Factors & Traders' Insurance v. City of New Orleans

Wyly, J. The plaintiff sues the defendant for $10,175 56, the amount of a license tax paid by it to the defendant during the years 1867, 1868 and 1869, on the ground that the said tax was unconstitutional, because not equal and uniform upon all persons pursuing the business or occupation of insuring. [455] The court gave judgment for the amount claimed, and the defendant appeals. The license tax collected from the plaintiff in 1867 was five-eighths of one per cent, on the amount of premiums received, and in 1868 and 1869 it was one and one-half per cent, on the amount of premiums. Any percentage on the amount of premiums received is clearly unconstitutional, because all insurance companies do not receive the same amount of premiums. Article 124 of the Constitution of 1864, and article 118 of the Constitution of 1868, require that a license tax, as well as a tax on property, shall be equal and uniform. To be equal •and uniform, the tax must be the same on all persons persuing the particular occupation or calling taxed, without reference to the abilities, fortunes or success of those engaged in it. City of New Orleans v. Home Mutual Insurance Company, 23 An. “He who has received what is not due to him, whether he receives it through error or knowingly, obliges himself to restore it to him from whom he has unduly received it.” R. C. C., art. 2301. Upon this article, and articles 2302 and 2304, the plaintiff relies to •support its demand for the restitution of the amount improperly paid. The defendant, however, contends that there was a natural obligation, binding the plaintiff in conscience and natural justice to pay what was paid, and therefore, under article 2303, it can not be recovered. Article 2303 declares that “ to acquire this right ” (the right to receive what was improperly paid) “ it is necessary that the thing paid be not due in any manner, either civilly or naturally. A natural obligation to pay will be sufficient to prevent the recovery.” It will be observed, from the plain provisions of article 2303, that ■in order to defeat the right of recovery there must be a natural obligation to pay “ the thing paid to pay the particular debt that has been •collected. If A pays a forged note to B, recovery of the amount can not be defeated, because the latter may hold a natural obligation against him. resulting from being the owner of another note that is prescribed. The law in express terms only permits the action for repetition to be defeated where there was a natural obligation to pay the “ thing paid;” that is, to pay the particular debt that has been paid. Now •the inquiry is, not whether there was a natural obligation binding the plaintiff in conscience and natural justice to pay some other debt of •equal amount to the city of New Orleans for the support of its government or otherwise, but it is simply whether there was a natural obligation to pay the particular debt or claim that was paid and which .is alleged to be unconstitutional ? It is useless to pursue any other inquiry, because the defense anmounced in article 2303 is in precise terms, limited to the particular debt or claim paid. [456] The question then is, was'the plaintiff under a natural obligation to-pay an unconstitutional taxi We say no. An unconstitutional ordinance of a municipal corporation is an absolute nullity; it was void from the beginning; it never had any obligatory force either in law or conscience. To say that an assessment in direct violation of the constitution binds the citizen in conscience and natural justice, is an absurdity too-manifest to require argument. Until there is an assessment (and an unconstitutional' assessment is no assessment) there is no debt; there is no obligation either natural- or civil. The amount collected from the plaintiff was unduly collected,, because he never owed the debt; there was no ordinance of the city requiring of the plaintiff a license tax. What was supposed to be an-ordinance requiring the assessment of the tax never had any existence, because it contravened article 124 of the constitution of 1864' and article 118 of the constitution of 1868. In support of his position, counsel of the defendant cites several decisions of this court: 9 R. 325; 12 An. 34, 346, 421. In not one of these cases was the question now under consideration presented, to- wit Whether there is a natural obligation to pay an unconstitutional tax?1 This court has never held that an unconstitutional tax imposes a natural obligation to pay. A natural obligation is defined to be one that can not be enforced by action, but it is binding “in conscience and according to natural-justice.” Revised Code, 1757. How any act of the corporation of New1 Orleans, prohibited by the Constitution, can create an obligation binding “in conscience and according to natural justice,” we can not imagine. In Isam J. Sims v. The Parish of Jackson, 22 An. 440: the question was, whether the plaintiff could recover from the defendant the amount of a cotton tax collected from him during the years 1865, 1866 and 1867, on the ground that said tax was not equal and uniform, and therefore it was violative of article 124 of the Constitution of 1864, then in force. The court held he could do so, and gave judgment against the parish of Jackson for the amount unduly collected of Sims. This is the only case to be found in our reports where the precise, question now under consideration was presented. While that decision stands, and we see no reason to overrule it, a party who has paid a municipal corporation an unconstitional tax may-demand its restitution, or the restitution of the amount thereof. Judgment affirmed.