McLavy v. American Legion Housing Corp.

• Decision Date: 14 February 1955
• Docket Number: No. 40082,40082
• Citation: 79 So.2d 316,227 La. 300
• Parties: Frank R. McLAVY et al. v. AMERICAN LEGION HOUSING CORPORATION et al.
• Court: Louisiana Supreme Court

Page 316

79 So.2d 316

227 La. 300

Frank R. McLAVY et al. v. AMERICAN LEGION HOUSING CORPORATION et al.

No. 40082.

Supreme Court of Louisiana.

Feb. 14, 1955.

Rehearing Denied March 21, 1955.

Weber & Weber, Emile M. Weber, Baton Rouge, for appellants.

Breazeale, Sachse & Wilson, Benton & Moseley, Kizer, Heaton, Craig & Cangelosi, Baton Rouge, for appellees.

MOISE, Justice.

In a suit brought under the Declaratory Judgment Act, Act 431 of 1948, Act 22 of the Extra Session of 1948, LSA-Revised Statutes 13:4231 et seq., the Judge of the Nineteenth Judicial District Court for the Parish of East Baton Rouge rendered a judgment in favor of the defendants and against the plaintiffs, which----

(a) Sustained the pleas of prescription filed by the Sewerage District No. 8;

(b) Sustained the exceptions of misjoinder of parties plaintiff filed by the National Home Mortgage Company, Inc., Crawford Corporation, American Legion Housing Corporation, Kansas City Title Insurance Company, and American Homes, Inc.; and

(c) Sustained the exceptions of no right or cause of action and the plea to the jurisdiction of the court filed on behalf of all said defendants;

and, accordingly, dismissed plaintiffs' suit at their cost.

From that judgment the plaintiffs prosecute this devolutive appeal.

The American Legion Housing Corporation was formed by Nicholson Post No. 38, American Legion, Baton Rouge, Louisiana, to assist Veterans of World War II obtain housing. The Post owned all of the stock, acquired land from the government, made contracts for its improvement, and sold the houses to veterans at alleged cost plus a small overhead. The project was known as 'Legion Village.'

Plaintiffs, purchasers of homes in 'Legion Village', allege that at the time they entered into contracts for the purchase of their homes, they were under the impression that everything was paid for 'Right up to the keys of the front door.' They declare that it was their understanding that all they would have to pay would be their monthly payments for the price of their homes. Their purchases were made during the latter part of 1947 and early 1948, and in December, 1948 they received notice from the City National Bank of Baton Rouge, Louisiana, that there was due an annual sewerage charge of $40, payable quarterly, assessed to retire a thirty year bond issue. Plaintiffs, 121 Veterans, deny that they owe anything for sewerage service. They contend that if any charges are due for the sewerage system, the charges should be paid by their vendor and contractor.

The plaintiffs' prayer is for a declaratory judgment in their favor, relieving them of responsibility for the sewerage charge. In the alternative, they pray that there be judgment in their favor and against Sewerage District No. 8 of the Parish of East Baton Rouge, Louisiana, declaring that the sewerage charges levied upon petitioners is nothing more than an ordinary tax, and, therefore, subject to be included under the homestead exemption granted to plaintiffs by the Legislature of the State of Louisiana. In the alternative, plaintiffs ask that the Sewerage District be permanently enjoined from levying or collecting, by itself or its agents, any charges whatsoever for the purpose of retiring the revenue bonds issued for the construction of the Sewerage District No. 8. In the alternative, they further set forth '* * * that Act 218 of 1946 [LSA-R.S. 33:4161 et seq.] be declared unconstitutional, and that there be rendered a declaratory judgment against the Kansas City Title Insurance Company of Missouri, a monied judgment in the sum of $1,200.00 to each petitioner. * * * and for all cost of suit.'

It is a self evident fact, in view of petitioners' prayer, that the Declaratory Judgment Act of 1948 could not possibly apply.

The following are made parties defendant:

'1. The American Legion Housing Corporation, the vendor;

2. Crawford Corporation, the contractor;

3. National Home Mortgage Company, Inc., the mortgage company who handled all the mortgages for the houses sold;

4. Kansas City Title Insurance Company, who insured the validity of the mortgages taken by National Home Mortgage Company, Inc., on the houses; and

5. American Homes, Inc., contractor for 33 additional homes other than those built by the American Legion.

The defendants filed the following exceptions:

Crawford Corporation:

1. Exception of misjoinder of parties defendant;

2. Exception of misjoinder of parties plaintiff;

3. Exception of wrongful cumulation of actions; and

4. Exception of no cause of action.

National Home Mortgage Company, Inc.:

1. Exception of misjoinder of parties defendant;

2. Exception of misjoinder of parties plaintiff;

3. Exception of wrongful cumulation of actions; and

4. Exception of no cause of action.

Sewerage District No. 8 of the Parish of East Baton Rouge:

1. A plea of lack of jurisdiction of the court ratione materiae to allow any contest as to the legality and validity of said bonds because it was made long past the delay permitted by Article 14, Section 14n of the State Constitution [LSA], Section 10 of Act 218 of 1946 [LSA-R.S. 33:4260] and Section 43 of Act 46 of 1921 [LSA-R.S. 39:518];

2. An exception of no cause or right of action; and

3. A plea of prescription of thirty and sixty days.

Kansas City Title Insurance Company:

1. Exception of no cause or right of action;

2. Exception for failure to fully state the names and places of residence of the plaintiffs;

3. Oyer of its policies;

4. Misjoinder of parties plaintiff;

5. Misjoinder of parties defendant; and

6. Wrongful cumulation of actions.

American Legion Housing Corporation:

1. Exception of nonjoinder of parties plaintiff;

2. Exception of nonjoinder of parties defendant;

3. Exception of misjoinder of parties plaintiff; and

4. Exception of misjoinder of parties defendant;

5. Want of capacity in that the suit purports to be a class action, a form of action unknown to the laws of Louisiana;

6. Improper cumulation of actions;

7. Prematurity;

8. Vagueness, particularly as to relief sought;

9. No cause or right of action; and

10. Prescription of thirty and sixty days.

American Homes:

1. Exception of misjoinder of parties defendant;

2. Exception of misjoinder of parties plaintiff;

3. Exception of wrongful cumulation of actions; and

4. Exception of no cause of action.

At the time the American Legion Housing Corporation purchased the property, on which plaintiffs' homes were constructed, there was a sewerage system which had been installed by the Defense Plant Corporation. In the year 1947 this system was sold to Sewerage District No. 8 of Baton Rouge, Louisiana. The District incorporated that system for the benefit of the entire Eighth District.

On June 24, 1947 and November 4, 1947, elections were held to determine whether bonds should be issued for the payment of the sewerage system. The vote authorized the bonds to be issued, and the election results were promulgated. The Police Jury for the Parish of East Baton Rouge then authorized the issuance of bonds, under the authority of Act 218 of 1946, LSA-R.S. 33:4161 et seq. A contract of acceptance of the sewerage system was recorded on December 4, 1947. The bonds, which were issued and sold to take care of the cost of the system, provided for an annual $40 service charge to be imposed on the occupants of the houses using the system, and the City National Bank of Baton Rouge, Louisiana, was named as the collecting agency. Plaintiffs are occupants of homes embraced in the system.

On consideration of the exceptions herein filed, the trial judge made the following observation:

'I have concluded to consider first the exception of no right or cause of action filed by Sewerage District No. 8. If no right of action exists in favor of plaintiffs against the Sewerage District it is difficult to see how action can exist against the other defendants for the simple reason that if they are estopped or foreclosed to attack the validity of the service charges and the court is without jurisdiction to entertain such an attack they could not be awarded judgment against any of the defendants in an action of this kind.'

At the time of the election and at the time the bonds were issued, the American Legion Housing Corporation was the owner of the land on which plaintiffs' homes were constructed. It made no attempt to contest the validity of the election or of the bonds. The service charge was a provision of the bond issue, and the American Legion Housing Corporation acquiresced in it.

Section 10 of Act 218 of 1946 prescribed:

'That for a period of 60 days from the date of the promulgation of the result of any election held hereunder, any person in interest shall have the right to contest the legality of such election for any cause, after which time no one shall have any cause of action to contest the regularity, formality or legality of said election for any cause whatever, and it shall be conclusively presumed that every legal requirement has been complied with and no court shall have authority to inquire into such matters after the lapse of such 60 days. The resolution authorizing the issuance of bonds hereunder shall be once published in a newspaper published in the municipal corporation, or if no newspaper is published therein, then in a newspaper published in the parish in which the municipal corporation is located, or if no newspaper is published in such parish then in a newspaper published in an adjoining parish. For a period of thirty days from the date of such publication any person in interest shall have the right to contest the legality of said resolution and of the bonds to be issued pursuant thereto and the provisions securing the bonds. After the expiration of said thirty days no one shall have any right of action to contest the validity of said bonds or the provisions of the resolution pursuant to which the bonds were issued, and all such bonds shall be...