New Orleans v. The Steamship Company

APPEAL from the Circuit Court for the District of Louisiana; the case being thus:

On the 1st of May, 1862, the army of the United States captured the city of New Orleans. It was held by military occupation until the 18th of March, 1866, when its government was handed over to the proper city authorities. The condition of things which subsisted before the rebellion, was then restored. During the military occupation it was governed by a mayor, a board of finance, and a board of street landings, appointed by the commanding general of the department. On the 8th of June, 1865, Hugh Kennedy was thus appointed mayor. On the 8th of July, 1865, as such mayor, pursuant to a resolution signed by the chairman of the board of finance and by the chairman of the board of street landings, both boards having been appointed in the same manner as himself, Kennedy executed to the appellees a lease of certain water-front property therein described. The lease made the following provisions:

The city granted to the company the right to inclose and occupy for their exclusive use the demised premises for the term of ten years.

The company was as its own expense to build a new wharf in front of the landing, as designated, with new bulkheads to retain the levee earthworks throughout the whole extent of the front assigned to them, they furnishing the requisite labor and materials; to keep the structure in complete order and repair until the termination of the lease, and then to deliver it to the city authorities in that condition, natural wear and tear only excepted. The company was to have the right, at its own cost, to construct buildings and sheds within the inclosed space as should be required for the transaction of their shipping and freighting business. The wharves were to be completed within a year from the date of the lease, of new materials, in a workmanlike manner, and to be protected by a line of heavy fender-piles in front, of sufficient size and strength to enable the largest of the company's ships to land and load at the wharf without damage. All the improvements, consisting of wharves, bulkheads, fender-piles, sheds, buildings, and inclosures, were to be kept in good repair by the company until the expiration of the lease.

The lease was not to be transferred without the city's consent, and, in case of default by the company to fulfil its engagements, the city had the right to annul it. At the expiration of the lease all the improvements made by the company were to become the property of the city. The company agreed to pay an annual rent of $8000, in monthly instalments, for which it gave its promissory notes, one hundred and twenty in number.

The company expended more than $65,000 in making the improvements specified in the lease, and duly paid its notes as they matured down to the 11th of April, 1866, including the one then due.

On the 18th of that month the city surveyor, aided by a number of laborers, acting under an order of the city council, approved by the mayor, destroyed the fence or inclosure erected by the company. It had cost them $7000. The company filed a bill and supplemental bill whereby they prayed for an injunction and damages. The notes for rent given by the company and then unpaid were delivered by the military authorities to the proper city authorities when the government of the city was transferred to the mayor and council. Those unpaid when this litigation was begun were held by the city then and for several months afterwards. They were tendered to the company by a supplemental answer in this case and deposited in court, where they still remained. The note last paid matured and was paid before the inclosure was destroyed. The city had not tendered back the money so paid, nor had it disclaimed the validity of the payment, nor had it tendered back the amount or any part of it, expended by the company in making the improvements, nor made any offer touching the subject.

In the process of the litigation the then mayor, Clark, applied to the Third District Court of the city for an injunction to restrain the company from rebuilding the inclosure which had been destroyed, and an injunction was granted accordingly.

The company thereupon served a rule upon Clark to show cause why he should not be punished for contempt in taking such action in another tribunal. At the final hearing of the case the city offered in evidence order No. 11 of Mayor-General Canby, commanding the military department of Louisiana. The order was dated at New Orleans, February 9th, 1866, and was thus:

'The several bureaus of the municipal government of the city of New Orleans, created by and acting under military authority, are enjoined and prohibited from alienating, or in any manner disposing of, the real estate or other property belonging to the city, or granting any franchise or right to corporations or individuals for a term extending beyond such period as the civil government of the city may be reorganized and re-established under and in conformity to the constitution and laws of the State; and any alienation, disposition, or grant will be subject to any rights and interest of the General Government which may be involved, and shall not extend beyond the time when the questions relative to those rights and interest may be determined by competent authority.'

The court refused to receive the order in evidence, and the city excepted.

The following facts were agreed on by the parties: 'From the execution of the lease to the 18th of April, 1866, the company had been in peaceable possession of the demised premises, and had performed all its obligations under the lease. No notice was given by the city of the intended demolition of the inclosure, and it was done early in the morning. Under its charter of 1856 the city had, before the war, leased portions of its wharves to individuals and companies, and had, in one instance, farmed out the collection of levee dues upon all the wharves by sections. The damages resulting from the destruction of the company's buildings, &c., and the necessary employment, in consequence of this destruction, of additional watchmen, amounted to $8000.'

At the hearing the court decreed that Clark, the mayor, should pay a fine of $300 for the contempt of the court wherewith he was charged; that the city should be enjoined from interfering with the possession and enjoyment of the demised premises by the company during the life of the lease, and that the company should recover from the city $8000 for damages, and that the city should pay the costs of the suit.

It was from this decree that the present appeal was taken.

Mr. W. H. Peckham for the appellant:

I. The imposition of a fine of $300 imposed on the mayor was error. His action was the assertion of a right, and in no sense violated the injunction issued in this cause. Possibly he mistook the court to which he should have applied. But if he had applied to the court below, the application would have been, not to dissolve or modify the injunction already issued, but for another injunction against the company, and in favor of the city, whether such application were made by motion or petition in this suit, or by filing a cross-bill, as might be appropriate under the practice adopted in Louisiana.

If the application to the court below would not have been a contempt, nor an application to dissolve or modify the existing injunction, neither can it be a contempt when made to a State court.

Perhaps a suit for that purpose would be regarded as ancillary to the first suit, within the doctrine of Freeman v. Howe, or, perhaps, as a distinct proceeding within the doctrine of Buck v. Colbath, but in neither case can it be called a contempt.

II. The refusal of the court below to admit the order of General Canby, No. 11, was error. Mayor Kennedy's authority depended on martial law, and was restricted by the terms of General Butler's proclamation. He was always subject to the directions of the military officers. These disapproved of, and virtually reversed his action. The fact that the date is after that of the lease, is immaterial. Martial law is not guided or controlled by constitutions. The apparent injustice to individuals of its decrees is a matter of no weight.

III. The lease cannot stand.

1. It was void of truth. Neither the military nor the civil government had power to make it. It was of property held by the city in trust for the public, for public use; and ultra vires. No power other than that of the State itself could alien the rights of the public, and transfer them to an individual or company, to the exclusion of the public. In Municipality No. 2 v. New Orleans Cotton Press, the court says:

'The city is not proprietor of a locus publicus, but only administrator. It belongs as much to the citizen of Ohio as to a citizen of New Orleans. It is a plan left open for the convenience of commerce, and for the use of the whole world-a thing hors du commerce.'2. The military mayor and boards had no authority to make such a lease. Whatever rights or powers they possessed terminated with the termination of hostilities, and they could no more create an interest to last beyond that time than could a tenant for years create one to last beyond his term.

Mr. James Emott, contra.

Mr. Justice SWAYNE (having stated the case) delivered the opinion of the court.