Assessors of Taxes v. State ex rel. Munday

44 N.J.L. 395

• Court: Supreme Court of New Jersey
• Decided: June 15, 1882
• Status: Published

Opinion

The opinion of the court was delivered by

Beasley, Chief Justice.

The relator, being a judg-

ment creditor of the city of Rahway, applied to the Supreme Court for a mandamus to require the assessors of that municipality to levy the amount so adjudged to be due, in compliance with the supplement to the “ Act respecting executions,” approved March 27th, 1878, (Pamph. L. 1878, p. 182,) and that application having been granted, the object of this writ of error is to review that determination.

The supplementary act thus referred to, being the act upon which the action of the Supreme Court has been based, provides to the effect that when an execution shall have been issued against a municipal corporation, and there shall be no property whereon to levy, the officer authorized to execute such process shall serve a copy of the same, not only on the collector of such municipal corporation, but also on the assessor thereof, and it shall thereupon be the duty of such assessor to assess and levy, in addition to the regular taxes, the amount due upon the said execution, with interest, and that this tax shall be assessed and collected at the same time and in the same manner, and under the same conditions, restrictions and regulations as taxes for other purposes are required to be assessed and collected in such municipal corporation. The defendant in error having conformed in his proceedings under his judgment to the requirements of the law, and the assessor of the city of Rahway having refused to assess according to these statutory provisions, the sum so due, the Supreme Court adjudged such refusal illegal, and, the case having been heard on a return to an alternative writ of mandamus, ordered peremptory process to issue, commanding the assessor to make the assessment in question.

This judicial action is challenged by the counsel of the city of Rahway on two grounds: first, because the act of 1878, above referred to, has been repealed by subsequent legislation, and, second, because if such repeal has not obtained, still, under the circumstances of this case, the Supreme Court, in the exercise of its discretionary control over the process of mandamus, was legally bound to refuse to allow such writ.

Pirst, then, with regard to the repeal of the supplement of the year 1878.

It is contended that this effect is the necessary result of the enactment of the act entitled “ A further supplement to an act entitled ‘An act for the better regulation of proceedings upon writs of mandamus,’ passed the second day of December, one thousand seven hundred and ninety-four,” approved March 8th, 1880. The regulations established by this law are to this effect: that whenever application is made for a writ of mandamus to require a municipal corporation to raise, by taxation, any judgment against it, the court to which such application shall be made shall, at the request of such municipal corporation, upon a rule to show cause, or upon affidavits, or otherwise, ascertain and determine, (1) the total indebtedness of such corporation, the time when payable, and the rate of interest payable thereon; (2) the real value, for purposes of taxation, of the taxable property within such corporation; (3) the amount required to be raised within such corporation for necessary expenses for municipal and other purposes during the current year; and (4) the highest rate of taxation capable of being imposed on such corporation without injury to the interests of the creditors of the corporation whose claims are not yet due. The second section of this act is in these words: “That it shall not be lawful to require any municipal corporation, by mandamus, to raise for any such judgment, in any one year, more than such sum as, in addition to the amount found to be required for necessary expenses as aforesaid, will be raised in such municipal corporation by imposing the highest rate of taxation, as determined in the manner aforesaid, and any sum ordered to be raised by taxation shall be included in the next annual tax levy for such municipal corporation.” The third and fourth sections declare that the sum so ordered to be raised may be required to be paid into court, and may be distributed pro rata among creditors having judgments against said corporations; and that if the sum so ordered to be' raised shall not discharge all the claims so proved, the court shall have the power to issue consecutive writs of mandamus, until the sums raised shall discharge such judgments.

The Supreme Court refused to execute this statute, on the ground that it deprived the defendant in error of a remedy for the enforcement of his contract on which his judgment is founded, existing at the time when such contract was made, and was, consequently, repugnant to the constitution of this state and to that of the United States.

In order to understand the question thus presented for our consideration, it is necessary to look at the legislation in force at the date of the transaction between these litigants, which subsequently took the form of the judgment in question.

It appears in this case, and it is admitted, that the debt which the defendant in error recovered against the city, accrued on four certain writings obligatory, and on certain interest warrants and coupons thereto attached, issued by the city of Rahway and under its seal, and delivered to the defendant on the 1st days of September and October, respectively, in the year 1875; as, therefore, it thus appears that the supplement to the Execution act, and which provided for an assessment in favor of a judgment creditor upon service of a copy of the execution on the assessor, was not passed until the year 1878, and was thus subsequent to the time of the contract, such supplement could be no bar to the enactment of this essentially inconsistent act of 1880. The pertinent legislation which was in operation on the 1st days of September and October, 1875, the dates of these contracts, was the following, viz., by section 47 of the charter of the city of Rahway, which was passed in the year 1865, (Pamph. L. J 865, p. 490,) the power is conferred upon the common council of the city to raise by tax, in each year, such sum or sums as it may deem expedient, for (among other purposes) the payment of the interest upon the city debt, and such part of the principal as may be due and payable; and the next section makes it the duty of the assessors to assess the sums so required. Another law then existent was the act respecting executions, approved March 27th, 1874, which, in the ninth section, provides that whenever an execution shall be issued against the inhabitants of any city, in case of the absence of property to satisfy the same, a copy of such writ shall be served on the collector who is required to pay the same out of the first moneys belonging to the city which shall come to his hands.

It thus appears that at the point of time at which the defendant in error became the creditor of the city, his remedies, in default of payment of his debt, were these: first, seizure under execution on leviable property belonging to the city; second, service of a copy of his execution on the collector of the city, and payment out of the first corporate moneys coming to his hands; third, in case the city council refused to impose a tax in order to raise money to pay the judgment, an appli- . cation to the Supreme Court for a mandamus.

As the first and second of these remedies have not in any wise been disturbed or affected by legislative interference, and as they are entirely inefficacious in the present instance, they will be laid out of the discussion. It is the third mode of redress, the municipal power of taxation enforceable by mandamus, which exclusively demands our attention.

By section 7, paragraph 3, of article IV. of the constitution of this state, it is declared that “ the legislature shall not pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts, or depriving a party of any remedy for enforcing a contract which existed when the contract was made.” This last clause relative to the remedy appears to have but little, if it has any, force, for it has recently been decided by the Supreme Court of the United States in the case of Louisiana v. New Orleans, 102 U. S. 203, that the provision securing the inviolability of the contract, is as a necessary consequence, protective of the remedy, such construction being justified from the .consideration that the obligatory force of a contract, in the constitutional sense, resides in its legal enforceability, and that when the contract is preserved from invasion, the means ■ by which the parties to it can be compelled to observe its stipulations, are likewise, by inevitable implication, preserved. Whether we therefore regard this provision as it exists in the constitution of the United States, or as it exists in that of this state, the same inquiry is presented, viz., whether this statute of 1880 deprives this defendant of a remedy which was in force at the time he entered into these engagements with the city.

Assuming for the moment, for the purpose of exposition, that the authority to impose taxes in order to pay the public debts of the corporation, as it was lodged in the common council when these bonds were issued, was irrepealable, so far as related to past debts; that the defendant, as a creditor, had the legal right to require, by the means of a mandamus, such right of taxation to be put into effect in his favor, there would seem to be no reasonable ground for a doubt that this law of 1880, just referred to, is an invasion of the constitutional rights of the bondholder. Viewing the matter from the standpoint of the assumptions just stated, it would obviously follow that having originally a complete and highly effective remedy, the creditor has been turned over to a remedy utterly inadequate and altogether precarious; for, instead of a right to a judicial order upon the municipal authorities to raise, by taxation, the amount of the moneys due him, he is, by this later legislation, enforced to accept, from year to year it may be, a quota of such sum as a judicial tribunal may, in its discretion, declare can be realized from taxation without injury to the interests of creditors whose debts have not matured. The substitution of such a means of redress as this latter one for the assumed right of the defendant to a mandamus enjoining the imposition of a special tax in his favor, would be so clear an invasion of his constitutional prerogative, that, to my mind, the subject will admit of no argument. Such a result will be assumed as a self-evident proposition; and, consequently, the only questions that are debatable are, whether the municipal franchise to tax, and the right of a creditor to a mandamus to compel its exercise, was, in a constitutional point of view, beyond the sphere of subsequent legislation.

These are the issues which were the principal matters of discussion before this court, and which have been treated with much acuteness and force of reasoning in the briefs of the respective counsel.

The first argument that was urged in behalf of the plaintiff in error was, that the power to tax, with which this city council was clothed at the dates of these contracts, was a discretionary power, the charter providing that this body, in each year, should be empowered to raise such sum or sums of money as it “ should deem expedient ” for the purpose designated. It was insisted that this reference to the judgment of the council as to the expediency of raising any given amount of money in a particular year, put the matter entirely in its discretion and removed it beyond the supervisory control of the courts. But the words thus emphasized are, in truth, valueless for any legal purpose, for if they should be entirely erased from the sentence in which they stand, the sense of the clause would remain unaltered. Every legislative grant to a municipal body to exercise the power of local taxation, carries with it, unless the terms of such grant are restrictive, the authority to levy such an amount of moneys for the public uses as such body may deem expedient. In almost all instances the sums to be raised are left to the judgment of the taxing body. But such judgment cannot be capriciously exercised, and must be conformed to those standards of conduct which are the acknowledged measures of legal obligation. If it seeks to violate such principles the judicial tribunals are bound to intervene. A municipality, so long as the ability and the means of imposing and collecting taxes are left to it, cannot refuse to exercise such capacities simply on the ground that, under the circumstances, it finds it inexpedient to pay its debts. I have found nothing in the phraseology of this particular charter, in the respect in question, which has a tendency to distinguish it from the ordinary case of' a municipality endowed, in the ordinary form, with a power to raise moneys for public uses by means of taxation.

■ Another consideration considerably pressed upon the attention of the court against the enforcement of the taxing power to pay this judgment was, that such judgment is founded on a bond which was issued to raise money to pay for municipal improvements, and that in the charter of this city there is á special provision that the costs of such improvements shall be assessed upon the owners of lands upon the line of the street so improved. It is true that such a provision is to be found in the charter of this city, but such provision, as is conclusively established by the existence of the judgment in this case, was not of such a character as to compel this creditor to resort to it as the sole means provided for the recovery of his debt. Had such been its effect, it would have afforded a defence to the action which has resulted in this judgment. Under the circumstances now exhibited, the inference is one of law that this bondholder, when he entered into his engagement with the city, had the right to look, for the repayment of his money, not only to the supposed ability of the municipal authority to impose a special tax on the lands benefited by the improvement, but, as well, to its other sources of revenue. That these bonds, even if they are to be assumed to be of the class known as improvement bonds, as was alleged by counsel, must now be held to have imposed a general liability upon this corporation, is plainly ruled by the case of United States v. New Orleans, 98 U. S. 381. But, in point of fact, the argument upon this head is as irrelevant as it is untenable, for there is nothing which appears in any wise before this court which serves to show that the debt, of which these bonds were the evidence, was in any respect connected with any local improvement whatever. All that this court can know upon this subject, as the case is here presented, is that this corporation became indebted to this defendant in error, and consequently gave to him those obligations on which he has obtained this judgment.

But it was further urged, iu opposition to this judgment in the court below, that the writ of mandanus is not, in a constitutional sense, “ a remedy for enforcing a contract,” and that if it be such remedy it is a discretionary writ, and finally, that the power of taxation confided to a municipal corporation could, unless in certain exceptional cases, be withdrawn or modified at the pleasure of the legislature.

The proposition that the writ in question is not a remedy for the enforcing a contract is, it seems to me, plainly inadmissible. It is true that it is not one of the usual methods for that end, but it is one of the extraordinary instrumentalities. If a judgment should be obtained in an inferior court, and such court should refuse, without legal reason, to issue an execution upon it, the mandamus compelling such action would be as much a remedy for enforcing such contract as would be either the judgment or final process. And so in many other cases which might be enumerated. That a municipal corporation owing a debt will, under common circumstances, be compelled by the use of this power to procure the funds to defray such debt, is a well-known procedure, and in-such instances I see no reason for the assertion that this writ is not strictly a remedy for the enforcement of an agreement. The contention is not countenanced by authority and is not sustainable.

With regard to the position that the writ is one resting in the discretion of the court, and that therefore it will not be issued when, on the whole, its effect would be detrimental to public interests, it is to be observed, in the first place, that a concession of the tenability of such position could not purge this act of 1880 from the taint of unconstitutionality. Even on the assumption designated, such act would impair the remedy, as its effect is to hem in and weaken the power of the court, in the exercise of its authority by force of such writ. But for this statute the court, let us say, in its discretion, could order the whole of the judgment debt to be levied by taxation; by force of such statute only a certain amount of such debt could be authorized to be raised. It is manifest, therefore, that this statute of 1880 is as illegitimate, if the process of mandamus is to be regarded as discretionary, as it would be if we were to hold that such writ is a remedy enuring to a party as of absolute right. The consequence is, that with respect to the judicial discretion to be exercised in the present ease, we would have to regard the question as qualified or conditioned by the provisions of the act of 1878, (and which is unrepealed if the act of 1880 is invalid,) which declares that when, under the circumstances mentioned, a copy of an execution shall have been served on the assessor of the city, it shall be his duty “ to assess and levy, in addition to regular taxes, the amount due upon said execution.” This legislative provision, it must be owned, vests in the judgment creditor a right to have his debt paid from the source specified ; the statute makes no allowance for the pecuniary embarrassments or the insolvency of the corporation; the mandate of the act is, that in every case and in all situations, upon the requisite proceedings being taken the sum due must be assessed and collected. It is believed no precedent can be found of courts, upon a proper application, refusing to require an officer to discharge such a duty, so specific and remedial, with regard to a purely private right, as this. In the case of City of Galena v. Amy, 5 Wall. 705, it was urged that a mandamus should not issue to compel taxation in order to pay a judgment, on the ground of the largeness of the claim and’ the inability of the city to pay it, but the court rejected the plea, saying: “ "We can give no weight to considerations of this character when placed in the scale as a counterpoise to the contract, the legal rights of the creditor and our duty to enforce them.” And such language would seem particularly appropriate in the present instance, when we have before us a statute giving the creditor a specified remedy to obtain satisfaction of his judgment, for, in prescribing such remedy, it was for the legislature to define the exceptions to its use, if there were to be such. This has not been done. The act says,, in every case the judgment creditor shall have an assessment made in his favor; is it competent for the court to say that he shall not have it in a certain class of cases ? The scheme of the statute may, as applied to present circumstances, be an unwise one, but as it' is the law it is difficult to see how the court can refuse to execute it. The allowance of the writ of mandamus is certainly, in some cases, an act resting in judicial discretion, but such right of judgment does not embrace the province of supervising legislative'acts creating private rights, and of refusing, occasionally, to put them in force from motives of supposed expediency or public policy. It would be difficult to find any sanction in reason or in judicial decisions for such an exercise of judicial authority.

I turn, then, to the last exception taken to the proceedings in the court below, and that is that the taxing power of this city, as it existed at the time when these contracts were entered into, was repealable at the will of the legislature, and that, consequently, the modification of such power made by the act of 1880 was constitutional.

The argument on this branch proceeded on the ground that, as the franchise to lay taxes was a part of the prerogative of the state, it could not be implied that a municipal corporation to which a portion of such prerogative was granted, had, by merely entering into a contract, imposed upon itself an obligation to use such franchise in the fulfillment of its stipulations. It was insisted that the cases in the United States court have gone no further than to hold that the legislative control over the municipal capacity to impose taxes continued nntrammeled, except in cases in which such capacity had entered into the contract sought to be enforced by way of security for its performance, or where a judicial order had been made for the exercise of such power in a particular case, before its revocation by the legislature. It is not to be denied that this position has some color of legality from certain expressions appearing in the case of Merriwether v. Garrett, 102 U. S. 472, and if that were the last case in the Supreme Court of the United States treating of this subject, this topic of the argument would require grave consideration. But such is not the situation, for the decision referred to has been explained in the later judgment given in Wolff v. New Orleans, 103 U. S. 358. And, indeed, this last-named decision is, in all important respects, so pertinent to the inquiry now before this court, that it not only displaces the case of Merriwether v. Garrett from its position of being a possible authority in favor of the plaintiff in error, but must be held to have decided all the essential questions which were discussed on the argument in the present case. In the case of Wolff v. New Orleans, above mentioned, the general rules propounded are that laws are void which withdraw or restrict the taxing power of a city so as to impair the obligation of its contracts, made under' a pledge, expressly or impliedly given, that it should be exercised for their fulfillment, and that a mandamus will lie to enforce it at the suit of the party to a contract who has no other adequate remedy. The facts giving rise to these resolutions were, in general, of the same character with those now under consideration. It was like the plan of the statute now in question, a legislative attempt to relieve an insolvent ■city from the pressure of its debts, and a mandamus was applied for to compel the exercise of the municipal power of taxation in favor of a judgment creditor. That judgment was on certain bonds which had been issued by the city by virtue of an act which made no provision for the use of the taxing power for the payment of the principal sum secured by such obligations. At the time of putting forth such contracts the city possessed a general power to raise moneys by taxation for the payment of its debts, and it was this power which, by the subsequent legislation, was sought to be controlled and narrowed. The decision of the court was that this latter law was void, inasmuch as it impaired the remedy to which the bondholder had the right to look when he became the creditor ■of the corporation. The following quotations from the opinion of the court in this case will show its close pertinency on the present occasion: “ The argument in support of the act,” says the opinion, “ is substantially this: that the taxing power belongs exclusively to the legislative department of the government, and when delegated to a municipal corporation may, equally with other powers of the corporation, be revoked or restricted at the pleasure of the legislature. It is true that the power of taxation belongs exclusively to the legislative department, and that the legislature may at any time revoke, at its pleasure, any of the powers of a municipal corporation, including, among others, that of taxation, subject, however, to-this qualification, which attends all state legislation, that its action in that respect shall not conflict with the prohibitions of the constitution of the United States, and, among other things,- shall not operate directly upon contracts of the corporation so as to impair their obligation by abrogating or lessening their means of enforcement. Legislation producing this-latter result, not indirectly as a consequence of legitimate measures taken, as will sometimes happen, but directly by operating upon those means, is prohibited by the constitution and must be disregarded—treated as never enacted—by all courts recognizing the constitution as the paramount law of the land. This doctrine has been repeatedly asserted by this-court when attempts have been made to limit the power of taxation of a municipal body, upon the faith of which contracts have been made, and by means of which alone they could be performed. So long as the corporation continues in existence, the court has said that the control of the legislature over the power of taxation delegated to it, is restrained to-cases where such control does not impair the obligation of contracts made upon a pledge, expressly or impliedly given, that the power should be exercised for their fulfillment.”

From these extracts from this opinion, it will be perceived that what is decided is this : that when a municipal corporation is in possession of a general power to lay taxes for the payment of its debts, and such corporation, so circumstanced, enters into a contract for the payment of money, such taxing power, by implication, is pledged as a security for the performance of such contract, and that, as a result, the taxing power so pledged cannot be curtailed or impaired by any subsequent legislation, so far as respects the party to such contract. As supplementary to these propositions, it was further held that the party claiming under such contract had the legal right to a mandamus, notwithstanding the alleged insolvency of the corporation, to enforce the city to exercise such taxing power in his behalf.

It is not perceived how this reported case is to be distinguished from the case now before us for decision, and as, upon the subjects involved, its determinations are of imperative and indisputable authority, such subjects must, as it is conceived, be considered to be res adjudieata.

With respect to the complaint that the court below refused to consolidate the proceedings in the several writs of mandamus, in conformity with the requisition to that effect contained in the act of 1880, it is sufficient to say that such matter has not been placed before this court by this writ of error. It is not shown that a motion to consolidate these cases was made in the Supreme Court, or that any judgment was passed with respect to that subject.

The judgment is affirmed.

For affirmance—The Chief Justice, Depue, Knapp, Scudder, Yan Syckel, Clement, Cole, Whitaker, Green. 9.

For reversal—None.