City of New Orleans v. Salmen Brick & Lumber Co.

SOMMERVILLE, J. The city of New Orleans, the city of Baltimore, the Board of Trustees of McDonogh Institute of Baltimore, a corporation organized and incorporated under and by virtue of the laws of the state of Maryland, the widow and heirs of Jules Denis, together with other persons residing in the city of New Orleans, alleging themselves to be the owners in indivisión of six squares, or parts of squares, located in the city of New Orleans, and lately belonging to the estate of John McDonogh, of New Orleans, and that said tracts of land are in the possession of said Salmen Brick & Lumber Company, defendant, bring this petitory action against defendant; and ask that they be recognized and put into possession of said property as the owners thereof. H. O. Stark, administrator of the succession of T. O. Stark, of New Orleans, setting up title to a tract of land of which these six squares, or parts of squares, form parts, under a tax title issued by the state to him under Act 82 of 1884, intervenes, and claims the whole of the tract, of which said six squares form parts containing 177% arpents. Mr. Stark pleaded’ the prescription of three years in support of his tax title. He did not join plaintiffs or defendant, but asked that petitioners’ said title to the tract herein described be recognized, including the property here sued for. — 834 — The Salmea Brick & Lumber Company answered by general denial; pleaded the prescription of 10 and 30 years; and called upon its warrantor in title, the Union Lumber Company, to defend the suit. The Union Lumber Company appeared and filed a plea of prescription of ten years. The plea of prescription of ten years was sustained, and plaintiffs’ suit, together with that of the intervener, was dismissed. Plaintiffs and intervener have appealed. When the plea of prescription was called for trial, the intervener asked that the trial thereof be referred to the merits, as it involved the taking of testimony, and the motion was denied. Intervener reserved a bill to the ruling of the court, and he has appealed suspensively. The ruling was correct, no sufficient reason has been assigned for referring a peremptory exception, which may put an end to the case, to a trial of the ease on the merits,'and thus inflict additional costs and expenses on litigants, and protract litigation unnecessarily. C. P. art. 345; Farmer v. Hafley, 38 La. Ann. 236; Jennings v. Vickers, 31 La. Ann. 679; Zerega v. Percival, 46 La. Ann. 590, 600, 15 South. 476; Saint v. Martel, 123 La. 815, 49 South. 582. [1] The land involved in this case forms part of the estate left in the will of the late John McDonogh to the city of New Orleans and the city of Baltimore. The will was admitted to probate and ordered executed in 1852, as appears from the report of the case found in 8 La. Ann. 171. John McDonogh died in New Orleans,, and, by will, gave a large amount of real and personal property to the city of New Orleans (his adopted residence) and to the city of Baltimore (of his native state), and their successors, forever. The legacies were made for the purpose of “educating the poor, without the cost of a cent to them, in the cities of New Orleans and Baltimore, and their respective suburbs.” By the Civil Code of this state, corporations created by law are permitted to possess an estate, to receive donations and legacies, make valid contracts, and manage their own affairs. The city of New Orleans is authorized and required to establish public schools for the free education of the youths of that city, etc. The city of Baltimore is authorized, by statute, to establish public schools, and to receive property in trust, and control and exercise the trust for any of its general corporate purposes, including educational and charitable purposes of any description, within its limits. The will of Mr. McDonogh was contested by the states of Maryland and Louisiana and by his collateral heirs, and we hold in 8 La. Ann. 171, that the cities named, under the powers conferred upon them, had the right to receive these legacies, and that the will was valid. This opinion was concurred in by the Supreme Court of the United States in 15 How. 367, 14 L. Ed. 732. In the course of the opinion, Eustis, C. J., says: “That without a positive prohibition municipal corporations in Louisiana should be incapacitated from receiving legacies for the public purposes of health, education and charity, seems to me to be repugnant to all sound ideas of policy, and to the reason of the law.” We are of the opinion that municipal corporations, at least in this country, are authorized to take and hold, unless specially restrained, property, real and personal, in trust for purposes in aid of the objects of the corporation, or for objects which will promote, aid, or assist in carrying out or perfecting those purposes; and that they cannot dispose of property of a public nature, in violation of the trust for which it is held. A municipality may hold its own property as a natural person; but that which it holds in general as — 836 — a special trust, for administrative purposes, cannot be alienated, or the form of the property be changed without legislative authority. It can and must use such property or its proceeds for the purpose to which it has been destined. Board of Liquidation v. City of New Orleans, 118 La. 715, 43 South. 307; Dillon on Municipal Corp. § 991 (575). Defendant and intervener are not here claiming that either of the cities plaintiff has undertaken to make title to them. The only legislative authority given to the city of New Orleans, so far as we are informed, to part with the ownership of the property given in trust by Mr. McDonogh, is found in Act No. 176, 1855, p. 230, where the city of New Orleans was given the right to partition said property between itself and the city of Baltimore, provided the cities of Baltimore and New Orleans concur in the act; and this partition was ordered to be made in kind. New Orleans v. Baltimore, 13 La. Ann. 162, 165. But it appears, as before stated, that the tract of land involved in this case has not been partitioned, and that the two cities plaintiffs are owners théreof in indivisión. [2,4] The education of the youths of a state is one of the functions of government, and the public school system is a department of the government. Education insures domestic tranquillity, provides for the common defense, promotes the general welfare, and it secures the blessings of liberty to ourselves and our posterity. It has ever been recognized as a function of government by all the states of the Union. The United States government has always granted aid and support to the pjiblie schools of the several states of the Union. The state of Louisiana from the earliest time has made provision for the support of public education, beginning with the Constitution of 1845, arts. 135 and 136. Provisions therefor have been constantly increasing, until, in the Constitution of 1898, it is provided that taxes shall be levied to “educate the children of the state” (article 227); and poll taxes, taxes on inheritances, legacies and donations, special taxes, proceeds of vacant estates, the interest on all proceeds of all public lands, funds, and property heretofore or hereafter bequeathed, granted or bequeathed to the state for school purposes; and all funds and property other than unimproved lands, bequeathed or granted to the state not designated for any other purpose, go to make up the school fund-Articles 231, 232, 252, 254. And in the city of New Orleans, one-half of the surplus in the hands of the board of liquidation of the city debt is added to the fund. Article 255. Article 248 et seq. provide for the establishment of public schools throughout the state; and it is provided that “bequests to educational, religious, and charitable institutions” are exempted from the payment of inheritance taxes. Article 235. The charter of the city of New Orleans directs and commands the common council “to organize and maintain free public schools.” Public schools, their property and their funds, are parts of the government itself, and are therefore public property. And thus it is not subject to taxation, state, parish, or municipal, or to seizure, and it is not subject to the law of prescription mentioned in the Civil Code. Tulane Educational Fund v. Board of Assessors, 38 La. Ann. 297; State v. Finlay, 33 La. Ann. 114. Laws protecting school funds are more strictly enforced than legislation of any other character. And property dedicated to such public use cannot be occupied or used by private individuals, or for private purposes. The property of Mr. McDonogh, bequeathed to the cities of New Orleans and Baltimore for educational purposes, is a trust, accepted by the governments of the cities, and it cannot be used by those governments for any other purpose. The control of that property is not only limited as to a — 838 — general nse, for an object of a public character, but to the use of educating the youths of these cities. The management of that trust is limited not only by its nature and character, but also by those who are to receive its benefit. The trust, as is indicated by the word, has not been received or acquired by either city in a strictly private or personal capacity. It is to be used for another; the youths of the two cities; for a public purpose. It is a trust fund. In the case of Commercial Bank v. City of New Orleans, 17 La. Ann. 190, 197, we recognize the division of the Roman Law of things for public use into two kinds: “(1) Those destined for the common use of mankind, and which every one might freely use such as rivers, seas, the banks of fivers and the seashore. These thing's were destined by nature for public use. (2) Those things which public policy deemed necessary and appropriate in spiritual or temporal affairs. In the last-mentioned class were embraced the streets, highways, market places, the places where courts of justice were held, colleges, town houses and other public places.” And, under the constitutional provision which exempts public property from taxation, the property used and designed for public educational purposes has always been exempted from seizure and taxation; whether such property belongs to the state itself or to some political subdivision thereof, where the title is vested directly in the state or one of its subordinate political subdivisions. Meriweather v. Garrett, 102 U. S. 472, 476, 26 L. Ed. 197; Cordill v. Quaker Realty Co., 130 La. 933, 58 South. 819; Gachet v. New Orleans, 52 La. Ann. 813, 27 South. 348; City of Alexandria v. O’Shee, 51 La. Ann. 719, 25 South. 382; Dillon on Mun. Corp. § 1396; Cooley on Taxation, p. 172. [3, 5] But the plea of prescription of three years set up by the administrator of the succession of Theodore O. Stark, who declared upon a tax title under Act 82 of 1884, was not tried or formally disposed of as to the city of New Orleans and city of Baltimore, and the Board of Trustees of MeDonogh Institute of Baltimore. The application of that prescriptive term is held not to apply to state property in Slattery v. Heilperin, 110 La. 86, 34 South. 139. What has been said with reference to the liability of public property, the public schools of the state, and of the political subdivisions of the state, to taxation, has application to the plea of prescription of ten years filed by the defendant. The provisions of the Code-providing for ten years’ prescription acquirendi causa has reference to affairs among the citizens of the state, private persons, and not to the state itself and to public .things. Prescription has for one of its bases a good and valid title in the possessor of the thing. And, as property dedicated or donated to a governmental agency for any public purpose, and that purpose is specially indicated, it cannot be alienated, or assessed for taxes, state, parish, or municipal, or sold for the nonpayment of taxes; there is, and cannot be, a good and valid title in defendant and its warrantors. The plea of prescription of ten years as to the city of New Orleans should have been overruled. “One takes nothing from the public domain by the plea of prescription.” Slattery v. Heilperin, 110 La. 86, 34 South. 139. “No silence or length of time can deprive a corporation of its power over public places. Its inaction may give an estate by sufferances, but nothing more.” Thibodeaux v. Maggioli, 4 La. Ann. 73; Delabigarre v. Second Municipality, 3 La. Ann. 230; Parish v. Second Municipality, 8 La. Ann. 145; Municipality No. 2 v. Orleans Cotton Press, 18 La. 276, 36 Am. Dec. 624; City of Baton Rouge v. Bird, 21 La. Ann. 244; City of Shreveport v. Walpole, 22 La. Ann. 526; Zagame v. City of New Orleans, 128 La. 388, 54 South. 916. “In nearly every state, however, at present, the rule is that title to property held by a municipal corporation for a public use cannot be acquired by adverse possession, and in most of the few states holding to the contrary statutes, have been recently enacted to conform to the majority rule.” McQuillen, Municipal Corporations, § 1158. There is no prescription established in the Code applicable to public property, and there840 is none in the statutes of the state. C. C. art. 3470; State v. Buck & Fruit Co., 46 La. Ann. 656, 15 South. 531. It is not an object which may be acquired by prescription. C. C. art. 3479; Board of Education v. Martin, 92 Cal. 209, 28 Pac. 799; Const. art. 193. This plea was properly sustained as to the individuals who made themselves parties plaintiff, and to H. Osborn Stark, administrator, intervener. The remaining matter to be considered is the liability of the city of Baltimore for taxes on property belonging to it, when such property belongs to the public school fund of that city, and is being held and used for educational purposes as a part of the public school system of the state of Maryland; and, secondly, as to whether the law of prescription, found in the Code, may be applied and enforced by one in adverse possession, claiming title under prescription. The city of New Orleans is authorized to acquire, retain, and possess, by donation or legacy, any property, real or personal, whether situated within or without said city (Act 53, 1840, p. 50). And we have decreed in the McDonogh Will Case, 8 La. Ann. 171, that the city of Baltimore has the same right, and we have sent it into possession of the property involved in this suit, to be used for “educating the poor” in the city of Baltimore. The property held by these two cities was given them in indivisión by John McDonogh, and for a specific public purpose, and they have been put into possession as owners in indivisión by the courts of this state. It is held by these cities in indivisión, and for free, public educational purposes. No one part or portion of that property belongs to one of them. The whole belongs to both. Defendant and intervener cannot say that I am not in possession of public property belonging to the city of New Orleans, or that I am in possession of public property belonging to the city of Baltimore. New Orleans has title, and Baltimore has title, to every portion of the property; and as defendant and intervener cannot possess or prescribe against the public property of the city of New Orleans, in any degree or in any manner, they cannot lawfully possess or prescribe against any portion of the property, even .though an undivided portion is held by the city of Baltimore for public purposes. We have already seen that public school property is public property, and that all public property in this state is exempt from taxation, and that the law of prescription is not applicable to the state of Louisiana, or to one of its subdivisions, where public property is Involved. The right of the state to its public property or domain is absolute, and excludes that of its own subjects as well as other nations. Wheaton’s Int. Law, p. 220. The McDonogh land lying in Louisiana, and bequeathed to the city of Baltimore for educational purposes, like the bequest to the city of New Orleans for the same purpose, is a trust fund, hors du commerce, not liable to seizure, is inalienable, and prescription should not run against it; but a better reason for its not running against said property and city is the great public policy of preserving public rights and property.from damage and loss through the negligence of public officers. The exemption from the effects of prescriptive statutes is essential to the well-being of the government of the state. And we have held that the maxim “Nullum tempus occurrit regi” is not restricted in its application to the state, but that it applies to municipal corporations as trustees of the rights of the public. In some other jurisdictions the law has been differently applied. Mayor v. Magnon, 4 Mart. (O. S.) 2, 8; Police Jury v. Foulhouze, 30 La. Ann. 64; Halpin v. Barringer, 26 La. Ann. 171; R. S. 1320, 3422. [6] We have held that prescription does not run against the United States government. Pepper v. Dunlap, 9 Rob. 283, 288, — 842 — And in the case of Northern Pacific Co. v. Townsend, 190 U. S. 267, 23 Sup. Ct. 671, 47 L. Ed. 1044, where an individual claimed title by adverse possession under the statutes of limitation of Minnesota to a portion of the railway’s right of way, the Supreme Court held that, although the plaintiff’s right of way granted to it by the United States was subject to the police power of the state, an individual could not acquire title to any portion thereof by adverse possession under the statute of limitations of the state. The court, after stating that the grant of the right of way was for a specific purpose, say: “This being the nature of the title to the land granted for the special purpose named, it is evident that to give such efficacy to a statute of limitations of a state as would operate to confer a permanent right of possession to any portion thereof upon an individual for his private use would be to allow that to be done by indirection which could not be done directly.” [7-10] The city of Baltimore owns the property under discussion with the consent of this state, and under the laws thereof. It was made a legatee of said property under the will of John McDonogh, declared valid by the courts of this state. And as our general government provides for the equality of the states of the Union, and as the people of the several states have formed a general government for a more perfect union, for the establishment of justice, for insuring domestic tranquility, for providing for the common defense, for promoting the general welfare, and for securing the blessings of liberty to ourselves and our posterity, it is necessary that the laws of the several states shall have equal effect upon and application to the property of each sister state, located within the boundaries of that state, as it has upon its own property which is being administered for the public good. The forms of process and rules of evidence and prescription are governed by the lex fori, whether the parties be a state itself, a resident of that state, or residents of another state. The state of Louisiana having the public property of the state of Maryland within its territory, and therefore under its jurisdiction, the laws of the state applying to public property of the state itself will be applied to the public property of the state of Maryland within this territory. And as the public property of the state is not liable to taxation, or seizure, or alienation, without special legislative authority, and as an adverse title thereto may not be acquired by prescription, the public property belonging to the state of Maryland, or to one of its subdivisions, is entitled to the same exemptions. This is implied from the relations which exist among the United States. The free school system being one of the instrumentalities or functions of the government of the state of Maryland, it cannot be interfered with by the state of Louisiana or any of its citizens. A similar point was disposed of by the Supreme Court of the United States in the case of The Collector v. Day, 11 Wall. 113, 122, 20 L. Ed. 122, whore the court held that the United States government could not tax the instrumentalities of the state government and collect an income tax on the salary of a state judge. In the case of Dobbin v. Commissioners of Erie County, 16 Pet. 435, 10 L. Ed. 1022, it was decided that it was not competent for the Legislature of a state to levy a tax upon the salary or emoluments of an officer of the United States. The decision was placed mainly upon the ground that' the officer was a means or instrumentality employed for carrying into effect some of the legitimate powers of the government, which could not be interfered with by taxation, or otherwise, by the state, and that the salary or compensation for the service of the officer was inseparably connected with the office. In the cases of McCullogh v. Maryland, 4 — 844 — Wheat 316, 4 L. Ed. 579, and Weston v. Charleston, 3 Pet. 449, 7 L. Ed. 481, it was decided: “That the state governments cannot lay a tax upon the constitutional means employed by the government of the Union to execute its constitutional powers.” The Chief Justice, in McCullogh v. Maryland, as the organ of the court, says: “If the states may tax one instrument, employed by the government in the execution of its powers, they may tax any and every other instrument. They may tax the mail; they may tax the mint; they may tax patent rights; they may tax judicial process; they may tax all of the means employed by the government, to an excess which would defeat all the ends of government. This was not intended by the American people. They did not design to make their government dependent on the states.” That the power of taxing it (the bank) by the states may be exercised so far as to destroy it, is too obvious to be denied. It' was observed by the court, in the case of McCullogh v. Maryland, that the power of taxation by the states was not abridged by the grant of a similar power to the government of the Union; that it was retained by the states; and that the power is to be concurrently exercised by the two governments; and, also, that there is no express constitutional prohibition- upon the state against taxing the means or instrumentalities of the general government. But it was held to be prohibited by necessary implication; otherwise, the states might impose taxation to an extent that would impair, if not wholly defeat, the operations of the federal authorities when acting in their appropriate sphere. And in the case of The Collector v. Day, it was shown that, upon the same construction of the Constitution, and for like reasons, the general government is prohibited from taxing the salary of a judicial officer of a state. The court there recognized the general government and the state, although both within the same territorial limits, as separate and distinct sovereignties, acting separately and independently of each other within their respective spheres. The former, in its appropriate sphere, is supreme; but the states, within the limits of their powers not granted, or, in the language.of the tenth amendment, “reserved,” are as independent of the general government as that government is independent* of the state. And it was therein held, because of the dependence of the general government for its existence upon the several states of the Union, that it was a reasonable, if not a necessary consequence, that the means and instrumentalities employed for carrying on the operations of the state governments, for preserving their existence, and fulfilling the high and responsible duties assigned to them by the Constitution, should be left free and unimpaired, should" not be liable to be crippled, much less defeated, by the taxing powers of another government, which power acknowledges no limit but the will of the legislative body imposing the tax; that the two governments are upon an equality; and the question is: whether the power “to lay and collect taxes” enables the general government to tax the salary of a judicial officer of the state, which officer is a means or instrumentality employed to carry into effect one of the state’s most important functions, the administration of the laws, and which concerns the exercise óf a right reserved to the states ; and the question was answered in the negative. If the means and instrumentalities employed by a general government and of this state to carry into operation the powers granted to them are, necessarily, and for the sake of self-preservation, exempt from taxation and the law of prescription, then are also the instrumentalities of government of a sister state exempt from taxation, seizure, alienation, and prescription in this state. The unimpaired existence of those instrumentalities in the one state is as essential as in the other. The ex — 846 — emption of a sister state, under the circumstances indicated, rests upon necessary implication, and is upheld by the great law of self-preservation. If the means employed by a government in conducting its operations are subject to the control of another and distinct government, then the first government can exist only at the mercy of the latter. The public property of a sister state located in this state might be likened to the diplomatic departments of foreign governments, where the diplomats, their families, suités and effects are immune from the laws of the state to which they are accredited, or through which they may be passing. And ambassadors, ministers, troops passing through, ships of war, all municipal institutions, are immune from the laws which apply to the inhabitants of the states through which they pass. And, surely, our sister states, and the property belonging to them, in our territory, are entitled to the same protection as is accorded to the property of this state by the laws thereof. Judge Dillon, in his valuable work on Municipal Corporations (section 1396 [773]), refers to a case where the city of Brooklyn attempted to tax property devoted to a public use within its territory and belonging to the city of New York, in the following language: “The general statutes of the state upon the subject of taxing property undoubtedly refer to private property, and not to that owned by the state; and, in view of the public nature of municipalities, and the purposes for which they are established, heretofore explained, the author is of the opinion that such enactments do not, by implication, extend to any property owned by them — certainly to none owned by them for public uses. On this principle the city of Brooklyn cannot impose a tax upon land in that city owned and used by the city of New York and by its lessee as a ferry landing in connection with a ferry franchise granted by its charters, to the last-named city. On the same ground it was held that a sale of land, the property of a city corporation, and constituting a part of the city cemetery, for taxes, was void. The sound principle is that property owned by the United States, by a state, or by a municipality for public uses, is not subject to be taxed unless so provided by positive legislation.” A contrary decision to that of the state of New York is reported in. 85 Kan. 178, 116 Pac. 251, 50 L. R. A. (N. S.) 243, Ann. Cas. 1912D, 800, in the case entitled State of Kansas ex rel. Taggart v. Holcomb. There a water plant belonging to Kansas City, Mo., but located in that part of Kansas City which is within the state of Kansas, was assessed for taxation by the state of Kansas, and the court held that the piece of public property was liable to taxation in Kansas, although the public property of Kansas was exempt. We do not concur in this interpretation of the law of exemption of public property from taxation. The state' of Louisiana declares “all public property” shall be exempt from taxation. The exemption is wholesome and sound; the language used, “all public property,” is written large, is strong, and is all-embracing ; it is clear and explicit; and it cannot be limited in its scope by interpretation so as to confine the exemption to only that public property within its domain which belongs to itself. “All public property” located in the state of Louisiana is exempt. The language is too clear not to be strictly followed. It is the same with reference to prescription ; it does not run against- the state of Louisiana. [11] We ask the state of Maryland and the city of Baltimore to give full faith and credit to the public acts, records, and judicial proceedings of the state of Louisiana, and to rely upon them. Having declared “all public property” shall be exempt from taxation in Louisiana, and thdt prescription shall not run against the state, it would be an unfair discrimination against the state of Maryland to hold that its public property was liable to taxation here, and that the citizens of Louisiana could acquire the public property of that state by prescription. To do so would prevent our sister states from giving full faith and credit to our public acts. They — 848 — could not rely upon them. Such use of power would reverse the spirit, if not the letter, of the Constitution of the United States, and substitute a wrong for a right. It would do more; it would violate the comity between the states, which is an essential element of private international law, and which instructs the government of one state to extend to sister states of the Union the equal application of the law to public property used for governmental purposes by sister states, located within this state, that is applied to public property used for governmental purposes of this state. One of the strongest foundations on which the Constitution of the United States rests — one which was taken from the Articles of Confederation, and which gives to the structure of our government much of the stability which, in the course of time, it has acquired — is found in article 4, § 1, Constitution of the United States, which is as follows: “Full faith and credit shall be given in each state to the public acts, records, and judicial proceedings of every other state.” The plea of prescription filed to the suit of the city of Baltimore should have been overruled. It is therefore ordered, adjudged, and decreed that the judgment appealed from be reversed in part and affirmed in part; that it be reversed in so far as it sustains the pleas of prescription filed by the defendant, the Salmen Brick & Lumber Company, Limited, and its warrantor, the Union Lumber Company, to the suit of the city of New Orleans, the city of Baltimore and the Board of Trustees of the McDonogh Institute of Baltimore; and that as to these plaintiffs the pleas of prescription are overruled; and that as amended the judgment appealed from is affirmed. Costs of appeal to be paid equally by appellees, intervener, and those plaintiffs whose appeal has not been sustained. The case is remanded to be proceeded with in accordance with law, in so far as the cities of New Orleans and Baltimore, and the Board of Trustees of McDonogh Institute are concerned. MONROE, J., dissents in so far as the judgment holds that the property of the city of Baltimore is exempt from taxation in this state and is not subject to the law upon the subjection of the prescription in favor of tax titles. PROVOSTX, J., not having- heard the argument, takes no part.