« ForrigeFortsett »
of the burdens of complaint here is, that the City, by failing to complete this work of drainage, had left the lands in such condition as to be of practically no value, -it is obvious that if the duty of collection rested primarily and absolutely on the City, it would be difficult to hold it derelict of duty therein, and renders very pertinent the language of the learned circuit court which decided this case in the court below (38 Fed. Rep. 779): "As to failure to collect, when these assessments were handed over to the City to collect they had been assessed 13 years, and for that period had been in the hands of commissioners created expressly for the conduct of the drainage system, and with no other business. If such bureaus had failed to collect for such a period, the inference is strongly forced upon us that the assessinents were substantially uncollectible, especially by a municipal corporation, herself crushed by debts. This is corroborated by the outcome of the mandamus proceedings taken by Van Norden, transferee of the company, and as warrant-holder, to compel the City to issue writs of feri facias against the owners in  1876. To the application for that writ the City answered that the cost of the proceed ing would equal, in her opinion, the amount realized. The result showed her estimate to be nearly correct; for the cost of the 125 writs selected by the warrant-holders, and therefore presumably the best for the purpose, was $34,000, and the amount collected under them only $36,000."
The second contention is that the City was itself a debtor to this drainage fund for nearly $700,000; that it had misappropriated a portion of the fund which it did receive; that as trustee of these assessments it was its duty to collect from itself as debtor to such fund; and that, having failed so to do, it can be properly charged in this proceeding. Considerable discussion took place on the argument, and is also found in the briefs, as to whether streets and other public property can be subjected to a lien for a share of the cost of local improvements, or whether the City stands in such relation to these properties that it can be held liable as owner. It is unnecessary to enter into the merits of this discussion. It may be that streets and other public grounds cannot be sold for nonpayment of assessments for local improvements or other taxes, and it may be that the City is not technically their owner, and yet, at the same time, it may be true that the City, as representing the public, may, under proper proceedings, be charged as debtor for the proportion of the cost of local improvements, which, by the rule established, would fall upon such public property.
Neither do we need to examine the various decisions of the Supreme Court of Louisiana, cited by counsel, or seek to determine what is the law of that State in respect to this matter. For the purposes of this case we assume that the various assessment proceedings, taken in connection with the decision of the supreme court approving the homologation of the tableaux, operated, if not to cast a specific lien upon the streets and other public grounds, at least to charge
upon the City an obligation to the drainage fund for that share of the total cost of the drainage determined by the proportion of the superficial feet of streets and other public grounds to the entire area of the drainage  districts. Upon that assumption the obligation of the City to the drainage fund amounted to several hundred thousand dollars. Assuming that to be true, the contention of appellee is that it has paid into that fund far more than such amount. It is admitted that the City has issued sixteen hundred thousand dollars of its own bonds, taking up thereby a proportionate amount of the drainage warrants. It is not questioned by complainant that if this issue of bonds is to be taken as a payment of its indebtedness to the drainage fund, its obligations to that fund have been fully discharged, and, in addition, that the amount of such contribution in excess of its obligations to that fund more than covers all alleged misappropriation thereof. In other words, the sixteen hundred thousand dollars exeeeds both the obligations of the City to the fund and its alleged misappropriation of any part thereof. But the contention of complainant is that there is nothing in the legislation, the ordinance, the warrants, the bonds or other proceedings which expresses an intent to make this contribution one in discharge of such indebtedness; and that, if it simply gave these bonds to the fund, if other and ultimate corporate benefit was the consideration of their issue, it cannot be affirmed that they were intended or ought to be taken as payment of the original obligation created by the assessment proceedings. The answer to this view is clear and just. It is true that Ordinance Number 814, which provides for the refunding of warrants into city bonds, contains no declaration that such refunding shall be in discharge of the City's obligation, as assessee, to the drainage fund; and that the assessment proceedings contain no receipt or release of the City as assessee, by reason of its issue of bonds. On the face of the record there is no discharge of the City's obligation as assessee; and if we rest upon the letter, it perhaps could not be denied that the City is still a debtor to that fund; but equity looks beyond the form to the substance of things, and these are substantial facts: For thirteen years a drainage system had been in force, in respect to which the City had no duty and no obligation other than as supposed owner and assessee of certain public grounds. The assessment proceedings had proceeded so far that there was a large apparent obligation of the City to the drainage fund. In 1871 an Act of the Legislature was passed, empowering the canal company to complete the work, transferring to a subordinate administrative body of the City all assessments theretofore made, and imposing upon it the further duty of assessment and collection. No provision is made by the Legislative Act for payment for the work done or to be done, otherwise than through the collection of these local assessments. In that emergency the City, by ordinance, says to the contractor named by the State, "Go on with the work, and if the war
rants issued in payment therefor be not satis. | against the rights created by the contribution. fied out of the assessment collections at the If the City, as assessee, owed this fund seven end of the year, they may be exchanged for hundred thousand dollars, it may rightfully city bonds." The work progresses, and war- answer to any demand of the contractor, or rants are issued and exchanged for city bonds, its assignees, that it pay such amount into which have passed into the markets of the the fund, "I have already paid it," and it is world and remain the undisputed obligations no reply to that answer to say, "When you of the City, and to an amount far in excess paid it you did not declare that you paid it of all the assessments charged against the in discharge of that indebtedness." It is City. In other words, the City, as assessee, enough that the City paid it, and paid it owing the drainage fund a certain debt, puts without other consideration than the disinto that fund twice the amount of the debt. charge of its indebtedness. We think this Can any creditors of that fund thereafter contention of the appellant must also fail. equitably charge the City as debtor to that The remaining proposition is that, under fund, because when it put its moneys into the authority of the Act of February 24, that fund it did not in express language say, 1876, the City purchased from the canal com"I put these in in discharge of my indebted-pany and its transferee all rights, franchises ness?" It will be borne in mind that no new and privileges possessed, and all tools, consideration passed from the contractor for machinery and apparatus belonging to said  this contribution of the City to the drainage company or its transferee; that having made fund. No Legislative Act contemplated such purchase, it abandoned the work then direct obligation on the part of the City. incomplete; and that the failure to complete From first to last all meant local improve- the work left large portions of the realty ment, to be paid by special assessments; and within the drainage districts of compara the contractor, all these years, had only tively no value, and thus rendered impossible legislative authority to look to the special the collection of the assessments. One satis. assessments for payment. Its contract was factory answer to this is, that the testimony entered into and performed, with knowledge indicates that if the work contemplated had that the only legal right it had for payment been completed the property would have still consisted in these assessments. Without remained in its valueless condition of swamp further consideration, the City put into this and overflowed lands, without other and fund these bonds, and they were accepted by further work. It would, to say the least, be the contractor. It is doubtless true that the ignoring the significance of a large amount motive of the City was to anticipate the of testimony, to hold that, if the work as collection of the assessments, and to put into contemplated had been finished, the lands the hands of the contractor available assets would have been drained and made valuable; to insure speedy performance of the work, but we do not base our decision upon the but the obligation of the contractor was to results of a completion of the contemplated do the work, and it gave no new obligation, work; we rather place it upon the other  no new consideration, to the City or any other ground-that a municipality which abandons party, for these bonds. To say after this a contemplated and intended work of public contribution of the City to this fund, a con- improvements assumes thereby no obligation tribution without consideration except in to any parties who have invested on the faith discharge of its debt to the fund, that because and expectation of benefit from the comple. it was not expressed that the contribution tion of the work. When a city or State was to be taken as in discharge of the in- contracts with an individual or company for debtedness, a court of equity will permit the the doing of certain work, the right remains contractor or its assignees to treat the contri- to the contracting parties, at any time, to bution as a donation and charge the contrib- abandon that work; no obligation arises to utor as a debtor, would be a mockery of third parties, who become interested in one justice and an insult to equity. It must be way or another in the completion of the borne in mind that a city is not like a pri- work; there is no guaranty that the contractvate individual, with absolute freedom of ing parties may not at any time abandon it; contract and donation. It is simply the or abandoning it, that any contingent, furrepresentative of the citizens and taxpayers, ther and speculative liability will arise in a trustee for their interests; it has no general favor of such third parties. When the City powers of donation, and its contribution to bought out the contractor, it did not assume a fund can never be considered as a donation his debts. A municipality may, with the when there is an indebtedness to that fund to consent of its contractor, at any time abandon be discharged. Indeed, if there were no in- contracted work. Such abandonment does debtedness, the contribution, as a whole, not make the city liable for the debts of the might well be considered as ultra vires, and contractor. So when the city purchases from if, by the issue of negotiable securities to the contractor his property invested and his that fund, an indefeasible obligation had rights existing in the contract, such purchase been assumed by the City, it might in equity creates no assumption of his debts. Having hold that fund as debtor to it for such amount. purchased, it may abandon the work; and Much stress is placed by counsel for appellant creditors of the contractor cannot charge it on this point, and large reliance is placed as debtor on the theory that if the work had on the fact that in these bond transactions been completed their claims would have bethere was no declaration of an intent to ap- come of value. Into every contract between propriate them to the payment of the City's a municipality and an individual there enindebtedness, as assessee, but, as we have ters, as between a contract between two pri-  indicated, such omission does not militate vate individuals, the right of determination
at any time by agreement of parties, and such | Counsel for the appellee contend that it did
It is contended that as the City of New Orleans and the Parish of Jefferson were not by the Acts of 1858, 1859 and 1861 expressly declared liable, or given anything to do with the execution of theworks inquestion, -which works were of the kind usually constructed at the expense of the individuals benefited, -the Legislature did not intend that the City and parish should be numbered among the contributors, and that as a general rule such assessments are not construed to include public property..
We have given this case long consideration.
The decree will be affirmed.
The conclusions above stated compel an affirmance of the judgment in the case between the same parties numbered 459, and by stipulation cases numbered 41 and 460 are to be controlled by this decision, and the same orders will therefore be entered in them.
Mr. Justice Brown did not hear the arguments in these cases, and takes no part in their decision.
Mr. Justice Harlan, dissenting:
The Chief Justice, Mr. Justice Lamar and myself are unable to assent to the opinion of the  court in this cause, and I will state as briefly as possible the view we take of the three controlling questions involved: Whether the City became debtor to the drainage fund for the assessments on the streets and other public places; whether it is liable as trustee for the individual assessments uncollected, and whether its debt and liability, if any, have been discharged either directly by payment or indirectly by an equitable set-off.
Did the City of New Orleans become debtor to the drainage fund for the assessments upon the streets, squares and other públic areas?
The questions raised on this proposition involve the powers, capacities and liabilities of the City of New Orleans, a municipal corporation of the State of Louisiana, and consequently a part of its governmental machinquestions of the legislative power are being examined. And furthermore, the conclusions of the Supreme Court of Louisiana on those questions, even if they are different from the usual holdings (and we do not mean to imply that they are), should have great, if not controlling, weight with this court. It seems to us that this point has been settled by that tribunal. The case at bar does not present the first instance in the history of New Orleans of the experiment of drainage based on area taxation. In the year 1835 a company was incorporated for that purpose, in which the City was a stockholder. The company taxed every foot of land, including streets, etc.
Litigation ensued. The point of liability was directly raised and distinctly decided. The supreme court sustained the tax on the [363 streets, and said: "The large proportion of the expenses by which this burden is thrown upon the City for these streets meets, in some measure, that equity which has been urged upon our consideration, that as the work has been undertaken for the public good, the public ought to bear the charge of it notwithstanding the benefit to the owner of the soil." Re New Orleans Draining Co. 11 La. Ann. 343.
Indeed, what could be more just than that a local assessment, directly beneficial to all, should, in some form and to some extent, at least, be provided for by a general contribution? Why should the cost of it be defrayed by one species of property alone? And how obtain that contribution more simply than by an assessment on the public property, although such assessment may not be enforcible by a sale, and must be otherwise provided for?
The decision above quoted was made in the year 1856. Two years later the first of the Statutes now under consideration, that of 1858, was passed. It is hardly conceivable that the Legislature which passed that Act were ignorant of the decision of 1856, or of the construction placed upon the Statute of 1835. Or that, knowing it, they still intended to produce a different result in the Act of 1858, not by adopting different, but by reproducing almost the identical, terms. The latter Statute is substantially, indeed, almost literally, a reproduction of the former; and that former
PEAKE V. CITY OF NEW ORLEANS.
Statute had just been construed by the su- | formity to the Act of 1858, to be collected in
In the case of Marquez v. New Orleans, 13 La. Ann. 319, the court held that the city as the owner of the middle ground, or public promenade, running along the centre of Claiborne Street, was liable for one half of the cost of improving that street, and in the case of cross streets, was liable for the whole cost, since as to these parts there were no abutting owners. The city was treated, and the case decided, exactly as if it were an individual proprietor.
The Act of 1861 provided that copies of the assessments made as above should be filed in certain designated courts, and, after notice, approved and homologated, and that they should then constitute judgments against the property assessed and the owners thereof, on which executions might issue as on judgments rendered in the ordinary mode, and that ten So also in the cases of Correjolles v. Succes- per cent be added to pay counsel fees and cost. Under these Statutes the boards organized, sion of Foucher, 26 La. Ann. 362, and of Barber Asphalt Pav. Co. v. Gogreve, 41 La. made the assessments, caused some of them Until 1869 Ann. 251, a question arose in respect to the to be homologated, collected a portion of the  ownership by the city of the public places, money and did some of the work. and the same conclusion was reached. How they continued to exist and to be more or less these cases may be reconciled with that of active in discharging their duties. The sysXiques v. Bujac, 7 La. Ann. 503, cited by the tem, however, did not prove satisfactory counsel for appellee to the point that public by reason of the absence of responsibility places are not held in fee, and that the term and of unity of action on the part of the "title" is not applicable to them, or whether several boards. The Act of 1869, therefore, they overrule it and all similar questions, are consolidated the districts, abolished the immaterial inquiries. The court, in the four boards and appointed a commissioner, who cases cited, held the city to be a proprietor, was to succeed to their property, collect the in the contemplation of the laws providing assessments and levy and collect others on for local assessments, and in the absence of such parts of the district as were not included any express statutory direction on that point; in the tableaux turned over to him. The comWe missioner, however, was not to do the work. and such is the exact question here. therefore consider that question settled; es- That was to be done by a company, which pecially when considered in connection with was to receive all the collections in return the fact that these assessments have been re- for certain work. By the Act of 1871 an entirely new scheme duced to judgments and confirmed by courts of competent jurisdiction, the validity of was devised. The Mississippi and Mexican which as well as the regularity of the assess- Gulf Ship Canal Company was authorized to ments have been recognized and approved by do the work needed; the city board of adminthe Supreme Court of Louisiana. State v.istrators was empowered to locate the canals New Orleans, 27 La. Ann. 497.
We now advert to the claim of the appel-
The Act of 1853 established the first, second
The Act of 1859 authorized the boards to borrow $350,000 for each district and to issue bonds therefor, and directed the boards, on issuing bonds, to make assessments in con
and levees, and required to build and run the
Such were the circumstances under which the City became the administrator and trustee
of this important interest and fund; and such | Third, the Statutes also provided, as has been
What, now, were the assets committed to her administration, and for which there must manifestly be some sort of an account? They
1. A balance uncollected of a
levy made in the first dis-
4. Ditto in the fourth district..
Total amount charge-
seen, that personal executions should be is-
(2) By a claim that the decision of the
-Leaving due on account
In December, 1878, after having failed to
of warrants were issued, rot unused. By