Central Savings Bank & Trust Co. v. City of Monroe

• Decision Date: 04 March 1940
• Docket Number: 35596.
• Citation: 194 La. 743,194 So. 767
• Parties: CENTRAL SAVINGS BANK & TRUST CO. v. CITY OF MONROE.
• Court: Louisiana Supreme Court

194 So. 767

194 La. 743

CENTRAL SAVINGS BANK & TRUST CO. v. CITY OF MONROE.

No. 35596.

Supreme Court of Louisiana.

March 4, 1940

Appeal from Fourth Judicial District Court, Parish of Ouachita; J T. Shell, Judge.

Action by the Central Savings Bank & Trust Company against the City of Monroe to recover taxes alleged to have been paid, through error of law, on property exempt from taxation. From a judgment maintaining defendant's exception of no right or cause of action and dismissing the action, plaintiff appeals.

Affirmed.

McHenry, Lamkin & Titche, of Monroe, for appellant.

Oliver & Digby, of Monroe, for appellee.

ROGERS, Justice.

The Central Savings Bank & Trust Company brings this suit against the City of Monroe to recover the sum of $5,571.80, with interest, alleging that through error of law it paid the principal sum claimed for taxes for the years 1933 to 1937 inclusive, on property exempt from taxation. The defendant municipality filed an exception of no right or cause of action to plaintiff's demand. The exception was maintained and plaintiff's suit dismissed. Plaintiff has appealed from the judgment.

Plaintiff bank predicates its demand on section 4 of Act 14 of the Extra Session of 1917, as amended by Act 221 of 1928 and Act 6 of 1934. These statutory provisions set forth the manner of computing the value of the shares of stock of a bank for purposes of taxation. Specifically, they provide that the capital stock of any bank must be assessed at its true value subject to an allowance for the value of all real estate and paid-in capital of any subsidiary wholly owned by the bank.

The plaintiff bank, for the years 1933 through 1937, in rendering its capital stock for assessment purposes, failed to deduct the value of the capital stock of the Central Company, Inc. a real estate holding company organized by plaintiff. As a result of the failure of the plaintiff bank to make this deduction, its capital stock was actually assessed for an amount greater than that required by law. The plaintiff bank discovered its error in the year 1939 and brought this suit, after an unsuccessful demand upon the defendant municipality for the return of the amount of taxes erroneously paid.

Defendant's exception of no right or cause of action is predicated upon two propositions of law, first, that plaintiff's suit is in effect one for the reduction of an assessment, and as provided by Act 97 of 1924, should have been brought within thirty days after the assessment rolls were filed, and secondly, that recovery must be denied plaintiff, because taxes voluntarily paid to a municipality in error of law can not be recovered unless the taxes, not having been budgeted or expended, are intact in the possession of the municipality.

We do not find it necessary to consider the first ground urged in support of the exception, because, conceding that the action of the bank for the return of the taxes erroneously paid is not barred by the provisions of Act 97 of 1924, the second ground urged in support of the exception is well-founded and must prevail.

Plaintiff predicates its right to recovery upon the decisions of this court in Catholic Society v. City of New Orleans, 10 La.Ann. 73; Bank of New Orleans v. City of New Orleans, 12 La.Ann. 421; and Sims v. Village of Mer Rouge, 141 La. 91, 74 So. 706.

In the first of the cited cases, the Catholic Society was allowed to recover the taxes paid on property used for schools, the decision resting upon certain articles of the Civil Code. But, in a number of cases subsequently decided, this court held that the articles of the Civil Code are inapplicable to actions for the recovery of taxes erroneously paid. Lisso & Bro. v. Police Jury, 127 La. 283, 292, 53 So. 566, 31 L.R.A.N.S., 1141; Dupre v. City of Opelousas, 161 La. 272, 108 So. 479; City of New Orleans v. Jackson Brewing Company, 162 La. 121, 110 So. 110.

In Lisso & Bro. v. Police Jury [127 La. 283, 53 So. 568, 31 L.R.A.N.S., 1141], this court made the following comment upon the case of Catholic Society v. City: ‘ It is true that our predecessors in this court have held that taxes, though paid voluntarily, might be recovered where the property was exempt from taxation. Catholic Society v. City [of New Orleans], 10 La. Ann. [73], 75. Upon the other hand, it has been held that, though the ordinances under which taxes paid were found to be unconstitutional or illegal, there was, nevertheless, a natural obligation on the part of the taxpayer sufficient to preclude recovery. Campbell v. City [of New Orleans], 12 La.Ann. 34; Factors & Traders' Ins. Co. v. City [of New Orleans], 25 La. Ann. 454; Fuselier v. St. Landry Parish, 107 La. 221, 31 So. 678.’

The decision in the Bank of New Orleans case was based partly on the prior decision in the case of Catholic Society. There the court allowed the bank to recover taxes paid ‘ on its profession,’ which at that time was exempt from taxation. But in the case of New Orleans Canal & Banking Co. v. City of New Orleans, 30 La.Ann. 1371, this court, quoting from Dillon on Municipal Corporations, said with reference to the right to recover taxes paid on an unauthorized assessment, that the payment must have been made upon compulsion, to prevent the immediate seizure of the taxpayer's goods or the arrest of his person, and not voluntary; in other words, that the assessment on which the tax erroneously paid is based must not only be unauthorized, but the payment must be an involuntary one, made under coercion or duress.

In Fuselier v. St. Landry Parish, 107 La. 221, 31 So. 678, 680, this court, again quoting from Dillon on Municipal Corporations, stated what coercion or duress must consist of to render the payment of a tax an involuntary payment, viz.-‘ The coercion or duress which will render a payment of taxes involuntary must, in general, consist of some actual or threatened exercise of power possessed or believed to be possessed by the party exacting or receiving the payment over the person or the property of another, from which the latter has no [other] means or reasonable means of immediate relief except payment.’

In Sims v. Village of Mer Rouge, the taxpayer was allowed to prosecute his action for recovery of the license tax, not only because there was no ordinance justifying the collection of the the license, but also because the payment was involuntary, made under fear of a criminal prosecution,...