b. Greater New York charter. The charter uniting municipal corporations to form the consolidated city of New York placed on the new corporation liability for all the valid charges against and liabilities of the municipal corporations which were united under the charter. In several cases the provisions of the charter relating to the liability of the new city for these demands have been construed.

In Koelesch v. New York (1898) 34 App. Div. 98, 54 N. Y. Supp. 110, recovery was sought against the city of New York on warrants which were issued by the general improvement commission of Long Island City prior to the consolidation under the Greater New York charter. In holding that the defendant was liable for the amount of the warrants, the court said: "It became the duty of the common council, in conjunction with the mayor, to provide the money for the payment of these warrants. This duty, it appears, was neglected, and on the following day, by operation of chapter 378 of the Laws of 1897, the city of New York succeeded to all of the rights and powers, and assumed all of the obligations, of the city of Long Island City and of the general improvement commission of Long Island City. Charter, chap. 1, § 1. All of the officers of the city of Long Island City were legislated out of office; the plaintiffs could not, therefore, proceed by mandamus to compel the officers of the former corporation to perform the duties pointed out by law. The municipality of Long Island City was, therefore, in default, and the city of New York, as the successor of Long Island City, became liable for the payment of the warrants issued to these plaintiffs, and, upon the refusal of the comptroller of the city of New York to pay these warrants, the plaintiffs had a cause of action for the recovery of the debt. To hold otherwise is to deprive the plaintiffs of all remedy, and to relieve the city of New York of one of the obligations which it assumed in becoming the successor of the city of Long Island City and the other corpo

rations which were absorbed in creating the Greater New York."

In Schwan v. New York (1902) 173 N. Y. 32, 65 N. E. 774, suit was brought against the city of New York on a contract for street sprinkling, made with a village which was made a part of the city of New York by the Greater New York charter. In holding that the dismissal of the plaintiff's complaint was erroneous, the court said: "The charter of this defendant, of which courts must take judicial notice as a public law, as by direction of § 1620, provided, in the tenth section, that the proper authorities of the various consolidated municipal corporations should prepare in the year 1897 a budget for the year 1898 and levy taxes accordingly, as though consolidation were not to be effected. The section further provided that the funds received by the chamberlain of the city of New York should be apportioned by the board of estimate and apportionment to the various city departments, 'so that such funds shall be used as nearly as may be, for the object for which they were raised,' etc. Under the dismissal of the complaint, upon the motion that was made before any evidence was introduced, all the material facts alleged in the complaint, and stated for proof in counsel's opening, must be deemed to have been admitted. Therefore, two material facts must be true, viz.: First, that, pursuant to the Greater New York charter, a budget had been prepared by the proper authorities of the village, which included the contract in question, and that taxes had been accordingly levied; and second, that the contract had been fully performed, with defendant's knowledge. The case is thus differentiated from that of Hendrickson v. New York (1899) 38 App. Div. 480, 56 N. Y. Supp. 580, affirmed in (1899) 160 N. Y. 144, 54 N. E. 680, where the action of the Jamaica town board was held, upon the evidence, not to have been taken in good faith, in making a street lighting contract, to be performed in ten years, upon the eve of the termination of its official existence. Furthermore, the provisions of § 10 of the charter were

not brought in question. If what the board of trustees had done was in good faith and within the provisions of the Greater New York charter, no reason is apparent why plaintiff should not be entitled to be paid for his work; especially if the moneys had been appropriated and received by defendant for the purpose.".

In East River Nat. Bank v. New York (1904) 93 App. Div. 242, 87 N. Y. Supp. 803, the plaintiff sought to recover from the city of New York the amount of certificates of indebtedness which were issued by commissioners to improve a street in Long Island City. This municipal corporation, after the certificates were issued, was consolidated with other municipal corporations to form the larger city of New York, and its debts became debts of the city of New York. The dismissal of the, plaintiff's complaint was upheld on the ground that the commissioners who issued the certificates were not a duly organized board of Long Island City, but a body appointed by the legislature for a special purpose, and that the legislature imposed no obligation on Long Island City which could be enforced by an action to pay the certificates. The court said: "When the city of New York was consolidated with the other municipal corporations in what was called the Greater New York, there was imposed upon the new city created a liability for 'all valid and lawful charges and liabilities now existing against any of the municipal or public corporations, or parts thereof, which by this act are made part of the corporation of the city of New York,

which, but for this act, would be valid and lawful charges or liabilities against the same,' and such charges and liabilities 'shall accordingly be defrayed and answered unto by it to the same extent, and no further, that the said several constituent corporations would have been bound if this act had not been passed.' Y. Charter [Laws 1897, chap. 378] § 4. Section 5 of the charter provides: 'All laws or parts of laws heretofore passed creating any debt or debts of the municipal and public corporations, united

N.

and consolidated as aforesaid, or for the payment of such debts, or respecting the same, shall remain in full force and effect, except that the same shall be carried out by the corporation hereby constituted, to wit, the city of New York.' These provisions carefully restrict the obligation which is imposed upon the city of New York as to the debts or obligations of the various municipal corporations that are included in the city thereby created. There is no provision of the charter that I have been able to discover, or to which our attention has been called, which imposes upon the city of New York a liability for an indebtedness created or authorized by the legislature, which is not an obligation of one of the municipalities which were consolidated into the city of New York."

The provision in the charter of Greater New York (Laws 1897, chap. 378,) relating to stocks or bonds theretofore lawfully issued in coupon form by any of the municipal corporations which were consolidated, and giving a privilege to the holders to convert them into registered stock or bonds, did not give holders of such stock or bonds the right to have them exchanged for registered stock of the city of New York. Re Whann (1899) 38 App. Div. 339, 58 N. Y. Supp. 5 (affirmed without opinion in (1899) 159 N. Y. 535, 53 N. E. 1133) wherein the court said: "The privilege accorded to the owners of such stock is to 'convert' their coupon bonds into registered bonds. There is not a single word in the section as to 'exchanging' coupons for registered bonds, or as to 'surrendering' such bonds, or as to the duty of the comptroller to 'cancel' them. They may be 'converted,' and the method of their conversion is prescribed in the last clause of the section. The comptroller is authorized to 'detach all coupons therefrom, and (he) shall thereupon indorse the fact of such registration with a reference to this section.' It is this act of cutting off the coupons and indorsing the fact of registration upon the bonds which 'converts' them from coupon to registered bonds, and, if it be neces

sary to give effect to every word in the section, it would do no violence to the language to say that, when he had thus transformed the bonds and redelivered them to the owner, he had ‘issued' registered bonds for the coupon bonds which had been presented to him. The manifest intention of the section was not the exchange of one bond or security for another, but merely a change in the method of paying principal and interest on the same bond."

Under the Greater New York charter, if the Statute of Limitations would be available as a defense in an action against the municipal corporation originally liable, it is available in an action against the corporation in which the original debtor has been merged, and which has assumed the obligation. Kahrs v. New York (1904) 98 App. Div. 233, 90 N. Y. Supp. 793.

IV, Property or funds subject to payment of debt.

may not be subjected to the payment of its debts, except through taxation. Meriwether v. Garrett (1880) 102 U. S. 472, 26 L. ed. 197; Drumhiller v. Wright (1923) 64 Cal. App. 498, 222 Pac. 166. In Meriwether v. Garrett (U.S.) supra, it was said: "In no state of the Union, outside of New England, does the doctrine obtain that the private property of individuals within the limits of a municipal corporation can be reached by its creditors, and subjected to the payment of their demands. In Massachusetts and Connecticut, and perhaps in other states in New England, the individual liability of the inhabitants of towns, parishes, and cities for the debts of the latter is maintained, and executions upon judgments issued against them can be enforced against the private property of the inhabitants. But this doctrine is admitted by the courts of those states to be peculiar to their jurisprudence, and an exception to the rule elsewhere prevailing. Elsewhere the private property of the inhabitants of a municipal body cannot be subjected to the payment of its debts, except by way of taxation; but taxes, as we have already said, can only be levied by legislative authority."

On the merger of one municipal corporation with another, in the absence of any statutory provision to the contrary, the territory which is added to the latter corporation is subject to the payment of debts previously incurred. Smith v. Saginaw (1890) 81 Mich. 123, 45 N. W. 964.

In Barber Asphalt Paving Co. v. Hayward (1913) 248 Mo. 280, 154 S. W. 140, it appeared that the city of Westport was dissolved, and its territory included within the limits of Kansas City. At the time of the merger, a pavement, authorized by an ordinance of Westport, was in the process of construction. After the work was completed, a special tax was levied and assessed against abutting lots by an ordinance of Kansas City. The suit was on a tax bill issued to the contractor. It was held that since Kansas City was by statute given all the property and "rights" of the dissolved corporation, and made liable for all of its

debts and liabilities, the tax bill was properly issued by Kansas City. It was also held that the charter and ordinances of Kansas City governed the details of the tax bill, including payments in instalments and interest. Barber Asphalt Paving Co. v. Field. (1908) 134 Mo. App. 663, 111 S. W. 907, is substantially to the same effect on the first point, and was cited in the later case.

In Meriwether v. Garrett (U. S.) supra, it appeared that a receiver and collector was appointed, under authority given by the legislature, to collect taxes levied before the repeal of the charter of a municipal corporation. Some of the taxes not collected had been levied pursuant to writs of mandamus, issued at the instance of creditors. It was held that the collector would be bound to appropriate the money from these taxes to the payment of the judgments for which the taxes were levied. On this point Field, J., said: "The taxes levied pursuant to writs of mandamus issued by the circuit court are still to be collected, the agency only for their collection being changed. The receiver appointed by the governor has taken the place of the collecting officers of the city. The funds received by him upon the special taxes thus levied cannot be appropriated to any other uses. The receiver, and any other agent of the state for the collection, can be compelled by the court, equally as the former collecting officers of the city, to proceed with the collection of such taxes by the sale of property, or by suit, or in any other way authorized by law, and to apply the proceeds upon the judgments."

If the general credit of the larger city, on the consolidation of municipal corporations, is not a substantial equivalent to a provision made by a city merged into the larger corporate body, for an additional tax to furnish a sinking fund to pay interest on bonds the legal obligation of the security remains unimpaired, and a bondholder has a remedy, on proper application to the courts, for a diversion of funds tending in fact to impair it. Ensley v. Simpson (1909) 166 Ala. 366, 52 Sc. 61. In that case a holder

of a bond of the city of Ensley sought a decree declaring acts which consolidated that city with the city of Birmingham to be void. In holding that he was not entitled to the relief sought, the court said: "It has been settled that the remedies for the enforcement of obligations assumed by municipal corporations which existed when the contract was made cannot be impaired by the legislature, or, if they are changed, a substantial equivalent must be provided. 'Where the resource for the payment of the bonds of a municipal corporation is the power of taxation existing when the bonds were issued, any law which withdraws or limits the taxing power and leaves no adequate means for the payment of the bonds is forbidden by the Constitution of the United States, and is null and void.' Mobile v. Watson (1886) 116 U. S. 289, 29 L. ed. 620, 6 Sup. Ct. Rep. 398, and authorities there cited. To the same effect are decisions of this court: Amy v. Selma (1884) 77 Ala. 103; Slaughter v. Mobile County (1882) 73 Ala. 134; Edwards v. Williamson (1881) 70 Ala. 145; Commissioners Ct. v. Rather (1872) 48 Ala. 433."

The same principle was applied in Meyer v. Brown (1884) 65 Cal. 583, 26 Pac. 281, wherein the court said: "The bonds carried with them the pledge of an annual tax, for municipal purposes, on all real and personal property within the city limits, except such as is exempt by law, of 100 cents on the 100 dollars, 55 per cent of which to be set apart and appropriated to an interest and sinking fund, to be applied to the payment of the annual interest upon the bonds, and to their final redemption. The tax was the chief security offered the creditors as an inducement to accept the bonds in payment of their claims. When the bonds for whose payment, with interest, provision was thus made, were issued and accepted by the creditors of the old city government, a contract was made as solemn and binding and as much beyond subsequent legislation as it would have been if made between private persons." See to the same effect, Meyer v. Porter (1884) 65 Cal. 67, 2 Pac. 884.

If the effect of a consolidation or merger is to dissolve or destroy a municipal corporation, and by reason of the merger the consolidated corporation acquires property or assets of the dissolved corporation, the latter corporation takes such property or assets, in the absence of legislative provision to the contrary, charged with the debts of the dissolved corporation. Walker v. Rome (1909) 6 Ga. App. 59, 64 S. E. 310.

See, however, Forsyth v. Seattle (1913) 73 Wash. 515, 132 Pac. 224, wherein the court said: "The learned trial judge rested his decision on the ground that the city of Seattle was obligated to apply the property it received from the former city of Georgetown to the liquidation of that city's debt, and that its failure so to do was a misappropriation of such property. We have not been able, however, to yield our assent to this conclusion. It is a general rule that, in the absence of statutory regulation, where one municipal corporation is merged into and its territory annexed to another, the property and assets of the merged corporation become the property and assets of the other; and, conversely, the debts and liabilities of the merged corporation become the debts and liabilities of the other. The rule applies to all property, of whatever character it may be, whether money in hand or collectable, and to all legal debts and liabilities, whatever their kind and nature. It is, of course, within the power of the legislature to regulate the disposition of property under such circumstances. It may provide, if it sees fit, that it shall be applied to debts of the annexed municipality, or disposed of in some other manner; but in the absence of such regulation the rule is that the surviving municipality takes the property absolutely. Our legislature has not attempted to regulate the disposition of property taken under such circumstances."

b. Apportionment of property in consolidated corporation.

Where two or more municipal corporations are consolidated, the legislature may make an apportionment of