#### MORRISSEY v. POLICE JURY OF VERMILION PARISH et al.

No. 2530.

Court of Appeal of Louisiana. First Circuit.

May 27, 1943.

Davidson & Davidson, of Lafayette, for appellant.

Edward Meaux, Dist. Atty., of Lafayette, and N. S. Hoffpauir, Asst. Dist. Atty., of Crowley, for appellees.

LeBLANC, Judge.

The issues of law presented in this case are precisely the same as those in the case of Estate of Mrs. Arthur Latreille v. Road District No. 2 of Vermilion Parish et al., La.App., 13 So.2d 740, in which an opinion and decree were this day handed down. What difference there is concerns the facts.

The note held by the plaintiff in this case is for $1,000 and was one of a series of five notes issued under the same set of facts and circumstances as was the note in the Latreille case, but was given to represent part of the purchase price of a tractor to be used for Road District No. 5 of Vermilion Parish which is also being sued as party defendant and against which judgment was rendered on confirmation of default. The note is dated March 26, 1927 and matured March 15, 1931. It is made payable to Morrissey-Easton Tractor Company, is by the payee endorsed through its vice-president, M. T. Morrissey, and also bears the latter’s personal endorsement. The note in the Latreille case had not been endorsed by Mr. Morrissey, personally.

The note in this case, like that in the Latreille suit had been negotiated and at one time was also held by the Estate of Mrs. Latreille. Suit had been instituted by the legal representatives of the estate against M. T. Morrissey as endorse'r, in Warren County, in the State of Mississippi on March 8, 1935. Judgment having been obtained against him it became necessary for him to pay the same, the full amount, including costs and attorney’s fees, being the sum of $1,536.33, for all of which he secured a transfer and assignment on which he instituted the present proceedings on March 7, 1936, against the Police Jury of the Parish of Vermilion, the individual members thereof and Road. District No. 5 of the said Parish. As in the Latreille case, the demand is one for damages predicated on the same alleged diversion of funds specially pledged and dedicated to the *745payment of the note, and the same exceptions and pleas of prescription are urged in defense by the Police Jury and the individual members composing the same. The testimony submitted in the Latreille case was also offered and filed in the record in this case and in addition there was an agreed statement of facts entered into and further testimony taken relating to what knowledge plaintiff may have had of the alleged diversion of funds in order to fix the commencement of the prescriptive period. After trial in the court below there was judgment maintaining the plea of prescription and dismissing the plaintiff's suit, whereupon he took this appeal.

The reason on which all other issues save that of prescription were disposed of in the Latreille case apply as well in this case and it only remains for us to consider the testimony in connection with the plea of prescription filed on behalf of the Police Jury.

Plaintiff insists that the first knowledge he had of the diversion of funds was in the middle of May, 1935 when he received a letter from his attorney in Mississippi imparting the information contained in a letter from his present counsel in Louisiana to the effect that the funds pledged to the payment of the note had been transferred to another fund and consequently payment could not be made. However, as shown by the correspondence referred to in the La-treille case, as early as May 2, 1934, demand had been made on the Morrissey-Easton Tractor Company of which he was vice-president, the letter stating that the note was payable March 15, 1931 which made it more than three years past due. On May 9, 1934, another letter was addressed to his company calling attention to the matter again and informing them further that the interest endorsement on the note bore the date March 15, 1930, which was more than four years previous. As vice-president of the company it is reasonable to assume that Mr. Morrissey was familiar with the circumstances under which the note had been executed by the Police Jury and with the fact that certain specific funds had been pledged and dedicated to its payment. Notwithstanding this, he takes no steps to inquire into the matter until July 9, 1934 on which date, he personally writes to the attorney handling the notes in Abbeville asking him how they had come in his possession and what were the maturity dates. This letter was answered on July 12, 1934, and then on July 24, 1934, plaintiff writes to inquire what effort had been made to collect from the parish. To this letter he received a prompt reply dated July 27, 1934, informing him that effort had been made without result. The correspondence was then prolonged to the point where it also produced no result and suit against him was filially resorted to.

It strikes us that during all the time from May 2, 1934 when demand was first made on his company, and certainly from July 27, 1934 when he personally was informed that effort to collect from the parish had been unavailable, plaintiff should have taken some steps, or at least exercised more diligence than he did, to ascertain the true status regarding this note, if indeed he did not already know what the status was. A simple inquiry at that time would necessarily have revealed that the funds securing its payment had been diverted, as the agreed statement of facts show that the diversion had taken place in 1931 or 1932. Nothing was done by the Police Jury to lull him into a state of false security or to hinder him from attempting, at least, to enforce payment on its part. . Its attitude was one of absolute passivity and this did not have the effect of arresting the course of prescription even though a wrong had been committed in diverting the funds dedicated to the payment of the note. See Littlefield v. City of Shreveport, 148 La. 693, 87 So. 714. That was the basis on which the learned district judge maintained the plea of prescription and we are of the opinion that he was correct.

For the reasons stated herein as well as for those stated in the opinion in the case of Estate of Mrs. Arthur Latreille v. Road District No. 2 of the Parish of Vermilion et al., filed this day, the judgment appealed from is affirmed at the costs of the plaintiff, appellant herein.

OTT, Judge

(concurring).

While I concur in the decree which dismisses plaintiff’s suit, I do not concur in the conclusions by which that result is reached.

In my ‘opinion, the plea of prescription of one year under Article 3536 of the Civil Code is not well founded. The present action is not one that arises from either an offense or a quasi offense, but is an action on a contract by which the plaintiff seeks to enforce an obligation of a road district which agreed to pay a certain amount of money on a specific date. This obligation was secured by the dedication *746of a part of the proceeds of a special tax voted and levied in the district for road purposes. The action against -the Police Jury and its individual members is based on a violation of their resolution or contract to set apart and apply in payment of this note a part of these tax funds. In other words, according to the agreed statement of facts, all that the Police Jury and its individual members did was to violate their contractual obligation toward the holder of the note by failing to apply a part of these tax funds when collected to the payment of the note, but used these funds in good faith for road purposes.

The funds were not wilfully diverted from a purpose for which the tax was voted and levied, but part of the funds which had been pledged for the payment of the note by the Police Jury was not applied by it for that purpose. However, the funds were used for public purposes in good faith and in building and maintaining roads in the district. There was no violation of a duty to the general public, but merely a breach of contract or a breach of trust which does not give rise to an action ex delicto nor constitute an offense or quasi offense so as to make the pleaded prescription applicable. See Olivier & Sons, Inc., v. Board of Commissioners, 181 La. 802, 160 So. 419; Dawkins v. Mitchell et al., 149 La. 1038, 90 So. 396.

The Police Jury (or the Parish of Vermilion) cannot be held liable for this note which was the obligation of the Road District No. 5, an entirely separate and distinct political subdivision. When the Legislature made the Police Jury the governing authority of road districts in the parish, it did not make the Police Jury responsible for the debts of the road districts by reason of any acts done by it in this administrative capacity. When the Police Jury used these tax funds in 1931 and 1932 in maintaining the roads in the Road District it was not acting for the Parish of Vermilion but was acting for the Road District. Whatever acts were performed by the Police Jury in using these funds in a different manner and for a different purpose than that for which the fhnds had been previously pledged by the Police Jury were acts of the Road District, through its officers and not acts of the Parish of Vermilion through its proper officers. The Parish of Vermilion, a political subdivision of the State, cannot be held for the acts of the administrative agency of a separate and distinct subdivision of the State.

As a general rule the individual members of a municipal council or other political subdivision of a state are not liable personally for funds lawfully collected for one purpose but applied by them in good faith for some other lawful purpose of the municipality or political subdivision in the absence of some constitutional or statutory provision specially making them liable. See annotation in 96 A.L.R. 664. As already stated, the members of the Police Jury did not misapply any of the tax funds and use them for a purpose other than that for which the tax was levied and collected, but it is admitted that they used these funds in good faith for the very purpose for which the tax was voted and collected, i. e., for maintaining the public roads in the road district. They did breach their obligations in dedicating a part of these funds to pay the note, but for their acts in a representative capacity as the governing authority of the road district, the district alone is liable.

It may be urged that to relieve the governing officials of personal responsibility in such cases would render insecure a pledge or dedication of public funds for the payment of a specific debt, but it must be remembered that such officials would not be relieved of personal responsibility if they acted fraudulently or in bad faith, or contrary to some law, or did not use the funds for some other lawful public purpose coming within the purview of their official duties. It could be urged with equal force that responsible citizens would hesitate to accept such a position if they could be held personally responsible for using public funds in good faith for one public purpose after these funds had been dedicated to the payment of a specific debt of the political subdivision. After all, a creditor with such a secured debt must rely to a great extent on the integrity and honor of these public officials to carry out in good faith their official acts, and if they neglect or refuse to do so, the creditor has a legal remedy to compel them to do so.

For the above reasons, I concur in the decree.