Fabric Fire Hose Co. v. Mayor of Vicksburg

1. Municipal Corporations. Extension of territory. Liability for debts. Section 3301, Code 1906, as amended by Laws 1908, chapter 186, and the other cognate sections in chapter 99 of the Code on municipalities provide alone for power in a municipality to incorporate by extension of its limits, adjacent unincorporated territory. Those sections nowhere look in any of their provisions to any grant of power to an existing municipality, to extend its territory over the territory of another municipality and thus absorb it, so that where a city extended its boundaries in ignorance of the fact that the new boundaries included another incorporated town, its ordinance was void, and it did not thereby become liable for the debts of the town thus attempted to be absorbed. 2. Same. In such case where the incorporated town thus absorbed was later dissolved and afterwards the city again extended its boundaries, so as to include the territory of such town, the city was not liable for the debts of the town, since at the time of the valid extension of its boundaries- there was no existing incorporated town. 3. Municipal Corporation. Extension of territory. Liability for debts. Where a city extended its boundaries so as to include the territory of a formerly incorporated town, the city had no power at the suit of a creditor of such town to tax the included territory to pay the debts of the town which had been abolished.

Appeal from tlie chancery court of Warren county. HoN. E. N. Thomas, Chancellor. Bill by the Fabric Fire Hose Company against the Mayor and Board of Aldermen of the City of Vicksburg. Decree for defendant, and plaintiff appeals. The facts are fully stated in the opinion of the court. Counsel for appellee rely upon the case of Village of Gandsi v. Town of Seminary, 49 So. 908, in support of the contention that this attempt on the part of the city to annex the greater part of Walters was void. In that ease it is held that while the purpose of the legislature was clearly to prevent the concurrent existence of two adjacent municipalities where one had more than five hundred inhabitants, yet, there was no way prescribed whereby - one municipality could absorb another without the consent of the latter. It occurs to us that the two cases are not necessarily parallel, for in the Gandsi case the inhabitants were unwilling to be annexed to Seminary and opposed being absorbed, while in the instant case there was not only no objection raised at the time, but a few months afterwards the people of Walters surrendered their charter and submitted quietly to being taxed by the city of Vicksburg, which they have been ever since. Why was this not a full compliance with the statute! Its language is that such smaller municipality “shall be abolished” when the said existing city or town shall extend their limits to take in said territory. It does not say “shall stand abolished.” The people of Walters almost immediately proceeded to act under the command of the statute and surrender their charter. But even tho it be conceded that the first attempt of the defendant city to annex this territory was invalid, it will be admitted by appellee that the last ordinance adopted by Vicksburg (January 1, 1917) in that regard was valid and accomplished the purpose attempted by the first, the town of Walters having, long before this last ordinance ceased to exist and the territory formerly embraced in same having become “adjacent unincorporated territory.” This last ordinance was adopted to make the matter certain and leave no doubt as to said territory having been properly annexed. If, then, the former attempt was valid, under the statute itself the defendant city became liable for the debts of Walters, for the statute- provides that when so taken in ‘ ‘ all legal debts and liabilities shall be assumed by the city or town and they shall be legally responsible for same as if they.had been contracted by the said city or town. ’ ’ If said first attempt was not .valid, then the city is still liable for said debts, for by onr own statutes and by the decisions of all the courts, the land formerly in Walters is impressed with a lien for their payment; .the debt of appellant was a valid and subsisting obligation on which a judgment bad been procured and was duly enrolled, and the defendant city annexed said lands with full notice and cum onere.. Onr own supreme court once held that the annullment of the charter of a municipality extinguished its debts (Port Gibson v. Moore, 13 S. & M. 157), but this decision was afterwards overruled in the case of Ross v. Wimberly, 60 Miss. 345, in which Judge Chalmebs delivered the opinion of the court and said: “On the 20th of January, 1880, the charter of the town of Coffeeville was repealed by the legislature. One month thereafter the town was reincorporated by the same name, with substantially. the same powers with some excision of territory and population.' The legal effect of this was, not. to extinguish the debts- of the original corporation, hut to leave them subsisting as valid obligations against the new one. 1 Dill, on Mun. Corp., sec. 170; Broughton v. Pensacola, 93 U. S. 266; Girard v. Philadelphia, 7 Wall. 1. “The case of Port Gibson v. Moore, 13 S. & M. announcing a different view, is contrary to the whole current of modern authority and is overruled.” Here we see that the new corporation created out of a part of the same land was held liable for the debts of the old town, the charter of which had been surrendered. The old town was abolished, as in the instant case, the territory remained unincorporated for a time, a new town was formed out a part of this territory. In effect, these exact steps were taken in the instant case, the only difference being that the territory was made part of an existing city instead of being formed into a new town. The point is that liability for the debts followed the property and we can see no real difference between the Coffeeville case" and that of Vicksburg and Walters. In the former it might have been and doubtless was urged that there was no statute exactly covering the case. ■ The property of the individual inhabitants cannot be levied upon -under the judgment but can be reached only through taxation by some power authorized to levy and collect a tax. Horner v. Coffee, 25 Miss. 434; Jefferson City Gas Light Co. v. Creeman Clark and City of New Orleans, 95 U. S. 644, 24 L. Ed. 523; State v. Hamilton, 40 Kans. 323; The Saphire, 78 U. S. —11 Wall. 164; 20 Wall. 127; Broughton v. Pensacola, 93 U. S. 266; 23 U. S. 896; Mount Pleasant v. Beckwith, 100 II. S. 514; 25 U. S. 699; State óf Kansas v. Charles Edward Lewis, 133 U. S. 198, .33 L. Ed. 604; Mount Pleasant and Caledonia v. Beckwith, 100 U. S. 414; Colchester v. Seaber, 3 Burr. 1866. “Municipal debts cannot be paid by an act of the legislature annulling the charter of the municipality, and, if not, then the creditors of such a political division must have some remedy after the annullment takes place. Without officers, or the power of electing- such agents, a municipal corporation if it can be called, would be an entity very difficult to be subjected to judicial process or to legal responsibility; but when the entity itself is extinguished, and the inhabitants with its territory and other property are transferred to other municipalities, the suggestion that creditors may pursue their remedy against the original contracting party is little less than a mockery. Public property with the inhabitants and their estates, and the power of taxation, having been transferred by the authority of the legislature to the appellants, the principles of equity and good conscience require that, inasmuch as they are and have been for nearly twenty years in the enjoyment of the benefits resulting from the annexation, they shall in due proportion's also hear the burdens. New Orleans v. Clark, 95 U. S. 644, 654, 24 L. Ed. 521, 522; Beckwith v. Racine, 7 Biss. 142, 149. "Where the legislature has repealed a municipal charter, or superseded a municipality by dissolving it or destroying its indentity without making provision for its debts, one of three results must follow: . 1. Either the act which does this is wholly void and inoperative, from which it would result that the legal existence and identity of the indebted municipality" will remain; or, 2. The creditor is without remedy except by an appeal to the legislature; or 3. Equity will assume jurisdiction, treating the property subject to taxation as a fund out of which the creditor is entitled to payment, and will order the officers of the new organizations within which such property is situate, to levy thereon the necessary taxes to pay the creditor. This last result, although supposed by some to be inconsistent with views expressed by the supreme court, in cases where the precise question now under consideration was not in judgment, has been judicially sanctioned by the United States court for Wisconsin; and where the circumstances are such as that equity can clearly afford a practicable' remedy without doing injustice to others, it is based upon considerations which commend themselves to the sense of universal justice. This view, since the foregoing was written, has received the sanction of the supreme court of the United States.” Dillon’s Municipal Corporations, 173, 186. Beginning with the year 1910, the City of Vicksburg has, each year, collected taxes on eighty-three and one-third per cent, of the property formerly embraced in the town of Walters. Many times over has the amount of the debt been paid into the city treasury from this source. At the time of the annexation, whether it was in 1909 or in 1917, the judgment in appellant’s favor against the town of Walters was on the judgment roll of Warren county. The annexation was made Avith full knowledge of the facts. We cannot but believe that, under all the circumstances of this case, this honorable court will hold the city of Vicksburg liable for this entire debt. Appellant’s bill is many barrelled, and each barrel loaded with different kinds of ammunition. It is intended to shoot almost any kind of game that may present itself. 'The prayer is divided into four parts: 1. For a decree against appellee for the full amount due it under its judgment, with interest and costs. 2. If mistaken in this, for that proportion of said judgment as the territory taken in bears to the whole territory of Walters. 3. For mandamus to compel ap-pellee to levy and collect a special tax from the property of this territory sufficient to pay said debt; and, 4. For anything that the court under the facts chooses to give'it. We will consider the first two of - these prayers together, and in doing so will follow appellant’s brief and review its authorities. We desire to say, however, that under no circumstances, we apprehend, will the city of Vicksburg be required to pay all of the indebtedness of the whole town of Walters. While appellant claims in its bill “that the taxable area taken into said defendant city is about eighty-three and one-third per cent, of the whole taxable area formerly embraced in said town of Walters,” which by our demurrer we have admitted, yet we are safe in saying, and as a critical examination of the boundaries of the old town of Walters and the territory so taken in under the ordinance referred to, as appears in the bill, will confirm, probably that not more than one-fourth of the real value of the taxable property of the town of Walters is embraced in the Fort Hill territory under consideration. By a careful examination of every one of appellant’s. authorities it will he seen, we respectfully submit, that in their facts they are essentially and widely different from the facts of the case at bar; we call attention especially to the fact that in every instance where the new municipality has been required to pay the debts of the old one there was either a re-incorporation of the old municipality or it was abolished by act of the legislature and a new one authorized and provided to spring up on, the site of the old one, thus establishing the legal relation of predecessor and successor a sine qua non to liability. ■ The first case cited on the point is that of Ross v. Wimberly, 60 Miss. 345. The facts in this case were that the charter of the town of Coffeeville was repealed by the legislature of 1880. It is evident that this .was done for the purpose of defeating its debts, under the authority of Port Gibson v. Moore, 12 S. & M. 157. One month thereafter the town was re-incorporated by thé same name, with substantially the same powers, same territory and same population, the court decided that this was practically the same town and that it must, therefore, pay the valid obligations of the old one. The next case cited is that of Jefferson City Gas Light Co. v. Clark and City of New Orleans, 95 XL S. 644, 24 L. Ed. 521. In this case by an act of the legislature of Louisiana of 1874 the town or municipality of Car-rollton was annexed to New Orleans, under the provision that the city of New Orleans should assume to pay the debts of the old municipality. The supreme court of the United States decided that under that act of the legislature whether the payment of the debts had. been provided for or not the city of New Orleans was liable. And this is the sum total of the decision. Nothing like the case at bar. The next case cited, and quoted from at great length, is that of the State of Kansas v. Lewis, 133 U. S. 198, 33 L. Ed. 604. In this case Comanche county, in the state of Kansas, contracted debts and afterwards temporarily went out of existence. Some time after that the county was revived and re-organized, but sought to escape the payment of the debts of the old county. A suit was brought against it to enforce the payment of these debts, and the supreme court of the United States decided that the debts of a county contracted during a valid organization remained the obligations of the county, although for a time the organization be abandoned and there be no officers to be reached by the process of the court. It will be observed that the reason that this county abandoned its organization was for the purpose of repudiating these very debts which it was claimed and provided had been fraudulently contracted, but the court said that upon a re-organization or reviving of this county it had to take with it the responsibilities of the old, the evidence of the debts having passed in the meantime into the hands of innocent purchasers, still nothing similar to the case at bar appears. The next case cited and also extensively quoted from is that of Broughton v. Pensacola, 93 U. S. 266, 23 L. Ed. 896. In this case the fcity of Pensacola had contracted a large indebtedness by subscribing two hundred and fifty thousand dollars to the capital stock of a certain railroad company, etc. Afterwards it undertook to repudiate this indebtedness by having its charter changed or amended so as to substitute a new one in its place. The creditors sued, and the supreme court of the United States held, quoting from the syllabus prepared by Mr. Justice Field, that: “A change in the charter of a municipal corporation' in whole or part, by an amendment of its provisions, or the substitution of a new charter in place of the old, embracing substantially the same corporation and the same territory, will not be deemed, in the absence of express legislative declaration otherwise, to effect the identity of the corporation, or to relieve it from its ■previous liabilities, although different powers are possessed under the amended or new charter, and different officers administer its affairs.” Still wholly unlike the case at bar. The next case cited and extensively quoted’ from by appellant is that of Mount Pleasant v. Beckwith, 100 U. S. 514, 25 L. Ed. 699. In this case it was decided simply and only that, quoting from the syllabus: “Where one town is merged in two others by a legislative act, unless the legislature regulate the rights and duties of the two latter, they succeed to all the public property and immunities of the extinguished municipality and they become liable for all the debts previously contracted by it.” It will be observed by an examination of this case that there was another effort on the part of an existing corporation to repudiate certain indebtedness by having itself merged^into another municipality, probably created for that very purpose. These, with the citations of authorities made in the different cases decided, are all the authorities relied on by appellant to support its contention herein, and as pointed out in the review of each of the cases it will be seen that they are entirely unlike the case at bar. The case'of Port of Mobile v. Watson, 116 U. S. 289, 29 L. Ed. 620, practically announces the rule stated. Quoting from the syllabus the decision of the court is as follows: “Here a municipal corporation is dissolved and a new corporation is created, composed .of substantially the same community, including substantially the same taxable property, within reduced territorial limits, organized for the same general purposes and holding by transfer, without, consideration, the public property of the former, it is the successor of the. old corporation and is liable for its debts.” This was another case where the effort was made to repudiate the debts contracted by. the city of Mobile by dissolving the corporation and re-organizing it under the name of the Port of Mobile. The court there pertinently says in passing upon the question: “It is, therefore, a vital question in the case whether the Port of Mobile is a legal successor of the city of Mobile and bound for its debts. ’ ’ The same rule is announced in the case of Shapleigh v. San Angelo, 167 U. S. 648, 42 L. Ed. 310; 1 Dillon Municipal Corp. (4 Ed.), see. 172. Counsel for appellant has not cited a single case, we submit, that upholds his contention. The city of Vicksburg, can in no sense be called the “legal successor” of the old town of Walters or any part of it. The third prayer of the bill is that this court, a court of equity, shall require and compel appellee, the city of Vicksburg to levy and collect a special tax upon the property constituting said teritory for the purpose of paying off this indebtedness. This is a prayer for a writ of mandamus, pure and simple, as that is the only remedy under our statute that can be resorted to for that purpose, and the proper and only forum for that remedy is the circuit court as shown by chapter 94, Code 1906. Mayor and Aldermen of the City of Davenport v. United States ex rel. Lord, 76 U.. S. 409, 19 L. Ed. 704, and note. It seems to us, therefore, that the demurrer was well taken and that the decree of the lower court in sustaining the same and dismissing the bill was eminently right and just, and that therefore the case should be affirmed.