State ex rel. New Orleans Gas Light Co. v. City of New Orleans

The opinion of the Court was delivered by

Fenner, J.

Relator is holder of a judgment against the city of New Orleans rendered on June 12, 1878.

This judgment was based on two contracts for lighting the city with gas: one dated December 31, 1874, by which relator agreed to light the city during the year 1875; the other dated December 17, 1875, by which it agreed to light the city during the years 1876 and 1877.

Appropriations for the payment of relator were duly made on the city budgets for 1875, 1876 and 1877; and the power of taxation for current city expenses possessed’ by the city, was exhausted during each of said several years.

Relator setting forth its contracts and judgment and alleging that, at the date of its contracts, the city possessed a power of taxation for current city expenses of one and one-quarter per cent, which, so far as necessary to the satisfaction of his contract, continues to exist unimpaired by subsequent legislative and constitutional limitations, seeks relief similar to that recently granted by us in the case of State ex rel. Marchand vs. City, 37 Ann., not yet reported.

In other words, while the city’s power of taxation for general purposes is now limited by the Constitution of the State to one per cent, he asks a mandamus compelling the city to levy one-quarter of one per cent in addition thereto for the satisfaction of Ms judgment.

This relator’s case is significantly differenced from that of Marchand by the fact that, at the date of relator’s contracts, the constitutional amendment of 1874 had already been adopted and promulgated.

That amendment declared : The city of New Orleans shall not hereafter increase her debt in any manner or form or under any pretext. And after the first day of January, 1875, no evidence of indebtedness or warrant for the payment of money, shall be issued by any officer of said city except against cash actually in the treasury,” etc.

*438We have, heretofore, carefully considered the meaning and effect of this amendment, saying: “ It rendered it impossible for the city, by any voluntary act, to incur increased debt, ‘ in any manner or form or under any pretext.’ All persons were fully charged with notice that, whatever services they might render, whatever supplies they might furnish, they could never become creditors of the city of New Orleans, because she was utterly incompetent to contract additional debt. If they choose to deal witli her, without exacting- present payment, upon the basis of exjiected revenues appropriated to their payment, they simply acquired rights or claims upon that fund, dependent exclusively on its realization and only payable out of the same when converted into cash actually in the treasury.” Taxpayers’ Association vs. N. O. 38 Ann. 567.

Since the foregoing decision we have had several cases before ns involving disputed claims between the city and creditors claiming under contracts made under the dominion of the amendment of 1874, and, in rendering- judgments in favor of the creditors, we have invariably restricted them to payment out of the revenues of the year which the services or supplies were furnished. Eager vs. New Orleans, 36 Ann. 937, and other cases.

It is claimed, however, that as relator’s judgment is absolute and contains no such restriction, it is conclusive as to the validity of the debt and entitles the judgment to all lawful means of satisfaction.

Without concluding ourselves on this question, we may, for the sake of argument, admit it.

Then, the question arises: what are lawful means of satisfaction 7 Has the relator a right to require the city to levy a tax in excess of the rate to which her power of taxation is limited by the Constitution of the State ?

To maintain such right, relator must show that the constitutional limitation violates the obligations of a contract entered into prior to its adoption. This requirement is imperative.

Relator points to a contract passed, indeed, prior to the Constitution; but that contract imposed upon the city no obligation to exercise, in any future year, the power of taxation then possessed, or indeed, any taxation whatever, for the satisfaction of the contract, beyond that for the year in which it was passed.

“A contract is impaired,” says the U. S. Supreme Court, “ when the means by which, at the time of its execution, it could be enforced, that is, by which the parties could be obliged to perform it, are rendered *439less efficacious by legislation operating directly upon those means.” Wolff vs. New Orleans, 13 Otto, 367.

A remedy which did not exist cannot be impaired.

It cannot possibly be said, therefore, that the provision of the present Constitution violates any obligation of relator’s contract, and it must submit to its unquestionable authority.

Conceding that relator’s judgment establishes the validity of the debt, yet as it is founded on a contract, the obligations of which are not impaired by Article 209 of the Constitution of 1879, that article is entitled to as full execution against it as if its judgment had not been founded on contract at all.

The best position relator can claim is to have his judgment placed upon a parity with that of Folsom Bros. vs. City, 32 Ann;—evidence, if you will, of an absolute valid indebtedness, entitled to satisfaction by all lawful remedies, but subjected to the domination of the existing Constitution of the State, which, though passed subsequently to the contract, violates no obligation of the latter.

For the reasons there given and approved by the Supreme Court of the United States, the relief here sought must be denied.

This renders it unnecessary to consider any other questions raised in the argument of the case.

Judgment affirmed.