U.S. Supreme Court
Shreveport v. Cole, 129 U.S. 36 (1889)
Shreveport v. Cole
Argued and submitted December 4, 1888
Decided January 7, 1889
129 U.S. 36
Two "residents of Shreveport, Louisiana," sued in the Circuit Court of the United States for the Western District of Louisiana on a contract of that municipality made in 1871, alleging as the ground of federal jurisdiction that the Constitution of Louisiana of 1879 had impaired the obligation of their contract. The municipality answered that it had been held by all the state courts that the provision of the constitution referred to did "not apply to contracts entered into prior to the adoption of the Constitution of 1879." The Supreme Court of Louisiana prior to the commencement of this suit had in fact so decided: Held that this suit was an attempt to evade the discrimination between suits between citizens of the same state and citizens of different states established by the Constitution and laws of the United States, and that the Circuit Court was without jurisdiction. chanroblesvirtualawlibrary
Jacobs and Smith filed their petition in the Circuit Court of the United States for the Western District of Louisiana, describing themselves as "residents of Shreveport, Louisiana," on the 11th day of February, 1882, against the City of Shreveport, "a municipal corporation established by the State of Louisiana, situated in the parish of Caddo, in said State of Louisiana, and within said western district," alleging it to be "justly indebted to petitioner in the sum of forty-seven thousand four hundred and sixty-six 31/100 dollars, with five percent per annum interest from Nov. 19, 1871, as shown by itemized statement hereto annexed as part hereof," upon a written contract annexed and made part of the petition, for the macadamizing of Commerce Street in said city, whereby the city agreed to pay five 40/100 dollars for each square yard of macadamizing, and sixty-five cents per cubic yard for grading, which amounted, upon completion of the work, to ninety-eight thousand one hundred and ninety-two 49/100 dollars, in which amount the city became indebted to petitioners, and that the sum of thirteen thousand four hundred and seventy-six 32/100 dollars was paid thereon by property owners, and a warrant for three thousand two hundred and thirty-five 25/100 dollars unpaid tax was also received by petitioners, leaving the indebtedness eighty-one thousand four hundred and eighty-six 92/100 dollars; that by the terms of the contract the city obligated itself
"to pay the amount of its indebtedness arising thereunto out of funds realized from the collection of wharfage dues, to be received by petitioners when paid by or collected from steamboats at the wharves of Shreveport, until the entire amount of such indebtedness under said contract was fully paid,"
and had collected and paid over such wharfage dues up to December 20, 1878, to the amount of thirty-four thousand and fourteen 61/100 dollars, leaving a balance due of forty-seven thousand four hundred and sixty-six 31/100 dollars. The petition then proceeded as follows:
"Petitioners allege that since the 20th day of December,
A.D. 1878, steamboats have arrived at the port of Shreveport from time to time up to present date, landed at the wharves of said city, and became thereby indebted for wharfage dues, collectible from such steamboats, their masters and owners, amounting in the aggregate to a large sum, say twelve thousand dollars, which should have been collected and paid over to petitioners by said city, but your petitioners aver that since the 20th December, A.D. 1878, said city has failed, neglected, and refused to collect any wharfage dues from steamboats landing at its wharves, and has failed to pay petitioners the amount due them under said contract or any part thereof."
"That on the 15th February, A.D. 1879, and on sundry days before and since said date, petitioners made amicable demand on said city to comply with its obligations under said contract by collecting and paying over to petitioners said wharfage dues, which said demands were by said city utterly disregarded. Petitioners allege that in consequence of the neglect and refusal of said city to collect and pay over to them said wharfage, and by its default in complying with the terms of the said contract, the entire balance due thereunder, viz., said sum of forty-seven thousand four hundred and sixty-six 31/100 dollars, with interest, as hereinbefore claimed, became due by and exigible from said city. "
"Petitioners allege amicable demand in vain."
"They allege further that the law of the State of Louisiana, so far as same had any bearing on or relation to the said contract between them and said city, and to the rights and obligations therefrom resulting, was by operation of law impliedly part of said contract, and there was an implied contract between said city and petitioners that in event of failure on part of either of the contracting parties to comply with the terms of said contract, the obligations resulting from and under said contract might be judicially enforced, and that under provisions of the law of Louisiana existing at date of said contract, petitioners had adequate remedies for the enforcement of their rights thereunder."
"But petitioners allege that Article 208 of the Constitution
of the State of Louisiana, adopted July 23, A.D. 1879, and ratified by the people of said state on the first Tuesday of the month of December, A.D. 1879, has impaired the obligation of said contract by depriving your petitioners of all remedies for the enforcement of same, in this, viz., by limiting municipal taxation throughout said state for all purposes whatever to ten mills on the dollar of valuation."
"Petitioners represent that the assessed value of all property subject to tax by said city is one million eight hundred and fifty-three thousand eight hundred and twenty dollars; that the tax thereon at rate of ten mills on the dollar, amounts to the sum of eighteen thousand five hundred and thirty-eight and 20/100 dollars; that the amount which the city is authorized to levy for license tax on trades, professions, and occupations does not exceed for anyone year the sum of seventy-five hundred dollars."
"That said city has no property which can be seized under execution and no revenues except such as are derived from taxation; that the entire revenues of said city for anyone year do not exceed the sum of thirty-one thousand dollars, an amount not more than sufficient for its alimony, and which must be appropriated for that purpose, and in consequence of said constitutional limitation, if same be valid and operative, no means exist under the law of Louisiana by which said city can raise funds wherewith to pay, or be compelled to pay, its just debts."
"Petitioners allege that Article 208, so far as the same limits municipal taxation, is as to them null and void because it violates the tenth section of the first article of the Constitution of the United States, which prohibits the State of Louisiana with all other states from passing any law impairing the obligation of contracts. That they are entitled to have said Article 208 of the Constitution of the State of Louisiana declared null and void, so that they may have some remedy by means of which to compel said city to pay its indebtedness to them; that the case herein presented arises under the Constitution of the United States, and that your honorable court has jurisdiction thereof. "
"The premises considered, petitioners pray that the City of Shreveport be cited to answer hereto; that after all legal notices and delays, they have judgment against said city, declaring said Article 208 of the Constitution of the State of Louisiana violative of the Constitution of the United States, null and void, and condemning said city to pay to petitioners said sum of forty-seven thousand four hundred and sixty-six 31/100 dollars, with legal interest from November 19, A.D. 1879, and all costs. They pray for all orders and decrees necessary, and for general relief in the premises."
To this petition the City of Shreveport filed, on May 2, 1882, its exceptions and plea to the jurisdiction, stating
"that there is no law, ordinance, or constitutional provision in Louisiana which would impair the obligation of the alleged contract between the plaintiffs and defendant, and no probability of the courts of the state throwing any obstacles in the way of the execution of a judgment in their favor if one should be obtained. On the contrary, all the state courts, from the highest to the lowest, in numerous decisions have held that the constitutional limitation of municipal taxation does not apply to contracts entered into prior to the adoption of the Constitution of 1879, which this is admitted to be,"
which were overruled February 26, 1883, and on March 1, 1883, the city filed its answer upon the merits.
Trial being had, the court charged the jury, among other things:
"That if the jury find from the evidence the income of the City of Shreveport, which is collected under provision, Art. 208, is insufficient to pay more than the amount necessary for alimony, and that the operation of Art. 208 will prevent city from collecting taxes sufficient to pay its debts, then as to any debt contracted prior to the adoption of state constitution of 1879, said Art. 208 violates the Constitution of the United States, and is null and void."
Verdict was returned March 13th, in these words:
"We, the jury, find the following judgment, to-wit: that the plaintiffs in this case have judgment against the defendant in the sum of $13,249.30, that being the amount of wharfage due the City of Shreveport, as proven on the trial to this date, reserving
all the rights to the plaintiffs for the balance claimed by them."
Whereupon this judgment was rendered:
"In this case, by reason of the law and evidence and the verdict of the jury being in favor of the plaintiffs, Benj. Jacobs and Joseph R. Smith, it is ordered, adjudged, and decreed that the plaintiffs do have and recover of the defendant, the City of Shreveport, the full sum of thirteen thousand two hundred and forty-nine and 30/100 dollars, with five percent per annum interest therein from the 17th day of February, 1882, and all costs of suit, said amount being wharfage dues which should have been collected by the defendant and paid over to plaintiffs up to March 13, 1883. It is further ordered, adjudged, and decreed that said amount of $13,249.30 when paid is to be a credit on the amount due by defendant to the plaintiffs as claimed in their petition, and it is further ordered and decreed that the rights of plaintiffs for the balance due them as claimed are reserved to them."
From which judgment the City of Shreveport prosecuted the writ of error herein.