City of New Orleans v. Doll

MOISE, Justice

(dissenting).

As a sitting judge of a court of last resort, I should not be, as said by a few, like angels of Pleaven who are never disturbed by the miseries on earth because they are too satisfied to care.

I am disturbed by the majority opinion because of the consequences that might result to the City of New Orleans, Louisiana — -an impairment of its credit and an interference with the security given to purchasers of City Paving Certificates in connection with its intensive paving program. The majority opinion is inequitable. The conclusions reached are not warranted from the language of the statute, Act 237 of 1924, as amended. The interpretation given to section 7 of Act 237 of 1924, as amended and re-enacted by Act 365 of 1948, by the writer of the majority opinion makes the constitutionality of the section questionable. A dissent is therefore urgent and insistent.1

The property in question was adjudicated to the State of Louisiana for unpaid taxes during the depression. The State acquired this property in 1931. Our statute provides that one may acquire property so adjudicated to the State by paying the assessed value of the property for the year in which the taxes were due. Act 296 of 1944, section 4.

The property herein involved was sold at public auction by the Civil Sheriff for the *1058Parish of Orleans in the year 1949 for the sum of $200. The State received the money and, following the statute, made payment according to the priority enumerated by section 7 of Act 237 of 1924 as amended by Act 365 of 1948. The City of New Orleans received only $115.97 on its recorded tax lien of approximately $2,000. It accepted the payment, but it claimed the balance due for the recorded paving liens.

Section 7 of Act 237 of 1924, as amended by Act 365 of 1948, reads:

“From the amount thus received by him the Treasurer shall deduct the taxes, interest, and costs due to the State and to any of its parishes, municipalities and other agencies at the time of the adjudication of the property to the State, together with all taxes, interest and costs due the State and any of its parishes, municipalities, and other agencies for subsequent years up to the day of sale hereunder, also the amount due any municipality for valid and existing paving liens operating against said property; and shall transfer the same to the credit of the State Tax Funds and to the accounts of said parishes, municipalities, and other agencies, and in due course he shall pay the same over to the latter in the following order of preference: First, taxes and interest due the state, and its parishes, and any of its agencies. Second, taxes and interest due the municipalities. Third, paving liens and interest due the municipalities.” LSA-R.S. 47:2190.

The City of New Orleans expropriated the property herein involved for its public purposes. A valuation of $2,500 was fixed by the court, and such an amount was deposited in the Registry of the Civil District Court for the Parish of Orleans in order that claimants might proceed against it.

Act 301 of 1946, section 48(j) provides:

“From the date that the said statement or statements of assessments are filed in the mortgage office they shall act, in rem, as a first lien and privilege on each specific lot or portion of real property therein assessed. Such lien and privilege shall be superior to any pre-existing or subsequent vendor’s lien, privilege or mortgage and shall remain in full force for the amount due in principal and interest, including court costs, if any, for collecting, until full and final payment of the assessment has been made, notwithstanding any subsequent sale or transfer of such lot or portion of real property. Whenever any such lot or portion or real property affected by such lien and privilege is sold for the unpaid city or state real estate taxes due thereon, and is adjudicated to the city or state, as the case may be, the fact of such adjudication to the city or state shall not have the effect of cancelling such lien and privilege by confusion, or otherwise, *1060but such lien and privilege shall continue in full force and effect, and be enforceable against such lot or portion of real property until the same is fully paid and satisfied.”

The above is a part of the New Orleans City Charter and is found under paving and other liens. Below section 60 of the same act, we find section 4 which recites:

“That all laws or parts of laws in conflict herewith, particularly Act No. 58 of 1910, are hereby repealed, providing that nothing contained in this Act shall impair the effect of Section 47% of Act No. 159 of 1912, as amended by Act No. 27 of the fourth extra session of 1935, and ratifying, validating and confirming all Refunding Paving Certificates issued or authorized to be issued pursuant to said Section 47%, and all assessments, taxes and charges authorized to be levied and collected for the payment thereof.”

On trial, the Civil District Court for the Parish of Orleans followed the above statute and held that the recorded lien for paving remained in full force and effect until it was fully paid and satisfied. Doll appealed from this judgment. The majority opinion reversed the ruling of the trial court.

To give effect to the majority opinion, the law of registry must be abrogated. Doll knew, because of registry, or was presumed to know of the existence of the paving lien of nearly $2,000 at the time of his purchase. The statute, Act 301 of 1946, § 48(j), in no unmistakable terms declares that this lien is one in rem which follows the property regardless of the person to whom it is sold. It made no exception for Doll.

The majority opinion states that property must be sold for its market value. We are asking ourselves whether $200 is a fair market value. How did the property obtain a valuation of $2,500 in the space of about one year? It was because of the paving improvements made to the property, and when we add this cost to the purchase price of $200 in 1949, it is understandable.

Doll should not have his pie and its eating and then not even leave to the City of New Orleans a crumb. For this property expropriated, the City of New Orleans has to pay a valuation of $2,500 which it deposited in the Registry of the Court. By reason of the majority decisioh, the city has to pay its paving lien certificate holders approximately $2,000. That makes the city pay $4,500. The mere statement shows the inéquitability of the majority opinion.

The paving lien certificates of the City of New Orleans are sold all over the United States. They are advertised in the financial journals of the large cities. The full faith and credit of the City of New Orleans is pledged for the payment of these certifi-' cates. Act 301 of 1946, section 48(m, n, o).

The majority opinion holds that Act 237 of ■ 1924, as amended, especially section 7, amended and re-enacted by Act 365 of 1948, supercedes section 48(j) of the City Char*1062ter of the City of New Orleans, Act 159 of 1912, as amended, especially Act 301 of 1946.

We must read the provisions of the two acts together, section 7, relating to priority of payment out of the proceeds of sales of property adjudicated to the State, and section 48(j), which gives full force and effect to the paving liens and privileges of the City of New Orleans. Nowhere does the language of section 7, Act 365 of 1948, provide for an extinguishment of the paving lien, and nowhere does it make a divestiture of the sacred law of registry. The objects of the two sections are so clearly separate and distinct there is no conflict.

The majority opinion states:

“ * * * In truth,- Section 7 makes certain the legislative intent that the purchaser at the sheriff’s sale obtains an unencumbered title * *

Nowhere does section 7 disclose any such legislative intent when it names an agent, the Treasurer of the State of Louisiana, to make priority payments as set out in the statute. If the legislature did intend what the majority opinion states that it did, I have grave doubts that such would have been constitutional. In Article 4, § 13, of the Constitution of 1921 it is provided :

“The Legislature shall have no power to release or extinguish, or to authorize the releasing or extinguishment, in whole or in part, of the indebtedness, liability or obligation of any corporation or individual to the State, or to any parish or municipal corporation thereof; provided, the heirs to confiscated property may be released’ from all taxes due thereon at the date of its reversion to them.”

The majority opinion further states:

“Obviously, then, the price is dedicated to the liquidation of the mentioned charges on the property and all tax-liens, paving liens or other encumbrances become extinguished when the sale is made. Any claim for their payment is referable only to the proceeds of the sale.”

If the legislature had intended any such concept, it would have so stated. The writer believes that it religiously refrained from coming to any such conclusion because of fear that such a provision would violate the constitutional mandate above recited.

The writer asks for a prayerful consideration of this dissent taken in connection with an application for rehearing, when and if made by the City of New Orleans.

The emergency is certain, and the issues are grave and all should be reconsidered as a whole.

For the reasons assigned, I respectfully dissent,

. The statement of results relate to property adjudicated to the State during the depression and sold under the terms and conditions similar to the instant case.