Von Hoffman v. City of Quincy, 71 U.S. 535 (1866)
U.S. Supreme CourtVon Hoffman v. City of Quincy, 71 U.S. 4 Wall. 535 535 (1866)
Von Hoffman v. City of Quincy
71 U.S. (4 Wall.) 535
1. Where a statute has authorized a municipal corporation to issue bonds and to exercise the power of local taxation in order to pay them, and persons have bought and paid value for bonds issued accordingly, the power of taxation thus given is a contract within the meaning of the Constitution, and cannot be withdrawn until the contract is satisfied. The state and the corporation in such a case are equally bound.
2. A subsequently passed statute which repeals or restricts the power of taxation so previously given, is, insofar as it affects bonds bought and held under the circumstances mentioned, a nullity.
3. It is the duty of the corporation to impose and collect the taxes in all respects as if the second statute had not been passed.
4. If it does not perform this duty a mandamus will lie to compel it.
The relator filed his petition in that court, alleging, among other things, as follows:
At the June Term, 1863, and before that time, he was the owner and holder of certain coupons on interest notes of the City of Quincy. They were past due and unpaid. When issued and negotiated they were attached to certain bonds made and delivered by that city in payment for the stock of the Northern Cross Railroad Company, and of the Quincy and Toledo Railroad Company, subscribed for by
the city under and by virtue of certain Acts of the Legislature of Illinois of the 17th of October, 1851, and 26th of January, 1853, and the 31st of January, 1857. By the provisions of these several acts, the city was authorized to collect a special annual tax upon the property, real and personal, therein, sufficient to pay the annual interest upon any bonds thereafter issued by the city for railroad purposes pursuant to law. It was required that the tax, when collected, should be set aside and held separate from the other portions of the city revenue as a fund specially pledged for the payment of the annual interest upon the bonds aforesaid. It was to be applied to this purpose from time to time as the interest should become due, "and to no other purpose whatsoever."
The city failed to pay the coupons held by the relator for a long time after they became due, and refused to levy the tax necessary for that purpose. The relator sued the city upon them in the court below, and at the June Term, 1863, recovered a judgment for $22,206.69 and costs. An execution was issued and returned unsatisfied. The judgment was unpaid. The city still neglected and refused to levy the requisite tax. He therefore prayed that a writ of mandamus be issued commanding the city and its proper officers to pay over to him any money in their hands otherwise unappropriated, not exceeding the amount of the judgment, interest, and costs and, for want of such funds, commanding them to levy the special tax as required by the acts of the legislature before referred to sufficient to satisfy the judgment, interest, and costs and to pay over to him the proceeds.
The city filed an answer. It alleged that there was no money in its treasury wherewith to satisfy the judgment, and as a reason why a peremptory writ of mandamus should not issue, referred to an Act of the Legislature of Illinois of the 14th of February, 1863, which contains the following provisions:
"Sec. 4. The city council of said city shall have power to levy and collect annually taxes on real and personal property within
the limits of said city, as follows:"
"On real and personal property within or which may hereafter be within portions of said city lighted with gas, to meet the expenses thereof, not exceeding twenty-eight cents on each one hundred dollars per annum on the annual assessed value thereof."
"On all real and personal property within the limits of said city, to meet the expenses of obtaining school grounds, and erecting, repairing, and improving school buildings and school grounds, and providing teachers and maintaining public schools in said city, and to be devoted exclusively for such purposes, not exceeding twenty-five cents on each one hundred dollars per annum on the annual assessed value thereof, provided that no more than eighteen cents on each one hundred dollars aforesaid shall be levied in any year for such purposes without the concurrence of a majority of the votes of legal voters of said city, to be cast at an election to be ordered by said city council, and held to determine the rate percent so to be levied."
"On all real and personal property within the limits of said city, to pay the debts and meet the general expenses of said city, not exceeding fifty cents on each one hundred dollars per annum on the annual assessed value thereof."
"Sec. 5. All laws and parts of laws, other than the provisions hereof, touching the levy or collection of taxes on property within said city, except those regulating such collection, and all laws conflicting herewith, are hereby repealed, but this act shall not affect taxes of said city relating to streets or alleys or to licenses of whatever nature, nor any sources of revenue other than taxes upon real or personal property, and which said act remains in full force and unrepealed."
The answer averred that the full amount of the tax authorized by this act had been assessed, and was in the process of collection; that the power of the city in this respect has been exhausted,
"and that the said fifty cents on the one hundred dollars, when collected, will not be sufficient to pay the current expenses of the city for the year 1864, and the debts of the said city."
It further alleged that about the year 1851, the city, under the Act of November 6, 1849, issued to the Northern Cross Railroad Company bonds to the amount of $100,000, and about the year 1854, under the Act of January 26, 1853, other bonds to the amount of
$100,000, and that about the year 1856 it made and delivered its other bonds to the amount of $100,000. It alleged that the bonds last issued were wholly unauthorized, but that they were subsequently ratified by the legislature by the Act of January 1, 1857. The relator's judgment, it averred, was founded upon coupons belonging to bonds of these three classes.
The relator demurred to the answer, and judgment was given against him.
The principal question in this Court was whether the Act of February 14 impaired the obligation of a contract, and was therefore void within the tenth section of the first article of the Constitution, which prohibits any state from passing such an act.
A second question was whether, if it did so, a mandamus would lie against the city to compel it to levy a tax to pay the debt.