29 F. 742 | U.S. Cir. Ct. | 1887
Following a public policy, reviewed in its application to the city of Memphis in Meriwether v. Garrett, 102 U. S. 472, the legislature of Tennessee, in 1879, inaugurated a plan of relief for insolvent municipal corporations, whereby it was expected they could escapo the payment of their debts, unless the creditors would accept the “ settlements ” tendered them under Lhe provisions of the legislation. The general plan was to repeal the charters, so that there should be no officials or agencies liable to judicial compulsion by mandamus; then to supply other agencies of local government, invested with all the powers of the old municipalities, except the taxing power, which was not only with
Under this legislation the supreme court of Tennessee has held that, by operation of the constitution of the United States, forbidding a state to pass laws impairing the obligation of contracts, these new “taxing districts” are simply the successors of the old corporations, so far as relates to the obligation to pay the indebtedness existing at the time of the repeal of the charters, and that creditors may proceed against them, as such successors, the obligation resting upon the inhabitants of'the particular territory. O’Connor v. Memphis, 6 Lea, 730, 738, 739; Luchrman v. Taxing Dist., 2 Lea, 425. The same doctrine is affirmed by the supreme court of the United States in Mobile v. Watson, 116 U. S. 289; S. C. 6 Sup. Ct. Rep. 398.
We have just held in Loudon v. Taxing Dist., (no opinion,) the circuit and district judges on the bench, upon considerations entirely satisfactory to us, that it is the logical result of that principle, if it be not distinctly .decided in the last-cited case, that any power of taxation, provided as'a means of paying their debts, heretofore granted to the original municipalities, devolves as readily as the obligation to pay them, and by like operation of the federal constitution, upon those successors, notwithstanding the attempted statutory prohibition. That power was a grant to the inhabitants of the particular municipal territory, and not to the designated officials through whose agency it was exercised; and those inhabitants may, and must, exercise the power, so far as the old creditors are concerned, through any new agencies existing by law, and adapted to the work of levying and collecting taxes. As evidence of that adaptation, it may be remarked that the “taxing districts” are especially authorized to exercise all the essential powers of taxation to pay the new bonds, if the legislature neglects that duty; and it is particularly worthy of notice, in view of the argument made at the bar that a given agency of the municipal government must be designated and especially clothed by statute with the power to levy and collect taxes, before the general power, devolved as above mentioned, can be exercised, that by the twelfth section of this very act of 1883 the power is not so conferred upon any designated agency of the new municipal government, but only upon “every municipal cor
Nor is there any practical difficulty in the way. The former method of having the municipalities make separate assessments, and providing independent agencies for the collection of municipal taxes, has been long since abolished by general law. Now the state officials make, through the agency of the county courts, one general assessment, upon which all taxes are levied and collected. This is placed in the hands of the county clerk, and it is required “that cities and incorporated towns shall certify the rate of taxation levied by them to the clerk of the county court,” and he extends them upon one tax-book, in appropriately designated columns, etc. Acts 1868, c. 102, § 2, p. 247; Acts 1875, c. 92, § 63, p. 159; Acts 1877, c. 73, § 6, p. 96; Id. § 8, p. 97; Acts 1881, c. 171, § 42, p. 255; Acts 1883, c. 105, § 42, p. 115.
Here, then, is adequate and complete machinery, provided by general law, for all municipal corporations possessing the general power of taxation, whereby they may effectually exercise it; and, given the general grant to a certain body of people, it is a mistake to suppose that they need to have a statutory appointment of named officials to cxercise.it. Those appointed for the general purposes of the local government of that body of inhabitants may exorcise the power, as they do all governmental powers of that local character.
It is only necessary, then, that we require the officials of the new government to certify to the county court clerk that rate which the judgment itself shows is needed to satisfy it, upon the basis of an assessment already at band; that the county court clerk extend that rate upon the tax-hooks; and that the other officials collect the tax so ascertained to be due from each tax-payer. It is a very simple process, and is the inevi
But certain special defenses are made in these causes that now require our attention. The legislature repealed the defendant’s charter in 1879, the judgments here involved being at that time unsatisfied in this court. Acts 1879, c. 27, p. 41. In 1881 the formation of “taxing districts of the second class” was authorized, and under that act such a “taxing district” was organized for Brownsville, in 1883. Acts 1881, c. 127, p. 174. By these two acts “commissioners” were substituted for the formerly existing “mayor and aldermen,” with all the usual authority, legislative, executive, and judicial, except the power to levy taxes, which was prohibited. But the act of 1879 especially enacted that nothing contained in it should impair the obligation of then existing contracts, and the act of 1881 “hereby levied” a tax of one dollar per hundred, one-half of which was to be applied to the current expenses, and the other to the old debts. Specific power was also given to one of the “commissioners,” called the “secretary and financial agent,” to assess and collect this tax. The general act of 1883, already noticed, relating to all tax
A question was made at the bar whether this last act of the extra session could bo made to fall within the terms of tire governor’s call for an extra session, as otherwise it would be unconstitutional. Const. Tenn. 1870, art. 8, § 9. Wo think it does. It was not the intention to require the governor to define with precision, as to details, the subjects of legislation, but only in a general way, by his call, to confine the business to particular subjects. Mitchell v. Turnpike Co., 3 Humph. 455. Too great latitude of construction might, undoubtedly, abrogate the restriction of the constitution, but, on the other hand, a too rigid require-' menfc in this regard would disastrously embarrass the executive and the legislature; since the former could never, with accuracy, foretell what the legislative mind would adopt as pertinent to the general subject, and therefore could not specifically define the provisions, or even the special character, of the forthcoming legislation, while the latter could not always, if ever,' determine with accuracy what might or might not be of too remote affinity with tbe call. Besides, it would be conferring on the governor legislative powers never contemplated by the constitution, to permit him to restrict the legislature as to the details or character of its enactments. We think, therefore, notwithstanding the discrepancy between the call for legislation “to enable taxing districts to compromise their old debts,” and legislation repealing former grants of power to levy taxes to pay them, that the act is not, in this regard, unconstitutional. The legislature and the governor might properly consider this repeal as a necessary means of reaching a “compromise.” Acts Extra Sess. 1885, p. 7, where the call is printed; Id. c. 10, p. 75, where the act is printed.
The next question arises upon the defendant’s objection that these judgments have not been revived by scire facias against the now corporation. We do not think this necessary. By section 15 of the act of 1881 the “taxing districts established under this act shall bo known by the name of the town or city at the time the corporation became extinct.” So there was no change at all, even of the corporate name, except from “town” or “city” to “taxing district” of Brownsville; and that section further provides that “all suits by or against said district shall be brought by or against the board of commissioners of the taxing district of
It is conceded at the bar that a mandamus against designated officials operates, without scire facias or other revivor, against their successors in office, and that a change oí personnel is immaterial; but it is urged that here there has been an extinction of the corporate defendant to the judgment, and that it is as if an individual defendant should die, when there must be a revivor against his administrator or other successor. This court has general power to issue the writ of scire facias, when applicable to its procedure, and the acts of congress provide against the abatement of pending suits by the death of parties; but wc are not aware of any federal statute regulating the revivor of judgments, unless the process acts, giving the same remedies of execution as are known to the state laws, may be said to require us to follow the state practice in that regard. Rev. St. §§ 716, 916, 955, 956. But we do not find that the state statutes contain -any special provisions different from the usual common-law procedure on this subject. General provision is made for the use of the scire facias to revive judgments upon the death of parties, (Thomp. & S. Code Tenn. §§ 2987, 2988; M. & V. Code Tenn. 3701-3704;) and against the abatement of all actions, which may be revived by scire facias or upon mere motion, according to circumstances, (Thomp. & S. Code Tenn. §§ 2845-2859; M. & V. Code Tenn. 3559-3570.) Among these provisions is one that, if the “ decedent” has parted with his interest pending the suit, it may be revived against “ his successor in interest,” instead of the representative or heir.
For the obvious reason that a corporation is supposed to be substantially immortal, and that a mere change in the personnel of its management does not require any notice in legal proceedings against it, none of these statutes, state or federal, make any provision for the revivor of suits against “extinct” corporations, except that where the state proceeds to dissolve the corporation, a decree of dissolution shall not extinguish its debts, but the court appoints a receiver of its property to pay the debts; and, if dissolved for any cause, they shall continue to exist for five years for the purpose of prosecuting and defending suits against them. Thomp. & S. Code Tenn. §§ 1493, 3426; M. & V. Code Tenn. 1720, 4163. These provisions of the Code relate to private corporations, and are not applicable, perhaps, except as analogies, to public municipal corporations; but this court had occasion to consider them in relation to an extinct railroad corporation in Kelley v. Mississippi Cent. R. Co., 1 Fed. Rep. 564, S. C. 2 Flip. 581, and there the somewhat false and misleading analogy to the death of individual suitors is suggested. It applies with greater force here, and comes of pressing too far the doctrine that a corporation, either private or municipal, has an existence independent of the persons who compose it. The “law provides heirs, executors, or administrators for dead persons; but an extinct corporation must be represented by the individuals who originally composed it. ” Id.
Now, here the population of the town of Brownsville, and all its accretions of individuals, from whatever source, constituted the munici
Hence we see that a revivor by scire facias is only required where new parties are to be charged with a liability. The reasoning of the above cases, ill ere applied to such corporations as banks, etc., is more applicable to a mere change of municipal authority. It is true, no doubt, that these commissioners should he entitled to show any defense they might have to the judgments that could he pleaded to a scire facias; but because defenses may arise which might he available on a scire facias does not entitle a party to that writ. He may find it necessary to make the defense otherwise, for he is not entitled to a scire facias, except when the conditions of the case require that writ to issue, according to the practice. But a suggestion, as shown by the praotico books, is traversable, and, if the facts upon which it is made be not true, it cannot be entered of record. Moreover, owing to the peculiar nature of a mandamus, it affords in itself ample opportunity to these commissioners to make any defense, by a return to the alternative writ or rule to show cause, that they can make to the scire facias. The court will not issue the writ peremptorily, if there be any reason, sufficient in fact or in law, against
This is not, however, very important, as we hold, that a bare suggestion, which may be now made of record, is all that is required. This suggestion need only state that, by subsequent legislation, the suable style of the defendant corporation has been changed from that which appears in the face of the judgment to that required by the new legislation. If this be done, the record is entirely consistent with any writ that may issue on the judgment, whether fieri facias or mandamus, and this is all that the practice seeks to accomplish in such cases. It is the same party, by a different name, sought to be charged, namely, the inhabitants of Brownsville, in their corporate capacity; not any new party. Hence no scire facias is necessary. And, since a mandamus may issue against individuals who may not be parties to the judgment, conformity to the judgment in names is not always either possible or necessary. Manifestly, we get those parties from the preliminary petition or affidavit upon which the mandamus is to be founded, and they niay be the names of any persons whatever who are charged with the duty sought to be enforced. When they answer as individuals, they can set up any defense, either in their own right or as the representatives of the defendant corporation.
Although there was a scire facias in O’Connor v. Memphis, supra, the court clearly recognizes that a suggestion on the record of the change of name may be the proper form of proceeding. 6 Lea, 731.
If Greeley v. Smith, 3 Story, 657; Mumma v. Potomac Co., 8 Pet. 281; The Sapphire, 11 Wall. 164; and Thompson v. U. S., 103 U. S. 480,— have any application, they support, and do not conflict with, the ruling we make.
Whether the inhabitants of the “city” of Brownsville, who in their corporate capacity contracted these debts, with a power conferred of paying them by local taxation, and whom the law still compels to pay them by the exercise of that power, were a different corporation from that same body of inhabitants who are now incorporated as the “taxing district” of Brownsville, or whether the old corporation be “dead,” and a new one “arisen” as its “successor,” or whether both be the same, under different names, are questions pertaining more to the metaphysical doctrine of “psychopannychism,” if that can be adapted to corporations, which are said “to have no soul,” than to the practical science of legal procedure.
The next defense set up is that one of the judgments is barred by the
“They all rest on the ground that the creditor has been disabled to sue, by a superior power, without any default of his own, and therefore that none of the reasons which induce the enactment of the statutes apply to his case; that, unless the statutes cease to run during the continuance of the supervening disability, lie is deprived of a portion of the time within which the law contemplated he might sue.”
There are other applications of the doctrine quite as familiar, as in cases of delay ponding appeals. Montgomery v. Hernandez, 12 Wheat. 129. 134. Moreover, this proceeding by mandamus is, in its constituent elements and its frame-work, capable of supporting even an equitable defense against the statute. Ang. & A. Corp. (11th Ed.) §§ 715, 721, 729; High, Extr. Rem. (2d Ed.) §§ 14, 457, et seq. The court docs not grant or refuse the writ upon purely legal considerations. If the defendant has any equitable defense against it, he may set it up in his answer to the rule to show cause or alternative writ, and it will authorize the court to refuse the peremptory writ. So, if he sets up a legal defense, and the plaintiff can show an equitable answer to it, we see no reason
The next matter for consideration is the character of relief to be granted to-the plaintiffs; and there are complications in the case which are perplexing, so much so that one of these petitions was originally filed as a bill in equity, but, under the orders of the court, was converted into an application for mandamus, for reasons that are obvious in the record. Under former writs, as to some of these judgments, taxes were levied, partly collected, and paid over. Some of these levies were commingled with other judgments from this and the state courts, one rate being intended to cover all, and now we are asked to compel another levy- for the unpaid balance.
We have repeatedly held in this court that where a levy has been made sufficiently large to cover the judgment, with a reasonable allowance of margin for delinquencies, we would not compel a further levy for inadequacy until all the remedies afforded by law against delinquent tax-payers and their property had been exhausted. Otherwise the burden would be always placed wholly upon the prompt tax-payers, and levies, out of all proportion to the needs of the case, vould be piled up, to go into the general fund, or be never collected. We adhere to this now; but the peculiarities of this case present, we think, an exception, unless the defendant shall, by its return to the writ, present facts that will bring the case within the ordinary ruling. It appears that there is no statutory receiver, as there -was in the Memphis Case, to collect the delinquent taxes of the “extinct” corporation, and it is stated that not even can the old tax-books be found, and the facts concerning the condition of the levies are not known. A receiver ivas authorized by the legislation, and one of the governors of the state appointed one, but, yielding to the hostile pressure of public opinion, and the difficulties of giving bond, he declined to qualify. Subsequent governors have neglected or refused to appoint a receiver, and no provision has been made, in the administration of affairs, for the collection of those levies. Obviously, we cannot compel the governor to appoint a receiver,—or we do not wish, at least, to attempt that,—and this court long since intimated that it would not do so, as it would be nugatory, in all probability. High, Extr. Rem. (2d Ed.) § 14. Nor could we compel a person to accept or qualify as receiver, if appointed. Therefore we think that, for the purposes of this case, the defendant corporation, and the state itself, may be held to have abandoned the levies heretofore made, and the creditors likewise; that it is thus demonstrated that the levies were inadequate to satisfy the judgments; and that the case stands as if it had been shown that the levies had been wholly exhausted, leaving a balance unpaid.
It is next insisted by the plaintiffs that since the legislature, by the act of 1881, levied a tax of one dollar, enacted that one-half of it be
'Now, these revocations of the taxing power under the act of 1885, and the repeal of the legislative levy under the act of 1881, arc not, either of them, affected by the federal constitution; because, being subsequent to the contracts upon which these judgments wore founded, they did not enter into, and become a part of, the remedy. Wherefore they were within the control of the legislature. So that, whether we consider tlic one or the other, they no longer exist as a basis for the coercive payment of these judgments through the operation of a mandamus.
But there is still another reason why we cannot proceed under the act of 1881. It may be doubtful, under the ruling of Lynn v. Polk, 8 Lea, 135, whether the legislature can levy a continuing tax beyond the two years for which it is elected, and whether that is not the utmost limit of its authority, under the slate constitution. But wo need now express no opinion on that point. It is well settled that, whatever be the power of a legislature in that regard, such levies are not favored, nor raised by implications and constructions of the statute. The intention to make a tax continuing or permanent must be clearly manifested by explicit enactment, otherwise the courts favor the principle of periodical levies, whereby the taxation is scrutinized in the constantly recurring assemblies of newly-elected representatives. U. S. v. Wigglesworth, 2 Story, 369; Adams v.
There is no such explicit manifestation of an intention to levy a permanent tax of one dollar, by the act of 1881, as is implied in the application to now enforce it against the taxing district of Brownsville, which was organized after the two years to which the levy would certainly apply-
The general result is that the plaintiffs are left to the same remedy that we applied in the Memphis Case, and they can have a writ only to that extent, unless the defendants, by their answer to the rule, show some better defense than has been suggested by their demurrers to the petition. We need not say, of course, that we cannot enforce any judgments of the state courts, and that as to these the petition will be denied. If the parties cannot agree as to any credits to be entered upon the judgments, that disagreement must be settled before the mandamus can issue, and, if desired, the clerk may, upon a reference, report the facts to the court, and the balances due. Some of these defenses would perhaps be more appropriate in an answer to the rule to show cause; but, on the demurrers to the petition, we take it, the defenses may be presented, and we have thought best to settle the case, so far as can be done, but without prejudice to the defendants to make any defense desired by response to the rule.
I am authorized to say that these were the conclusions reached by the court at the hearing, and that the circuit judge fully concurs in this opinion. Counsel will prepare the necessary orders. So ordered.