- § 912 (730b). Suit by Attorney-General of the State. The weight of authority seems to be that the Attorney-General of a State, or its other public law officer, has by virtue of his office the right in his name, or in the name of the State, upon the relation of persons interested, to bring, in cases which are properly of equitable coguizance and which affect the public, a bill in equity to prevent munici pal corporations from exceeding the line of their lawful authority, or to have their illegal acts set aside or corrected. This doctrine 1 Davis v. New York, 2 Duer, 663. In this case the subject is very learnedly discussed by Mr. Justice Duer, who cites and reviews the principal English authorities, and deduces from them the doctrine that when the act of a municipal corporation, which is the subject of complaint, affects injuriously and equally the entire public within the jurisdiction of the corporation, the Attorney-General is a necessary party. See, also, People v. Lowber, 7 Abb. (N. Y.) Pr. 158, - an action by the Attorney-General to prevent the corporation from completing an alleged unauthorized contract for the purchase of land on which to erect a market-house. People v. New York, 9 Abb. (N. Y.) Pr. 253; 10 Abb. (N. Y.) Pr. 144; Same v. Same, 32 Barb. (N. Y.) 102. In Doolittle v. Broome Co. Sup., 18 N. Y. 157, referred to infra, sec. 920, Denio, J., admits that the Attorney-General may file an information in equity to prevent an act which would be a breach of trust. The right of the Attorney-General to bring a suit to prevent the illegal issue of bonds by an incorporated town to a railroad company was denied by Mullin, J., in the Supreme Court, and the previous cases in that State above cited were disapproved; but it is observable that the learned judge seems to proceed upon the basis, believed to be fundamentally erroneous, "that the people, that is, the State in its corporate capacity and character, has no manner of interest" in a litigation where the question is whether corporate powers which it has granted have been exceeded or not. People v. Miner, 2 Lansing (N. Y.), 396 (1868); reaffirmed, People v. Alb. & Susq. R. R. Co., 5 Lansing (N. Y.), 25. In the People v. Ingersoll, 58 N. Y. 1 (1874), and People v. Field, 58 N. Y. 491, the Court of Appeals decided that the Attorney-General could not intervene by civil action in the name of the State to recover money due to the city of New York (infra, sec. 913). In California, it has been decided that where a suit is instituted in the name of the State by the Attorney-General, on the relation of the real party in interest seeking relief, and the State has no interest therein, the Attorney-General, as such, has no power to control the suit or withdraw his consent to the use of the State's name, to the prejudice of the relator. People v. No. San F. H. & R. Assoc., 38 Cal. 564. See ante, chap. xx. as to relator. In Missouri a very able lawyer, sitting as a special judge (Shepley, J.), upon a review of the English cases, held that an information in equity by a law officer of the State would lie to prevent the county authorities from doing an unauthorized act, such as issuing railroad bonds. State v. Saline Co., 51 Mo. 350 (1873); s. c. 11 Am. Rep. 454, Wagner, J., dissenting; infra, secs. 914, note, 919, note. Suit on behalf of all taxpayers, when once entertained by the court, cannot be dismissed without an order of court. McAden v. Jenkins, 64 N. C. 796, before Pearson, C. J. In Upper Canada the mayor is the head of the council, and the head and chief executive officer of the corporation, and it is held that a bill will lie in equity by some of the inhabitants of a munici pality alleging an illegal misapplication of its funds by the mayor. Paterson v. Bowes, 4 Grant (Can.), 170. The AttorneyGeneral is not a necessary party to such suit. Ib. Where the mayor of a city secretly contracted to purchase at a discount a large number of the debentures of the city, which it was expected would be issued under a contemplated by-law of the city council, and was afterwards him has been asserted by an able court, in a case where there was no statute giving the Attorney-General power to interfere to prevent an abuse of corporate powers, or prescribing the terms of such interference, and where the injury complained of by the relators was a disregard of the provisions of a municipal charter, which required contracts to be let to the lowest responsible bidder. It was conceded in that case that the Attorney-General would have the right to enjoin the misappropriation of a charitable fund held by the corporation; and the court considered that there was no substantial distinction between such a case and one where, under legislative authority, a corporation, authorized to raise funds by taxation for specified purposes or on certain conditions only, threatens effectually to abuse its powers in this respect by a misappropriation or unwarranted use of corporate moneys or funds.1 § 913. Same subject. Tweed Frauds in New York City. - In cases arising out of the well-known municipal frauds in New York of Tweed and his confederates, it was held by the Court of Appeals that an action, unless given by statute, could not be maintained in the name of the State by the Attorney-General to recover a judgment in the name of the State for moneys illegally and fraudulently taken by the defendants from and belonging to the city of New York. As the ownership of such moneys was in the city self an active party in procuring and giv-, pavements, but the difference in the bids ing effect to the by-law subsequently was less than $200, of which less than passed, he was held to be a trustee for $30 was to be paid by the city, and the the city of the profit derived from the contractors had gone on without objection transaction. Toronto v. Bowes, 4 Grant and incurred large expenses, and the lot(Can.), 489, affirmed in appeal, 6 Grant owners did not complain, the amount (Can.), 1, and afterwards affirmed by the involved was too small to warrant the inprivy council; more fully ante, sec. 444. tervention of the Attorney-General, espeHarrison's Munic. Man. (5th ed.) 320, cially as it appeared that the error of the council, if any, was not intentional, but one of judgment only. Ante, sec. 659. A judgment of the Supreme Judicial Court of Massachusetts sustained in its reasoning the principles laid down in the text and approved by the Supreme Court of Michigan in the case just cited. torney-Gen. v. Boston, 123 Mass. 460 (1877); infra, sec. 920, note; ante, sec. 113. As to injunction for restraining tax or assessment for paving street with patented pavement. Hobart v. Detroit, 7 Mich. 246; Attorney-Gen. v. Detroit, 26 Mich. 263; Dean v. Charlton, 23 Wis. 590; Harlem v. New York, 33 N. Y. 309; ante, sec. 467. 321. 1 Attorney-General v. Detroit, 26 Mich. 263 (1872); s. c. 12 Am. Law Reg. (N. s.) 148. "Every misuse of corporate authority is in a legal sense an abuse of trust, and the State, as the visitor and supervisory authority and creator of the trust, is exercising no impertinent vigilance when it inquires into and seeks to check it." Ib. Per Cooley, J., who in s opinion carefully considers what kind and degree of abuse of corporate power will justify the interference of the AttorneyGeneral. It was held in this case that where the council awarded the contract to the highest of two bidders for putting down At corporation, the court decided that the right of action to recover the same was in that corporation and not in the State. And it was further decided that the fact that the city corporation through its officers fraudulently colluded with the defendants, to protect them from civil actions to enforce their liability, did not give a right of action to the State or authorize the Attorney-General without express legislative sanction to bring suit in the name of the State to recover such moneys, making the wrong-doers and the municipality defendants.1 § 914 (731). When Taxpayers and Property-Holders may have Injunction. In this country, the right of property-holders or taxable inhabitants to resort to equity to restrain municipal corporations and their officers from transcending their lawful powers or violating their legal duties in any mode which will injuriously affect the taxpayers, such as making an unauthorized appropriation of the corporate funds, or an illegal or wrongful disposition of the corporate property, or levying and collecting void and illegal taxes and assessments upon real property under circumstances presently to be explained, has, without the aid of statute provision to that effect, been affirmed or recognized in numerous cases in many of the States. It is the prevailing, we may now add, almost universal doctrine on this subject. It can, we think, be vindicated upon principle, in view of the nature of the powers exercised by municipal corporations and the necessity of affording easy, direct, and adequate preventive relief against their misuse. It is better that those immediately affected by corporate abuses should be armed with the power to interfere directly in their own names than to compel them to rely upon the action of a distant State officer. The equity jurisdiction may, in such cases, usually rest upon fraud, breach of trust, multiplicity of suits, or the inadequacy of the ordinary remedies at law. It is advisable, in view of its importance, briefly to examine 1 People v. Fields, 58 N. Y. 491 (1874); People v. Ingersoll, 58 N. Y. 1 (1874); Church, C. J., and Rapallo, J., dissenting. The English cases referred to in secs. 909 and 910 of this work, holding that the Attorney-General, on behalf of the crown, may resort to equity to prevent the abuse of corporate powers relating to property and funds, even if the doctrine of those cases prevailed in New York, which was not decided, were considered as distinguishable from the case before the court, as this was a civil action for the recovery Post, of money, which could only be brought by the doctrine above mentioned, and the grounds upon which it rests, in the light of some of the leading judgments of the courts, the better to see its scope, limitations, and application.1 Equity has the power to restrain the collection of taxes, where fraud has occurred, or on proper case made, where the assessment or levy is without legal authority. Infra, secs. 923, 924, and cases; First Nat. Bank of Shawneetown v. Cook, 77 Ill. 622 (1875); Brandriff v. Harrison Co., 50 Iowa, 164; Dupage Co. Sup. v. Jenks, 65 Ill. 275; Riley v. Western Union Tel. Co., 47 Ind. 511 (1874); Lebanon v. O. & M. R. R. Co., 77 Ill. 539 (1875). The doctrine of the text was approved and applied by Pardee, J., in the case of the Liberty Bell, where the city of New Orleans was enjoined, at the suit of a taxpayer, from appropriating city funds to pay for the transportation of the old Liberty Bell from Philadelphia to New Orleans for a centennial exposition in the latter place. The learned judge well observed: "Municipal corporations exhibit the highest patriotism in obeying the laws made for their government." The Liberty Bell (Bayle v. N. O.), 23 Fed. Rep. 843 (1885). See, also, Harrington v. Plainview, 27 Minn. 224; Willard v. Comstock, 58 Wis. 565; Lynch v. Eastern La. F. & M. Ry. Co., 57 Wis. 430 (to enjoin delivery of railway aid bonds); Robertson v. Breedlove, 61 Tex. 316 (restraining issue of bonds by a county); Richmond v. Crenshaw, 76 Va. 936, and cases cited; followed Shenandoah Valley R. R. Co. v. Clarke County, 78 Va. 269; Roper v. McWhorter, 77 Va. 214; Sackett v. New Albany, 88 Ind. 473; Butler v. Detroit, 43 Mich. 552; Scott v. Alexander, 23 S. C. 120 (aldermen required to pay the costs personally in an action restraining them from increasing the municipal debt beyond the statutory limit). The mu nicipal corporation itself was held not to be entitled to invoke a court of equity to restrain the collection of a tax by State and county officers upon private property within its limits, though the tax was levied to pay its bonds alleged to be illegal. Waverly v. Auditor, 100 Ill. 354. To entitle a party to relief in equity, he must bring his case under some acknowl edged head of equity jurisdiction; the mere illegality of the tax without more, or the threat to sell property for its satisfaction, is generally held not to be sufficient, but the authorities on this point are not uniform, since some courts will, at the instance of the taxpayer, enjoin the collection of any tax or assessment that is admitted or clearly shown to be illegal or void. Dows v. Chicago, 11 Wall. 108; Hunnewinkle v. Georgetown, 15 Wall. 547; Ala. Gold L. Ins. Co. v. Lott, 54 Ala. 499; Montgomery v. Sayre, 65 Ala. 564; Lemont v. Singer, &c. Stone Co., 98 Ill. 94; Corrothers v. Clinton Dist. Bd. of Ed., 16 W. Va. 527; Mobile v. Baldwin, 57 Ala. 61; Sav. & L. Soc. v. Austin, 46 Cal. 415; Porter v. Rockford, R. I. & St. L. R. R. Co., 76 Ill. 561 (1875); Elkton Land Co. v. Ayers, 62 Ala. 413; C. B. & Q. R. R. Co. v. Siders, 88 Ill. 321; Columbia Co. Comm'rs v. Bryson, 13 Fla. 281 (1871); Floyd v. Gilbreath, 27 Ark. 675; Heywood v. Buffalo, 14 N. Y. 534; McDonald v. Murphree, 45 Miss. 705; Sayre v. Tompkins, 23 Mo. 443; Barrow v. Davis, 46 Mo. 394; U. P. R. R. v. Lincoln Co., 2 Dill. C. C. 297; Weaver v. State, 39 Ala. 535; Cook County v. Chicago, B. & Q. R. R. Co., 35 Ill. 460. But see post, secs. 923, 924; Williams v. Pinney, 25 Iowa, 436; Jeffersonville v. Patterson, 32 Ind. 140; Burnes v. Atchison, 2 Kan. 454; Warden v. Fond du Lac Co. Sup., 14 Wis. 618; and the payment of such portion as is alleged to be legal may be made a condition precedent to the granting of the relief sought. Deeflir v. Bowen, 61 Ind. 29. "The collection of a legal tax will not be restrained to prevent the enforcement of an illegal one." Covington v. Rockingham, 93 N. C. 134; London v. Wilmington, 78 N. C. 109; Stilz v. Indianapolis, 81 Ind. 582. See also High on Injunctions, sec. 498; more fully, infra, secs. 923, 924, and notes as to restraining the collection of illegal taxes. A resident cannot enjoin the collection of license tax for which he is liable, but a city may enjoin him from carrying on his § 915. Same subject. Rationale of Doctrine; Author's View. The doctrine of the preceding section is also supported by an analogy supplied by a settled rule of equity applicable to private corporations. In these the ultimate cestuis que trust are the stockholders. In municipal corporations the cestuis que trust are in a substantial sense the inhabitants embraced within their limits. In each case the corporation, or its governing body, is a trustee. If the governing body of a private corporation is acting ultra vires or fraudulently, the corporation is ordinarily the proper party to prevent or redress the wrong by appropriate action or suit in the name of the corporation. But if the directors will not bring such an action, our jurisprudence is not so defective as to leave creditors or shareholders remediless, and either creditors or shareholders may institute the necessary suits to protect their respective rights, making the corporation and the directors defendants. This is a necessary and wholesome doctrine. Why should a different rule apply to a municipal corporation? If the property or funds of such a corporation be illegally or wrongfully interfered with, or its powers be business until he pays it (New Orleans v. Becker, 31 La. An. 644), upon the ground that he might by appeals, &c., protract the litigation for a long period of time, and thus carry on his business without paying tax, and after tedious litigation there might be no property out of which to collect it. Ib. The author directs attention to the decision below cited of the United States Supreme Court, as to the equitable conditions which should be met before a court of equity will enjoin the collection of taxes. State Railroad Tax Cases, 92 U. S. 575 (1875). Suggested distinction between enjoining local and municipal taxes and State taxes levied for general revenue. Parmley v. St. L., I. M. & S. R. R. Co., 3 Dillon, 25 (1874). Where a city had disregarded the forms prescribed in its charter for the letting of wharves and in not inviting competition by publication or otherwise, and had passed an ordinance authorizing a lease of wharves upon terms disadvantageous to itself and its inhabitants, the Supreme Court of Louisiana held that individual taxpayers suing for themselves, and others in a like situation, had a standing in court in an action to prevent the execution of the lease and to annul the ordinance. Handy v. New Orleans, 39 La. An. 107. To same effect Conery v. New Orleans Water Works Co., 39 La. An. 770. A city may be enjoined from selling land dedicated as a common, at the suit of an inhabitant whose individual rights as to his own property are threatened. Cummings v. St. Louis, 90 Mo. 259; see ante, chap. on Dedication. Where a city had reached the limit of indebtedness permitted by its charter, it was enjoined from carrying out a contract for its water supply which might have made it liable for a large increase. Davenport v. Kleinschmidt, 6 Mont. 502; see ante, chap. xiv. on effect of transcending the authorized limit of indebtedness; infra, sec. 919, note. The plaintiff in an action to contest the validity of an election authorizing the issue of county bonds for erecting public buildings, is not entitled merely upon his verified petition, as a matter of right, to a temporary injunction restraining the issue of the bonds. John |