City of Ft. Madison v. Ft. Madison Water Co.

• Decision Date: 17 November 1904
• Docket Number: 1,884.
• Citation: 134 F. 214
• Parties: CITY OF FT. MADISON et al. v. FT. MADISON WATER CO.
• Court: U.S. Court of Appeals — Eighth Circuit

134 F. 214

CITY OF FT. MADISON et al. v. FT. MADISON WATER CO.

No. 1,884.

United States Court of Appeals, Eighth Circuit.

November 17, 1904

This was an application by the Ft. Madison Water Company for a writ of mandamus to compel the municipal authorities of the City of Ft. Madison, Iowa, to levy and collect a tax sufficient to pay a judgment which the water company had obtained against the city for unpaid hydrant rental. In 1885 the city and one Inman entered into a contract, by means of an ordinance and its acceptance, whereby the former rented certain hydrants, to be installed in connection with a system of waterworks, and obligated itself to pay a specified rental therefor. The water company succeeded to all of the rights of Inman. The contract was fully authorized by the existing laws of Iowa, and the city was empowered to levy and collect annually a special tax to meet the rental agreed to be paid. McClain's Iowa Code, Secs. 641, 643. A statutory limitation upon this power was expressed in these words 'Said tax shall not exceed the sum of five mills on the dollar for any one year, nor shall the same be levied upon the taxable property of said city or town which lies wholly without the limits of the benefit or protection of such works, which limit shall be fixed by the city council or board of trustees each year before making said levy. ' The ordinance which embraced the terms of the contract contained this clause: 'Said hydrant rental to be paid quarterly out of the special tax fund to be levied and collected as other taxes of the city are for this purpose ' The municipal authorities duly designated as the property which was benefited and protected all that lying within a district bounded by an encircling line drawn 1,000 feet beyond the outlying hydrants. This was the district which was, primarily, at least, subject to the annual five mill tax levy to provide a fund to meet the hydrant rental.

In 1897 an act of the Legislature of Iowa was passed which provided 'All property subject to taxation shall be valued at its actual value, which shall be entered opposite each item, and shall be assessed at twenty-five per cent. of such actual value. Such assessed value shall be entered in a separate column opposite each item, and is to be taken and considered as the taxable value of such property, and the value at which it shall be listed and upon which the levy shall be made. ' Section 1305, Code. 1897.

The five mill levy upon 25 per centum of the actual value of the property within the taxing district did not yield sufficient revenue to fully satisfy the obligations of the city. The water company sued the city, and recovered a judgment against it for $4,528.90, being for unpaid rentals for a period of six months ending September 30, 1900.

The water company seeks the payment of this judgment through an enforced levy and collection of taxes. In the prayer of its petition it asks that the municipal authorities be required to levy and collect either a general tax upon all of the property within the taxing district instead of one upon 25 per centum of such value as contemplated by the act of 1897. The Circuit Court rendered judgment for the issuance of a writ commanding the municipal authorities to levy and collect a sufficient tax 'upon all property subject to taxation within the limits of the city of Ft. Madison as shall be necessary to pay off and discharge the judgment. ' The city prosecutes this proceeding in error.

Omar E. Herminghausen (Edwin C. Weber, on the brief), for plaintiffs in error.

James C. Davis, for defendants in error.

Before SANBORN, THAYER, and HOOK, Circuit Judges.

HOOK Circuit Judge (after stating the case as above).

The judgment upon which is predicated the application of the water company for a writ of mandamus was affirmed by this court in City of Ft. Madison v. Ft. Madison Water Co., 114 F. 292, 52 C.C.A. 204. It was there said:

'Whether the water company can by mandamus compel the city to levy either a general or special tax to pay such judgment is a question not raised by this record. The right to a judgment against the city for the debt, and the right to a mandamus to compel the city to levy a tax to pay the judgment, are separate and distinct questions, the latter of which is not now before us, and concerning which it will be distinctly understood we express no opinion.'

The questions then unnecessary to be determined are now presented. Is it the duty of the city, under the contract and under the laws of the state, to levy a tax to pay the judgment? If the duty exists, should the tax be a special one upon the property benefited and protected by the location of the hydrants and embraced within the taxing district established as required by the statute, or a general tax upon all of the property in the city? The city contends that since it has levied a five-mill special tax upon the property within the benefited district, assessed at 25 per centum of its actual value, and has paid the money arising therefrom to the water company, it has exhausted its power in that direction. And while it does not deny that, under the construction of the Iowa law adopted by the Supreme Court of that state (Waterworks Co. v....