Devereaux v. City of Brownsville

• Citation: 29 F. 742
• Parties: DEVEREAUX v. CITY OF BROWNSVILLE. LOAGUE, Adm'r, v. TAXING DIST. OF BROWNSVILLE.
• Decision Date: 25 January 1887
• Court: U.S. District Court — Western District of Tennessee

29 F. 742

DEVEREAUX v. CITY OF BROWNSVILLE.

LOAGUE, Adm'r, v. TAXING DIST. OF BROWNSVILLE.

United States Circuit Court, W.D. Tennessee.

January 25, 1887

Myers &amp Sneed and Craft & Cooper, for petitioners.

Bond &amp Rutledge and Smith & Collier, for defendant.

Before JACKSON and HAMMOND, JJ.

HAMMOND J.

Following a public policy, reviewed in its application to the city of Memphis in Meriwether v. Garrett, 102 U.S. 472, the legislature of Tennessee, in 1879, inaugurated a plan of relief for insolvent municipal corporations, whereby it was expected they could escape the payment of their debts, unless the creditors would accept the 'settlements' tendered them under the provisions of the legislation. The general plan was to repeal the charters, so that there should be no officials or agencies liable to judicial compulsion by mandamus; then to supply other agencies of local government invested with all the powers of the old municipalities except the taxing power, which was not only withheld, but conspicuously prohibited, to those new organizations, called 'taxing districts.' The taxes for carrying on the new contrivances were to be levied directly by the legislature itself upon the taxables within their boundaries, and, that body not being amenable to any judicial coercion by mandamus, it was believed that the creditors were wholly without remedy. The legislature then provided for a settlement with creditors upon the general basis of refunding the old indebtedness at the half, the amount at which the state 'settles' or 'compromises' its own indebtedness. The taxes to pay the interest and principal of the new bonds, like other taxes for municipal purposes, were to be levied directly by the legislature; but provision is made that, in default of such levy, the 'taxing districts' may themselves levy the necessary tax. Acts 1883, c. 170, p. 224. This act applies to all 'taxing districts,' of whatever class, and by its twentieth section 'repeals all laws, or parts of laws, in conflict herewith.'

Under this legislation the supreme court of Tennessee has held that, by operation of the constitution of the United States, forbidding a state to pass laws impairing the obligation of contracts, these new 'taxing districts' are simply the successors of the old corporations, so far as relates to the obligation to pay the indebtedness existing at the time of the repeal of the charters, and that creditors may proceed against them, as such successors, the obligation resting upon the inhabitants of the particular territory. O'Connor v. Memphis, 6 Lea, 730, 738, 739; Luehrman v. Taxing Dist., 2 Lea, 425. The same doctrine is affirmed by the supreme court of the United States in Mobile v. Watson, 116 U.S. 289; S.C. 6 S.Ct. 398.

We have just held in Loudon v. Taxing Dist., (no opinion,) the circuit and district judges on the bench, upon considerations entirely satisfactory to us, that it is the logical result of that principle, if it be not distinctly decided in the last-cited case, that any power of taxation, provided as a means of paying their debts, heretofore granted to the original municipalities, devolves as readily as the obligation to pay them, and by like operation of the federal constitution, upon those successors, notwithstanding the attempted statutory prohibition. That power was a grant to the inhabitants of the particular municipal territory, and not to the designated officials through whose agency it was exercised; and those inhabitants may, and must, exercise the power, so far as the old creditors are concerned, through any new agencies existing by law, and adapted to the work of levying and collecting taxes. As evidence of that adaptation, it may be remarked that the 'taxing districts' are especially authorized to exercise all the essential powers of taxation to pay the new bonds, if the legislature neglects that duty; and it is particularly worthy of notice, in view of the argument made at the bar that a given agency of the municipal government must be designated and especially clothed by statute with the power to levy and collect taxes, before the general power, devolved as above mentioned, can be exercised, that by the twelfth section of this very act of 1883 the power is not so conferred upon any designated agency of the new municipal government, but only upon 'every municipal corporation or taxing district which compromises its debts,' etc. The whole argument of the defendant was that no given agency of the new governments could exercise the taxing power, unless appointed by law to do so; yet this new legislation does not appoint any agency, but confers it in the most general terms, as did the old legislation, upon the municipality itself; that is, upon the inhabitants of that locality. This would seem to be a sufficient answer to the argument, for it can hardly be imagined that any further legislation is necessary to enforce this power in favor of the holders of the new bonds, if occasion should require it; and the mandamus would necessarily run against the legislative and administrative officers of the taxing districts, just as we are here asked to order it. That is to say, it is a necessary implication from the general grant of the taxing power that the officials of the municipality exercising other legislative duties would be required to perform this. We do not imply the grant of taxing power as a product of the federal constitution, nor create it by judicial judgment,-- not at all; but we hold that the grant heretofore made to the inhabitants of the given territory has never been provided upon which the law devolves the duty embodied in the general grant, just as it would devolve it upon these self-same agencies were the courts required to act upon the general grant of taxing power under this twelfth section of the act of 1883.

Nor is there any practical difficulty in the way. The former method of having the municipalities make separate assessments, and providing independent agencies for the collection of municipal taxes, has been long since abolished by general law. Now the state officials make, through the agency of the county courts, one general assessment, upon which all taxes are levied and collected. This is placed in the hands of the county clerk, and it is required 'that cities and incorporated towns shall certify the rate of taxation levied by them to the clerk of the county court,' and he extends them upon one tax book, in appropriately designated columns, etc. Acts 1868, c. 102. Sec. 2, p. 247; Acts 1875, c. 92, Sec. 63, p. 159; Acts 1877, c. 73, Sec. 6, p.96; Id. Sec. 8, p. 97; Acts 1881, c. 171, Sec. 42, p. 255; Acts 1883, c. 105, Sec. 42, p. 115.

Here, then, is adequate and complete machinery, provided by general law, for all municipal corporations possessing the general power of taxation, whereby they may effectually exercise it; and, given the general grant to a certain body of people, it is a mistake to suppose that they need to have a statutory appointment of named officials to exercise it. Those appointed for the general purposes of the local government of that body of inhabitants may exercise the power, as they do all governmental powers of that local character.

It is only necessary, then, that we require the officials of the new government to certify to the county court clerk that rate which the judgment itself shows is needed to satisfy it, upon the basis of an assessment already at hand; that the county clerk extend that rate upon the tax-books; and that the other officials collect the tax so ascertained to be due from each tax-payer. It is a very simple process, and is the inevitable outcome of the decisions of the state and federal supreme courts already cited. Once grant the taxing power to a body of people incorporated for local government, as a part of the remedy given to holders of its bonds authorized by law, and it remains with them until the debt is paid, and may be exercised as long as any machinery of local government is provided for them. The entire destruction of the machinery in all its parts, and the relegation of the inhabitants to the general mass, might accomplish the intended purpose of this legislation; but, at the very moment that new agencies of incorporation and government are substituted for the old, the inexorable rule of justice comes into play under our constitution, and the existing obligations must be paid. The vociferous statutory prohibitions of this legislation are void, both as to the new corporations and their new agencies, so far as concerns the old indebtedness. The new machinery succeeds to and takes the place of the old, finding its powers of action in the old grants of the taxing power in precisely the same way that it finds the other elements of the contract obligation that cannot be impaired. Our general tax laws applicable to the whole state furnish conveniently the instrumentalities for the work of taxation, and there is no necessity to decide how this principle would operate if they were wanting,--whether we would compel an assessment, levy, and collection by the taxing district officials, and which of them would be selected by the court to perform the duty, etc. As it is, we have the assessment, we have an official to separately extend each levy on the collection book, and other officials to collect the tax. The judgment itself shows the aggregate amount required, and a simple calculation and the making of a certificate of the rate is all that the municipal authorities need do to accomplish the work. Their duty to make the certificate comes from the original grant of the taxing power, coupled with the general tax laws of 1881 and 1883, authorizing the certificate to be made, not by any specifically appointed officials, but by 'cities and...