City of New Orleans v. Dupuy Storage & Forwarding Corp.

41 So. 2d 721, 215 La. 795, 1949 La. LEXIS 997
CourtSupreme Court of Louisiana
DecidedJune 30, 1949
DocketNo. 39437.
StatusPublished
Cited by6 cases

This text of 41 So. 2d 721 (City of New Orleans v. Dupuy Storage & Forwarding Corp.) is published on Counsel Stack Legal Research, covering Supreme Court of Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of New Orleans v. Dupuy Storage & Forwarding Corp., 41 So. 2d 721, 215 La. 795, 1949 La. LEXIS 997 (La. 1949).

Opinion

MOISE, Justice.

This is an action to compel the defendant, Dupuy Storage and Forwarding Corporation, to carry out an agreement to pur *797 chase from the plaintiff, at a stipulated price of $11,215.20 cash, certain lots of ground described in the petition. It is admitted that the land is vacant, that it is not taxable, nor dedicated for a public use; and it is alleged that the property is not needed by the Public Belt Railroad System for use in the operation thereof, either presently or in the future. The defendant admits that it is obligated to buy the property at the price stated but questions the authority of the plaintiff to sell the property and convey a good and merchantable title. There was judgment in the district court compelling the defendant to specifically perform, and from this judgment the defendant appeals.

The Public Belt Railroad System is of municipal origin, Ordinance No. 2683 NCS, with constitutional recognition, Art. 14, Sec. 26, Const. 1921. With its creation, an additional facility to promote commerce and establish a mode of handling freight and railroad cars throughout the territorial jurisdiction of the port, as well as the transportation of railroad freight cars to all points within and without the City, was provided. Its objective is to prevent dis■crimination, to afford to all users of its service the same equality of right as to timely movement of cars and freight, as well as a uniformity of service charges. The land in question was bought by the plaintiff some twenty years ago in contemplation of using it for public purposes. The Commission, finding that the property is not suitable for the purpose for which it was bought and is, therefore, an idle investment, is desirous of disposing of it. The opportunity is now presented to use the property for a purpose germane to the development of the Public Belt System. In the proposed act of sale to the defendant there is contained the covenant that the vendee shall construct an industrial plant within one year from the date of the sale, to be serviced by the Public Belt, the tracks to be built for such service at the expense of the vendee. The writing in of this covenant of necessity forms a component part of the development of the system by bringing about an increase of revenues and by taking idle property out of commerce. An increase in revenues is “a consummation devotedly to be wished for” because this utility is supported in the main by its own revenues.

The defendant contends that the provisions of the Constitution and the laws providing for the creation and operation of the Public Belt Railroad Commission do not authorize the sale of real estate belonging to it, except in certain stipulated cases; that the proposed sale by plaintiff to defendant would be an ultra vires act of the plaintiff’s representatives, and therefore, defendant would not acquire a good and merchantable title; and that, if plaintiff is authorized to sell the land, there is no provision for the method of sale.

*799 The pertinent part of Article* XIV, Sec. 26 of the Constitution of 1921 provides : j

“It shall be the duty of the City of New Orleans to continue the operation of a Public Belt Railroad by and through a commission to be known as the Public Belt Railroad Commission for the City of New Orleans. * * * The control, operation, management and development of the Public Belt Railroad system shall be exclusively vested in said commission, which shall always be separate and distinct from that of any railroad. * * * Said Public Belt Railroad system shall be and remain the sole property of the people of the City of New Orleans at all times, and shall in no way or manner ever be hypothecated or alienated.”

Defendant argues that the provisions of this article prohibit the Commission from disposing of the property. The above language, however, is clear and free from ambiguity and shows conclusively that the hypothecation or alienation therein referred to affects and applies specifically to the Public Belt Railroad System. Certainly, there is no provision in the law prohibiting the Commission from disposing of an idle investment. This land, as shown by the admitted statement of facts, forms no part of the Public Belt System, has never been dedicated as a part thereof, and the constitutional framers never intended that the right to develop should be construed to hamper a business administration from converting a public liability into an asset, thereby insuring a greater development in the operation of the system itself.

This suit is controlled by the doctrine announced in the cases of Board of Port Commissioners v. New Orleans Public Service, Inc., 161 La. 741, 745, 109 So. 408 and Henderson v. City of Shreveport et al., 160 La. 360, 107 So. 139. The facts in the Board of Port Commissioners’ case fit the facts in the instant case with the exception that here the reasons for a sale are stronger because of the covenant written in the act of sale, which is germane to the future development of the Public Belt System. On page 745 of the Port Commissioners’ opinion, 109 So. at page 409, the Court held:

“ * * * The reason why the board has no statutory authority to sell real estate is that all of the real estate owned by the board must be dedicated to public use, and the board has no authority or right to buy land except what is necessary to be administered by the board for public use. To say that the board has no right or authority to sell real estate is merely to state the corollary of the proposition that the board has no right or authority to buy real estate except what is necessary to be held and administered by the Board for public use. But, if the board makes the mistake of buying property that is afterwards found to be not necessary or suitable for any public use, the board, is obliged and therefore has the right to dispose of it.” (Italics mine.)

*801 The Port Commissioner’s decision was based on the doctrine announced in the case of Henderson v. City of Shreveport et al., 160 La. 360, 107 So. 139. The reasoning in that decision is well stated in the Port Commissioner’s case from which we quote at page 743, 109 So. at page 409:

“ * * * the plaintiffs, as resident taxpayers of the City of Shreveport, sought to enjoin the school board from selling and the city from buying a vacant lot which the school board had bought with funds that were dedicated to the purchase of sites for school buildings, but which was afterwards found to be not suitable and not needed for such purpose. There was no statutory authority for a school board to sell real estate, except to ‘change the location of a schoolhouse, sell or dispose of the old site, and use the proceeds thereof toward procuring a new one.’ The lot which the school board was about to sell to the city had never been used as a schoolhouse site, and the proceeds of the sale were not intended to be invested then or immediately in a new site. Nevertheless, it was held that, as the school board had no right to hold the vacant lot, and could be compelled by mandamus to dispose of it, after it was known to be of no use for school purposes, the board had the necessary authority to sell it. The court said:

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41 So. 2d 721, 215 La. 795, 1949 La. LEXIS 997, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-new-orleans-v-dupuy-storage-forwarding-corp-la-1949.