Commissioners of Sinking Fund of City of Philadelphia v. City of Philadelphia
| Citation | 324 Pa. 129,188 A. 314 |
| Decision Date | 19 November 1936 |
| Docket Number | 420 |
| Parties | Sinking Fund Commissioners of Philadelphia v. Philadelphia et al., Appellants |
| Court | United States State Supreme Court of Pennsylvania |
Argued September 29, 1936
Petition of City of Philadelphia et al. for modification of judgment, appeal, No. 420, Jan. T., 1935, from order of C.P No. 4, Phila. Co., Dec. T., 1934, No. 8876, in case of the Commissioners of the Sinking Fund of the City of Philadelphia v. City of Philadelphia et al. Order entered directing city to pay $1,000,000 on the judgment on February 1, 1937 further disposition of the cause to be temporarily withheld.
We accordingly make the following order: The City will pay $1,000,000 on the judgment on February 1st, 1937; further disposition of the cause to be temporarily withheld.
Joseph Sharfsin, City Solicitor, with him John P. Berry and Ernest Lowengrund, Assistant City Solicitors, for petitioners.
Henry S. Drinker, Jr., amicus curiae.
Before KEPHART, C.J., MAXEY, DREW, LINN, STERN and BARNES, JJ.
The Commissioners of the Sinking Fund of Philadelphia instituted mandamus proceedings to compel the payment of the sums due that fund on account of bond issues for the year 1935. A judgment was entered against the City in the sum of $7,667,015.04, which was directed to be paid in three separate installments. The judgment was appealed to this court and affirmed in Sinking Fund Com. v. Phila., 320 Pa. 394. We ordered this sum to be forthwith paid. Of the amount due $1,000,000 has been paid. The city, through the Mayor and the City Council, in June of this year petitioned this court, asking us, in effect, to control or supervise the enforcement of our order by permitting its payment over a period of time. The chief arguments for relief are the inability to pay that year's sinking fund requirement from the revenues of the City, the paucity of tax payments and the disastrous effect of an increased tax levy. The Sinking Fund Commissioners joined in the prayer and agreed that unless modification were made it "would be disastrous in the highest degree to the interests of the City of Philadelphia and without benefit to the sinking funds of the City."
In considering the former appeal, this Court and the court below had before them all the contentions of the parties which bore on the merits of the problem. We there reviewed Article XV, Sec. 3, of the Constitution, requiring the creation of a Sinking Fund; Article IX, Sec. 10, as affected by the amendment to Section 8 of Article IX; Article XXVIII, Sec. 2, of the Charter Act, the contention that the Sinking Fund Commissioners were subordinate to City Council without a right to invoke the remedy sought, and that the acts of City Council were discretionary and in the absence of fraud the courts would not inquire into their exercise as affecting the amount necessary to be placed in the Sinking Fund. Other questions were suggested and this Court, after due consideration of all of them, affirmed the judgment of the court below.
That judgment was the result of a breach of contract and a neglect to comply with the constitutional mandates upon which rights were predicated. It has often been held that a judgment is not a contract nor the obligation of a contract but is a new obligation under which antecedent rights are to be enforced. See Wehrman v. Moore, 177 Iowa 542, 159 N.W. 218; Morley v. Lake Shore Ry. Co., 146 U.S. 162; Livingston v. Livingston, 173 N.Y. 377, 66 N.E. 123; Belford v. Woodward, 158 Ill. 122, 41 N.E. 1097. The judgment concludes all controversial matters between the parties prior to its rendition and substitutes a sum of money based upon ascertained rights and duties. The contract rights and duties springing therefrom are merged in the final judgment -- they gave it life. As they are the substantive elements from which the court received the power to enter it, it must follow that nothing can be done by modification of the judgment that destroys the underlying elements, otherwise relief by judgments would be tenuous. The end of judicial procedure based on altercations between members of society is the judgment and the means of enforcing it. The judgment there entered was final and conclusive of the sum due based on the litigated matters.
We do not intend nor are we asked to reduce or modify it. We are asked to supervise the compliance as to time. Enforcement, as stated, is just as vital to the successful litigant as the judgment. While a state may by law modify the remedy or means of enforcing obligations, it cannot so change, modify or reduce the remedy as to prejudice substantive rights that have accrued, nor may it pass a law that so modifies the judgment as to impair the rights inherent in the contractual obligations upon which that judgment was grounded. See Breitenbach v. Bush, 44 Pa. 313; Penrose v. Erie Canal Co., 56 Pa. 46. Thus an act withdrawing a fund from the lien of an execution to the prejudice of a creditor was held invalid under the Federal Constitution (Worthen v. Thomas, 292 U.S. 426), as was the application of an artificial credit against a judgment at law in derogation of the obligation of the contract: Beaver County B. & L. Assn. v. Winowich, 323 Pa. 483. Any statute which attempts to frustrate the obligation of contract and take away accrued substantive rights thereunder through the modification of the means of enforcing the judgment has been held an inarticulate legislative expression. The "impairment of obligations" clause of the constitution protects from legislative interference not only the contract but its obligations so far as they inhere in the judgment.
But the protection afforded by the constitution is against acts of the law-making bodies. How far may the courts go in the administration of law in controlling the enforcement of the judgment? The Federal Supreme Court has held that the clause, "No state shall . . . pass any . . . law impairing the obligation of contracts . . ." relates solely to the laws passed by a state and does not control decisions of the courts: Kryger v. Wilson, 242 U.S. 171; Cleveland, etc., R. Co. v. Cleveland, 235 U.S. 50; Cross Lake Shooting, etc., Club v. La., 224 U.S. 632; and U.S.C.A., Const., Art. I, Sec. 10, Cl. 1, note 16, page 45. The constitution of our state contains a similar inhibition against impairment of the obligation of contracts: Article I, Sec. 17. It likewise affects only laws passed by the legislature and does not affect judicial decisions. [1] Therefore any action we may take as to the enforcement of a judgment can not run counter to either Article I, Sec. 10, of the Federal Constitution or Article I, Sec. 17, of our Constitution.
The due process clause differs, however, from the impairment clause. It reads: ". . . nor shall any State deprive any person of life, liberty, or property, without due process of law; . . ." Under the due process clause the word "State" is broad enough to include the decision of courts. [2] That which constitutes an impairment of the obligation of the contract may also constitute a deprivation of due process. In both property rights may suffer. Therefore no order can be made by a court in the enforcement of a judgment which would, in violation of "due process," take from a litigant substantive property rights -- rights which may likewise be secured for him from legislative interference by the impairment of obligations clause of the Constitution.
We are not asked to invade the security procured through the judgment nor to reduce in the slightest its effectiveness for the purpose given; we are asked to suspend for a time its enforcement. Has a court the power to grant relief in the enforcement of a judgment in mandamus to ameliorate the harsh exactions of strict enforcement which would be oppressive and burdensome and where no possible harm can come to the beneficiaries of the judgment? The City for the year 1935 failed to meet the constitutional demand and breached its contract with the bondholders. For the wrong that was done the judgment was entered. There is no possibility to restore the parties to their original rights. The year 1935 is passed. We cannot undo the wrong, but we may repair the breach by compelling the sum to be paid that should have been paid. There are no constitutional provisions or contractual stipulations providing a compulsory, express remedy for defaults. That condition must be treated by the courts or the legislature through appropriate action when it arises. The contract rights of the bondholders and the constitutional and statutory violations which formed the basis of the reparatory judgment being now merged therein, the manner in which that judgment may be enforced was left uncontrolled by the terms of the contract or by the provisions of the constitution. It follows that unless the form of relief sought violates some substantive right the prayer therefor can be granted.
Our power comes from statute and the inherent powers lodged in a court to control its process. In this State and in every State where the equitable powers are administered through common law forms, the court can control the enforcement of a judgment where such control does not violate constitutional inhibitions. We have held from time immemorial that judges in common law courts may stay execution for causes which are sufficient and that their orders will not be disturbed unless there is a clear abuse of discretion: Augustine v. Augustine, 291 Pa. 15; Anstead v. Cook, 291 Pa. 335. In equitable proceedings also the power of the courts is absolute over their own decrees: cf. Totten v. Totten, 299 Ill. 43; Mootry v. Grayson, 104 F. 613; Cadotte v. Cadotte, 120 Mich. 667; Fulton Investment Co. v. Dorsey, 220 F. 298. The consideration of an...
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