the burden of their debts, by providing for the payment of the debt of each one by taxes to be levied only on property within the limits of the municipality which incurred the debt. Pennsylvania Co. v. Pittsburg (1910) 226 Pa. 322, 134 Am. St. Rep. 1063, 75 Atl. 421. See also Burlington Sav. Bank v. Clinton (1901; C. C.) 106 Fed. 269 (statement as to holding of the case and quotation from the opinion will be found infra, VI.)

In Pennsylvania Co. v. Pittsburg (Pa.) supra, the court said: "The general rule is that, when two or more cities are consolidated into one municipality, the legislature by the act authorizing the consolidation may make the consolidated city liable for the indebtedness of the old municipalities; or it may provide for an equitable apportionment of the existing burdens by requiring each of the respective municipalities to be responsible for its own indebtedness at the time of consolidation, and by providing for the payment of such indebtedness by taxation limited to the property located within the limits of the municipality contracting the same."

Although provision is made, on the consolidation of municipal corporations, for the payment of the indebtedness of each one by taxes on only the property within the municipality incurring the indebtedness, the legislature may subsequently provide for liability of the consolidated city for the debts of the merged corporations, and require uniformity of taxation throughout the territorial limits of the consolidated city. Layton v. New Orleans (1857) 12 La. Ann. 515; Moore v. Pittsburgh (1916) 254 Pa. 185, 98 Atl. 1037.

In Layton v. New Orleans (La.) supra, the plaintiff contended that a statute forbidding the levy by a city council of any tax, unless equal and uniform within the limits of the city, was unconstitutional, because it violated the contract entered into by the legislature with municipal corporations in consolidating them under a single government. The statutes effecting the consolidation directed that their debts, which were to be assumed

by the city at large, should be ultimately paid by the taxation of the inhabitants of the respective districts comprising the former municipalities, in proportion to the burden which they imposed on the new government by their respective debts. In holding that the statute as to uniform taxes was not subject to the objection made against it, the court said: "There was no contract made with the individuals comprising the city of Lafayette, for they did not intervene in the proceeding nor give an equivalent, nor stipulate in their favor that the state should surrender its power of taxation. As it respects municipal corporations, it has always been held that the law of the state creating them and conferring upon their officers a part of the sovereign authority as mandataries of the government is not a contract, and, as a consequence, that the legislature may modify such act of incorporation at its pleasure. Montpelier Academy v. George (1840) 14 La. 406, 33 Am. Dec. 585; Police Jury v. Shreveport (1850) 5 La. Ann. 665."

Under a statute providing that no property within either of two municipal corporations which have been consolidated shall be taxed to pay any portion of the indebtedness of the other, a consolidated city may issue its bonds to pay legal debts of each of the preexisting corporations, provided the bonds for the indebtedness of each are payable by taxes on property within its limits only. De Mattos v. New Whatcom (1892) 4 Wash. 127, 29 Pac. 933.

A statute providing for the payment of debts of a dissolved municipal corporation by taxes on property which was formerly within its territory will not be given effect so as to limit the enforcement of debts of the dissolved corporation against corporations to which its territory is annexed, if the statute violates a constitutional prohibition of a special law when a general law can be made applicable. Pepin Twp. v. Sage (1904) 64 C. C. A. 169, 129 Fed. 657, wherein the court said: "By its terms the act under consideration makes the presence of the following conditions requisite to

a general law operating uniformly in all cases. To make the repealable special charters of municipalities owing their existence to that character of legislation the basis of a classification, when no necessity or reason for a difference in remedies, liability, or legislative treatment inheres in that fact, is special legislation. A statute establishing such a classification does not include all objects which, in their nature, are of the same class, but excludes some whose conditions and wants render such legislation equally necessary and appropriate to them as members of the class."

V. Special commission,

or officer,

agency to raise funds.

as

its operation: (1) The indebtedness must be that of a municipality organized or created under a charter or special law. (2) The dissolution of the municipality must have occurred through the direct legislative repeal of such charter or special law. (3) The indebtedness must be outstanding bonds or other written obligations. (4) The effect of the repeal must have been to attach the territory of the municipality so dissolved to one or more municipalities existing at the time. In Minnesota there has long existed a system of general laws providing for the creation, division, and dissolution of villages and other municipal corporations, and for detaching territory therefrom and attaching territory thereto. Municipalities existing under these general laws incur debts substantially in the same way and for the same purposes as do those existing under special laws. Both classes contract debts by implication as well as through bonds or other written obligations, and both may incur liabilities through tortious acts of their officers and servants. The engagements and liabilities of both classes stand upon the same footing, and the creditors of both are entitled to the same consideration. Both classes are subject to dissolution, and the necessity or propriety of providing for the payment of their debts in that event is the same, whether the municipality owes its existence to a special law or to the general laws, and whether it be dissolved by direct act of the legislature, or by the action of its inhabitants, had under the general laws. Nothing in the special or general character of the laws by or under which municipalities are created or dissolved suggests that it should be made the basis of a distinction or difference in those who succeed to the obligation to pay the debts of dissolved municipalities, or in the property from which the money to pay these debts shall be raised by taxation, or in the character of the debts to be paid, whether evidenced by written obligations or otherwise. The subject is one which in its nature, and with justice to all concerned, can be reasonably covered by duty of their collection, can be com

On the annulment of a charter of a city, it is competent for the legislature to authorize the appointment of commissioners with power to collect and control the assets of the dissolved corporation, and make the application of them required by. law. Amy v. Selma (1884) 77 Ala. 103.

See also the reported case (STATE EX REL. JOHNSON V. GOODGAME, ante, 118), wherein it is said that the protection required for the creditors of an abolished municipality may be accomplished by providing for the continuation of the assessment and collection of taxes and the disbursement of funds by proper officials named for that purpose, without the continuation of any corporate existence, or by the creation of a new corporation which is made the successor to all the rights and to all the liabilities of the one abolished.

In Meriwether v. Garrett (1880) 102 U. S. 501, 26 L. ed. 197, the court said: "The receiver and back-tax collector appointed under the authority of the Act of March 13, 1879, is a public officer, clothed with authority from the legislature for the collection of the taxes levied before the repeal of the charter.

The funds collected by him from taxes levied under judicial direction cannot be appropriated to any other uses than those for which they were raised. He, as well as any other agent of the state charged with the

pelled by appropriate judicial orders to proceed with the collection of such taxes by sale of property, or by suit, or in any other way authorized by law, and to apply the proceeds upon the judgments."

In San Miguel County v. Pierce (1892) 6 N. M. 324, 28 Pac. 512, it appeared that a statute disincorporated certain cities, and provided that the commissioners of the counties in which the cities were situated should ascertain the amount of their indebtedness and levy a special tax on property within the limits of the disincorporated cities, amounting in each year to one fifth of the indebtedness, so as to liquidate the whole indebtedness within five years. A holder of warrants on the treasurer of one of the disincorporated cities presented them to the county treasurer, and, on his refusal to pay them, brought suit against the county. In reversing a judgment in his favor against the county, the court said: "The act invoked by defendant in error does not purport to transfer to the county the legal liability of the city to pay these warrants. It merely designates the board of county commissioners as a suitable agency for the purpose of ascertaining and providing a fund for the payment of the approved legal obligations of the disincorporated city. But the relation of debtor and creditor -never having existed, with regard to these orders, between the plaintiff and the defendant-was not created by the act, and no personal judgment in a suit of this nature could, in any event, be rendered against the county for the amount of the indebtedness. The liabilities and remedies of the respective parties cannot exceed the terms of the act creating them. plaintiff made the requisite application for the allowance and approval of his claims, and had the county board failed to do its duty in the premises, an appeal lay from the adverse decision to the district court; and upon such appeal the court could render judgment approving or disapproving the whole or any part of such account or claim, as the same would appear just and proper. Laws 1884, § 4, chap.

Had

38. Had plaintiff complied with these requirements, he would have pursued the only course available under the statute; and, if he prevailed in either course, he would have been entitled to an adequate remedy, by mandamus or otherwise, requiring the county. commissioners to levy a tax in pursuance of law to pay the claim allowed."

VI, Court as agency to raise funds. A court of equity, it seems, has no power ordinarily to appoint officers to levy or collect a tax to pay the demands of creditors of a dissolved municipal corporation. Meriwether v. Garrett (1880) 102 U. S. 472, 26 L. ed. 197. It may, however, require duly constituted officers of a municipal body which is the successor of the dissolved corporation, and a trustee for the payment of its debts, to assess and collect a tax to pay the debts. Burlington Sav. Bank v. Clinton (1901; C. C.) 106 Fed. 269.

And the legislature may authorize the commissioners of a dissolved municipal corporation to apply to a court of equity for instruction, direction, and protection in the performance of their duties. Amy v. Selma (1884) 77 Ala. 103.

In Meriwether v. Garrett (U. S.) supra, it appeared that a state legislature repealed the charter of an insolvent city and established another agency, or other agencies, for local government. Subsequently, under authority given by the legislature, a receiver and collector of back taxes was appointed. On the day before the passage of the act repealing the charter, creditors of the city filed a bill in a Federal circuit court, alleging a large indebtedness to them on the part of the city, and the failure of the city to collect a large part of the taxes imposed, some of which were levied pursuant to writs of mandamus which the creditors had obtained. The circuit court appointed a receiver of the assets and property of the city, with broad powers. With a few exceptions he was required to take possession of all of the assets and property of the city, including taxes previously levied, ex

lishing the amount due thereon, and, as already said, the method by which a legal service could be had in an action at law is certainly not made plain. Moreover, the duty and obligation to levy the taxes necessary to meet the indebtedness of Lyons City is now imposed upon the city of Clinton, but the issuance of a writ of mandamus to the city of Clinton is not within the power of the court, except in aid of an action in which the court has acquired jurisdiction over the city of Clinton. To set in motion the taxing power conferred by § 614 of the Code of Iowa by means of a writ of mandamus from this court, it is necessary that the court should first render a judgment at law against the city of Clinton, and I do not believe that such a judgment is provided for in § 614. In the Federal courts it seems clear that the rights created by this section can be worked out only through a proceeding in equity. This section does not impose upon the city of Clinton a legal liability for the indebtedness owing by Lyons City, which would authorize the court to render a judgment at law against the city of Clinton for the amount thereof. The section does confer upon the city of Clinton the power and duty to impose the taxes necessary to meet the obligations of Lyons City upon the taxable property within the limits of the latter city. By this provision of the section the city of Clinton is created a trustee, and charged with the performance of certain duties to the creditors of Lyons City. The rights thus created in favor of the creditors of Lyons City by the state statute are enforceable in the courts of the United States, but the method or mode of enforcement is governed by the rules of Federal procedure, and there is no legal remedy of such a sufficient character as to preclude invoking the aid of a court of equity. Furthermore, even though it were true that a legal remedy did exist, that would not defeat the right to invoke the jurisdiction in equity, provided it be the fact that the relation held by the city of Clinton in the matter of imposing taxes to meet the indebtedness of Lyons City is that

of a trustee. In such case the legal and equitable remedies would be concurrent, and either could be availed of by complainant. Townsend v. Vanderwerker (1895) 160 U. S. 171, 40 L. ed. 383, 16 Sup. Ct. Rep. 258,"

A Federal court ordinarily is without power to provide the machinery to levy or collect taxes to pay the debts of a dissolved corporation. If a state legislature fails to provide for the levy of a tax for this purpose, and does not appoin' competent officers to collect the tax, a Federal court cannot assume the duty. Meriwether 7. Garrett (1880) 102 U. S. 472, 26 L. ed. 197.

A statement of similar import appears in Branch v. Sour Lake (1924; D. C.) 9 F. (2d) 971, affirmed in (1925; C. C. A. 5th) 6 F. (2d) 355, writ of certiorari denied in (1925) 269 U. S. 565, 70 L. ed. 414, 46 Sup. Ct. Rep. 24, wherein, however, the court held that the state legislature had set up machinery adequate for the purpose. It appeared in that case that a city in Texas had been organized under proceedings for incorporation which were invalid, and that a court had held that it was never legally incorporated. Thereafter a statute was enacted for the protection of holders of any indebtedness against dissolved municipal corporations, including de facto corporations dissolved by a court of competent jurisdiction. The holder of such indebtedness was given the right to maintain a suit in a proper court to establish the obligation and obtain service on the dissolved corporation by serving the citation on the mayor, secretary, or treasurer of the corporation, or on one pretending to act as such, at the time of its dissolution. It was also provided that the status of the corporation should remain unchanged, in so far as the holders of its indebtedness were concerned, until the payment of the indebtedness. A suit was brought in a Federal court by a citizen of Kansas against the dissolved city and individuals designated as mayor and aldermen of the city. In sustaining the jurisdiction of the court, it was held that the corporation was a citizen of the state within the meaning of the statute relating to the