author: Nicholls, C. J. Nicholls, C. J.

text:
    12,538.
    State ex rel. Henry Orr, Sr., vs. The City of New Orleans et als.
    Taxpayers have a standing in court to contest upon proper charges the validity of a municipal ordinance or contract executed under it, whenever its enforcement may increase the burden of taxation. Handy vs. New Orleans, 39 An. 107,
    Article 51 of the Constitution, which declares that ** no money shall ever be taken from the public treasury, directly or indirectly, in aid of any church, sect or .denomination of religion, or in aid of any priest, preacher or teacher thereof* ••as such, and no preference shall ever be given to, nor any discrimination ¡against any church, sect or creed of religion, or any form of religious faith or worship, nor shall any appropriation be made for private, charitable or benevolent purposes to any person or community; provided this shall not •apply to the State asylums for the insane and deaf, and dumb and blind, and tthc Charity Hospital, and public charitable institutions conducted under ■State authority/'’ refers to appropriations made by the General Assembly, and ito moneys taken from the State treasury, not to appropriations made by the •common councils of cities, or to moneys taken from the city treasuries.
    Article 56 of the Constitution prohibits the loaning, pledging or granting of any fund of the political corporations of the State to any person or persons, association or corporation, public or private. To the extent that any appropriation made by a city council in favor of a charitable association of the city •exceeds in amount the precise legal equivalent rendered by the particular •institution which is to receive it for the support of just such persons as the •city itself would be legally chargeable with, the appropriation evidences a •donation and a gift, and by reason of that fact it is beyond the power of the •council to make it under Art. 56 of the Constitution. Appropriations to •charitable associations granted from a general sense by the council of the •laudable objects and purposes of those institution,'.but having no fixed, certain, established consideration for the same, are at best remunerative donations for possible anticipated future benefits, and not being based upon contract express or implied are ultra vires.

      The twenty-first and twenty-fourth sections of the charter of the city of New Orleans, defining the duties of the city comptroller and treasurer, did not contemplate that an appropriation by the city council should per se justify the withdrawal of the amount of the same from the city treasurer. They obviously intended that each claim presented under an appropriation should be sub. jected to examination and auditing, and should be based upon affirmatively shown exact legal consideration.
    APPEAL from the Civil District Court for the Parish of Orleans. Rightor, J.

      John C. Wielcliffe and Arthur H. Brown for Plaintiff, Appellant.

      Charles J. Théard, Charles S. Riee, Anthony Sambola, J. St. Paul, Dinkelspiel & Hart, James J. McLoughlin, Assistant City Attorney; Sam’l L. Gilmore, City Attorney; J. Madison Vanee (Frank MeGloin of Counsel) for Defendants, Appellees.
    Argued and submitted December 18, 1897.
    Opinion handed down March 7, 1898.
    Rehearing refusing May 2, 1898.
   The opinion of the court was delivered by

Nicholls, C. J.

In a petition filed by him in the Civil District Court, on November 30, 1896, relator averred that he was a citizen and taxpayer of the city of New Orleans, and the father of two children of school age, who were dependent upon the public schools of that city for an education, and who were attending said schools. That through lack of sufficient appropriation of public money from the public treasury of said city by the City Council of New Orleans to the school fund of said city for the year 1896, the School Board of said city had declared that it would be necessary to close the said public schools during the month of November, 1896. That in the budget of expenditures of the city of New Orleans for the year 1896, the City Council of the city of New Orleans appropriated and ordered taken from the public treasury of the city of New Orleans the sum of forty thousand two hundred dollars, and same paid to sundry private, charitable and benevolent institutions, to-wit: Evangelical Lutheran Orphan Asylum (Bethel); Protestant Orphans’ Home, St. Vincent’s Orphan Asylum, Wet Nurses, St. Mary’s Orphan Boys’ Asylum, House of Good Shepherd, German Protestant Orphan Asylum, Touro Infirmary, Faith Home for Aged •Widows, Lafon’s Old Folks’ Home, St. Vincent’s Asylum, New Orleans Female Orphan Asylum, Female Orphan Asylum of the Immaculate Conception, German Protestant Home for the Aged and Infirm, Jewish Home, Home for Incurables, Maison Hospitaliere, St. Alphonsus Asylum, St. Vincent’s Half Orphan Asylum, Louisiana Asylum, St. Joseph’s Boys and Girls’ Asylum, Holy Family Asylum, St. Joseph’s Asyium of the Little Sisters of the Poor, Protestont Episcopal Children’s Home, Eye, Ear, Nose and Threat Hospital, Convalescent’s Home, Louisiana Freedman’s Asylum, St. Vincent de Paul’s Society, Conference of St. Joseph and Immaculate Conception, St. Mary’s Asylum of Little Sisters of the Poor and the Carmelite Nuns, which said sums in various amounts were ordered to be paid to private persons and communities as members and representatives of various churches, sects and denominations of religion, for an itemized statement of which reference was made to the' said budget of 1896, adopted by the said City Council on the fourteenth day of January, 1896, and to the resolution of apportionment thereunder, adopted by said council or its committee on the fourth day of February, 1896, both of which were made part of the petition. That the existing City Council through its Committee on Budget and Assessment had prepared a budget of expenditures of the public moneys and of appropriations from the public treasury of the city of New Orleans fo the year 1897, which budget had been published in the newspapers of the city of New Orleans; said budget having been prepared and provisionally adopted by said committee on the third day of December, 1896, which budget was made part of the petition.

That by said budget it was proposed to appropriate and take from the treasury of the city of New Orleans a sum of money largely in excess of the sum of twenty-seven thousand dollars for priyate, charitable and benevolent purposes in various amounts to sundry private persons and communities as representatives of and in aid of sundry churches, sects and denominations of religion; that said proposed budget would be adopted by the council and said sums taken from the treasury for said purposes unless the said council and officers were restrained from so doing by due process and orders of court. That none of the appropriations referred to either in the budget of 1896 or that of 1897 were for the State Asylums for the Insane, Deaf, Dumb or Blind, nor for any charity hospital nor other charitable institution or institutions conducted under State or any other public authority. That all of said appropriations and proposed appropriations were illegal, contrary to law, and beyond the power of the Oity Council to make or to have made.

That of the appropriation of 1896 a large portion had been paid from the treasury by the Oity Treasurer on the warrant of the comptroller and the amounts remaining would be so paid out unless said officers were prevented from doing so by law. That if said balance were paid out under the budget of 1896 there would not be sufficient money in the treasury to permit the public schools to remain open for the full time during the year prescribed by law and relator’s children would be prevented from attending same during the time they are closed. That if the appropriations proposed in the budget of 1897 were made and the money taken from the treasury there would not be left money enough therein to keep open the public schools during the year 1897 for the full term prescribed bylaw and custom in said city, and relator’s children would be prevented, • as stated, from attending school, and thereby prevented from obtaining the education at the public schools which was the right of every American citizen and citizen of the State of Louisiana. That relator’s interest in the subject matter was largely in excess of two thous- and dollars. In view of the premises, relator prayed for citation upon the mayor — the treasurer and comptroller of the city and also the common council; that relator have judgment against them decreeing all of said appropriations null and void, and prohibiting any further payment of the money appropriated by the budget of 1896 to the said private, charitable and benevolent purposes to said purposes and com - . munities, and prohibiting the council from appropriating any money for said purposes out of the treasury for the year 1897 as'proposed, or any subsequent year, and that the mayor be prohibited from approving, and forbidden to approve any ordinance making such appropriation or appropriations; that the-comptroller be forbidden from drawing and the treasurer from paying any warrant thereunder, or any money under color of appropriation for any private, charitable pr benevolent purpose whatever, to any person or community or in aid ■ of any church, sect or denomination of religion whatever, and for all writs and orders necessary to enforce the judgment to that effect.

. Defendants, through their counsel, filed an exception of no cause of action, and prayed that the suit be' dismissed; This exception was referred to the merits.

On the 9th of January, 1897, relator filed a supplemental petition, in which he alleged that since the filing of his petition, the appropriations for 1897, which had been referred to as proposed appropriations, had been, in fact, made in the budget of 1897, and had been approved by the mayor, and were made to the persons and communities named in the supplemental petition for the amounts therein stated. Relator substantially reiterated the allegations of his original petition as to the illegal character of the same and sét forth &e novo his grounds of complaint. He averred that payments made out of the appropriations for the purposes stated were illegal and without warrant of law. He prayed that they be so decreed, and that the officials participating therein be decreed liable for the same and ordered to pay the same into the city treasury. He reiterated the prayer of his original petition, adding thereto relief in consonance with the allegations of the supplemental petition.

The defendants answered under benefit of their exception. They pleaded, first, the general issue. They then admitted that the city of New Orleans had made certain appropriations for the years 1896 and 1897 to the institutions named in plaintiff’s petition, but they averred that said appropriations were made strictly in accordance with law.

The Protestant Orphan Home, the Association for the Relief of Jewish Widows and Orphans, the German Evangelical Lutheran Bethlehem Orphan Association, the Touro Infirmary and the New Orleans Convalescent Home, parties in whose behalf and for whose benefit, among other, appropriations had been made in the budgets of 1896 and 1897, intervened in the suit to join the defendants and protect their interests under the appropriations. Their petitions of intervention were substantially alike. They averred that they were each an incorporated charity under the laws of the State and owners of an asylum for the care, nourishment and protection of the indigent sick and orphans; that they were possessed of no adequate means of support and depended very largely upon contributions made by charitable persons and appropriations made by the city of New Orleans, similar to those contained in the budget of 1897. That the city made use of their institution for the care and support of their indigents and orphans. Thq,t said contributions and appropriations were absolutely necessary for the charitable uses for which the institutions were respectively founded. That the appropriations attacked in nowise contravened the charter of the city of New Orleans; were not ultra vires, but were lawful and proper under the Constitution and laws of the State. That relator disclosed no infer-es! for the relief prayed for and that the court was without jurisdiction ratione materise.

The District Court after trial rendered judgment in favor of defendants and intervenors, refusing the injunction and mandamus prayed for, and dismissing the suit.

Plaintiff, appealed.

The opinion of the court was delivered by

Nicholls, C. J.

In Handy et al. vs. The City of New Orleans et al., 39 An. 107, this court held that taxpayers have a standing in court to contest, upon proper charges, the validity of a municipal ordinance and contract executed under it, whenever its enforcement may increase the burden of taxation. That a petition of taxpayers discloses a cause of action which charges that a municipal corporation has passed an ordinance in excess of its powers and in violation of prohibitory provisions in its charter. Under the authority of that decision the District Court properly overruled the exception of no cause of action filed by the defendants. The petition in this case not only contained averments of the character referred to, but specially charged that the ordinances attacked were violative of the State Constitution.

Belator’s principal • attack on the ordinances of the city is based upon the provisions of Art. 51 of the Constitution, which declares that “no money shall ever be taken from the public treasury directly or indirectly, in aid of any church, sect or denomination of religion, or in aid of any priest, preacher, minister or teacher thereof as such, and no preference shall ever be given to, nor any discrimination made against any church, sect or creed of religion, or any form of religious faith or worship; nor shall any appropriation be made for private, charitable or benevolent purposes to any person or community; provided this shall not apply to the State asylums for the insane and deaf, dumb and blind, and the charity hospitals and public charitable institutions conducted under State authority.”

This article is found under the heading of “ Limitations upon Legislative Powers,” and is evidently directed against taking money out of the State Treasury and of prohibiting the General Assembly from itself making appropriation for private, charitable or benevolent purposes other than for those specially enumerated and permitted.

As the acts complained of are not those of the General Assembly, but of the city of New Orleans, we are called on to comment upon that particular article of the Constitution only in so far as relator bases upon it the contention that a prohibition upon the powers of the Legislature itself carries with it as a necessary and unavoidable consequence a similar prohibition upon all the subordinate or inferior political organizations in the State. He argues that all the powers of such bodies are derived from the General Assembly, and that the latter can not confer upon its creatures powers which it can not exercise itself. This argument rests upon a misconception of -the original powers of the General Assembly and the effect upon them of constitutional limitations. It has been repeatedly held that unlike the Congress of the United States, which must find affirmative authority for its action* the Legislature of a State is unlimited in its powers, except in so far as the latter are restricted within certain limitations by constitutional provisions.

It has also been repeatedly held that the scope of these restrictions is not to be extended; that they are not to be enlarged by construction beyond their terms. The decision iu Hughes vs. Murdock, 45 An. 935, to that effect merely announces a well recognized doctrine. Arts. 44 and 45 of the Constitution afford examples of cases where the limitations upon the powers of the General Assembly are made to extend not only to the direct actions of the Legislature itself, but to its powers of delegation of authority to others.

The position taken that there is manifest inconsistency between prohibiting the Legislature from taking action upon some particular subject and yet authorizing it either to permit subordinate corporations to do so, or authorizing it to charge them with the duty of doing so, is not logically correct. For instance: there may be certain duties, the performance of which from their character could be- and should be exacted in certain localities for the public good, the-expenses of which should be made to be contributed to by the people of that special locality. While the people of the State at large might have an interest in seeing those duties performed and they should through the Legislature have supervision and control over them to some extent, it might be very unfair and improper to cast a general burden in respect to the same upon the whole people. Different localities should be made to bear exclusively the burden to the extent that they were specially and directly concerned in the subject-matter.

We would see no inconsistency in the Constitution’s forbidding the Legislature from appropriating the State’s money for the care of the indigent insane in the different parishes, and yet either making it obligatory upon it to charge the various parishes with the duty of properly providing for them or leaving that matter open for legislative discretionary action. The duty of providing for the indigent insane would still remain properly a matter of public concern; the Constitution would simply have shifted the burden of the duty from the State at large to the people of the particular places where those unfortunate persons should chance to be found.

Deciding, however, that the provisions of Art. 51 of the Constitution do not extend to this case leaves for examination how far the ordinances of the city are chargeable with illegality under Art. 56 of that instrument and under its own charter. It is best that no technical obstacle be thrown in the way of the solution of that question at this time. It is subject to be presented at any moment, and it should be disposed of at once, to the end that the Constitutional Convention, now in session, may take such action in the matter as to it may be deemed right and to the best interests of the people of the State.

Article 56 of the Constitution declares that the funds, credit, property, or things of value of the State, or of any political corporation thereof, shall not be loaned, pledged or granted to or for any person or persons, association or corporation, public or private; nor shall the State or any political corporation purchase or subscribe to the capital or stock of any corporation or association whatever, or for any private enterprise. Nor shall the State, nor any political corporation thereof assume the liabilities of any political, municipal, parochial, private or other corporation or association whatsoever; nor shall the State undertake to carry on the business of any such corporation or association or become a part owner therein; provided the State, through the General Assembly, shall have power to grant the right of way through its public lands to any railroad or canal.”

No mention is made in this atticle of appropriations which might be sought to be made for private, charitable or benevolent purposes, nor is the prohibition of the article aimed at grants as being “directly or indirectly in aid of any church, sect or denomination of religion, or in ,aid of any priest, preacher, minister or teacher thereof as such.”

The prohibition against grants is as broad as words can make it, and is totally independent of the object to which the grant when made would be applied. The article-is found in the Constitution (as is Art. 51), under the heading of “Limitations of Legislative Powers,” but, unlike the latter, its terms extend expressly to a prohibition of the “ granting of the funds of any political corporation of the ¡State to any person or persons, association or corporation, public or private.” The granting of the funds of the political corporations to private persons or corporations being itself prohibited independently of the body attempting to make the grant, or to permit the same to be made, removes from the General Assembly the power through any delegation from it to confer authority on parishes or cities in the State to make them. Grants of parishes or cities of that character based on such delegation would be null and void.

The article prohibits the loaning, pledging or granting of any funds of the political corporations of the State to any person or persons, association or corporation, public or private.

It must be conceded that the institutions in whose behalf the appropriations attacked were made are private corporations. The public authorities have no control or authority over them.

The question remains whether the ordinances attacked evidence .“grants ” of the funds of the city of New Orleans.

Webster defines the verb “to grant ” as signifying:

1. To give over — to make conveyance of — to give the possession or title of — usually in answer to petition — to convey.

2. To confer or beBtow with or without compensation, particularly in answer to prayer or request.

3. To admit as true when disputed or not satisfactorily proved, to yield belief to, to allow to yield, to concede, synonyms. To give, confer, bestow, convey, transfer, admit, allow, concede. And the word “ grant ” asa noun as signifying:

1. The .act of granting — a bestowing or conferring; concession, admission of something as true.

2. The thing granted or bestowed, a gift, a boon.

3. A transfer of property by deed or writing, especially an appropriation or conveyance made by the government; as a grant of land.

It is argued that the ordinances of the city of New Orleans are not grants of the funds of the city; that they are not gifts; that the city stands charged with the duty of supporting its own infirm, sick and disabled paupers; that the institutions in question have taken upon themselves that obligation; that they have discharged and will continue to discharge the same; that in so doing they have relieved the city and will continue to relieve the city from the pecuniary obgliations which but for them it would have itself to incur; that the city has received and will receive a quid pro quo for the amounts appropriated ; that the city has the legal power to discharge its duties through agencies other than itself or by contracts with other parties.

Relator replies that though the duty of municipal corporations to support their own infirm, sick and disabled paupers is recognized in Art. 163 of the Constitution, that article is not self-executing; that it directs the General Assembly to make such duty obligatory, but that that body has as yet taken no action in that direction. We are not aware of any action taken by the General Assembly under the requirements of Art. 163 of the Constitution other than Act No. 42 of 1890, which relates only to police juries. We think that the ■General'Assembly construed the provisions of that article as to its •obligation of taking affirmative action as applying only to parishes; that the second clause of the article itself affirmatively made it the ■duty of municipal corporations to support the indigent infirm, sick and disabled persons within their borders.

Whether this was its view of the matter or not, whether it was a correct view or not, we need not inquire, for we are not called upon in this case to say whether legal proceedings could be legally taken out to coerce the city to make provision for such persons, but whether when they had done so their action would be unauthorized in the absence of a statute of the State making it obligatory upon them to do sol We have no hesitation that if the only attack made upon the action of the city would have been the absence of such a statute, it would have been utterly groundless.

There can be no question as to the duty of cities to support indigent sick, disabled and infirm persons within their borders, but the question is how and under what circumstances and conditions are they to do so. Had the city built or leased premises having this object in view, and placed employees of its own over them and made provision through ordinances for the payment of the expenses incurred jm’so doing, no one, we suppose, would question the validity of such ordinances by reason of a want of power in the city to pass them.

Had the city made express contracts either with individuals or with private fcorporations by which the latter would have come under a well defined civil, legal tie to perform such duties for the city, the officers of the city having legal power to exact performance according to the terms of the contract and to hold such parties liable for breach of the same, and had the city passed ordinances appropriating money to carry out its obligations toward the other contracting parties under such contracts, and had the validity of such appropriations been submitted to us, a very different question would have been presented’from that actually before the court.

As matters stand we find a case where there exists not only no contractual relations, either express or implied, between the city and the various corporations on whose behalf the ordinances attacked have been made, but none between those institutions and the indigent sick, poor or disabled of New Orleans. Neither the city nor those indigent sick or disabled persons themselves would have a right of action to coerce any one of them into receiving or supporting them; their action in that matter would be purely and exclusively within their own control. Their boards of directors and not the city officials would decide who should be received and supported, how many should be so supported and for how long. On the other hand none of these institutions by virtue of the fact that they had received and supported indigent orphans or indigent infirm men and women, and that the city had made appropriations in their behalf, would have such a vested right in such appropriations as to prevent a repeal of the ordinances making them or to give a right of action against the city.

We do not understand that the city pretends to have any legal supervision or control over these institutions. We do not understand the amount of the appropriations to the different institutions to he gradedupon any fixed established relation between such amounts and service which could be legally charged for by each as based upon a precise legal equivalent consideration received. We understand the council to exercise its own judgment as to how much each institution should be granted and to exact no accounting for the amounts received. That the appropriations are made in bulk and drawn out in bulk; no specific vouchers being given as to how the sums received had been or would be applied. Under such circumstancea the appropriations, though based upon a general sense by the council of the laudable objects and purposes of the institutions have really no. fixed certain established consideration for the same. There may bo- or there may not be a consideration for some of them, and that consideration may be or it may not be an equivalent for the moneys, received. Those moneys at the best would be received by way of remunerative donations, for possible anticipated future benefits, not by reason of contract, express or implied. Whether or not any particular appropriation was in support of a real or a remunerative donation would rest in doubt, and for determination would have to be tested in each case by extrinsic evidence. To the extent, at least, that any given appropriation exceeded in amount the precise legal equivalent rendered by the particular institution receiving it for the support of just such persons as the city itself would be legally chargeable with, the ordinance would evidence a gift and a donation to it, and by reason of that fact, would be beyond the power of the council to make. Coates vs. Campbell, 37 Minn. 498. There are no fixed established conditions attached by the ordinances as conditions precedent either to the earning of or the payment of the money® 'to the different institutions. There is no attempted or visible check upon either the council, the finance committee, the comptroller or the treasurer. The right of payment seems to be made to rest simply. upon the fact of appropriation itself, nothing more. There seems to be nothing to guide either the comptroller, the finance committee or the treasurer in approving or auditing claims advanced under the ordinances. We do not think that ordinances of that character are. sustainable, or that such ordinances were in the contemplation of the General Assembly in framing the charter of the city-of New Orleans. We t'nink-the twenty-first and twenty-fourth sec-,itions of the charter, defining the duties of the comptroller and the ¡treasurer contemplated something more than an appropriation by the •council to justify a withdrawal of the amount of the same from the •city treasury. They obviously intended that each claim should be • subjected to examination and auditing and should be based upon affirmatively shown, exact legal consideration. Institution for the Education of the Mute and Blind vs. John M. Henderson, State Auditor. Colorado Supreme Court, November, 1882. 18 Vol. Lawyer’s Annotated Reports, 899, 400. Coates vs. Campbell, 37 Minn. 498. "In the discussion of questions of law we are not authorized to act Upon our own ideas of what should or should not be either in the Constitution or in the statutes of the State touching matters of policy or expediency. We have to take matters as we find them fixed and determined by those whose province it is under the. distribution of the powers ofthe State to deal with them. The trouble in this case arises not so much from the fact that estimates were made in the annual .budget for the application of moneys for the support of the poor under the heading of “Public Charities” as that through the method adopted by the common council payments of the amounts specified in the ordinances are authorized to be drawn by the various institutions themselves by and through the force of the ' ordinances and the appropriations themselves; freed from the necessity of establishing affirmatively before the' finance committee, the comptroller and the treasurer, that the amounts about to be received were based, not upon a grant, but upon'a valid, legal, existing and equivalent consideration. We do not know from the record what course has been followed by those officers in the execution of the ordinances; the methods followed for payment are not attacked.

In the Cook County case (125 Illinois 540) the Supreme Court of Illinois, referring to the necessity it was under of pronouncing a judgment which was in evident opposition to its sympathies and wishes, setting aside an appropriation made in aid of parties engaged in most praiseworthy work, but under circumstances prohibited by the constitution, said:

“ They are engaged in the best and holiest of all works, that of reforming and earing for the unfortunate. We agree with counsel for appellee that they do their work faithfully and well. It is so shown by the proof. It is not for us to discuss the wisdom or unwisdom of this prohibition. There it is, couched in terms so emphatic that it can not fail to challenge attention. Any scheme, even though hallowed by the blessing of the church, that surges against the will of the people as crystallized into their organic law must break in pieces as breaks the foam of the sea against the rock on the shore.”

Our duty, under similar circumstances, is no less imperative than that imposed upon the Supreme Oourt of our sister State.

For the reasons herein assigned it is ordered, adjudged and decreed that the judgment appealed from be and the same is hereby annulled, avoided and reversed, and it is now ordered, adjudged and decreed that the ordinances of the city of New Orleans, making appropriation in favor of any charitable or benevolent institution of the city of New Orleans, under and by the force of which appropriations themselves the institutions in whose favor they are made can draw out from the treasury of the city the funds so appropriated, are illegal and unconstitutional, and the finance committee and chairman of the finance committee are enjoined and inhibited from endorsing or approving any requisition, claim or demand for payment of said appropriation or any part thereof by force simply of the appropriations themselves, and the comptroller of the city of New Orleans is hereby enjoined and inhibited from warranting upon the treasurer for the payment of any portion of said appropriations, and the treasurer enjoined and inhibited from paying any portion of said appropriations simply by force and by reason of the appropriations themselves.

Miller, Breaux, J. J., dissenting in separate opinions.


source: Caselaw Access Project

author: Nicholls, O. J.

license: Public Domain

text:
    No. 12,680.
    E. J. Pertuit vs. Felix Damare.
    Mortgages are not (as cutting off equities) negotiable in the sense of the law merchant.
    A father who being tutor of his minor children receives into his possession as such as part of their inheritage from their grandmother, negotiable notes made by him to his own order and by himself endorsed, which notes repre-sented the purchase price of property purchased by him, and were secured by special mortgage and vendor’s privilege on the property purchased, became ipso facto the debtor of his children for the amount of the notes, the said debt being secured in their favor by special mortgage and vendor’s privilege. The notes in the tutor’s hands were the mere evidences of his debt to them.

      The tutor being so indebted to his children, could not alter the situation to their prejudice by illegally tranferring these notes before maturity to a third person. The rights oí the transferee' quoad the mortgage and privilege are subordinated to those of the minors.
    A PPEAL from the Twentieth Judicial District Court for the Parish of St. James. Guión, J. ,

      Sims & Lambremont for Plaintiff, Appellee.

      Edward N. Pugh for Auguste Damaré, Under-tutor, Third Opponent and Intervenor, Appellant.
    Argued and submitted December 30, 1897.
    Opinion handed down February 23, 1898.
    Rehearing refused May 30, 1898.
   The opinion of the court was delivered by

Nicholls, O. J.

On the 23d of August, 1890, by act before E. D. Laiche, deputy clerk and notary public in and for the parish of St. James, Felix P. Poché sold and delivered to Felix Damaré a certain tract of land, described in said act, for and in consideration of the price of thirty-two thousand dollars, of which price three thousand four hundred and twenty dollars were paid cash, and the balance was represented by eight promissory notes executed by the purchaser to his own order and by himself endorsed for different amounts payable at different dates at the office of the clerk of court of the parish of St. James, the notes bearing interest at eight per cent, per annum from their date until paid. These notes were, by the terms of purchase, secured as to payment by special mortgage on the property sold, vendor’s privilege being retained.

On December 31, 1896, the plaintiff, Pertuit, took out executory . process against the property mortgaged, as being the holder and ■ owner of three of the eight notes representing, as stated, the purchase price of the same — to-wit: one note of two thousand dollars, . maturing January, 1891; one note of four thousand dollars, maturing January 23, 1892, and one note of four thousand dollars, maturing .January 23, 1893. The act of sale and mortgage had been duly recorded in the record books of the parish of St. James.

On the 5th of January, 1897, Auguste Domaré, as under-tutor of the minors Felieie, Roger, Azema, Fernand and George Damaré, issue of the marriage of Leontine Jolly, deceased, with Felix Damaré, filed a petition in the District Oourt for St. James, in which he alleged:

That on the 30th June, 1890, Felix Damaré was confirmed as natural tutor of the said minors, and petitioner as their under-tutor.

That on the 12th of January, 1891, Mrs. Azema Bourgeois, widow of Cesar D. Jolly, the grandmother of the minors, died, leaving said minors and Oesar Felix Damaré, their brother, her sole heirs. That at the time of said Mrs. Azema Jolly’s death, she was the owner and possessor of three promissory notes, made and subscribed by Felix Damaré, the father and tutor of said minors, under date of August 23, 1893, one for the sum of two thousand dollars, payable January 23, 1891, and two, each for the sum of four thousand dollars, payable respectively on January 23, 1892, and 1893, all to the order of said Felix Damaré, and endorsed in blank, bearing interest from date, at eight per cent, per annum; said notes being identified with an act of sale and mortgage passed before Emile J. Laiche, deputy clerk of court, and secured by special mortgage and vendor’s privilege on the property of said Damaré, fully described and set forth in the said act of sale. That being the sole heirs of their said grandmother, Mrs. Jolly, and she being the owner of said notes at her death, the said notes became the property of said minors and of their brother. That their said property in said notes had never been divested, and that said minors and their brothers were still the owners of said notes. That Felix Damaré, their father and tutor, had never been authorized by any order of court, or by the advice of any family meeting, to dispose, in any manner, shape or form, either ■directly or indirectly, of said three notes, the property of said minors and of their brother, and that they were still vested with full ownership of said notes. That in his said capacity of under-tutor of said minors, he represented and showed that on the 31st of December, 1896, one Elphege J. Pertuit, claiming to be the holder of said three notes (the property of said minors and their brother) instituted, via exeoutiva against Felix Damaré, the maker of said notes, and the tutor of said minors, in the suit entitled, Blphege J. Pertuit, vs. Felix Damaré, No. I960 of the docket of said oourt. That he was advised and averred that said notes, on the death of their grandmother (the said minors and their brother being her sole heirs) went into the charge and control of Felix Damaré, their tutor, by reason of their said heredity — Mrs. Jolly’s succession never being opened and the said notes being her only property. That said Damaré, tutor, was absolutely without power or authority^ part with said notes or in any way to dispose of the same; that he was absolutely without power to confer on any one the title to said notes, the property of said minors; that any one taking said notes from said Damaré, the maker of the same, was charged with notice and acted tc en pleine connaissanee ” of the fact that said Damaré was without authority and power to destroy or impair, in the least, the ttile and ownership of said minors to said notes. That he distinctly charged and averred that said Pertuit acquired said notes long after maturity and with full knowledge of the title and ownership of said minors, in and to said notes, and that said Pertuit has no title or claim whatever to said notes or any part thereof. That the interest of said Damaré, tutor, and that of the minors were in conflict, and it was his duty as their tutor to intervene in said suit and protect the interest of the minors.

Should the court, however, hold that said, minors were not the owners of said notes by reason of the fact that the notes made by and due by their tutor, as tutor, had the effect of extinguishing said notes and as creating a cash indebtedness by the tutor to said minors, then, and in that event, and under the reservation, he said and averred that said notes should be decreed to be extinguished and the lien and mortgage securing the same, canceled and erased.

That under no conceivable circumstances had Pertuit, the plaintiff in said suit, any title or claim in and to said notes, or any lien or mortgage bearing on said property. That the further proceeding of said Pertuit in said suit would cause minors irreparable injury and damage, and the same should be arrested and stopped until the decision of the present suit. That petitioner should be allowed and permitted to intervene in said suit, and said Pertuit should be enjoined from taking any further steps in said suit until further orders of the court.

In view of the premises, he prayed to be allowed to intervene in his said capacity in behalf of said minors; that Pertuit, the plaintiff, and Damaré, the defendant (the latter individually and as tutor), be cited; that judgment be rendered in favor of the minors and against said defendants, decreeing, recognizing and adjudging that said minors are the owners in the proportion of one undivided sixth each ■of the said notes as heirs of their grandmother, Mrs. Jolly; that said notes be delivered and turned over to said minors, and said Pertuit be decreed to be absolutely without right or interest in and to said notes. Should the court, however, hold that said minors are not the owners of the notes, then, and in that event and under reservation, petitioner prayed that said notes and all the accessories thereto are extinguished and wiped out, and their tutor is indebted unto them for the amount of said notes as so much cash received by him (tutor) for account of said minors, and that said lien, and the lien and mortgage securing the same, be canceled and erased; that a writ of injunction issue against the plaintiff, Pertuit, enjoining and restraining him from taking any further steps or doing anything whatever in said suit until the further orders of the court; that after due proceedings said injunction be maintained and perpetuated, with costs. ’

An injunction was ordered to issue as prayed for, and was served upon the parties.

■The plaintiff, Pertuit, answered, pleading, first, the general issue. Further answering, he averred that he acquired and held said notes through and from Paul D. Pertuit, a resident of the parish, well known therein, in good faith and for a valuable consideration; and that said Paul D. Pertuit acquired said notes in good faith and in the ordinary course of business, long before maturity, for a valuable consideration. That neither the said Paul Pertuit nor himself had ever had, at any time, notice of any of the matters set up in the petition of intervention and opposition. He, therefore, said that the intervention and opposition were not well founded in fact, law or equity. He prayed that they be rejected and dismissed with costs, reserving to him his action in a separate suit for the damages inflicted by the wrongful injunction sued out.

The District Court rendered judgment, decreeing the minors, Felicie, Roger, Azema, Fernand and George Damaré, to be the ■owners of five undivided sixths of the note of two thousand dollars sued on, together with five-sixths of the interest accrued and to accrue thereon, and recognizing the same to be secured by special mortgage and vendor’s privilege upon the property described in the petition, taking effect from the 23d of August, 1890, and that to that extent E. J. Pertuit be decreed to have no right, title nor interest therein; decreeing further Elphege J. Pertuit to be the owner of the other two notes of four thousand dollars each sued on, together with all interest accrued and to accrue thereon, and the said notes, in principal, interest and attorney’s fees, to be secured by special mortgage and vendor’s privilege, dating and taking effect from the 23d of August, 1893, upon all of the property described in the petition for executory process; decreeing further, that the demand of the third opponents, the minor children of Felix Damaré, to be recognized as the owners of said two notes be rejected and dismissed; that the injunction sued out by them be dissolved and set aside to that extent, and that in all other respects it be sustained and perpetuated; decreeing further that Elphege J. Pertuit be authorized to proceed with the seizure and sale of the property described, according to law,to pay and satisfy the amount of said two notes, in principal, interest, attorney’s fees and costs of seizure and sale; that the costs-incurred by the demand of the third opponents, since the filing of 'the petition of third opposition and injunction, be paid by the seizing creditor, Pertuit.

■ Third opponents appealed.

After the appeal was taken, Felix Damaré, the father and tutor of the minors, died, and one of the latter (Miss Felicie Damaré) became of age. On motion, Miss Felicie Damaré and Felix Damaré, Jr., who-had been appointed tutor to the remaining minors, were made parties-to the appeal, Felix Damaré, Jr., being made party as tutor. Appellee asked in the Supreme Oourt that the judgment be amended' by rejecting the claim of the minors to the ownership of the two thousand dollar note; he also pleaded in aid of his own ownership-of the notes the prescription acquirendi causa of three and five years; also as against any claim which Felix Damaré, Jr., might set up, the prescription liberandi causa of four years.

On the 23d of August, 1890, Judge Felix Poché sold to Felix: Damaré, a certain plantation in the parish of St. James, which he had himself, upon the same day, purchased at a sale made in the succession of Cesar Désiré Jolly. The price of the property was-thirty-two thousand dollars, of which three thousand four hundred and twenty dollars were paid cash and the balance of twenty-eight thousand five hundred and etghty dollars were represented by eight promissory notes of Damaré’s, payable to his own order and by himself endorsed in blank for different amounts, and maturing at different dates, bearing interest at eight per cent, per annum from their date until paid. Among these notes was one for six hundred and fifty dollars, and three for five thousand dollars each, these notes being secured by preference by special mortgage and vendor’s privilege on an undivided half of the property; one note for two thousand nine hundred and thirty dollars, one note for two thousand dollars and two notes of four thousand dollars each.

These four notes were secured by special mortgage and vendor’s privilege on the whole plantation — the note for two thousand nine hundred and thirty dollars being granted a preference of mortgage and payment over the second undivided half of the property. The note for two thousand dollars was payable on the 23d of January, 1891, and the two notes of two thousand dollors were payable on the 21st of January, 1892, and one on the 23d of January, 1893.

At the time of the sale made in the matter of the succession of Oesar D. Jolly, his wife, Mrs. Azema Bourgeois, held a mortgage claim against her husband on the property sold for ten thousand dollars.

The terms of the sale at which Judge Poché bought were cash, but we think it evident that while he got credit for the price, yet the price was settled by creditors of the succession of Jolly accepting Damaré’s notes made in representation of the price of the sale from Poché to Damaré as so much cash. The widow of Jolly received in lieu of her mortgage claim the three notes of Damaré which matured on the 23d of January of the years 1891, 1892 and 1893, the first being, as stated, for two thousand dollars, and the two others for four thousand dollars each. Felix Damaré had married Leontine Jolly, the daughter of Cesar Jolly, and his wife, Azema Bourgeois. Mrs, .Felix Damaré died in 1888, leaving as issue of her marriage six minor 'children. The father was confirmed as their tutor on the thirtieth day of June, 1890. The abstract of inventory which the law required to be recorded in order to secure by mortgage in favor of these children the faithful performance of the administration of their property by their tutor was recorded the same day. Cesar D. Jolly died in 1889. His widow, Azema Bourgeois, died on the 11th of February, 1891. At the time of her death she was living at the house of her son-in-law, Felix Damaré. She had then in her possession (in her armoir) the three notes of Damaré, which she had received from Judge Poché. The only heirs of Mrs. Jolly were her grandchildren, the children of Damaré. After the death of their grandmother, Damaré, who was then tutor of his children, took possession of those notes belonging to them as heirs of their grandmother, of which he was the maker.

On or about the 20th of February, 1891, after the maturity of the first note, be called upon Evariste Poché, a brother of Judge Poché, who was a practising attorney in the parish of St. James, who frer quently made investments of the money of ether parfies for them, and having money of his own, made also, frequently, investments on his account, to ascertain whether he would let him have money on these notes,” and having received an affirmative reply, he several days later returned to Poché’s office, where the latter gave him ten thousand dollars (seven thousand dollars in currency and three thousand dollars in a check), and Damaré delivered to him the notes. The giving of the notes and the payment of the money were simultaneous-being one single transaction. Interest on these notes was paid by Damaré each year up to 1894, and endorsements to that effect were placed on the back of the notes. All these payments were made to Evariste Poché. Damaré dealt exclusively with him, not knowing until long afterward that the Pertuits had any connertion with or interest in the notes. In the latter part of February, 1891, Paul Pertuit, one of the parties for whom Poché was in the habit of making investments, called at the office of the latter and was shown these three notes by him. They had endorsed upon each of them at that time the fact that Interest had been paid thereon up to January 23,1891; the endorsement onthe two thousand dollar note which had matured on that date, stating additionally that payment of the note was extended to January 23, 1892. Seeing that the notes were declared by their paraph to be secured by special mortgage and vendor’s privilege, he bought them from Evariste Poché for ten? thousand dollars, which he paid him in currency, taking possession of the notes and holding them until September, 189 , when under a business arrangement with his cousin (the plaintiff in executory proceedings), he transferred them to him. Poché received the interest for Paul Pertuit as his agent. Pertuit testified that at the time he acquired the notes from Poché he had no information in regard te any fact which led him to believe that Poché had no right to sell the notes. Damaré, the tutor, was never authorized by a family meeting or by order of court to sell the notes. Evariste Poché knew all about tbe manner of the settlement of the succession of Désiré Jolly. Damaré, at the time of the transfer of the notes to him, told him that they were Mrs. Jolly’s notes.

It is, under this condition of affairs, as shown by the evidence, that this case comes before us for decision as to the conflicting rights of the minors, claiming the ownership of the notes as not having had their title divested, either directly or indirectly by any act of theirs or of any one authorized thereto on their behalf and those of Paul Pertuit (substantially represented by the plaintiff in executory proceedings) , claiming to be holder and owner of the notes, mortgage and privilege, as having purchased them in good faith for a valuable consideration and in due course of trade, and also as having purchased them (with the exception of the note for two thousand dollars) prior to their respective maturities.

It is contended by the under-tutor, on behalf of the minors, that by express law the sale of property belonging to a third person is null. O. 0. 2452. That a person can not be deprived of his property without his consent, expressed or implied; that minors, in view of their incapacity and helpless condition, are specially under the protection of the law; that in a case where they are shown to have been despoiled of their property, without shadow or pretence of right or authority, they have a superior equity over one claiming ownership to the same, even in good faith, but under acts of conversion and wrong. That the tutor of minors is prohibited from disposing of the property of his wards without the advice of a family meeting or orders of court. That these minors have been guilty of no laches, imprudence or negligence of which (to their loss) others could take advantage. That no act of estoppel is chargeable to them. That plaintiff’s whole claim of right rests upon invoking in his favor the provisions of the commercial law; that that law has never been formally adopted in Louisiana, and its provisions have never been permitted to stand when in opposition to positive and direct statute law of the State. That the rules of the commercial law touching the transfer of notes and the cutting off of equities do not extend to the assignment of- the mortgages and privileges by which notes are secured. That plaintiff acquired at one and the same time these three notes of the same series, all of the same date, and all identified by paraph with the same notarial act. That at the date of this acquisition one of the notes was past due; that that fact not only opened the equities as to that particular note, but as to the others which plaintiff purchased at that time. That even if plaintiff could successfully hold the ownership of the notes as against the minors he could take nothing adversely to them under the mortgage and privilege securing the notes, it not being negotiable. That if plaintiff were permitted to do so, and to gain the full benefit of the special mortgage and vendor’s privilege securing the notes adversely ' to them, the effect would be to permit their tutor by a sale of really his own debt to them, to give to his vendee a right which would prime their own, as they would be forced to fall back upon a general mortgage, dating from June, 1890, while plaintiff would claim upon a vendor’s privilege upon the special property, which was the only property owned by their father; that the law did not contemplate and should not permit so iniquitous a result to the ruin of minors.

Plaintiff, on the other hand, invokes (as the under-tutor supposed he would invoke) in his own behalf the rules of the commercial law, which he maintains extends to and covers the rights of mortgage and privilege by which the notes were secured. He relies also upon the state of the public record, which he avers gave every reason to believe that the notes were legally owned and held by Evariste Poché, and legally secured in his hands as such holder by vendor’s privilege and special mortgage. He asserts his absolute good faith in the premises and his utter ignorance of the fact that Damaré had any other connection with the notes than as maker of the same.

He contends that the purchase of the notes carried with it, as accessories thereto, the mortgage and privilege securing it (0. 0. 2615), and that these accessories can not be separated from the principal obligation.

In the case at bar Felix Damaré, the maker of the notes and the transferee of the same to Evariste Poché, has no defence to make and could urge none, either to the notes or the mortgage or privilege. The notes are unquestionably due by him, and unquestionably secured by special mortgage and vendor’s privilege; Damaré himself is, by his conduct and contract, estopped from contending to the contrary. The equities which are advanced in this suit are not those between the holder of the notes and mortgage and the maker, which is the ordinary form in which they are presented, but between dif- . ferent parties contesting, as between themselves, their respective titles to the notes and the right to the benefit of their accessory mortguge and privilege.

We are of the opinion that Damaré was without right and authority to transfer the notes, as he did, to Evariste Poché without order of court or legal proceedings. At the time he made the transfer not only was Poché advised of the condition of affairs and the ownership •of the notes, but one of the three notes, then simultaneously trans - fered to him, was past due.

The Supreme Court of Michigan in Able vs. McGuigan, 78 Mich. 415 (44 N. W. 393) and Shultz vs. Shultz (71 N. W. 858) was of the opinion that a transfer of notes under such circumstances throw open the equities as to all the notes matured and unmatured.

Damaré’s action in the premises was a conversion or species of theft of the property of his minor children, of whom he was then the tutor. Independently of this, had Evariste Poché examined the record he would have found that these notes, subscribed by Damaré to his own order and by himself endorsed, had been by him, at the time of the sale, delivered to his brother, Judge Poché, and the subsequent possession of the same by Damaré, the maker, called for ■examination and explanation.

There is no doubt that were Evariste Poche himself the plaintiff in this suit, his claim would be repelled by bad faith and knowledge on his part.

There is some doubt as to whether Poché in acquiring the notes did .so for his own account, or whether he did so as agent for Pertuit as an undisclosed principal for whom he was in the habit of making investments. We accept that as an actual fact, Paul Pertuit himself ■was not aware at the time he received the notes from Poché that they had been the property of Mrs. Jolly, or the minors, or that they had ever returned into the possession of Felix Damaré, the maker.

The District Oodrt was of the opinion that under the circumstances •of the case, the ownership of the note for two thousand with its accessory mortgage and privilege had never passed out of the minors, and so decreed, but it held that the ownership of the other two notes, with their accompanying mortgage and vendor’s privilege were transferred to Pertuit and would hold good even as against the minors under the rules of the commercial law, and the jurisprudence •of the State based upon a consideration of rights of parties taken on the faith of the condition of the public records.

We have repeatedly enforced the rules of the commercial law in their bearing upon equities as between the maker of negotiable notes and holders and owners who acquired the same before maturity in due course of trade and for a valuable consideration. The matter has-passed beyond the domain of discussion, and makers of notes execute the same in Louisiana with direct reference to their rights and obligations being determined and fixed by the principles of the com-' mercial law and the usages of commerce. 0. 0. 1954, 1964. Though the commercial law has not been directly and formally adopted in this-State as a whole, the existence of its influence and control over certain subjects has not only been recognized by our courts, but has also been directly referred to in the law itself, as, for instance, in Art. 1914 of the Civil Code.

We have on a number of occasions permitted the holders and owners of negotiable notes who had acquired the same under circumstances such as to cut off the equities between themselves and the maker, to also enforce for their benefit and advantage the mortgage by which the makers had secured payment of their note, although there were really defences to the notes, and although we hold to the opinion that mortgages were not negotiable in the sense of cutting off the equities in relation to the enforcement of mortgages. An examination of these cases will, we think, show in each of them there was an element of estoppel as against those seeking to go behind the mortgages to attack their validity and to question the right to their enforcement. It is true that in those cases we referred in connection with their special facts to the condition of the public records, but we have nowhere announced that the simple fact alone that the public record when examined would show the proper registry of a special mortgage as having been granted by one authorized to grant it without any indication on the face of the record going to show reasons why it was not legally enforceable, would carry with it as a necessary unavoidable consequence against all parties in interest that the mortgage would be permitted to be enforced acrording to its terms and tenor to their prejudice regardless of reasons which could be legally assigned by particular parties why this result should not be permitted to be reached.

To have made such an announcement would have been to have-declared that we accepted the doctrine of the negotiability of mortgages to its fullest extent.

We have always taken care in the cases we have referred to, to disclaim holding the opinion that mortgages were negotiable in the-sense that word is used in the commercial law and to place our-decisions therein upon the special circumstances of the particular-cases.

In the consideration of those cases we have to keep in mind precisely who the parties to the litigation were and what were the relations-they bore to the subject matter before the court.

In dealing with the rights of the minors we have to consider them) strictly as third parties to the sale made by their father and tutor of their notes with their mortgage and privilege. They have no connection with that sale. The'ir father was confirmed as their tutor on the thirtieth day of June, 1890, and the faithful administration by the tutor of their property stands secured in their favor to the extent their claim was registered by the general mortgage given them by the law. In point of date and of registry that mortgage was first in order. In addition to this their father was indebted to them in the full amount of the three notes with interest accrued and to accrue; this indebtedness being secured in their favor by special mortgage and vendor’s privilege.

Will the transfer by ■ the tutor of these privilege-bearing notes (belonging to them) uuder the circumstances in which the transfer was made, be permitted to confer upon the holder of the notes a right superior in rank and effect to those held by the minors?

We have been called upon several times to examine into and determine the relative rights of a party holding an existing undisputed mortgage on certain property, and those of a party claiming to hold a mortgage superior to the same by reason of being the third holder of a negotiable promissory note which he had acquired before maturity, in good faith, for a valuable consideration, and which note was secured by a special mortgage originally ranking that held by the other party, and standing uneanceled on the public records when the note was acquired, when in point of fact the mortgage, had been extinguished by reason of an ancicipated payment made* by the maker prior to the maturity of the note. In such case we-. have constantly held that although the third holder was entitled) under the commercial law to a judgment on the notes against the-maker, notwithstanding it had really been paid, yet he could not enforce the mortgage to the detriment of third parties. That the mortgage being merely an accessory obligation, fell, when iu point of fact the note was paid and the subsequent reissuing of the note,, whether by the maker or by a person, who, having got possession of it, had, without right, reissued it, could not revive the mortgage to the prejudice of third parties.

See on this subject Hill vs. Hall, 4 Rob. 416; Schmidt vs. Frey, 8 Rob. 435; Bowman vs. MeKelvoy & Bradford, 14 An. 587; Schinkel vs. Hanewinkel, 19 An. 260; Brou vs. Becnel, 20 An. 256; Doll vs. Rizotti, 20 An. 265, 266; Hoyle vs. Cazabat, 25 An. 440; Hall, Rod & Putnam vs. Chancere, 25 Au. 493; Morris & Co. vs. White, 28 An. 855; Jennings vs. Vickers et al., 31 An. 684; Butler vs. Slocomb, 33 An. 173; Taylor vs. Rous (Manning’s Unreported Cases, page 331) ; Layman vs. Vicknair, 47 An. 684; Securities Co. vs. Talbert, 49 An. 1404. A mortgage would have to be granted de novo.

■ The principle lying behind these decisions is that the rights of holders of notes which they acquired before maturity, in good faith for a valuable consideration in due course of trade, are different as to the mortgages and privileges securing the note than they are as to the notes themselves; that mortgages and privileges are not negotiable in the sense in which that word is used in the commercial law, as necessarily and generally cutting off equities touching the rights of parties in relation to the mortgages.

The circumstances of a particular case and the relations of parties which would go to justify the barring out of actual equities must be exceptional.

In Bank vs. Flaithers, 45 An. 78, and in Layman vs. Vieknair, 47 An. 684, we expressly declared that these exceptional cases, when they were recognized, could not be made to rest upon the doctrine of .the negotiability of mortgages under the law merchant.

In Butler vs. Slocomb, 33 An. 173, we said: “We must not be -understood, however, as saying that in such cases (chose referred to by the court) when the note passes from the mortgagee the mortgage does not pass with it, for such is not our opinion, inasmuch as the mortgage does follow the note. Whát we would say is that the mortgage when it does pass is acquired in the same condition that it ■was in before the mortgagee parted with his rights in, under or to the same. We assert and affirm the proposition that a mortgage when .assignable and assigned can not be transferred to a third person so as to give him any greater right than the mortgagee himself possessed. In so doing we are supported by justice, by law and by jurisprudence.”

In Securities Co. vs. Talbert, 49 An. 1404, we said: “ We are next to inquire whether the plaintiff has by purchase of the notes acquired any greater right of protection than Norman F. Thompson had in the premises. Mrs. Talbert does not question the fact that plaintiff has a valid debt and a valid mortgage against her husband’s property; what she denies is, that plaintiff’s mortgage ranks her own. The original holder of the notes, as we have said, accepted his mortgage, not on the strength of the condition of the public record as claimed, but on reliance upon an incorrect statement and admission of fact made by the wife. The plaintiff had no dealings whatever with Talbert or his wife; he holds the mortgage as a mere assignee, and takes no greater rights in the premises as to the mortgage than his assignor had. The mortgage is not negotiable in the same sense as negotiable notes are negotiable, and the rules governing the equities in matters of negotiable notes have no bearing. We do not think that our decisions granting protection to third parties, dealing on the faith of the condition of the public record reach this case.”

In Bank vs. Flathers, 45 An. 78, we said: This court has very deliberately held that a bona -fide holder of a negotiable note acquired before maturity, secured by a mortgage duly recorded, which has been- executed by one having lawful authority to make it, and bearing on its face nothing to impeach its validity, can not be defeated in his mortgage rights by secret equities between the original parties existing before, or arising after its execution of which neither the act nor the public records afforded any notice, and of which he had no actual notice, at least when sueh equities are opposed by the original mortgagor or on his right.

We then proceeded to say that our opinion rested upon no assertion of the negotiability of mortgages, but upon other principles of law and equity, which forbid a man who, as a security for negotiable note's, had executed a mortgage, which he had fullright and capacity to make on property belonging to himself by an act suggesting on its face no defect duly recorded and importing confession of judgment in favor not only of the mortgagee, but of any future holder of the note to impair its binding force and effect by pleading secret equities created by his own fault, negligence or imprudence and of which the subsequent holder of the notes had no notice and no means of information. When cases arise in which the above elements, or some of them, are missing, we will determine them according to their particular facts."

We do not stop to inquire here whether the proposition announced was not too broadly stated. The extract from the decision which we have copied is inserted in this opinion for the purpose of showing that our ruling was based not on the negotiability of mortgages, but upon the doctrine of estoppel, and to call attention to the paragraph which we have italicized in regard to the parties setting up the equities in which the general terms of the statement were qualified by the expression that the rule announced was correct, “ at least when such equities were opposed by the original mortgagor or in his rights."

No equities are opposed in the ease at bar by the mortgagor or in his right, but by third parties.

We have examined the question of the effect of the transfer of a negotiable note before maturity in good faith and for a valuable consideration in due course of trade upon the mortgages and privileges securing the same for the purpose of ascertaining what plaintiff’s position would be quoad the minors and what legal injury would result to them from accepting as true the proposition contended for by plaintiff in executory process, that he became the legal holder of the three notes sued on by his purchase from Evariste Poché, and also became, by said purchase, the owner of the mortgages and privilege securing the same. We should give to the plaintiff the benefit of that purchase as regards Damaré, and the property in question to the extent that this can be legally done without injury to the minors.

The minors have no greater interest in this matter than the securing of their original rights free from impairment. That being accomplished it is immaterial to them what may be the situation of tíie other parties as between themselves.

There can be no question, as we have said, that Felix Damaré, having received from Evariste Poché ten thousand dollars as the consideration of these transfers of these three promissory .notes secured by mortgage would be estopped from denying his indebtedness to Pertuit upon the notes or contesting the mortgages. As between himself, Evariste Poché and Pertuit, he should be held to that position even though as between the minors and Poché and Pertuit the transfer were open to attack. It frequently happens' that contracts are held good as between the con-tracking parties while held null and void, in so far as the rights of third parties would be involved. We have an instance of that kind in matters calling for the exercise of the revocatory action (0. O. 1974) where the contract attacked is set aside in so far as it prejudices the attacking creditor, but is allowed, except to that extent, to stand; and again, in the matter of the sale of movable effects the property may have shifted by the sale and the rights of the purchaser as owner be protected as between himself and his vendor, and yet be ignored until actual change of possession as between himself and seizing creditors of that vendor. C. 0. 1922. We conceive it to be our duty to solve the issues presented to us in manner such as shall protect the rights of all parties as fully as the situation will legally permit to be done in the exercise of our equity powers.

We recognize the justice and equity of permitting Pertuit as against Damáré to hold the notes with their accessories, and to enforce the same, and the difficulty and hardship as against him of separating the accessory from the principal obligations.

The difficulty in the way of accomplishing this equitable result in favor of Pertuit, and yet enabling the minors to avail themselves of the privilege in their behalf, which secured to them this indebtedness of their father, seems to rest upon the supposed necessity of being forced to detach this vendor’s privilege from the notes, and to-connect it with the general indebtedness to the minors by their father, resulting from the tutorship when the notes themselves, which evidenced the particular indebtedness which the privilege was intended to secure had been transferred to other parties.

We are of the opinion that Damaré, the tutor, was without power by an illegal transfer to Evariste Pocbé of the notes belonging to his wards, which he then held in his possession as tutor and which represented in his hands an indebtedness by him to them of ten thousand dollars, secured by special mortgage and vendor's privilege, to transfer to him or any one holding under him as accessory obligations securing those notes any security which would prime the security by which payment by him of the amount of the notes was secured in favor of his minor children. He might by such transfer have created- obligations against himself which he would be estopped to deny or repudiate, but he was powerless to transfer to third parties his own existing debt to his children. A person can transfer his property but not his own debt. Debts are not property.

Had the tutor on the morning of the day upon which he transferred the notes to Evariste Poché borrowed ten thousand dollars from him and given him in representation of his debt his negotiable notes, of even date secured by special mortgage of that day, it would have been out of his power to have secured those notes by vendor’s privilege, or to have given to that mortgage a date anterior to the date on which it was granted, or cause it to have the effect of priming anterior mortgages. The property being encumbered or charged with mortgages in favor of other parties, his capacity to mortgage would be held in check by the rights of the parties holding those mortgages. C. C. 490, 492. He could convey by mortgage to his mortgagee of that date no greater right in the thing mortgaged than he had himself. What he could not accomplish by a direct mortgage granted by him on the day of the transfer of the notes,' he could not accomplish to the prejudice of third parties by disposing of notes not belonging to him, secured by a vendor’s privilege and by a mortgage of anterior date.

His holding possession of them did not extend his power of mortgaging the property with such prejudicial retroactive effect. No transfer of the notes could give to the transferee any greater rights under the mortgage securing them than the transferrer could have legally vested in them by direct mortgage on that day. Besides this, while it is true that neither the tutor nor his transferees could insist upon holding that the effect bf Damaré, being the. tutor of his children, and of his being also their debtor upon the promissory notes of which he was the maker, would be to operate a presumptive fictitious payment of the notes, altering the character of the indebtedness, from a debt evidenced by note and secured by special mortgage and vendor’s privilege into a general indebtedness through the tutorship, secured by the tutorship mortgage (Zeigler vs. His Creditors, 49 An. 175; Dodds vs. Lanaux, 45 An. 296; Schneider vs. Burns, 45 An. 882; Duranton, Vol. 20, p. 11; Pont, p. 481) we think the minors would have the option (if their rights would be otherwise prejudiced) to elect to hold their father’s indebtedness to be of that character and to occupy any vantage ground and protection ' which that position might afford them as against acts of conversion of their property by their father. If the transfer of these notes by their father, made under the circumstances stated, could and should be held to have transferred them to Poché and his assignee with their mortgages, then we think the minors could validly claim, if necessary, that prior to this transfer they had been fictitiously paid to them by their father, and that the legal situation would be that which would result from a reissue of notes by the maker after an anticipated payment, but after an extinguishment of the mortgage and privilege securing them,. The existing mortgage having fallen, an act de novo would have been required to create at new mortgage.

If the effect of that situation would, under the decisions, be to-permit the transferee of the notes to hold them as owners with their mortgages, their rights under the mortgage and privilege would be-subordinated to the existing rights and equities of anterior creditors,, among whom, under the circumstances of the supposed election,, would be the minors appearing in this case, holding under their general mortgage. But unless this theory of a fictitious payment should be strictly limited in its effects to the parties to this litigation, neither would be benefited by its application, but on the contrary, it would operate to their prejudice. It would’enure to the benefit of third parties having no ground or reason to invoke the doctrine, as payment has not, in point of fact, been made. There are on the property, privilege claims held by other persons concurrent with that of the minors, and these parties being bound by no equities, would, by reason of the privileges they hold, prime the general mortgage by which the rights of the minors would be secured, as well as prime those of Pertuit.

The minors can not be forced to fall back upon their general mortgage, or as upon a matter of general indebtedness, unless it should be to their interest so to do. As we have said when they became the owners of the three privilege notes involved in this litigation, their father became their debtor to the amount of those notes with accrued and accruing interest secured by special mortgage and vendor’s privilege. As between them the negotiability or non-negotiability of the notes was a matter of no moment. They merely were the evidence of their father’s indebtedness. Of this special indebtedness so secured, their father could, by no wrongful act of his own, deprive them. McCall vs. Mercier, 1 La. 347; Zeigler vs. His Creditors, 49 An. 175. If they were all of age to-day, and he were unwilling or unable to actually place those notes in their possession, they would none the less have the legal right as against him to institute proceedings upon the notes, ■explaining the cause of their not producing them, and to obtain judgment against him for the amount thereof with recognition in their favor of the vendor’s privilege and special mortgage securing the same. Brown vs. Saddler, 13 An. 205. Damaré himself -would be powerless to complain of the non-production of the notes •or to urge that they had been by him transferred to third parties with their mortgage and privilege, and that he would be called upon to make a double payment. He would be estopped from raising ■such a defence as against his wards, and were he in fact to' be called upon to make a double payment he would occupy precisely the legal and just position which would be called for by his conduct — he would be justly estopped as well to his children as to Pertuit. A special feature of this particular case is, that the transferrer of the note to Poehé (under whom Pertuit holds) was himself the very debtor at that time to third parties for a valuable consideration upon those notes, and that he would justly himself incur a double liability on accout of his illegal conduct. It would be no defence to the suit brought against him by his children that third parties had acquired rights in, to, or upon the notes, with their accessories and the property. Two parallel actions based upon the notes with their mortgage and privilege could very consistently and legally coexist against Damaré; one brought by Damaré’s children against him, the other by Damaré against him. Pertuit certainly would have no legal ground of complaint that the children should institute such an action or obtain judgment against their father with recognition of their vendor’s privilege. The relative legal rights of parties as resulting from the mortgages and vendor’s privilege could be and would be open to be tested upon a sale of the property mortgaged. Pertuit might obtain judgment against Damaré for the amount of the note's in his possession •with recognition in his favor of the vendor’s privilege and mortgage, .and the children also obtain judgment for the same amount with .similar recognition of privilege and mortgage.

There would be two debts owed by Damaré. It is a mistake "to suppose that the acquisition by third parties of rights in respect to the notes and privilege and mortgage had the effect of destroying and extinguishing the minors ownership of the debt evidenced by these notes and mortgages, where the act on which these adverse rights rested were unauthorized acts and acts of ■conversion and spoliation. True it may be that for some purposes and to some extent they might have to acknowledge the rights of others so acquired, but they would none the less still retain their own rights of ownership, for the act of sale was as to them null. 0. C. 2452. Suppose that Damaré, at the maturity of the respective notes had paid Pertuit the amount thereof, would the notes have returned as extinguished notes with extinguished mortgage and privilege into his possession? Unquestionably not. Why not? Simply because though the transfer of the notes as between Damaré and Pertuit might be operative giving the latter rights of imperfect or qualified ownership therein, the minors’ ownership of the notes and their right in the mortgage remained in force.

The return simply unfettered the notes and mortgages from the rights' which had been temporarily impressed upon them to the extent that such ¡rights had been legally impressed. From this it -would appear that a double set of rights could legally coexist in respect to these notes.

Property held in trust by a trustee can always be followed when converted so long as the property can be followed and identified. Third parties may have acquired rights, but the owners have lost none of their own without their consent express or implied or without their fault. This ease presents simply the question as to the extent to which third parties have acquired rights to the detriment of the minors, for the minors’ rights are intact. Pertuit, as holder of the notes, could obtain jndgment thereon, record the judgment in his own favor,a judicial mortgage — execute the judgment by writ oifi.fa. and obtain a privilege by seizure which would enure to his individual benefit, but so far as the property mortgaged is concerned he could never under the mortgage obtain a preference of payment out of the proceeds thereof which would prime the rights of the actual owners of the notes with their privilege and mortgage. He can take nothing under the mortgage and privilege to the prejudice of those parties. So long as the notes with their privilege and mortgage stand with actual existing rights of the minors therein they bar the way to any claim of preference advanced by him.

Damaré, the father and tutor of the minors, is now dead. The rights of the minors have become fixed. A new tutor has been appointed to them, authorized to enforce those rights in all respects. In view of all the facts and circumstances of this particular case, we think the course to be pursued in order to guard the interests of all parties and to prejudice the legal rights of none is to give effect as-between the plaintiff and Felix Damaré, Sr., to the transfer of the notes declared on in the executory proceedings in this case and to the transfer of the accessory obligations securing the payment of those notes, and to authorize the enforcement of payment of said notes by the plaintiff, but to subordinate the rights of the plaintiff in executory process to payment out of the proceeds of the sale of the property mortgaged to the prior payment out of those proceeds of the minors, represented therein by their under-tutor, and Miss Felicie-Damaré to the full amount of the notes declared on with the interest thereon accrued to and to accrue with the right to plaintiff, E. J. Pertuit, to plead and to prove as far as the facts may justify any actual payment or extinguishment of the amount due by Damaré to-his children, parties to this suit.

For the reasons herein assigned, it is ordered, adjudged and decreed that the judgment of the District Court be and the same is hereby annulled, avoided and reversed, and it is now ordered, adjudged and decreed that the injunction taken out by Auguste Damaré as under-tutor of the minors named in the pleadings, be, and the same is set aside, and the plaintiff, E. J. Pertuit, as holder of the notes declared on by him, be and he is hereby authorized and permitted-to proceed to the sale of the property mortgaged to secure the payment of said notes, but that his right as such of payment out of the-proceeds of the sale of the said property be subordinated to a preference of payment out of the same to the minors on whose behalf the-said under-tutor intervened herein to the full amount of the said notes with interest accrued and to accrue thereon, with the right-reserved to plaintiff, E. J. Pertuit, to plead and to prove, as far as the-facts may justify, any reduction upon the same by payment or extinguishment actually made thereof.

Mr. Justice Breaux concurs in the decree.

Miller, J., dissenting, filed a dissenting opinion in this case.

Blanchard, J., concurs with Miller.


author: Nicholls, C. J.

text:
    No. 12,740.
    State of Louisiana vs. Pierre Prade.
    When the statement of facts recited in a bill of excention by counsel differs from that asserted by the court, that of the court is controlling.

      Where a District Judge after a full trial is satisfied that the testimony sought to-be made the basis of a new trial would not alter the result at a second trial, even if admitted, either because the testimony was otherwise so strong against the accused as would make such particular testimony clearly unavailing, or because he knew the witnesses who were proposed to be put upon the stand, and was convinced they would not be believed, or because of similar reasons hi3 opportunities for acting advisedly, justly and properly are so superior to those of the Supreme Court that it would not be warranted in substituting its udgment for his in the premises, except in very clear cases.
    A PPEAL from the Nineteenth Judicial District Court for the Parish of St. Martin. Voorhies, J.

      M. J. Cunningham, Attorney General, and James Simon, District Attorney (P. A. Simmons, Jr., of Counsel), for Plaintiff, Appellee.

      Edward Simon for Defendant, Appellant.
    Argued and submitted April 9, 1898.
    Opinion handed down May 2, 1898.
    Rehearing refused May SO, 1898.
   The opinion of the court was delivered by

Nicholls, C. J.

The defendant was convicted of] an assault with intent to commit rape, and sentenced to three years’ hard labor in the penitentiary.

The complaints urged by him on appeal are those reserved 'in a bill of exception to the action of the District Court in overruling a motion for a new trial.

The first ground assigned for a new trial was that when his cause was called for trial the attorney whom he had employed to defend him announced in open court that he withdrew from the case, but immediately accepted, at the request of the court, the position of an assigned counsel, but “ that said attorney expressly limited with the consent of the court his- assistance to attending to the evidence on the trial and jury matters,” in consequence of which limitation the defence contemplated by Art. 8 of the Constitution was not carried out, and defendant not defended, said attorney not arguing the matters involved on the merits. That said attorney forthwith went to trial without asking time to prepare the defence indispensable in the matter, particularly on a charge of felony like this. That defendant, a youth of humble station in life, was unable to see to his own defence and to know the sort of evidence necessary in his defence.

2. Because since the trial of the case defendant had discovered evidence of a witness unknown to him until after said trial, who would make proof under oath (this witness being one Alcide Malvaux) — that said witness met the prosecutrix on the day said pretended crime was alleged to have been committed, on the evening of said day, she being on foot on the road at a distance of a few acres from the town of St. Martinsville, she being in company with a white man also on foot and a black man, and talking together — that said prosecutrix told said witness Malvaux to take her to town (which he did in his buggy) to her house, and on the way she told him that defendant, Pierre Prade, had given her three dollars to have carnal intercourse with her, and she showed him the money, and at that time she said she had Prade’s hat — that she said to witness chat she did not want to have intercourse with him at that time — that she said to said witness to go in his buggy and to bring Pierre to her, as she wanted to give him his hat, and said witness went and took Prade to her, and she and Prade went into her room and after the expiration of about ten minutes they both came out, and she gave Pierre his hat and thanked witness; that she told Pierre she would have carnal intercourse with him at another time — that said witness would also prove that the prosecutrix was an infamous low prostitute of the town of St. Martinsville.

3. Because defendant could prove by several witnesses found since the trial (naming them) who could not be found before with reasonable diligence (material witneesses not corroborative) that the character of the prosecutrix was that of a low prostitute of the town unworthy of credit upon oath.

That the testimony of Malvaux had been discovered since the trial; that it could not be had before or at the time of trial; that it was material in its effect and to establish his innocence; that it was not merely cumulative, corroborative and collateral, and was such as to produce an opposite result; that it was such as reasouable diligence of defendant could not have found at first trial.

Accompanying the application was an affidavit of Malvaux in which he swore that the facts related in the motion for new trial as being within his knowledge, and as haying been told to him by the prosecutrix and figuring under ground No. 1 of said motion were true and correct.

The court, in overruling the motion, said:

The facts stated by mover under ground No. 1 are incorrect. Honorable James E. Mouton was employed by him as counsel when he was arrested in June, 1897, and bailed, and remained his counsel to the day of the trial. Mover’s witnesses were summoned by him and on the day of the trial were all present in court. When the case was called for trial by reason of some disagreement betwen Mover and his counsel (the latter) mentioning the fact to the court desired to withdraw from the case.

The court then asked mover whether he had an attorney to represent him, and he answered to the court that James E. Mouton was his counsel. Thereupon at the request of the court Judge Mouton consented to represent the accused by appointment of the court. He stated that he was ready to go to trial and the trial was proceeded with. When counsel in his petition says that Prade had had a half and incomplete trial, he did gross injustice to the court and to the jurors who tried the cause and misrepresented the counsel who had defended the accused with so much zeal and talent to the knowledge of all who assisted at the trial. The case was argued neither by the State nor by the defence, and submitted by both on the charge of the judge. The counsel of accused, Judge Mouton, was well cognizant of all the facts of the ease, having been employed three or four months.

The second ground is without merit.

1. Because if Malvaux testifies, as it is alleged that he can, his testimony would be the reverse of that given by the accused himself when on the stand.

Newly discovered evidence, the effect of which would be to impeach the testimony of the accused himself is not a ground for new trial.

2. Malvaux in his affidavit takes particular care not to swear to the truth of the facts detailed in the second ground for new trial, but merely swears to the facts as being within his knowledge and as having been told him by the prosecutrix and figuring under ground No. 1 of the motion for a new trial.

3. Because admitting that Malvaux’ affidavit is correct, it is evident by mover’s very allegations that he knew that he was a witness to the facts stated (so material as he alleged to his defence), and yet he showed no diligence to have the witness, though accused was out of jail up to conviction (State vs. Washington, 36 An. 341).

To warrant a new trial, the newly discovered evidence must not be for the purpose of contradicting State witnesses. It must be such as could not have been secured by reasonable diligence, and it must not only be shown that due diligence was used, but that it was used to discover the evidence (State vs. Charlot, 8 Rob. 529; State vs. Morris, 27 An. 480; State vs. Woodworth and McCauley, 28 An. 89).

During the three months that intervened between his arrest and his trial, accused took no steps to secure his presence as a witness, though he resided within two miles of the court house.

The fact of the prosecutrix having received three dollars was brought to the notice of the jury, who disbelieved it, and it is not likely Malvaux’ testimony would produce a different result, the more so as the witness of the accused who saw the prosecutrix immediately after the outrage, with the face bruised and clothes torn to pieces, all (with the exception of one) denied that prosecutrix had any money then. The fact that the prosecutrix was a woman of ill repute, was shown at the trial.

Opinion.

If the recitals of the bill of exceptions had come to us uncontro - verted, we would have been called on to decide whether an assignment of counsel by the court to. an accused person, who had no counsel, would be proper when the counsel assigned attaches to his acceptance of the trust conditions and limitations as to the extent and character of the services he should render to the accused. We would be also called on to declare whether if not proper the error would be of such a character as to carry with it the setting aside of the verdict of the jury, and the judgment rendered upon it. In the case at bir, in overruling defendant’s motion for a new trial, the court declared that “the facts stated therein were incorrect.” Counsel insists that this general statement was followed by a recital of particular facts connected with the assignment, and a defence of the manner in which the counsel who. had been assigned performed his duty; but that the court nowhere-referred to or denied the special circumstance which constituted the very basis of his complaint, which was, that the counsel who had been assigned, accepted the trust under conditions and limitations affixed by himself and consented to by the court. He insists that such was the fact and that the court had passed that particular fact by. We would be slow to believe that a judge in affixing to a bill of exceptions a statement of facts would so express himself as to convey to us the idea that he was certifying that all the recitals of the bill were untrue, when in fact he was leaving some of the recitals uncovered and uncontradieted. We have on several occasions urged upon district judges the importance of carefully examining the allegations made in bills of exceptions so as to cut off the possibility of any discussion as to precisely which facts were admitted, and which were denied by the court. We referred particularly to this matter in State vs. Wright, 48 An. 1488, und the condition of the present case necessitates our again calling special attention to the subject. We have repeatedly said that where the court and counsel differ as .to facts the statement of the court is controlling.

We must dispose of this ¡jase under that rule.

The conclusions of the District Court in respect to alleged newly discovered evidence as a basis for a new trial are reached by him with thorough knowledge of the condition of the entire evidence in the case, and with the advantage of having seen and heard all the witnesses. This court knows nothing of the facts of the case, otherwise than as it comes to a limited knowledge of them through the bills of exceptions. If a District Judge, after a full trial, be satisfied that the testimouy sought to be made the basis of a new trial should not and would not alter the result of the second trial, even if admitted, either because the testimouy otherwise was so strong against the accused as would make such particular testimony clearly unavailing, or because he knew the witnesses who were proposed to be put upon the stand and was convinced that they would not be believed, or because of other similar reasons, his opportunities for acting advisedly, justly and properly are so superior to our own that we would not be warranted in substituting our.judgment for his in the premises, except in very clear cases. On the statement of the judge we have no reason to believe that a jury with Malvaux’ testimony before it, would be in any way different from what it was before.

District judges know that the State asks for the conviction of no man as to whose guilt there is reasonable doubt; they should act on that theory, and we must assume they do.

For the reasons herein assigned:

It is hereby ordered, adjudged and decreed that the judgment appealed from be and the same is hereby affirmed.