Case ID: la-ann_34/html/0469-01.html
Source: Caselaw Access Project
Author: {"author": "Lew, J. Fenner, J. Levy, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

No. 8233.
    The State of Louisiana ex rel. Henry Samory vs. The City of New Orleans.
    This is a suit by the holder of certain, bonds of the City of New Orleans, issued under Act No. 49 of 1869, to compel by Mandamus the said City to pay the interest due ou those bonds in 1881, out of tbo revenues of that year. Held, that the revenues of that year being already absorbed by the expenditures, as shown by the budget, the Relator is not entitled to the Mandamus.
    The writ of Mandamus should not he granted in cases where, if issued, it would prove unavailing.
    The Mandamus, if granted, could not be executed by the levy of an additional tax, because the Relator has not aslfed for the levy of such additional tax.
    The City of New Orleans, in the absence of a judicial decree, could not legally, of its own accord, levy a tax beyond the constitutional limitations, to'pay its debt.
    APPEAL from the Civil District Court for the Parish of Orleans. Monroe, J.
    
      1). G. & L. L. Labatt, for the Relator and Appellee:
    1. Whenever a party interested in the performance of a ministerial duty imposed by law upon apublio officer of a corporation, shows a deliberate refusal or neglect to perform, at the specified time required by law, by which he will be injuied or apprehends injury or damage, and such party has no other adequate remedy at law, he will bo entitled to the writ of mandamus to compel performance.
    *2. Where the City of New Orleans has been duly authorized by legislative acts to negotiate a loan and issue bonds payable in the future, and provision is made therein for incorporating in the annual budget the interest falling due semi-annually as a liability to bo provided for by taxation and for a sinking fund to retire or pay, the bonds, and the Council refuse to exercise the powers conferred, or appropriate the revenues to other objects, a mandamus will lie at the instance of any party injured to compel obedience, and no subsequent limitation, legislative or organic, can justify neglect or refusal to comply. See 8 Otto, TT. S. vs. New Orleans.
    3. Where bonds are issued under legislative authority by a municipal corporation, and at the time there exist no legislative limitation of taxation to pay said bonds at maturity, or to provide for the interest accruing, no subsequent legislation, whether statutory or organic, can impose a limitation depriving the holders of the right to be paid as fixed by the contract, and it is eminently just, that in such a case, the courts should enforce obedience by mandamus.
    4. “Any law which in its operation amounts to a denial or obstruction of the rights accruing by a contract, though professing to act on the remedy, is directly obnoxious to the prohibition of the Constitution." 22 Graft. 265; 6 Cr. 87; 8 Wb. 1; 2 How. 605; 32 Wh. 233 t 4 “Wall. 553; 2 Wall. 10; 13 Wall., White vs. Hart, 96 IT. S. 595; Ranger case, 8 Otto : Wolff, 12 Otto, and Premium Bond case, La. An. R.
    5. Tho right to a mandamus is based on three things, which appear in this Record, conclusively; 1. A clear legal right in relator. 2. A corresponding-ministerial duty in the defendants. 3. A want of any other specific or adequate remedy. C. P. Article 834; Strong, C. J., in Commonwealth vs. Pittsburg; 34th Penu. Stat. 509 ; 15 A. 334, 603; 9 A. 496 ; 2 L, 395 ; 5 L. 332 ; 6 L. 598 ; 7 L. 511; 9 L, 332; 21 A. 552.
    6. When the time has passed to do a particular act required by a maudamus, and respondents by appeal suspend its performance, this Court will so modify the writ on affirmance as to malee it effective and prevent a denial of justice. Commr. vs. Sellew, 9th Otto,
    
      O. F. Buck, City Attorney, for Respondent and Appellant:
    1. In virtue of the Act Ho. 5, Acts of 1870, Extra Session, no creditor of the City of Hew Orleans, whether he he holder of a liquidated or unliquidated claim, can compel the payment of money by means of the writ of mandamus, by appropriation out of general receipts and revenues.
    2. On general principles, mandamus will not lie to compel the payment of money when then» is an adequate remedy at law, by ordinary action, to reduce the claim to judgment.
    3. Mandamus to compel the performance of a “duty" enjoined on the municipal government, will not issue when the duty, so-called, is part of the discretionary exercise of legislative* authority, and not a mere absolute ministerial one.
    4. The writ of mandamus to levy a tax, or provide the funds wherewith to pay a bonded debt, is not allowed against a municipal corporation, without judgment previously obtai/ned, except in the single instance where a specific tax is directed by the Legislature to pay a particular debt authorized by it. The tax so directed to be levied is part of tho contract, and therefore permitted to be enforced without judgment on the debt.
    Sec. 5, Act 49, Acts .of 1869, provides that it shall be the duty of the Common Council of the City of Hew Orleans, annually, (at the formation of the annual budget) to appropriate a sum sufficient to pay the interest on certain bonds authorized by said Act. The limitation on the power of taxation was fixed at 14 per cent. This “ duty " was continued in Act Ho. 7, Acts of 1870, (City Charter) and the rate of tax raised to 12 per cent. By subsequent legislation, Act 31, Acts of 1876, the Premium Bond Act and Constitution of 1879, the foregoing provisions were repealed; a tax of fifreen mills authorized — five mills for the benefit of the only class of bonds retaining recognition iu the statutes, and ten mills-for the support of the government. It is submitted on this statement of statutory provisions, that a mandamus cannot be made.peremptory, directing the City Council to appropriate a certain amount of money out of the revenues which, in its discretion, acting in its legislative capacity it has the right,- if it is not its positive duty, to do so, to appropriate to tho general uses of the government. State ex rel. Moore vs. City, 31 An. 726 ,• B. Saloy vs City, 33 An. 79.
    A holder of municipal bonds, the interest on which is'to be paid with money to be appropriated out of general revenues of the corporation, has no vested right in any particular rate of taxation, and could not by mandamus compel the levy of a tax to provide a fund out of which his interest shall be paid. A fortiori, where the limit of taxation has been reduced for general purposes, to a rate intended to provide only the necessasy alimony of the government, the duty to provide for the payment of such interest is, ipso facto, removed or repealed; and whatever other remedy the creditor may have, ho cannot by mandamus compel the appropriation of money to pay his claim out of funds expressly and exclusively dedicated to- the necessary current expenses of the government.
   On Motion to Dismiss.

Tlie opinion of tlie Court was delivered by

Lew, J.

The motion to dismiss, herein, is similar to and based on the same grounds as that in N°, 8232, just decided, .and for the reasons therein given, this motion is denied.

On the Merits.

Fenner, J.

By Act No. 49 of 1869, the legislature of the State authorized the City of New Orleans to issue bonds to the amount of five millions of dollars, to be used in exchange for, and in payment of certain then existing indebtedness of the City, evidenced by city notes, judgments, outstanding warrants, etc.

By the Act No. 93 of 1856, in force at the time, the taxing power of the City of New Orleans was limited to one and one-lialf per cent, upon the assessed value of both real and personal property, except as to certain then existing indebtedness.

The Act of 1869 did. not, by any express jiro vision, enlarge the taxing power of the City, or direct or authorize the levy of any special tax for the redemption of either the interest or principal of the bonds.

The only provision made for that purpose, with which we are here concerned, was the following:

“ That to secure the payment of the interest and capital of all the bonds to be issued under this Act, it shall be the duty of the common council of said City, within one month after the passage of this Act, and annually in the month of January thereafter * * * to appropriate a sufficient sum out of the revenues of the current year, to pay the monthly sum of $29,166$,” which sums, it is further provided, shall be. deposited monthly, by the city treasurer, with the fiscal agent, and by him applied exclusively to the semi-annual payment of the interest coupons on said bonds.

The interest on the bonds was regularly paid until 1876, by the levy of an annual tax exceeding one and one-lialf per cent, the taxing limit having been extended to 1.75 per cent, by the legislative Act No. 7 of Extra Session of 1870, and the limitation as to taxes for interest on the bonded debt having been subsequently entirely removed by Act 73 of 1872.

In 1876, tlie Act No. 31, commonly known as the Premium Bond Law, was passed, which restored the one and one-lialf limit on the taxing-power of the City which had existed at the date of the Act of 1869, which authorized the funding of all the bonded indebtedness of the City into Premium Bonds, and required that all of said tax which should be levied for the payment of interest or principal of bonds, should be devoted .to the bonds issued under the funding scheme therein provided.

From the date of the passage of this Act, up to the adoption of the Constitution of 1879, the City authorities^ continued to levy annually a tax of one and one-half per cent, but has devoted the whole of it to City-expenses or alimony, and to the Premium Bonds issued under the Act of 1870, and has not provided for the interest on the bonds of 1869.

An Article of the present Constitution of the State, adopted in 1879, restricted the taxing power of the City to one per cent., but, at the demand of bonded creditors, we held that, if necessary for the performance of their contract, the City was bound to exercise the taxing power which it possessed at the date of said contract, notwithstanding the subsequent restriction. State ex rel. Moore vs. N. O. 32 A.

In conformity to this decision the City, up to this date, has continued to levy annually a tax of one and one-half per cent.

Act 38 of 1879, makes it the duty of tlie council, on or about the 2d Tuesday of December, 1879, and annually thereafter, to propose a detailed statement of receipts and expenditures for tlie ensuing- year, to publish said statement for ten days, and, at their first meeting- after such publication, to adopt said statement or estimate, and to levy a tax to meet the expenditures thus estimated not to exceed the limit prescribed by law; and provides that the estimate thus adopted shall constitute an appropriation for the purposes therein set forth, "and that no money shall be drawn from the treasury except upon such appropriation ; and further provides that appropriations made in said estimate for any particular purpose, shall not be diverted from that object by any cause or reason whatsoever * *■ but shall remain and be kept sacred to the object of the appropriation.” t

On the 24th of December, 1830, Relator, holder of bonds issued under the Act of 1869, filed his petition containing all necessary and appropriate averments, and praying for a writ of injunction to restrain the Mayor and Administrators from adopting the budget or estimate without providing therein for payment of the interest on liis"bonds, and also for a writ of mandamus commanding" them to provide and set apart, out of the receipts and revenues of the year 1881, a sum sufficient to pay the semi-annual interest on his bonds falling due on the 1st March and 1st September, 1831, and to place and insert said amount in tlie estimate of liabilities and expenditures of the City for the fiscal year of 1881, according to law, and also to provide for the annual interest on said bonds as it matures for each succeeding year, until full satisfaction of his contract.

The writ of injunction was not allowed, but by an order of the Court dated December 27th, 1880, the alternativ e writ of mandamus was issued, made returnable on January 8, 1881, on which day the City authorities filed their answer or return to the writ, setting up numerous causes why the writ should not be made peremptory, which will hereafter be noticed in the course of this decision.

The Court a qua rendered judgment making the mandamus peremptory, “in so far as to order the Respondents to provide and set apart from the revenues of 1881, the sum of $6,125, to meet and pay the semiannual interest on the bonds held by Relator.”

From this judgment the Respondents alone have appealed, and the Relator has asked no amendment thereof; so that the sole.question before us is to determine whether this particular judgment shall be affirmed, or reversed, or amended to the advantage of the appellants. We have no concern with any different or additional relief to which Relator might be entitled in another, or even in the present proceeding.

Amongst other causes why the mandamus should not be made peremptory, the Respondents returned, in substance, and the evidence establishes, that on the 18th day of December, they had proposed and published their detailed statement of receipts and expenditures, and that on the 29th December, they had ado|)ted said statement, and had levied a tax of one and one-half per cent, which exhausted the power of taxation possessed by them, either under existing law, or under the law which was in force at the time when Relator’s bonds were issued; and that the whole revenues therefrom, together with all other revenues of the City, would be absorbed by the appropriations made in the said budget or detailed statement.

It cannot be denied, that in proposing, publishing and adopting the budget, at the times and in the manner in which these things were done, the Respondents acted in simple obedience to the imperative mandates of the Act 88 of 1879, heretofore referred to. There was nothing in the judicial action had in the Relator’s proceeding, which, in any manner, restrained or controlled their action in the premises, or which could have authorized or excused them for postponing the performance of the said functions bej'ond the times fixed in the law itself, to await the determination of the claim asserted by him and denied by themselves.

In considering whether the judgment appealed from shall be affirmed or reversed, we are immediately confronted with the practical question as to how the peremptory mandamus ordered by said judgment shall be executed.

“ It is a fundamental principle of the law of mandamus,” says Mr. High, “ that the writ will never be granted in cases where, if issued, it would prove unavailing. -And wherever it is apparent to the Court that the object sought is impossible of attainment, either through want of power on the part of the persons against whom it is invoked, or for other sufficient causes, the Court will refuse to interfere.” High’s Extraordinary Rem. § 14, and authorities there cited.

The mandamus orders the Respondents to provide and set apart from the revenues of 1881, the sum of $6,125, to meet and pay the semiannual interest to fall due on the bonds hold by Relator,” etc.

It is apparent that it can be executed in only one of two ways, viz :

1st. By taking the amount from the revenues already raised, and the whole of which have already been appropriated to other purposes; or

2d. By levying an additional tax, for the -purpose of raising the additional revenue needed to meet Relator’s demand.

As to the first method: It is not established that there are, or will be, any revenues of 1881 in excess of the appropriations made in the budget.

The law of 1879 is absolute, that appropriations made in the budget for any particular purpose, shall not be diverted from that object for any cause or reason whatsoever, * * but shall remain and be kept sacred to the object of the appropriation.” We are at a loss to discover where we are to find authority to compel the Respondents to violate this plain mandate of the law. This Act is no novelty in legislation. A similar provision is found in Section 124 of Act 164 of 1856, in force at the date of Relator’s contract, and his case would not be different if that Act remained in force.

However clear may have been Relator’s right to have had an appropriation made for his demand, and however clear the duty of Respondents to have made it, the fact remains that the appropriation was not made. This fact alone would not, perhaps, have been sufficient to defeat his right by mandamus, to compel the city authorities to do, out of season, that which, after proper demand a.nd putting in default, they had failed to do in season. But it is supplemented by the additional fact, that the entire revenues have been actually appropriated to other purposes, and that the law forbids absolutely the diversion of the revenues from those purposes.

Supposing, for the sake of argument, that Relator should have the right, in some legal proceeding, to go behind the law and to assert a preference on the revenues over some/or all of the appropriations, and to claim the. annulment or reduction of some or all of them, in order that his claim might be paid — could such a right bo asserted in a mandamus proceeding ? An infinite number of objections to such an idea immediately suggest themselves, chief amongst which is the fact that third persons have acquired rights and claims in and upon the several appropriations, of which they cannot be divested in a mandamus proceeding to which they are not parties.

Mr. High only enunciates a self-evident proposition when he says that courts will refuse to interfere hy mandamus, " especially when it is apparent that the interests of third parties, not before the court, are involved.” High on Ex. Rem. § 39.

How should Respondents execute the mandamus herein, if maintained 9 What appropriation shall they annul or reduce, in order to provide for Relator’s demand 9 The mandamus does not specify. Suplióse they should decide, for example, to provide for it out of the appropriation made for the payment of "judgments.” Would not the judgment creditors entitled to the benefit of that appropriation have the right to enjoin them from so doing 9 If, on the other hand, they should determine to reduce all the appropriations rateably, that would only expose them to the same assaults by a multitude, instead of by a few interested parties. If it be said that they may provide for it out of appropriations for city expenses, the reply is, first, that they are not ordered so to do; and, under the law, appropriations for these purposes are as inviolable as any others; secondly, that, no doubt, upon these funds as well as others, employees have acquired rights; thirdly, that these appropriations may be essential to the alimony or support of the City.

We are not to be influenced by the fact, that the provision sought to be enforced here is for only $6,000. It might as well have been for $600,000, the allowance of which might completely paralyze the functions of the City government.

We are not concerned, here, with the question of the inadequacy of other legal remedies for the enforcement of Relator’s rights. That is a reason for the exercise of the remedy of mandamus, when that remedy is otherwise adequate and appropriate. But we hold that, in such a matter as that now under discussion, mandamus is not, under any circumstances, an adequate, appropriate, or even legal remedy, and we wish it distinctly understood that we decide nothing else.

II.

Can the mandamus be executed by levying an additional tax for the purpose of providing for Relator’s demand 9

We are dispensed from the discussion of the question of power or duty on the part of the Respondents to levy any tax beyond that already levied, by the following distinct admissions in the brief of Relator’s counsel, which are sustained by the record, and which we quote:

“ Relator does not ask the levy of any tax, either directly or indirectly, nor does he claim that the levy of a taxis required and necessary to satisfy his demand. Not a word can he found in his petition or its prayer to the offect that ho asks, either directly or indirectly, the levy of any tax whatever, as a condition of the City’s contract with him.”

In presence of the limitation imposed by ArticleJJOh of the Constitution, it is clear that the City authorities have no right, of their own motion, to exceed that limitation.

Tho question whether the limitation can be enforced against the rights of contract creditors is a judicial question. When such a question has been once determined by tho Courts in favor of a particular class of contract creditors, thoy must obey the judicial mandate, and respect thereafter the rights of such creditors. But, in absence of such judiciul determination, they have no power to exceed the limit imposed upon them by the Constitution.

It being conceded that tho mandamus herein, does not compel or require them to levy a tax in excess of that already levied by them, which exceeds the Constitutional limitation, they have no right to do so, and there is an end of this question in the present case.

It is, therefore, ordered, adjudged and decreed, that the judgment appealed from ho reversed, that the Relator’s demand he rejeetod, that the alternative writ of mandamus issued herein be dissolved, and the peremptory writ denied, at Relator’s costs in both Courts.

On Application por Rehearing.

Levy, J.

An attentive perusal and consideration of the brief of the learned counsel of Relator, lias tailed to satisfy us that there is any error in the decisions already made by us in these cases. Tlie case of DeLeon vs. City, this day decided, is differentiated from these in the nature of tho demand, and we. therein repeat tho reasons which to our minds are conclusive agaiust Relator’s demand, so strenuously urged in liis application for a rehearing.

A rehearing is, therefore, refused.