text:
    No. 11,043.
    L. D. Prescott et al. vs. J. U. Payne, Jr. J. W. Prescott et al. vs. J. U. Payne, Jr. C. S. Tucker et al. vs. J. U. Payne, Jr.
    Consolidated.
    1. Notwithstanding a tax title may be inherently void, it is entitled to be respected and uphold aa valid until judicially investigated and its nullity pronounced; and an assessing onicer may act upon its prima facie validity in making an assessment. It is not made his duty to investigate prior assessments for the purpose of ascertaining their possible illegality.
    2. Whilst it is undoubtedly true that, in respect to such persons as trace title through an assessment inherently void, such defects may be visited upon them: yet, when that title has been annulled and revoked, and the property is again sold for delinquent taxes assessed against it while it was held by the first purchaser a.s owner, such non-apparenfc defects can not be invoked to defeat the assessment and avoid such subsequent sale. Ordinarily, property should be assessed in the name of the person possessing both the legal and the equitable title, though eases may arise justifying an assessment being made in the name of one possessing only a prima facie title.
    3. A statute which confers upon a tax collector authority to sell property sold or forfeited to the State only, does not confer upon that officer power to sell property of a delinquent tax payer in satisfaction of taxes .duo the State.
    á. A tender of the amount of price paid at the tax sale, with 10 per cent, added, may be made at any time prior to judgment annulling tax sale; or it may be liquidated and adjusted in the decree. ✓
    5. A judgment decreeing purchaser at tax sale entitled to be placed in possession does not form res judicata in respect to the title, and the last defendant in the action for possession is not thereby precluded from suing for its revocation.
    (5, Surget vs. Newman, 42 An. 777, affirmed in respect to prescription of three years.
    7. The prescription of ten years acquircndi causa can not bo maintained unless title is accompanied with possession duringthe time required by law.
    APPEAL from the Twelfth District Court, Parish of Avoyelles. Barbin, Judge ad hoe.

      E. J. Joffrion and W. 8. Frazee for Plaintiffs and Appellees.

      E. North Cullom, Jr., and E. P. Veazie for Defendants and Appellants :
    A tax sale o£ property assessed in the name o£ anotherperson than the true owner, preceded by notices given to tlie party assessed and not to the true owner, is absolutely null and void.
    Prescription o£ two and throe years, under the statutes in such eases, does not bar the claim o£ the owner lor the recovery ol the property. 15 An. 15, 26 An. 730;. Leticia Laque vs. Vincent Boagni etal., 31 An. 912; Eischel vs. Mercier,32 An. 705.

      Lands held in indivisión must be assessed in the name of all the joint owners and can be sold only in name of all. S3 An. 1163, Hayes, Administrator, vs. Viator.
    The names of the owners of the land should be correctly carried on assessment rolls. Guidry vs. Broussard, 32 An. 924 ; 29 An. 509.
    The land in contest was not forfeited to the State for failure to pay taxes of 1876. and 1877, and the taxes were prescribed at date of sale to X’ayne, defendant.. ' This prescription need not be specially pleaded. Hieltman vs. Dawson, 33 An. 438,439.
    Written notice required by Act 47 of 1873 is an essential prerequisite of the tax sale,, and in default of its service upon the true owner of the land the sale is null and void. Villey vs. Jarreau et al., 33 An. 291; Stafford vs. Twitchell, 33 An. 520.
    When the tax collector’s sale is a nullity, plaintiff is not required to tender back the purchase price to recover the property. Same ease and 26 An. 189; 32 An. 1290.
    The provisions of Acts 77 and 107 of 1880 were in no manner complied with, and the sale to Payne of the property in contest was null and void for that reason.
    “A tax sale of property sold at a previous tax sale, which is itself shown to be. null, can convey no title.” TIitchcock vs. Mackin, 37 An. 209, 215.

      Irion <fc Lafargue, and Thorpe <& Peterman on the same side.
   The opinion of the court was delivered by

Watkins, J.

Far the greater part of them residing in States other than Louisiana, petitioners suing in their right as simple heirs of Willis B. Prescott and Adelaide M. Moore, both deceased, indifferently, demand the annulment of defendant’s tax title to the property in controversy, and as ancillary thereto, the annulment of the intermediate tax title of J. W. Offut to the same property. .

The plaintiffs’ claim of title is, that anciently the community of Willis B. Prescott and wife owned a tract of land, which consisted of about fifteen hundred acres, part of which was in cultivation, and was called Lone Cypress plantation; and that W. B. Prescott and Wm; M. Prescott owned, in indivisión, another and smaller tract of land adjacent thereto.

W. E. Prescott, dying testate, left some debts and special legacies to be paid, and bequeathed to his surviving, widow, Adelaide, the usufruct of his share of his estate.

The surviving widow, finding herself so circumstanced that she eould not discharge the debts and legacies'and protect her usufruct as well, instituted a partition suit, whereby there was conveyed to her the share of the deceased in the community property; and in similar proceedings, conducted contradictorily with the succession of. W. M. Prescott, she likewise acquired his interest therein. And, after paying debts and legacies, there remained on handsome $8000, which was subject to her usufruct; and his succession was closed by final account.

Subsequently Widow Adelaide Prescott became indebted to Payne, Huntingdon & Co., and in satisfaction of. which indebtedness she conveyed to that firm an undivided half interest in the plantation.

Subsequently the entire property was adjudicated to one W. J. Offut at tax sale on the 28th of May, 1876; and thereafter said firm instituted suit and obtained judgment annulling this adjudication on .the 27th of October, 1877. Subsequently J. U. Payne, Sr., as the assignee of Payne, Huntington & Co., brought suit against the heirs of Willis B. Prescott for the partition of the property held in indivisión; and in pursuance of a decree of court therein obtained a partition in kind was effected on June 23, 1878, one-half being allotted to each of the two parties; the lower half to the Prescott heirs, ■which is the property in controversy.

Thus it appears there is some uncertainty as to the ownership of the land, inasmuch as it was apparently acquired by Widow Adelaide Prescott in 1858 in the partition of the property of the succession of her husband, and by the heirs of Prescott in the partition with J. U. Payne, Sr., just referred to.

But as this is not a question in this case — the suit being directed against a stranger to both the widow and the heirs of Prescott — it is sufficient that we accept the title as we find it, and deal with it accordingly. An additional fact may be taken into consideration which strengthens that conclusion, and it is, that Widow Adelaide Prescott subsequently married Leigh and died intestate, thereby investing the heirs of Prescott with the additional title they derived from her by inheritance.

As applicable to the defendant’s claim of ownership under his tax .title, the following statement covers the pertinent points necessary’ 'to be mentioned, viz.:

At a tax sale made on the 7th of May, 1881, the defendant became the adjudicatee of the entire Lone Cypress plantation, consisting of 1526 aeres of land and improvements, and the 145 acres additional land, in consideration of $840.30 acknowledged to have been received by the tax collector in cash; and the sheriff and tax collector executed in his favor’ a proees verbal in due form, and same was duly .and seasonably recorded in the proper conveyance office.

The prooes verbal employs substantially the following recitals, viz.:

1. That the tax sale was made in conformity with and in pursuance of the provisions of Acts 47 and 107 of 1880.

2. That the property was duly advertised for and exposed to sale-on the 7th of May, 1881, at the court house door in the town of. Marksville, parish of Avoyelles.

3. That the property consisted of 1526 acres of land known- as the-' Lone Cypress plantation, situated on Bayou Bceuf, and forming a part of sections 9, 21, 22, 23 and 24, township 2 south, and of range 2. east; and of 145 acres in section 3, township 2, of range 4 east.

4. That said properties were seized for the payment of taxes due-by William J. Offut, Willis Prescott agent of Mrs. Leigh, and the* heirs of Willis B. Prescott, deceased, as owner thereof, according to-the tableau and assessment rolls for the years 1876, 1877 and 1878.”

5. That at the said sale the defendant being the last and highest bidder, the property was adjudicated to him at the price of $840.30,

6. That the amount of taxes due the State for these years aggregated $468.15, and those due the parish aggregated $316.96.

7. That the right of redemption was reserved, to be exercised conformably to law.

Subsequently, on the 9th «f August, 1882, the defendant instituted proceedings against Widow Adelaide Leigh, née Moore, to recover possession of the property thus adjudicated to him, in pursuance of the provisions of Act 107 of 1880, alleging that (in) so far as he has been able to ascertain, Mrs. Adelaide Moore, widow of John F. Leigh, was owner of said property at the time of said tax sale.” And on the 6th of May, 1883, there was a final judgment rendered in favor of the plaintiff (defendant here) decreeing him entitled to be placed in possession of said property, and directing the sheriff to seize same and place him in possession thereof.

Prom this judgment an order of appeal was taken, but it was never prosecuted; and it became final at the dace of its rendition and signature.

Nothing further appears to have been done in the premises until June 11, 1888, when a writ of possession issued under the aforesaid judgment, and thereunder the defendant J. U. Payne, Jr., was. placed in possession on the 10th of June following.

The grounds of nullity set out in the plaintiffs’ petition are quite numerous, though they are substantially the same in each of the three consolidated causes.

Charges of nullity are not only preferred against the tax title of defendant, but against that of Offut as well; for in the prayer of the petition there is a specific- claim made for the revocation of the latter, as well as of the former.

But we are at a loss to perceive how we are to entertain such prayer, or could be expected to entertain it, in view of the plaintiffs’ distinct judicial admission of the revocation of Offut’s title, at the suit of J. U. Payne, Sr., in 1877, and the subsequent partition of the lands between Payne and the heirs of W. B. Prescott, under whom they claim.

Neither plaintiffs or defendant make any claim of title under Offut, as adjudicatee, and there is no necessity to review it.

"While not specifically so alleged, yet it is evident that it was plaintiffs’ intention, as well as it is their present theory, that because of certain álleged nullities in the tax title of Offut, the ownership of the properly was not vested in him, and hence assessments made of the properly as his, in 1876, 1877 and 1878, were illegal and defective, and can not support the subsequent adjudication of the property to defendant.

This theory is distinctly announced in the brief of counsel for ■Caroline Tucker et als., and in support of it they cite Gibson vs. Hitchcock, 37 An. 209.

Considering that question preliminarily, we find that in 1877 — ■ -contemporaneously with the sale of Offut — the property that was the subject of the litigation in that case, was adjudicated to Hitchcock, in the enforced collection of taxes of prior years; and, pending litigation which ensued, the property was again advertised for sale for the delinquent taxes of 1877 and 1878, and adjudicated to Mackin. Thereupon the legal representatives of Hitchcock, claiming ownership under the former tax sale, demanded the fight to redeem the property from Mackin adjudicated at the latter tax sale. In answer the defendants in the redemption suit set up certain badges of nullity in the Hitchcocktax title, and among the number, that the property was not sufficiently described; and upon this last ground plaintiffs’ title was held to be void.

There can bo no serious question as to that being a proper issue for a suit in redemption, or that the judgment therein rendered was a correct one.

But it is equally true that, as matter of law, the Hitchcock title was apparently a good one, and entitled to be respected and upheld as such until judicially investigated and declared null and void. This being the case, and this principle being applied to the Offut title, it seems manifest that the assessing officer was justified in making the' assessment according to the title. It was certainly not his duty to institute an examination into prior assessments to ascertain the possible illegality of the sale to Offut; and had he made such an examination and found what, in his opinion, was evidence' of error or illegality in such assessment, it would have been unquestionably out of his power and beyond his capacity to so decide, possessing no judicial power.

Accepting this view as correct, we are of the opinion that any alleged errors in the title of Offut could not possibly affect an assessment made in his name during the time the property stood upon record in his name.

If the defendant were claiming ownership through the Offut title, directly or indirectly, its nullities could be visited upon him; but inasmuch as the fact confessedly is that the Offut tax title was judicially annulled at the suit of J. U. Payne, Sr., in 1877, and the rightful owners reinstated in possession, and thereafter the property was partitioned, and the portion that was allotted to the Prescott heirs is claimed by the plaintiffs in this suit — -they are unavailing.

While it is true that in 1881 the defendant purchased the property for the taxes of Offut, which were assessed to him as owner during the period of time he held under his tax title, and prior to his divestiture at the suit of J. U. Payne, Sr., and the reinvestiture of title in Payne, Sr., and the heirs of Prescott; yet there is a recital in his tax title that, at time of the sale, the property was in Mrs.' Leigh and the heirs of W. B. Prescott as owners; that is to say cum onere.

The theory of plaintiffs, further amplified, is that the nullity of the Offut title resulted in the nullity of the subsequent assessment in his name; and the nullity of the title and assessment of Offut necessarily draws after it the nullity of the defendant’s title. 2 Desty on Taxation, 628 and 629; 33 An. 816; 39 An. 205, 206.

The principle involved is very much the same as that involved in Insurance Company vs. Levi, 42 An. 432, in which we dealt with property, the title to which had been suffered to remain in abeyance during the several years, during which the assessments complained of'hadbeen made; and we held that if it suited the convenience of the parties in interest to acquiesce in this situation, they “ should not expect the city to lose her revenue on account of a possible defect in the assessment.”

Ordinarily, it is not necessary that property should be assessed in the name of one possessing both the legal and equitable title, in order that the assessment be legal and valid; for eases may arise justifying, an assessment being made in the name of one possessing only prima facie title, and such an assessment would serve as the foundation of a valid tax title.

If assessing officers could not assess other than those possessing absolutely perfect titles, a great deal of property would escape taxation entirely.

Recurring to the question of the alleged nullity of the defendant’s tax title, there is but one ground that needs consideration, and that is necessarily fatal to it; and it is, that the tax sale was made in conformity to the provisions of Acts 47 and 107 of 1880 for the collection of taxes that were assessed in 1876, 1877 and 1878; and that said sale was illegal because Act 77 of 1880 relates to the assessment and collection of the revenues of that year, and had no reference to antecedent taxes; and Act 107 of 1880 relates exclusively to the sale of property that had been theretofore forfeited to the State for the nonpayment of taxes; and the averment of the petition is, that the property in question had never been forfeited to the State..

In Surget vs. Newman, 42 An. 781, we had this particular statute under consideration as applicable to a plea of three years’ prescription under Act 105 of 1874, and in the course of our opinion said:

“ This statute was doubtless enacted for the purpose of putting in force the provisions of Art. 1 of the ordinance for the relief of delinquent taxpayers, but it evidently relates only to the sale of property forfeited or sold to the State for delinquent taxes and licenses. This appears from a casual inspection of the act; and we have frequently so construed it. It is equally obvious that a statute which directs and requires a tax collector to sell property forfeited or-sold to the State only does not confer upon that officer power or authority to sell property of a delinquent taxpayer in satisfaction of taxes due. the State.

“ It was this particular deficiency in the Act of 1880 which necessitated the passage of Act 98 of 1882, Sec. 1 of which requires the tax collector to advertise for, sale property, which had theretofore be§n. forfeited, to the State for unpaid taxes,; property which had been sold to the. State for unpaid ta¡xes, an.d property upon which .any taxes (were) due to the State ,* . * , prior to January 1, 1888.’ Therefore, if the tax collector did proceed u,nder that law, to enforce the collection of taxes due the State prior to the 1st of January, 1880, * . * .it can not be said of his adjudication that it is a title to * * , . property purchased at tax sale under and by virtue of any law of this State,” etc.

Applying the principle of law announced in that case to the tax title under examination, it is evident that it can not stand the test. The proces verbal shows upon its face that the sale was made, not of property which had been forfeited to the State, but of property of Mrs. Leigh and the Prescott heirs, for the purpose of collecting taxes that were assessed .against it. in 1876, 1877 and 1878, when Offut was the proprietor. It further shows that the sale was made in pursuance of Acts 77 and 107 of 1880, indifferently.

It is further manifest that the tax collector, in acting under these laws, proceeded without warrant or authority, and that the sale was absolutely void on that account, and confers no title on the defendant.

The exceptions of the defendant are- peremptory in character and may be summarized as follows, viz.:

1. Failure of the. plaintiffs to make a tender of the price paid at the sale, as a condition precedent to the institution of , suits, to annul the title.

2. Res adjudícala founded upon the suit of defendant against Mrs. Leigh to be put in possession of the property sold, and the judgment thereon pronounced. ...

3. The prescription of three and five years.

As a defence, the plea of ten years’ prescription acquirendi causa is urged as a muniment of title.

In the alternative, claim is made in reconvention for the restitution of the purchase price, taxes paid since, sale, and the value of improvements and repairs.

a. In State of Louisiana vs. Cannon, 44 An. —, we recently decided, upon a thorough examination of, authority,, that, ‘ ‘ the plea of Want of previous tender, as a condition precedent to the, institution of a suit to annul a judicial sale, is not applicable to tax sales. The Constitution declares that no sale of property .for taxes shall be annulled for any informality in the proceedings until the price paid, with 10 per cent, interest, be tendered to the purchaser; and that provision has been construed to mean that tender may be made at any time prior to final judgment, or that-the .price may be liquidated and adjusted in the judgment.”

Breaux vs. Negrotto, 43 An. 427.

b. The suit and judgment referred to and relied upon as supporting the plea of res adjudieata was uot a proceeding which involved the title of the defendant. The only question that .was therein adjudicated was possession and not ownership, and of which the tax title furnished the only evidence.

Notwithstanding the judgment decreed the defendant entitled to be placed in possession, it left the defendant in that, suit free to sue for the revocation of the title upon which the judgment is founded.

c. The prescription of three years is not good, for the reason we assigned for refusing to apply it in Surget vs. Newman, 42 An. 777, viz.:

“ It is clear to our minds that, in applying the bar of the statute to an action to invalidate the title to property purchased at tax sale, it is our province and duty to see to it that the sale was made under and by virtue of some law of the State which authorized the proceedings, and our conclusion is,, that the title in question fails to disclose the existence of any statute authorizing sueh a sale, and, therefore, it can not be said to be a title to property purchased at a tax sale under and by virtue of arty law of this ¡¡State, and the prescription im voked * * is not available to the defendant,” etc.

d. The prescription of five years only applies to informalities in sale proceedings, and not to such absolute and incurable nullities as are found to exist in the instant case.

e. The plea of ten years’ prescription is not well grounded, because the title of defendant was unaccompanied by. possession, which is one-of its essential elements.

R. C. O. 3479.•

That article requires that possession shall have continued “during the time required by law; ” and Art. 3487 requires “that the possessor shall have held the thing in fact and in right;” and same article further declares “that the possession shall have been continuous and uninterrupted, peaceable, public and unequivocal,” etc.

In this respect the facts are that the property was adjudicated to the defendant on the 7th of May, 1881. On the 9th of August, 1882, •defendant, as adjudicatee, instituted suit against Mrs. Leigh for possession, and on the 6th of May, 1883, there was a final judgment rendered in his favor; but nothing appears to have been done in the way of executing it until the 16th of June, 1888.

It is quite evident that defendant has not had that possession which is requisite to sustain the plea of ten years’ prescription.

The judge a quo was of opinion and decided that the rents and revenues were the just equivalent of the taxes, repairs and price paid, and accordingly held that one was compensated by the other; and we find no sufficient reason to change his decision or decree.

Judgment affirmed.

Mr. Justice Fenner recuses himself on the ground of relationship to the defendant.


source: Caselaw Access Project

author: Watkins, J. Beeaux, J.

license: Public Domain

text:
    No. 10,774.
    Grand Lodge of Louisiana of Free and Accepted Masons vs. City of New Orleans.
    The constitutional provision relating to the exemption of property from taxation can not be avoided on the ground that it is retrospective.
    The exemption was not a charter grant.
    It was not a right removed from all legislative control.
    The plain terms of the organic law prohibiting the exemption of property leased or used for corporate profit or income must be obeyed.
    That part of the property occupied by plaintiff’s order is exempt.
    That part used or leased for corporate income or profit is subject to taxation.
    From the assessed value of the whole property is deducted the value of that part which is not subject to taxation. The remainder is taxable.
    APPEAL from the Oivil District Court for the Parish of Orleans.' King, J.

      J. Q. A. Fellows and Buck, Dinkelspiel & Hart for Plaintiffs and Appellees: ’ '
    Masonic societies are charitable (eleemosynary) institutions within the meaning of Art. 207 of the Constitution. 34 An. 574.
    The exemption of Act No. 225 of 1855 is a contract for a valid consideration between the State and the Grand Lodge E. and A. Masons, and that any attempt to tax the property so long as the conditions exist impairs the obligation of the- contract. There is no necessity of looking for the consideration outside the objects for which the corporation was created. These objects are decreed by the Legislature to he beneficial. 15 Otto 362; 8 Wall. 430; Id. 439; 33 An. 850; 36 An. 396

      A special statute 'exempting t'lie property from taxation is’not repealed1 by the Constitution oí-1879. Whenever the sovereign-exoneratesitdoesso .witlimiVnifipenc,e., 3B.An,*850.

      W. B. Sommeryille, Assistant City Attorney, and Carleion Hunt', City Attorney, for Defendant and Appellant:
    1. Act No. 225 oí 1855, exempting the property of plaintiff from taxation, is not a part of plaintiff’s charter, contained in Act No. 41 of 1816.'
    2. Act-No.' 225 is in the nature of a gratuity by the-'LegiSiature, which was subject to repeal at any time. , . . ...... ■
    3. Property acquired by plaintiff in 1853 was not acquired with reference to the action of the State in 1855. And the exemption of plaintiff’s property from taxation in the latter year can not be held tobe tile-basis of a Contract under 8 Wall. 430 and 105 U. S. 362. ... .;
    4. Articles 203 and 207 of the Constitution of Í879 repeal Act No. 225 of 1853.
    5. The opinion in City vs. Poydras Asylum, 33 An. 850, construing the terms of the Constitution of 1868, with reference to taxation, is not authority on the meaning and scope of Arts. 203 and 207 of the Constitution of 1879 on the same subject
    6. Plaintiff’s property falls within the proviso contained in Art. 207, and is, therefore, subject to taxation.
   The opinion of the court was delivered by

Watkins, J.

The plaintiff enjoined the city-from proceeding to seize and sell for delinquent taxes of the years 1888, 1889 and 1890 property of which it is the owner, and which is situated in the square bounded by St. Charles, Perdido, Union and.Carondelet streets in the city of New Orleans, and known as the “Masonic Grand Lodge Hall,” alleging its exemption from.said taxes under the provisions of Act 225 of 1855.

It alleges that said exemption was granted by the State in consid - eration of the principles and objects of the institution of Freemasonry, which are charity and individual benevolence, and the •establishment and promotion of charitahlé institutions; and in further consideration of the resolution that is contained in its act of purchase of said property in 1853, to the effect that the entire revenues of same, as soon as it is paid for, shall be devoted “to the relief of worthy distressed members of the order, their wives, children and families, and as a permanent charity-fund,” etc. And it avers that said exemption “became a contract between the State of Louisiana and the Grand Lodge * * * ' so long as the said property should be the property of the Grand Lodge and be occupied by it,” and its revenues continue to bé so applied.

It is furthér averred that each of those conditions.now exists, and has. continuously existed since the .enactment of said exemption law,, and that the law. under the color of which the defendant claims the right t.o levy and collect said taxes impairs the obligation of its protected contract in violation of Sec. 10 pf Art. 1 of the Constitution of the United States, and is, therefore, null and void.

The city’s answer is a general denial.

The contention of the plaintiff is that said, exemption, under the circumstances related, had and has the ,force ,of a. legislative contract which could not be repealed or impaired by subsequent constitutional provision or statutory enactment'.

On the other hand, the contention of the defendant is, that Act 225 of 1855, relied upon by the plaintiff, conferred a mere gratuity, benefaction or munificence, which was subject to repeal or legislative recall at any time. That Art. 207 of the State Constitution repeals the Act of 1855 by imposing the additional restriction upon the exemption of the property of charitable institutions, that same “.shall not be used or leased f.or purposes of private or corporate profit or income,” and that proof of the property not being so used is a condition precedent to the allowance of the exemption.

This contention of the city is supplemented by the further one that, as in the charter granted to the plaintiff in 1816 there is no mention of the exemption of .its property from taxation, and as the property in question was acquired by it two years prior to the enactment of the exemption act, and the exemption did not, therefore, constitute any part of the consideration thereof, said act does not contain the constituent elements of a contract which could.be,protected by the Federal Constitution from-impairment.,

And therefore the Act of .1855 became, subject to repeal by the contrary provisions of Art. 20.7 of the Constitution of the State— there having been in existence no contract on the part, of the State not to tax the- plaintiff’s property at the tir&e of if,s acquisition, and there having been no covenant on the part of the State, stipulated in its charter, as to the exemption of property which it might thereafter acquire. ... . ,, ' . .

From the premises laid down on either side it is clear that the dev. cisión of this, case .must necessarily depend, upon, the existence vel non between the State and plaintiff, antecedent to the adoption of,, the Cpnstitutipn.qf 1879,,.pf ,a .contract in.rpspect to the exemption.of its-property from, taxation..

It is conceded that the State granted a charter to the Grand Lodge in 1816, and that it contained no mention of any exemption of its property — present or prospective — from taxation. That the property alleged to be exempt was purchased in 1858, and the exemption statute was not enacted until the 15th of March, 1855. It is couched in the following terms, viz.:

‘1 Be' it enacted, That the building situated at the corner of St. Charles and Perdido streets, in the city of New Orleans, and known as the hall of the Grand Lodge of P. and A. Masons of the State of Louisiana, shall be exempt from State and parish taxation■ so long as it is occupied as the Grand Lodge of the F. and A. Masons.” Act 225 of 1855, p. 271.

In order to disclose a consideration for this alleged contract plaintiff introduced proof to show that the Grand Lodge is an eleemosynary institution “founded on the ancient usages of their society, the principles of which are charity and universal benevolence.”

But, while conceding the charitable objects and purposes of the order, defendant’s counsel contends that that is insufficient to maintain the exemption without further proof that said exempt property has not been “ used or leased for purposes of private or corporate profit or income.” Const., Art. 207.

We are thus presented with a close question of constitutional law, and to resolve it satisfactorily, recourse must be had to the decisions of the Supreme Court as well as our own, and the opinions of text writers.

Pirst consulting Judge Cooley — whose views upon such questions are always lucidly expressed and instructive — we find that after having made a careful examination of the authorities, he has taken the distinction which the city attorney suggests as the correct one on which to place our decision.

That author has divided into two distinct topics the question here presented as one and indivisible.

Treating of charters granted by a State to private corporations, containing stipulations exempting corporate franchises and property from taxation, he says, such a charter “ is a contract between the commonwealth and the corporators, ’ ’ and that such stipulations 1 ‘ are irrepealable.” Cooley on Taxation, Chap. Ill, p. 55.

But, in subsequently discussing exemptions of corporate franchises • and property, which are “granted on considerations of public policy,” he says, same “may be recalled whenever the legislative view of public policy may be changed. To the individuals, corporations or associations benefited by them, they are to be regarded as favors or privileges merely, to continue during the pleasure of the sovereignty; and there can be no breach of faith — certainly no want of power — in terminating them at any time.” Ibid., Chap. VI, pp. 145, 54.

See also cases illustrating this principle, which are cited on page 54.

As preliminary to this distinction the author says:

“ An exception, however, is held to exist in case of an agreement by a State, entered into for a consideration, to refrain from exercising this power; that provision of the’ Federal Constitution which forbids the State passing laws which impair the obligation of contracts, applying as well to contracts by the State itself, as to those between individvals. ********

“ A number of cases, for which this has been the precedent, are referred to in the note, but it is conceded in all of them that there must be a consideration to the State for the relinquishment, or the elements of a contract will be wanting.” Id., p. 54.

A leading and conspicuous case, fairly illustrating the questions herein involved, is City of New Orleans vs. St. Anna’s Asylum, 31 An. 292.

In that ease it appears that the defendant asylum was created by a legislative charter granted in 1853, and it acquired in 1874 the property which was alleged to be exempt, and .resisted the payment of taxes assessed thereon in 1876. In stating the question before it the court said:

“ Under the settled jurisprudence there can be no doubt of the liability oí the property in controversy, unless removed from the general rule by some exception.

“ Such exemption is claimed as resulting from the-charter of the defendant corporation, by which it is contended that, a contract was created divesting the State of all power to' repeal the exemption claimed.”

After quoting the provisions of the charter which were relied upon as constituting a contract, the court proceeds to state:

• “The solitary question, therefore, is-, was this exemption a contract of such a nature as to invest the corporation with such' a right as to remove it from ail subsequent legislative control? We think not,” etc.

Proceeding with the expression of the reasons which' influenced this conclusion, they said:

“That a general power to repeal or modify' a charter enters into the charter, and pro tanto divests it of the character oí a contract, is now the settled opinion of the Supreme Court of the United States.” (Italics are ours.)

Heneé", the conclusion of the court was that the State had the authority, under the general power it possessed, of repealing or modifying the legislative charters of private corporations, to divest it of the character of a contract altogether.

That case was carried up, on writ of error, to the Supreme Court— Asylum vs. New Orleans, 105 U. S. 362 — and it was therein reversed and the exemption sustained. Referring to the sixth section of the legislative charter of the asylum, which grants the exemption relied upon, the court said:

“The corporation filed an answer setting up the "exemption from taxes contained in its charter, and claiming that it was a contract, and contended that the Constitution of 1868, and the statute passed in pursuance thereof, impaired the obligation of said contract, in violation of the tenth section of the first article of the Constitution of the United States.”

After stating the grounds of the decision by our predecessors, as shown by our previous quotations, they proceeded to make an examination and give a synopsis of the cases cited and relied upon, and said:

“We think they do not apply to the case now under consideration. In the first place, the Constitutions of Michigan and Wisconsin, in which States those cases arose, reserved to their legislatures, respectively, the power to alter, amend and repeal charters of "incorporation. In the next place, in those cases, the exemption granted was held to be gratuitous on the part o'f the State, no consideration passing therefor from the companies. It was no part of their charters of incorporation, and, therefore, formed no consideration for their acceptance. Whereas, in the present case, the exemption was expressed in the charter itself, and was one of the inducements offered for its acceptance and for making donations for the establishment of the institution.”

Thereupon the court held that the imposition of the tax in question against the property of the asylum “ was not a legitimate exercise of the power of dissolution reserved'in'the Code ” of Louisiana, and that the 118th article of the Constitution of 1868 was in violation of the Constitution of the United States in this respect.

We have quoted from this decision at' great length, as it fully sanctions the distinction taken by Judge Cooley, and affirms the correctness of the principle on which the exemption is placed; that is to say, upon a provision of a legislative charter for the granting of which the exemption constitutes a consideration, and an'inducement to the acceptance thereof.

Home of the Friendless vs. Rouse, 8 Wallace, 430, is an exactly parallel case.

From the statement of the case it appears that the Legislature of the State of Missouri granted a charter in 1853 to a private corporation, styled the Home of the Friendless, a charitable institution, and therein a stipulation was placed exempting all of its property from taxation, in general terms. That, under the provisions of a State Constitution adopted in 1865, the Legislature authorized the levy of a tax on the property of this corporation; and the corporation resisted payment on the ground of the impairment of its contract of exemption. This exemption was' denied by the Missouri court, but the Supreme Court, on writ of error, held: “ Tbis charter is a contract between the State of Missouri and the corporators, that the property given for charitable uses specified in it shall, so long as it is applied to these uses, be exempt from taxation. It follows that any attempt to tax'it impairs the obligation of the contract.”

To the same effect are many other decisions of the Supreme Court, and we cite the following, viz.: University vs. People, 99 U. S. 309; Merritt vs. Philadelphia, etc., 18 Wall. 206; North Missouri R. R. Co. vs. Maguire, 20 Wall. 46; Erie R. R. Co. vs. Pennsylvania, 21 Wall. 497; The Delaware R. R. Tax, 18 Wall. 206; Miller vs. The State, 15 Wall. 478; The Binghampton Bridge, 3 Wall. 51.

As appertaining to this question quite á number of decisions, collateral thereto, may be appropriately cited.

For instance, in Edwards vs. Hearsay, 96 U. S. 595, what a contract was in a contitutional sense was défined to be “the agreement of minds, upon a sufficient consideration, that something' specified shall be done ol’shall not be done.”

In Fletcher vs. Peck, 6 Crahch 87, it was held that when a State “law is in the nature of a contract, and rights have been vested under it, its repeal can not divest these rights.”

It is conceded to be the settled interpretation of the Supreme Court, in reference to the contract clause of the Constitution of the. United States, that a State Constitution is a law within the meaning thereof. Railroad Company vs. McClure, 10 Wall. 511; Gray vs. Davis, 1 Woods, 420; Green vs. Barry, 15 Wallace, 610; White vs. Hart, 13 Wallace, 647; Williams vs. Bruffy, 95 U. S. 184; Bank vs. Skelly, 1 Black, 436; Dodge vs. Woolsey, 18 Howard, 331.

But the decisions are quite as numerous and as pertinent which illustrate-the correctness of the second proposition of Judge Cooley, and of this class the case of Rector, etc., of Christ Church vs. County of Philadelphia, 24 Howard, 300, may be taken as a leading and forcibly expressed opinion thereon.

In the statement of the case the court said: “In the year 1833 the Legislature of Pennsylvania passed an act which recited that Christ Church Hospital in the city of Philadelphia had for many years afforded an asylum to numerous poor and distressed widows, who would probably else have become a public charge; and it being represented that'in consequence of the decay of the buildings of the hospital estate and the increasing burden of taxes its means are curtailed and its usefulness limited,’ they enacted ‘ that the real property, including ground rents, now belonging and payable to Christ Church Hospital in the city of Philadelphia, so long as same shall continue to belong to the said hospital, shall be and remain free from taxes.’ ”

It further appears that in 1851 the Pennsylvania Legislature passed a law declaring “ that all property, real and personal, belonging to any association or incorporated company which is now by law exempt from taxation other than that which is in the actual use and occupation of such association or incorporated company, and from which an income or revenue is derived by the owners thereof, shall hereafter be subject to taxation in the same manner and for the same purposes as other property is now by law- taxable; and so much of any law as is hereby altered and supplied be and the same is hereby repealed.”

The Pennsylvania court held that the exemption conferred by the statute of 1833 in favor of the Christ Church Hospital was partially repealed by the Act of 1851, and that -an assessment of its property in virtue thereof was not repugnant to the contract clause of the Federal Constitution.

On writ of error the plaintiff’s contention was that the exemption of the. act was perpetual, as the act itself was in effect a protected contract — just as plaintiff’s contention is here.

The court, through Mr. Justice Campbell, says:

“ This concession of the Legislature was spontaneous, and no service or duty or other remunerative condition was imposed on the corporation. It belongs to the class of laws denominated privilegia favorabilia. It attached only to such real property as belonged to the corporation and while it remained as its property; but it is not a necessary implication from these facts that the concession is perpetual or was designed to continue during the corporate existence

* * The inducements that moved the Legislature to concede the favor contained in the Act of 1838 are special, and were probably temporary in their operation * “ * It is in the nature of such a privilege as the Act of 1833 confers that it exists bene plaeitum, and may be revoked at the pleasure of the sovereign.”

We have quoted from this case at length because there seems to be an exact parallel between it and the instant case, and for that reason the decision is peculiarly applicable and pertinent.

In Salt Company vs. East Saginaw, 13 Wall. 373, the court very clearly distinguished statutes which contain exemptions from taxation, the property of private corporations merely, and those which grant charters to such corporations and therein stipulate continuing exemptions.

The court in analyzing the statute of Michigan, which was therein involved, made this observation: A law dictated by public policy and the general good, etc., * * such a law is nota contract, except to bestow the promised bounty upon those who earn it, so long as the law remains unrepealed. There is no pledge that it shall not be repealed at any time."

Again: ‘ Charters granted to private corporations are held to be contracts. Powers and privileges are conferred by the State, and corresponding duties and obligations are assumed by the corporation.”

In the case of Commonwealth vs. Bird, 12 Mass. 443; a similar principle is announced. The same is true of the ease of Brainard vs. The Town of Colchester, 31 Conn. 407.

But the whole question is very tersely,put and decided in People vs. Roper, 35 N. Y. 629, the court declaring that:

“ If is also true that, for adequate consideration, and in the exercise; of, its. general authority, (the State) may invite investments in a particular description of property, for. the benefit of the State, by stipulating for its exemption, in the hands pi the .holders, from assessment, as a subject of general taxation.” * * . *

But “it is never fo be assumed, however, that the State has, even to this extent, fettered its power in the future, except upon clear and irresistible evidence that the engagement was in the nature of a private contract, as distinguished from a mere act of general legislation,” etc.

After-quoting at length the language, of Chief Justice Marshall, in Providence Bank vs. Billings, 4. Wheaton, 429, the court said:

“ Por an irrepealable contract of such a nature, in the name of the body-politic, no authority is found, either in our legislative or our congressional precedents.

‘1A contract in a corporate charter, for. immunity in respect to a franchise conferred by government, is essentially distinct in its nature from a prospective absolution.of the citizen from his future obligations to the State.” (Italics ours.)

We are of opinion that the foregoing summary of authority, Federal and State, fully sanctions and substantiates the correctness of the distinction made by Judge .Cooley between repealable and irrepealable statutory exemptions from corporate taxation.

We have carefully examined the decisions of the courts of last resort,in many other States, as well as. those of this court, and have found none which pronounce a contrary view. On the contrary, we find t-hem in full accord therewith in every particular.

In the case of City of New Orleans vs. The Poydras Orphans’ Asylum, 33 An. 850, in which the plaintiff’s effort to collect taxes assessed against property of the defendant was resisted on the ground, that same was exempt from, taxation by various statutes enacted prior to the adoption of the Constitution of 186.8, and which the plaintiff contended to have been repealed thereby, passed off on the ground that there was “ no incompatibility between the exemption laws invoked and the Constitution of 1868;” and hence the exemption -laws invoked, were .not .repealed thereby, but remained in full force, and the tax was defeated. ;

It is a fact fully attested by a comparison made of the exemption law of 1855, that is invoked by the plaintiff, and the pertinent provision of Art. 207 of the Constitution that the former is subjected by the latter to an additional and essential condition precedent, that is destructive of the claim of the plaintiff, unless the exemption be given the force of a protected contract.

The following extract from Art. 207 is relied upon, viz.:

“ The following property shall be exempt from taxation, and no other, viz.: All public property, places of religious worship'or burial, all charitable institutions * * provided, the property so exempted be not used or leased for purposes of private or corporate profit or income.'”

In considering a germane question instate ex rel. Bartel vs. Board of Assessors, 34 An. 574, we held that the primary objects of the “Supreme Council of 33 Scotch Masonry,” as appears from the evidence in the record and its legislative charter of 1870, are benevolence and charity, and, as such, was entitled to enjoy the prohibition contained in Art. 207 of the Constitution; but because the evidence disclosed that part of the buildings were rented for stores, and produced revenue, we held that that was obnoxious to the proviso of Art. 207 of the Constitution, and maintained the tax. See also State ex rel. Tulane Fund vs. Board; 35 An. 668.

The only condition imposed by the exemption act of 1855 was that the exempt property should continue to be “ occupied as the Grand Lodge of the F. and A. Masons.”

The proof shows that during the years in which the complained of assessments were made, a part of the ground floor of the exempt property was rented for stores, and that some of the rooms, were rented for other like purposes; and that from these sources a large amount of corporate income had been realized. And, if the plaintiff does not possess a contract in the sense of the Federal Constitution, its property is clearly subject to taxation under the terms of the Bartel decision and Art. 207 of the Constitution.

And it is well worthy of remark that it is in line with many previous adjudications on this question, and, among the number, the following may be cited, viz.: City of New Orleans vs. The Congregation, etc., 15 An. 379; City of New Orleans vs. N. O. Mechanics, etc., 27 An. 436; New Orleans vs. People’s Bank, 27 An. 646; New Orleans vs. Metropolitan Loan, etc., 27 An. 498; New Orleans vs. St. Patrick’s Hall, 28 An. 512; State vs. Bank, 23 An. 271; New Orleans vs. Lafayette Ins. Co., 28 An. 750; City vs. Carondelet Canal & Nav. Co., 36 An. 396.

On the whole, our conclusions are that Act 225 of 1855, which exempts from State and parish taxation- the property of the plaintiff “ so long as it is occupied as the Grand Lodge of the P. and A. Masons,” does not contain a contract between the State and that corporation that is irrepealable, but that the exemption of the statute was granted on considerations of public policy independently of the consideration existing in its previously granted legislative charter, and subject to be recalled whenever the legislative view of public policy might be changed. That the provisions of that act.are subordinate to those of Art. 207 of the Constitution of the State, providing that the property of charitable institutions shall be exempt from taxation if it “ be not used or leased for purposes of private or corporate profit or income.” That this constitutional provision, nor. the statute under which the tax in question was levied, are amenable to the constitutional invalidity urged against them.

We very much regret that we have been constrained to subject to taxation the property of the plaintiff’s meritorious association, but we have been unable, after careful research, to find any authority in our own decisions or those of the Supreme Court which holds that a bare statutory exemption, not contained in the legislative charter of a private corporation, nor in an amendment thereto, and not ex-, pressly defined to be a contract between the State and the corpora-tors, is irrepealable', and not subject to recall at the option of the Legislature.

We find the authorities are unanimous to the contrary; but if we be in error in this view, the Supreme Court can set the decision right.

Plaintiff’s injunction was, therefore, erroneously maintained and perpetuated.

It is therefore ordered and decreed that the judgment repealed from be reversed, and it is further ordered, and decreed that the plaintiff’s injunction be dissolved at its costs in both courts.

On Application for a Rehearing;

Beeaux, J.

We will not restate the case; it is sufficient to say that the eleemosynary character of the institution is hot controverted by defendant’s counsel.

That this court has decided that Masonry is a charitable institution. 36 An. 397.

That defendant’s propositions are:

That the act pleaded, as exempting the property of. plaintiff from taxation, is not part of the plaintiffs’ charter, nor an amendment, being a subsequent and independent act in the nature of a favor or privilege, subject to repeal at any time.

That the action of the State exempting the property subsequent to its purchase by plaintiff can not be held as the basis of a contract affecting the previously purchased property.

That Art. 207 of the Oonstitution repealed the special exempting act pleaded.

That the terms of the Oonstitution of 1868, with reference to exemption, are different from those of the Oonstitution of 1879. .

The plaintiff in reply to these propositions earnestly contends that the questions have been decided in several cases, and that it is protected by the rule of stare decisis.

The St. Anna Asylum, a corporation created for charitable purposes by legislative charter, owned property, the revenues of which were applied to charitable purposes:

In a case which was tried against ¡that institution it was decided that its revenues were not exempt from taxation.

On appeal to the SupremeiCourt of the United States the judgment was reversed. The court held that the exemption was made part of the charter, and was one of the inducements offered for its acceptance and for making donations for the establishment of the institution. Asylum vs. New Orleans, Otto, 105, p. 362.

Oommencing with the leading Dartmouth Oollege case, in which the Legislature assumed to remodel the charter of that college, the doctrine has been affirmed and reaffirmed, as held in our original opinion, that such a charter is a contract which the State grants in expectation of benefits to'the public,-which can not be amended or repealed to the prejudice of the rights accorded.

There is no analogy between the pending case and the St. Anna Asylum ease further than that they are both ■ charitable institutions, and that each leased part of it property.

In the ormer the act of exemption - does not contain or import a consideration; in the latter'the charter contained the elements of a contract protected by the Federal and State Oonstitutions.

The other eases referred to apply, and the questions involved have a bearing upon the issues in the ease under consideration.

We are therefore, compelled to meet the principles laid down in them and to express our inability to reach the same conclusion.

In City of New Orleans vs. Poydras Orphan Asylum, 33 An. 852, the defendant corporation was created by special act of February,. 1817. It was exempted from taxation. under special act of March, 1836.

The case being similar to the pending case, the special exemption did not secure a vested right.

The taxes claimed were for the year 1870, and the ease was decided under the Constitution of 1868.

The court held that all the property, that yielding a revenue to, and that actually occupied by the Poydras Asylum, was exempt from the payment of the said tax.

The principle upon which the decision rests will be referred to later in our decision.

The question of immunity from taxation of charitable institutions, owning property other than that which they occupied, received consideration in the case of the New Orleans Female Orphan Asylum vs. Houston, Tax Collector, 37 An. 69; the taxes claimed were for certain years preceding 1879.

The charter did not contain a clause exempting its property from taxation. The exemption was secured under subsequent special legislation, as in the pending case.

Property yielding a revenue for the benefit of the asylum was decreed exempt from taxation.

We quote from the dissenting opinion in that case, of the late Justice Manning:

“ The whole subject came.under review in the Poydras Asylum case and was so extensively treated as to render a renewal of the discussion both unnecessary and tedious. I content myself with saying that the dissenting opinion of Mr. Justice Fenner in that case expresses my view, and for the reasons therein given I dissent from the majority opinion in this case.

“ I recognize, however, the injustice that would be done by subjecting the plaintiff and other charitable institutions in oonsimili easu to the payment of taxes while the Poydras Asylum has been decreed exempt, and I shall in future adopt the ruling in that case as final.”

In another case referred to, the City vs. Canal and Navigation Co., 36 An. 397, the plaintiff claimed that the special statute exempting property of the defendant from taxation was repealed by the Constitution of 1879.

The court held:

“In the case of the Roydras Asylum, 33 An. 850, we had occasion to consider a similar question of exemption, and we came to the conclusion that the Constitution did not contemplate or produce the effect claimed.”

The reasoning and the authorities collected in that case are applicable to the present one.

In a subsequent case, involving a question of the exemption of the said company, it was decided by this court that the said defendant had assumed certain obligations and had thereby acquired a vested right which made a repeal of its exemption void. ,,City vs. OanaS and Navigation Co., 44 An. —.

Two principles of interpretation and construction are set forth and followed in the above mentioned decisions:

1. That Art. 207 of the Constitution is prospective and not retrospective.

2. That a special law is not repealed by a subsequent general law.

We have been slow in following a line of discussion which has resulted in our adopting the views herein expressed and in laying down a general rule of exemption we think should be followed. W» recognize the soundness of the principle that generally no statute should have a retrospective effect. But the sovereign has a power we can not disregard.

The limit of that power is expressed by the following:

“ Retrospective laws which do not impair the obligation of con-, tracts or partake of the character of ex post facto laws are not condemned or forbidden by any part of the Constitution of the United .States.” Satterlee vs. Mathewson, 2 Peters, 380.

In the pending case and those held to be analogous there is iw contractual obligation and no vested right having the effect of with - drawing from the sovereign the power of repeal of special acts of exemption.

Erom Dwarris, p. 163, on the same subject, we quote:

“ The rule of interpretation by which that construction of a statute is tó be avoided which gives it a retrospective operation has little o*r no application in construing the organic law.”

All trustworthy authorities agree in maintaining the principle that a special exemption law may be repealed if no vested right exist.

If the principles laid down in the decisions referred to should prevail, it would not be possible to repeal any special act of exemption, although absolutely gratuitous.

The next question relates to the repeal of the special act by the subsequent general law.

The article (207 of the Constitution) contains a prohibition contrary to and irreconcilable with the special statute pleaded by plaintiff.

The plaintiff collects a revenue from part of the property; 'the proviso of said article prohibits the exemption of property used or leased for purposes of private or corporate profit, or income. The maxim, leges posteriores priores contrarias abrogant applies.

Prom one of the cases referred to by plaintiffs’ counsel we quote:

“The old is abrogated by the new law only when the latter is couched in the negative or is so clearly repugnant as to imply a negative. 33 An. 850.

The proviso in question is irreconcilable and repugnant, and contains an absolute prohibition. It is direct, and became a part of every statute granting immunity from the payment of taxes in which no right is secured except that of exemption at the will of the sovereign.

The special act exempting the plaintiff is only ineffective in so far as use is made of its property for the purpose of corporate profit or income.

The part of plaintiffs’ property not leased or used for corporate profit or income is exempt. In State ex rel. A. N. Bertel et al. vs. Board of Assessors, 34 An. 574, the assessment was reduced by deducting the value of the property exempt.

A decree will be entered having in view a similar reduction.

From the assessed values of the whole property described in plaintiffs’ petition must be deducted that part which is not subject to taxation; leaving the remainder subject to taxation.

On the application for a rehearing an oral argument was heard.

The case having been reconsidered on this application our decree is amended without granting a rehearing and the case is remanded.

It is therefore ordered, adjudged and decreed that our previous decree be amended by recognizing the exemption of that part of the property occupied by the grand and subordinate lodges of F. and A. Masons of Louisiana, and in other respects the demand is rejected.

The ease is hereby remanded to the court a qua, with direction to hear evidence and ascertain what property is thus occupied, and what property is rented or used for purposes of private or corporate profit or income, and to pass upon and decide the relative values of that part of the property thus occupied by said Masons to that leased or used as aforesaid, i. e., from the assessed value of the property, viz., $60,000, must be deducted the value of the property exempt as aforesaid.

Judgment for taxes will be rendered in compliance with law in the remainder of the assessment for taxes due annually for the years claimed.

The defendant to pay the cost of appeal and the cost of the lower court already incurred.


author: McEnbry, J. Watkins, J.

text:
    No. 10,013.
    Charles A. Phillipi & Co. vs. Their Creditors.
    A mortgage creditor of an insolvent debtor who lias made a surrender wbicli has been accepted by the creditors and a syndic elected, can not proceed by ex-ecutory process against the insolvent debtor.
    The syndic alone, under the direction of the creditors, can sell the property.
    In order to sell it it is not necessary for the syndic to proceed to a foreclosure of the mortgage, as the property was surrendered for the purpose of sale to pay the debt. The syndic has the right to select the sheriff or any auctioneer to make the sale, or he can offer the property himself for sale, unless otherwise ordered by the creditors.
    The court having jurisdiction of the insolvency, under a rule taken by the creditors to declare a mortgage debt simulated and the mortgage canceled, has jurisdiction to determine the validity of the mortgage. But it can not order the sheriff, against the wishes of the creditors, to sell the mortgage property.
    Where the syndic has been dispensed with giving bond, this does not prevent the mortgage creditor from requiring him to give bond for the amount of the mortgage resting on the property to be sold. In default of giving bond the mortgage creditor, if he buys the property, has the right to retain the amount of his mortgage debt, less’the amount which is necessary to pay the costs of the insolvency, which the mortgage debt has to bear.
    Where the property has been surrendered and accepted, and a syndic elected, and died, the creditors can. at a meeting called to select a syndic, deliberate upon . the ¿banner of selling the property. Contra when the first meeting of creditors is called for the purpose of accepting the surrender and electing a syndic.

      A PEAL from the Civil District Court for the Parish of Orleans. King, J.

      B. R. Forman for Appellant:
    1. The proces verbal of meetingof creditors need not be homologated, but unless opposed in ten days stands approved. Revised Statutes, Secs. 1801 and 1802.
    2. After a cession no suits can be brought against an insolvent. R. S , Secs. 1790 1800, 1801 and 1818; O, O. 2176; O. O. 2150; Laurence vs. (xnice, 9 R. 219; Fabrc vs McRae, 14 An. 648.
    8. After the surrender a mortgagee can not seize the mortgaged property, but must be paid by the syndic. Ohiapella vs. Lanusse, JO 'SI. 448; Wheeler vs. Stewart, 18 An. 678.
    The proper time for settling questions of privilege or mortgage, and their conflicting rank against an insolvent estate, is upon the filing of the tableau and not upon a rule to sell property and cancel mortgages. Astor vs. Saul, 4 N. S. 682; Brown vs. Saul, 4 N. S. 640; Grainer vs. Devlin, 1 La. 172; Dubois vs. Xiques,. 14 An. 427.
    5. The syndic, or any auctioneer selected by him, lias the right to sell property surrendered and not exclusively the sheriff. R. S., See. 8897.
    6. The syndic, and not the sheriff, must release and cancel mortgages on surrendered property, and the whole proceeds must be paid into the hands of the syndic and not retained by any creditor. R. S , Sec. 1818.

      Thos. J. Semmes fox* Appellee:
    1. Title to the property of the insolvent remains in him, notwithstanding his cession, and his heirs are not estojiped to claim it when it has not been sold by the syndic. 88 An. 1175; 87 An. 474.

      I. Tn cas© of a pledge, the creditor can dispose of the pledged property, notwithstanding the surrender of the pledgor. 8S An. 866.
    8, Creditors of an insolvent have no right to ftx the terms of sale of property surrendered, except at a meeting specially called for that purpose. 40 An. 654.
    4. Creditors can not dispense syndic from giving security to the extent of mortgage and privilege claims. Rev fitat., Pec, 1796.
    5. Stay of proceedings, in case of cession, suspends prescription. 16 An. .506.
   The opinion of the court was delivered by

McEnbry, J.

Charles A. Phillipi made a surrender in the Civil District Oonrt, January 29, 1885.

He was elected syndic without giving bond.

He was discharged from his debts by a vote of the creditors, and a judgment in accordance with the vote of the creditors was rendered. Charles A. Phillipi died.

He never filed any account.

The creditors seem to have been indifferent until the present syndic was appointed.

Before the present syndic was appointed Osesar Phillipi, the holder of a note for the sum of $7500, secured by special mortgage on property situated in the parish of Rapides, proceeded by executory process against the surviving widow of Charles A. Phillipi, and tutrix of his minors, to have said mortgaged property seized and sold.

After the institution of proceedings, three of the partnership creditors of O. A. Phillipi & Oo. applied to the court having jurisdiction of the insolvency and procured the appointment of Charles Forman provisional syndic.

He applied to the District Court of Rapides for, and obtained an injunction restraining the sale of the mortgaged property, on the ground that the court had no jurisdiction to issue said writ, as the property constituted part of the property surrendered by the insolvent, and that the mortgage itself was a simulation.

The provisional syndic was afterward elected syndic without security and qualified without giving bond.

The syndic took a rule in the Civil District Court, parish of Orleans, which had jurisdiction of the insolvent proceedings, on Osesar Phillipi, the plaintiff in the executory proceedings, in which he avers that the creditors, at.the meeting at which they elected the syndic, Charles Forman, voted to sell the immovable property for one-third cash, balance on one and two years’ credit; that the mor gage securing plaintiff’s debt was a simulation, and that Phillipi was proceeding in contempt of the court to have the property sold under executory proceedings in the parish of Rapides, and prayed for the cancellation of the mortgage, and that the property be sold on the terms and conditions as voted by the creditors.

There was judgment for the defendant .in rule, cumulating the executory proceedings with the insolvency, recognizing the validity of the note and the mortgage securing the same to the amount of $6000, with 8 per cent, interest per annum from 6th July, 1885, and 5 per cent, attorney’s fees, that the'sheriff of Rapides sell the property for cash if the mortgage creditor requires it, and in default of such demand that it be sold on terms of credit as fixed by the meeting of creditors; reserving to the mortgage creditor the right to bid in the property, and to retain the amount due him less $1000, which was to be paid over to the syndic to meet privileged claims.

From this judgment the syndic and the several creditors appealed.

The order of seizure and sale issued by the District Judge for the District Court of Rapides at the instance of the' mortgage creditor was null and void, as the court was without jurisdiction.

The property surrendered and accepted by the creditors vested in them. The syndic elected by the creditors was entitled to take possession of same, and he has the exclusive right under their direction to administer it for their benefit. Revised Statutes 1791; 18 An. 292.

All proceedings against the insolvent are stayed, and must be referred to the court having jurisdiction of the insolvency. Revised Statutes 1790; 9 Robinson, 219.

The mortgaged property situated in Rapides was therefore under the control and administration of the syndic first elected by the creditors. His death made no change ia the condition of the property surrendered. It remained still vested in the creditors, to be taken possession of and administered by another syndic to be elected by them.

The creditors and the syndic before the court having jurisdiction of the insolvency took a rule on the holder of the mortgage note to. have the debt and mortgage declared a simulation and the mortgage canceled. Nothing was done in the executory proceedings after the injunction was issued, and we may, therefore, omit any further reference to the same; and we will also disregard the order of the district judge in cumulating said executory with the insolvent proceedings. We will only notice those matters which were properly before the court.

The proceedings in rule originated with the creditors and the syndic, and the court in which the rule was filed had jurisdiction to inquire into and determine the validity of the mortgaged debt. All persons interested were before the court.

The District Court held that the note and mortgage were genuine obligations and valid to the extent of $6000, with 8 per cent, interest from 6th July, 1885. To recapitulate the evidence upon which he based his judgment will be unnecessary.

It is satisfactory and conclusive.

The question of prescription presented by the syndic qan not pre - vail, as the surrender of the property and the acceptance were made in 1885. McRea vs. Creditors, 16 An. 306.

In this ease the creditors had accepted the surrender made by the insolvent, and had elected a syndic. We do not think the facts bring this case under the reasons assigned for the decree in Spears vs. Creditors, 40 An. 654.

It was not premature, therefore, for the creditors at the meeting when the second syndicate was elected to deliberate and vote upon the manner of disposing of the property. But the mortgage and privilege creditors were not bound by the proceedings which ordered the mortgaged property to be sold on terms of credit. They have the right to have the mortgaged property sold for cash for the amount of the debt secured.

Here the creditor has declared that he wishes the mortgaged property to be sold for cash to pay his debt.

This declaration was not made at the meeting of creditors, but before a court of competent jurisdiction contradictorily with the other creditors.

The judgment ordered the sheriff of Rapides to proceed with the sale of the property.

In this we think there was error, as it is the duty of the syndic to cause the property to be sold, and he can employ for this purpose either the sheriff or an auctioneer, or' he may, under the directions of the creditors, sell the property himself.

There is no reason why in selling the property there should be a resort to executory process. The property was surrendered by the mortgagor and placed in possession of the creditors for sale to pay the debt. The syndic can, therefore, sell it without resorting to judicial process.

The conflict, of interests among the creditors is settled when the tableau of distribution is made, the proceeds baking the place of the property.

In this case the validity of the mortgage is fixed in a judgment in proceedings instituted by all creditors contradictorily with the mortgage creditor. It only remains for the syndic to take possession of the property, pay off the mortgage debt out of the proceeds of the sale and such privileged claims in the insolvency that the mortgage debt has to bear.

The syndic has been dispensed from giving bond. He must give bond for the amount of the mortgage debt and privileged claims.

It would be unreasonable to require the creditor to surrender his secured claim into the hands of an administrator or syndic without bond.

Under the circumstances of this case we are of the opinion that unless the syndic gives the bond as required by law the mortgage creditor, if he buys the p operty, has the right to retain in his hands the amount of his debt, paying to the syndic only the amount which the mortgage debt has to bear in the payment of the costs of the insolvency.

The creditors have ordered the property to be sold. The mortgage creditor has demanded that it be sold for cash, for the amount of his debt.

It is the duty of the syndic to speedily carry out these instructions.

There is no reason for delay, and the accumulation of unnecessary costs.

It is therefore ordered, adjudged and decreed that the judgment appealed from be affirmed, so far as it recognizes the validity of the mortgaged debt held by Csesar Phillipi, defendant in rule, on the mortgaged property, situated in Rapides parish, and in other respects it be annulled, avoided and reversed; and it is further ordered that this case be remanded to be proceeded with according to law and the views herein expressed.

On Application por Rehearing.

Watkins, J.

From the record it appears that O. A. Phillipi & Co., residing in New Orleans, made a surrender under the State insolvent law, in the Civil Court of the Parish of Orleans, and procured the usual order staying proceedings against their persons and property.

Charles A. Phillipi was elected definitive syndic, and died without disposing of the property of the insolvents, paying their creditors or rendering an account of his gestión.

Subsequent to his death his father, Caesar Phillipi, acquired his note of $7500 with mortgage on property situated in Rapides parish, which he proceeded to foreclose in executory proceedings inaugurated in that parish, which were arrested by an injunction obtained by a subsequently elected syndic, on the ground that the Rapides court had no jurisdiction to grant the order of seizure and sale.

At the meeting of creditors, whereat the syndic was chosen, he was dispensed from giving bond, and the property was ordered sold, notwithstanding the mortgage creditor was Dot given notice and did not consent to the syndic’s dispensation from bond.

Subsequently the syndic took a rule on Csesar Phillipi to show cause why his mortgage should not be held and decreed to be a simu - lation, wholly without consideration and void, and the record thereof canceled and erased; and, further, to show cause why the property should not be sold on the terms fixed by the meeting of creditors, that is to b v, one-third cash, and the remainder on one and two years’ credit.

This rule was served on Phillipi.

A trial was had, evidence pro et con adduced, and judgment rendered maintaining the reality of the debt and mortgage, annulling the decision of the meeting of creditors fixing the terms of sale, cumulating the executory proceedings with those of the insolvency, and directing sale to be made by the sheriff of Rapides for cash, if the mortgage creditor should require it, saving to him the right to retain the proceeds of sale to the amount of his debt, less his pro rata share of costs.

Our opinion and decree maintains the authority of the syndic and the jurisdiction of the court of the insolvency to order sale, and the want of jurisdiction in the court of Rapides parish over the property of the insolvent. They annul the judgment so far as it empowers the sheriff of Rapides parish to proceed with the sale, but they affirm .the judgment in so far as it maintains the debt and mortgage of Casar Phillipi and recognizes his right to require a sale for cash. They supplement the relief accorded hi n by requiring the syndic to furnish bond, or, in the alternative, by permitting the mortgage creditor to buy in the mortgage property and retain the proceeds up to the amount of his debt, less his proportionate share of costs.

The theory on which the opinion proceeds is, that the simulation •ml non of the mortgage can be legally determined on rule, contradictorily, between the syndic and the apparent mortgage creditor, though the conflicting interests of creditors must be subsequently adjusted when the assets of the insolvents are marshaled for distribution upon a tableau of classification in concur su.

The complaint made of our opinion is, chiefly, that the court erred in passing on the question of simulation in a rule taken by the syndic to sell property and erase the inscription of a mortgage;” but the record shows that the rule-of the syndic distinctly and especially attacks the mortgage as being simulated and without consideration; and on that ground it demands its cancellation from the mortgage records of Rapides parish, as interfering with the sale proposed, and authority to make which the syndic asks.

That was the principal issue tried and decided in the court below. It is the principal issue on this appeal, which is prosecuted by the syndic in behalf of all, joined by certain creditors of the insolvent.

At this stage of the proceedings it would be rather an easy-going-way of getting rid of the mortgage to have this court retrace its steps and say it has no power to render such a judgment.

But we are of the opinion that the court has the power, and properly exercised it on the syndic’s own invitation.

Standing as he was in the presence of a mortgage, apparently 'securing a large indebtedness of one of the insolvents, resting upon his sole available asset, how could he hope to have realized anything from the proceeds thereof, for account of ordinary creditors, without first procuring its erasure?

How could he have reasonably expected to carry out the direction of the meeting of creditors to sell the property on terms of credit the mortgage creditor receiving no notice and having taken no part therein — without first having the mortgage declared a simulation?

The fact of the syndic having raised such an issue is a conclusive admission of its necessity.

The syndic represented all creditors, and several have joined in the appeal, and are concluded quoad hoc by the judgment rendered

In Chapoton vs. Her Creditors, 44 An. 350, one of the principal questions was the capacity of a syndic to prosecute the revocatory action for the annulment of a mortgage, and stand in judgment for the mass of creditors, some of the creditors and the mortgagee excepting and resisting his right and capacity; but we maintained the syndic’s power and authority. In the course of our opinion in that case, the question presented here was considered as settled adversely to the syndic’s present contention.

The proces verbal of the meeting of creditors, whereat the present syndic was elected, is in the record and was formally offered in evidence by the plaintiff in rule, and it shows no notice to Oaesar Phillipi and no appearance by him. Tt also shows that the aggregate amount of the claims of all creditors present and voting for syndic was only'$4318.68, whereas the claim of Oassar Phillipi is $6000 in capital alone, and was, manifestly, not taken into consideration. Notwithstanding this fact the proces verbal states that the syndic was dispensed from giving bond, while the law is that “the syndic shalii always be bound to give security for the amount [of the mortgage- and privileged claims.” Revised Statutes, Sec. 1796.

We are called upon by the rule to consider the directions of tbemeeting of creditors in respect to a sale being made for cash, in connection with his prayer for the cancellation of Caesar Phillipi:s mortgage as simulated and void; and finding the mortgage to be real and valid, we do not feel at liberty to approve the finding of the meeting of creditors, or to make an order for the sale of the property mortgaged except upon the condition that the syndic furnish security, which shall take the place of the security of the hypothecated property. Such relief is the necessary incident of our decree directing sale for cash to be made.

A careful consideration of the record has confirmed ns in the correctness of our original conclusions. Rehearing refused.