Court Opinion

ID: 3556337
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:07:14.011305+00
Date Added: 2024-06-11T14:06:48.792017
License: Public Domain

The great question is as to the true construction of the act authorizing the city of Concord to establish water-works in said city, approved June 30, 1871. By the first section of that act, the city of Concord is authorized to construct, manage, maintain, and own suitable water-works in said city, for the purpose of introducing into and distributing through the more compact parts of said city an adequate supply of water for extinguishing fires and for the use of its citizens, and for other proper uses.
By section 5, "Said city is also authorized and empowered to contract with individuals and corporations for supplying them with water, and to make such contracts and to establish such regulations and tolls for the use of water as may from time to time be deemed proper," c.
By section 6, "Said city is also authorized to borrow such sums of money, on the credit of the city, as may from time to time be deemed advisable, for the purpose of defraying the expense of constructing, maintaining, and operating said water-works, and to issue notes or bonds of the city therefor, * * and also to levy such taxes as may at any time be deemed advisable for the same purpose, or for paying any sums borrowed therefor, as aforesaid; and said city, if it shall so elect, may, at any time before commencing the construction of said water-work establish and fix, by proper boundaries, a water precinct in said city, and including such parts thereof as may be thought proper * *; and all taxes levied, as provided in this section, during the time said water precinct shall exist, shall be levied and assessed upon the taxable inhabitants and property of said precinct, and not on any other part of said city, in the same manner as provided by law for assessing taxes within the gas precinct in said city," c. *Page 381 
The defendants, in their answer, admit that the city, on the fourth day of April, 1874, by its city council, voted to raise the sum of $59,000 to defray the necessary expenses and charges of the city for the ensuing year, and appropriated $7,400 thereof for water for the fire department; and that the intention was and is to pay out all of that sum to the board of water commissioners for water for the fire department of the city, and for no other purpose whatever. And they claim that under the act this may well and legally be done, while the plaintiffs contend that it is a mere evasion — an attempt to do in an indirect way what they are forbidden by the act to do at all.
It is said, in the first place, that by the act the city corporation and not the inhabitants of the water precinct own the water-works; that it is absurd to say the city can contract an obligation to itself for the use of its own property; and that it is no better than a farce to make an appropriation to meet a want that is already supplied, and the expense of which has been already met in the financial arrangements whereby the water-works were constructed and are to be maintained.
This point is met by the defendants with the reply, that although the legal title to the water-works is in the city corporation, still, inasmuch as those works are to be paid for and maintained by taxes levied exclusively upon the taxable inhabitants and property of the water precinct, a trust results in favor of the inhabitants of the precinct, which a court of equity should recognize and enforce; and hence, that there is no legal objection to establishing a rate to be paid by the city for the use of property thus held by it upon an equitable trust. If the case were to turn on this point alone, I might hesitate before deciding against the claims of the city on the sole ground that they cannot contract a legal obligation for the use of their own property. There certainly seems to be force in the suggestion, that although the legal title may be in the city, still the beneficial ownership ought to be regarded as in the inhabitants of the precinct, although the precinct is not a body having such organic or corporate existence that it can either hold property or enter into contracts with respect to its disposition or use. It is not necessary however, to consider this point or to determine whether this somewhat anomalous creature, brought into existence by the act of the legislature and the subsequent action of the city, can be investigated with rights of property, — such as to entitle it as an aggregate body to a standing in a court of equity for the protection of those rights.
The act provides, in terms entirely plain and unequivocal, that, in case a water precinct should be established before commencing the construction of the water-works all taxes levied, as provided in the first part of section 6 of the act — that is, all taxes to defray the expense both of constructing and maintaining the water-works — shall be levied and assessed upon the taxable inhabitants and property of said precinct; — and this, as it seems to me, is the end of the case.
The argument has been pressed upon us with great ability and force, that the construction of this provision contended for by the *Page 382 
plaintiffs would work great injustice to the inhabitants of the precinct, inasmuch as the duty of furnishing water for the use of the fire department of the whole city is one that by law as well as in equity rests upon the whole city; and that to cast this burden entirely upon the precinct so far as regards the wants of that part of the city, and still leave the precinct subject to its proportion of the burden of supplying water for the same use in other parts of the city, is unequal and unjust, — the manifest effect being to relieve one part of the city of its legal burdens by casting them upon another part.
The field of inquiry suggested by this argument is very broad. Let us suppose a case not dissimilar, it is presumed, to the present. A city corporation consists of eight wards, four of which comprise the compact part of the town and the remaining four cover a large amount of territory in the country immediately outside. In the first four wards, a large amount of property in the shape of buildings is concentrated upon a comparatively small area. The buildings are expensive, the liability to fire great, the rates of insurance, consequently, high. In the other wards, which, it may be supposed, have an equal valuation, more or less, the buildings are less expensive, and so widely detached from each other that, as a general rule, the destruction of one by fire does not greatly endanger others. The rates of insurance may be less, in the proportion of 1 to 6 or 8, or more. The rates of insurance furnish some indication of the supposed liability to fire, and the liability to fire would not seem to be all inequitable criterion whereby to determine the proportion which each property-holder ought to bear in providing the means for extinguishing it.
This does not amount to a full answer to the defendants' argument as to inequality, because the fact still remains that the inhabitants of the water precinct must bear the whole burden of furnishing water for the use of the fire department within the precinct, and also their proportional share of the same service for the outlying wards, whatever that may be; but it does show that the inequality is by no means so great as would at first appear, and that a strictly equitable adjustment would involve inquiries of a semi-public or political character quite as appropriate, to say the least, for the legislature as the court. But however that may be, — however the equities might appear to stand, upon a full and careful examination of all the rights and interests, public as well as private, that should be considered in arriving at a just solution of the problem were the whole matter open for our determination here, — I cannot but regard all inquiries of that sort as precluded by the plain terms in which the statute is expressed. The city is authorized to build and maintain water-works, among other things, for extinguishing fires. Then the whole burden is expressly thrown upon the water precinct, and no change is made in the object for which the works may be maintained. They are to be maintained for the purpose of supplying water to extinguish fires in the city, just as much in case a water precinct is established as though it were not.
The legislature and the city undertook to adjust the equities between *Page 383 
the compact and outlying portions of the city in establishing the water precinct, and providing how the works should be maintained; and I think this appropriation of $7,400 from the public funds of the city for water for the fire department was but an indirect way of throwing upon the city a portion of the burden of constructing and maintaining the water-works, which, by the act, is placed upon the precinct; that it was therefore illegal, and cannot be sustained.
The first prayer of the bill is for an injunction restraining the city, its agents, c., from paying out any part of said sum of $7,400 for interest on the water bonds, or for cost of erecting and maintaining the water-works, c.; and I am of opinion that an injunction may and should be granted, according to the prayer of the bill. As to money in its treasury, the city corporation is in the nature of trustee of the inhabitants of the city and must apply it to the purposes for which they were incorporated. This furnishes one ground on which a court of equity may interfere. Further: if without fraud the corporation should misappropriate the trust fund, which by the admissions of the answer they propose to do here, it is not plain what remedy at law the tax-payer would have. Upon one or both these grounds courts of equity, in this state and elsewhere, have generally taken cognizance of cases of this sort, and granted relief by way of injunction to prevent the misapplication by municipal corporations of the corporate funds. Brown v. Marsh, 21 N.H. 81; Barr v. Deniston, 19 N.H. 170; Merrill v. Plainfield, 45 N.H. 126; New London v. Brainard, 22 Conn. 552; — and see Dillon Mun. Corp., sec. 732, et seq., and cases cited in notes.
The second prayer is for an injunction to forbid the collection of the tax against the plaintiffs — Brown, Amsden, Holden, and Tallant — towards raising said sum of $7,400. I am of opinion that this prayer should be denied, for the reason that in case the petitioners suffer damage by the collection of a tax illegally assessed against them, they have, under the circumstances here shown, a plain and adequate remedy at law. The state of authority on this question, in this state, is not very satisfactory. I do not find that it has been considered in but two cases, and those cases, as I understand them, are not to be reconciled.
In Barr v. Deniston, 19 N.H. 170, an injunction seems to have been granted to restrain the collection of a tax illegally assessed against the inhabitants of a school district; while, in the recent case of Savings Bank v. Portsmouth, 52 N.H. 17, it was held that "This court has no jurisdiction by bill in equity to restrain a town, or the collector thereof, from the collection of a tax which is illegally assessed, as the party has a plain and adequate remedy at law."
Barr v. Deniston was not referred to by counsel or the court in Savings Bank v. Portsmouth, and was probably overlooked. The question is not much discussed in either case.
The head note to Brown v. Marsh, 21 N.H. 81, to the effect that the officers of the town were restrained by injunction from collecting a tax which was held to have been illegally assessed, seems to be entirely *Page 384 
unsupported by anything that appears in the case, and contrary to the fact, as shown by the report of the case. The substance of the bill is given, and the prayer was, "that the defendants may be enjoined from paying to the tax-paying polls and greater sum than the interest of the unexpended balance of the surplus revenue, or from allowing to them, in any manner, the sums set against their names respectively, on the list of taxes in the hands of the collector." The order was in these words: "The judgment of the court is, that an injunction issue, according to the prayer of the bill."
This shows that the case is a full authority sustaining the jurisdiction of equity to restrain an illegal appropriation of the public funds by municipal officers, but no authority for the further proposition that the collection of a tax illegally assessed will be restrained at the suit of all individual tax-payer.
So Merrill v. Plainfield, 45 N.H. 126, which has been referred to by the plaintiffs' counsel as an authority in favor of restraining the collection of the tax, does not touch that question at all, but merely holds the same as Brown v. Marsh, — that an injunction will be granted to prevent the payment of money illegally voted by the town.
In this state of our own cases, we are to inquire whether the earlier or the later decision is to be followed.
Judge Cooley, in his late work on Taxation, page 538, says, — "When a tax is assessed as a personal charge against the party taxed, or against his personal property, it is difficult to suggest any ground of equitable jurisdiction. Presumptively, the remedy at law is adequate. If the tax is illegal and the party makes payment, he is entitled to recover back the amount. The case does not differ in this regard from any other case in which a party is compelled to pay an illegal demand: the illegality alone affords no ground for equitable interference, and the proceedings to enforce the tax by distress and sale can give none, as these only constitute an ordinary trespass;" — and he cites a large number of American cases, from eleven different states — among them Savings Bank v. Portsmouth — in support of the rule thus laid down. Judge Dillon says — "The correct view doubtless is, that equity ought not, except for the clearest reasons, to interfere with the speedy and ordinary collection of municipal or other public revenues. If there is no power to levy the tax in question under any circumstances, or if it be assessed upon property not subject to taxation, and the remedy at law is not adequate, a plain case for equitable interposition is made out; but if the power to levy the tax exist, and the property be subject to taxation, mere errors and irregularities should, according to the better considered view, be corrected on certiorari, or other appropriate proceedings, or their effect left to be tested at law: for equity ought not to interfere with the collection of taxes, unless the complainant makes a case coming within some acknowledged head of equity jurisdiction — such as the prevention of a multiplicity of suits, irreparable injury, or where a cloud will be thrown upon his title to real estate." Dillon Mun. Corp., Sec. 737. *Page 385 
With respect to the prevention of multiplicity of suits, Mr. Justice Cooley has the following pertinent observations in the case of Youngblood v. Sexton, 12 Alb. Law J. 266: "If complainants rely upon the jurisdiction of equity to take cognizance of a controversy when thereby a multiplicity of suits may be prevented, the reliance fails, because the principles that govern that jurisdiction have no application to this case. It is sometimes admissible, when many parties are alike affected or threatened by one illegal act, that they shall unite in a suit to restrain it; and this has been done in this state in the case of an illegal assessment of lands. Scoville v. Lansing, 17 Mich. 437. But the cases are very few and very peculiar where this can be permitted, unless each of the complainants has all equitable action on his own behalf. Now, the nature of this case is such, that each of these complainants, if the tax is invalid, has a remedy at law, which is as complete and ample as the law gives in other cases. * * But no other complainant has any joint interest with him in resisting this law. The sum demanded of each is distinct and separate, and it does not concern one of the complainants whether another pays or not. All the joint interest the parties have is a joint interest in a question of law, — just such an interest as might exist in any case where separate demands are made of several persons. Such a common interest there might be if several persons should give several promissory notes on distinct purchases of a worthless article; and such there might have been under the former prohibitory liquor law, had demands been made against several persons for liquors illegally sold to them. We venture to say that it would not be seriously suggested that a common interest in any such question of law, where the legal interests of the parties were wholly distinct, could constitute any ground of equitable jurisdiction, when the several controversies affected by the question were purely legal controversies. Suits do not become of equitable cognizance because of their number merely." In this case, it was held that a court of equity has no jurisdiction to restrain the collection of a personal tax; nor will it assume jurisdiction to prevent a multiplicity of suits, where the parties have, severally, remedies at law.
In Loud v. Charlestown, 99 Mass. 208, the court held that the remedy at law of a person upon whom a tax is illegally assessed by a town or city is plain, adequate, complete, and exclusive, in event of the collection of the tax, and that the court has not jurisdiction in equity to restrain such collection; — see, also, Dodd v. Hartford, 25 Conn. 232, and other cases cited in Cooley on Taxation, ubi supra; also, Hill. on Injunctions 458, and cases cited.
"In the case of Taylor v. Secor, and two other like cases, the supreme court of the United States has just decided — October term, 1875 — the following points:
"1. While this court does not lay down any absolute rule limiting the powers of a court of equity in restraining the collection of taxes, it declares that it is essential that every case be brought within some of the recognized rules of equity jurisdiction, and that neither illegality *Page 386 
nor irregularity in the proceedings, nor error, nor excess in the valuation, nor the hardship nor injustice of the law, provided it be constitutional, nor any grievance which can be remedied by a suit at law, either before or after the payment of the tax, will authorize an injunction against its collection.
"2. This rule is founded on the principle that the levy of taxes is a legislative and not a judicial function; and the court can neither make nor cause to be made a new assessment, if the one complained of be erroneous; — and, also, in the necessity that the taxes — without which the state cannot exist — should be regularly and promptly paid into its treasury."* 13 Alb. Law J. 331.
These authorities, and the reasons upon which they rest, are quite conclusive, to my mind, that the rule, as laid down in Savings Bank v. Portsmouth, is the correct one, and that we should follow it in the present case. It is not necessary to go any further than to hold that upon the facts appearing in the present case the plaintiffs are not entitled to an injunction restraining the collection of the tax, for the reason that, in case the assessment of which they complain turns out to be illegal, the law furnishes them a plain and ample remedy for the mischief they apprehend.
CUSHING, C. J., concurred.
Decree accordingly.
* "These reasons, and the weight of authority by which they are supported, must always incline the court to require a clear case for equitable relief before it will sustain an injunction against the collection of a tax which is part of the revenue of a state. Whether the same rigid rule should be applied to taxes levied by counties, towns, and cities, we need not here inquire; but there is both reason and authority for holding that the control of the courts, in the exercise of power over private property by these corporations, is more necessary, and is unaccompanied by many of the evils that belong to it when affecting the revenue of the state." Taylor v. Secor — MILLER, J. REPORTER.