Saloy v. City of New Orleans

The opinion, of the Court was delivered by

Todd, J.

The plaintiffs, residents and taxpayers of the City of New *81Orleans, seek by this suit to compel the city, through its proper officer, to receive, in full discharge of their taxes, ten mills on the dollar of the valuation put on their property for the purposes of State taxation for, the year 1880, and to have declared illegal, null and void, the assessment by the city, in 1879, for municipal taxation for the year 1880, at the rate of fifteen mills, as violative of the Constitution of 1879, and the limitation therein declared.

The city, in its answer, asserts its right to collect the taxes levied under the assessment made in December, 1879, at the rate of fifteen mills on the dollar, and that the taxes thus levied include :

1st. The interest tax on the bonded debt of the city, under the act and ordinances known as the premium bond plan.

2d. The tax imposed for the maintenance of the schools.

3d. The tax for municipal purposes, such as police, lighting, improvements, salaries, repairs, care of insane, and generally for the support and administration of the city government.

It was further averred that the taxes were levied with reference to budgets of receipts and expenses duly prepared, under ordinances mentioned, adopted pursuant to the city charter, and amendments thereto, which ordinances were complete and in full force from and after the 23d of December, 1879. It was denied that the said assessment, and the taxes assessed, were affected by any article of the Constitution of 1879, or by any act of the Legislature passed subsequent to its adoption, relied on as supporting the pretensions of the plaintiffs. And it was averred that if any article of the State Constitution, or any legislative act, could be construed as destroying said assessment, or reducing said fifteen mill tax, it was violative of the Constitution of the United States, forbidding the passage of any law impairing the obligation of contracts.

Finally, it was alleged that, for the necessary expenses of administering the city government, a tax of at least ten mills was required, and that the balance of the tax, five mills, though insufficient for the purpose, was necessary for the support of the schools and the interest on the bonded debt.

Judgment was prayed for in reeonvention in favor of the city against each of the plaintiffs for the amount of taxes assessed against them respectively, under the assessment of 1879, with costs and interest, which several amounts are specifically set forth in the answer.

Judgment was rendered by the lower court, prohibiting the collection of a greater tax than ten mills, and annulling the assessment beyond that rate.

From this judgment the city has appealed, and the plaintiffs have asked an amendment of the judgment, declaring the entire assessment null and void.

*82The conclusions we have arrived at after a thorough review of the issues presented by the record, dispense us from the necessity of considering and discussing seriatim the several interesting constitutional questions involved. The main question presented is whether the city authorities can be compelled to accept ten mills in full payment of the city’s taxes for 1880.

This question is not altogether a new one. In the case of the State ex rel. Lucas E. Moore vs. City, this same tax of fifteen mills, which had then been levied by the city, was under consideration, and the issue presented in that case with reference to this tax was substantially the same now before us.

In that case as in this the limitation embraced in article 209 of the Constitution of 1879, was relied on as a bar to the levy by the city of a tax for any purpose exceeding ten mills; and we were asked, in case we should decide that the bonds sued on in that case constituted a valid contract, entitling the holders of them to the tax stipulated thereby, to restrain the city within the limit of ten mills, and to compel her to appropriate out of the ten mills so much as might be necessary to satisfy the claim of the creditor. This we refused to do. The reasons for that refusal were stated in the decision, which were in substance, that the necessary expenses of the city government should be paid out of the taxes levied; that such was the intent of the Constitution, and we declined to say what were the necessary expenses of such administration, for the reason that the determination of this question was a legislative and not a judicial function, and that neither the Constitution, apart from the ten mill limitation, nor any law of the State, had defined and fixed the measure of such expenses. And we further declared that •if we should compel the five mills to be levied by the terms of the contract for the payment of the interest on these bonds, to be taken out of the ten mills, we would then judicially limit the necessary expenses of the city to five mills. That on the same principle this or another court might direct the remaining five mills to be applied to the satisfaction of other contract obligations, and the city would thus be deprived of all means whatever for the support of its government, and the corporation thereby practically destroyed, and the inhabitants of the ¡city remitted to anarchy and chaos; results which, it is self-evident, the framers of the Constitution never contemplated, and which the very terms of the instrument show were never intended.

We, therefore, decided in the plainest terms, that we could not and would not interfere with the discretion of the municipal legislature in determining the amount required for the necessary expenses of the city government, and in appropriating thereto a sufficient amount of its revenues derived from taxation not exceeding ten mills.

*83We further held that the power and duty of the city to levy the tax demanded in that case were derived, not from the Constitution of 1879, but from antecedent legislative authority, validly conferred, entering into and forming part of a contract so protected by the Constitution of the United States, that it could not be revoked or impaired, but would continue to, exist independently of the State Constitution, and even had that Constitution forbidden the levying of any tax whatever to pay the debt.

With these views we maintained the levy of the tax, though in excess of the ten mills already appropriated to the support of the city government. In doing so, we recognized the perfect liberty of the city authorities to reduce the estimate of expenses and the appropriations therefor, but expressly disclaimed any authority to compel them to do so.

The record in the present case shows that the city government has not altered its budget in this respect. On the contrary, it abounds with evidence to show that no reduction could be made, and that the appropriations made are even inadequate for an efficient administration of the government.

When, therefore, the plaintiffs herein ask us to compel the city to accept ten mills in full settlement of their taxes, it is clear that they demand we should do one of two things, viz: either to remit the five mill tax ordered to be levied in the Lucas E. Moore case, and the two mill tax levied under the judgment of the Circuit Court of the United States, or to reduce the tax levied for the expenses of the city government down to three mills.

The first, it is plain, we could not do, because the judgment in the Moore case is final, and not open to recall, and the judgment of the U. S. Circuit Court is not subject to our control.

To grant the alternative demand, and confine, by the authority of our decree, the city expenses to three mills, would involve the reversal of the opinion in the Moore case upon a point in which there was no express dissent on the part of any member of this Court, that is, touching the authority of this Court to control the discretion of the City Council in relation to the amount required to defray the expenses of the city government.

With the questions determined in the case referred to, we' have nothing to do in this case, save and except with the construction of article 209 of the present Constitution of the State. No question has ever im-. pressed us with a graver sense of responsibility, growing out of the magnitude of the interests which its determination involves, and we have, therefore, welcomed the opportunity of a further consideration touching the proper effect and construction of the article in question, *84and after listening with profound attention to the able arguments of the learned counsel have, with great deliberation, reviewed and reconsidered the entire subject.

If the power of taxation possessed by the City of New Orleans was confined to that granted by the Constitution of 1879, the question presented would be free from difficulty. But, as already indicated, the power of taxation required to meet the antecedent contract obligations of the city is not derived from and controlled by that Constitution. It was derived from valid legislative authority existing, or created at the time of such contracts, entering into and forming part of those contracts, and incapable of being affected or destroyed by any action of the State, without violating that clause of the Federal Constitution which forbids any such State action as would impair the obligation of contracts. This constitutional inhibition is the paramount law of the land on this subject, to which the State government, in all its departments/and all subordinate authorities within the State, must conform, and against which the fundamental law of the State, declared in its Constitution, is as powerless and ineffective as the enactments of a legislature or the ordinances of a municipal corporation.

The Supreme Court of the United States, recently and correctly, declared : “ It is a fundamental principle in our system of complex national polity, that the Constitution, laws and treaties of the United States are as much part of the laws of every State as its own local laws and Constitution.” 100 U. S. 584.

Although we are the creatures of the Constitution of the State, the judicial trust confided to us embraces a faithful administration of all the laws of the land ; and our duty, as well as our solemn oaths, bind us to obey equally the Constitution of the United States and the Constitution of the State.

"We deem it useless to cite authorities to sustain these propositions. It will be conceded that such is the settled jurisprudence of the Supreme Court of the United States, which has been followed and adopted by the courts of every other State in the Union.

We have not overlooked the appeal made to us, to disregard and override the interpretation which has been placed upon the Constitution of the United States by the Supreme Court of the United States, not in a single decision, but by a long series of decisions, stretching back to the days of Chief Justice Marshall, and sanctified by the concurrence of judges representing every school of constitutional construction. To this appeal we are bound to close our ears. Between the highest Federal tribunal and the highest courts of the several States there exists a wholesome comity, under which the Federal courts accept, as binding upon them, the construction placed by the supremo tribunals of the . *85States -upon their own constitutions and statutes ; and, per contra, it is justly due that the State courts should pay equal regard to the adjudications of the Federal Supreme Court upon the Federal Constitution.

The States are deeply interested in the preservation of this comity, because, while the Federal Supreme Court, in the exercise of its appellate jurisdiction, can enforce its construction of the Federal Constitution and laws, even in defiance of the State courts, the latter have only the principle of voluntary comity to depend on, in order to secure the performance of the correlative duty of the Federal courts-

We, by no means, bind ourselves to a slavish adherence to Federal authority, if such should sanction flagrant usurpations repugnant to our consciences ; but we find no difficulty of this kind in our way in the matter now under consideration.

From this it appears that the City of New Orleans possesses powers of taxation derived from entirely different sources, viz.:

First. The power to levy a tax not exceeding ten mills, derived from and entirely controlled by the State Constitution of 1879.

Second. The power to levy taxes to satisfy its antecedent contract obligations, derived from valid legislative authority existing at the date of the contracts, incorporated therein, and protected and continued in force, independently of the will of the State, by the Constitution of the United States.

When, therefore, as in the Folsom case, a creditor of the city, entitled to the tax claimed under the law as it existed when his debt originated, but whose rights were not founded on a contract, and, therefore, not protected by the Constitution of the United States, appeared before us demanding a mandamus to compel the city to levy a tax in excess of ten mills, we pointed to the Constitution of 1879, and said to him: “That Constitution has destroyed your right; it had the power to destroy it, because, not being based on a contract, it was not protected by the Constitution of the United States. We can give you no relief.”

But when, as in the Moore ease, a contract creditor of the city demanded a tax guaranteed by his contract, we looked at his rights as fixed by the contract, and said: “This right is protected in its integrity by the Constitution of the United States; it exists, and must be enforced without regard to any provision of the State Constitution of 1879, and we must, therefore, grant him the relief asked.”

Whatever else may be said of these decisions, it must be admitted that, thus far, they are not inconsistent.

It is claimed, however, that as we declared in the Folsom case, that the provision of the State Constitution must have effect against all rights not protected by the Constitution of the United States, therefore it must have effect to reduce, or, if need be, destroy the right of the city *86to pay its necessary administration expenses out of' its tax revenue, such right not being within the protection of the Constitution of the United States.

To this we answer:

1st. The text of the decisions in both the Moore and Folsom cases shows that those dicta were applied to rights claimed against the City of New Orleans outside of and beyond the limitation imposed by the Constitution of 1879, and not to rights claimed by the city under and within those limitations.

2d. ■ If it were true that the rights of contract creditors and of the city were both controlled by the ten mills limitation of the Constitution of 1879, and were, therefore, exclusive of each other, so that they could not co-exist, it might logically follow, that the allowance out of the ten mills of a certain portion to contract creditors, would operate to reduce to that extent the amount allowed for the expenses of the city government. We have, however, shown that such is not the case. That the rights of contract creditors are not controlled by that limitation, and are not based on the Constitution of 1879, nor derived therefrom; that the allowance of the tax required to meet the demands of these creditors, does not, necessarily, come out of the ten mills authorized by the Constitution, and does not, therefore, exclude or conflict with the requirements of the city for her necessary alimony; and that even if the city should be allowed the whole ten mills for the support of her government, it would not destroy or affect the right of contract creditors to claim the additional tax necessary for the satisfaction of their debts.

3d. We held that it was not the intention of the Constitution, in any event, to deprive the city of the right to apply such portion of the ten mills to the support of the city government as might be found necessary by the municipal legislature in the exercise of the discretion confided to it. Such a proposition seems to us almost too clear for argument. It is only necessary to refer to the objects intended to be accomplished and the purposes to be carried out by a municipal corporation, to make it apparent to every one.

The object of the creation of such a corporation is solely to promote the well-being of the citizens who are subject to it. Its charter contemplates and provides for all measures that are necessary to promote this great end, such as a proper police for the establishment of public order, suppression of crime and the administration of justice, the construction and maintenance of wharves and public works for the purposes of commerce, drainage, and all other sanitary provisions to ensure the public health, the lighting of the streets and the extinguishment of fires, and all other measures conducive to the security of life and property, and promotion of the welfare and prosperity of the *87people. Judge Dillon has more clearly and fully defined these objects ■when he says:

“ Municipal corporations are instituted by the supreme authority of •the State for the public'good. They exercise, by delegation from the Legislature, a portion of the-sovereign power.- The main object of their creation is to act as administrative agencies for the State, and to provide for the police and local government of designated civil divisions of its territory. To this end they are invested with governmental powers and charged with civil, political and municipal duties. To enable them, beneficially, to exercise these powers and discharge their duties, they are clothed with the authority to raise revenues by taxation and in other modes, as by fines and penalties. The revenue of the public corporation is the essential means by which it is enabled to perform its appointed work. Deprived of its regular and adequate supply of revenue, such a corporation is practically destroyed and the very ends of its creation thwarted.”

Dillon, Mun. Cor., 64.

When we apply these principles to a great commercial metropolis, like the City of New Orleans, with its hundreds of thousands of inhabitants and its varied interests, how these objects rise in importance and these great and benign purposes of city charters and municipal corporations swell in magnitude! It was to subserve these great interests and purposes, and not merely to pay debts, that public corporations are established. To carry out these objects the power of taxation is essential. Without such power and the revenue it supplies the corporation dies. Unless its existence is insured and its capacities and resources kept alive, it cannot pay its debts. Thus, the first and paramount consideration, both as relates to the inhabitants of a city and its creditors, is the proper alimony for its support.

The idea that a limitation of municipal taxation could ever exclude the application of its revenues to an extent necessary to the administration of its government, is entirely unsupported by authority. Nor is it a new question in the jurisprudence of this State. This precise issue was presented and passed on in the ease of Shields vs. Pipes, 31 A. 765.

The facts of that case were substantially as follows:

Under a law of the State, passed in 1869, one Peter Young was entitled to a special tax to pay a judgment recovered by him against the parish of Concordia. Subsequently the Legislature passed Act No. 96 of 1877. The 103d section of this act provided “that no parish tax * * * shall, for any one year, for all purposes, exceed the rate of one per cent, on the assessed value ; and no judgment tax shall be levied beyond the above limit; the intent thereof being to limit parochial taxa*88tion throughout the State to a minimum of one per cent., and to repeal all general laws authorizing the levy of a special judgment tax.”

It will not be disputed that the power of the Legislature to reduce and limit the alimony of a parish or municipal corporation is as eom- ■ píete as that of a constitutional convention. It will be admitted, too, that the language of the legislative act above quoted is much stronger .and more explicit in confining all power of taxation, whether for ■parochial alimony dr for judgment taxes, within the limit of ten mills, than is the language of article 209 of the Constitution.

Notwithstanding this act, the police jury levied a tax of ten mills for parochial expenses, and levied an additional tax of more than ten mills to pay judgments.

The tax collector was proceeding to collect these taxes, when Shields, a taxpayer, alleging that the ordinance in question and proceedings of the tax collector were illegal, because violative of the statute referred to, that he had tendered to the tax collector ten mills in payment of his taxes, and that there was no authority for the tax collector to de.mand more for any purpose, prayed for an injunction to prevent the ■ tax collector from collecting any additional tax beyond the ten mills.

To this the tax collector responded:

1. That the tax of ten mills is not more than sufficient to pay the current expenses of the parish.

2. That the Act of 1869 was in force at the time the judgment was ■rendered.

3. That the Act of 1877 is unconstitutional and without effect as to the tax levied to pay the judgment.

Thus the parallel between that case and this is complete.

This Court in that case quoted the article of the-Constitution of the United States prohibiting a State from impairing the obligation of a contract, and the article of the State Constitution protecting vested ■rights, and said : “ To apply the Act of 1877 to these pre-existing judgments and the vested rights resulting from them, would be to violate the letter and spirit of these constitutional provisions;” and it therefore held, as we held in the Moore ease, with respect to contract creditors, that the judgment creditors were entitled to their tax.

But did the Court say, as we are asked to say in this case, that the judgment tax must be paid out of the ten mills to which parochial taxation was limited by the Act of 1877, and that act must have its effect, upon and against the right of the parish to provide for its current, expenses? Not so/ ' ■

Mr. Justice Marr, as the organ of an" unanimous Court, in his able and .elaborate opinion, said :

“At the time when these judgments were rendered, the only means *89of enforcing the judgment was that prescribed by the Act of 1869. • When the Legislature subsequently repealed all general laws authorizing the levy of a special judgment tax, and fixed the maximum of parochial taxation at ten mills, a rate which it was admitted, in this case, was not more than sufficient to pay current expenses of the parish, it either intended that this law 'should apply only to judgments rendered in future, or it attempted to deprive these judgment creditors of all remedy and to divest the rights vested in them by the judgments.”

This the Court held that it could not do, and affirmed the judgment of the lower court dissolving the injunction, thus rejecting the idea that such a construction could be placed upon the legislative limitation as to require the judgment tax. to be taken out of the ten mills, and thereby deprive the parish of all means of paying its current expenses.

This decision is sanctioned and sustained by the highest authority, and has our entire concurrence. Van Hoffman vs. City of Quincy, 4 Wall. 535; City of Muscatine vs. Batz, 8 Wall. 575.

The next and only question left for our consideration is in regard to the validity of the assessment of property for city taxes made in December, 1879. The judge a quo maintained the validity of this assessment, though deciding that only ten mills could be collected under it. We concur in his conclusions on this point, declaring the assessment legal and valid, and adopt his reasons therefor, given in his able and elaborate opinion. The same issue is before us in the case of the succession of Dupuy; and, in the opinion we shall render in that case, will take occasion to present our reasons more fully.

While mere considerations of public interest and convenience could exercise no controlling influence over our decision of purely legal questions, it is yet a matter of gratification to us to feel that in our determination of the grave questions submitted to us we shall conserve the true interests of all classes of people. We cannot conceive that it could be to the interest of any class that the City of New Orleans should be deprived of the revenues necessary to enable it to perform the functions of government, and carry out the purposes for which it was created.

Certain it is that if these functions and purposes were abandoned, every interest of society would suffer. A city without police, without lights, without a fire department, without schools, without repairs and maintenance of streets and wharves, without prisons for criminals, without places of refuge for the insane and unfortunate, without, in fine, any of those accessories of municipal organization which alone render possible the living together of vast congregations of people, would be a place not to live in, but to fly from, as if it were infected with the deadliest pestilence.

*90We are further consoled by the reflection, that if,; as is contended by some, the appropriations to these necessary purposes are excessive, although the remedy does not lie within our control, it might be sought at .the hands of the Legislature, which has full power to restrain municipal expenditures for alimony within such limits as, in its wisdom, may seem fit.

Entertaining these views covering the issues involved in the case, supported, as we believe them to be, by incontrovertible authority, State and Federal, we conclude that the tax of fifteen mills complained of is a legal and valid tax, and must be paid in full; and that the reconventional demand of the city, requiring the payment by the plaintiffs, respectively, of the several amounts due by them for taxes, as set forth in the answer, must be sustained.

It is, therefore, ordered, adjudged and decreed that the judgment appealed from be annulled, avoided and reversed ; and, proceeding to render such judgment as should have been rendered by the lower court, it is ordered, adjudged and decreed that the demand of the plaintiffs to be discharged from the municipal taxes for the year 1880, assessed against them respectively, upon the payment by them of ten mills on said assessment, and to have annulled the said assessment for city taxes, made in December, 1879, be rejected; and it is further ordered, adjudged and decreed that the Oity of New Orleans, on her reconventional demand» recover of the plaintiffs as follows, to-wit:

B. Saloy, the sum of........................................$ 1,797 00

J. Bayle, the sum of........................................ 202 50

Mrs. J. Bayle, the sum of................................... 2á 00

B. Cestin, the sum of....................................... 105 00

John Friedericks, the sum of............................... 552 00

E. Seignouret, the sum of.................................. 15 00

J. A. Seignouret, the sum of................................ 127 50

with ten per cent, interest per annum on said several sums, from the 31st of March, 1880, till paid, and that the privilege and mortgage on the respective properties assessed be recognized; the costs of both Courts to be paid by the plaintiffs and appellants.