City of Wheeling v. John F. Casey Co.

• Decision Date: 06 October 1936
• Docket Number: No. 4052.,4052.
• Citation: 85 F.2d 922
• Parties: CITY OF WHEELING et al. v. JOHN F. CASEY CO.
• Court: U.S. Court of Appeals — Fourth Circuit

85 F.2d 922 (1936)

CITY OF WHEELING et al. v. JOHN F. CASEY CO.

No. 4052.

Circuit Court of Appeals, Fourth Circuit.

October 6, 1936.

Jay T. McCamic, of Wheeling, W. Va. (Charles McCamic, Russell B. Goodwin, and Benjamin L. Rosenbloom, all of Wheeling, W. Va., on the brief), for appellants.

James B. Riley, of Wheeling, W. Va. (T. S. Riley and Robert J. Riley, both of Wheeling, W. Va., on the brief), for appellee.

Before PARKER, NORTHCOTT, and SOPER, Circuit Judges.

NORTHCOTT, Circuit Judge.

This is a suit in equity brought in January, 1936, by the appellee, a Pennsylvania corporation, herein referred to as the plaintiff, against the appellants, citizens of West Virginia, herein referred to as the defendants, in the District Court of the United States for the Northern District of West Virginia. Of the defendants Harry J. Humphrey was manager, Charles F. Schultze was mayor and member of the council, and Benjamin L. Rosenbloom, Russell B. Goodwin, Chester W. McElroy, John J. Mathison, Paul Duffy, E. W. S. Neff, and Dr. M. Gaydosh were members of council of the city of Wheeling, a municipal corporation of the state of West Virginia. The object of this suit was to enjoin the defendants from paying out certain moneys in the hands of the defendant the city of Wheeling. In June, 1932, the plaintiff had secured a judgment for $75,000 against the city of Wheeling in a suit growing out of a contract for the erection of the city's water works. This judgment was affirmed by this court in January, 1935. 74 F.(2d) 794. And certiorari was denied by the Supreme Court in October, 1935. 296 U.S. 593, 56 S.Ct. 106, 80 L.Ed. 420. On November 29, 1935, the plaintiff served defendants with a notice that on the 7th day of December, 1935, it would make application to the District Court of the United States for the Northern District of West Virginia for a writ of mandamus directing the defendants to pay the said judgment, and further praying that if there were not sufficient funds belonging to the city available for such payment, such of the defendants as constituted the tax levying body of the municipality be commanded to lay a special levy in sufficient amount to satisfy said judgment.

For several years the city of Wheeling had been engaged in litigation with the Natural Gas Company of West Virginia, and in August, 1935, there was effected a compromise by reason of which the Gas Company paid to the city the sum of $117,326.86. At the time of the receipt of this sum the city paid from it $43,879.28, attorneys' and engineering fees incurred in the course of the litigation. The remainder of the fund, $73,447.58, was, by an ordinance enacted on the 20th day of August, 1935, set aside as a separate fund that could not be used without the authority of the city council. There had been provided for, in the annual budget for said city, prior to the settlement with the Gas Company, money to pay said attorneys' and engineering fees, and this money so provided for would become available on the collection of the city's taxes for the year 1935-36.

On December 3, 1935, after receiving notice of the application for a mandamus, an ordinance was passed by the city council appropriating the said sum paid by the Gas Company ($117,326.86) for various purposes. This ordinance read, in part, as follows:

"By reason of a recovery by the City of Wheeling of certain advances of tax money in the sum of $117,326.86 for the conduct of litigation in reducing gas rates in the City of Wheeling, and further

"By reason of the fact that the departments of the City of Wheeling, due to the limitation in taxes, have had insufficient sums allotted to them in the said `budget' to carry on their absolutely necessary governmental activities, and further

"By reason of the dire distress and uncertainties which surround the continuance of relief in the County of Ohio and the City of Wheeling, and further

"By reason of the fact that the City of Wheeling has heretofore made commitments for the purchase of materials in excess of $60,000 in order to obtain Public Works Authority Funds from the Federal Government for the repair of its streets and sidewalks in certain sections of the City, so as to provide relief work for the unemployed citizens of Wheeling, the said Council of the City of Wheeling doth now ordain, authorize and direct the expenditure of the said funds in the sums and for the purposes following:"

On December 7, 1935, the mandamus petition was filed in open court and an amendment made thereto. A supplemental petition was also filed by the plaintiff setting forth the receipt of the money from the Gas Company and the passage of the ordinance of December 3, 1935, and asking that the ordinance be ordered rescinded and a part of the unappropriated funds (received from the Gas Company), sufficient to pay plaintiff's judgment, be ordered applied to the satisfaction of same. The defendants filed demurrers to the mandamus petition and to the supplemental petition. A temporary restraining order was issued by the court directing that the fund in question be not expended until the further order of the court.

The respondents in the suit for mandamus gave notice that they would move to dissolve the temporary restraining order on January 24, 1936, and on January 22, 1936, the plaintiff instituted this suit in equity, setting up in the bill the facts with regard to their judgment, charging that the ordinance of December 3, 1935, was passed by the council of the city with the deliberate purpose of defeating the collection of plaintiff's judgment, and praying for a temporary injunction holding matters in status quo, with reference to the fund in question, until the entry of a final order in the mandamus proceeding.

The motion to dissolve the temporary restraining order in the law action, as well as the application for a temporary injunction in this suit, came on to be heard on the 24th day of January, 1936, at which time the defendants filed their answers to the bill and testimony was taken. The matters were further heard on the 29th day of January, 1936, at which time the plaintiff moved for the issuance of a temporary injunction.

At the conclusion of the hearing the court held that the plaintiff was entitled to an injunction, and on January 31, 1936, an order was entered stating certain findings of fact and conclusions of law and enjoining the defendants from using, paying out, or expending any part of the fund in question, up to the amount necessary to satisfy plaintiff's judgment, until the final adjudication of the mandamus proceeding. From this action of the court below this appeal was brought.

Two questions are presented on this appeal: (1) Whether the court below had the power to direct the payment of plaintiff's judgment out of the particular fund received from the Gas Company, and (2) whether the plaintiff had, in its mandamus suit, an adequate remedy at law.

It is well settled that in a proper case an equity suit may be brought in aid of an action for a mandamus, but it is equally well settled that, under our system of government, the executive, legislative, and judicial departments are independent of each other. Courts have invariably refused to invade the province of legislative bodies. While there may be a well grounded suspicion that the city...