APPEAL from the Circuit Court for the Western District of Wisconsin; the case being thus:
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 and 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 compely 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 [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.
Messrs. H. W. and D. W. Tenney (with whom was Mr. S. U. Pinney), for the creditor appellant:
The theory of the bill is that the complainant having established a clear legal right at law, and having demonstrated that he has no remedy there, it is the duty of a court of equity to devise and enforce an effectual remedy. This must be done through its own officers, because there are no others in existence capable of doing it.
The opposite theory is that the court can only command existing city officers to execute existing State tax laws, and if there are no such officers, the end of judicial power is reached.
We assert the right of the Federal court to take possession of a city, and sell it in its own way, without regard to State laws of State officers. And on the other side, the position is that the Federal court is powerless in this case to execute its judgments, except through instrumentalities provided by another sovereign; and that, these being withdrawn, the city may safely and effectually repudiate its debt.
That we have established a clear legal right will be admitted. Equally admitted will it be that, in good faith, through several years, we have tried with diligence, but in vain, every resource of the law, and that now and for a long time past there are no officers in existence capable of executing the command of the court to levy a tax, and that the city has no property subject to execution. What is our remedy at law, if we have one? Any further attempt at law would not only be fruitless to us, but would bring the court of law which sought to give it into ridicule.
Then comes the important question whether, all legal remedies failing, the court of chancery can give us a remedy? This involves the original and ultimate powers of the court. Story says: [2]
'Perhaps the most general, if not the most precise description of a court of equity, in the English and American sense, is, that it has jurisdiction in cases of rights recognized and protected by the municipal jurisprudence, where a plain, adequate, and complete remedy cannot be had in the courts of common law.'
Now, a proceeding at law, which, after having been tried and retried, once, twice, and again, is found to be wholly worthless, cannot be called 'an adequate and complete remedy.'
Looking through the specific enumeration of the cases in which equity acts, we find nothing substantially limiting the broad statement made by Story, or taking our case out of it. The very ground of the jurisdiction of equity is that there is a legal right and no legal remedy, and by necessity the jurisdiction must be coextensive with the reason. Finding that the general words and the reason of the law cover our case, and finding no limitation thereon, we may stop and ask our opponents to show where any limitation has been made, and why it should be made, to prevent the court from giving us redress in this case, as it does in others upon the same reason. Here is legal right and no legal remedy. If that ever gives jurisdiction, why not in this case? If the court generally takes jurisdiction on that ground, what is there to make this an exception?
Will it be said that in other cases there is a practicable remedy which the court can devise and enforce, but not in this? The persons and the property chargeable with this debt are within the territory habitually traversed by the marshal, and so within the reach of the court. The number of persons interested in resisting the execution of the decree of the court is not so great but that the court can summon to its aid a hundred fold to execute it. The thing to be done is not so complex or extensive but that the court can handle it properly. Wherein, then, is the difficulty?
Are the proper parties before the court to entitle us to the relief we ask? The defendant is the same that contracted the debt. It is the same that was charged with the duty of paying it, and which alone had the power to take the property of the citizens for that purpose. It is the embodiment of the citizens to act for them in this matter, made and unmade by them at their pleasure, so far as filling the offices and controlling their action is concerned. It had authority to borrow the money for the citizens, to spend it for the citizens, and to defend against the payment of it at the expense of the citizens. In short, it had ample and exclusive authority to represent the citizens at every stage. The citizens are a numerous and fluctuating body, whom it would be impracticable to bring into court, and merely as representatives of a class, the officers upon whom the law requires process to be served, and whose duty it is made to take action in regard to it, have shown by their diligence that they are sufficient for that purpose.
It may be said that we hold in substance only a contract that the city officers will levy a tax for our benefit, and that the court has no power except to compel a specific performance of this agreement. Such was not the contract. The gist of the contract was to repay the money borrowed, and to this the contract to raise a tax was subsidiary. We are not seeking a specific performance through the means appointed, knowing it cannot be had, but, as in a creditor's bill, are seeking to reach assets in equity which cannot be reached at law. The case is the same as if any ordinary debtor, at the time of contracting his debt, had agreed that he would raise the money to pay it in a particular way, and then had disabled himself from raising the money in that way, having ample funds otherwise.
It may be said that the relief we ask involves an exercise of the taxing power, and that this is not a judicial power. We do not ask the court to exercise the power of taxation, and we admit that in the proper sense of the word the court does not possess such a power. In some analogous cases, courts have spoken of 'ordering the marshal to levy a tax,' &c., and one of the questions certified here is, whether the court has power to appoint the marshal to levy and collect the tax which the city officers ought to have levied and collected. This makes it necessary to discriminate accurately the taxing power from that which we invoke.
In this ordinary sense of the word, the taxing power is a legislative power, and can only be exercised under and by virtue of that power, and by the particular officers and in the particular manner provided for by the legislature. But the power which we invoke and the rights which we assert are simpler than this. We say that the court has jurisdiction of the persons and the property in question, and of the case; and that it can, in any way which its wisdom may approve, subject the taxable property of the city to the payment of our debt, without the intervention of State taxing officers, and without regard to tax laws. The court has the subject-matter within its reach, and the persons representing it before its bar. It has property in sight, out of which it has adjudicated that this debt should be paid. It can see no restriction upon its power to lay hold of it and apply it to that purpose. Why should it fail to execute justice in the matter? It constantly hears controversies as to the title to lands, or the existence of liens or charges upon them, or equities respecting them, and finds no difficulty in handling the matter by its own officers, by sale, or passing of title, or otherwise, so as to accomplish what it has determined that justice requires. If an equitable charge existed against a tract of land owned in severalty by a thousand different persons, the court would not defeat the charge nor refuse jurisdiction because of the difficulty of settling the equities between so many defendants. That seems to us the only difficulty here, and not a very great one. And considering that the parties interested have by their own wrongful acts prevented the payment of this debt by the levy of a tax, which would have settled the equities between them perfectly, it seems to us that we should not be delayed, much less defeated, by this difficulty.
Stating more specifically what remedy we think the court should give us, we may say that it might be something like this: The court might make a decree subjecting the taxable property of the city of Watertown to the payment of this debt, and ordering the marshal to make a list thereof from the best sources he could obtain, and as nearly as convenient like the last assessment roll, the same to be reported to the court. The court might then hear and settle objections to this list, apportion our claim upon the items thereof, as valued, and order the marshal to collect from each person or piece of property the amount apportioned thereto, or in default, to sell the property, or levy on the property of the persons in default, in the main following the analogy of the tax laws, but not too literally. In all the proceedings these things should be kept in mind: First, that the principal object is to give the complainant a simple and effectual remedy. Second, that the proceedings should be wholly in the control of the Federal court, and should not depend on the actions of any State or city officers. Third, that the State tax laws should be disregarded as a source of authority, and regarded as an analogy only so far as convenient. Fourth, that anything done for the purpose of settling equities between the defendants in interest is only a matter of grace, and should not be allowed to work any substantial injury to the complainant.
We suppose that the court might order the money to be made out of any of the taxable property in the city, leaving the citizens to settle the equities between themselves at their leisure; and perhaps that would be the best way.
There is a dearth of precedents on the point now raised. However, in Welch v. St. Genevieve, [3] the court, in a mandamus case, ordered the marshal to levy and collect a tax to pay the debt. There was no State statute authorizing it. In Supervisors v. Rogers, [4] the court issued a mandamus to the marshal 'commanding him to levy and collect the taxes named in said peremptory writ,' &c. But there was a State statute authorizing the court to 'direct that the act required to be done may be done by the plaintiff or some other person appointed by the court,' and the proceeding was probably founded upon that.
Mr. D. Hall (with whom was Messrs. M. H. Carpenter and H. L. Palmer), contra.
Mr. Justice HUNT delivered the opinion of the court.
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This work is in the public domain in the United States because it is a work of the United States federal government (see 17 U.S.C. 105).
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