Case Name: Virgil T. JACKSON, Jr., Testamentary Executor of the Succession of Mrs. Edith Forbes Jackson v. Leo G. D'AUBIN et al.
Court: Louisiana Supreme Court
Jurisdiction: Louisiana
Decision Date: 1976-02-23
Citations: 338 So. 2d 575
Docket Number: No. 56909
Parties: Virgil T. JACKSON, Jr., Testamentary Executor of the Succession of Mrs. Edith Forbes Jackson v. Leo G. D’AUBIN et al.
Judges: DIXON, J., dissents.
Reporter: Southern Reporter, Second Series
Volume: 338
Pages: 575–584

Head Matter:
Virgil T. JACKSON, Jr., Testamentary Executor of the Succession of Mrs. Edith Forbes Jackson v. Leo G. D’AUBIN et al.
No. 56909.
Supreme Court of Louisiana.
Feb. 23, 1976.
On Rehearing Oct. 6, 1976.
C. Alvin Tyler & Associates, Baton Rouge, for defendant-respondent.
Ashton L. Stewart, Laycock, Stewart & Preis, Baton Rouge, for plaintiff-applicant.

Opinion:
SANDERS, Chief Justice.
This proceeding commenced when the testamentary executor of the Succession of Mrs. Edith Forbes Jackson sought a judicial partition by licitation of certain immovable property located in East Baton Rouge Parish, specifically Lots 3 and 4 of Square 11 of the Devall Town Subdivision. The estate of Mrs. Jackson claimed to be the owner of an undivided one-half interest in the property and named the other claimants as defendants in the partition proceeding.
After a hearing, the district court ordered the partition by licitation of the property and appointed a Notary Public to effect the partition. In his proces verbal dated February 18, 1974, the notary reported that the property was sold at public auction on February 6, 1974, for the price of $157,000.00 cash. After deducting the expenses of the sale, the proceeds remaining for distribution were deposited in the registry of the court because the notary's report also showed that certain claims to the deposit proceeds required a determination by the court.
The pertinent facts as found by the Court of Appeal are virtually undisputed:
". . . Virgil T. Jackson, Sr. died in Jefferson Parish, Louisiana, where he was domiciled, on November 10, 1959. His last will and testament, dated June 26, 1958, in which the testator confirmed the usufruct of the community property to his widow, Mrs. Edith Forbes Jackson, and bequeathed the naked ownership of said property to a trustee in spendthrift trust[s] for his four children as beneficiaries, was probated in the 24th Judicial District Court for the Parish of Jefferson on November 18, 1959. In the judgment of possession signed on March 10, 1960, the trust[s] . . [were] not mentioned and the children of the deceased were recognized as owners in indivisión of the testator's property, subject to the usufruct of their mother. After the death of the testator's widow, Mrs. Edith Forbes Jackson, on October 6, 1971, an amended judgment was obtained in the testator's succession proceeding on March 1, 1973, recognizing the spendthrift trust[s] and placing dative co-trustees in possession of the trust property.
"Meanwhile, the United States, in order to collect delinquent income taxes in the amount of $510.00 owed by William P. Jackson, II, one of the testator's children, . . seized the tax debtor's interest and sold the same to Leo G. D'Aubin at a public sale on August 3, 1965'. Then, on August 16, 1966, the United States executed a quit-claim deed in favor of D'Aubin."
Thus, two parties claimed the one-eighth interest of William P. Jackson, II, in the property, namely, the trustees of the spendthrift trusts and the purchaser at the tax sale. The district court dismissed the claim of the tax purchaser, recognizing the claim of the trustees.
The Court of Appeal reversed, upholding the claim of the tax purchaser. La.App., 316 So.2d 478 (1975). On application of the trustees, we granted certiorari to review the judgment. La., 320 So.2d 910 (1975). After consideration, we affirm the judgment of the Court of Appeal.
In determining whether and to what extent a taxpayer has property rights to which a federal tax lien can attach, both federal and state courts must look to state law. Aquilino v. U. £>., 363 U.S. 509, 80 S.Ct. 1277, 4 L.Ed.2d 1365 (1960). The applicable federal statute, 26 U.S.C. § 6321, providing that the United States is entitled to a lien upon all property rights belonging to a person who has failed to pay any tax, creates no property rights but merely attaches federally defined consequences to rights created under state law. U. S. v. Bess, 357 U.S. 51, 78 S.Ct. 1054, 2 L.Ed.2d 1135 (1958). The quitclaim deed executed by the United States conveyed to D'Aubin "all the right, title, and interest of said taxpayers" in and to the described real estate. We are required, therefore, to make a determination of what rights, if any, the United States actually conveyed to D'Aubin under Louisiana law.
The trustees contend that the ownership of the property vested in the testamentary trustee immediately upon the settlor's death, and the Court of Appeal failed to recognize that the trustee, rather than the beneficiary, owned the property at the time of the seizure and sale for the delinquent taxes of the beneficiary.
We agree that under Article 940 of the Louisiana Civil Code and LSA-R.S. 9:1821, the trust was created at the moment of the settlor's death. At that time, title to the property making up the corpus of the trust vested in the trustee named in the will. However, the trust instrument was not recorded in East Baton Rouge Parish, where the property in question was located. This omission to record brings into operation another provision of the Trust Code, LSA-R.S. 9:2092, which, in our opinion, is controlling. That section provides:
"If at any time the trust property of either an inter vivos trust or a testamentary trust includes immovables or other property the title to which must be recorded in order to affect third parties, a trustee shall file the trust instrument for record in each parish in which the property is located."
We hold that under LSA-R.S. 9:2092, an unrecorded trust instrument has no effect insofar as immovables are concerned, except between the immediate parties. It is null and void as to all others.
Article 2266 of the Louisiana Civil Code is the basis of the general Public Records Doctrine. This Court has recognized an exception to the general doctrine in holding that the absence of recordation is not fatal to the rights of forced heirs and others whose rights vest by operation of law. See, e. g., Long v. Chailan, 187 La. 507, 175 So. 42 (1937); Knighten v. Ruffin, La.App., 255 So.2d 388 (1971).
This exception, in our opinion, is inapplicable to the trustee of a testamentary trust. A trust is a creature of statute. Section 2092 of the Trust Code makes it mandatory for the trustee to record the trust instrument in order to affect third parties. To give an unrecorded trust instrument greater effect than the statute provides would, in our opinion, defeat the purpose of the recor-dation requirement.
Since the recording requirement applies, actual knowledge of the trust on the part of the tax purchaser does not alter the result. See American Creosote Company v. Springer, 257 La. 116, 241 So.2d 510 (1970); Ewald v. Hodges, 239 La. 883, 120 So.2d 465 (1960); Blevins v. Manufacturers Record Publishing Company, 235 La. 708, 105 So.2d 392 (1958); McDuffie v. Walker, 125 La. 152, 51 So. 100 (1910).
Our holding in this case should not be construed to mean that reliance by a purchaser upon a judgment of possession is sufficient in all cases, or even in this case. We hold narrowly that when a succession includes a testamentary trust, the trust instrument must be recorded in the parish where the immovable property is located in order to affect third parties.
Having concluded that in effect no trust existed as to the purchaser at the tax sale, we need not reach the other issues raised.
For the reasons assigned, the judgment of the Court of Appeal is affirmed.
DIXON, J., dissents.
MARCUS, J., dissents and assigns reasons.