Town of Farmerville v. Commercial Credit Co.

136 So. 82, 173 La. 43, 76 A.L.R. 686, 1931 La. LEXIS 1819
CourtSupreme Court of Louisiana
DecidedMay 25, 1931
DocketNo. 31008.
StatusPublished
Cited by9 cases

This text of 136 So. 82 (Town of Farmerville v. Commercial Credit Co.) 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
Town of Farmerville v. Commercial Credit Co., 136 So. 82, 173 La. 43, 76 A.L.R. 686, 1931 La. LEXIS 1819 (La. 1931).

Opinions

ODOM, J.

At an election held in the town of Farmer-ville on October 26, 1926, the taxpaying voters of the municipality authorized the incurring of a debt and the issuance of bonds in the sum of $52,000 “for the purpose of purchasing or constructing waterworks within and for the town, together with all equipment and furnishings thereto, title to which shall be in the public.” The mayor and board of aldermen issued the bonds, sold them, and with the proceeds constructed a system of waterworks for the town.

It seems that the estimated cost of the plant which the town proposed to install was $52,000, and the proposition to incur debt and issue bonds was submitted and voted on that basis. But it subsequently developed that the total cost of the waterworks plant would exceed that amount by $5,000. The plans finally adopted for the plant called for one 60 horse power engine, one 25 horse power engine one Sullivan air compressor and one power pump, with certain equipment appertaining to such machinery. These were purchased from the Fairbanks-Morse Company for the sum of $12,400. But the mayor and board of aldermen had left out of the proceeds of the sale of the bonds only $7,400, which they delivered to Fairbanks-Morse as a cash payment on the machinery, and for the 'balance of the price issued five notes each for $1,000, secured by vendor’s lien and chattel mortgage on the machinery, the making of the notes and the granting of the lien and chattel mortgage being authorized by a resolution adopted by the mayor and the board.

The machinery was delivered, installed, and became part of the waterworks plant. The Commercial Credit Company, defendant, acquired these notes in due course. The may- or and board of aldermen paid the first maturing note and one-half of the second one, but defaulted on the balance. Whereupon the holder of the notes sought to foreclose'its lien and chattel mortgage by seizure and sale of the machinery.

The town then brought the present suit to enjoin the seizure and sale on the ground that the property had been incorporated in the municipal waterworks plant and become part of it, and as such was public property, dedicated to public use, and therefore exempt from seizure and sale. There was judgment in the lower court for the town perpetually enjoining the creditor “from seizing, advertising or selling the property involved in this suit,” The creditor appealed.

The municipality admits that it owes the amount represented by these mortgage notes, but contends that inasmuch as this machinery *47 is now a part of the municipal waterworks plant, a public utility, title to which is vested in the public and dedicated to public use, it cannot be seized and sold to satisfy any debt of the municipality; that public property, dedicated to the use and benefit of its inhabitants, is out of commerce and cannot be reached by its creditors under any ’process whatever. The defendant, on the other hand, while conceding that as a general rule public property cannot be seized and sold by the creditors of a municipality, contends that in cases like the present one, where a creditor has a vendor’s lien and special mortgage, he may enforce the same against the property sold, even though the title thereto is vested in the public.

The cases of Edey v. City of Shreveport, 26 La. Ann. 636, and City of Shreveport v. A. Flournoy, Sheriff, et al., 26 La. Ann. 709, are cited in support of the proposition that property owned by a municipal corporation may be seized and sold to satisfy a mortgage given for the purchase price. In the first of the above-cited cases, the city purchased certain lots of ground to be donated to a railroad company'for a site for its depot. The city paid one-half the price in cash and granted a lien and special mortgage on the property to secure the balance. Tlie court upheld the mortgage creditor’s foreclosure proceeding.

In the second case, the city of Shreveport sought to enjoin a creditor from proceeding by executory process to enforce the payment of the price of three lots. The court sustained a judgment dissolving the injunction, saying: “The city of Shreveport can not keep the property and refuse to pay the price.”

If the property involved in these two suits had, as a matter of fact, been purchased for strictly public, municipal purposes, and was, at the time these proceedings were instituted, dedicated to public use, the cases would support the contention of the creditor in the case at bar. But in the one case the property was purchased to be donated to a railroad company and in the other the use to be made of the property is not stated. These decisions are therefore not in point.

The property involved in this litigation is a necessary, indispensable part of the waterworks plant of the town of Earmerville. The funds with which this plant was constructed were raised through a bond issue voted by the taxpayers of the town, as authorized by section 14, art. 14 of the Constitution 1921 and by Act No. 46, Extra Session of 1921. That article of the Constitution provides that municipal corporations may incur debt and issue negotiable bonds for “purchasing or constructing waterworks, sewers, drains, lighting and power plants, artificial ice and refrigeration plants, public parks, school houses, teachers’ homes, and other public buildings, and works of public improvement, together with all necessary equipment and furnishings therefor, title to which, shall be im, the public, and for such other public purposes as the Legislature may authorize.” Section 7 of the said act authorizes municipal corporations to incur debt and issue bonds for the purpose of “purchasing or constructing , waterworks, * * * halls, court houses, jails, public markets, abbatoirs, fire department stations and equipment, hospitals, auditoriums, public parks, natatoriums, libraries, school houses, teachers’ homes, and other public buildings and such other worhs of public improvement as the Legislature may expressly authorize.” (All italics ours.) That section of the act closes with the following declaration: “The title to all such works, buildings and improvements shall1 be in the public.”

As pertinent to the issues involved, in this case, it is important to note that both: in the *49 Constitution and the act, waterworks, public parks, schoolhouses, and other public buildings are referred to as public improvements for public purposes. As public utilities, waterworks plants, parks, and buildings are apparently placed in the same category as being public improvements, public property, title to which is in the public. They are built at public expense for the benefit and advantage of the inhabitants of the municipality, and are dedicated to public use.

The waterworks- plant of the town of Farmerville, having been built under and pursuant to the provisions of the Constitution and an act of the Legislature, which provide that all such works and improvements are public property with title vested, not in the town as a corporate entity, but in the public, it follows that the town in its corporate capacity strictly speaking does not own them, has no title to them. They are owned by the public. The town in its corporate capacity, as a fictitious person, is merely the representative of the inhabitants. In such capacity, it merely holds such property as trustee and administers it as agent for the use and benefit of the public.

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Bluebook (online)
136 So. 82, 173 La. 43, 76 A.L.R. 686, 1931 La. LEXIS 1819, Counsel Stack Legal Research, https://law.counselstack.com/opinion/town-of-farmerville-v-commercial-credit-co-la-1931.