City of New Orleans v. United States

• Decision Date: 07 December 1891
• Parties: MAYOR, ETC., OF CITY OF NEW ORLEANS v. UNITED STATES ex rel. STEWART.
• Court: U.S. Court of Appeals — Fifth Circuit

49 F. 40

MAYOR, ETC., OF CITY OF NEW ORLEANS v. UNITED STATES ex rel. STEWART.

United States Court of Appeals, Fifth Circuit.

December 7, 1891

Francis B. Lee, for plaintiffs in error.

Chas Louque, for the relator.

STATEMENT BY LOCKE, DISTRICT JUDGE.

This was a petition by C. H. Stewart, the relator, filed December 31, 1890, in the circuit court of the United States for the district of Louisiana, for a writ of mandamus to compel the mayor and council of the city of New Orleans to put upon the budget and appropriate money for the payment of a judgment for $2,484.92, which had been recovered against the city of New Orleans in said circuit court in June, 1888, and filed and registered in the office of the comptroller of the city of New Orleans, for payment according to the provisions of the act of March 17, 1870 being Act No. 5, session of 1870. The writ was granted, and from this judgment the case is brought to this court.

The original petition in the suit in which the judgment was obtained shows that the suit was founded upon certificates issued by the city of New Orleans for services rendered that city, namely, street wages, during the year 1882, and alleges that they were made payable out of the revenues of said year, but that the city of New Orleans misappropriated the funds which were so set apart, and destroyed the restriction hitherto existing. The record does not show any traverse or plea to said original petition, but the case went to trial by the court, the parties in the cause having waived a jury trial, and, the cause having been submitted upon the issues of fact as well as law, a final judgment was rendered thereon, which was made general and unrestricted. In the return to the alternative writ of mandamus, the judgment was admitted, but it was urged in defense that it was not a liability of the kind contemplated by the act of 1870; ^[1] that by Act No. 30 of 1877 the obligations contracted during any particular year are confined to the revenues of that year; that unless such revenues pay the claims, it is not an indebtedness of the corporation, and consequently not a liability of the city; and that no liability can be budgeted for out of the regular revenue constituting the alimony of the city, unless there is more thereof than is necessary to carry on the government satisfactorily, and provide for the peace, happiness, health, and comfort of its inhabitants.

Before LOCKE and BRUCE, District Judges.

LOCKE District Judge, (after stating the facts as above.)

The question as to whether the debt for the collection of which a mandamus was prayed was a liability of the city of New Orleans or not has been determined by the judgment. If there could have been any defense made to the action on account of the debt having been contracted for the purposes of the year 1882, and not paid from the revenues of that year, and therefore involving the accumulation of an indebtedness such as was prohibited by the act of 1877, it should have been made at the trial of the cause in the court below. In U.S. v.New Orleans, 98 U.S. 395, the court says:

'In the present case the indebtedness of the city of New Orleans is conclusively established by the judgments recovered. The validity of the bonds upon which they were rendered is not now open to question. Nor is the payment of the judgments restricted to any species of property or revenues, or subject to any conditions. The indebtedness is absolute. If there were any question originally as to a limitation of the means by which the bonds were to be paid, it is cut off from consideration now by the judgments. If a limitation existed, it should have been insisted upon when the suits on the bonds were pending, and continued in the judgments. The fact that none is thus continued is conclusive on this application that none existed.'

Also, Nelson v. Police Jury St. Martin's Parish, 111 U.S. 716, 4 S.Ct. 648.

But it is urged that, although this may be a judgment absolute, yet it may be sufficiently examined, for the purpose of ascertaining if it is such a liability as was entitled to registration under the act of 1870. If we yield to the arguments of counsel so urgently made, and go back of the judgment for that purpose only, we find that the cause of action was on contract for services and supplies for the year 1882; and that the original petition alleges that the funds of that year were misappropriated by the city of New Orleans. Upon these allegations the case was tried, and an absolute judgment given.

The allegations of the petition upon which the judgment was based, in the absence of any further record, are sufficient to show the nature and character of the debt, and the reason why it was not paid from the revenues of that year. There is nothing to show that any provision of the act of 1877 was violated, that any money was appropriated for the year 1882 in excess of its revenues, nor that any warrant or evidence of indebtedness was issued, except against money actually in the treasury. It certainly cannot be contended that the act of 1877 was intended to invalidate a debt which was just and legal when incurred, on account of a misappropriation of funds from which it should have been paid. The reason why the judgment was not made payable from the revenues of the year 1882 is plainly apparent from the allegations of the record that those funds had already been misappropriated. But we consider that the judgment has determined all those questions, and must be accepted as final and conclusive.

In every act in which the budgeting or estimating for the amount of revenue required for the ensuing year has been considered it has been expressly stated, in terms, that the liabilities should be included in the estimates. That the policy of legislation and will of the legislators is against permitting an increase of indebtedness, from which so much financial trouble has come in the past, is distinctly shown. If the liabilities of one year's unpaid bills can be ignored, so can those of another, until the accumulation of a floating indebtedness comes to be regarded as a matter of no importance. In order to prevent this, it appears that the duty of municipal officers has been made plain and distinct in this respect. It has been repeatedly established, by a line of decisions, both in the supreme court of the United States and of this state, that it is the duty of the common council of the city to budget, provide for, and pay its liabilities. Where it has been found that there had been a more extended power of taxation at the time of the contract upon which the indebtedness was founded, it has been ordered that that be resorted to; and, where it has been considered that the revenues of the city were...