Lawrence Lewis.

American and English corporation cases : a collection of all corporation cases, both private and municipal (excepting railway cases), decided in the courts of last resort in the United States, England, and Canada [1883-1894] online

. (page 47 of 73)
Online LibraryLawrence LewisAmerican and English corporation cases : a collection of all corporation cases, both private and municipal (excepting railway cases), decided in the courts of last resort in the United States, England, and Canada [1883-1894] → online text (page 47 of 73)
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lage, so far as is necessary to legalize a tax, updn its dupli-
cate, to pay a village debt, which, as between city and village,
still remains a village debt. We think that the levy of the
tax in question is not forbidden by Article XI I. of the



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CITY OF CLEVELAND Z/. HEISLEY. 449

Constitution. It is simply a levy upon all taxable property
within East Cleveland, to pay East Cleveland's debt ; to pay
a debt that that property is legally bound to pay in that
way.

But it is urged that the city was, by the statute in force,
forbidden to levy a greater aggregate tax than
eleven mills, in addition to the tax for school and lSStofm^S?
school-house purposes, and such further rate as "^^■^®^'^^-
was necessary to pay the interest on its public debt, and for
cemetery purposes ; and that the levy actually made, exclu-
sive of the tax complained of, aggregated iOt^ mills. The tax
complained of was 33^^ mills, making the aggregate in the two
wards 13^^ mills.

A village aggregate might be eight mills.

It is plain that the village could not confer upon the city
power to exceed the village aggregate. The city had and
retained full power to tax, up to its own aggregate. Its
power to tax was given by the statute. Hence it could not
legally pass the statutory limit. If the village limit had been
greater for the year of the levy than that of the city, under
the doctrines hereinbefore stated, the city could, within the
two wards, for the purpose before us, tax up to said village
limit.

In making the levy complained of, the city exceeded both
limits. An ordinance levying a tax on the two wards,
which, when added to the other taxes, computable in fixing
the aggregate that could lawfully be imposed, did not exceed
eleven mills, would have been valid. The levy actually made
was wholly void, because it made an aggregate greater than
eleven mills. No part of it is sustained by valid action of the
council. Ohio «/. Humphries, 25 Ohio St. 520; Cummings
V. Fitch, 40 Id. 56.

The city claims that the levy complained of is not a tax
computable as part of the eleven mills, but is a ^^^^^^"^
special assessment upon specified property. SSS^ ^"^"^

Sec. 581, Municipal Code (66 Ohio Laws, 248), reads
thus:

" If, in the opinion of the council, it would be equitable,

the whole, or a proportion of the cost of the improvement, as

may be fixed by the council, . . . may be raised by the levy

and assessment, by the council, of a tax upon the general

9 Cor. Cas. — 29



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450 CITY OF CLEVELAND V. HEISLEY.

duplicate of all the real and personal property subject to tax-
ation within the limits of the corporation." If the village had
continued to exist, the levy to pay these bonds would have
been a tax under this section. As already stated, the village,
having once exhausted its power to determine the distribution
of the cost of the improvement, could not, afterwards,
increase the burden upon the abutting lots. That distribu-
tion finally determined how the respective shares of the cost
should be paid. In levying such tax, the city council acts
instead of the village council, and can make no change in the
nature of the levy. In the words of Judge White (The State
V. S trader, 25 Ohio St 536), " we see no just ground on which
taxes raised by general levy, for the improvement of streets,
can be excluded from the aggregate amount of taxes, to the
levying of which corporations are restricted."

As already said, this is a tax levied upon the general dupli-
cate of East Cleveland. It must be counted as part of the
aggregate levy for the two wards.

This conclusion may make it difficult for the city to enjoy
the full benefit of Stipulation 3, but no court can help it The
legislature of course has power to raise the limit of taxation
for municipalities. Whatever that limit may be at the time
of making a levy, the city can go to it, but not beyond it

Therefore the district court did not err in enjoining the
collection of the tax, and its action in so doing is

Affirmed.

Tax Levy Cannot Exceed Limits Fixed by Statute or Con-
stitution. — It is well settled that the levy of a greater amount than is
authorized by law is void. Greedup v, Franklin Co.. 30 Ark. loi. It has
been held that a tax cannot be levied to pay a judgment against a fund
when the tax already levied for that fund equals the maximum — 10 mills
— fixed by law. Sterling School Furniture Co. v. Harvey, 45 Iowa 4^;
Iowa R. L. Co. V, Sac. Co., 39 Iowa, 124. Where county commissioners
levied a tax of one per cent for current expenses, which came up to the
limit fixed, and they then levied an eight-mill tax to make up a deficit in the
preceding year's revenue, the second levy was held void. Atchison, T. A
S. F. R. R. Co. 2/. Woodcock, 18 Kans. 20. County commissioners have no
power to assess an additional tax for previous years on land, on a subse-
quently increased valuation, after taxes for the previous years have been
paid. Sudderth v, Britain, 76 N. C. 458. They have no power to increase
the levy beyond the constitutional limit witliout legislative authority
given in advance. Cromartie v, Commmr's, Z7 N. C. 135 . French v.
New Hanover Co., 74 N. C. 692; Trull v, Madison Co., 72 N. C. 3^»*



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JUSTICE V. THE CITY OF LOGANSPORT. 45 1

Clifton V, Wynne, 80 N. C. 145 ; Mauney v, Montgomery Co., 71 N. C.
486. In Texas the limitation of the constitution on the power of coun-
ties to levy taxes applies only to the erection of public buildings. Texas
A P. R. R. Co. V. Harrison Co., 54 Tex. 119. But while the constitu-
tional restraint imposed on the taxing power applies to taxes levied to
meet the ordinary expenses of county government, it does not extend to
such as may be necessary for the payment of obligations incurred before
the adoption of the constitution. In such cases the limit may be ex-
ceeded. Clifton V, Wynne, 80 N. C. 147 ; Haughton v, Comm'rs, 70 N.
C. 466 ; Street v. Commr*s. 70 N. C, 644 ; Brothers v. Currituck Comm'rs,
70 N. C. 726; Trull V. Madison, 72 N. C. 388; French v. New Hanover
Co.. 74 N. C. 692.



Justice

V.

The City of Logansport.

(loi Indiana, 326.)

Municipal corporations in levying taxes are instrumentalities of govern-
ment, and taxes levied by them are. in legal effect, levied by the State, so
that the lien for such taxes is of equal rank and priority to taxes levied
for State or county purposes.

A purchaser at a tax sale made by the county officers takes the land sub-
ject to the lien for city taxes existing thereon, if the land is of sufficient
value to pay all taxes ; but, if the land is not of sufficient value to pay all
taxes, then the sale first rightfully made will divest the lien for the other
taxes.

From Cass Circuit Court.
D. C. Justice for appellant.
J. C. Nelson and Q. A.Myers for appellee.

Elliott, J. — The appellant foreclosed a mortgage executed
to him by Jacob J. Puterbaugh, and acquired title facts.

under the sale made on the decree. In 1877 the city of
Logansport assessed taxes against the real estate embraced
in the mortgage amounting to $600. At the time the taxes
for 1877 accrued Puterbaugh was the owner of the property,
and was also the owner of $io,cxx) worth of personal property
subject to seizure for the taxes assessed against him. State
and county taxes were assessed against the property for the
years 1877, 1878, and 1879, ^^^ ^^ ^^^ latter year the prop-



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POKATIOm AHD
TAXES OOmiDSA*



452 JUSTICE V. THE CITY OF LOGANSPORT.

erty was sold to pay the delinquent and current State and
county taxes. The appellant was the purchaser at the sale,
and received a deed in due course of law. He seeks by the
present suit to restrain the city from enforcing the taxes
assessed by it against the real estate bought by him at the
sale for State and county taxes.

The theory of the appellant is that the title acquired through
the sale made for State and county taxes swept away all liens
of the city, and vested in him the property discharged from
all liens for municipal taxes.

This theory is constructed on an unsubstantial foundation.
MuHiOTAL ooB- Taxes levied by a municipal corporation are levied
for a public purpose and by public officers. A
municipal corporation is part of the government ;
it is a governmental organization, invested with the powers
of government over a designated locality. One of the oldest
as well as one of the best definitions of a municipal corpora-
tion is, " an investing the people of the place with the local
government thereof." Cuddon v. Eastwick, i Salk. 193.
Cities are much older governmental institutions than counties,
and they were influential agencies in securing stable and lib-
eral government centuries before counties were organized.
Robertson says : " The institution of cities into communities,
corporations, or bodies politic, and granting them the privi-
lege of municipal jurisdiction, contributed more, perhaps,
than any other cause to introduce regular government, police,
and arts, and to diffuse them over Europe." Chancellor Kent
and Judge Dillon accept as correct De Tocqueville's theory,
that municipal corporations are important governmental insti-
tutions, and essential to the preservation of free government
2 Kent Com. (12th ed.) 275 ; i Dillon Munic. Corp. (3d ed.),
section 9, n. 2. The chancellor says : " Public corporations
are such as are created by the government for political pur-
poses, as counties, cities, towns, and villages ; they are invested
with subordinate legislative powers, to be exercised for local
purposes connected with the public good." Counties do not,
therefore, rank higher than cities; they are not as ancient;
they are not more important instrumentalities of government,
nor have they more comprehensive powers. It is not possi-
ble, therefore, to successfully maintain that taxes for county
purposes take precedence of taxes levied by a city pursuant



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JUSTICE V. THE CITY OF LOGANSPORT. 453

to legislative authority. It might with quite as much reason
be affirmed that taxes levied by a city have precedence of
taxes levied by a county as to assert the contrary.
The position which best comports with reason and SSS^roJfSjJr

* , , - . _, , ftr • • OPAL TAXIS.

authority is this : There is no difference in prionty,
and a purchaser at a tax sale made by the county authorities
takes the property subject to the city taxes, except, perhaps,
in cases where it is made to clearly appear that the property
is not of sufficient value to pay both city and county taxes.
Where the property is not of sufficient value to pay both city
and county taxes, then the sale first rightfully made divests the
lien of the other governmental corporation.

The power to levy taxes is an attribute of sovereignty.
Sovereign powers reside in the State, but the power to exer-
cise the sovereign power of taxation may be delegated to a
municipal corporation. In exercising this sovereign power
the corporation invested with it is exercising a power of the
State, and the taxes levied by it as an instrument of the gov-
ernment are, in legal eflFect, levied by the State. The State
acts through one of its governmental subdivisions, and is the
source of power. Whether the taxes are levied by a county
or a city, they are taxes laid upon the people by the State,
acting through its chosen representatives. This view is sup-
ported by the well-reasoned case of Denike v. Rourke, 3 Bis-
sell, 39, where it was said : " Municipal taxes are levied by
virtue of the same general authority which levies and enforces
a payment of State and county taxes — the municipal authori-
ties acting by virtue of the power delegated to them by the
State government, and a sale by municipal authority is, there-
fore, essentially in all respects a sale by State authority."
The question was presented in Dennison v. City of Keokuk,
45 Iowa, 266, as it is here, and it was held, as we hold, that the
sale by the county officers did not divest the lien for city taxes.

Counsel for appellant makes some criticism upon the pro-
vision of the statute that city taxes are to be a lien " to the
same extent as a judgment of a court of record of
general jurisdiction ;" but, in making this criticism,
counsel pursues the illogical course of wresting the
phrase from its connection and completely isolating it.
Statutes are not to be thus treated. The context is to be read
as an entirety, not subjected to a process of dissection. Treat-



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TOOBTHBB.



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454 CARLTON V. NEWMAN.

ing the statute logically, there can be no doubt that it creates
an enduring lien ; it does, indeed, do this in very plain words,
for it declares that " such lien shall be perpetual for all taxes
due from the owner." It would be difficult, if not impossible,
to have employed stronger words. It is obvious that a per-
petual lien cannot be destroyed by a sale made upon a lien
of equal rank. The purchaser may, perhaps, secure a right
to redeem from the city taxes, but he does not secure a title
divested of the lien.
Judgment affirmed.



Carlton

V.

Newman.



{Advance Case, Maine. August 8, 1885.)

When an entire school-district tax is illegal, equity will, at the suit of
all or a part of the taxpayers, enjoin its collection in order to prevent a
multiplicity of suits.

Municipal officers erecting a school-house can lawfully expend therefor
no more money than is voted for the purpose.

Nor, if more than this sum is expended, can the legislature authorize
the excess to be taxed upon the polls and estates of the district.

Joseph C. Holman and Drummond & Drummond for plaintiffs.
E, O. Greenleafiox defendants.

Virgin, J. — While the defendant admits the facts, he
denies that equity can enjoin the collection of the pretended
tax, even on the assumption that it was assessed without the
authority of law and, therefore void, and he contends that
the only remedies open to the plaintiffs, and all the other tax-
payers on whose polls and estates the tax has been assessed
are simply such as the law affords, viz. : Each to defend the
action of debt against himself, provided the collector shall
proceed to enforce the collection by such action, under the
provisions of Rev. Stat., chap. 6, § 141 ; or, in case the col-
lector shall resort to the more usual mode of seizing their
inclividual property under the other statutory provisions for
the collection of taxes, then for each taxpayer whose property



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CARLTON V. NEWMAN. 455

shall be taken to bring an action for damages, or recover
back the money when collected, and these remedies are said
to be " plain, adequate, and complete."

If a tax against an individual be illegal, simply by reason
of some irregularity in its assessment, as for instance, on ac-
count of over- valuation, or if laid on property which the tax-
payer did not own at the time, he would then have ample
remedy therefor by a seasonable application for an abate-
ment. Rev. Stat, chap. 6, §§ 68, 69; Gilpatrick v. Saco, 57
Me. 277. Moreover, it is generally held that a bill to restrain
the collection of a tax cannot be maintained on the sole
ground of its illegality. Greene v. Mumford, 5 R. I. 472 ;
Sherman v, Leonard, 10 Id. 469 ; Guest v. Brooklyn, 69 N. Y.
506; Loud V. Charlestown, 99 Mass. 208 ; Whiting v. Boston,
106 Id. 89, 93 ; Hunnewell v. Charlestown, Id. 350. There
must be some allegation presenting a case of equity jurisdic-
tion. Dows V. Chicago, 11 Wall. 108; Hannewinkle v.
Georgetown, 15 Id. 547; State Railroad Tax Cases, 92 U. S.
575, 614; cases cited 2 Dest. Tax, 676, 677. In Hunnewell v.
Charlestown, supra^ brought b a single plaintiff, the court
adds : " The question is not affected by the fact that there
are others, whether few or many, who are subjected to a like
assessment by the same proceedings of the city council and
who propose to contest their liability."

But we are of opinion that when it appears that an entire
school-district tax is illegal, because assessed without author-
ity of law, a bill to enjoin its collection, brought illegal tax
by all of the taxpayers of the district jointly on Sf^"""*'^"-
whose polls and estates the tax has been assessed, or by any
number thereof on behalf of themselves and all the others
similarly situated, may be sustained upon the ground of in-
herent jurisdiction of equity to interpose for the purpose of pre-
ventmg a multiplicity of suits ; that, although each taxpayer
has some legal remedy, it is grossly inadequate when com-
pared with the comprehensive and complete relief afforded
by a single decree.

The general doctrine, coeval with equity proceedings,
asserted in a multitude of decisions, that, in certain cases,
where parties have some remedy, equity may interpose and
take cognizance for the purpose of preventing a multiplicity
of suits, was declared by Chancellor Kent to be " a favorite



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456 CARLTON V. NEWMAN.

object with a court of equity." Brinkerhofif v. Brown, 6
Johns. Ch. 151, and the number of parties and the multiplicity
of actual or threatened suits, as stated by Comstock, J., some-
times justify a resort to equity when the subject is not at all
of an equitable character and there is no other element of
equity jurisdiction. N. Y. & N. H. R. R. v. Schuyler, 17
N. Y. 608. And yet the precise extent and limitations of the
doctrine are still unsettled, the decisions being quite inhar-
monious even as to its fundamental grounds. It is said that
"bills of peace" were founded upon this ground — to quiet
unnecessary litigation as to titles, and where one person
claimed or defended a right against many or many against
one. Sto. Eq., §864. In these bills originally, whether
brotight by or in behalf of many against one, or by one against
or on behalf of many, ** chancery confined its jurisdiction to
cases wherein there was common interest in the subject-mat-
ter of the controversy, or a common title from which all their
separate claims and all the questions at issue arose, it not
being enough that the claims of each individual being sepa-
rate and distinct, there was a community of interest merely in
the question of law or fact involved, or in the kind and form
of remedy demanded and obtained by or against each indi-
vidual." Pom. Eq., § 268. But, at an early day, the limita-
tions began to yield and the jurisdiction to extend. Thus, in
York V. Pilkington, i Atk. 282, Lord Chancellor Hardwicke
at first intimated that the bill could not be maintained for want
of any general right or privity among the parties, and because
the nature of the defendants' claims was different, and that,
therefore, injunction would not quiet the possession, as other
persons not parties might likewise claim a right. But after
argument, he changed his opinion, saying bills might be main-
tained, although there were no privity between the plaintiffs
and defendants, nor any general right on the part of the
defendants, and when many more might be concerned than
those before the court.

This jurisdiction has continued to extend until it comprises
a great variety of cases, which do not come strictly within
bills of peace, but which courts have declared to be analogous
thereto and within the principles thereof, and in which there
was no common title or community of interest in anything,
save the question at issue and the remedy sought. Thus, m



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CARLTON V. NEWMAN. 457

a recent case, where the owner of lands on a river sought, by
a bill against them lointly, to restrain several owners of mines
from depositing the debris thereof in the river and its tribu-
taries, where it floated down and was deposited on the plain-
tiff's lands, on demurrer, Sawyer, J., sustained the bill, say-
ing: "The rights of all involve and depend upon identically
the same question, both of law and fact. It is one of the class
of cases, like bills of peace and bills founded on analogous
principles, where a single individual may bring a suit against
numerous defendants, where there is no joint interest or title,
but where the questions at issue and the evidence to establish
the rights of the parties and the relief demanded are identical/'
Woodruff V. North B. G. M. Co., 8 Sawy. 628. This case has
been cited and approved by this court in the very recent case
of like nature, v Lock wood v. Lawrence, ante^ 403, to appear
in 77 Me.

So in a late English case, the bursting of the plaintiff's
reservoir occasioned an inundation which damaged the
property of many persons. The statute commissioners issued
certificates to such as satisfactorily proved their damages and
entitled them to costs and could be enforced by action at
law. Fifteen hundred of these certificates were alleged to be
invalid ; and to avoid a multiplicity of suits against itself, the
bilj was brought by the plaintiff against five holders of the
certificates •' on behalf of themselves and all other the persons
named in any of certain pretended certificates." On demurrer,
the bill was sustained first by Vice-Chancellor Kindersley,
and on appeal by Lord Chancellor Chelmsford, who said:
" Perhaps, strictly speaking, this is not a bill of peace, as the
rights of the claimants under the alleged certificates are not
identical ; but it appears to me to be within the principle of
bills of this description. The rights of the numerous claim-
ants all depend upon the same question." And after remark-
ing that if the certificates had no validity, the executions
could not be set aside until considerable expense had been
incurred by many, he concluded : " It seems to me to be a
very fit case by analogy, at lea^t to a bill of peace, for a court
of equity to interpose and prevent the unnecessary expense
and litigation, which would be thus occasioned, and to decide
once for all the validity or invalidity of the certificates upon
which the claims of all the parties depend." Sheffield Water-



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4S8 CARLTON V, NEWMAN.

works V. Yeomans, L. R., 2 Ch. App. 8, 12. See, also» N. ^
& N. H. R. R. V. Schuyler, supra; Board Sup. v. Deyoe, 77
N. Y. 219.

In Brinkerhoff v. Brown, supray a bill by various distinct
judgment creditors to render effectual their executions
against their debtor was sustained in order to prevent a
multiplicity of suits, although their only community of in-
terest was in the relief demanded. See, also, Cadigan v.
Brown, 120 Mass. 493, and Ballou v. Hopkinton, 4 Gray, 324,
wherein one of the reasons assigned for holding jurisdiction
in equity was, that at law each owner must bring a separate
action to obtain a remedy for his particular injury, and
equity prevents a multiplicity of suits.

After an exhaustive examination of the subject both upon
principle and authority, an eminent legal author sums up his
conclusions as follows : " Under the greatest diversity of
circumstances and the greatest variety of claims arising from
unauthorized public acts, private tortious acts, invasion of
private property rights, violation of contract obligations, and
notwithstanding the positive denials by some American
courts, the weight of authority is simply overwhelming that
the jurisdiction may and should be exercised either on be-
half of ^ numerous body of separate claimants against a
single party or on behalf of a single party against a numerous
body, although there is no * common title ' nor * community
of right,' ... or of * interest in the subject-matter,* among
these individuals ; but where there is and because there is
merely a community of interest among them in the questions
of law and fact involved in the general controversy, or in the
kind and form of relief demanded and obtained by or against
each individual member of the numerous body. The same
overwhelming weight of authority effectually disposes of
the rule laid down by some judges as a test, that equity will
never exercise its jurisdiction to prevent a multiplicity of
suits, unless the plaintiff, or each of the plaintiffs, is himself
the person who would necessarily and contrary to his own
will be exposed to numerous actions or vexatious litigation.
This position is opposed to the whole course of decisions in
suits of the third and fourth classes from the earliest period
down to the present time." Pom. Eq., § 269.

These principles apply to the case at bar. They have



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CARLTON V. NEWMAN. 459

been applied to a large number like this. Each of the



Online LibraryLawrence LewisAmerican and English corporation cases : a collection of all corporation cases, both private and municipal (excepting railway cases), decided in the courts of last resort in the United States, England, and Canada [1883-1894] → online text (page 47 of 73)