City of New Orleans v. Fisher

• Decision Date: 17 January 1899
• Docket Number: 747.
• Citation: 91 F. 574
• Parties: CITY OF NEW ORLEANS v. FISHER et al. [1]
• Court: U.S. Court of Appeals — Fifth Circuit

91 F. 574

CITY OF NEW ORLEANS v. FISHER et al. ^[1]

No. 747.

United States Court of Appeals, Fifth Circuit.

January 17, 1899

This suit was commenced by a bill brought by Mrs. M. M. Fisher joined and authorized by her husband, John Fisher, of Cuba and citizens of the kingdom of Spain, against the city of New Orleans; and in said bill it was alleged that she recovered a judgment in this honorable court against the board of school directors, a corporation created by the laws of the state of Louisiana, and a citizen thereof, in the sum of more than $10,000, as more fully appears by the record of said suit 'that your oratrix obtained two other judgments against the same school board, before the civil district court for the parish of Orleans, amounting in the aggregate to many thousand dollars; that all of said judgments are now final that they are made payable out of the school taxes levied by the city of New Orleans prior to 1879. Your oratrix avers that the school taxes out of which said judgments have been made payable is a trust fund levied by the city of New Orleans, for the purpose of paying the expenses of the public schools of the city of New Orleans. (1) That the city of New Orleans has failed to collect the said taxes punctually, and that it was through her fault and negligence that the same remains uncollected, and, by reason of her neglect, she has become liable for the amount of taxes yet remaining uncollected. (2) Your oratrix further complains and says that said taxes, under the law, carried interest at the rate of ten per cent, per annum, and that the city of New Orleans has never paid to the school board any of the interest due on said taxes, but she has misapplied and diverted the same to other, unlawful, uses. (3) Your oratrix further avers that the school board created the obligation against said school taxes, by virtue of contracts which were legally entered into, and your oratrix was protected by the constitution of the United States from any impairment of her contract; that, in violation of this constitutional right, the state of Louisiana passed Act. No. 82 of 1884, which directed that the property of delinquent taxpayers should be sold for state taxes, and she caused the city taxes, including the school taxes, to be canceled; that she was thus guilty-- First, as a delinquent trustee, for not having enforced the collection of the said tax, and second, for having failed to protect the interest of your oratrix in said state tax sale; that the cancellations thus made amount to many thousands of dollars. (4) That the said city of New Orleans, at various times, passed ordinances canceling and annulling the said taxes, and remitting the interest thereon; that your oratrix is unable to give the exact amount of each kind of violations of her obligations by the trustee, and it is absolutely necessary to make the city of New Orleans account for the various amounts which have been lost to your oratrix through the unfaithfulness of said trustee; that the board of school directors to whom the city of New Orleans should account have refused to demand such an account, and will continue so to do, and your oratrix would be left without a remedy; that the fund which the city of New Orleans administers seems now to be insufficient to satisfy the demands of all the creditors who are entitled to be paid out of the same. Your oratrix further avers that her judgments are made directly payable out of the school taxes levied prior to 1879, and she has an equitable lien there against, enforceable before a court of equity. She further avers that, under the law, her certificates, which are merged in her judgments, have been, under the law, received by the city of New Orleans directly in payment of the school taxes, without the intervention of the board of school directors; that, for those reasons, your oratrix brings her bill against the city of New Orleans for an account. Your oratrix brings this bill for herself and all parties similarly situated who are willing to appear and contribute to the costs thereof, they being too numerous to be made parties hereto. May it please your honors to grant unto your oratrix a writ of subpoena to be directed to the city of New Orleans, through its mayor, and to the school board of the city schools of New Orleans, E. B. Kruttschnitt, president, thereby commanding them and each of them, on the first Monday in June, 1896, under the penalties therein to be limited, personally to appear before this Hon. court, then and there full, true, direct, and perfect answer make to all and singular the premises, and further to stand to, abide, perform such further orders, directions, and decree that this Hon. court may make, and to give a full, fair, and perfect account of all the school taxes collected by the city of New Orleans for the years 1873, 1874, 1875, 1876, 1877, and 1878; of all the interest received thereon by said city and never accounted for; of all the taxes which were not collected for want of proper enforcement, and which have since been canceled, both sales made by the state tax collectors and by ordinance adopted by the city council. And your oratrix further prays for all general and particular relief as shall seem agreeable to equity and good conscience.

On June 1, 1896, the city of New Orleans, through its city attorney, entered its appearance. Afterwards, on August 24, 1896, a so-called 'supplemental bill was filed,' wherein it was alleged: 'Your oratrix avers that the city of New Orleans has at various times seized, for the taxes due for the years during which her claim arose, a number of houses and lots, and has purchased the same in satisfaction of the taxes due, and that a resulting trust has, under the law, followed the said property; and your oratrix is entitled to have the value of said real estate realized upon, and the rents accounted for by the city of New Orleans. Your oratrix is unable to give an exact statement of the houses and properties so purchased by the city of New Orleans, but she avers that the same largely exceeds thirty thousand dollars; that said city allows said property to go to waste; and your oratrix avers that she has a statutory lien on all of said property, under the laws of the United States, and that she is entitled to the appointment of a receiver to take charge of same, and realize under order of court; that the acts complained of are contrary to equity, and your oratrix has no rights save before the equitable jurisdiction of this Hon. court. Your oratrix brings this, her bill, for her own benefit, and for all other persons in her same situation. May it please your honors to grant unto your oratrix a receiver to take charge of the property purchased by the city of New Orleans for the taxes 1874 to 1879, inclusive, with such powers as receivers generally possess, and more especially to be mentioned in the order to be filed, and that the city of New Orleans, through the mayor thereof, be ordered to show cause, on such day as this Hon. court may fix, why the prayer herein for receiver should not be granted; and your oratrix prays for general relief.

General demurrers were filed to the original and amended bills, which were afterwards overruled. On March 12, 1897, the city of New Orleans filed answer, substantially as follows: '(1) Defendant admits that oratrix recovered judgments against the board of school directors, a corporation of the state of Louisiana, and a citizen thereof, both in this honorable court and in the civil district court for the parish of Orleans, as is set forth in oratrix's bill of complaint and records annexed thereto and referred to therein. (2) Defendant admits that all of said judgments are now final, and are payable as decreed and provided for in the said judgments. (3) Defendant denies that the school taxes out of which said judgments have been made payable is a trust fund levied by the city of New Orleans for the purpose of paying the expenses of the public schools of said city. (4) Defendant denies that it has ever failed to collect said taxes punctually; and denies that any of the same remain uncollected; and denies that, if any of the same remain uncollected, they so remain by reason of any negligence on the part of this defendant; and denies that defendant is liable at all for the amount of any such taxes yet remaining uncollected, if any such there be. (5) Defendant admits that the city of New Orleans has never paid to the school board any interest which she may have collected on any back taxes; and defendant denies that any such interest, if same has ever been collected, was due to the school board; and defendant denies that she has ever misapplied or diverted to unlawful uses any interest that she may have collected from delinquent taxpayers or back taxes; and defendant avers and shows that, by express provision of law, all interest which she may collect on any back taxes is especially set aside for certain purposes, and cannot by her be used for school purposes or for any other purpose than that commanded by law. (6) Defendant denies that the school board created the obligation against the school taxes set forth in oratrix's bill of complaint, by virtue of any contracts legally entered into, and denies that the oratrix has any right to invoke the protection of the constitution of the United States herein, and denies that the provisions of the same regarding impairment of contracts have been in any manner violated by this defendant. (7) Defendant denies that Act No. 82 of 1884 was passed in violation of any constitutional rights on oratrix in the premises; and defendant declares that whatever was done by the state of Louisiana in passing the said act, if it was done, was within the legislative authority; and the said taxes and...