V. Cl;l'Y OF HOUSTON.
heingsueCi thereon, it presents no case for equitable relief by way of equitable set-off under the authorities. . This demurrer is accordingly sustained, and the bill is dismissed with' costs.
et aZ. v.
CITY OF HOUSTON. l
(Circuit Court, E. D. Texa8. March 1,1888.)
· MUNICIPAL CORPORATIONS":"BoNDS-DIVERSION OF FUNDS-INJUNCTION.
of the bonds the revenue of the market was to be devoted to the payment of the interest on the bonds and to form a sinking' fund to redeem them. After the issuance of the honds, the corporation obtained a new charter, authorized by which they devoted the revenue of the market to other purposes than that provided for in the ordinance authorizing the bonds. Plaintiffs. holders of sqme of these bonds, brought a bill in equity to comperspecitic performance. and asked for an injunction to prevent further diversion of the market-house revenues. Held, the facts being admitted, that an injunction pendente lite, as prayed for, should issue.
lmed sOtile bonds to ·provide a fund for building a market-house. By the terms
4: municipal corporation, under an ordinance authorized by its charter, is-
SAMB-ORDINANCES-CoNSTITUmONA.L LAW-IMPAIRING OBLIGATIONS OF CONTRACTe.
A corporation, under an ordinance authorized by their charter; issued· some bonds to provide· a. fund for building a market-house. By the terIDS, of the bOllds the revenue 9f the market was to. be. devoted to the pay; mentof the interest, on the bonds, and to form a smkmg fund to redeem them; lleld, that as the ordinance was authorized by the charter, and there· fore valid; it constituted a contract between the holders olthe bonds and the ,city, aDd that subsequent ordinances of the city making any other disposition ,91. market revenue were void, and that so much of a charter granted· the city' afier the issue of the bonds &sauthorized the city council to divert any of such revenue froID the special fund as contracted in the ordinance under which the bonds were issued was inoperative. as impairing the obligations of a contract in violation of Const. U. S. art. 1, § 10. 2
'In·Equity. Bill for specific performance and injunction. The city 'of Houston, authorized, by its charter, passed an ordinance for the i13Suance of bonds to raise a fund for building a market. Und r,the terms of the ordinance the revenue from the market was to interest on the bonds, and to constitute be devoted to the paymen\ of
t&ported byChas. B. Stafford,Esq., oUhe New bar. By' the obligation of a contract is meant the means which, at ,the time of its creation, the lawa1fordsfor its enforcement. Where a contract is made upon the faith that levied, repealing or modifying the taxing power of a corporation so as to a:eprive tlieholder of the contract of his is unconstitutional, because impairing.. the obligation of a contract. State v. Police oIUry, 4 Sup. Ct. Rep. 648. Respecting ot.her legislation, col1sidered with rellpect constitutional inhibition against impairing the obligation of contracts. see Seibert v. U. 'S.:.I-7 Sup. Ct. Rep. 1100 ; Water Co. v. Borough of Easton, Id.916; Water-Works Co. v. water-Works Co.· ld. 405 ; FiSk. v.'. Police Jury, 6 Sup. .... and note i Bridge C? v. Railway CO;j 1(.!P.a.) 8 Atl. I\ep,.,2!l3j State v.Jersey C1ty, . .J.} Id.l23; t;tate v. Railroad Co., (N. J.) 7Atl :a,ep, 826, note; Railroad.Co. v. City a Savannah, 80 Fed. Rep. Willis v. Mlller, 29 1<'00. Rep.· Gas-Light Co. v. City'of Saginaw, 28 Fed. Rep. 52\1, and note; Com v.. MS.nryJ-.. (V.8 1 S. E. Rep'. 185: Com. v. Weller, ld.loo; com..v. Jones, Id. 84<; an.d .·) .. S\lperinteDdent, (1110.)8 B. W. Rep. 888; Tait's Ex'r v.AsylU1n,(Va.) 4 B. J1i. Rep. 697. '
a sinking fund to cancel them. .Subsequently the city obtained a new char:tfllT. Under its allthority the revenue of the market was used for other purposes than provided for in the bond ordinance. Plaintiffs, holders of these bonds to the amount of $78,000, filed a bill in equity to prevent further diversion of the market fund, and praying for specific performance and for a receiver. E. H. Farrar, for Brady & Ring, for defendant. PARpEE, J. There can be no question that the ordinance of the city November 13,1871, authorized the issuance of bonds of for the purpose of defraying the expenses of improving the public market by building a new market-house; nor that, by the same ordinance, if words baNe any meaning, the said bonds were agreed to be secured by the appropriation setting apart and pledging, as a special fund, to pay the interest and to create a sinking fund to pay the principal, of all the money and other revenues accrlling after the 1st day of January, 1872, in any manner from the public market, market-house, and market-houses, by renting,leasing, or otherwise conducting or managing the same. As the contemplated bonds were issued and the money raised and expended under said ordinance, there can in law be no doubt that the said ordiof said nance comtituted a valid, binding contract between the bondsand"the city of Houston, if the mayor,aldermen; and inhabitants of the city of E:ouston had authority linder their legislative charter to pass thes,llMl. 9rdinance and enter into said contract. The charter of the city of nouston', in force at the time, was passed by the legislature of the state of 'f.exas August 2, 1870. See chapter 38 ·of the of Texas, J870, p.'68. The twenty-second section of that charter reads as follows: ..
'''fhat the mayor and aldermen of the ci.ty of Houston shall have power to appropriate so much of the revenues of the city, emanating fr9ffi whatever source;: to the. hnprovement pf the pubHc market, roads, and. bayou, within or without corporation, leadingt9 the. city, as they in their wisdom may from time to time deem for the furtherance of these objects, theyshallhave power to borrow nioney upon the credit of the city, and issue the bonds of 'the city therefor; 'but no sum of shall be borrowed at a hiKher rate of interest than 10 per cent. All bonds shall specify for what purpose they were issued, and shall not be invalid if sold forIess than their par value; and .when any bonds are issued by the city, a fund shall be provided to paythEdnterest and create a sinking fund to redeem the bonds, which fund shall not be diverted nOl"drawnupon for any other purpose, and the city treaslll'euha:11 honor no draft drawn on said fund, except to pay interest UPOll or for which it was provided."
anypersoll or corporation for the improvement of the streets, bayou, or 1'o.ad8 leading to the same, or to leasethemal'ket or other revenues of the city for any term of years, and to do and perform all acts that theylDay deem advisable for the interests of the city."
Arid sec,tion39 of said reads: "That the city council of H9uston shall have power to make contracts with
FAZENDE V. CITY OF HOUSTON.
Here is authority to appropriate the revenues of the city, emanating from whatever source, to the improvement of the public market, to bar.. row money upon the credit of the city therefor, to issue bonds, to provide a fund to pay the interest, and create a sinking fund to redeem the bonds, and to lease the market or other revenues of the city for any term of years. The authority seems full and complete. That sume of the revenues ofthe public market are derived from rents and charges in the nature of "occupation taxes," and to that extent are within the legislative control of the city council, does not affect the validity of the ordinance nor of the legislative authority to pass the ordinance. As the ordinance was authorized by the charter, and therefore valid, it constitutes a contract between the holders of the market-house bonds and the city of Houston, arid it follows as settled jurisprudence that the ordinances of the city of Houston making any other disposition or appropriation of the market revenues than as specified in the ordinance under which the bonds were issued are void and have no legal effect, and that so much of the present charter of the city of Houston as authorizes the city council of the city of Houston to divert any of the market-house rents or revenues from the special fund, as contracted for in said ordinance under which said bonds were issued, is inoperative as impairing the obligations of the said ordinance and contract, because in violation of article 1, § 10, of the Constitution of the United Statef.'. The showing made on this hearing-and the facts are undisputed-is that the defendants are not applying the revenues of the market in accordance with the terms of said ordinance and contract, but have been and are diverting the same to other purposes, such as paving streets, paying salaries, insurance, repairs, grocery bills, interest on other bonds, and for other purposes, all in violation of said contract; that none of said revenues have been devoted for many years to the payment of the interest to which they are pledged, save when ordered by judgment of court, or when the funds on hand could be used to purchase coupons at a large discount; that there is now a fund on hand derived from said revenues which the defendants refuse to apply to the payment of interest on said market-house bonds, but which is held for other purposes; and that complainants are the holders of a large number of said bonds, amounting in principal to the sum of $78,000, on which the interest has not been paid since 1874, although duly demanded and judgments obtained thereon. The scope and object of the bill in this cause is to prevent furtber diversion of the market-house revenues, and to enforce a specific performance of the ordinance passed November 13, 1871. The jurisdiction is undisputed, and the occasion for its exercise seems clear. The pending application, is for an injunction pendente and a receiver. The appointment of a receiver is not at present insisted on, and may well wait further proceedings in the premises. The injunction on the showing, made on the authority of Maenhaut v. New Orleans, 2 Woods, 108, and the adjudicated cases there cited, and on general equity principles, should issue substantially as moved for, that the fund now in hand and to acv.34F.no.2-7
:FEDERAL ,REPORTER. ,
erue should,1:ie preserved until 'final decree. The following order may be entered on,theminutes, and process issue accordingly: This' cause, came on to be heard before DON A. P AHDEE, 'Esq., circuit jUdge in chambers, ,on the motion of the ,complainants for an injuQction pending the suit an,d for./lo receiver, after. due to the was argued by H.,Farrar, Esq., and by Brady &I Ring for thlidefeildants; when, considering offeredaud the,reasons tiled, it is ordered that ,an injunctionpendpnte Ute issue herein. uommanding and enjoiiling the defendants, the mayor,aldermen, and inhabitants of the city of Houston, and George R. Bringhurst; secretary and treasl1rer of said city of Houston, and each of them. fromdl:verting directly or indiri;lCtlyany ·portion of rents, Pevenues, tolls, incOIne,i'tmdreceipts of the market-house and Ularket-houses of the city from the market-house bond fund, as andprovided for inthe ,otdinance passed November 11, 1871, and approved by the mayor Novetqber 13,,1871, authorizing and prOViding for the issue of bonds for improving the pUblic market, and from using or setting apart said rents and revenues, tolls <imd income for any other fund or purpose than tbe market-house 'bond fund: prov:ided in said ordinance, and from using .0I'spplyingsaid fund accrued an4to accru.e in any otherway Qr tll8nner than for the of inttlrest, !,nd to create a sinking pro'vided in a.tiy of the CIty of Houston to the contrary notwithstanding. ThiS 'iHjunctiOn to take the place of the restraining order her.etofore issued in this cause. The matter of appointing a receiver iIi this cause is continued indefinitely.
'(Circuit Oourt, D. Oolorado.
1.FRAUDS.,STAlrUTE OP-AGIUl!l!liMENTS RELATING TO LAND-PARTNERSHIP.
2. PARTNERSHIP"':"POWER OF PA:aTil':ER TO BIND THE FIRM.'
AbiU il) eqUity, by one claiming to be a partner, to obtain. a conveyance of an interest in lands on the ground that they belonged to a partnership formed ,for bUY1. ng.· and selling r8al estat.e, ,W.hieh alleges 'that the. partnership was .. formed llothby means of. convllJ.:sations and by letters. is demurrable, assl1ch partnership caMot p6 ,formed by parol.
A billbjr'oneclaimingto be a partner, to obtain conveyance of an interest in l.and claimed to be partnership l.lWd, which alleges that the partnership was formed fqrcthe purpose of buying, and selling land. dges not state a cause of , action $gainst a vendee of one of the alleged partners; since, if the vendor was a partner, he had authority to sell the land. In Equity. On V. D. Markham andL.M.,Outhbert, for complainant. ' Goo. J'.lBoal, for defendant Wheeler. L. S.lJiiwn" for defendant company.
HALLETf.r, J. Suit was brought by Har.vey Young against Jerome B. Wheeler to obtain a conveyance of an interest in certain lands. Plaintiff alleges that in the latter part of the year 1882, and the part of the