U.S. Supreme Court
New Orleans v. Warner, 175 U.S. 120 (1899)
New Orleans v. Warner
Argued March 18, 1899
Decided November 13, 1899
175 U.S. 120
Following the decisions of the Supreme Court of Louisiana, this Court holds that the drainage warrants of the City of New Orleans, in question in this case, being neither bills of exchange, nor promissory notes, nor notes payable chanroblesvirtualawlibrary
to order or bearer, nor effects negotiable by endorsement or delivery, are not included within the terms of Article 3540 of the Civil Code of Louisiana, prescribing certain actions therein named, and are not prescribed by the statutes of that state.
The City of New Orleans, having voluntarily assumed the obligations of a trustee with respect to the fund to be raised by the collection of drainage assessments, cannot set up the prescription contained in Article 3547 of the Code against an application which, as such trustee, it had undertaken and had failed to perform -- the rule being well settled that, in an action by a cestui que trust against an express trustee, the statute of limitations has no application, and no length of time is a bar.
It is immaterial whether the assessments against the city itself for the drainage of public property were reduced to judgments or not: by reducing its own claim to judgment, it neither ceased to be debtor nor trustee.
The judgment and decree in Peake v. New Orleans, 139 U. S. 342, cannot be considered as a controlling authority in this case, the facts being different, as shown in the opinion of the Court in this case, and it would be inequitable to permit the city to set up that decision as an excuse for its failure to collect these assessments.
A judgment for taxes does not differ from any other judgment in respect to its conclusiveness, and the City of New Orleans cannot, after the lapse of more than twenty years, question its liability upon the judgments against it for the amount of these assessments.
It was the intention of the amendment of 1874 to the Constitution of Louisiana, limiting the power of New Orleans to contract debts thereafter, to validate the issues of drainage warrants, some of which are questioned in this suit, not only for the work done, but for the property purchased by the city, in case it should elect to do the work itself.
The fact that the city chose in 1876 to pay for property which Van Norden bought from the Ship Canal Company in 1872 six times as much as he then paid for it is one that cannot be considered here, as, from the decision in Fletcher v. Peck, 6 Cranch 87, to the present time, this Court has uniformly refused to inquire into the motives of legislative bodies.
The objection that the decree finds the city a debtor to the complainant in the amount of the warrants is more apparent than real, since it also declares that he is entitled to be paid out of the drainage assessments, refers it to a master to state an account of such assessments, and provides for an absolute decree against the city only if the fund established by the accounting shall be sufficient, and for a pro rata decree if such fund be not sufficient to pay all the warrant holders in full.
The liability of the city to pay interest was conditioned upon the presentation of the warrants and the endorsement upon them of the date of such presentation; but the commencement of suit was a sufficient demand to charge the defendant the interest from that day at the rate specified in the contract. chanroblesvirtualawlibrary
This was a bill in equity filed November 26, 1894, in the Circuit Court for the Eastern District of Louisiana by John G. Warner, a citizen of the State of New York on behalf of himself and all other parties holding obligations of the same nature and kind as himself, to charge the City of New Orleans as the debtor of specific taxes averred to have been levied by lawful authority for the payment of certain warrants, issued for the purchase of a drainage plant and franchise, the collection of which was made the duty of petitioner by statutes hereinafter set forth. A liability on the part of the city was averred as the result of a contract alleged to have been broken by it, and a disregard and violation of duties imposed upon it by statute as to the prosecution of the work of drainage and the collection of assessments therefor.
The facts of the case are so fully set forth in the cases of Peake v. New Orleans, 139 U. S. 342, and Warner v. New Orleans, 167 U. S. 467, that a succinct statement of such facts, taken largely from the opinion of the circuit court of appeals is all that is deemed necessary here.
By an Act approved March 18, 1858, the Legislature of Louisiana provided for a system of draining certain lands within the City of New Orleans and elsewhere, which was to be carried out by boards of commissioners appointed for the three districts into which the territory was divided. The act further provided for plans of the work to be prepared by the commissioners, for assessments to be levied upon the lands benefited, and for the entry of judgments decreeing the lands to be subject to a lien for such amount as might be assessed.
By a supplemental act approved March 17, 1859, the boards of commissioners were authorized to borrow money to carry on the work, and to issue bonds therefor. It was contemplated that the money should be raised at once for the payment of the work, in anticipation of the collection of the assessments.
By an Act approved March 1, 1861, the prior acts were amended by providing for a summary mode of collecting the assessments, authorizing the commissioners to apply to certain courts for the approval and homologation of the assessment rolls, which approval and homologation the act declared chanroblesvirtualawlibrary
"shall be a judgment against the property assessed and the owners thereof, upon which execution may issue in the ordinary mode of proceeding."
The commissioners made plans of the work proposed to be done, including therein the streets, squares, and public places within the several districts, as the property of the City of New Orleans, and from time to time judgments were rendered charging these public places, as well as private property, with the amounts that had been assessed for drainage purposes. The city was named as the owner of these public places in the tableau, and judgments were rendered against it as such owner for sums amounting in the several districts to $719,926.63.
On February 24, 1871, the legislature passed an act entitled "An Act to Provide for the Drainage of New Orleans." This act abolished the several boards of drainage commissioners, transferred their assets to the Board of Administrators of the City of New Orleans, sub