[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 660 The Morgan Bird Gravel Company, Inc., was placed in the hands of a receiver on August 31, 1925. The account of the receiver was filed on January 27, 1927. It ranked the indebtedness of the corporation as follows:
First, the receiver's fees, attorney's fees, court costs, and receiver's certificates; second, accounts payable, incurred by the receiver; third, T.G. Roberts' subrogation to state and parish taxes, amounting to $4,321.06; fourth, mortgage indebtedness, including a claim of the Southern Iron Equipment Company for the sum of $6,812; and, lastly, the ordinary indebtedness of the corporation, antedating the receivership. There is not sufficient money in the receivership to satisfy all the claims listed as entitled to the first rank of priority, but T.G. Roberts and the Southern Iron Equipment Company have each filed oppositions to the receiver's account, claiming relief from the situation in which the account places them.
Roberts alleges, in his opposition, that his claim is one for state and parish taxes, assessed against the corporation, for the year 1924, and paid by him on August 8, 1925, prior to the appointment of the receiver, with subrogation both legal and conventional, the act of conventional subrogation being duly recorded in the mortgage records of Webster parish. He asks to be paid, as the subrogee of the state and the parish of Webster, by preference over all other creditors. The receiver denies that Roberts is entitled to a *Page 662 privilege at all, the property on which the taxes are claimed to have been paid being personal property, and, if he should have a privilege, the receiver denies that it ranks, or is equal in rank, to the privileges, securing the claims, appearing on the final account as receiver's fees, receiver's certificates, attorney's fees, court costs, and accounts payable, incurred by the receiver.
We think the state and the parish of Webster each had a privilege on the personal property against which the taxes were levied — the parish, under Act No. 119 of 1882 and section 14 of article 10 of the Constitution of 1921, which, together, provide that all laws applicable to the collection of state taxes apply alike to the collection of municipal, parochial, and other taxes; and the state, under section 11 of article 10 of the Constitution of 1921, and section 49 of Act No. 170 of 1898.
Section 11 of article 10 of the Constitution of 1921 directs that:
"Taxes on movables shall be collected by seizure and sale by the tax collector of the movable property of the delinquent, whether it be the property assessed or not, sufficient to pay the tax."
Section 49 of Act No. 170 of 1898, page 370, provides, among other things, that:
"Whenever, any sheriff, constable, marshal, receiver, liquidator, syndic or other judicial or court officer or functionary shall take possession of personal property it shall be his duty to pay at once all the taxes that may be due or become due upon the same, and if he fails to do so he shall become responsible personally and upon his bond for the payment of the same. * * * *Page 663
"The Tax Collector shall also have the right to proceed by rule at any time in the Court having custody of personal property or the proceeds thereof, to compel such sheriff, constable, marshal, receiver, liquidator or syndic to compel the payment of all taxes due upon the property, without waiting for proceedings on final account or tableau of distribution."
In Cleveland Steel Co. v. Joe Kaufman Co., 155 La. 529, 99 So. 428, this court, after quoting the foregoing provisions, said that two things seem clear from them, namely, first, that all movable property of the delinquent, whether assessed or not, is liable for any taxes due by him thereon, and, secondly, that the tax collector has the right to insist upon the payment of the taxes at once, and in preference to all others, out of the personal property of the delinquent, no matter by whom held. The court also said, later on, that the right to be paid by preference out of property, or its proceeds, is nothing else but a first privilege on the property or its proceeds.
When the law calls upon such an official as a receiver or a syndic, meaning a syndic of an insolvent estate, to pay taxes, at once, on personal property of the receivership or estate administered by the syndic, due or that may become due, without any conditions or qualifications whatever, dealing with an estate, which in one instance is not uncommonly insolvent and, in the other, always so, and impowers tax collectors to enforce a compliance with this duty by appropriate methods, without waiting for proceedings on final account, the conclusion is inescapable that the law thereby confers on the state, in *Page 664 unmistakable terms, a privilege on personal property, to secure the payment of the taxes due, or that may become due, thereon, and that this privilege primes all others, for no exceptions are made as to the obligation of the officials, named, to pay, no matter what kind of obligations, and how many, are due by the estate. It is a matter of no consequence, as appears from the context of the law, whether or not the taxes fell due before the official took possession of the property.
It is urged, however, that, in so far, at least, as relates to the rank of the receiver's certificates, such a conclusion as the one just drawn, concerning the rank of the privilege of the state on personal property, to secure its taxes, is repealed in part by Act No. 199 of 1914, page 381, affecting most of the certificates, which repeal is repeated by Act No. 7 of 1926, affecting the rest. Act No. 199 of 1914, after providing that the court may authorize the receiver to borrow or obtain money on certificates of indebtedness, to be taxed as costs of court, provides that:
"The sum so obtained shall bear a privilege on all of the property real or personal and the income of the corporation to be paid by preference and priority over all other creditors of the corporation, — save the vendor's lien and privilege which may be outstanding due and owing at the time the certificates are issued, which vendor's lien and privilege shall remain unimpaired and retain its present status as provided for by existing laws." The act of 1926, which amends and re-enacts the act of 1914, makes no change, so far as affects the present issue, in the act amended and re-enacted. Its purpose seems to have been to add mortgages on real property to *Page 665 the clause, creating the exception to the rank, given certificates.
These acts do not affect section 49 of the act of 1898, conferring, in favor of the state, a privilege, above all other privileges, on personal property for taxes due. The Legislature is not here legislating concerning the state. The state is impliedly excepted from the acts of 1914 and 1926. It is not here legislating against itself, for the Legislature, after it has accorded the state a privilege, is not presumed to sacrifice it, in the interest of private persons, to the injury of the public fisc. There should be an unmistakable intention shown to make such sacrifice, which does not here appear. These acts are easily reconcilable.
The state is no longer interested in these taxes, for Roberts has paid them, and was conventionally subrogated, at the time, to the rights of the state and the parish, by the tax collector, pursuant to the provisions of section 89 of Act No. 170 of 1898, page 384, which expressly authorize him to receive payment from any person, other than the person in whose name the property is assessed, and to subrogate the payee of the same to all rights, liens, and mortgages of the state and parish. Hence, there can be no question that Roberts was subrogated conventionally to the privileges of the state and the parish of Webster, whether he was subrogated or not to their special remedies for enforcing the taxes, which is beside the question here properly at issue, the question concerning only the substantial rights conferred by the subrogation.
Roberts also urges that he was subrogated to the rights of the state and the parish by *Page 666 operation of law, because, at the time of payment, he was both a stockholder and a creditor of the corporation. It is not questioned that he was not such. Being a creditor whose claim was primed by the claims of the state and the parish, he was subrogated to these privileges by operation of law, by their payment. Civ. Code, art. 2161; Dickson v. Hynes, 36 La. Ann. 685.
The contention is urged that Roberts is precluded from urging his claim in opposition to the holders of the receiver's certificates, because he did not object to their issuance, although he was a party to the receivership proceedings. There was no occasion for him to object to preserve his privilege. The law informed the holders of the certificates as to their rights against the state and the parish, and as to the rights of whoever might be or was their subrogee. The declaration in the law, which we presume was carried into the certificates, that they bear a first privilege, should not have been misleading to the purchasers of these instruments. The contention is also urged that Roberts precluded himself from asserting his claim by not asserting it earlier. Without reference to his attempts to assert it earlier, it is sufficient to say that he was not called upon to assert it, until it was about to prescribe, or until, in order to collect it, it became necessary to do so in the receivership proceedings.
The opposition of the Southern Iron Equipment Company, which is next presented, sets forth that, upon a date, prior to the receivership, it sold to the defunct corporation a locomotive and a steam shovel, under a contract, conditioned that the title to them should remain in the vendor until the purchase *Page 667 price, which was partly cash and partly represented by promissory notes, should be paid in full; that some of the notes were paid prior to the receivership; that for the balance, namely, $6,812, opponent has a vendor's privilege on the fund, representing the purchase price of the property, which entitles it to be paid by preference out of such fund over all others; that, should the court consider that opponent has no vendor's privilege, then its conditional contract of sale should be recognized, as its property, and, accordingly, that the property should be delivered to opponent.
Opponent, from the beginning of the receivership, made efforts to repossess itself of the property sold by it, or else to have the property sold and to be paid by preference out of the proceeds of sale. The receiver showed a willingness to have the property sold, but from one cause or another, over which neither the receiver nor opponent had control, the sale fell through, each time, before its date arrived. Finally, the property was offered, under separate appraisement, at the same time, as we take it, as other property of the estate, and was bid in by opponent for the balance due on it. The property, however, was not delivered then. This failure to deliver was caused by the refusal of the court to permit the delivery of the property, due to the fact that, at the time of the sale, there was a proceeding pending to force the corporation into bankruptcy. Later, apparently without notice and without an order of court, the receiver, through his attorneys, entered into a contract with opponent, through its counsel, reciting as the consideration for the contract the amount of the claim of opponent; the fact that, by order *Page 668 of court, the receiver offered the property, here involved, as well as other property, for sale, at public auction, and that opponent bid the amount of its claim thereon; the fact that, while the court permitted the property to be offered, it refused to permit the consummation of the sale, because of the pendency of the bankruptcy proceeding; the fact that the bankruptcy proceeding had been pending for a number of months without a decision thereon, and that, in the meantime, the property was depreciating in value, and closes with an agreement between the receiver and opponent, by which the latter is authorized to repossess itself of the property, the repossession to be in satisfaction of opponent's claim, opponent to indemnify the receiver against all liability for his action. This contract was concurred in by the attorneys for the petitioners in bankruptcy, with the exception of the assertion as to the depreciation of the property.
This contract, in our view, is not entitled to be accorded effect. A contract, of such nature as the present, executed without an order of court, sanctioning its execution, is null and void. A receiver should not be permitted of his own motion, to the injury of creditors, to surrender property of the receivership to a creditor in satisfaction of his debt, for, in the distribution of the funds of the receivership, that debt may be ranked by other claims, and the proceeds of that property needed to satisfy them, in whole or in part. The parties to the contract evidently recognized the danger of their act, else why the provision in the contract for indemnity? The property in controversy has been received by opponent, and the fund, arising from its adjudication *Page 669 to opponent, at receiver's sale, must be treated as before the court.
Opponent cannot now, whatever its rights might have been at one time, claim the property under the conditional contract of sale, under which it delivered it to the corporation. This is so, because the contract gives opponent one of two options, either to repossess itself of the property upon the failure of the corporation to pay the purchase price or any part of it, and to retain the amount paid, or to enforce payment of the balance due, and opponent has elected the latter course by bidding the property in at receiver's sale. He cannot now recede from the election made by him. At one time, perhaps, defendant might have repossessed himself of the locomotive, under the laws of this state, by virtue of his contract, though we doubt this as to the steam shovel, which was probably intended for use, not as railroad equipment, but in gravel pits, and this is so, although, ordinarily, what are termed in our sister states "conditional sales," are, under the laws of this state, recognized only as conveying absolute title to property. By statute, however, conditional sales of railway and street railway equipment are entitled to full force and effect. Act No. 111 of 1894, p. 149. This also seems to be the case, as relates to tank cars, not involved here, by another, though perhaps an unnecessary, act, namely, Act No. 119 of 1918, p. 192.
We now come to the vendor's privilege, claimed by opponent. While it does not clearly appear from the record that opponent had a vendor's privilege on the property sold by it to the corporation, yet, for the purposes of this case, we propose to assume that it had, *Page 670 and that it now has one on the proceeds of the sale of that particular property.
Opponent bases its contention that its vendor's privilege primes the receiver's certificates on that part of Act No. 199 of 1914, which we shall repeat, reading as follows:
"The sum so obtained [referring to money received on receiver's certificates] shall bear a privilege on all of the property real or personal and the income of the corporation to be paid by preference and priority over all other creditors of the corporation, — save the vendor's lien and privilege which may be outstanding due and owing at the time the certificates are issued, which vendor's lien and privilege shall remain unimpaired and retain its present status as provided for by existing laws."
While the expression, "the vendor's lien and privilege," appearing in the exception in the foregoing quotation, is sufficiently broad to include the privilege on both movable and immovable property, yet an analysis of the provision, in which it appears, shows that it has reference only to the vendor's privilege on immovable property. To refer it to immovable property is necessary to prevent a strange situation, never contemplated. To illustrate, the lessor's privilege, which affects only movable property, primes the vendor's privilege, and did so when the act was passed. The act does not purport to raise the rank of the vendor's privilege. To the contrary, it expressly retains the status of that privilege, as it exists under existing laws. The act, however, does, by implication, rank receiver's certificates above the lessor's privilege, which, in its nature, affects only movable property, by placing the privilege for receiver's certificates above all *Page 671 others. For instance, if a lessor were also in this suit, asserting his lessor's privilege on the proceeds of the property, if it were held that the vendor's privilege, mentioned in the act, referred to the vendor's privilege on movable property as well as immovable property, the court could not decree the one asserting the vendor's privilege to be entitled to the fund, because the lessor, as provided by law (Civ. Code, art. 3263) primes the vendor, and the status of the vendor, the act provides, shall remain intact. It could not grant it to the lessor, because the receiver's certificates, as provided by the act, prime the lessor. Therefore the only construction that can be made, consistently with law, is to rule that the vendor's privilege, named in the act, is the vendor's privilege on immovable property, which, in reality, is a higher privilege than the one on movable property.
In the Succession of Cooley, 26 La. Ann. 166, a similar question arose. The contest there was one concerning the relative rank of the privilege of the surviving widow, under article 3252 of the Civil Code, and the vendor's privilege on movable property. This article provided then, as it does now, that the $1,000 to the widow should be "paid in preference to all other debts, except those for the vendor's privilege and expenses incurred in selling the property." The expression, "the vendor's privilege," found in this article, is as broad and unqualified as the same expression is in the act of 1914. The court there found by a process of reasoning, which we have adopted, that a proper construction of the article demanded that the expression, "the vendor's privileges," found in it, be held to mean such privileges on immovable property. *Page 672
In the act, amending and re-enacting the act of 1914 — Act No. 7 of 1926 — which affects two of the certificates, it seems even clearer that the expression, "the vendor's lien and privilege," refers only to such privilege on immovable property. The purpose of that act, as stated, was to add another exception to the rank of receiver's certificates, namely, mortgages on immovable property. The fact that this exception is stated first, and shows that the Legislature's attention was there directed to immovable property, followed in the same sentence by the exception, relative to vendor's privileges, the two clauses, making the exception, being connected by the conjunction "and," strongly suggests that the Legislature's attention, in treating of the vendor's privilege, was still directed to immovable property.
Our conclusion is that the vendor's privilege on movable property does not prime the privilege of the holder of certificates. We are also of the opinion that it does not prime the privilege for attorney's fees, or those securing receiver's fees, court costs, or bills payable, incurred by the receiver, which last are costs of the receivership in running it as a going concern, and may, in a sense, be considered as court costs.
As to the contention that neither the attorneys for the receiver nor the receiver himself can assert their claims against opponent, because they consented to the delivery of the property, involved in this opposition, to opponent, in satisfaction of his claim, we think that, in this instance, the contention cannot be sustained, if sustainable in any. The amounts allowable for those fees are not in contest here, and to sustain the contention might, so far as appears, throw a burden *Page 673 upon others, who had no connection with the delivery. This is also substantially true as to the contention that Roberts, whose opposition was first considered, abandoned, in effect, his claim against the present opponent. The fact that the present opponent, the Southern Iron Equipment Company, is listed in the account as a mortgage creditor, instead of a creditor with vendor's privilege, works no injury, under the circumstances, as it does not change the order of opponents payment, nor the amount, if anything, coming to it.
The trial judge rendered judgment, sustaining the opposition of Roberts, to the extent of placing him on the list of debts of the corporation to be paid first and by preference out of the funds, coming into the hands of the receiver from the proceeds of the sale of the property in Webster parish, subject to the opposition of S.L. Herold, et al. based on different grounds, and not yet tried, and rejecting the opposition of the Southern Iron Equipment Company.
The judgment, appealed from, is affirmed.
O'NIELL, C.J., and ODOM, J., dissent.