossess the executors, before an inventory is completed, and a tutor is legally qualified for the minor heir, and thus avoid an administration. In such a case, the distribution of the legacies is an act of administration which must be performed, as indicated in the will, by the testamentary executors, and an administration therefore becomes necessary.
    A PPEAL from tlie Civil District tx Houston, J. Court for the Parish of Orleans.

      W. B. Koontz and T. Gilmore & Sons for the Executors, Appellants:
    1. Testamentary executors continue in office until the estate is finally wound up, E. 0. C., 1673, unless removed from causes specified by law. C. P, 1013 et seq.

    2. An ex-parte order, without notice to the executors, putting three heirs in possession of three-fourths of a succession, tlie remaining heir being a minor, before a partition, and without payment of debts, is a nullity, and does not ipso facto divest tbe executors of their seizin. C. P. 1000, 1003 j Eabin vs. Nolan, 4 E. 283; Caldwell vs. Cooper, 6 E. 9 ; B. C. C. 1047; Blake vs. Kearney, 30 An. 389; Succession Eoffignac, 21 An. 364.
    3. The executors have the right to appeal from such a judgment or order. Succession of McKenna, 23 An. 370; Succession Egana, 18 An. 63; Ecady vs. New Orleans, 27 An. 170; Payne vs. Dejean, 32 An. 890.
    4. An appeal bond given for an amount fixed by the court, will be sufficient to maintain an appeal. Hughes vs. Caruthers, 26 An 530; Taylor vs. Pipes, 24 An. 531: Succession. McCall, 19 An. 507; Succession Armant, 20 An. 340; Elder vs. New Orleaus, 30 An. 500.
    5. The case in which the appeal bond is filed is clearly designated, when described in the body of the bond, and when it conforms to the description in the order of the Judge granting the appeal. Gernon vs. Gayle, 34 An. 338.
    J Ad. Hosier, V. J. Hosier and L. L. Levy for tlie Appellees:
    1. The will constituting the four children of testatrix the universal legatees, being probated, ordered to be registered and executed, they had a right, without citation or notice to executors, to present petition for possession, making proof of no legacies; no debts nnpaid; theie was no issue of fact to be tried, especially when executors had not qualified. The opposition of heirs to the issuing of letters testamentary must bo sustained. The Art. 1671, E. C. C., is applicable; 32 An. 321, Sue of Walker.
    2. If in a testate succession there be neither debts nor legacies to pay, nothing to execute, the appointment of an executor is inoperative. Sue. of Walker, 32 An. 321, and authorities therein cited by the Court. Sue. Dupuy, 4 An. 572; Sue Hoy, 3 An. 502.
    3. The seizin of the executor, fiction of law, which docs not interfere with the legal possession of the heir—the latter, true possessor—same authorities. The heir, in case no debts, no legacies to be paid, can take the seizin from the executor, which is not constituted for his personal advantage; in such a case, the pretensions of an executor is an unlawful intrusion.
    The heir is really the one in possession, notwithstanding there be a will and an executor apt pointed, even with seizin. The seizin of the executor is not a true possession; he hold» in the name of the heir 14 Laurent, §339; Bemolomhc, vol. 1, Sue. p« 133; same, C. C. 934; 15 La. 537; 7 Bob. 133; 12 Bob. 258; 2 An. 339.
    The appointment of an executor, with tlie seizin of the succession, is not a substantial testa* mentary disposition, independent of any other. 4 An. 572; Crazier & Adams vs. Hills, 5 An. 113; C. C. 987, 988, 984. Considered as heir ab initio.

      4, The heir can, at anytime, take seizin, on complying with Art. 1032, by giving security. 1671,1012; 2 Bob. 382;-,3 Bob. 349 ; 3 An. 706. h¡b creditor has asked for security. In this testamentary succession there are no legacies, save that of a few movables devised to the youngest child, whose tutor is the very same Zimmerman who figures herein. The other two legacies, 1st, an immovable to Zimmerman, (one of the appellants) who has had himself put in possession on his own petition; the other immovable is the dwelling house, to Marietta Schopp, as to all of which the heirs acknowledge possession in them. There remains nothing for the mandate of the executors. The seizin is not for the lucre of the executor. Coin Dclisle, p. 489; Lemolombe, vol. 5, p. 48.
   On Motion to Dismiss.

The opinion of the Court was delivered by

Boché, J.

This record presents two appeals taken by Charles Kmumel and Charles Zimmerman, as executors of the last will of the deceased, and by Charles Zimmerman, as tutor of the minor Lilly Baumgarden.

The first is a devohitive appeal taken from a judgment of the lower court placing the three heirs of age in possession of their shares of the succession, rendered on the 2()th of February, 1882, and the other, a suspensive appeal'taken from a judgment rendered on the 30th of March of the same year, dismissing an action instituted on the 24th of February, 1882, by the same parties in the same capacities, for the nullity of the judgment, rendered on the 20th of that month.

The motion to dismiss both appeals urges several grounds, which we shall consider in their order:

I.

That appellants have failed to show any appealable interest in the premises, and have no authority to appeal in their alleged capacities. The record shows that Kummel and Zimmerman, who were appointed. as executors by the deceased in her will, had been qualified as such when the order of February 20th, 1882, was rendered. As executors it was their right and their duty to take charge of the property of the succession and to proceed in the execution of the testator’s will, and as such they had the undoubted power to prosecute an appeal from a judgment purporting to disturb their possession and control of the estate. It is not sound to argue in support of this motion that the order of February 20th vacated their functions. This is the very question for solution under the appeal. There is no force in the position of appellees that Charles Zimmerman has acquiesced in the judgment putting the heirs in possession, by taking possession of a piece of property which liad been bequeathed to him by the testatrix. He was put in possession under a separate and distinct proceeding instituted by himself, for the purpose of enforcing his rights as legatee. Succession of McKenna, 23 An. 370.

II.

That the appeals wfere not filed in time, appellants having failed to furnish the bonds required of them by the order of appeal rendered below on the 0th of April, 1882.

The record shows in this connection that appellants had applied for suspensive appeals from both judgments rendered in the premises; that the Judge had refused a suspensive and granted only a devolutive appeal from the judgment of February 30th, 1882, and had granted a suspensive appeal from the other judgment; making both returnable on the 3d Monday of April following, and fixing the amount of the bonds at $150 each, and that appellants furnished their bond in the suspensive appeal on the 10th of that month. It appears further, that on proper showing made before this Court, on the 19th of April, on the 3d of May and on the 17th of May, additional delays were given to file the transcript of appeal in the succession of Theresa Baumgarden,” the last of which expired on the 18th of June, 1882, and the transcript was filed on the 16th of that month.

These facts certainly save thesuspensive appeal: that which was taken from the decree dismissing the action in nullity of the judgment of February 20th, 1882.

As these two judgments are ingredients or steps forming part of the proceedings looking to the settlement of the succession, we construe the various motions made by appellants for extension of delays, as applying to and including both appeals. The fact that the appeal bond in the devolutive appeal was furnished only on the 11th of May, the order having been made on the 6th of April previous, is explained to our satisfaction by the following circumstances and incidents:

Believing that there was error to their prejudice in the Judge’s refusal of a suspensive appeal from his judgment placing the heirs in possession, appellants applied for relief by mandamus and prohibition to this Court, and under the effect of the alternative writ of prohibition, matters were kept in abeyance and suspense, until our opinion, which is reported in 34 An. page 654, was rendered. Hence, we conceive that their appeal bond was furnished in time, and we therefore hold that the devolutive appeal was not presented too late.

iii.

The objection that neither of the appeal bonds is sufficiently identified with either of the judgments is answered by the mere reading of the bonds, which show clearly that the bond furnished on the 10th of April refers to the suspensive appeal, and that the bond of May 11th covers the devolutive appeal.

IV.

Having recognized the right of appeal of Hummel and Zimmerman in their respective capacities, we see no force in the objection that they should have executed their bonds in their individual capacity and not as executors and as tutor.

V.

The objection that the amount of each of the bonds is insufficient, is answered by our jurisprudence, which has settled that in such cases the appellant, in furnishing his bond in the amount fixed by the court, satisfies the requirements of the law. Elder vs. New Orleans, 31 An. 500.

VI.

Several months after filing a motion to dismiss these appeals, on the grounds which we have just disposed of, appellees presented an additional motion, urging the want of service of citation of appeal, and that, therefore, the proper parties were not before the court.

In urging this ground they manifestly lose sight of their own previous appearance by which they had made themselves parties.

After appearance by appellees it is too late to complain of want of citation. This is a self-evident proposition needing no argument in its support. Foote vs. City of New Orleans, 20 An. 22; Lee vs. Goodrich, 21 An. 278; Jones vs. Shreveport, 28 An. 835.

The motions to dismiss are, therefore, overruled.

«On the Merits.

Theresa Baumgarden died on February 5th, 1832, leaving a last will and testament which was ordered to be executed on the 14th of the same month, on which day Charles Zimmerman and Charles Hummel, appointed testamentary executors, were confirmed as such. On the 16th of the same month they were sworn as executors, and letters testamentary were issued to them, whereupon they proceeded to have an inventory made of the effects of the succession, which had been ordered on their petition on the 14th of that month.

At this stage of the proceedings, on a petition of the three heirs of age, an order was rendered by the court placing said heirs in possession of tlicir shares of the estate, from which order Zimmerman and Kummcl, as executors, and Zimmerman, as testamentary tutor of the fourth heir, a minor, have taken an appeal. They have also appealed from a judgment dismissing an exception of no cause of action, a suit which they had instituted for the nullity of the judgment placing the heirs of age in possession of the succession.

The question involved in both appeals is the legality of the judgment rendered ex parte on the 20th of February, 1832, placing the heirs in possession and practically doing away with the administration of the succession by the executors appointed by the will.

This question presents the issue as to the necessity of an administration of the succession under the circumstances shown by the record.

In her will Mrs. Baumgarden made the following special legacies:

1. To her daughter Marietta, she bequeathed over and above her legal share, the house and lot occupied by the deceased.

2. To her brother Charles Zimmerman, she bequeathed a house and lot adjoining her residence above mentioned.

3. To her daughter Lilly, yet a minor, she bequeathed over and above her legal share, all her bod and table linen, silverware and jew'elry.

And in the will she appointed her brother, Charles Zimmerman, as tutor of her said minor daughter, Lilly Baumgarden.

The distribution of these various legacies to the legatees must be preceded by an inventory, showing the total amount or value of the property depending upon the succession, and the value of each item of property made the subject of a special legacy, for the purpose, among others, of ascertaining whether the legacies would or not exceed the disposable portion of the property of the testatrix. This inventory was also necessary for the qualification of the tutor of the minor, Lilly Baumgarden, who could not be qualified before recording his bond of tutorship, (Section 2360 Revised Statutes,) and who could not furnish a legal bond before ascertaining by an inventory the amount of the minor’s credit, money and other movable effects, as well as the value of the special legacy accruing to her under the terms of the will. C. C. Art. 318.

These are all acts necessary to a proper settlement of the succession and to the execution of the will of the deceased, and under the will, which is the law of the case, these acts must be performed by those persons to whom she has conferred the mandate and who are willing to accept the trust.

It is, therefore, clear that the practical effect of the ex parte judgment complained of is to defeat the execution of the will in the manner and form of execution indicated by the testatrix, to remove a portion of the estate from the control and administration of the executors, and to leave in their hands that portion which accrued to the minor, wh o has not asked through a proper representative to be placed in possession of the share accruing to her either as heir oras legatee. As shown above, her testamentary tutor could not be legally qualified before inventory, and the record shows no appointment of a special tutor to her. As a minor, she must by the force of the law claim the benefit of inventory, and hence she could not as yet be placed in possession of her share of the estate, unless it should be under the exceptional circumstances of the case of Soye vs. Price, 30 An. 93, which are- not here presented.

That circumstance, coupled with the necessary acts of administration to be performed under the will, placed the succession directly under the operation of Article 1047 of our Civil Code, and in the absence of an administration provided for in the will, would have necessitated the appointment of an administrator. Blake et al. vs. Kearney et al., 30 An. 388.

Appellees contend that the succession owes no debts, and that, therefore, an administration is unnecessary, and that the costs of the same should not be inflicted on the heirs and legatees, and they rely upon the decisions in the Succession- of Story, 3 An. 502; Succession of Dupuy, 4 An. 572; Succession of Walker, 32 An. 321.

In the first place, the record fails to bear them out in the assertion that the estate is free of debts. True, none are shown. But in their petition for the nullity of the order complained of, the executors allege the existence of debts; that petition was met by an exception which of necessity admitted the truth of the allegations contained therein. But admitting, for the sake of argument, that the succession owes no debts, the facts of this case place it beyond the reach and scope of the decisions quoted.

In the succession of Walker, the deceased made no testamentary dispositions and left an only child, her sole and forced heir, and by -the mere operation of the law, the succession property fell in the possession of the heir, without the necessity of an administrator or executor.

In the succession of Dupuy, the only legatee had died before the testator, and the court held that the appointment of an executor thus became inoperative, and appointed a curator for the absent heirs.

The succession of Story was not a testate succession, and the Court saw no necessity of an administration for a succession in which there were no testamentary dispositions to execute and no debts to pay.

From that case we quote the following language :

‘‘Even in case there are no debts .due by a succession, we do not undertake to sáy that an administrator cannot be appointed. There may be oases in which such an appointment would be advantageous, nay necessary, to the interests of a succession, and the propriety of subjecting the succession to this charge would rest with the discretion of the Judge on the facts before him.”

We believe that the facts shown by the record in this case, as herein-above recited, dictate the necessity of an administration in the premises and that the order complained of should not have been issued. Under these views we pretermit the question of the illegality of the order because it was rendered ex parte, without notice or citation on the executors.

Nothing contained in this opinion must he construed as a denial of the right of the heirs, appellees herein, to obtain the legal seizin from the testamentary executors, in accordance with the provisions of law.

It is, therefore, ordered that the judgments rendered by the lower court on the 20th of February, 1882, and on the 5th of April, 1882, and herein appealed from, be annulled, avoided and reversed, and that the matter of the succession of Theresa Baumgarden be remanded to the lower court to be proceeded with according to law and to the views herein expressed; and that appellees pay costs of appeal, and all costs incurred by these proceedings for possession of their shares of the succession, and in the suit instituted by appellants for nullity of the order placing them in possession.

On Application for a Rehearing.

Appellees complain that our decree avoiding the judgment of the lower court of November 20th, 1882, which placed the heirs of age in possession of the property of the succession of Tlieresa Baumgarden, will vacate that portion of the decree which placed the same heirs in possession of the succession of their pre-deceased father, N. A. Baumgarden.

We understand that we have been concerned in these proceedings with the succession of Mrs. Theresa Baumgarden only, and hence, we ■ b.ave made no reference to the succession of her pre-deceased husband, with which we had, and we could have had, no concern under the pleadings on wliicli our decree was predicated. ‘ '

The suit in nullity, brought by appellants on the 24th of February, 1882, had reference only to that portion of the judgment which placed the heirs in possession of the estate of their mother, and the appeal which they took from the judgment dismissing their action, as well as the appeal whieh they took from the judgment of November 20fch, 1882, submitted that issue alone to our consideration. Honce, we intended, and we must he construed to have annulled the action of the1 lower court in putting the heirs of Theresa Baumgarden iu possession of her succession and nothing more, and to have made no order affecting the status of these parties as heirs of their father, whose succession is not involved iu these proceedings.

Appellees’ complaint that our decree has cut them off from the right of answering to the merits of appellants’ action in nullity has no force. Our decision recognizes the legality of the appointment of executors under the will, and no useful purpose could be reached by reopening the case for a trial on the merits of the action in nullity, because the order of the lower court is vacated iu the direct appeal taken therefrom.

Rehearing refused.


author: Fenner, J. ¡. Bermudez, C. J. Poché, J.

text:
    No. 8659.
    H. J. Rivet et al. vs. The City of New Orleans et al.
    Tlie object of this suit was, in substance, to have the Ordinances of the City of New Orleans . levying the 15 mills tax for the alimony of the City and the premium bonds, and levying the 16$ mills tax for the judgments of the IT. S. Courts, declared null and void ? and also, to enjoin the collection of such taxes.
    The decision reasserts the constitutionality of the premium bond Act, (Act No. 31 of 1876,) as established in previous cases, and the want of foundation of the theory that, under the present Constitution, no tax exceeding ten mills on the dollar can be collected.
    The nature, object and legal bearings of said premium bond Áct aro examined at length in the opinion of the Court.

      Held, that the premium bond tax should be levied and collected in full, and not, as claimed by the plaintiffs, under the circumstances of tli© case, only in such proportion as the outstanding premium bonds bear to the whole twenty millions contemplated in the Act of 1876.
    APPEAL from the Civil District Court for the Parish of Orleans, T'mot, J.

      33. 33. Forman for Plaintiffs and Appellants.

      T. J. Semmee <& Payne on the same side.

      O. F. Buck, City Attorney, and Wynne Rogers for Defendants and Appellees.

      Miller, Finney <& Miller on the same side.
   The opinion of the Court was delivered by

Fenner, J.

The plaintiffs are individual taxpayers of the City of New Orleans.

The scope of the relief sought by them in this action embraces the following objects, viz :

1. To declare null and void the Ordinances of the City, Nos. 7531, 7532, 7535 and 7536, being respectively (No. 7531) tbe ordinance levying the fifteen mills tax for the alimony of the City and the premium bonds; (No. 7532) the ordinance levying 16f mills tax to pay judgments of United States Courts in obedience to writs of mandamus from said Courts; (No. 7535) the license ordinance, and (No. 7536) the ordinance making the estimate of liabilities and expenditures, all for the year 1832.

2. To enjoin and prohibit the enforcement of the tax ordinances, Nos. 7531. and 7532.

3. To enjoin the City from levying or collecting, on account of the premium bond tax, more than enough to pay the principal, interest and premiums on the drawn premium bonds of those actually outstanding, ($8,595,520,) and from levying any tax to pay'any principal, interest or premiums on account of such bonds which have not been issued by the City, or, which, after issuance, have been bought, paid or otherwise extinguished.

4. To enjoin the City from levying or collecting any tax exceeding ten mills on the dollar, and to decree that the City has no claim or privilege on the property of petitioners for any tax beyond ten mills on the dollar.

. The grounds upon which this sweeping- relief is asked are numerous. Many of them are too frivolous to require notice, and others may be summarily disposed of.

First. So far as the tax levied under mandamus of the United States Courts, to pay judgments, is concerned, the objections thereto may be dismissed with the statement that courts of the State have no power to interfere with the Federal tribunals in the exercise of the power of enforcing their own judgments.

Second. The objections to the budget are conclusively rebutted by the answer of the City and the record, showing that Act 38 of 1879 was substantially complied with.

Third. The charge that the tax was illegally levied on movable property, under an assessment made thereof in 1881, instead of in 1882, in which the tax was collectible, in violation of the requirement of Articles 211 and 218 of the Constitution, need not be considered here, because, if true, it would not sustain the relief now asked. Plaintiffs may find ample remedy in opposing- this defense to the collection of any such tax on movable property belonging to them. We say this without even suggesting an opinion as to the validity of such defense.

Fourth. The claim, that under the Constitution no tax exceeding ten mills on the dollar can be collected, has been fully disposed of in the Moore, the Saloy, the DeLeon, the Ranger, and other cases.

We now approach the serious issues in the case, which are:

1. Whether, under existing circumstances, the premium bond tax can be lawfully levied and collected.

2. Whether the whole of that tax can be levied, or only such proportion thereof as the outstanding premium bonds bear to the whole twenty millions, the issuance of which, it is claimed, was contemplated when the tax was provided.

These questions were argued with great zeal and apparent confidence by the counsel of the plaintiffs, and we shall now proceed to dispose of the same. As their claims are based upon the terms of the premium bond Act, we shall begin by stating and analyzing its provisions.

The Act No. 31 of 1876, commonly called the premium bond Act, was an appeal by the State, in behalf of a desperate, overtaxed and bankrupt City, to the generosity, the interest and the fears of its creditors.

The Act, in its preamble, recited that the total debt, bonded aud floating, of the City, exceeded $23,000,000; that its taxable property had become so reduced in value as to require taxation of at least live per cent, per annum to meet the payments according to the terms of, the Acts creating the debt; that so exorbitant a tax was impossible of collection, and would lead to a further shrinkage in assessable values, inevitably eventuating in practical bankruptcy ; and that the premium bond plan, which had already been adopted by tbe City Council, offered an avenue of escape from impending evils. ’

The Act then proceeded to make the following provisions: It approved and ratified the ordinances of the Council adopting the plan; it authorized and directed the City to exchange premium bonds for all outstanding valid bonds; it appointed a permanent syndicate of citizens to supervise and control the execution of the plan; it nfade it the duty of the City Council, in the annual budget adopted for each ensuing year, to include a sum sufficient to pay the drawu bonds aud pi’eininms under the plan; it imposed on the Council the farther duty annually to levy a tax at a rate sufficient to provide the amount included in the budget as aforesaid, which tax after the year 1881 was to be at least one-half of one per cent.; it provided that the tax so levied should constitute a special fund to he used for no other purpose than the car-lying out of the plan, and that the funds arising therefrom should be placed to the credit of a premium bond account, to be paid only ou the authority of the commissioners of the consolidated debt, aud that the tax should he denominated as the premium bond tax and should be separately mentioned in the tax rolls and receipts; it provided that any surplus arising above the requirements of the plan, and all drawn series and premiums falling to the City should he used in the retirement of outstanding bonds not funded into premiums. The Act further declared that no tax for the payment of any bonds or interest thereon', other than premium bonds, should be thereafter levied by the City of New Orleans, repealed all laws authorizing such taxation, and forbade all courts to mandamus the City to levy or collect any interest tax other than that provided by the Act. It declared that the taxing power of the City for all purposes, including the premium bond tax, should be limited to’one and One-half per centum per annum; and it declared that this limitation of the taxing power was a'cob tract, not only with the holder of premium bonds', büt álso with the taxpayers, so as to authorize any such holder or taxpayer to object to any rate of taxation in excess of the rate herein limited.” In a different section it Was further provided, that this Act in all its provisions and limitations be held a contract between the City of New Orleans, the holders of premium bonds and the taxpayers, so as to authorize any of the contracting parties to resist any increase of taxation' above the rate limited therein.” ■ ■

The Act contained other provisions not germane to our present purpose. ‘ ' 1

It is to be borne in mind- that this Act was passed soon after the initiation of the scheme and before any considerable exchange of bonds had been effected. It was a legislative contract proposed by the State to all holders of City bonds, with the obvious purpose of inducing its acceptance by promising every advantage to those who would accept and withholding every one from thóse'who refused.

The meaning of the Act is too clear to escape ’the perception of any. The State said to the holders of bonds:

“ If you will exchange your bonds for premium bonds, I will impose upon the City the absolute duty of levying an annual tax of at least five mills (after 1881) to be devoted exclusively, as far as necessary, to the payment of premium bonds, in accordance with the plan; I will forbid any taxation beyond this five mills and ten mills additional for all other purposesj I will forbid the levying of any tax whatever for the payment of interest on bonds other than premium bonds; I will leave the holders of bonds who refuse my proposition no resource for payment except from the surplus of the five mills tax not required for the execution of the premium bond plan, and from the drawn series of premium bonds, and prizes which may fall to the City; and I will declare all these provisions to constitute a contract, só as to authorize the holder of premium bonds, the City, or any taxpayer to object to and resist the levying or collection of any tax other than the tax authorized by the Act.”

The Act is susceptible of no other possible interpretation. It first provided absolutely and without qualification that the premium, bond tax of at least five mills, after 1881, should, under,all circumstances, be, annually .levied, collected, kept apart, and devoted to the purposes prescribed pit then said that the taxing power-of the City, including the premium bond tax, should be limited to fifteen mills, which was equivalent to saying that beyond the premium bond tax-theCity might levy ten mills for all purposes and no more. When it authorized the premium . .bondholder and the taxpayer to, object to .and resist any taxation ,.M in excess of the rate herein limited,” it meant any taxation additional to or other than the tax for .premium bonds, and for other, purposes,authorized by and limited in the Act.

The pretense that the Act intended to authorize these parties to resist the levying of the premium bond tax, which, it has solemnly agreed and positively required should be levied annually, would seem to be too self-contradictory for serious consideration.

It is said that this Act is a reciprocal, synallagmatic contract. Such it clearly is. This means it is a contract in which, under the definition of the Code, “ the parties expressly enter into mutual engagements,” (C. C. 1765) that is to say, one party “ engages to do or not to. do ” certain things, and in consideration thereof the other party “ engages to do or not to do” certain other things. .

It becomes important, therefore, to ascertain not only what are the Several engagements of such a contract, but also which party bound, himself.to perform the respective engagements..

, Now, which-party to this coutract engaged that the premium bond tax should be annually levied ? Which party engaged, that no tax in excess of this premium bond tax and ten mills additional should be levied? Which party engaged that no tax for tlie payment of bonds or interest on bonds other than premiums should be levied? Manifestly, these were all'engagements exclusively undertaken by the State, acting for her creature, the City of New Orleans. This is apparent from the nature, of the engagements, because nobody hut the State or City can. levy taxes.or limit taxation, or refuse to levy, taxes.. But it is equally clear, froni the language of the Act, which in the very clauses defining, these engagements as .a contract, adds the words: “so as to authorize the prerniurq .bondholder or any taxpayer.to legally object to any rate, of taxation,, in excess.of the rate herein stipulated,” in other words, to resist any, breach by tbe State or City of their engagements.

.On tbe, ot]ier. band, the engagements of the bondholder, when he aceeded to,the contract, were: •

I. To exchange his bonds for premium bonds, thereby, abandoning, all his rights, .and remedies, on his original,bonds .and,, substituting tlierefor5 the rights and remedies prescribed in the Act for his new bonds.

2. That he would never exact for the satisfaction of Ms bonds any ■tax beyond that stipulated in the Act.

So far as the taxpayer is concerned, his nomination as a party to the "contract means nothing. • No provision is made for requiring or obtaining his consent, without which he could not be made a party.- He is bound thereby just' so far as the State, in th'e exercise of the law-liia&ing power, was competent to bind him and no further, ánd to that ektent be would have been bound, had no mention been made of him, to precisely the same extent and with the same force as'■ under the provisions referred to. ' ' ■ •

- In the Saloy case, these same taxpayers, or some of them, were before us resisting the enforcement of the premium bond- tax, at a time when there was no taxation beyond the limit fixed in the Act. Would it have been an answer to their suit to say that "they were parties to the contract and estopped from raising the defenses which we there considered and disposed of ? ■ ■ 1

He is no party to the. contract. He is simply subject to and entitled to all the benefit of the law. So long as this legislative contract remains law, and to the extent that it is law, he has the right to prevent the violation thereof by anybody to the injury of his rights.

The taxpayers in this case are contesting a tax levied by the City. Obviously the question is, had the City the power to' levy the tax ? If it had, the tax must be sustained, otherwise it must be annulled.

The questions as to the Constitutionality of Act 31 of 1876,' and as to the validity of the contract sanctioned thereby, in so far as the provisions for the premium bond tax and plan áre concerned, as well as the question of the duty of the City to’comply with those provisions, have been finally passed upon by this Court, and we do not understand that the counsel for plaintiffs seek to agitate or reopen these issues.

Their position now is, that conceding the validity of the contract and the duty of the City to comply therewith, yet, that under the terms of the contract itself, the City is relieved from the duty of levying the premium bond tax in year 1881, for the reason that the -City had been compelled by mandamus of United States Courts to levy, in that year, taxes for other purposes in excess of the limit of taxation established by that contract. The conclusive answer to this Contention flows directly from the analysis we have already made of that contract and of the mutual engagements assumed by the several parties thereto’»

We there showed that the obligation to limit taxation was one‘of several engagements undertaken by the State and City alone, in con■sideration of other and different engagements undertaken by the assenting bondholders.

It is not pretended that the premium bondholders have violated any of the engagements which, under our construction of the contract, were undertaken by them. Nor is there any charge that they have, in any manner, provoked or contributed to the excessive taxation complained of.

The naked question remains, whether a party to a synallagmatic contract, who has undertaken therein to perform several engagements, can, by violating, from whatever cause, one of them, escape the obligation of performing the others in favor of his co-contractor who has performed all of his reciprocal engagements.

- Suc.h a question can find but one answer, and that an emphatic .negative.

. Another, conclusive ground of denying this claim of plaintiff would ■result from the impossibility of assuming that this Act, which positively required that the premium bond tax should be levied, and that, including the same, no tax exceeding fifteen mills should be levied, and authorizing the parties ■ to resist any taxation in excess thereof, could possibly be construed as authorizing resistance, under any circumstances, to the premium bond tax, the levying of which it had just expressly required in the most positive terms, and which was the very gist and marrow of the entire proposition embodied in the Act and submitted to the creditors.

The taxpayers of the City of New Orleans have derived in the past, ■and will continue to derive immense advantages from this Act. Under its provisions, bonds of the City to the extent of more than thirteen millions of dollars were funded into premium bonds. The annual.interest on the bonds so funded would have amounted to nearly a million of dollars annually, the payment of which would have required an annual tax nearly double that which is levied under the premium bond plan. Even of the diminished tax so levied, more than three-fifths is returned directly to the City, to be used under the provisions of the Act, for the reduction of her bonded debt.

Such is a portion of the valuable consideration which moved from these funding bondholders to the City and the taxpayers, under this contract.

The only counter consideration which the bondholders received was the levying and appropriation of the tax provided by the Act, of which it is the object of the present suit to deprive them.

The adoption of the construction of this contract, insisted on by •plaintiffs, would be to convict the State of having.laid a cunning, deeeitful and dishonorable trap in which to catch and despoil confiding creditors.

The State submitted a proposition of settlement to the City’s creditors, in which it plainly said : those of you who accept shall have a tax : those of you who refuse shall have none.” Some of the creditors ■accepted; others refused. Now, we are told that the meaning and effect of the contract is, that those who refused shall have a tax, and those who accepted shall have none. •

No court could countenance such an interpretation.

■II.

It is next contended by plaintiff that the five mills- tax provided in the contract was based on the assumption that the entire twenty millions of outstanding bonds should be funded into premiums, and that, as only a portion of the same were so funded, and as the City is compelled to provide otherwise for the refunded bonds, therefore the five mills should be reduced in the proportion which the premium bonds 'actually outstanding bear to the contemplated twenty millions. •

To this there are several answers, viz :

■ 1. The Act itself fully contemplated the contingency that all the bonds would not be funded, and that the series of premium bonds not issued would be held and drawn for by the City, and provided that any surplus of the premium bond tax not required to carry out the plan, and also, all series and premiums drawn by the City, should be used in retiring unfunded bonds in the manner provided in the Act. There was no provision that the failure to secure the'exchange of any portion of outstanding bonds should interfere with the amount of the tax or with the execution of the plan; and we find no judicial authority to supply such a provision.

2. It would be impossible to order a reduction of the tax without requiring, at the same time, a change of the entire premium bond' scheme. : That scheme contemplates aiid authorizes no other drawing except, on the original basis of the series of twenty millions of bonds; and the tax is designed to provide for the payment of the fixed number of series and premiums drawn. Now, although' duly about eight millions of the bonds are held by others than the City itself, yet, since the drawing Is determined by chance, it might well be that the large majority of drawn series and premiums might fall to the holders of these $8,000,000 of bonds. In such event, if the tax had been reduced, as claimed, whence would they find their payment 9

' Whether the legislative power might modify the entire plan by reducing, simultaneously and in exact, equal proportion, the number of Series to be drawn from, the number of series to be drawn and the amount of prizes, and the amount of tax, .might present a question worthy of consideration; but clearly, the reduction of the tax, without corresponding modification of dtlier features of the plan, would operate a radical invasion and diminution of the bondholders’ rights.

The holders of premium bonds actually outstanding have no greater advantages than they would have-if every dollar of the twenty million's had been issued and remained outstanding.' The City herself receives whatever portion of the tax would' have gone to the holders of thé bonds, now in bet'hands, if they had "been'issued.

Under the law, as it exists, the .City is required to invest tho part coming to her-in,retiring unfunded bonds; If it be desired that such portion should he applied to the- payment of interest ou bonds other than premiums, and thus reducing the tax necessary to pay such interest, application should he made to the legislature—certainly, not .to the judiciary. . ¡

It has been suggested, that because the portion of the proceeds of the premium bond tax which fell directly to the City in. past years lias been illegally diverted from the. purposes prescribed by the law, and devoted to the. retirement of premium bonds instead of other unfunded bonds, therefore the holders of premium bonds should he required-to permit the whole proceeds of. the tax in 1881 and subsequent years, to go to the unfunded bonds until this illegal diversion has been compensated and made good. The suggestion might have some force if the holders of premium bonds were a joint stock company jointly interested in all the bonds. But .when it is considered that the holders of the present outstanding bonds were in no way parties to this illegal diveiv sion, had no interest in the bonds, which have, been thus retired, and have derived no advantage of any kind from.the diversion, the injustice of the suggestion is at once apparent. .

The Constitution of the United States extends the protection of its sheltering arms over all the valid contract creditors of the City of New Orleans. ...

We have swept out of. the Act 31 of 1876, every provision which impaired the contracts of those bondholders who did not accept tho proffered exchange.

We have adjudged its validity, in all other respects, as a contract between the State and City and the premium bondholders. We have heretofore enforced the right of the latter to the tax provided in tho contract.

. We find no consideration of law or justice favoring the adoption of a strained and unreasonable construction of this contract, which, while maintaining its validity and leaving the City in possession of all the enormous advantages received therefrom, would deprive the premium bondholders of every benefit solemnly promised in the Act and forming, the .sole inducement and consideration for their acceptance.

. The judgment appealed from is, therefore, affirmed at appellants’ cost.

Dissenting Opinion.'

¡. Bermudez, C. J.

The very serious matter submitted in this, case to. the consideration of the Court, is the effect produced on the taxing power of the City by the limitation of one and a half per cent, contained in the premium bond Act. As far as the five mills not necessary for the alimony are concerned, when creditors claiming under its provisions come in conflict with other creditors who are entitled to the exercise of the municipal power of taxation for the enforcement of their rights, growing out of anterior contracts, the obligations of which are shielded from impairment by the Federal Constitution, and when. the taxpayers from whom the tax is tobe exacted, resista levy, at a rate in excess of the limitation to satisfy both classes, and insist upon the observance of the limitation as a matter of contract in their favor, abso-. lutely binding on the creditors composing the first class.

, The litigants-are named parties to the contract: the plaintiffs, as taxpayers and residents and debtors; the City, as the mouthpiece of the creditors of both denominations. While the plaintiffs, for their own protection against excessive taxation, ¡necessarily champion the rights of the outstanding creditors representing the unfunded bonded City debt, the City specially advocates those of the holders of the bqnds issued in 1876, under the legislative authority of that year. As to these this Act cannot be said to be tainted with unconstitutionally, however much it may be and undoubtedly is such, as regards others, whose prior rights have been sought to be invaded and annihilated by ruthless ostracism and wanton spoliation.

The difficulty presented consists, in determining what was and is the Object of the Act which imposes the limitation invoked as an inhibition against all and any taxation in excess of the rate, stated; in other words, what is the meaning and purport of the limitation clause; or,, practically, whether antecedent creditors, whose claims are founded. o.u antecedent contracts, the obligations of which cannot be impaired, are entitled to exhaust, in their exclusive behalf, the exercise of the, taxable power of the City of New Orleans,, up to the limitation placed upon it by the premium bond Act ? ., ,

,.If those creditors are entitled to such preference,, then the whole of the five mill tax, when raised, will have to.be applied in deduction of, the 16| mills required to pay their judgments from the Federal Cour.t,. so that the aggregate, instead of-being 314 mills, would be 26f -mills only. In that case the holders of drawn premium bonds would have to wait until after the preferred ones shall have been fully paid what may be due them. It would not be until then that the five mills would be levied for their benefit.

If those same creditors are not entitled to .the preference, then the 16-3 mills and any subsequent other rate of taxation for a similar object shall' have'to be' raised, withoutany aid’from the fifteen mill tax, and the five mills, if not inore, over and above the amount required for municipal alimony, but-within the 15 mills, shall continue to be raised until the consummation of the scheme;

Into that matter shall it now be inquired.

In view of the most'distressing circumstances in which the City of New Orleans was at the Time' Involved, the municipal authorities assumed to veuiiire'iff the ‘adoption Of a certain plan, in order to force a composition with the creditors whose claims were represented by bonds. Apprehending grounded resistance, these authorities procured from the' General Assembly an ¿Vet ratifying their doings and expounding their scheme known as the premium bond Act. It bears No. 31 of the Acts of 1876.

The evident purpose of that remarkable legislation ” was to compel the bondholders, each and all, nolens nolens, to fund their bonds and to receive in exchange thereof other bonds, payable at unknown and fortuitous dates, and tó 'be known as the "premiums bonds of the City; These were to be of'thé denomination of twenty dollars, dated September 1st, 1875, and to bear five per cent, interest from July 15th of that year, the interest and principal’ and á premium to be paid at the same time and not separately. That titne'was to be determined by hazard in a lottery, upon the turn of a wheel, in January, April, July and October of each year, or such other dates as the Council may prescribe and pursuant to a certain schedule. ''

All the unfunded, outstanding or “ old ” bonds were to be deemed as funded for the purposes of the Act, and the: City was to hold the premium bonds representing the unfunded bonds, for which provision was to be made out of drawn bonds they held or remaining in the possession of the City; the provision being the application of such drawn bonds in kind or cash to the retirement of such unfunded, outstanding or “ old’” bonds.

At the end of fifty years the City was to be liberated from all bonded' indebtedness.

For the purpose of providing for the payment of the drawn bonds, in principal, interest and premium, it was prescribed that a budget would be prepared and adopted, and that a tax of five mills only should be levied, up to' the year 1881, and of at least five mills after that year, provided the rate of taxation for 11 every purpose of government,'1'1 including said five mills, should never exceed one and a half per cent, or fifteen mills on the dollar, until the full and complete payment of said premium bonds.

Section II, (which is to the effect that should the one-lialf of one per cent, tax be more than adequate to pay the. drawn premium bonds, the surplus shall be used in retiring the outstanding bonds, and which declares that said one-half of one per cent, shall be considered as part of the one and a half per cent, taxation to which the taxing power of the City is limited) expressly declares that “ the intention of this Section is to limit the City taxation to one and a half per cent, annually, until the entire extinction of the bonded debt.” It does notsay funded, but bonded.

To coerce submission to its terms and provisions, it was provided by Section 7 that no tax for the payment of principal or interest of other than premium bonds would thereafter be levied, and that all laws authorizing or requiring the City to pay such tax were repealed. The Section went so far as to declare that it would be incompetent for any court to issue a mandamus to the officers of the City to levy and collect any interest tax other than that for the premium bonds.

The 11th Section provides that the surplus, if any, realized by the annual levy of the tax to be raised in the execution of the plan, shall be distributed in retiring the outstanding bonded debt.

In the first paragraph of the preamble of the Act, the total of the City debt is stated to exceed twenty-three millions of dollars.

The Constitution, in force at the time of the passage of the Act, required the object or objects of all acts to be expressed in the title.

In the present case the title of the Act begins with the words: “ An Act. to adjust, regulate and provide for the bonded debt of the City of New Orleans,” etc.

As appears from the pamphlet in evidence in the case, the premium bond plan contemplated the funding of the entire debt of the City.

It is, therefore, manifest that the premium bond Act was designed to embrace the entire debt of the City, and that all means were resorted to in order to induce and compel the creditors of the City to accept its terms. It is also manifest that for “ every purpose of government” it was agreed by a formal contract that the taxing power of the City was limited to fifteen mills, including the five mills intended for the execution of the plan, and that under no contingency would that power ever be exercised beyond that limit, until the entire extinction of the bonded debt of the City.

That contract must be read by the light of the Constitution of the United States, which protects debts resulting from antecedent contracts against all impairment of the obligations of the same. Hence, it is, that the obnoxious 7th Section, which was levelled against all outstanding unfunded bonds owned by recalcitrant holders, has been loudly denounced by every court under whose attention it has come, and read out of the Act, as containing provisions impairing the obligations of contracts and so absolutely repugnant to the Federal Constitution.

"When relieved of that offensive feature, the provisions of the Act have the complexion - of a special legislation, designed to carry out the object expressed in its title, which was to adjust, regulate and provide for the entire bonded debt of the City of New Orleans, whether funded or not.

If such be, and indeed it is .the case, then the five mills tax was intended for the benefit of all the bondholders of the City, whether their bonds were funded or unfunded, and was to accrue or be distributed in due proportion among the holders of both classes of municipal •obligations.

■ The evidence in the case shows that all the outstanding or old ” bonds of the City were not funded, that of those $13,235,540 only were funded j that the five mills tax has been regularly levied and collected; ■that the proceeds realized have been applied to the payment of drawn premium bonds, whether owned by creditors or held by the City, representing its unfunded bonded debt; that the sums drawn by the bonds ■thus remaining in the possession of the City, were not at all applied to the redemption of any of the unfunded obligations, but were exclusively used for the purchase of premium bonds, so that the- original amount of such bonds which had actually issued to creditors (viz: $13,235,540) was reduced to $8,599,020. By this mode obligations ■were taken up in five years which it would have required twenty years to retire under the mechanism of the Act. Such an operation was never contemplated. It was a flagrant injustice by which the premium bondholders cannot be permitted to be benefitted. The evil or wrong •done must be repaired by all the means which the long arms of equity can successfully reach and employ.

It therefore follows that, as the five mills were to be raised for the benefit of the bonded debt of the City, however represented, and were •to be apportioned accordingly, and as they were not so applied from •the beginning, the holders of bonds susceptible of being drawn, under ■the Act, must be deprived of all participation until the proper balance 'or equilibrium has been restored.

No doubt, those creditors who accepted the terms and conditiqns of -the Act did so, deeming they would . thereby improve or better their condition. Whether they have accomplished that result or not is a question with which this Court has no concern Avhatsoever.

The only question before it is, whether the plaintiffs shall pay the fhre mills, and whether, when paid, those five mills shall be applied to the payment of drawn premium bonds, or to the satisfaction in part of the l6f mills tax raised to meet the judgment creditors recognized by the U. S. Circuit Court. '

The fact is glaring that there is outstanding a bonded unfunded City debt of $6,251,553, the interest on Avliich has not been extinguished by a farthing for the last six years.

The taxpayers, plaintiffs in this case, contend, in the terms of the Act under which the premium bonds were issued, and A^liich is a coutract between them and the holders of such bonds and the City, that the intention was to limit the City taxation for “ every purpose of government” to one and a half per cent, annually, until the extinction of the bonded debt of the City; and that as part of that debt is unfunded and remains still due, they cannot be required now to pay more than fifteen mills.

That position seems unanswerable by the premium bondholders, although it be no impregnable bulwark against the holders of unfunded bonds, whose rights as'creditors, antecedent to the Act of 1876, are beyond the reach of that or of any subsequent legislation.

It is, therefore, considered that, while the judgment creditors are entitled to a special tax of 16£ mills for the satisfaction of their judicially liquidated demands, based on valid anterior contracts, and while the taxing power of the City of New Orleans, under the law which confers, but restricts it, can be and must be exercised owing to existing imperious necessities, the plaintiffs should not be made to pay the 31 £ mills claimed for 1882, but only 26| mills altogether, out of Avhich ten mills only are to be applied for municipal alimony and the remaining 16£ mills to be distributed exclusively among the judgment creditors!

The Ordinances attacked impair the contract insisted upon by the plaintiffs.

The taxpayers, plaintiffs in this case, have made a last effort to resist the illegal collection from them of the entire five mills.

It is proved that the amount of premium bonds issued and held by creditors of the City is only $8,599,020; that the difference between that sum and the amount originally uttered, as well to creditors, or retained by the City, and representing the unfunded bonded debt, is considered as outstanding and that the five mills tax will continue to be levied just as though the entire unfunded bonded debt was funded and Avas represented by creditors holding premium bonds.

The thought is appalling that this tax will be raised annually during thirty odd years to come for the nominal benefit of unfunded outstanding bonds, really for the advantage of funded bonds actually issued to creditors, the aggregate capital of which will however decrease annually. The use made in the past of the premium bonds drawn by the City is far from being an assurance that in the future holders of unfunded outstanding antecedent bonds will obtain any relief therefrom. The past has been and the future promises to be nothing short of a bare delusion and a crying injustice.

It is illegitimate for courts of justice, in the solemn discharge of their Racred duties, to allow themselves to be influenced in the least by the consequences which may attend their judgments. If it were legitimate to do so, a graphic, desolating picture could be drawn of the lamentable conditioi? in which the tax-ridden community of the City of New Orleans is now' to be reduced.

With the prospect of an annual tax of $050,000 for the Consolidated Bonds of 1882 and for such judgments as may have to be paid by the levy of special taxes, the quantum of taxation may probably exceed 40 mills on the dollar of taxable property in the City, a rate surely not in contemplation when the Act of 1876 was adopted.

A different construction writes out the contract from the premium bond Act and leaves the plaintiffs in a worse predicament than that in which they would find themselves had not the sanctified law of relief been passed, a law stigmatized by the United States Supreme Court as “ tainted with the leprosy of repudiation.”

I, therefore, dissent from the opinion and decree.

Dissenting Opinion.

Poché, J.

I cannot assent to the conclusions reached and adopted by the majority of the Court in this case.

At the time that the premium bond Act was passed, in 1876, it was announced to the world, that in view of the immense debt due by the City of New Orleans, and of the consequent depreciation of all values, the rate of taxation necessary to liquidate the debt was so exorbitant as to render the collection of the tax impossible. Hence, the scheme known as the premium bond plan was proposed by the City authorities,, and was legislated into existence by the General Assembly.

I understand this Act to be what it expressly purports to be : a solemn contract between the City, the holders of premium bonds and the taxpayers or residents of said City. Its avowed object was to provide a mode of adjusting and settling the entire bonded debt of the City. The stipulation in favor of the bondholder was the agreement to levy an annual tax of five mills, to be applied exclusively to tlio settlement of the bonded debt, until the entire extinction thereof, which, under the plan as detailed, was to be accomplished in fifty years.

The stipulation in favor of the taxpayer was the guarantee of a limitation of City taxation to fifteen mills for all purposes, including the tax specially set apart for the payment and settlement of the bonded debt. The City, as the common agent of the creditor and of the debtor, was charged with the faithful execution of the contract. As it was anticipated that some holders of City bonds would not accept the proposed settlement, and as it was forbidden in the Act to make any other proposition by taxation outside of the plan, for unfunded bonds, it was provided that any surplus which might remain of the product of this tax, after the payment of drawn premium bonds and premiums, and the amount realized from drawn premiums on bonds held for the City, should be used in retiring the outstanding bonds. It cannot be controverted that all those stipulations and conditions were accepted by, and are in law binding on all holders of premium bonds, who are even estopped from alleging the unconstitutionality of the odious or repudiating clauses of the Act, because such clauses are favorable to them.

Under the operation of the Act, the five mill tax has been regularly collected since 1876, and the number of bonds converted into premium bonds amounts to $13,029,303; and the evidence shows that no portion of the tax thus levied has ever been applied in any manner to the benefit of the outstanding or unfunded bonds.

Some of the holders of the excluded or neglected bonds invoked the aid of the judiciary, and exposed the unconstitutional discrimination thus made and enforced against their securities. The result of their litigation has been the annihilation as to them of the obnoxious clauses of the Act of 1876, aud the immediate consequence has been a levy by various mandates of the Federal courts of a tax, independently of the fifteen mill tax, amounting to 16ft mills.

After the adoption of the present Constitution and in obedience to its limitation to municipal taxation, the City proposed to obey its mandate, but the premium bondholder applied to the courts for the enforcement of his contract, and in the Moore case the City was coerced, and in the Saloy case the taxpayer was in his turn ruled, to the strict performance of the contract evidenced by the Act of 1876, notwithstanding the constitutional restriction interposed by the people of the State in the organic law of 1879. The practical result to the taxpayer from all this litigation has been a tax, now enforced, up to 31ft mills, with a very near prospect of an additional levy sufficient to make up $650,000 annually for tlie consolidated bondholders, under the recent decree in the Pilsbury case, followed by another of $170,000 to meet the requirements of the Ranger case.

Feeling that the burden of taxation had almost reached the point described in the preamble of the Act of 1876; finding that the stipulations in his favor in the contract bad been violated; that the amount which he had agreed, to pay in fifty years was being exacted in twenty years, under the practical operation of the premium bond Act, which had been judicially consecrated as a binding obligation, the taxpayer, in his turn, invokes the aid of the judiciary for protection under the contract. This is the object of the present suit.

For obvious reasons, we are powerless to relieve him from the .burden of judicial taxation imposed by the mandates of the Federal courts, whose acts are beyond our reach and control. For reasons equally. potent, we are unable to relieve him of the indispensable charge of providing for the current expenses of the city government.

But on the other branch of his case we have the power, both in law ■ and in equity, to relieve him, and, in my humble opinion, it was our bounden duty not to turn a deaf ear to his complaint.

Under the provisions of the premium bond Act, and quoad the holders of the premium bonds, the taxpayer .of New Orleans is, in my opinion, assimilitated to an unfortunate debtor, unable to meet punctually the payment of an enormous debt. In his embarrassment he calls a meeting of his creditors, to whom lie exposes his condition, and from whom he obtains an agreement .postponing, on condition of stated annual or semi-annual instalments, the payment of his entire debt to fifty years. By consent the assets of the debtor are placed in the hands and.under the control of a third party, who is designated as the agent of both the debtor and the creditors, and who is clothed with . full power to realize the proceeds of the assets, and to make the payments under a plan adopted by all parties. Iu order to meet the demands of such of the creditors as could not be compelled to accept the terms of the ooncursus, the agent is instructed to set apart for them a certain portion of the proceeds annually realized from tlie assets of the debtor. But in the course of time the insolvent debtor discovers that a different use is being made of his .resources by the agent who betrays his trust, and applies all of the debtor’s resources to the payment of the claims of the contracting creditors, and that under the course pursued the latter would be paid in twenty instead of fifty years. Whereupon the deluded debtor invokes the aid of the courts for redress of liis grievances.

In this case the debtor is answered by the premium bondholder, that the only part of the contract which he recognizes is that which secures him his annual five mill tax, but that he has no concern with and that lie is not bound by any other condition or stipulation. The taxpayer awaits the decision of the court, and then he is answered and informed that he was not a necessary party to the contract in which his ñamó was included as a mere superfluity; and that the premium bondholder, who thus acquires a chance of being paid in full in twenty years, when the respite which was granted by the Act was intended for fifty years, is not benefitted by .the unauthorized and unforeseen mode of executing the plan.

.With all due deference to my associates, I cannot join them in such an answer.

To the argument made by counsel that a different answer from this Court would destroy values recognized by the courts, would shake, confidence in securities well established as commercial commodities; and would disturb the equanimity of commerce, I reply, that I see on the other hand an impoverished, tax-ridden and overburdened people,' willing to meet their obligations within the time agreed upon, and demanding nothing more than the legal enforcement of the contract in . its entirety.

I, therefore, dissent from the opinion and decree in the case, for the .foregoing reasons, which I hastily sketched in the short time between the adoption and the announcement of the opinion.