Tenth Ward Road Dist. No. 11 v. Texas & P. Ry. Co.

• Decision Date: 02 March 1926
• Docket Number: No. 4587.,4587.
• Citation: 45 ALR 1513,12 F.2d 245
• Parties: TENTH WARD ROAD DIST. NO. 11 OF AVOYELLES PARISH v. TEXAS & P. RY. CO. et al.
• Court: U.S. Court of Appeals — Fifth Circuit

45 ALR 1513, 12 F.2d 245 (1926)

TENTH WARD ROAD DIST. NO. 11 OF AVOYELLES PARISH v. TEXAS & P. RY. CO. et al.

No. 4587.

Circuit Court of Appeals, Fifth Circuit.

March 2, 1926.

Lewis R. Graham, of New Orleans, La., and G. L. Porterie, of Marksville, La., for appellant.

Esmond Phelps, of New Orleans, La., for appellees.

Before WALKER and BRYAN, Circuit Judges, and GRUBB, District Judge.

GRUBB, District Judge.

This is an appeal from a decree of the District Court, dismissing appellant's bill of complaint. On May 24, 1917, the receivers of the Texas & Pacific Railway Company filed an ancillary bill in the receivership proceedings, then pending in the United States District Court for the Western District of Louisiana, against the police jury of the parish of Avoyelles, the tax collector of the parish, and the boards of supervisors of certain road districts thereof. The bill attacked the validity of the proceedings creating seven of the road districts in said parish and of the special taxes and bond issues authorized by the voters and the governing authorities thereof. On May 28, 1917, the District Court entered an order for a hearing of the application for an injunction pendente lite before three judges under section 266 of the Judicial Code (Comp. St. § 1243), and also granting a temporary restraining order, without bond, against the tax collector of the parish of Avoyelles, "enjoining and restraining him from selling or attempting to sell any property of the Texas & Pacific Railway Company situated in the parish of Avoyelles, to enforce the payment or collection of any tax or taxes levied under or by virtue of the laws, ordinances, and proceedings referred to in the bill of complaint," and that the injunction remain in force pending the hearing of the motion for a temporary injunction. No restraining order was issued against any one of the defendants except the tax collector. The receiver gave no injunction bond. The application for a preliminary injunction was heard before three judges, but no decision was rendered on it; and the case was finally decided by the District Judge on the merits.

The decree of the District Court sustained the validity of the taxes assessed in two of the road districts, declared invalid the taxes assessed in three of the road districts, and did not pass upon the validity of the proceedings in the other two road districts, as no attempt had been made to assess taxes therein. On November 13, 1918, an appeal to this court was granted to the receiver. No order was entered continuing the restraining order in effect. On June 18, 1919, the appeal was decided by this court. Wight v. Police Jury of Parish of Avoyelles, La., et al., 264 F. 705. The decree of the District Court was affirmed in all respects except that, as to road district No. 11, Tenth ward, the judgment sustaining the validity of the six-mill tax levied in accordance with an election, the result of which was promulgated September 8, 1915, is modified to hold that the tax to the extent of five mills is valid, and as to the additional mill invalid, and as to such one mill injunction will issue as prayed by appellant. On January 21st, 1924, appellant filed suit in the receivership proceedings to recover from the receivers of the Texas & Pacific Railway Company the sum of $26,897.95 and $450 as attorney's fees, as damages sustained by the proceedings aforesaid. On February 28, 1924, appellant was allowed to amend its bill, but the amendment was not filed until June 14, 1924. The receivership of the Texas & Pacific Railway Company was terminated May 14, 1924, by a decree in which the court retained jurisdiction of all suits pending against the receivers and required the company to defend such claims.

The bill alleged that on May 24, 1917, the road district had sold a bond issue of $100,000, the proceeds of which were to be used for the construction of the Alexandria-Melville Highway, and had entered into contracts for the construction thereof which were based on unit prices per cubic yard for the material furnished; that the institution of the suit by the receivers and the issuing of the restraining order forced the appellant to cancel the contract for the sale of bonds, and that this in turn necessitated the cancellation of the construction contract, as the only means to pay therefor was from the proceeds of the bond issue; that it was not until the beginning of the year of 1919 that appellant was able to finance the construction of the highway; that on January 27, 1919, a new contract for the construction of the highway was let, which was also based upon unit prices per cubic yard for materials furnished; that the cost of constructing the highway under the last contract was $26,897.95 greater than it would have cost under the first contract, which amount was claimed as damages. A motion to dismiss the bill was filed by the receivers and the company, upon the ground that the bill disclosed no cause of action, and that the claim was barred by the prescription of one year provided in article 3536 of the Civil Code of...