Taxing District of Brownsville v. Loague

• Decision Date: 05 March 1889
• Citation: 32 L.Ed. 780,129 U.S. 493,9 S.Ct. 327
• Parties: TAXING DISTRICT OF BROWNSVILLE v. LOAGUE. 1
• Court: U.S. Supreme Court

9 S.Ct. 327

129 U.S. 493

32 L.Ed. 780

TAXING DISTRICT OF BROWNSVILLE v. LOAGUE.¹

March 5, 1889.

This is a writ of error to the circuit court of the United States for the Western district of Tennessee, bringing under review the judgment of that court awarding a peremptory mandamus in favor of John Loague, administrator of R. D. Baker, deceased, against the board of commissioners of the taxing district of the city of Brownsville, Tenn., to proceed 'to levy and collect and pay over to petitioner a tax sufficient to pay each and all' of certain judgments described in the petition for such mandamus. The petition was filed March 19, 1886, and set forth that Baker was in his life-time the owner and holder for value of certain coupons representing interest on certain bonds issued by the city of Brownsville, Tenn., under an act of the general assembly of that state passed February 8, 1870, (being the act referred to in the foregoing cause of Norton v. Taxing Dist., ante, 322,) upon which he obtained four judgments against said city in said court, namely, one March 1, 1876, for $2,628, and costs of suit; another December 20, 1876, for the sum of $822.50, and costs; another December 21, 1877, for the sum of $822.66, and costs; another on the 14th day of December, 1878, for the sum of $821.60, and costs. That executions were issued on all of said judgments, upon which returns of nulla bona were made, and thereupon said Baker instituted proceedings on three of said judgments to compel by mandamus the levy and collection of a tax to satisfy said judgments and costs; which resulted in the collection of $1,200 on the first judgment, and an unavail- ing assessment and levy on the second, and perhaps on the third, but that, except as to the amount aforesaid, all of said judgments remained unpaid. That on the 24th of February, 1879, the general assembly of Tennessee repealed the character of the city of Brownsville, but provided in the repealing act that it should 'not be so construed as to impair the obligation of existing contracts into which said corporation has heretofore entered.' That by an act of the general assembly of Tennessee approved March 14, 1879, it was provided that the governor of the state should appoint an officer for the corporations whose charters had been repealed, to be known as a receiver and back-tax collector, whose duty it should be to collect all back taxes of such municipalities remaining uncollected at the repeal of their charters. That such officer was appointed for Brownsville, but did not qualify, and it was impossible for petitioner's intestate to receive any benefit intended to be secured by the appointment and qualification of such officer; and that on the first day of April, 1881, the people and territory of the city of Brownsville were again incorporated and organized into a municipal corporations known as the "Taxing District of Brownsville," under an act entitled "An act to establish taxing districts of the second class, and to provide the means of local government therfor," which is given in substance in said petition, together with certain provisions of an act amendatory thereof, passed April 4, 1885. Reference is also made to an act of January 31, 1879, applicable to "the several communities embraced in the territorial limits of all such minicipal corporations in this state as have had, or may have, their charters abolished;" and which provides, as to the commissioners and trustee constituting governing agencies, that "no writ of mandamus or other process shall lie to compel them to levy any taxes, nor shall the commissioners or said trustee, nor the local government created by this act, pay or b liable for any debt created by said extinct corporation, nor shall any of the taxes collected under this act ever be used for the payment of any of said debts," which prohibition in that act, and acts amendatory thereof, petitioner insists is null and void. Petitioner avers that defendants have, under the act of April 1, 1881, and the act of April 4, 1885, power to levy and collect taxes to pay said judgments, and then says "that the defendant corporation, the taxing district of Brownsville, and its predecessor, the city of Brownsville, have no assets or means of payment of petitioner's judgments aforesaid, and petitioner's only remedy to enforce the collection of his judgments is that awarded by the act authorizing the issue of the bonds from which the coupons were detached upon which said judgments were obtained, and petitioner is advised that said remedy remains in full force against the defendants as the municipal authorities of the taxing district of Brownsville, and can be invoked against them as effectually as it could have been against the corporate authorities of the city of Brownsvill before its charter was repealed." Petitioner prays, in conclusion, together with other relief not material to be mentioned here, for an alternative writ, on hearing to be made peremptory, "commanding defendants to levy and collect a tax sufficient to pay petitioner's judgments aforesaid, and all costs on same, and all costs incurred in his mandamus proceedings heretofore had by his intestate to collect the same."

On the 27th of March, 1886, a rule to show cause was entered, to which defendants appeared and moved to quash, which motion was treated by agreement as a demurrer, and subsequently the court delivered its opinion in decision of the questions thus raised, (29 Fed. Rep. 742,) a portion of which is as follows: '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.' * * * The legislature repealed the defendant's charter in 1879, the judgments here involved being at that time unsatsfied in this court. Acts 1879, c. 27, p. 41. In 1881 the formation of 'taxing districts of the second class' was authorized, and under that act such a 'taxing district' was organized for Brownsville in 1883. Acts 1881, c. 127, p. 174. By these two acts 'commissioners' were substituted for the formerly existing 'mayor and aldermen,' with all the usual authority, legislative, executive, and judicial, except the power to levy taxes, which was prohibited; but the act of 1879 especially enacted that nothing contained in it should impair the obligation of them existing contracts, and the act of 1881 'hereby levied' a tax of one dollar per hundred, one-half of which was to be applied to the current expenses, and the other to the old debts. Specific power was also given to one of the 'commissioners,' called the 'secretary and financial agent,' to assess and collect this tax. The general act of 1883, already noticed, relating to all taxing districts had been passed, but by an act of 1885 the act of 1881, relating to 'taxing districts of the second class,' was amended, and section 2 gives the commissioners the most ample power to levy taxes and appropriate money to provide for the payment of 'all the debts and current expenses of the districts.' Acts 1885, c. 82, p. 162. It is apparent that, notwithstanding the general act of 1883, and its broad repealing clause, the legislature (or, rather, the authors of this legislation relating to Brownsville) considered the act of 1881 as wholly unaffected by it. But by a subsequent act of 1885, at the extra session, the full powers given under the former act of that year were taken away, or rather limited to the payment of the 'compromise' bonds only, the evident object of the last act being to correct this careless blunder of a departure from the general plan of relief already fully commented upon. Acts Ex. Sess. 1885, c. 10, p. 75.'

The act of the extraordinary session referred to was approved June 10, 1885, and reads thus: 'Section 1. Be it enacted by the general assembly of the state of Tennessee that section 2 of an act entitled 'An act to establish taxing districts of the second class, and to provide the means of local government therefor,' passed March 30, 1885, be so amended as to read as follows: That section 8 of said act, passed April 1, 1881, be so amended as that the board of commissioners, after the debts of the taxing districts shall have first been...