Rees v. City of Watertown - 86 U.S. 107 (1873)
U.S. Supreme Court
Rees v. City of Watertown, 86 U.S. 19 Wall. 107 107 (1873)
Rees v. City of Watertown
86 U.S. (19 Wall.) 107
Although a mandamus, and alias mandamus, and pluries mandamus, commanding a city to levy and collect a tax upon the taxable property of its citizens in it, to pay judgments which the relator in the mandamus has obtained against it, have all, in consequence of the devices of the city authorities, such as resignation of their offices &c., proved unavailing to compel the levy and collection of the tax, and though "the prospect of future success" by the same writ "is perhaps not flattering," the federal courts sitting in equity do not possess power to appoint the marshal to levy and collect the tax, nor to subject the taxable property situate within the corporate limits of the city in any way to an assessment in order to pay the judgment.
Rees, a citizen of Illinois, being owner of certain bonds issued under authority of an act of the Legislature of the State
of Wisconsin, by the City of Watertown, in that state, to the Watertown & Madison Railroad Company, and by the company sold for its benefit, brought suit in the Circuit Court of the United States for the District of Wisconsin, against the city, and, in 1867, recovered two judgments for about $10,000.
In the summer of 1868, he issued executions upon the two judgments thus obtained, which were returned wholly unsatisfied.
In November of the same year, he procured from the United States circuit court a peremptory writ of mandamus directing the City of Watertown to levy and collect a tax upon the taxable property of the city, to pay the said judgments, but before the writ could be served, a majority of the members of the city council resigned their offices. This fact was returned by the marshal, and proceedings upon the mandamus thereupon ceased.
In May, 1869, another board of aldermen having been elected, Rees procured another writ of mandamus to be issued, which writ was served on all of the aldermen except one Holger, who was sick at the time of the service upon the others. No steps were taken to comply with the requisition of the writ. An order to show cause why the aldermen should not be punished for contempt in not complying with its requirements was obtained, and before its return day, six of the aldermen resigned their offices, leaving in office but one more than a quorum, of whom the said Holger, upon whom the writ had not been served, was one. Various proceedings were had and various excuses made, the whole resulting in an order that the aldermen should at once levy and collect the tax; but before the order could be served on Holger, he resigned his office, and again the board was left without a quorum. Nothing was accomplished by their effort in aid of the plaintiff, but fines were imposed upon the recusant aldermen, which were ordered to be applied in discharge of the costs of the proceedings.
In October, 1870, the plaintiff obtained a third writ of mandamus, which resulted as the former ones had done, and
by the same means, on the part of the officers of the city. A special election was ordered to be held to fill the vacancies of the aldermen so resigning, but no votes were cast, except three in one ward, and the person for whom they were cast refused to qualify. The general truth of these facts was not denied. No part of the debt was ever paid.
In this state of things, the District of Wisconsin having been divided into an eastern and a western district, and the City of Watertown being in the latter, Rees brought suit in the latter district on his judgments obtained in the general district before the division, and got a new judgment upon them for $11,066.
He now filed a bill in the said western district, setting forth the above facts, the general truth of which was not denied; that the debt due to him had never been paid, and that, with an accumulation of fourteen years' interest, the same remained unpaid, and that all his efforts to obtain satisfaction of his judgments had failed. All this was equally undenied.
The bill set forth also certain acts of the legislature of Wisconsin, which, it was alleged, were intended to aid the defendant in evading the payment of its debts, and which, it seemed sufficiently plain, had had that effect, whatever might have been the intent of the legislature passing them.
The bill alleging that the corporate authorities were trustees for the benefit of the creditors of the city, and that the property of the citizens was a trust fund for the payment of its debts, and that it was the duty of the court to lay hold of such property and cause it to be justly applied, now prayed that the court would subject the taxable property of the city to the payment of the judgments. It asked specifically that a decree might be made, subjecting the taxable property of the citizens to the payment of the complainant's judgments, and that the marshal of the district might be empowered to seize and sell so much of it as might be necessary, and to pay over to him the proceeds of such sale.
The answer (or the argument made in the brief upon it) set up, among other things,
"that the City of Watertown
contained a population of but 7553 inhabitants; that the value of its property was assessed at but little over a million of dollars; that the debt of the city is $750,000; that it was impossible for the city to pay this debt; that it was expected and provided that the railroad company would pay the bonds in question; that the city had compromised and settled a portion of its debt; that it had levied the taxes necessary to effect such compromise; and that it was ready to compromise all outstanding bonds and judgments at as high a rate as can be collected of the people of Watertown; that there was no law to compel the retention of the office by aldermen to levy taxes; that the plaintiff took his chance of its being voluntarily done, and that not being voluntarily done there was no violation of law."
By the charter of the City of Watertown [Footnote 1] it was thus enacted:
"Nor shall any real or personal property of any inhabitant of said city, or any individual or corporation, be levied upon or sold by virtue of any execution issued to satisfy or collect any debt, obligation, or contract of said city."
The case was tried in June, 1872, before two judges, holding the circuit court, upon these questions:
"1. Whether, when the principal and interest on the bonds were unpaid, as well as the judgment, and there being no property on which to levy an execution, the plaintiff was confined to a remedy at law by mandamus or otherwise, to enforce the payment of his judgment recovered in this Court."
"2. Whether it was competent for the court, as a court of equity, on the failure of the officers of the City of Watertown to levy the tax as required by law, referred to in the bill, through their neglect, refusal, absence, or resignation, to appoint the marshal of the court to levy and collect the tax to pay the judgment."
"3. Whether it was competent for the court, as a court of equity, to subject the taxable property situate within the corporate limits of the City of Watertown, in any way, to an assessment,
in order to pay the judgment of this Court referred to in the bill of complaint."
The judges were divided in opinion upon them and the bill was dismissed.
The case was now here on certificate of division and appeal, the error assigned being that the court dismissed the bill, when it ought to have given the relief prayed for.