Kerr v. City of New Orleans

SHELBY, Circuit Judge, after stating the case as above, delivered the opinion of the court. — 924 — It is well settled that property owned by a municipal corporation, and used for public purposes, or charged with public trusts or uses, cannot be sold under execution issued on a judgment rendered against the corporation. 2 Dillon, Mun. Corp. (4th Ed.) 576, 577; Meriwether v. Garrett, 102 U. S. 472, 26 L. Ed. 197; Mayor v. Hopkins, 13 La. 326. But the private property of the corporation — that is, such as it owns for profit, commerce, or investment, and that is not charged with public trusts or used for public purposes — may be sold on execution against the corporation. Dillon, Mun. Corp. (4th Ed.) 576; City of New Orleans v. Home Insurance Co., 23 La. Ann. 61. It has already been determined by the highest authority that the property levied on was locus publicus, and not subject to levy and sale (New Orleans v. Louisiana Construction Company, 140 U. S. 654, 11 Sup. Ct. 968, 35 L. Ed. 556); and that determination will be conclusive in this case unless it appears on the final hearing that the property, by proper authority, has been changed to private property held by the city for purposes of commerce, investment, or profit, and not for public purposes, and that it is not charged with public trusts or uses. Wé mention this not to intimate any opinion, but to indicate that the final decision of this case may depend on the solution of a controverted question of fact. In the decree appealed from the Circuit Court has not reached the merits of the case. An injunction pendente lite only has been granted. The court has decided only to preserve the existing conditions till a hearing on the merits. When the case is at issue and the evidence taken the bill may be dismissed or the injunction may be perpetuated. In the decree before us the court has only decided that the plaintiff is entitled to have the defendant enjoined from selling the real estate levied on pending the suit. Formerly the granting of an injunction pendente lite was in the absolute discretion of the primary court, inasmuch as its action was not reviewable by appeal. . The act of March 3, 1891, allowed an appeal from such decree. Act March 3, 1891, c. 517, § 7, 26 Stat. 826 [U. S. Comp. St. 1901, p. 547], amended June 6, 1900, c. 803, § 7, 31 Stat. 660 [U. S. Comp. St. 1901, p. 551]. But since this act was passed its uniform construction has been that the granting of an injunction pending the suit is in the sound judicial discretion of the trial court, and that its order will not be disturbed on appeal unless it is violative of the rules of equity that have been established for the guidance of its discretion. In some of the cases the same meaning is expressed by saying that the ruling of the trial court in granting the temporary injunction will not be reversed unless there has been an “abuse” of its discretion, and in others it is, said that the decree will not be reversed unless it clearly appears that the injunction has been “improvidently” allowed. The appellate court is not to decide what it would have done as to allowing the injunction, but it must recognize that the law has imposed on. the trial court the responsibility of the exercise of this power and the duty to exercise this discretion, and unless there has been a plain disregard of some settled rule of equity which should govern the issue of injunctions, so that it appears clearly that the injunction is issued improvidently, — 925 — the decree should not be reversed. Note to act establishing the Circuit Courts of Appeals (90 Fed. xliv); Proctor & Gamble Co. v. Globe Refining Co., 92 Fed. 357, 34 C. C. A. 405; Dimick v. Shaw, 94 Fed. 266, 36 C. C. A. 347; City of Terre Haute v. Farmers’ Loan & Trust Co., 99 Fed. 838, 40 C. C. A. 117; Lake Shore, etc., Ry. v. Felton, 103 Fed. 227, 43 C. C. A. 189; Bartholomew v. Union Paper Co., 113 Fed. 289, 51 C. C. A. 230; United States Gramophone Co. v. Seaman, 113 Fed. 745, 51 C. C. A. 419; Chickering v. Chickering, 120 Fed. 69, 56 C. C. A. 475; Empire State, etc., Mining Co. v. Bunker Hill, etc., Mining Co., 121 Fed. 973, 58 C. C. A. 311; New Albany Waterworks v. Louisville Banking Co., 122 Fed. 776, 58 C. C. A. 576. It is true that on an appeal from such interlocutory decree the appellate court is authorized to look into the merits of the case, and there is a class of cases in which it would be proper for the court to save both parties the expense of further litigation. Where the equity of the bill is challenged, if the appellate court was of opinion that the plaintiff was not entitled to an injunction because his bill had no equity to support it, the court should direct the dismissal of the bill. Smith v. Vulcan Ironworks, 165 U. S. 518, 17 Sup. Ct. 407, 41 L.Ed. 810. But this is clearly not such a case, because here the issues are not yet joined by pleading, and it is indicated by the bill and affidavits and the “answer to the rule” signed by the defendants’ solicitor that the case is one involving controverted questions of fact. In Clark v. McGhee, 87 Fed. 789, 31 C. C. A. 321, this court, speaking by Judge McCormick, asserted its authority in a proper case on such an appeal to decide the case on its merits, but said that “where the record is insufficient or incomplete the court will only consider whether the interlocutory order was providently granted.” It is alleged in the bill, which is sworn to by the mayor, that the property levied on is “one of the sugar sheds of the port of New Orleans, and dedicated to public use as such.” Again, it is alleged “that said property was and is dedicated to public use, and held by your orator for the use and benefit of all the inhabitants of the city of New Orleans, as part of the public quay in .use as a sugar shed, * * *” and that “its destination or character as locus publicus has never been changed.” No answer or plea was filed by the appellants. There is no sworn pleading or affidavit in the record denying the averments of the bill. Such affidavits were admissible., 1 Bates, Fed. Eq. Proc. 534. The “return” made by the defendants (appellants here) to “the rule to show cause why the injunction should not issue” gives their grounds of contention that the property seized was the subject of seizure and sale under execution. The property was held under a lease, from which the city of New Orleans derived a revenue. On May 19, 1902, the city, acting by its proper officers, directed the comptroller to advertise the property for sale, on terms stated. It was advertised for sale. Bids were made for the property, but the city, having reserved the right to reject all bids, rejected such bids, and did not sell the property. This offer to sell the property, its advertisement, and the report of bids, and their rejection, is shown by exhibits attached to — 926 — the “return.” It is also stated in the “return,” hut not supported by-affidavit or any evidence, that “since the action of the council in rejecting the bids for the property seized herein subsequent efforts were made to sell the same, * * * and that the city council have within the last ten days renewed efforts to sell said property.” The complainant (the appellee here) offered in evidence the affidavits of William Mehle, president of the common council of the city, and of Bernard C. Shields, a member of the council. The affidavit of the former shows the public use of the property, “and that the council has not changed their use, and it is doubtful whether it will do so.” The affidavit of the latter is that “the council has made a tentative offer to sell the property, but has never withdrawn it from public use; that all bids were rejected some months ago upon the only proposal the city ever made to sell the property.” The bill was the only verified pleading, and the two affidavits and the exhibits to the “return” the only evidence, before the trial court. The record before us does not show that the injunction pendente lite was improvidently issued. The decree of the Circuit Court is affirmed, PARDEE, Circuit Judge, having granted the restraining order, took no part in the decision of this case.