City of Cleveland, Tenn. v. United States

• Decision Date: 08 October 1901
• Docket Number: 934.
• Citation: 111 F. 341
• Parties: CITY OF CLEVELAND, TENN., et al., v. UNITED STATES.
• Court: U.S. Court of Appeals — Sixth Circuit

111 F. 341

CITY OF CLEVELAND, TENN., et al., v. UNITED STATES.

No. 934.

United States Court of Appeals, Sixth Circuit.

October 8, 1901

Pritchard & Sizer, for plaintiffs in error.

Brown &amp Spurlock, for the United States.

In 1895 the plaintiff in error contracted for a supply of water for public uses, and for the lighting of its streets by electricity. The tax budget for that year included a tax of 22 cents on each $100 of assessable values for the purpose of paying for the water supply so to be provided, and of 18 cents to meet the expenses of public lighting. This tax was collected, and a part applied on the current contracts, but the remainder has never been so used, but remains in the city treasury or unaccounted for. Subsequently the power of the city to so contract was denied, and the liability repudiated. Suit was thereupon brought to recover upon the contract so far as executed, which resulted in a judgment against the city for $9,852.12 and costs. The questions upon which the city resisted payment, and the grounds upon which it was held liable, appear in the opinion of this court, reported under the style of Cunningham v. City of Cleveland, 98 F 657, 661, 39 C.C.A. 311. Judgment final was rendered in 1899. Execution issued, which was returned nulla bona. Thereupon a petition for a writ of mandamus was duly filed in the court below. To the alternative writ a return was made in substance insisting that the city had exhausted its power of taxation for the current year by assessing a tax of 75 cents on the $100, and that the whole of this tax was essential to the maintenance of its governmental functions, and that no surplus would remain after providing for municipal necessities. A demurrer to the return was sustained. The court below was of opinion that the power to create a debt for water and light implied the power to levy a special tax to pay the judgment rendered upon the debt thus created, and that the limit placed upon the city's power of taxation was inapplicable to a judgment upon a debt so made. It was also held that the return was insufficient in not setting out the several purposes for which the city had levied a general tax. From this judgment the city has sued out this writ of error.

Before LURTON, DAY, and SEVERENS, Circuit Judges.

LURTON Circuit Judge, after making the foregoing statement, .

What are the limitations upon the taxing powers of the plaintiff in error? The return shows that a tax aggregating 75 cents had been laid and was in process of collection when the alternative writ issued. The insistence of the city was and is that no authority exists for the levy of any greater rate of tax, and none for any special tax to pay judgments upon claims of the character of that represented by relator. The question as to whether the whole or any part of the fund arising from the tax so already assessed can be appropriated to the payment of the relator's judgment may be postponed, for the first and most important question is whether the limitation set up by the return is applicable in the circumstances of this case. The relator's debt was incurred in 1895, and is for rent of water hydrants and for public street lighting. At that time the city was controlled by the provisions of a special charter granted by the Tennessee legislature April 7, 1893, being an 'Act to amend the charter of Cleveland, Tennessee,' etc. Chapter 184, Acts 1893. The subsequent amendments of that act are of no importance, since they do not enlarge the taxing powers of the corporation, and could not effectually deprive the relator of any remedy which he had under the law existing at the date of the contract. Seibert v. Lewis, 122 U.S. 284, 7 Sup.Ct. 1190, 30 L.Ed. 1161. Legislation which lessens the efficacy of the means for enforcing the obligation of a contract in existence when the obligation was incurred would conflict with the provision of the constitution prohibiting the impairment of the obligation of contracts. Louisiana v. City of New Orleans, 102 U.S. 203, 25 L.Ed. 132; City of Memphis v. Bethel, 3 Tenn. Cas. 205.

It must, at the outset, be conceded that a mandamus cannot be awarded to compel the mayor and council of the plaintiff in error to levy any tax which they were not authorized to levy by the law of the state from which they derive their powers. The office of such a writ is not to create new duties, but to compel the discharge of those already imposed by the municipal law of the state. In other words, the power to levy the tax which the relator seeks to compel must exist in some legislation, or be plainly implied for some local statute or charter. Carroll Co. Sup'rs v. U.S., 18 Wall. 71, 77, 21 L.Ed. 771; U.S. v. Macon Co., 99 U.S. 582, 591, 25 L.Ed. 331. The limitation set up by the city upon its taxing power is found in section 23 of the charter. That section reads as follows:

'That the board of mayor and aldermen shall have power and authority to levy taxes for town and school purposes upon all taxable property, real, personal and mixed, within the limits of the town, not exceeding in the total levy for all general purposes in any year seventy-five cents on one hundred dollars of the total assessment of said property for town and school purposes of that year.'

It is difficult to misread this provision. It is a plain limitation whereby the taxing power for 'town and school purposes' is limited to a 'total levy for all general purposes in any year' to 'seventy-five cents on one hundred dollars of the total assessment' of city property. By the twenty-eighth section of the same act power is granted to levy and collect taxes upon all property and privileges within the limits of the town, and which are taxable by the state. By the fourteenth section of the act the recorder is constituted the assessing officer, and it is made his duty to assess taxes and deliver to the city 'a tax list' which shall be the authority of the city for collecting the taxes of this city. This 'tax list' is the document referred to in the last two lines of section 23, above set out, as the 'total assessment of said property for town and school purposes of that year. ' Section 27 is supposed to confer an additional power of taxation. It is as follows:

'That the board of mayor and aldermen may levy a tax, not exceeding fifteen cents on the hundred, upon all property subject to state taxation, and a street tax of two dollars on all male persons between the ages of eighteen and forty-five years of age within the corporate limits of said city for streets, alleys and sidewalks, and a tax not exceeding twenty-five cents on the hundred upon all property subject to state taxation, and a poll tax not exceeding the state or county poll tax on all male persons between the ages of twenty-one and forty-five years of age within said corporation limits, exclusively for common school purposes.'

It will be observed that no language is used indicating that this street and school tax shall be in addition to the 'total levy' authorized by section 23. Schools and streets are within the 'general purposes' covered by section 23, and 'town and school purposes' are specifically mentioned as purposes provided for by the 'total levy' authorized by section 23. We can but conclude that the power conferred by section 27 must be construed as subject to the general limitations of the twenty-third section. Weber v. Traubel, 95 Ill. 427; People v. Lake Erie & W.R. Co., 167 Ill. 283, 47 N.E. 518. The cases of Nashville, C. & St. L.R. Co. v. Franklin Co., 5 Lea, 707, and Same v. Hodges, 7 Lea 663, turned upon the particular terms of the two acts construed. The question is one of legislative intention, and we find no difficulty in reaching the conclusion that the street and school tax authorized by section 27 was not intended as a tax in addition to the 'total levy' authorized by section 23, but as subject to the general limitation of that section.

But it is insisted that express power was given to the city to contract for water and lights for public purposes, and that therefore the city has the power by implication to levy a tax to meet such contract. Authority to levy a tax to pay debts whose creation is authorized by law may be implied when no mode for their payment is prescribed, and there is no limitation upon the power of taxation which repels the presumption. This rule was thus stated in Citizens' Savings & Loan Ass'n v. City of Topeka, 20 Wall. 660, 22 L.Ed. 460: 'It is to be inferred, when the legislature of a state authorizes a county or city to contract a debt by bond, it intends to authorize it to levy such taxes as are necessary to pay the debt, unless there is in the act itself, or in some general statute, a limitation upon the power of taxation which repels such an inference.'

In U.S. v. City of New Orleans, 98 U.S. 381, 393, 25 L.Ed. 225, 226, it was held that authority to issue bonds to pay for stock subscribed in a railroad implied power to levy a tax to pay the interest and principal of the bonds so authorized. Said the court in the case cited:

'The authorization without providing the means for such expenditures would be an idle and futile proceeding. ' 'Their authorization therefore implies and carries with it the power to adopt the ordinary means employed by such bodies to raise money for their execution, unless such funds are otherwise provided. And the ordinary means in such cases is taxation. A municipality without the power of taxation would be a body without life, incapable of acting, and serving no useful purpose.'

The principle is an old and familiar one, and has been applied in a variety of instances. Thus, where a thing is granted, such as an estate or franchise, there passes by necessary implication a right to those incidents...