City of Galena v. Amy - 72 U.S. 705 (1866)
U.S. Supreme Court
City of Galena v. Amy, 72 U.S. 5 Wall. 705 705 (1866)
City of Galena v. Amy
72 U.S. (5 Wall.) 705
1. Where an act amending a city charter says that the city council "may, if it believe that the public good, and the best interests of the city require" it, levy a tax to pay its funded debt, a mandamus will lie, at the suit of a judgment creditor, to make it levy a tax, if it does not. The Supervisors v. United States, 4 Wall. 435, approved.
2. Where a city has a power such as the one above given, it is no return to an alternative mandamus, commanding it to lay a special tax of one percent to pay the principal, and one percent to pay the interest and costs of judgments obtained against it for nonpayment of its funded debt, or show cause &c., that it did, in one year, levy such a tax and that the funds raised by it are wholly exhausted.
Nor is it an argument against the issuing of a peremptory mandamus that the city owes a large amount of other debts, and that if these taxes are collected, other creditors will be entitled to share in the distribution of the proceeds.
3. The acts of the General Assembly of Illinois passed June 30, 1857, and February 6, 1865, amendatory of the Act of June 21, 1852, giving by its fourth section the power to tax its quoted in the first paragraph above, do not repeal that fourth section.
The fourth section of a statute of Illinois passed June 21, 1852, and incorporating the city of Galena declares that the city council "may, if the said city council believe that the public good and the best interests of the city require," annually collect a tax not exceeding one percent on a dollar on the assessed value of all estate taxable in the city, in addition to all other taxes, the fund to be kept separate, and annually, on the 1st of January, paid over, pro rata, upon the funded indebtedness of the city. "This section to continue and be in force until the whole amount of the city's indebtedness, with the interest to accrue thereon, is fully paid."
With this provision in force, the city issued a large amount of bonds to enable it to make various public improvements. One Amy having become possessed of a number of them, and the interest being unpaid, he brought suit and obtained judgment against the city upon them in the Circuit Court for Northern Illinois. The validity of the bonds was not drawn in question. The judgments being wholly unsatisfied, and the city having no property liable to execution,
Amy demanded of the mayor and aldermen that they should levy a tax to pay principal, interest, and costs of the judgment. They refused to do so. He then filed an information in the Circuit Court for the Northern District of Illinois, for a mandamus. He set forth the above quoted fourth section of the Act of June 21, 1852, empowering the city council to levy a specific tax of one percent to pay the interest on its funded debt, and that this tax had not been levied. That by an Act of June 30, 1857, the city council was authorized to levy 1st, a tax of one percent for general and contingent expenses; 2d, five mills for school purposes; 3d, one percent to pay interest on public debt; 4th, an unlimited tax for market halls &c., and other public improvements. That none of the taxes to which the plaintiff, as a bond creditor, has a right had been levied and applied to his principal or interest after a period named, long past. And he prayed the court to issue a mandamus commanding the city council and their successors in office, at their next regular term, to levy a special tax upon the taxable property of the city of one percent to pay the principal, and one percent to pay the interest and costs of the judgments,
"and to pay the same out of the proceeds, and to continue to levy a like amount for each succeeding year until said judgments, interests, and costs are wholly paid."
The city made a return that in 1865 they levied a tax of one percent to pay interest on public debt, and that it had been applied to a proper and lawful purpose.
They set up in bar of the plaintiff's right that they only powers to tax which they had were by the Acts of June 30, 1857, already mentioned, and an act of February, 1865, amendatory of the act of 1852. Sections of these last two acts relating to taxation, and stating for what purposes taxes might be laid were set forth. In the act of 1857 were these:
"Section 1. The city council shall have power, by ordinance, to levy and collect annual taxes not exceeding one percent on the dollar on the assessed value of all real and personal estate
and property within the city &c., made taxable by the law of the state for state purposes, to defray the general and contingent expenses of the city, not herein otherwise provided for; which taxes shall constitute the general fund."
"Section 3. To levy and collect taxes not exceeding one percent on the dollar per annum on all property subject to taxation, to meet the interest accruing on the debt of the city."
In the act of 1865 the following:
"Section 12. The city council shall levy and collect a tax of one percent on the dollar per annum on all property subject to taxation, which tax, when collected, shall be set apart for the sole and exclusive purpose of paying the interest upon the public debt of the city whilst the same is in existence."
The latter act, the act of 1865, also contained the section set forth in the return.
"Section 19. All acts or parts thereof which conflict with the provisions of this act are also repealed, but nothing in this act shall be so construed as to deprive the city council of said city of any power or authority conferred upon the same by the act incorporating the city and the various acts amendatory thereof, except so far as such powers and authority have been expressly modified or repealed by this act or the acts heretofore mentioned."
The return further set forth that the principal of the debt was $142,272, and the assessed value of the property, real and personal, within the city jurisdiction, was $740,000, and that the annual interest upon the debt now exceeded one percent upon the assessed value of the property in the city liable to taxation. It added that the councils intended, in good faith towards the city and its creditors (the relator included), to levy all the taxes which it had a right by law to levy. But that the General Assembly having, by the acts aforesaid, placed a limit upon the power of taxation, the councils were wholly unable to raise money for the payment of the judgments excepting by means of proper ordinances passed under and in pursuance of section one of the Act of January
30, 1857 (above quoted), and that by that section moneys raised were first to be applied to the payment of the ordinary and contingent expenses of the city, and unless so applied that the government of the city could not be administered.
To this answer the relator demurred. The court sustained the demurrer; and the respondents electing to stand by the return, it was ordered that a peremptory mandamus should issue. The respondents now brought the case before this Court for review.