.

employed by the state, and not by the de- The act of 1912 under which this suit fendant board, and was the attorney of the has been brought contains no such proviso state, and not of the defendant board. The as that which was contained in the act of suit was by the state to forfeit the charter 1906. It simply declares, without proviso of one of her corporations. The defendant or condition, that "it is hereby made the board not only was not a party to it, but, legal duty of the sewerage and water board for over a year after it had been brought, was not even in existence. The following authorities are distinctly in point, and are conclusive against a right of action of any kind, equitable or legal, arising in favor of an attorney at law for legal services without his having been employed. Knowing how arduous and valuable and meritorious were the services of Mr. Forman, it is with regret that the court finds itself compelled to decide against him."

And it was held (quoting from the sylla

bus) that "the right of an attorney at law to demand payment for his services depends upon whether he was or not employed. He cannot recover from one who did not employ him, however valuable the result of his services may have been to such person, and especially if the person was not even a party to the suit."

to pay to Benjamin Rice Forman a just compensation for his services rendered in the case of the State of Louisiana v. New Orleans Waterworks Company," that what may constitute such "just compensation" shall be determined by consent, or, if the parties are unable to agree, by final judgment of court, and that the payment of the judgment may be made by the sewerage and water board, or enforced against it, in a particular way. So far, therefore, as the courts are concerned, the duty which

the act purports to impose upon them is ices rendered by Mr. Forman, and give merely to determine the value of the servjudgment accordingly; and all that stands in the way of the discharge of that duty is the plea of res judicata, predicated upon the judgment above cited, and herein filed by the sewerage and water board, and the objection interposed by that board, that the

provide for the organization of cities and There is a class of claims against a muvillages by general law. It may, in the exer-nicipal corporation which under the Consticise of such power, attach such conditions or obligations to the grant of municipal powers and privileges as it sees fit, and may compel the recognition and assumption of obligations not binding in law, but just and equitable in their character.

Claims neither moral nor equitable.

The legislature, however, has no power to compel a municipal corporation to pay a claim against it, which it is under no obligation, moral or equitable, to pay; nor can the legislature require a court to render judgment for such claim upon proof of the amount thereof. McQuillin, Mun. Corp. § 237. See also FORMAN V. SEWERAGE & WATER BD.

Thus, an act which assumes to create and impose on the county a liability for services not rendered to it, but to private individuals, in a contest in which they were in antagonism to the county as a political entity, and in which the official representatives of the county were their adversaries, is unconstitutional. Thus, it was held in Warren County v. Cowan, 60 Miss. 876, 45 Am. Rep. 424, that the legislature could not compel a county to pay for services rendered by attorneys employed by taxpayers to lower a tax rate, the court stating that if the right of the legislature to compel payments of a moral claim is conceded, such concession will not support this act, for no sort of obligation exists upon the county in question to pay for services rendered against the county as a political organism. The laborer is worthy of his hire, but to be paid by his employer.

tution cannot be legalized by statute, and these claims are invalid or void because they do not arise from the performance of a “county, city, town, or village purpose" as provided by the Constitution.

Thus, a statute requiring a city to pay counsel fees expended by an officer in successfully defending against a proceeding to remove him from office or to convict him of a crime is in matter of Chapman v. New York, 168 N. Y. 80, 56 L.R.A. 846, 85 Am. St. Rep. 661, 61 N. E. 108, held unconstitutional as contravening that provision of the Constitution which declares that no county, city, town, or village shall give any moneys, or lend its name or credit in aid of any individual or corporation, nor be allowed to incur any indebtedness, except for a county, city, town, or village purpose. The court stated that there was no legal liability or moral obligation on the part of the city to pay his expenses, which were not necessary for the common good and general welfare of the municipality, nor public in character, nor so far as appears sanctioned by its citizens.

So, the passage of a statute authorizing the issuance of revenue bonds to be met by taxation, for the payment of the necessary expenses which had been previously incurred by a municipal officer in defending himself from a charge of official misconduct, is precluded by a constitutional provision forbidding any municipality to give any money to any individual, or to incur indebtedness for other than municipal purposes. Ibid. In the above case the court stated that no benefit was conferred upon the city, and there was never a legal or

act of 1912 is unauthorized and unconsti- anywhere that can now so change the situa tutional.

The plea of res judicata covers part, but not the whole, of the case here presented, since the judgment relied on as supporting it merely held that neither the services rendered by Mr. Forman nor the act of 1906 created any cause of action, legal or equitable, in his favor, and against the sewerage and water board; whereas the suit now before the court is prosecuted under the act of 1912, and, upon the pleadings of the defendant, presents the questions whether that act, purporting, as it does, to create such cause of action, is competent and constitutional legislation.

It is clear that the judgment, to the effect that Mr. Forman had no claim, legal or equitable, against the sewerage and water board, is conclusive upon that issue, and as entirely beyond legislative control as is any other final judgment of this court, quoad persons and issues with respect to whom, and to which, the court was vested with jurisdiction, and, as completely beyond the control of the court as of the legislature; and hence there is no power lodged

moral obligation on the part of the city to pay the claim in question.

So, it is not within the power of the legis lature to require a city to pay the legal expenses of an official who has successfully defended himself against an indictment, the city being under no legal or moral obligation to reimburse the official. Re Straus, 44 App. Div. 425, 61 N. Y. Supp. 37, see also Re Jensen, 28 Misc. 378, 59 N. Y. Supp. 653, affirmed in 44 App. Div. 509, 60 N. Y. Supp. 933, and set out in note in 48 L.R.A.

476.

tion as to give the heirs of Mr. Forman the status of creditors, in any sense, of the sewerage and water board for the compensation here claimed.

The remaining question, and the only question left for decision, then, is whether it is competent and constitutional for the general assembly to require, and for this court to decree, that the sewerage and water board shall devote a fund which the Constitution has placed under a particular control for a particular use, to the payment of a claim, the holder of which, as thus ascertained and determined by final judgment, has no right, legal or equitable, in or to such fund. The learned counsel for plaintiffs, however, ignore the narrow compass within which the case here presented must be restricted, and, arguing at length to show that their clients have an equitable claim against the defendant, cite authorities in support of the power of the general assembly to compel its payment. Thus they say: "Briefly stated, our contention is that the sewerage and water board, being a municipal corporation, is subject to compensation, and directed the employment of the city funds for other than city purposes.

The board of apportionment was in People ex rel. Pomeroy v. Green, 63 Barb. 390, directed to audit and allow a claim against the city of New York for services of a publisher performed under color of legal authority, and necessary and beneficial to the city, such services coming within the provisions of an act requiring the comptroller "to allow and pay the bills of the several proprietors of the newspapers in A statute rendering a municipality lia- said city and county, for all city and county ble to a de jure officer for salary paid to a advertising actually done prior to January de facto officer is held unconstitutional in 1st, 1872." The object of this act, said the Stemmler v New York, 179 N. Y. 473, 72 N. court, so far as the newspapers were conE. 581. The court in the above case states cerned, evidently was to provide an apthat, while this case might fall within the propriate procedure with an adequate broad doctrine laid down in Guilford v. remedy for the speedy liquidation and payChenango County, 13 N Y. 143, and similar ment of all strictly legal obligations, and cases, yet with the amendments of the Con- also of all just and honest claims of an stitution of 1846, adopted in 1874, the rule equitable, if not of a technically legal, charis now quite different. Those amendments acter. There was the fullest intention of were new, and for the first time forbade any providing for publishers who had acted city to give or loan its money or credit in under legal authority, or at least in good aid of an individual, prohibited the legis- faith under color of such authority, but not lature or any city from granting any extra of presenting any part of the public funds compensation to public officers, and prevent to those who had acted in palpable violaed them from employing or requiring the tion of law and without a shadow of auuse of city funds for any but city purposes. thority. Further on the court said that a The statute in question clearly falls within large part of the publications for which the inhibition of the Constitution as amend- claims were presented were made apparented in 1874, as it required the city of Newly without any contract, express or implied, York to pay an amount for which it was not liable, legally nor in equity or in justice. It in effect provided for a mere gratuity or extra compensation to a public officer who had performed no service for the city, and had done nothing which entitled him, as against the city, to any such

and without any legal authority or even
official request. The allowance of such
claims would be a pure gratuity, and the
court would not by mandamus-a writ
which issues only in cases of unquestionable
legal right-direct the board even to con-
sider them.
J. D. C.

"There can be no question that it [the claim here asserted] is founded on the receipt and acceptance of property and the obligation, thence arising, to pay for the

same. •

the control of the legislature in all respects, they could hope to own a system which had save in so far as the act creating it was previously owned them. embedded in the organic law of the state and thereby taken beyond the domain of legislative control. The dedication of the funds arising from the tax to the purpose of acquiring a water system either by construction or purchase was, no doubt, crys"As to the point that 'the sewerage and tallized in this manner, and therefore re- water board was not in existence when the moved from the possibility of legislative suit [to forfeit the charter of the waterinterference. But that crystallization went works company] was brought,' there is nothno further. It did not preclude the legis- ing to it. If there is such an equitable lature from applying those funds to the foundation for the act as to warrant very purposes to which the tax was dedi- the legislature in directing payment for the cated. Some control over the subject-mat- service, it may impose the duty upon the ter by the legislature was undoubtedly re- board, whether then created or not." served. This reservation justly appears in They then quote McQuillin on Municipal the carefully reserved right to amend the Corporations, vol. 1, § 237, p. 536, to the act of 1899, a right which is expressly rati-effect that "the payment of legitimate fied and confirmed by the constitutional claims against the municipal corporation amendment itself. The purpose was served, no doubt; the make-up of the board was sacred."

may be compelled by the legislature. The courts permit the legislature to use the power of compulsory taxation for this purpose. The payment of a debt may be enforced when equitable in character, although it may not be binding in law, and even unenforceable in law or equity."

But, no doubt, considering it inapplicable to their case, the counsel do not quote the following from the same volume and section, to wit: "But the legislature has no power to compel a municipal corporation to pay a claim made against it, and which it is under no obligation, moral or equitable, to pay; nor can the legislature require a court to render judgment for such claim upon proof of the amount thereof."

"Before the new water system could be constructed, it was essential to clear the site. The site was obstructed by the monopoly franchise of the old waterworks company. The removal of that obstruction was The instant case is the more clearly withso plainly necessary, and the cost of the in the rule last above stated, for the addiremoval so plainly a part of the object for tional reason that the fund from which it which the special tax was levied, that act is proposed that the claim of the plaintiff No. 6 of 1899 carried, as § 15, a special shall be paid, and the only fund upon which provision expressly authorizing the pur- the sewerage and water board can draw, chase, or the expropriation, of that fran- is placed, not by legislative action alone, chise, and expressly reciting that same but by the Constitution of the state, in could be paid for by the assumption of the the custody of the board of liquidation outstanding bonds of the old company. The of the city debt, to be drawn upon only for public valued the property of the old comthe establishment and maintenance of the pany at between $2,000,000 and $3,000,000. water, sewerage, and drainage systems of If, therefore, the site had been cleared by New Orleans, and for the payment in prinexpropriation, that clearance would have cipal and interest of the bonds issued in cost the special tax fund that sum of that behalf. The contention that the compensation of Mr. Forman should, from an equitable point of view, be regarded as among those uses presented the main, if not the sole, issue in the case heretofore decided, and that issue, as we have seen, was decided adversely to the contention, and became a "thing adjudged." The decisions cited by the learned counsel support the doctrine as stated in the excerpt from MeQuillin, quoted by them, but do not bear upon this case, since the defendant now before the court incurred no obligation

money.

"If Mr. Forman's services in removing the monopoly franchise of the New Or leans Waterworks Company were not strictly in line with the purpose of the people and their petition to construct a water, sewerage, and drainage system, there is nothing strictly in line' with it. It was the suit brought by Mr. Forman that provoked and inspired the taxpayers' petition. The people awoke to the fact that maybe

whatever with respect to the cost of the pro- | to deny the entries on the books of the ceeding by the state to withdraw the mo- bank, their sworn published statements, and nopolistic franchise which it had granted to their sworn representations to the state the waterworks company, when it found examiner of state banks concerning a dethat company violating the terms of the posit to the credit of another insolvent bank, where the state examiner, the degrant and using the franchise as a means positors and creditors of the insolvent bank, of oppression; and we find no authorities and the public have accepted and acted upon which hold that a legislature can compel such sworn published statements. Public the diversion of a fund, the destination of policy requires that the bank should be which has been fixed by the Constitution, bound by the acts of its officers. to the payment of a claim which quoad, and contradictorily with, the parties by and against whom, respectively, it is made, there has been a final judgment decreeing it to be neither legal nor equitable. The judgment appealed from is therefore af

firmed.

(February 8, 1915.)

A of the Judicial District Court for the Parish of Washington, in favor of plaintiff and intervener in a suit to prevent the payment to the special liquidator of the Commercial Bank of a certain amount appearing on the books of the Bank of Angie to its credit as a deposit. Reversed.

PPEAL by defendant from a judgment

The facts are stated in the opinion. Mr. St. Clair Adams, for appellant: Officers and directors of a bank who have made sworn statements to the stat examiner of state banks, and published the same, cannot be permitted thereafter to contradict these statements and testify as to the falsity of the record so made by them.

Wright v. Gurley, 133 La. 745, 63 So. 310; Pauly v. O'Brien, 69 Fed. 460; Brodrick v. Brown, 69 Fed. 497; Briggs v. Stafford, 14 La. 381; Florance v. Twichell, 5 La. Ann. 16.

A bank officer is estopped from denying his sworn statements, published reports, books, and papers, upon which the state examiner of state banks, third persons, and the public in general have acted.

Wright v. Gurley, 133 La. 745, 63 So. 310.

The courts will not extricate a bank from a situation created by the deceit, fraud,

Note. ― Right of bank to contradict en-dent wrote to the defendant bank explaintries in its books or statements in public reports.

It will be observed that this note is not concerned with the personal liability of officers of the bank, but only with that of the bank itself.

As to the power of a bank officer to bind his bank by an agreement that the liability of a party to commercial paper shall not be enforced, see State Bank v. Forsyth, 28 L.R.A. (N.S.) 501, and note.

The only case found in which the facts are similar to those involved in KENNEDY v. YOUNG is Rankin v. City Nat. Bank, 208 U. S. 541, 52 L. ed. 610, 28 Sup. Ct. Rep. 346, affirming 75 C. C. A. 343, 144 Fed. 587, in which it appeared that the National Bank of Guthrie had made excessive loans to certain individuals; that the bank examiner complained and directed that the loans be reduced; that thereupon the presi

ing the situation and proposing to give his personal note to defendant for $30,000, which sum was to be credited to his bank in a special account not subject to check, but to be kept until the note was retired: that the proposition was accepted, the note taken and credited to the president's personal account with defendant, in which account the money of the Guthrie bank was habitually kept as a special deposit, apart from the general deposit subject to check; that the president then gave his check against the account to the Guthrie bank, which credited it to bills receivable, the whole amount on deposit with defendant, the general deposit subject to check, and the special deposit not subject to check, being made to appear on the books aggregated as a general account, obviously for the purpose of deceiving the bank examiner; the objectionable loans were then taken off the books; but it does not appear

and misconduct of its officers, but will The plaintiff, H. H. Kennedy, a depositor "leave him bound who has bound himself." in the Bank of Angie to the extent of some Pauly v. O'Brien, 69 Fed. 460; Landwirth v. Shaphran, 47 La. Ann. 336, 16 So. 839; Wright v. Gurley, supra.

Sommerville, J., delivered the opinion of $11,000, were placed directly to the credit of the court: