text:
    No. 12,399.
    Benjamin Wright vs. State Board of Liquidation.
    The object of this and similar suits is not to obtain judgment against the State for the amount of the bonds.
    But to ascertain or find certain facts, t. e., do the bonds possess the requisites enumerated i.n the act of 1875, -without which they can not be funded.
    The State can be sued only by its own consent, and may, therefore, impose such limitations and restrictions on the right of suit as it pleases.
    The court, in determining its powers and duties in suits against the State, must look to the act authorizing the same to determine the scope and limitation of its power and jurisdiction.
    without regard to the question of ownership, whether in hands of original payee orthose of innocent holders, the bonds can not be funded, under the ftct of 1875, until this court shall have investigated and decreed that they are legal and valid obligations of the State, were not issued in violation of the Constitution, were issued in strict conformity to law and for a valid consideration.
    APPEAL from the Fifth Oivil District Court for the Parish of Orleans. Théard, J.

      Richard De Gray, F. B. Thomas and William Hopkins Young for Plaintiff and Intervenor, Appellants.

      M. J. Cunningham, Attorney General, for Defendant, Appellee.
    Argued and submitted March 20, 1897.
    Opinion handed down April 12, 1897.
    Rehearing refused June 30, 1897.
   The opinion of the court was delivered by

Blanchard, J.

Plaintiff sues as owner and holder of eight bonds of the State of Louisiana, each for one thousand dollars, issued by authority of Act SI of the General Assembly of the State, approved February 21, 1870.

William Hopkins Young intervened in the suit, alleging that he is the owner and holder of twenty-two bonds of the same series, each for the sum of one thousand dollars.

The bonds are all dated July 1, 1870, and were made payable to the New Orleans, Mobile & Chattanooga Railroad Company, or bearer, forty years from date, with interest coupons attached.

Both petitions aver that the bonds were issued for a valid consideration, after full compliance with all the conditions and requirements of Act 81 of 1870, and that they are constitutional, legal and valid obligations of the State.

The object of the suit is to compel the Board of Liquidation to exchange the bonds for consolidated bonds of the State under the terms of Act No. 8 of 1874. The allegation is made that the Board of Liquidation had been duly applied to for this purpose, but that the application to fund and exchange had been relused.

In the answer of defendant it is specially denied that the railroad, in aid of which the bonds were issued, was ever constructed as contemplated by the law. It is averred that the bonds declared on are questioned and doubtful as to their legality and validity; that they are unconstitutional, without valid consideration and not fundable under Act 3 of 1874 and the amendment thereto.

The case was tried on these issues, and there was judgment in favor of plaintiff and intervenor. It is this judgment we are called upon to review.

The State, by the Funding Act, approved January 24, 1874, declared its willingness to fund its outstanding obligations at sixty cents on the dollar, and organized the Board of Liquidation to carry into effect its provisions.

By Act No. 11 of the Extra Session of 1875, known as the Supplemental Funding Act, it prohibited the Board of Liquidation from issuing bonds in exchange for any outstanding obligations of the State, the legality or validity of which is questioned, until the same shall first, by final decree of this court, be declared legal and valid obligations of the State, contracted in strict conformity to law, not in violation of the Constitution of the State or of the United States, and for a valid consideration.

In reference to suits brought under the Supplemental Funding Act, this court, in the case of Lord Cecil et al. vs. Board of Liquidation, 30 An. 35, said:

“ It will be observed that the object of this and similar suits is not to obtain a judgment against the State for the amount of the bonds. The decree we are to render is assimilated to a special verdict of a jury, who had been charged to ascertain or find certain facts — i. e., do the bonds possess the requisites enumerated in the act of 1875, which it is essential they should have in order to justify the Board of Liquidation in funding them.”

The State can be sued only by its own consent, and it may, therefore, impose such limitations and restrictions on the right of suit as it pleases.

Hence, this court, in determining its powers and duties in cases against the State, must look to the act authorizing the same, in order to determine the scope and limitation of its power and jurisdiction. Outside of the act authorizing the suit, and beyond the limitations therein fixed, it is absolutely without authority to hear and determine; and must, therefore, confine its investigations within the limits and to the objects specified. Spencer, J., Concurring Opinion, 30 An. 46.

The bonds in controversy being questioned as to their validity, the Board of Liquidators declined to fund them.

Plaintiff, under the terms of both the original and supplemental funding acts, is authorized to apply to the courts for relief, and accordingly does so.

But the later act tells him that his bonds can not be funded until this court shall have investigated and decreed that the bonds are legal and valid obligations against the State, that they were not issued in violation of the Constitution, that they were issued in strict conformity to law, and that' they have a valid consideration. If they fail to pass muster in any one of these particulars this .court can not order their funding and exchange for consolidated bonds.

And the court must make this inquiry without regard to the ownership of the bonds. It must make it whether the bonds be in the hands of the original payees, or in those of innocent third holders for value before maturity.

The case can not be affected in the slightest degree by any equities which plaintiff and intervenor may lay claim to under the law governing negotiable instruments. That question was fully settled in Lord Cecil’s case, supra, and reaffirmed in Carver vs. Board, 35 An. 263, and in Adams vs. Board, 39 An. 690. In this view of the case, if the consideration of these bonds has failed so far as the original payees are concerned, it has failed equally with regard to all subsequent transferees; and if the consideration has failed, these bonds can not be held to be, in the language of the Supplemental Funding Act, “ legal and valid obligations against the State.”

The Attorney General insists that the bonds are stricken with unconstitutionality on two grounds:

1. Because at the time when they were actually issued the debt of the State had already reached the limit of twenty-five million dollars, beyond which, by the third amendment to the Constitution of 1868, it could not be extended.

2. Because Art. 114 of the Constitution of 1868 required the object or objects of every law to be expressed in its title, and the title of Act 31 of 1870 did not express any object to levy a tax, or to provide the ways or means to pay the debt therein authorized.

He also insists it is not shown by legal and competent evidence that the bonds were issued in strict conformity to law; that is to say, that all the conditions and requirements of Act 31 of 1870 were complied with, and that it was incumbent upon plaintiff to show this affirmatively, and he can not rely upon legal presumptions arising from the act of the State officials in issuing the bonds, etc.

In our view of the case it is not necessary to pass upon these defences. There is another decisive of the controversy, and that is that the consideration of these bonds has failed, and therefore they do not occupy before the court the status of “legal and valid obligations against the State.”

Section 7 of Act 31 of 1870, after reciting “ that in order to invite immigration to the State, extend the cultivation and increase the products of that part of its territory lying west of the Mississippi river, augment the commerce and growth of the city of New Orleans and promote the general prosperity of the people of the commonwealth, it is of vital importance that the railroad of the New Orleans, Mobile & Chattanooga Railroad Company be extended westerly from the city of New Orleans * * * to the city of Houston in Texas, and that the same be constructed and put in operation between said cities in the shortest practicable time, and to induce the said company to so extend its said railroad, and incur the inconvenience and increased cost of a speedy construction of the same, and to insure its-construction and opening for traffic between said cities within the time hereinafter specified,” declared that the State granted and would pay and deliver unto the said company the bonds of the State-to the amount of three million dollars, as follows: “ Seven hundred and fifty thousand dollars of bonds whenever the railroad was constructed from a point opposite New Orleans to Bayou Lafourche, at or-near Donaldsonville; another instalment of seven hundred and fifty thousand dollars of bonds when the road was completed from Bayou Lafourche to Vermilionville; a third instalment of seven hundred and fifty thousand dollars of bonds when the road was completed from Vermilionville to the Sabine river; and a fourth instalment of seven hundred and fifty thousand dollars of bonds when the road was completed from the Sabine river to the city of Houston.”

The section further provided that this grant of bonds is made upon the condition, and express agreement with the company, that the railroad was to be constructed from New Orleans to the Sabine-river and be opened for traffic within three years, and from the Sabine river to Houston within six months later; and that in the event the company failed to construct its road to the Sabine river-within the time fixed, it was to receive no further issue or instalment of bonds, and shall be bound to return to the Treasurer of the State, to be canceled, all bonds which shall have been issu'ed to it and which it still owned or held, and to account for and pay over into-the State Treasury all sums of money received for bonds sold or disposed of.

It was further provided that any failure to complete the railroad from the Sabine river to the city of Houston because- of difficulties and delays resulting from the failure to secure timely legislation from the State of Texas “shall not release the State from the obligation of the contract hereby entered into with said company or any part thereof, provided the said company shall construct the said railroad from the west bank of the Mississippi river opposite the city of New Orleans * * * to the Sabine river within the time and the-manner hereinabove specified.” Obviously, from this language, if the-road was constructed to the Sabine river within the specified time,, the State was to be considered released from the contract.

Undoubtedly, the motive of the Legislature in enacting the law-quoted was to secure the construction óf a line of communication by rail between New Orleans and Houston, and that the consideration of the grant of bonds, in whole or in part, was the construction of said line of railway to the Sabine river within three years. It is clear from the terms of the act that none of the instalments of bonds issued in aid of the road as its construction progressed was to be considered as having a sufficient consideration unless the road was completed to the Sabine river within the prescribed time. It was certainly the intention of the act that the consideration for which the bonds were to be issued was indivisible notwithstanding the bonds were to be issued in instalments as the work progressed. If the road should be completed to the Sabine river within three years, there was a valid consideration for the three instalments of bonds to be issued on the construction of the road up to that point. If the road was not completed to the Sabine river within the three years, the consideration of all the bonds, issued in instalments prior to its default, was to be considered as having failed. The building of the whole road to the Sabine river was to be the consideration for the whole amount of bonds authorized to that point, and the building of no part or section was intended to be the consideration for any part of the bonds. That was the declaration of the law, accepted and agreed to by the company.

Aftei- the enactment of the act of 1870, the New Orleans, Mobile ■& Chattanooga Railroad Company pushed forward the construction of its road to the Bayou Lafourche, and demanded and received the first instalment of seven hundred and fifty thousand dollars of bonds.

But there it stopped; not a rod further did it proceed with the construction of the road toward the Sabine river. It utterly defaulted on the remaining portions of the line.

After the close of the three years, in which the road was to be completed to the Sabine, the State brought suit against the •company to have its default judicially declared, and to recover back the bonds issued, or, if sold, the proceeds thei’eof. There was judgment in favor of the State, but'not one bond was ever returned and not one dollar of their proceeds was ever recovered. Indeed, prior to this suit by the State, this railroad corporation, its franchises, property, roadbed, rolling stock, etc., had been sold out at the suit •of other creditors in foreclosure of its first mortgage bonds.

The suit of the State aforesaid established the default of the railroad company and thereby ascertained judicially the failure of the ■consideration of the $750,000 of bonds issued to the company on the completion of its road to Bayou Lafourche. The bonds now declared on are a part of that issue. We have already shown that the fact that they are in the hands of third persons, for value before maturity, does not relieve them from the close scrutiny we must make to determine whether or not they are “ legal and valid obligations against the State,” bolstered up by a valid consideration. These bonds must be held as having been issued without a valid consideration. It will not do to say that being part of the instalment of bonds issued on the completion of the road to Bayou Lafourche, and the construction of that section having been timely and before the default of the company became actual or declared, therefore they were issued for a valid consideration.

The utmost that can be claimed for the bonds, on that account, is, that when issued they were invested with a conditional consideration. If the road were constructed to the Sabine river within three years this conditional, inchoate, incomplete consideration would ripen into a full and complete consideration.

If the company defaulted on the construction of its road to the Sabine, the consideration of the bonds would be stricken with failure and nullity ab initio.

Nor does the decision of this court in State ex rel. R. R. Co. vs. Auditor, 23 An. 622, relied on by plaintiff, weaken the force of this position.

That was an action of mandamus to compel the State Auditor and Treasurer to register the $750,000 of bonds issued to this railroad company. The court held that the bonds must be registered, that the act of February 21, 1870, evidenced a contract, between the State and the company, that the effect of the third amendment of the Constitution of 1868, forbidding increase of the State debt beyond $85,000,000, was not retroactive, and that the State had granted this aid to the railroad company before the adoption of this amendment. That case was decided in July, 1871. The railroad had been constructed to Bayou Lafourche, the first instalment of bonds, based on that' construction, had issued, and the company had not yet defaulted on the construction of the remainder of the road to the Sabine river. It still had more than twenty months of time remaining in which to meet its obligation in this regard. Non constat that it would not do so.

Consequently, the question of the failure or want of consideration of the bonds could not be raised and was not raised in the mandamus suit.

Plaintiff and intervenor urge that the Board of Liquidation has already passed upon the legality and validity of the series of bonds, of which those in controversy form part, by finding six hundred and eighty of the seven hundred .and fifty issued on the completion of the railroad to Bayou Lafourche, and that this decision of the board should stand as effective for the whole series.

It appears that from January 24, 1874, the date of approval of the original funding act, to May 17, 1875, the date of approval of the supplemental funding act, six hundred and eighty of this issue of bonds, out of the total of seven hundred and fifty, were funded and exchanged for consolidated bonds of the State. This left seventy of these bonds unaccounted for. The thirty bonds involved in this suit are part of this seventy. From the passage of the supplemental funding act of 1875 down to January 5, 1895, nearly twenty years, no part of the remaining seventy bonds was heard of in connection with an effort to fund the same. On the latter date, January 5, 1895, the eight bonds of plaintiff herein were presented to the board for funding, and on December 24, 1895, the twenty-two bonds of intervenor were presented. The first were rejected by the board May 8, 1895, and the latter February 5, 1896.

The dormant state in which these bonds were permitted so long to rest might fairly justify the inference that, after the passage of the supplemental funding act, requiring the close scrutiny by this court of obligations sought to be funded whose validity was questioned, the remaining bonds of the issue under consideration were not thought to be fundable.

Under the terms of the original funding act, the Board of Liquidation possessed much more enlarged powers in the matter of passing upon obligations for their funding vel non than they possessed after the passage of the supplemental funding act. Accordingly, the first funding board seems to have exercised its discretion of admitting to the benefits of the funding scheme all the bonds of the issue in question which were presented. The passage of the supplemental funding act, and later, the induction into office of a new Board of Liquidation, put a stop to this.

No bond of this issue has been funded since, and this is the first time any of these bonds have come before this court for its scrutiny and decree as to their legality and validity under the provisions of the act of 1875.

The contention that the Legislature in providing that if the rail - road company failed to complete its road by sections to the Sabine river within the time agreed on, no bond should be issued for the sections not seasonably completed and that the company should return the bonds already received and still held by it, and account for the proceeds of those sold, intended that the State should be held responsible to third holders of the bonds disposed of, may be correct; but that question is not now before us. It will be time enough to pass upon it when it is.

That issue could arise properly only in an action brought upon the bonds by the holders thereof against the State by its permission. Such is not the instant case. Here the only question is, are the bonds presented such as the State, through its Board of Liquidation, will exchange for consolidated bonds of the State — and the board can not pass favorably upon the application, these bonds being questioned — until this court decrees these bonds to be constitutional, to have been issued in strict conformity to law, and to possess a valid consideration. We have hereinbefore seen that the bonds declared on can not, in this proceeding, be held to have been issued for a valid consideration.

It is therefore ordered and decreed that the judgment appealed from be annulled, avoided and reversed, and that there be judgment for defendant rejecting the demands of the plaintiff and intervenor, with costs in both courts.

Nicholls, O. J., recused himself.

Breaux, J., takes no part.


source: Caselaw Access Project

author: Miller, J. Blanchard, J.

license: Public Domain

text:
    No. 12,543.
    State of Louisiana ex rel. A. L. Lyons, Tax Collector, vs. Circuit Court of Appeals, Third Circuit.
    1. The Circuit Court of Appeals is without jurisdiction to decree that a license tax of the State is unconstitutional, the jurisdiction of that question being confided by the Constitution to this court. Constitution, Art. 81.

      2.The certiorari is the appropriate remedy when the execution of the judgment, void for the want of jurisdiction, is injurious to the relator’s rights. Constitution, Art. 90; Code of Practice, Arts. 855, 865, 866.

      On Rehearing. — 1. The Supreme Court alone has jurisdiction of questions relating to the constitutionality or legality of tax exactions.
    2. This extends to all kinds of taxes, whether on property or on occupations.
    3. This exclusive jurisdiction embraces the whole scope of remedial legislation pertinent to the subject of taxation, including questions affecting the constitutionality or legality of the means adopted by the legislature for enforcing the collection of taxes, or for preserving, or in any manner relating to, the liens given by law to secure payment of taxes.
    4. The Circuit Court of Appeals is without jurisdiction to pass upon the constitutionality of acts of the Legislature granting the State the first privilege, without registry, upon immovable property to secure payment of license taxes.
    QN APPLICATION for Writs of Certiorari and Prohibition.

      M. J. Cunningham, Attorney General, and Edw. L. .Wells, Attorney to aid Tax Collector, for Relator.
    Respondents in propria persona.

    Submitted on briefs June 5, 1897.
    Opinion handed down June 14, 1897.
    Judgment modified and rehearing refused June 30, 1897.
   The opinion of*the court was delivered by

Miller, J.

The State Tax Collector by third opposition claimed a license tax from the defendant whose property was under seizure, and asserted the preference of payment accorded to the State over the seizing creditor. The judgment of the lower court was in favor of the State, but on the appeal the Circuit Court of Appeals reversed the judgment on the ground, that the license tax was unconstitutional, because, added to the tax on defendant’s property, the aggregate exceeded the limit of one per cent, on property prescribed by the Constitution.

The ground of unconstitutionality sustained by the Court of Appeals was not pleaded. It was brought to the attention of the court only by a suggestion from the counsel of the seizing creditor. If the license tax had been assailed in the answer as unconstitutional and the judgment had maintained it, the appeal would have been to this court. If appealed to the Circuit Court of Appeals, on the ground of uneonstitutionality, the State could have dismissed the appeal. As it is the Circuit Court of Appeals has decided the ease against the State on a ground not pleaded, and which was beyond the jurisdiction of that court to decide. We think in deciding the case on that ground the court exceeded its jurisdiction.

We have denied the certiorari in cases when the proceeding in the ■ lower court has ended and the writ could serve no purpose. Here the condition is different. The writ issues as well after as before judgment, when the execution would deprive relator of his rights. Code of Practice, Arts. 855, 865, 866.

It is therefore ordered, adjudged and decreed that the judgment of the lower court complained of be set aside, the cause reinstated for trial on the issues made by the answer, and not on the constitutional ground.

Nicholls, O. J., absent; ill.

ON Application eor Rehearing.

Blanchard, J.

In the application for the rehearing it is urged we misconceived the ground upon which defendant court based its judgment. It appears that the ground of the decision which we then examined was that attributed to the court in the brief filed on behalf of the State. In the present opinion we have given full consideration to the theory of their judgment as explained by our learned brothers of the Circuit Court, themselves, in their application aforesaid.

The relator invokes the remedial writ of certiorari and prohibition to have brought up for review here the proceedings of defendant court in the case of the Live Oak Distillery Co. vs. O. S. Lyons, and to have decreed null, void and of no effect the judgment rendered therein by said court on the third opposition filed by the State.

The plaintiff in the suit was the holder of a special mortgage on the immovable property of defendant and proceeded via executiva to foreclose the same. The property was seized and sold, whereupon the Perkins & Miller Company appeared and filed a third opposition claiming to be paid by preference over the seizing creditors out of the proceeds of the property by reason of a prior mortgage held by them; and at the same time the State of Louisiana, through relator, its tax collector, appeared and filed a third opposition claiming that the defendant was due the State one hundred dollars for license tax as retail liquor dealer, with interest and penalties, and that under the law the State had a privilege to secure payment of this tax, on the mortgaged property, superior in rank to the mortgages existing thereon. The tax collector prayed, on be'half of the State, to be paid by preference out of the proceeds of the property.

The property brought at the sale nine hundred dollars — far less than sufficient to meet the several claims asserted against it.

The contest over the proceeds appears to have been between the third opponents — the Perkins & Miller Lumber Company and the -State. The claims of both primed that of the seizing creditor.

In the District Court there was judgment decreeing the State entitled to be paid by preference over the lumber company. The latter prosecuted an appeal from this judgment to the defendant court herein, and that court, assuming jurisdiction, amended the judgment appealed from and rejected the demand of the State to be paid by ■preference over the mortgage creditor.

Later, application was made by the tax collector to this court for its supervisory jurisdiction and control as aforesaid. This application is based on the broad ground that defendant court was without .jurisdiction ratione materias to try and determine the question presented on the appeal, and that, therefore, its judgment was and is void. It is contended that defendant court assumed to determine the unconstitutionality of certain sections of Act No. 150 of the acts of 1890, and of Act No. 106 of the acts of 1894, upon which the State’s right to the collection of the license tax, and especially its superior privilege upon the property in question to secure the payment thereof, are predicated; that the effect of this was to defeat ■collection of the tax by declaring unconstitutional and void a portion of the tax laws of the State; and that the authority to do this is vested alone by the Oonstitution in the Supreme Court of the State.

Respondent judges reply, denying irregularity of the proceedings, and aver that, even if irregular, relator had sanctioned the same by submitting to the jurisdiction of the court, the case had gone against him, he had applied for a rehearing, which had been refused, ■and that the case was ended.

We find in the record an agreement of parties that a sufficient sum out of the proceeds of the property to pay the license claim of the State “shall be held subject to the judgment to be herein rendered.” The remainder was paid over to the holders of the mortgages.

The judgment of the District Oourt, while decreeing the claim of the State superior to all other claims, held it to be a general privilege which must be enforced upon other property of the defendant, and if not thereby satisfied then the privilege was to be exercised against the Perkins & Miller Lumber Company, who were adjudged to pay whatever deficiency might exist in favor of the State after exhausting whatever other property defendant might have. This was evidently based upon the theory and fact that the lumber company had received all the proceeds of the property and had been substituted, by consent, for the sheriff, as holders of the fund. The appeal of the lumber company to defendant court was only as to that part of the judgment which gave the State precedence on its claim for license taxes over the mortgage and privilege claimed by the company.

"We find that the judgment of the defendant court herein reversing the decree of the District Court was rendered October 15, 1896, and that the rehearing applied for by the State was overruled by that court October 19, 1896.

And we find that it was several months thereafter before the present application for the writs of certiorari and prohibition was made.

While this tardiness on the part of the State in asserting its rights would, ordinarily, result in denial of the application as coming too late, we think the agreement of parties heretofore referred to, as to the holding of a sufficient portion of the fund to meet the demand of the State and to respond to the judgment rendered, obviates the difficulty and maintains the status sufficiently to enable the decree to be rendered herein operative.

It) other words, we hold the ease is not “ ended,” as contended for by respondent judges, and that the fund, so far as the State is concerned, is still intact.

This brings us to the crucial test in the case before us: Did the Circuit Court have jurisdiction to try and determine the question covered by its judgment? It must be held it did not.

Under Art. 81 of the Constitution this court alone has jurisdiction of questions relating to the constitutionality or legality of tax exac-tions. This extends to all kinds of taxes, whether on property or on occupations. That a license is a tax has long since been settled. Parish vs. Levy, 40 An. 332; Parish vs. Brigham, 41 An. 665; Cooley’s Constitutional Limitations, 4 Ed., p. 598.

The language of the article of the Constitution referred to, that this court shall have jurisdiction of “all cases in which the constitutionality or legality of any tax, toll or impost whatever * * * shall be in contestation, whatever may be the amount thereof,” means license taxes as well as taxes on property.

And this exclusive jurisdiction extends as well to all questions affecting the constitutionality or legality of the means adopted by the Legislature for enforcing the collection of taxes, or for preserving, or in any manner relating to, the liens of the State and its political corporations for taxes due or to become due. It embraces, indeed, the whole scope of remedial legislation pertinent to the subject. Such questions can be passed upon only by this court.

It follows that the Circuit Court was without jurisdiction to decide either the constitutionality of the license tax in question, or the constitutionality of the acts of the Legislature giving the State the first privilege upon defendant’s immovable property to secure payment of said tax, or the constitutionality of the legislative declaration that such privilege should be effective, though omitting to provide for the registry thereof.

It was not competent for that court to pass upon the question whether or not the Legislature could enact that a license tax shall operate as a privilege on both movable and immovable property, and whether or not such a privilege can, without registry, be enforced on the proceeds of immovable property over a prior mortgage with registry.

These latter were the precise questions it did assume to decide, and held that the enforcement of such privilege, without the registry, impaired the obligation of the contract of the mortgage creditor. These were clearly constitutional questions affecting the tax in question and its collection. No appeal on the same could properly be taken from the District Court to the Circuit Court. Such appeal could only be to this tribunal.

It follows that the judgment of the Circuit Court thereon was and is void and of no effect.

For the reasons assigned, it is ordered, adjudged and decreed that the remedial writs issued herein be made peremptory, setting aside and annulling the decree rendered by defendant court and filed October 15, 1896, in the case of the Live Oak Distillery Company vs. O. S. Lyons, Perkins & Miller Lumber Company, Limited, and the State of Louisiana, third opponents; and that to this extent the previous decree of this court herein be amended.

Nothing herein contained is to be construed as interfering with the jurisdiction of defendant court in the case referred to, on other questions than those prohibited by this opinion and decree.

Rehearing refused.


author: Breaux, J.

text:
    No. 12,566.
    State of Louisiana ex rel. A. J. Kockritz, Justice of the Peace, vs. Walter Guion, Judge of the Twentieth Judicial District Court.
    After having considered all the issues raised by the objection to the information and after having considered the scope of the information charging the defendant with extortion in office, the court remanded the ease for trial in order that the questions may be decided on appeal; if under the sentence and judgment the ease is appealable, and if not appealable under the penalty imposed that the questions may be decided under its supervisory jurisdiction.
    iN APPLICATION for Writs of Gertiorari and Prohibition.

      John Marks and Pugh <& Pugh for Relator.

      M. J. Cunningham, Attorney General, and G. A. Gondran, District Attorney, for Respondent.
    Submitted on briefs June 19, 1897.
    Opinion handed down June 25, 1897.
    Rehearing refused July 1, 1897.
   The opinion of the court was delivered by

Breaux, J.

The information filed against the defendant sets forth and charges that he committed the offence of extortion in office while acting as justice of the peace. The information contains the statement of the prosecuting officer; charging that in a case before the magistrate (the relator here), the offence shown by the affidavit of •the prosecuting witness was assault and battery; subsequently, the prosecuting witness, who was the wife of the accused, entered into a compromise with her husband, against whom she had lodged a complaint. In compliance with the desire of the wife the relator entered a discontinuance of the prosecution. He did not, it is charged, forward the affidavit to the District Court for action. He received six dollars and forty cents as costs incurred.

In order to more fully set forth the offence charged, we copy the following frjm the information: “That previous to the day fixed for the hearing of said charge before said Justice of the Peace, the said Elmira Oroom and the accused, her husband, Lewis Oroom, •compromised said case between themselves, and the said Justice of the Peace, Albert Kockritz aforesaid, did receive from said parties the sum of six dollars and forty cents, being the fees of the Constable and Justice of the Peace in said case, and thereupon the said Albert Kockritz discontinued said affidavit before the court and never sent same for action to the District Court.”

The defendant, who was the relator here, sought by demurrer to have the information quashed on the ground that, it disclosed no offence denounced by statute; that in cases of assault and battery and other misdemeanors the Justice of the Peace is authorized to receive costs from the parties between whom the compromise was effected.

He invoked Sec. 990 of the Revised Statutes, directing that in all cases of assault and battery and misdemeanor no charge shall be brought against the parish when the parties compromise and withdraw the prosecution.

The relator also referred us to Act 7 of 1877, in which fees are different in amount when due by the parish from what they are when paid by the defendant; that is, they are fifty per cent, less when paid by the parish.

The respondent’s contention in argument was that the case turnqd upon the proper interpretation to be placed on Sec. 990 of the Revised Statutes and Act 19 of 1886.

Our attention was specially called by the respondent to the last ■ clause of the Sec. 990 of the Revised Statutes, which reads: It shall \be lawful for the Attorney General and the District Attorney to enter a nolle prosequi; our attention was also invited to the provisions of Act 136 of 1886.

No one denies that the District Court has jurisdiction to determine whether the defendant is guilty of extortion in office.

After having entered into the examination of the particulars of the case it became evident to us that this is not the proper time to decide the questions presented.

Non constat that the cause will ever come to us for a final decision. There are facts to be considered and determined by the judge a qua and jury, from which no review is possible.

If the case is not appealable under the sentence and judgment imposed the defendant will not be left without remedy if anything occurred in the proceedings of the court differing from the regular course of the common law.

There are possible phases of the ease which perhaps should be heard and passed upon even though costs may be due by a defendant who effected a compromise in matter of assault and battery. We desire to avoid anticipating issues.

We do not feel authorized to stop a prosecution at this stage of the proceedings and reverse the ruling in refusing to sustain a demurrer.

When a case is appealable objection to the court’s action in declining to annul an information on the grounds here presented comes up regularly on the appeal.

For similar reason ordinarily, in eases such as the one before us, a review of such issues should be postponed, until the issues are well defined.

The invalidity of the proceedings in the lower court, if there is invalidity, may be examined into much more satisfactorily, and passed upon after the trial will have made evident all the questions over which we have jurisdiction.

To sustain the writ it is not only needful to show that some of the procedings are not regular and valid, but it must also be made evident that the charge in all bearings is irregular and invalid.

An accusation may not, in all respects, appear entirely void in the review of the reasons for overhauling a demurrer. After trial, however, it may be entirely different. The nullity of the information and of the whole proceedings may become quite manifest.

This court has never been hasty in taking up and passing upon questions in the course of a trial, looking to a final determination of all the issues involved before a full hearing and trial.

No reasons here suggested themselves to justify an immediate and final action in this case.

We think that the ends of justice will be subserved by declining to hold at this time and at this period in the history of the case that the information is null and void in its entirety and all proceedings absolutely irregular and invalid.

It is therefore ordered and adjudged that the provisional order herein rendered be set aside and the relator’s demand be rejected at his cost.

Rehearing refused July 1, 1897.

Nicholls, C. J., absent; ill.


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

text:
    No. 12,354.
    J. B. O’Kelly vs. J. G. and K. F. Ferguson.
    The fact that a party had transferred certain notes held hy him to another person as collateral did not withdraw entirely from him the power of protecting his interests hy proceeding against the maker of the notes.
    Notwithstanding the pledge plaintiffs were the owners of the notes as expressly declared in Art. 3166, C. 0.
    The language of Art. 3170, C. C., is permissive, not mandatory; the pledgee is not declared to be charged with the active duty of watching the movements of the debtor, with a view of forestalling or frustrating any attempt at fraud on his part.
    Certain duties do devolve upon the pledgee hy reason of the pledge (C. C., Art. 3167); but in testing, in any particular case, whether he has been in fault, the degree of care necessary to be used (when a credit is pledged), in protecting the very thing itself which was pledged, must not he confounded with that exacted from him in guarding the obligations themselves of the debtor under this credit.
    The lessor has a double right, a right of pledge, with its right of detention and included and resultant right of preference, and a right of privilege proper; and, though he may have lost his right of pledge by permitting with his consent the object subject to it to escape from his grasp of detention, he can still fall back for security upon his privilege unless that right be also from some cause extinguished.
    The lessor’s privilege as a substantive right does not extend beyond the crop of the year for which the rent was due, and while the abandonment by the lessee of theleased premises may have the effect of advancing the maturity of the Instalments of rent or to hasten his lessor’s remedy, that fact does not have the effect of broadening his rights of privilege against third persons.
    APPEAL from the Twenty-third Judicial District Court for the Parish of Tensas. S. Chas. Young, J., ad hoc.

      Elam & Dale for Plaintiff, Appellant.

      Wade R. Young and B. H. Snyder for Defendants, Appellees.
    Argued and submitted January 21, 1897.
    Opinion handed down February 15, 1897.
    Rehearing refused May 10, 1897.
    Statement of the Oasb.
    Plaintiff claimed from James B. Ferguson and Kimbal P. Ferguson, the defendants, the sum of twenty-four hundred and thirty-two dollars and fifty cents, with interest as stated, subject to certain credits as the holder of three promissory notes executed by the defendants, payment of which were secured by special mortgage on certain described property in the parish of Tensas.
    Defendants denied any indebtedness to plaintiff. They admitted that they were the owners of Woodburn plantation and that they had executed a mortgage thereon as averred, but they alleged that said mortgage indebtedness was fully paid, compensated and extinguished, not only for the amount of the notes now claimed, but for the whole amount of said debt as set out in the act of mortgage; that on January 4, 1893, defendants, as owners of the Woodburn plantation, leased the same to 0. 0. Knowles for a term of five years, commencing January 4, 1893, for the price of
    three thousand dollars, evidenced by five promissory notes of Knowles for the sum of six hundred dollars each, payable annually after date on the 1st of December of the years 1893, 1894, 1895, 1896, and 1897, and upon the farther condition that he should keep a paid-up policy on the gin house on said plantation for the amount of one thousand dollars for the benefit of respondents, and should clear and cultivate all of the land not then cleared and in cultivation inside of the enclosed field, and also all land cleared and under cultivation; to ditch the land to afford proper drainage, and to keep all buildings and fences in good repair, and at the termination of the lease to turn over the plantation to respondents with buildings and all pertaining thereto in good repair and condition; that having executed said lease and Knowles having entered into possession of the leased premises as the tenant of respondents, he being a customer of Bedford & O’Kelley (the original holders of the notes sued on and the mortgage securing the same), who were closely connected with him in business, respondents desiring to borrow a certain sum of money to be paid in whole or in part from the proceeds of said lease as the respective instalments thereof fell due, executed the said mortgage in favor of Bedford & O’Kelley, knowing that the said firm as the friends and factors of Knowles were in a position to protect the interests of respondents as well as their own and to collect the instalments of rent as they fell due and to enforce the terms of the lease, if Knowles should at any time fail to perform his contract and for said purpose at the special instance of Bedford & O’Kelley the mortgages, and the better, to enable them so to do conveyed to Bedford & O’Kelley (in addition to the mortgage given as security to the five notes of respondents) the contract of lease with Knowles, and the five rent notes and all of their rights, and Bedford & O’Kelley acknowledged receipt of the notes and agreed and bound themselves to collect the same and apply the proceeds as they fell due to the payment of the five mortgage notes of respondents held by them; that Bedford & O’Kelley did perform their contract in so far as to collect the rent notes for the years 1893 and 1894, and to apply the proceeds as agreed on, but at the close of the year 1894 they violated their contract, and in their own interest and for their own purposes, and in disregard of the rights of respondents and of their obligations in the premises, withhheld from respondents the knowledge of the fact that they proposed to have Knowles abandon the lease, and in gross violation of their agreements and of their obligations they did cause Knowles to remove from the premises, without the knowledge of respondents, all the property subject to the landlord’s lien and pledge to secure the performance of the conditions of the lease and to deliver all said property to them; and further-caused Knowles to convey to them all of his other property, and thus attempted to defeat not only the lien and pledge of respondents, as lessors, but also to prevent them from pursuing Knowles, who, at said time, was utterly insolvent, upon his personal obligation. That Bedford & O’Kelley, in consideration of the transfer of the rent notes and of the contract of lease, bound themselves absolutely and unconditionally to collect the notes, and to apply the proceeds as they fell due to the payment of the five mortgage notes of respondents, held by them. That as said rent notes became due (immediately upon the abandonment of the premises by Knowles), the said Bedford & O’Kelley became then and there liable upon their contract to collect said notes, and to apply the proceeds to the payment of the five mortgage notes absolutely and unconditionally. They further averred that they had the lien and pledge of the lessor for the payment o6> the rent and other obligations of the lease on all the movable effects of the lessee on the property leased, and on all the fruits produced during the lease of the land, and on the effects of the under- tenants, so far as the latter were indebted to the principal lessee. That it was the duty of Bedford & O’Kelley, not only in the performance of their contract, but as holders of the collateral security, to enforce the payment of the rent and other obligations of the lease by the levy of a writ of provisional seizure on all the property subject to the lien and pledge, as soon as they were advised that Knowles proposed to abandon the leased premises, or, at least, notify respondents so as to enable them to protect their interests. That instead of complying with the terms of their agreement to collect said rent notes and with the obligations imposed upon them by law, they grossly violated their contract and their obligations, and applied all the property of Knowles, so subject to the lien and pledge of respondents, to the payment of his indebtedness to them, without notice to respondents and without their knowledge. They further averred that at the time Bedford & O’Keliey were advised that Knowles proposed to abandon the leased premises they could in the exercise of the right, have seized the objects which were subject to it before the lessee took them away, or within fifteen days after they were taken away, and while they continued to be the property of the lessee, which could haye been identified of a value sufficient to satisfy all the obligations of the lease. That instead of so doing, they applied all such property or its proceeds to the payment of the indebtedness of Knowles to them, and left about thirty bales of cotton of the value of six hundred dollars in the fields ungathered, and thereby became liable for the value. They further averred that by failure of Bedford & O’Kelley to enforce the payment of the rent and other obligations of the lease, respondents had been damaged to the amount of three thousand dollars by 'the loss of the rent and the failure of the lessee to keep the gin house insured and to clear and cultivate all the land not then ■cleared and in cultivation inside of the enclosed field, and also all lands then cleared and under cultivation, and to ditch the land to afford proper drainage and to keep all fences and buildings in good repair, and on or at the expiration of the lease to turn the plantation over to respondents with buildings and all pertaining thereto in good repair and condition. -.They further averred that by the wrongful and tortious conduct of Bedford & O’Kelley, and of the said O’Kelley in the premises, and of thehvgross violation of their ■contract and of the obligations imposed on them by law, respondents had lost the rents of the plantation for the years 1895, 1896 and 1897, and their said lands were lying waste and uncultivated, the ditches had filled up and the drainage become obstructed ■and the buildings and fences left in bad repair, and said property depreciated in value to their damage to the amount of five thousand dollars. In view of the premises, the respondents prayed that it be decreed that the amount of the rents for the years 1895, 1896 and 1897 be applied to the payment of the mortgage debt of respondents to Bedford & O’Kelley. That the said mortgage debt be decreed compensated and extinguished to the amount of the value •of the movable effects, subject to the lien and pledge of the lessor at the time at which Bedford & O’Kelley became advised of the intention of Knowles to abandon the leased premises by the damage which respondents have suffered by the failure of Knowles to perform the obligations of the lease to the amount of five thousand •dollars. That the respondents have judgment in reeovention against Bedford & O’Kelley and said O’Kelley for said sum of five thousand ■dollars. That the sale of the other property of Knowles, so conveyed to Bedford & O’Kelley or to O’Kelley than that subject to the lien and pledge of the lessor, be set aside as a fraudulent preference by Knowles, who was utterly insolvent, and that the proceeds be distributed pro rata among his creditors. That Knowles be cited and that respondents have judgment against him for said sum of ■five thousand dollars.
    Knowles pleaded the general issue.
    On the trial plaintiffs tendered defendants the rent notes remaining unpaid, which had been transferred to them as collateral.
    The District Oourt, on the 28fch of November, 1896, rendered a judgment that the plaintiff O’Kelley recover from the defendants in

      solido the sum of two thousand four hundred and thirty-two dollars •and fifty cents, with eight per cent, interest as claimed in the peti"tion, subject to the credits admitted therein, but decreed that this ■amount be compensated pro tanto by the amount of the rent note -due December 4, 1895, for the sum of six hundred dollars, with five •per cent, interest from said date; that plaintiff further recover ■ten per cent, as attorney’s fees on the net balance due after ■deducting the rent note of 1895 and all costs of the original demand. It further adjudged and decreed that the defendants recover ■on their reconventional demand of the plaintiff O’Kelley, the sum of six hundred dollars with five per cent, per annum interest from December 4, 1896 (the instalment of rent due for 1896 to become exigible on December 4, 1896) the further sum of six hundred dollars with five per cent, per annum interest from December 4, 1897, to become exigible on the last named date, this last instalment to be credited with any net revenue defendants may receive for the use or rent of the Woodburn plantation for the year 1897. Plaintiff appealed.
   The opinion of the court was delivered by

Nicholls, C. J.

On the 4th of January, 1893, the defendants (Ferguson) leased to O. O. Knowles for the period of . five years commencing in January, 1893, and ending January, 1898, the Wood-burn plantation, in the parish of Tensas,-for and in consideration of a rent of three thousand dollars. The rent was represented by five notes of Knowles of six hundred dollars each, payable on or before the first day of December of the years 1893, 1894, 1895, 1896, 1897 and 1898. On the 15th day of May, 1893, the defendants (Ferguson) mortgaged certain property in the parish of Tensas to the firm of Bedford. & O’Kelley to secure an indebtedness to the latter of three thousand eight hundred and twelve dollars, represented by five promissory notes, which they executed in solido payable to their own order, one for eight hundred and twelve dollars and fifty cents, due January 1, 1894; one for eight hundred and forty dollars, •due 1st of January, 1895; one for seven hundred and eighty dollars, •due 1st January, 1896; one for seven hundred and twenty dollars and fifty cents, due 1st of January, 1897, and one for six hundred and sixty dollars, due 1st January, 1898, each note bearing interest at eight per cent, per annum after maturity, the aggregate amount Of the notes being three thousand eight hundredfand twelve dollars.

On the 4th day of May, 1893, the parties executed the following agreement:

Vicksburg, 4, 1893.
This Instrument Witnesseth: That James G. Ferguson and Kim-ball F. Ferguson, of Warren county, State of Mississippi, are indebted to Bedford & O’Kelley, composed of Thomas 0. Bedford, of the above county and State, and J. B. O’Kelley, of Tensas parish, State of Louisiana, to the amount of three thousand and eight hundred and twelve dollars and fifty-three cents, as evidenced by five promissory notes signed by the above named J. G. and Kimball F. Ferguson, described in a certain mortgage and signed by the above’ named J. G. and Kimball F. Ferguson, of the Woodburn plantation, in Tensas parish, in favor of Bedford & O’Kelley, as security for the five notes above named, and in addition to the above named mortgage, as security for the five notes above named, James G. Ferguson conveys to Bedford & O’Kelley five notes, with all rights and interest, executed and signed by O. O. Knowles, and in favor of J. G. Ferguson for six hundred dollars each, aggregating three thousand dollars, the first note due and payable on December 1, 1893, the other four notes due and payable on the 1st day of December, 1894, 1895, 1896 and 1897. Now it is distinctly understood that Bedford & O’Kelléy acknowledge the receipt of the five notes executed by 0. 0. Knowles, and in favor of James G. Ferguson, and that the said Bedford & O’Kelley agree and bind themselves to collect the said five notes receipted for and apply the proceeds, as they fall due, to the payment of the five notes Bedford & O’Kelley hold against the said J. G. and Kimball F. Ferguson and secured by mortgage on the Woodburn plantation of the said Fergusons, in Tensas parish, State of Louisiana; the five notes conveyed by James G. Ferguson a.re rent notes on the Woodburn plantation belonging to said Ferguson in Tensas parish, La., which is fully described in a lease of five years executed by James G. Ferguson to O. 0. Knowles, and as those five notes become due, Bedford & O’Kelley, as holders of said notes, agree to collect the said notes and apply the amount of said notes to the payment of the five notes Bedford & O’Kelley hold against said Fergusons as named heretofore and described in mortgage on the Woodburn plantation and in favor of Bedford & O’Kelley.
T. O. Bedford.
J. B. O’Kelley.

Knowles prior to leasing the Woodburn plantation had been cultivating several plantations in Tensas parish, Bedford & O’Kelley being his factors. Entering into possession of the Woodburn plantation, under this lease in the beginning of 1893, Knowles abandoned it in January of 1895, though at what precise date he did so the record does not show. Bedford & O’Kelley during that period continued to make him advances. The planting operations of 1893 and 1894-left Knowles heavily indebted to them. The crop of 1893 was, however, sufficient to cover the first rent note. Bedford & O’Kelley, to-whom the crop was shipped, took up the note, placing a corresponding credit on their mortgage claim against the Fergusons. In November of 1894 Bedford & O’Kelley having become discouraged at Knowles’ want of success notified him they could no longer make him advances upon Woodburn plantation. Unable to obtain them from other parties he abandoned the plantation, taking the stock, carts and farming utensils which he had been using on the place and also a lot of corn over to another plantation in the neighborhood of which he was the lessee.

The crop of 1894, of the Woodburn plantation, was shipped to Bedford & O’Kelley. They applied six hundred dollars of the proceeds to the extinguishment of Knowles’ second note (they carrying with it a corresponding credit on the Fergusons’ notes) and the balance to his indebtedness to themselves. The defendants complain of the course followed by Bedford & O’Kelley (now represented by O’Kelley). They charge that the firm was aware early in November of Knowles’ intention of abandoning the plantation and failed to give defendants timely notice so that they could protect their interests by seizure of the property subject to their privilege and pledge, and failed to do so themselves. They contend that the effect of Knowles’ abandonment of the plantation was to subject everything on the Woodburn plantation in 1894 and early in 1895— cotton,, cotton seed, corn, mules, horses, carts, plows and farming implements — to immediate liability for the entire rent of the plantation up to 1897, and to immediate liability to provisional seizure — that the entire rent which so became due was secured by a privilege and pledge on all these objects on the place, which primed any rights which plaintiff had upon the same. They contend that that firm was without right or authority to apply any portion of the proceeds of the crop of 1894 to their debt so long as any portion of the rent due to them remained unpaid.

Defendants rely on Art. 3167 of the Civil Code, which is to the effect that the creditor is answerable agreeably to the rules which have been established under the title: “Of Conventional Obligations,” “for the loss or decay of the pledge which may happen through his fault,” and upon the obligations between themselves and the plaintiffs, resulting from the special agreement between them which appears in the record, also upon the citation of authorities to be found in the Vol. 18, American and English Encyclopedia of Law, page 682.

Under their view of the obligations of the plaintiff it was their legal duty at once, upon being informed that -the lessees proposed to-abandon the plantation, not only to notify the lessors, but to provisionally seize everything there was on the place to secure the payment of all the rent notes which had been placed in their hands. They maintain that having placed the notes in the hands of the plaintiff they were themselves either powerless to take out remedial process against their lessees, or that it was not their duty to do so. The fact that the defendants transferred the notes to the plaintiff as collateral did not, in our opinion, withdraw from them the power of protecting their interests by proceedings against the makers of the notes. Notwithstanding the pledge, they were still owners of the notes, as is expressly declared in Art. 3166 of the Civil Code. The article reads as follows: ‘ ‘ Until the debtor be divested from his property (if it is the case) he remains the proprietor of the pledge, which is in the hands of the creditor only as deposit to secure his privilege on it.” Laurent refers to this matter in Sec. 499, in his treatise ‘Du Gage’ (Laurent, Vol. 28), though he states that the exercise of the right of ownership would be hampered by the pledge. He says: ‘ Celui qui donne une créance en gage conserve le droit d’agir contre le débiteur puisqu’il reste propriétaire de la créance (Art. 2079) ; mais ce droit d’agir est entravé par le gage ” Alluding to interests upon the pledged notes he says they should be credited upon the principal debt, the reason assigned being: “ Si le débiteur refusait de payer les interets le demandeur ser ait dans impossibilité de l’y contraindre puisqu’il ne peut pas prouver son droit, le titre de sa créance étant dans les mains du gagiste. II devriat done mettre celuiei en cause aussi souvent qu’l s’agit de reclamer les interets. Le legislateur a pensé qu’il etait plus simple d’autoriser le gagiste a exiger le payment des interets.”

We see no obstacle in the way of the lessor’s having recourse directly to conservatory proceedings to protect his interests. He could legally make all the allegations necessary to that end and procure the necessary proof on the trial. It would not be essentially-necessary for the purpose that he should be in actual possession of the notes.

The pledgee’s rights would not be jeopardized by the fact that the pledged notes should be permitted by the pledgee to be temporarily made use of in a suit brought by the pledgor.

“ Le gage doit étre reputé avoir toujours été dans la possession des eréanciers gagistes, quoique la grosse ait été momentanément-confiée par le dépositaires, soit aux avoués, soit aux propriétaires-memes de la eréance, pour exercer des poursuites centre le débiteur eédé ou sa caution solidaire, dans l’interet des preteurs.” Bourges, 5 juin, 1852, D. P. 54. 2. 125; Dalloz & Vergé, under Art. 2076, C. N. No. 46.

Article 8170, Civil Code, declares that “if the credit which has been given in pledge becomes due before it is redeemed by the person pawning it, the creditor, by virtue of the transfer which has been made to him, shall be justified in receiving the amount and in taking measures to recover it. When received he must apply it to the payment of the debt due himself and restore the surplus, should there be any, to the person from whom he held it in pledge.”

It will be noticed that the law refers to the “ time when the-pledge became due,” as that at which it is contemplated the right should be exercised of receiving the amount of the credit, and that of taking measures to recover it; also that the language of the article is permissive, not mandatory. The pledgee is not declared to be charged with the active duty Of constantly watching the movements-of the debtor with a view to forestalling or frustrating any attempted fraud on his part. He is not required, as a legal duty, to subject himself to damage by taking out attachments, provisional seizures or injunctions to secure the recovery of notes not yet due, under the penalty of losing recourse against his own debtor upon the claim which he holds against him.

The pledgor is not at liberty to neglect looking after his own interests and to transfer to his pledgee the whole responsibility of supervising them for him. Dalloz & Vergé under Art. 2080, No. 4.

Certain duties do devolve upon the pledgees by reason of the pledge, but they are by no means so broad as the defendants contend for. The creditor is answerable under Art. 3167 for the loss of the pledge which may happen through his fault, but in testing in any particular case whether he has been in fault, the degree of care necessary to be used (when a credit is pledged) in protecting the very thing itself which was pledged must not be confounded with that exacted from him in guarding the obligations themselves of the debtor under the credit. A pledgee may be held bound to see that demand of payment- and notice of protest be given in the case of the pledgee of negotiable notes, and that the notes be not permitted to prescribe while in his hands, and yet not be called on to have recourse to any of the extraordinary remedies ” of the law which carry possible damages with them. Defendants in this case made no demand upon the plaintiff to take action, made no tender of costs, nor offer of indemnity. (Hughes vs. Boyce, 2 An. 805).

Defendants say that plaintiff’s obligations were wider under the special agreement which they entered into with them than they would have been under the law itself. They say plaintiffs expressly bound themselves to collect the notes. We do not agree with the defendants in this position. The agreement must be interpreted in connection with the circumstances under which it was made — the relations of parties and the subject matter they were dealing with. The plaintiffs were creditors of the defendants. Defendants were creditors of Knowles. Plaintiffs were the factors of Knowles. All parties knew that the crops on the Woodburn plantation would go into the possession or under the control of the factors. All parties contemplated that this should be done. The maturity of the rent notes was a short time before that of the mortgage notes. It was under this condition of affairs that plaintiffs undertook “to collect the notes.” What was their obligation under the agreement? In the first place, it was not to collect the note3 before they fell due, but “as they fell due” — in the next place it was not a general obligation to collect the notes, but a special obligation to collect them out of the proceeds of the crop then expected to be in their hands. There was no general obligation assumed to collect in the sense of putting the claims in suit. The possible violation of the contract of lease by Knowles was not in contemplation of any of the parties. Plaintiffs did precisely what they agreed to do. Out of the crops of 1893 and 1894 in their hands they collected the rent notes of those years and applied the amounts collected to the reduction pro tanto of defendants’ mortgage notes.

Defendants charge that Bedford & O’Kelley fraudulently caused Knowles to abandon the plantation; that they knew of his intention to abandon it and failed to notify them of the fact. There is nothing in the evidence going to show any collusion between them and Knowles in respect to his leaving the plantation. It is true that their declining to make further advances to Knowles coupled with the fact that he could not procure them elsewhere led up as its result to Knowles abandoning the lease, bat they (were under no legal obligation either to Knowles or to the defendants to continue to make him advances, especially in view of the fact of his constantly increasing indebtedness to them. Granting that it was their duty on ascertaining that Knowles intended to give up the lease to notify the defendants, we think that they did so, though there is a conflict in the evidence as to the precise time at which defendants came to a knowledge of the fact. We have not found in the record the date at which Knowles left the place, and we are inclined to the belief that defendants had reason to think, before the 1st of January, 1895, that Knowles, would not be able to continue his planting operations for that year. One of the plaintiffs (Bedford) testifies that he informed one of the defendants some time in the month of December, 1894, of the situation of affairs. Defendants, we think, had time to have taken action themselves in the premises, but they evidently rested under the mistaken idea that they had no duty or responsibility in the matter,' We fail to see any fact on which defendants can rest their complaint that Bedford & O’Kelley, as pledgees, failed to protect the pledge and the rights and interests of the pledgors. We are now dealing with so much of defendants’ complaint as refers to the property removed by Knowles from the plantation. If their defence can be sustained it must be on other grounds than this.

Defendants’ next contention is that the crop of 1894 went into the hands of Bedford & O’Kelley, struck by a privilege in their favor as lessors to secure the payment of the entire rent matured and not matured up to January, 1898; that this privilege primed any right that the factors had upon the same and the latter were without right or authority, either generally in law or under their special agreement to collect the notes, to impute the proceeds of the crop of 1894 to the payment of their own debt.

Our attention has been called by defendants to Arts. 2705 and 3218, and by plaintiffs to Art. 3217, paragraph 8, and Art. 3219 of the Civil Code. The first of these articles is found in the Code under the special heading of “Lease,” the others under the heading of “Privileges,” “Subdivisions,” “Of the Privileges of the Lessor,” and “ Of the Privileges, on Particular Movables.”

They read as follows:

Article 2705: “ The lessor has for the payment of his rent and other obligations of the lease a right of pledge on the movable effects of the lessee, which are found on the property leased. In the case of predial estates this right embraces everything that serves for the labors of the farm, the furniture of the lessees and the fruits produced during the lease of the land, and in the ease of houses and other offices, it includes the furniture of the lessee and the merchandise obtained in the house or apartment, if it be a store or shop ” * * *.

Article 3218: “ The right which the lessor has over the products of his estate and on the movables which are found on the place leased for his rent is of a higher nature than mere privilege. The latter is only enforced on the price arising from the sale of movables to which it applies. It does not enable the creditor to take or keep the effects themselves specially. The lessor, on the contrary, may take the effects themselves and retain them until he is paid.”

Article 3219: “The privilege of the lessor is enforced on the property subject to it in the manner described in the title: O£ Lease.’ ”

Article 3217: “The debts which are PRIVILEGED on certain-movables are the following:

(i ¡U *
" 2.*
“ 3. The rents of immovables and the wages of laborers employed in working the same, on the crops of the year, and on the furniture, which is found in the house let, or on the farm, and on everything which serves to the working of the farm.”

Defendants contend that the effect of Knowles’ abandonment of the lease was to cause all the rent notes which he had given, to immediately mature; that being so matured the crop of 1894 (which prior to that fact was struck with the right of pledge conferred in a. general way by Art. 2705 of the Code for the payment of the entire rent) became specially struck and affected with the privilege and pledge provided for in Art. 3217 for the payment of the entire rent-up to the beginning of 1898, as if the lease had been for a single-year and as if the maturity of the rent notes had all been originally fixed for December 1, 1894.

Defendants call our attention to Christy vs. Casanave, 2 N. S. 451; Reynolds vs. Swain, 13 La. 194; Holden vs. Tenner, 6 An. 74; Ledoux vs. Jones, 20 An. 540.

In the first mentioned case the lessee, Oasanave, daring the lease, notified his lessor that- he intended to leave the premises. The lessor thereupon applied to the court; asking that all the goods, etc., belonging to defendant should be seized, sequestered and sold to pay him the sum of seven hundred dollars, being the amount of rent for the entire lease, which would thereafter become due on the contract, and that he recover judgment for that sum. The judge, on his petition, ordered the sheriff to seize and sell all the goods, etc., or so much thereof as might be sufficient to pay and satisfy the plaintiff the sum of seven hundred dollars due and to become due for house rent. The court on the trial of the ease rendered a judgment in favor of the plaintiff, and defendant appealed, maintaining that, notwithstanding his declaration of intention, plaintiff could: only enforce the contract as made — that is, from month to month. The Supreme Court affirmed the judgment.

In Reynolds vs. Swain, 13 La. 194, plaintiff (a lessor) sued defendant on a lease to recover the sum of fifteen hundred dollars for one year’s rent due and to become due, the lessee having abandoned the premises. The District Court rendered judgment in favor of the plaintiff for fifteen hundred dollars, with leave to take out a general execution or special execution by seizure of the property on the premises, subject to privilege, for the sum of eight hundred and seventy-five dollars, being the amount due the 1st of June, and so on from month to month for the sum of one hundred and twenty-five dollars per month on refusal of defendant to pay the same. On appeal it was contended the case of Christy vs. Oasanave had been decided before the promulgation of the Civil Code and under the operation of the civil laws of the State, and that those laws had been repealed in 1828. The Supreme Court held that the principles settled in that case, making tenants who abandon their lease liable at once for the rent of the whole term, although drawn from the Roman civil laws which had no intrinsic authority here, yet the reason of them had great cogency and was adopted for the elucidation of principles applicable to analogous cases. In the body of the decision affirming the judgment, the court made use of the following language: “When a tenant removes his goods from the premises and abandons them, he withholds from the landlord the pledge he had given for the payment of the rent. It is, therefore, just that he should be permitted immediately to secure himself, if he can, by seizure of the property removed, or by a personal action against the tenant. The District Judge has provided for the security of the latter by directing that the execution should not issue for more than the amount of the debt actually payable and afterward at the end of every month for the monthly rent, affording him the opportunity of seeking relief if he has any right thereto on account of any rent received by the plaintiff from other tenants.”

Holden vs. Tanner, 6 An. 74, and Ledoux vs. Jones, 20 An. 540, were suits between lessors and parties who had become sureties oif the lessors for the payment of the rent. The court simply held that upon an abandonment of the premises the lessee and his sureties became at once liable to an action for the whole rent. There was no issue in either as to the character and extent of the seizure to be made under the judgments to be obtained, nor as to what the effect this immediate advancing of a right of action had or might have upon the rights of either the parties or third parties relatively to conflicting rights of pledge or privilege upon the products of the land or the different objects upon the property leased. Plaintiffs contend that though Arts. 2705 and 3218, C. C., are general in their terms and extend the right of “ pledge ” to everything on the “farm ” leased, yet so far as the “crops ” on the plantation are concerned and so far as a “privilege” on the crop is concerned the pledge and the privilege extend only to the crop of a particular year for the rent of that year. They argue that it would be unreasonable to suppose that the lawmaker intended to forcedly keep on the different plantations in the State the crops of each year to secure in favor of the lessor the payment of instalments of rent, payable several years ahead; that the business in the State would be greatly hampered by such a rule. That while under the act of 1886 the privilege of the furnisher of supplies is subordinated to that of the lessor, it is only subordinated to the extent of the lessor’s instalment of rent which falls due during the year in which the crop was made. That no person could be found to furnish supplies to a lessee if by an abandonment of the lease by the tenant (over which fact the furnisher of supplies had no control) the lessor should become immediately invested with a right of privilege superior to that of the furnisher of supplies on the crop which he had contributed to raising for the payment of the rent for the period of an entire lease covering several years. They maintain that the generality of the terms of Arts. 2705 and 3218 of the Civil Code are restrained quoad $he “ crops ” on the plantation and quoad “ privileges” on crops by the provisions of Art. 3217, which limit the “privilege” on the crops, to that of the current year.

If this precise question has ever been submitted to this court before, the decision has escaped our notice. Counsel have referred to no adjudication on the subject.

Articles 2705 and 3218 refer in terms to a right of “ pledge ” and Art. 2317 to a right of “ privilege.” These two rights are distinct, though they resemble each other in their object and some of their results. They both carry with them the power to have the object affected by the same sold and the proceeds of sale applied by preference to the payment of the debt which the rights secured.

Article 3218 refers to the pledge as being of a higher nature than privilege, inasmuch as [the “ right, of the detention ” given by the contract of pledge, while it includes all the benefits of a privilege,, gives rights beyond those of a privilege. That is true, but none the less it is in some respects a more precarious right than is the privilege, for if possession, which is the essential basis of a pledge, be lost, the pledge is lost with its resultant benefits, while a “privilege proper,” which the creditor may consistently and concurrently hold on the same subject, not resting simply on possession, may survive. We think the lessor has a double right, a right of pledge with its right of detention, and included and resulting right of preference and a right of privilege proper; that though he may have lost his right of “ pledge ” by permitting the possession of the object subject to it to escape from his grasp, he can still fall back for security upon his privilege unless that right be also from some cause extinguished.

The right of pledge is intended specially to secure the right of the lessor as between himself and his lessee, though creditors may be held in check and subordinated to the pledgee through the pledge and right of detention; while the “privilege ” is designed specially to fix and determine preferences among creditors. We can assume for the purposes of this litigation that the lessor had a right of “pledge "upon all the fruits produced by the property leased to cover the rent for the entire period of the lease. In the case at bar whatever rights of “ pledge ” defendants may have had in the crop of 1894 they abandoned. That crop went with the consent of defendants into the hands of the factor charged with no other duty on part of the latter, under their agreement, than to collect the rent note of 1894 and apply the proceeds of the same to the mortgage note of the same year. This duty they performed. If defendants had any right of “ pledge ” upon the crop in the hands of the factors •or upon its proceeds, they should have exercised that right by seizure in their hands within the time allowed for the seizure of property removed from the plantation leased (C. C. 2709). They made no such seizure themselves (and, as we have seen, plaintiffs were under no obligation to make a seizure); their pledge having been lost (Pickersgill vs. Brown, 7 An. 314), they had to rely upon their privilege. We agree with plaintiffs’ counsel that the lessor’s privilege as a substantive right does not extend beyond the crop of the year for which the rent was due, and that while the abandonment by the lessee of the leased premises may have the effect of advancing the maturity of the instalments of rent so as to hasten his lessor’s remedy, that fact does not have the effect of broadening his rights of privilege against third parties.

We are next to see whether the relations between plaintiffs and defendants, by reason of holding the pledged .notes, were of such a character as to deprive them as regards the latter of the rights which they would otherwise have had over the crop of 1894 and its proceeds. There is no claim on behalf of Knowles that the crop of that year was not properly imputed by his factors to the indebtedness due to them by him(Bloodworth vs. Jacobs, 2 An. 25; Pickersgill vs. Brown, 7 An. 314), and the imputation made must stand unless there be rights intervening which would make such imputation illegal.

We see nothing in the agreement by which plaintiffs, who were mortgage creditors of the defendants and also factors of Knowles, consented to receive possession of the rent notes given by Knowles to the defendants, collect the same as they fell due, and apply the proceeds to the reduction, pro tanto, of defendants’ mortgage notes, ■which would estop them from making available their own rights against Knowles. The transaction was really one more of convenience to the defendants than anything else. When plaintiffs consented to make the collections they did, it certainly was not in the ■contemplation of any of the parties that they should surrender •directly or indirectly, in favor of the defendants, any of their own rights against Knowles and the crops on which they had a privilege; that they should, .under any circumstances, subordinate their rights to the full extent of those which might thereafter originate in favor of the defendants against Knowles by reason of the latter’s violating his contract. Is it for one moment to be supposed that the plaintiffs would have received the rent notes for collection if accompanied with an understanding, express or implied, that plaintiffs should stand by and take nothing from the crops in payment of their debt until all the rent notes executed by Knowles should be paid? Collaterals furnished to them under such ■conditions would be an intolerable burden instead of a benefit. We think the whole measure of the plaintiffs’ obligations, direct or indirect, were contained in their agreement to collect the rent notes as they fell due out of the proceeds of the crops of the Wood-burn plantation, and to apply them to the reduction, pro tanto, •of defendants’ corresponding note. This obligation they carried out; there their duty ended. We are of opinion that the judgment appealed from is erroneous.

For the reasons herein assigned, it is ordered, adjudged and decreed that the judgment appealed from is hereby annulled, avoided and reversed; and it is now ordered, adjudged and decreed that the plaintiff, John B. O’Kelley, do have judgment against the •defendants, James G. Ferguson and Kimball F. Ferguson, in solido, for the sum of twenty-four hundred and thirty-two dollars and fifty cents, with interest and attorney’s fees, as set forth in their petition, subject to the credits admitted in their petition, and costs in both courts.

It is further ordered, adjudged and decreed that plaintiffs’ rights of mortgage on the property described in their petition, to the extent of the indebtedness sued for, be and they are hereby specially recognized on the said mortgaged property, and the same are hereby made executory, and the said property is ordered to be seized and sold to pay said debt.

On Application for Rehearing.

Watkins, J.

This suit is one via ordinaria in the foreclosure of a •special mortgage securing certain promissory notes which the plaintiff acquired from the commercial firm of Bedford & O’Kelley, of which he was a member.

The defendants admitted executing the notes and having secured same by mortgage on the Woodburn plantation, but they claim to have become fully discharged from any indebtedness thereon by compensation in the following manner, viz.:

That contemporaneously with the execution of the aforesaid notes and mortgage, they executed a lease of the mortgaged premises to one Knowles for a period of five years for the price of three thousand dollars in annual instalments of six hundred dollars each, and placed them in the hands of Bedford & O’Kelley as collateral security for the notes secured by mortgage; said mortgagees and pledgees entering into a written agreement at the time to collect the rent notes and apply the proceeds to the satisfaction of the mortgage notes as they became due.

That the lessee of the plantation, in turn, became a customer of Bedford & O’Kelley and bought supplies from them, to the knowledge of the mortgagors; the latter relying on the fact, that, as factors of the lessees, the mortgagees were in a position to protect their interests, and on the avails of the lease to keep down their indebtedness on the mortgage.

That these arrangements worked well for a year or two, and the rents were collected by Bedford & O’Kelley and the proceeds applied to the extinguishment of the mortgage; but subsequently the lessee discontinued his planting operations, abandoned the leased premises and removed the farming implements, stock, etc., without discharging the obligations of the lease; and leaving the payment of the rent and .the mortgage notes unprovided for.

On this state of facts the defendants claim to have been largely damaged by Bedford & O’Kelley on account of their failure to provisionally seize the effects of the lessee, and thus secure the rent and satisfy the mortgage debt — their contention being that the default of the lessee and his violation of the lease contract matured the deferred instalments of the rent and made same collectible by suit and seizure.

On the other hand, the contention of the mortgagees is that the lessee owed them a large balance of account for necessary plantation supplies furnished, bearing a lien on the crop, and which gave them a legal right to protect themselves. That while they had the legal right as pledgees of the rent notes to provisionally 'seize the lessee’s crop, yet the defendants as owners thereof had also that right and could have protected themselves by suit and seizure.

The District Judge entertaining the theory of the defendants gave judgment accordingly and the plaintiff appealed.

Our decree reversed that judgment and rejected the defendants’ demands and gave the plaintiffs judgment.

Our opinion favored the theory above outlined as that of the plaintiff, and held that while as a general proposition the default of the lessee in paying maturer instalments of a continuing lease matured the deferred instalments thereof and subjected his effects and property to seizure for the whole rent, yet this effect is produced only with respect to the parties, lessor and lessees, and did not extend to other privileged creditors of the lessor in such a manner as to diminish their rights on the crop.

On this application defendants’ counsel contends (1) that it was error on the part of the court to hold that it was the duty of the defendants as pledgors to institute suit against the defaulting lessee; (2) and that it was error on the part of the court to hold that the pledgee who had made advances on the crop can, after the lessee’s abandonment of the leased premises, apply the fruits to his own claim to the prejudice of that of the pledgor.

We think it clear that the pledgee was only bound to use the ordinary care of a prudent owner in securing the collection of the rent, and no more; but that did not exclude the right of the pledgor and owner of so doing. Especially as the lessee was under personal and peculiar obligations to him.

Under the circumstances of this case and the mutual engagements of the parties it would be inequitable and illegal to put all the loss as well as responsibility upon the pledgee and mortgagee.

If the creditor had believed that he would have entailed upon himself the consequences supposed by accepting the piedge, he would doubtless have never given his consent, for it would have been to risk not only his mortgage but the advances he made to the lessee as well, upon the good faith of the lessee in keeping his contract to the end.

It is a conspicuous feature of.this case that the lessor knew at the time that he made the contract that the lessee was a customer of the mortgagor, and that there was the possibility of a conflict of interest between them.

Rehearing refused.


author: Miller, J.

text:
    No. 12,556.
    State of Louisiana vs. F. E. Johns. On Motion of George W. Summers to Set Aside Forfeiture of Bail Bond.
    when there is neither brief or assignment of errors, and error the court can perceive ini the record, the .iudgment of the lover court will be affirmed.
    A PPEAL from the Ninth Judicial District Court for the Parish of Sabine. Hall, J.

      M. J. Ounningham, Attorney General, and J. B. Lae, District -Attorney, for Plaintiff, Appellee.

      Don E. Sorelle, for Surety, Appellant.
    Submitted on briefs June 19, 1897.
    Opinion handed down June 22, 1897.
   The opinion of the court was delivered by

Miller, J.

The surety on an appearance bond is the appellant from -a judgment forfeiting his bond.

He has filed no brief nor assignment of errors. From our examination of the record it seems the appeal is from the judgment forfeiting a bond of one hundred dollars. We can find no basis on which we ■can disturb the judgment.

It is therefore ordered, adjudged and decreed that the judgment of the lower court be affirmed with costs.