Badger v. City of New Orleans

The opinion of the court was delivered by Miller, J. The Relator demands that this court order the city of New Orleans to place upon its budget of expenses .for the year 1897, to be paid from the yearly revenues, one hundred and twenty thousand dollars claimed by the relator for the company he represents, under its contract for removing the garbage of the city; the contract having been entered into in 1893 for the period of twenty years, with stipulated payments of ten thousand dollars per — 806 — month to be provided for in the annual budgets. Pending the application for the injunction, the city prepared and published its budget, omitting the company, but placing in the proposed annual expenditures one hundred and twenty thousand dollars for removing garbage, and thereafter the relator obtained an injunction, prohibiting the city from disposing of the one hundred and twenty thousand dollars and other items on the budget, to the prejudice of his demand for payment out of the revenues of 1897. The City answered, averring the nullity and non-performance of the garbage contract,- and prosecutes this appeal from the judgment in relator’s favor. The demands of the relator are modified in argument, and instead’ of payment he asks that the amount he claims be put on the budget as accruing to him, or that the amount now on it for garbage removal be ordered to be retained until the relator’s rights be determined insults to be brought by the city or by him. The City in argument urges the invalidity and non-performance of the garbage contract- and relies on the resolution of the council declaring the contract null. It is brought to our notice, too, that there is a pending suit in the United States Circuit Court brought by the relator asserting his-right under the contract, a-nd in which suit the city relies on its defences. It is thus manifest the binding obligation of the garbage contract is controverted by the city, and is at issue in the pending litigation in the Circuit Court. Modified as are the demands by the argument, it is clear that the-relief he asks at our hands is in aid of the contract obligation he asserts, disputed as is the obligation by the city through its council and in the courts. If we give the relief we place at the relator’s disposal, should he eventually obtain judgment, the amount he claims under his contract; we take from the city to the same extent the control of its budget and the control of its revenues required for' the municipal functions. If we give this relief we necessarily give a-disputed contract recognition, .and make provision to secure performance by the city. The question confronts us at the outset,, whether by mandamus, restricted as it is to enforce purely ministerial duties, with all the aid afforded by the injunction, we can make-obligatory on the City even to the extent claimed an alleged contract the existence of which is denied, and force the City to place on its-budget the amount it refuses to recognize. In our present discussion we deal first with the proposition to en — 807 — join the City from disposing of the one hundred and twenty thousand dollars now on the budget for garbage removal, not put there for the garbage company, but to be expended by the city through its ordinary instrumentalities for the removal of garbage. All can. appreciate that items placed on the budget for the specific purposes stated may be protected from diversion by the parties in interest. It is equally appreciable that funds placed on the budget, destined by law to the satisfaction of a class of creditors, may by injunction be preserved from any application to any other class. See the case of Barber Asphalt Paving Company vs. City of New Orleans, 43 An. 464, and other cases of that type. But in this case there is no provision whatever on the budget for the relator. What is asked in effect is, that the injunction shall restrain the application of an amount which is on the budget, but not for him, to which he conceives he is entitled and should, in his judgment, be allotted to him. Under the form of an injunction, he, in effect, asks that provision be made for him on the budget, not, it is true, that it shall be ordered paid to him, but none the less, that it shall be placed and retained on the budget to abide his rights. We think it must be recognized as familiar, that creditors can not in advance of judgment with exceptions unnecessary to be stated, enjoin the disposition of the debtor’s property. In Mr. High’s comprehensive chapter on the subject of injunctions to municipal corporations he has exhibited the uses of the writ. The misappropriation of municipal funds is, of course, prominent in his discussion. Thus, he instances appropriation of county funds in aid of a private corporation without authority of law; donations without legal authority for school houses; the disposition by county commissioners of the surplus revenues in an illegal and unauthorized manner, and similar cases are stated by him as affording the basis of an injunction. But there is no recognition in the chapter, of an injunction of a creditor to restrain the disposition of the corporate funds. As to creditors we understand the general principle to be that injunction to restrain the debtor’s control of his property can not be obtained. “ It is to be observed, however, that the jurisdiction (i. e., of injunction in behalf of creditors) is not exerted in favor of mere contract creditors, or creditors at large, whose claims are not reduced to judgment, and in the absence of statutory provisions authorizing the relief courts will not interfere by injunction to — 808 — restrain the debtor from any disposition of his property, however fraudulent the disposition he may seek to make,” etc. 2 High, Chapter 27. The answer that the creditor of the city of New Orleans dependent on the annual revenues for his payment and with a contract right to that payment is not a “ mere contract creditor ” does, in our view, withdraw him from the general principle announced by the text writer. Every creditor of the city for labor, supplies, or in other respects, is entitled by law to be placed on the budget for the year in. which his debt accrues, but that, in our view, would not, if he were omitted, entitle him to an injunction to restrain the City from making provisions on its budget for the annual expenses of municipal government. Hard as his condition might be if omitted, he could claim no such injunction as is asked for at our hands, but would be remitted toother relief. Again, in exceptional cases, it is the judgment creditor on whose behalf the injunction, issues to restrain the debtor’s disposition of his property. The judgment establishes his right. Here, it is asked by one who has no judgment, whose asserted debt is disputed and is the subject of pending litigation. With the best consideration we have been able to give this part of the case, we cans not see our way clear to grant the injunction. If there is any warrant for enjoining a municipal corporation from making its annual budget and providing for municipal expenditures, because there is an omission of a creditor with a contract stipulating he shall be put on the budget, but the validity and performance of whose asserted obligation the Oity disputes and contests in court, the authority has eluded our research. If we, in view of the hardship of this case, pressed on us in argument, issue the injunction, we make the precedent repugnant, as we think, to settled principles and apt to prove extremely embarrassing in the future. But the injunction in this case is the mere auxiliary of the mandamus, and the difficulty in respect to that remedy is, in our view of the most serious character. The mandamus issues only to enforce the purely ministerial duty imposed by law. It is said here, the duty arises from an ordinance of the council, and that the ordinance is a law. The ordinance authorized the contract. The ordinance followed by the agreement creates the commutative contract; the company is to remove the garbage in the mode and under the conditions stated in the contract; on performance of the work by the contractor — 809 — he is to be paid by the city. The duty of payment arises from the contract, or rather its performance. Our research confirms us in the opinion that no mandamus can issue to enforce an obligation, which, if it exists, simply arises from a contract and its faithful performance. We find the law epitomized thus: “Duties imposed on a corporation, not by express law or by the conditions of its charter, will not be enforced by mandamus; the use of the writ is limited to obligations imposed by law.” High, Secs. 321, 339. We have been inclined to think it elementary that the duty to be enforced must be imposed by law, not contract. In the much discussed case of Kendall vs. United States, 12 Peters, 554, devoted, it is true, in large part to other questions, the right to the mandamus was placed on the ground of the duty sought to be enforced, was purely ministerial, imposed by law. Take the array of cases in Bouvier. They refer to writs of mandamus to enforce duties created by law. In our reports we have the mandamus to compel the levy of a tax directed by law; the bank required by its charter to exhibit the list of its shareholders may be compelled by mandamus to do so; the treasurer required by the Constitution and laws to pay the auditor’s warrants on specific appropriations may be constrained by mandamus. Watts, Templeton et al. vs. Police Jury of Carroll, 11 An. 141; Hatch vs. Bank, 1 Rob. 470; Cockburn vs. Bank, 13 An. 289; Homerich vs. Hunter, 14 An. 225, and others, but none involving a mere contract obligation. In the cases cited by the Relator of writs of maridamus to compel the levy of a tax to pay municipal bonds, the basis for the writ has been the law under which the bond issues, directing the tax to be levied. Dillon on Municipal Bonds, Sec. 25; Von Hoffman vs. Quincy, 4 Wall. 555; Butz vs. Muscatine, 8 Wall. 577. It' seems to us the conclusion must be the writ follows and enforces the ministerial duty created by the law, and will not command the supposed duty arising only from contract. Again, the issue on the writ of mandamus confined to the enforcement of the obligation arising from the law does not admit of the inquiry into the asserted violation of a contract. In this ease the proof tendered by the City to show the non-performance of the contract was included. If not performed there was no obligation of the city. We are asked, then, to enforce, though only to a limited extent, a contract the defences to which are alleged, and the enforcement is asked in proceeding by mandamus in which the defences can — 810 — not be urged. It seem to us the inability to urge any defences, though they may exist, is in itself suggestive that the mandamus is not the remedy for the asserted wrong of the relator. We And the principle running all through the text-books, in connection with another restriction on the writ, that “ mandamus is not an appropriate remedy for the enforcement of contract rights, and it is not the province of the writ to settle differences of opinion between municipal authorities and claimants as to the amount due for services rendered; all disputed claims or accounts against the municipality should be referred to the jury and to the ordinary processes of the courts, and in the foot-note of the text-book is the suggestive reference to a Pennsylvania decision, that after judgment against the municipality on the disputed demand the writ may issue to enforce its payment. High Extraordinary Remedies, Secs. 889, 821, 25; 16 Sargeant & Rawle, p. IV. In the same line the author states that pending litigation in another court in which the relator has invoked relief will be a bar to the writ of mandamus sought by him. Sec. 25. If in answer to all this it is said the writ does not seek to compel payment to the garbage company, still it is none the less true that the relief asked is a step toward compelling that payment. If the remedy cannot be invoked for performance of the contract, every advance in that direction is forbidden under a writ of specific and restricted scope. If the writ issues the court intervenes in a controversy of the City with its creditor as to the validity of his contract with the City, and notwithstanding the denial of any liability on its part,' and its pending litigation on the subject in the United States Circuit Court directs the city to place the disputed amount on its budget, in.legal effect setting aside the fund for its payment. If, as we think it clear, that contract obligations and disputed claims can not be the basis of the writ of mandamus, then'what we are asked to do, though short of ordering payment, is extending the writ of mandamus beyond the well-defined limits of the law. That we do to-day we.may be called on to repeat to-morrow. The result would be to transfer to this court every issue -between the city and its creditor, claiming under a contract stipulating he should be put on the. budget, and irrespective of all defences of the city, we should be, called on to control its budget so as .to make place on it for all claims disputed by the city and resisted in the courts. With. the .most patient consideration we are unable to give our sanction to — 811 — such use of the writ of mandamus, confined by universal acceptance, we think, to purely ministerial duties and not to end or aid disputed contract obligations. There is another aspect of this case. We find on this budget of 1897, items of expenditure of the year 1896. Under our revenue system the expenses of the year must be paid from the revenues of that year. It is a salutary provision to check municipal extravagance by forbidding the anticipation of the revenues of future years to pay the debts of the present. In this respect the budget proposes an unlawful diversion of funds, the prevention of which is the appropriate office of the writ of injunction. High on Injunction, Sec. 1269. Although the relator, in our view, is not in position to demand payment, his right of payment from the revenue of 1897 being contingent on the judgment he may obtain, we think, sufficient to-entitle him to the injunction against the application of the revenue-of 1897 to pay liabilities of 1896. A large part of the discussion here has been directed to the assertion of power in the council to end a contract by resolution. This- and other phases of the argument, we pass in a decision turning altogether on the remedy sought by the relator. We have not been inattentive, either, to the consideration pressed on us with great-earnestness of the effect of leaving the relator off the budget of 1897, and thus it is claimed excluding him practically from all provision for payment of his demand under a contract of the city, on. the faith of which it is stated the Garbage Company has expended a. large amount for the plant and the equipment necessary for the performance of the contract. If it be determined in the appropriate proceeding the city has any defence against this contract, the relator.will have to bear his loss. If, on the other hand, it is ascertained! the City has no cause of complaint, the relator will be left only with his suit for damages admitting, if recovered, of no satisfaction from-the revenues of this year, because the Council proposes to apply-them to other purposes, and denied any recourse on the revenues of the future by the law devoting the annual revenue of each year to the year’s expenses and excluding all other demands. While we-appreciate this' argument the question of the right to the remedy sought must be submitted to other tests. If the relator stood at the bar of this court with judgments fortifying his contract rights, his position would be sensibly altered. If after he presents' himself — 812 — with such judgment establishing his right to the instalments to be paid to him each and every month according to his contract, this court would be called to exert its control as far as practicable over the budgeted revenues of the year, so as to secure his rights and the observance of the law requiring the application of the year’s revenues to the debts of the year. Our' judgment on the remedy alone will leave the relator the full benefit of other modes of relief. It is therefore ordered, adjudged and decreed that the judgment of the lower court be avoided and reversed in so far as it directs the city to place the relator on the budget of 1897, as claimed by him, and enjoins the payment of the one hundred and twenty thousand dollars now on the budget, but in so far as said judgment decrees that the city be enjoined from applying the revenues of 1897 to the items on the budget for debts or expenses of 1896, that the judgment of the lower court be and is hereby affirmed. Nicholls, C. J., concurs in the decree.