State of Louisiana Folsom v. Mayor of the City of New Orleans/Dissent Harlan

HARLAN, J., dissenting.

By the constitution of Louisiana adopted in 1879, and which went into effect January 1, 1880, it is declared that 'no parish or municipal tax for all purposes whatever shall exceed ten mills on the dollar of valuation.'

The judgments held by plaintiffs in error against the city of New Orleans were rendered and became final long before the adoption of that constitutional provision. At the time of their rendition, the law forbade execution against the defendant, but the city had the power, and was under a duty, which the courts could compel it to discharge, to include in its budget or annual estimate for contingent expenses a sum sufficient to pay these judgments. At that time, also, the rate of taxation prescribed by law was ample to enable the city to meet all such obligations. But if the limitation upon taxation imposed by the state constitution be applied to the judgments in question, then it is conceded the city cannot raise more money than will be required to meet the ordinary and necessary expenses of municipal administration. Consequently, under the limit of 10 mills on the dollar of valuation, the judgments of plaintiffs become as valueless as they would be had the state constitution in terms forbidden the city from paying them.

1. Are the judgments in the question contracts? This question is answered by the Court of Appeals of New York, speaking by Woodruff, J., in Taylor v. Root, 4 Keyes, 344. It is there said:

"Contracts are of three kinds: Simple contracts, contracts by specialty, and contracts of record. A judgment is a contract of the highest nature known to the law ... The cause or consideration of the judgment is of no possible importance; that is merged in the judgment. When recovered, the judgment stands as a conclusive declaration that the plaintiff therein is entitled to the sum of money recovered. No matter what may have been the original cause of action, the judgment forever settles the plaintiff's claim and the defendant's assent thereto; this assent may have been reluctant, but in law it is an assent, and the defendant is estopped by the judgment to dissent. Forever thereafter, any claim on the judgment is setting up a cause of action on contract."

Blackstone says that "when any specific sum is adjudged to be due from the defendant to the plaintiff on an action or suit at law, this is a contract of the highest nature, being established by the sentence of a court of judicature." 3 Bl. 465. Chitty enumerates judgments among contracts or obligations of record, and observes that they "are of superior force, because they have been promulgated by, or are founded upon, the authority and have received the sanction of, a court of record." Chitty on Contracts, 3. An action in form ex contractu will lie on a judgment of a court of record, because the law implies a contract to pay it from the fact of there being a legal obligation to do so, "although," says Chitty, "the transaction in its origin was totally unconnected with contract, and there has been no promise in fact." Id. 87.

It seems to me that these judgments are contracts, within any reasonable interpretation of the contract clause of the national Constitution. It can hardly be that the framers of that instrument attached less consequence to contracts of record than to simple contracts. If this view be correct, then the withdrawal from the city of New Orleans of the authority which it possessed when they were rendered, to levy taxes sufficient for their payment, impaired the obligation of the contracts evidenced by those judgments.

2. But if this view be erroneous, it seems quite clear that the state constitution of 1879 cannot be applied to these judgments without bringing it into conflict with that provision of the national constitution which declares that no state shall deprive any person of property without due process of law. That these judgments are property within the meaning of the constitution cannot, it seems to me, be doubted. They are none the less property because the original cause of action did not arise out of contract in the literal meaning of that word, but rests upon a statute making municipal corporations liable for property destroyed by a mob. If a judgment giving damages for such a tort is not a contract within the meaning of the contract clause of the constitution, it is, nevertheless, property, of which the owner may not be deprived without due process of law. Its value as property depends in every legal sense upon the remedies which the law gives to enforce its collection. To withhold from the citizen who has a judgment for money the judicial means of enforcing its collection-or, what is, in effect, the same thing, to withdraw from the judgment debtor, a municipal corporation, the authority to levy taxes for its payment is to destroy the value of the judgment as property.

In Pumpelly v. Green Bay Co. 13 Wall. 166, this court had occasion to consider the meaning of that provision in the constitutions of the several states which forbids private property from being taken for public purposes without just compensation therefor. Under the authority of statutes of Wisconsin certain dams were constructed across a public navigable stream of that state. The dams so constructed caused the waters to overflow the land of a citizen, resulting in the almost complete destruction of its value. The argument was there made that the land was not taken within the meaning of the constitution, and that the damage was only the consequential result of such use of a navigable stream as the government had a right to make for the purposes of navigation. But, touching that suggestion, this court said:

'It would be a very curious and unsatisfactory result if, in     construing a provision of constitutional law, always      understood to have been adopted for protection and security      to the rights of the individual as against the government,      and which has received the commendation of jurists,      statesmen, and commentators, as placing the just principles      of the common law on that subject beyond the power of      ordinary legislation to change or control them, it shall be      held that if the government refrains from the absolute      conversion of real property to the uses of the public it can      destroy its value entirely, can inflict irreparable and      permanent injury to any extent, can, in effect, subject it to      total destruction without making any compensation, because,      in the narrowest sense of that word, it is not taken for the      public use. Such a construction would pervert the     constitutional provision into a restriction upon the rights      of the citizen, as those rights stood at the common law,      instead of the government, and make it an authority for      invasion of private rights under the pretext of the public good, which      had no warrant in the laws or practice of our ancestors.'

These principles of constitutional construction have an important bearing upon the present case. If the property of the citizen is 'taken,' within the meaning of the constitution, when its value is destroyed or permanently impaired through the act of the government, or by the act of others under the sanction or authority of the government, it would seem that the citizen, holding a judgment for money against a municipal corporation, which judgment is capable of enforcement by judicial proceedings at the time of its rendition,-is deprived of his property without due process of law, if the state, by a subsequent law, so reduces the rate of taxation as to make it impossible for the corporation to satisfy such judgment. Since the value of the judgment, as property, depends necessarily upon the remedies given for its enforcement, the withdrawal of all remedies for its enforcement, and compelling the owner to rely exclusively upon the generosity of the judgment debtor, is, I submit, to deprive the owner of his property.

But it is said that the plaintiffs are not deprived of their judgments, so long as they continue to be existing liabilities against the city. My answer is, that such liability upon the part of the city is of no consequence, unless, when payment is refused, it can be enforced by legal proceedings. A money judgment which cannot be collected is of as little value as Pumpelly's farm was, when covered by water to such an extent that it could not be used for any of the purposes for which land is desired.

It is also said by my brethren that plaintiffs are not deprived of their property in these judgments because at the time they are unable to collect them. No state shall 'deprive any person of life, liberty, or property without due process of law,' is the mandate of the constitution. Could a state law depriving a person of his liberty be sustained upon the ground that such deprivation was only for a time? Pumpelly's land was adjudged to have been taken within the meaning of the constitution, although it was possible that, at some future time, the dams constructed under the authority of the state might be abandoned, or might give way, causing the waters to retire within their original limits, and thereby enabling the owner to reoccupy his farm. It is barely possible that the people of Louisiana may, at some future period in their history, amend her constitution, so as to permit the city of New Orleans to levy taxes sufficient to meet its indebtedness, as established by the judicial tribunals of that state. But such a possibility cannot properly be recognized as an element in the legal inquiry whether the state may so reduce the rate of taxation, by one of its municipal corporations, as to deprive it altogether of the power to pay valid judgments against it, which, at the time of their rendition, and under the rate of taxation which then obtained, were collectible through judicial proceedings. It is further said that these judgments may also, 'perhaps,' be used by the relators or their assignees as offsets to demands of the city. My answer is, that the city may never have such demands. The possibility that it may have, ought not to control the determination of this case, involving, I submit, a present deprivation of property without due process of law.

In this case, before the adoption of the constitution of 1879-80, before even the convention that framed it met, the plaintiffs had obtained, in the inferior state court, a final order, in a mandamus suit, requiring the city of New Orleans to include in its next budget or statement of liabilities (and in succeeding budgets, until they were paid) the amounts of existing judgments against it, including those held by plaintiffs, and to levy a tax to the extent of $1.75 on every $100 of valuation to meet them. This judgment, in the mandamus suit, was in accordance with the law of the state as it then was. Plaintiffs, by the application of the constitutional limitation upon municipal taxation, adopted after rendition of judgment in the mandamus suit, is thus deprived not only of the benefit of that judgment, but of all power to enforce the collection of the original judgments, in the only way they can be enforced, or be made of any value. If this be not a deprivation of property without due process of law, it is, I think, difficult to conceive of a case involving such a deprivation.

For these reasons, I feel constrained to dissent from the judgment.