Matter of the New Orleans Improvement & Banking Co.

Rost, J. Oppositions were made by several of the creditors of the Improvement and Banking Company to the final tableau of distribution filed by the commissioners appointed to liquidate that institution; and the various appeals presented by this record, have been taken from the judgments rendered on those oppositions. The most important error to which our attention is directed is assigned by J. Corning Co., who are note holders, and claim to be paid out of the proceeds of the real estate, under a mortgage subscribed in their favor by the bank, in 1842. They allege that the District Court erred in giving the precedence to the mortgage of the Citizens’ Bank, on the same property, after it had lost its rank for want of reinscription. The facts material to this part of the case are as follows: On the 22d of May, 1835, Dominique Seghers sold to the Improvement Bank the land on which the St. Louis Hotel stands. A part of the price was paid in cash, and for the balance of $200,000, it Was stipulated that the bank might, Within a given time, elect to pay it, or to furnish in satisfaction thereof her bonds to that amount, bearing interest payable in 1850. The bank elected to give bonds, and accordingly, on the 21st of March, 1836, the bonds were executed and secured by an act of mortgage of that date. They were paraphed to identify them with the act, and delivered to Seghers. The act of 22d of May, 1835, was duly recorded on the current register of the recorder of mortgages, on the 30th May following. The act of 21st March, 1836, securing by mortgage the bonds referred to, was recorded on the 28th of the same month, not in the current register, and in the order of time, but upon the margin of the record of the act of the 22d of May, 1835. On the 14th April, 1840, Seghers sold the bonds to the Citizens’ Bank, who took from him a transfer of the bonds and subrogation to the mortgage given to secure them, by notarial act. This act was also presented to the recorder of mortgages for recording, and he did accordingly record a memorandum of it, not in the current register, in the order of time, but on the margin of the record of the act of the 22d of May, 1835, and following the record of the act of the 21st March, 1836. In 1848 this controversy arose between the Citizens’ Bank and the note hold ers, each contending for a priority in rank, as mortgagees on the property sold by Seghers. The note-holders allege that the only valid inscription is that made in the order of its date, in May, 1835; that the subsequent inscriptions having been made in the margin of this, though subsequent in date, cannot affect them, because they are not bound to look more than ten years back from 1845. The Citizens’ Bank, on the contrary, maintains that the recording of the act of subrogation of the 14th April, 1840, was a new and a later inscription, by which a new creditor gave notice of his claim; that, under art. 3330 C. C., a creditor is competent to make an inscription of a public act, or of a judgment in his favor, and that no agency of the debtor is required therein. That art. 3356 C. C. requiring mortgages to be recorded in the order of their date, without leaving any intervals between them, is merely directory to the recorder. They further argue that it is unnecessary to enquire into the question of reinscription, because, under the provisions of an act of 1843, amending art. 3333 C. C., no reinscription was necessary. The District Court dismissed this opposition, and recognized the right of mortgage claimed by the Citizens’ Bank. The opponents have appealed. [473] The court being equally divided on this opposition, I will proceed to state the reasons of the opinion I have formed. The act relied on by the Citizens’ Bank in support of the proposition that no reinscription was necessary, is in these words: “ Be it enacted that art. 3333 of the Civil Code be so amended that, it shall be the duty of the recorder of mortgages, and of judges performing the like duties, to cancel and erase, on the single application in waiting to that effect, by the owner, creditor of the owner, or other pax-ty interested, all inscriptions of mortgages which have existed or may exist on their record for a period exceeding ten years, without a renewal of such inscription: provided, however,' that this section shall not apply to mortgages against husbands for tire dotal or other claims of their wives, to mortgages against tutors and curators in favor of minors, interdicted or absent persons, nor to such mortgages in favor of the property banks.” The words, such mortgages, have not a precise meaning. But in the french text the general description of hypotMques consenties en favuer des banques hypoihécaires, is made use of. The appellants argue that, this act must be construed with an act of 1842, which provides that the rules requiring the reinscription of mortgages shall not apply to mortgages which have been or may be given by the stockholders of the vai-ious px-operty banks, and that its application should be limited to stock mortgages. That, if’it embraces other mortgages, it can only be those given dia;ectly to the bank, not those acquired by subrogation, as this has been. That, if it extends to mortgages acquii'ed by subrogation, it is necessary that the subrogation should be duly inscribed in the book of the recoi'der of mortgages, and that the inscription in this case, in the book of 1835, of a memorandum, defective in form, is insufficient. There is no reference to the act of 1842 in that of 1843. The latter purports to be a direct amendment of the article of the Code, and the reason and policy which induced the first exception, lead me to the conclusion that it was intended to be enlaa'ged by the second enactment. It does not follow that, because this legislation is exceptional, it should be consti-ued strictly. It is one of the means resorted to by the legislatux-e to secure the State against loss on the bonds issued in favor of the property banks; and when the meaning of their enactments is not free from ambiguity, I consider it my duty to make such construction as will advance the object they had in view. I do not think that the words used in the statute were intended to limit its application either to stock mortgages, or to those given directly to the property banks. It is doing no violence to language to consider all mortgages owned by them as mortgages in their favox-, under the statute, without reference to the manner in which they have been acquired. The subrogation in this case was made by authentic act, and x-eeorded where the law required similar contracts to be recorded; this affected the opponents with notice without any inscription in- the books of the recoa-der of mortgages. It was good against all the world as an alienation. It matters not, therefore, whether the memoa-andum, inscribed in the office of the a-ecorder of mortgages, was defective as an inscription, or recorded out of its proper place. It was at least notice of the subrogation to the recorder; and, under the provisions of the act of 1843, he could no longer cancel the mortgage. After the subrogation to the Citizens’ Bank, in the manner already stated, this mortgage stood, under the act of 1843, in the same position as mortgages against husbands, tixtors and curators. [474] That the legislature intended the reserved inscriptions to continue in force, cannot, upon any rule of construction, admit of a doubt. This legislation-no more impaired the obligations of the contract between the bank and the holders of its circulation, than all the other exceptional laws passed of late years, in relation to banks, have impaired those obligations. Registry laws are essentially under the control of the legislature, who may at all times dispense with reinscriptions. I arp of opinion that no reinscription was necessary, to preserve the rank of the mortgage of the Citizens’ Bank. The Citizens’ Bank has appealed, and alleges that it is aggrieved by the following dispositions of the judgment: 1. All those declaring that the property of the Improvement and Banking Company is subject to taxation, the same being exempted by the 19th section of their charter. 2. The one allowing a privilege to municipality No. One, for the whole amount of their claim, while the same, if due at all, is reduced by law to the last two years. The 19th section of the charter of the Improvement and Banking Company, provides that the capital stock of the company shall be exempt from taxation. The taxes claimed were not levied upon the capital stock. They are taxes on real estate, which the company was of course bound to' pay. We concur with the judge of the District Court that, under the 7th section of the law of 1840 (Sessions Acts, p. 51), the municipality No. One, has a privilege for taxes due them, and that the proviso at the end of the section limiting their privilege to two years, is applicable to the claim for paving only. The Commissioners of the Improvement and Banking Company have appealed from the following dispositions of the judgment. 1. The one allowing to the Citizens’ Bank the sum of $4,693 32, the amount of rents received since the St. Louis Hotel was seized by the sheriff, under their mortgage. 2. The one allowing interest at the rate of twelve per cent per annum to the holders of the notes, from the suspension of specie payments. It appears that, after the Improvement and Banking Company had gone into voluntary liquidation, the Citizens’ Bank seized the St. Louis Hotel, under the mortgage to' which they had been subrogated by Seghers. It was understood between the par-ties that, in order to save costs and to prevent delay, the seizure should be permitted to go on, the legal right of the Improvement Bank to resist the seizure and sale being reserved. During the continuance of the seizure the rents mentioned in the last petition of appeal accrued, and' the' court allowed them to the Citizens’ Bank. The appellants contend that there is error in this part of the judgment: I. Because the privilege granted to the Citizens’'Bank, by the 26th section of its charter, was not applicable to the present case. 2. Because, even if this privilege actually existed', the Citizens’ Bank could not avail itself of it, because it had become a party to tfre concurso. These grounds assume that the Improvement and Banking Company was liquidated as an insolvent concern. The reverse is manifestly true. They gave security to the satisfaction of' the Board of currency for their'deposits and circulation, and' remained in possession of their assets as a solvent corporation. Their charter was never declared forfeited by a decree of court. The liquidation, on their part was voluntary, and it was managed exclusively by the stockholders without any participation or interference on the part of the creditors. There' was no concurso, and the Citizens’ Bank had the right to proceed as they have-done. The right to the rents is not contested, if the seizure is considered valid'. [475] In the case of Bartlette v. The New Orleans Canal and Banking Company, 1 Rob. 543, our predecessors Reid that, the interest allowed by the charter of a bank, when it suspends specie payments, is not due from the time of the suspen.sion, hut only from the day of the demand of payment by the note-holder. We adhere to the decision of the court in that case, and are of opinion that the judgment must be amended, so far as it allows interest on the circulation without a demand. Under the views expressed in Girod v. His Creditors, 2 Annual, 546, we can take no notice of the appeals of Duncan N. Hennen andP. Alvarez. Mr. Hennen filed no opposition in the District Court, and the judgment homologating the account, so fax as not opposed, is conclusive against him. We could not entertain his appeal without assuming original jurisdiction of the opposition first made by him in this court. Alvarez is in the same situation. The attorney general made opposition, claiming a privilege for the whole amount of the taxes due on the real estate of the company. The judgment having limited the privilege to the taxes of the last two years, he prays that it be amended. Whatever may have been the state of the law before the passage of the aet of 1830, it appears to us that the district judge decided correctly, under the provision of that act, limiting the privilege of the State to the taxes of the last two years. The only appeal which remains to be noticed is that of the General Council, which is taken from the judgment of the District Court, disallowing a privilege for the taxes due them. The opposition originally made was founded upon a judgment obtained agains.t the Improvement Bank, with privilege on the St. Louis Hotel. But the Citizens’ Bank was not a party to these proceedings, and the District Court, considering that the laws giving a privilege to the several Municipalities for their taxes, make no provision for those due to the General Council, dismissed the opposition. It is urged that the tax claimed was imposed by the police juiy, who had the power necessary for laying such taxes as they might judge necessary to defray the expenses of the public works of their respective parishes. That these .taxes are merely assessments on property, and attached to the property itself, and not to the person who may at the time be the owner, in consequence of which a privilege exists upon the property, although no express law gives it. The case of Oakey v. Mayor et al., 1 La. 15, is cited in support of these views. We are unable to distinguish the taxes imposed by the General Council from • those levied by the Municipalities. They are all of the same nature, and under the settled jurisprudence of this court in matters of privilege, the court below-decided correctly.