PEAKE v. CITY OF NEW ORLEANS, 60 F. 127

LOCKE, District. Judge.

By the act of March 18, 1858, of the state of Louisiana, enacted for the purposes of draining and reclaiming swamp lands in the parishes of Orleans and Jefferson, there were organized three boards of commissioners, — one for each drainage district,- — who were invested with all the rights and powers necessary to drain their several districts, by entering upon lands, and erecting engines and machinery, and digging canals and drains, and making embankments and levees; and by making plans and advertisements, and making proof before one of the district courts, they were authorized to levy assessments upon the land so drained.

In 1859 a supplementary act authorized the board of commissioners to issue 30-year bonds, and use the proceeds for carrying on the work of drainage, and provided for their payment; and on March 1, 1861, another act provided for the collection of the assessments for the payment of the interest on such bonds and the principal as they matured. ■ While these acts were in force, and constituted the entire law regarding the drainage of New Orleans and the surrounding country, the president of the board of commissioners for the second drainage district purchased, with money collected as drainage taxes and held as drainage funds, a certain lot of land, known as “Square No. 467,” and erected thereon, at the cost of $57,671.38, paid out of money of such fund, a drainage machine, since known as the “Dublin Draining Machine,” which has since that time been continuously operated for the drainage of a large part of the property situated in that part of New Orleans.

Subsequent to the purchase of this land and the erection of this draining machine, the drainage of New Orleans wasi provided for by

an act of the legislature of February 14, 1871, authorizing and empowering the Mississippi & Mexican Gulf Ship Canal Company to enter upon the construction of such a system of drainage by canals, embankments, leve'es, pumps, and drainage machines, as was specified in the act, and should be further designated by the board of administrators of the city of New Orleans.

This city was also made the successor of the boards of drainage commissioners provided for by the acts of 1858, and it was provided that said boards should transfer to its board of administration all money, assessments,' claims of drainage, real estate, books, plans, and other property, that they held as such, and it was further provided : “That all money or moneys received by the said board of administrators from the said commissioners of the drainage districts, either from the sale of property received from said commissions, from the collection of claims for drainage now due, from the collection of drainage assessments, and from any of the sources of revenue contemplated by the provisions of this

section of this act, be placed to the credit of the Mississippi and Mexican Gulf Ship Ganal Company, and held as a fund to bo applied only to the drainage of Now Orleans and Carrollton, in accordance with the provisions of this act; and that all property, not. money, so received, shall be held in trust for the payment of said Mississippi and Mexican Gulf Ship Canal Company, and ultimately for the benefit of New Orleans, should the same not be required for the work of drainage.” Subsequently, by Act No. 16 of February 24, 1876, the city of New Orleans assumed exclusive control of all drainage works in the drainage districts.

There being outstanding at that time a large number of drainage warrants, a portion of which were owned by the appellant herein, he brought suit against that city as trustee holding the property of the drainage funds for the payments of such debts. A judgment being obtained in his favor, a. receiver was appointed, to whom was conveyed, by the mayor of New Orleans, a large number of lots of land, the property of that fund, among which was the square in question, — No. 467, — upon which had been erected the Dublin draining machine, (see 2 C. C.

A. 626, 52 Fed. 74; 38 Fed. 779,) whereupon the city of New Orleans tiled its bill of complaint, alleging that said square of land was public properly, and had been dedicated to the public use, and was inalienable, and praying that the deed therefor be erased and canceled, and declared null and void. Upon a hearing in the court below the prayer of the bill was granted, and it was ordered that the receiver reconvey to the city oí New Orleans, as public property, said square of laud. From that .judgment an appeal has been taken. This square of land came to the city through the effect of Act No. 30 of 1871.

It was purchased with public money collected for a public purpose, and if it could in any way be treated as held in trust, or liable to be disposed of for any other purpose, it must, be by the provisions of that act. Appellant claims that a portion of the ninth

section of said act, wherein it provides “that all property, not money, so received, shall be held in trust for the payment of said (Mississippi and Mexican Gulf BMp Canal Company, and ultimatelv for the benefit of New Orleans, should the same not be required for the work of drainage,” devoies all such property to such trust, and that the final clause, “should the same not be required for the work of drainage,” only modifies that immediately preceding, “and ultimately for the benefit of New Orleans.” We cannot accept this view of the case.

Not only does the form of the expression, but the history, object, and intent of the legislation, appear to prohibit such construction.

The eniire drainage scheme was for the benefit of New Orleans, through the use of money and property that was applied to it, and the suggestion or declaration that the payments for the labor and services of the canal company would ultimately produce sucb result and sucb benefit would seem reasonable; but to place sucb a construction upon tbe language as would declare that that wbicb was not required for tbe wort of drainage should ultimately be for tbe benefit of New Orleans more than that wbicb was so required produces an absurdity.

This final clause is a limiting and restrictive one, and must limit either tbe property wbicb is to be held in trust, or that wbicb shall ultimately be for tbe benefit of New Orleans. There is every reason why sucb restriction should be placed upon tbe class of property so held in trust, but no reason why all of sucb payments might not result ultimately to tbe benefit of New Orleans. Sucb construction as is claimed by tbe appellant would undo all the benefits which bad resulted froto tbe system.

If tbe property wbicb was required for tbe work of drainage was to be held in trust for tbe payment of tbe debts of tbe corporation, it would be placing tbe city at tbe mercy of tbe creditors of tbe company, in a manner wbicb we cannot consider tbe legislature intended.

This is a limitation, — a negative and modifying clause used finally, — and we can but believe it was intended to limit tbe property wbicb was to be held in trust, and tbe paragraph was to be construed as a parenthesis inclosed by commas, wbicb might be replaced by curved lines, and read, “All property, not money, so-received, shall be held in trust for the payment of said Mississippi and Mexican Gulf Ship Canal Company (and ultimately for tbe benefit of New Orleans) should tbe same not be required for, tbe work of drainage.” It is also contended by appellant that tbe “work of drainage” mentioned in said ninth

section should be held only to apply to those works and áppliances wbicb were contemplated by tbe act of 1871, and that all tbe property and appliances not in accordance with that system of drainage should be held in trust for tbe payment of such debts of tbe Mississippi & Mexican Gulf Ship Canal Company as might be incurred.

It is true that large amounts of warrants were issued and debts incurred, but we cannot appreciate tbe force of tbe argument that while tbe works erected by tbe said company after its entering upon its contract were protected from any lien or tbe effect of any trust, if they were required for drainage purposes, yet tbe property wbicb bad been purchased and rendered valuable, and was used for the work of drainage, prior to its connection with the drainage system, and was still so required, was subject to sucb lien, nor can we accept sucb construction of the act.

Tbe evidence shows conclusively that this square is especially required for the work of drainage; that for nearly 25 years tbe value of a large portion of tbe city has depended upon it; that “without it considerable of tbe property back of St. Charles Avenue would not be habitable.” Several witnesses testify in most positive language of tbe disastrous results wbicb would follow tbe suspension of its work.

We consider that this was no portion of tbe property which was declared to be held in trust for the payment of tbe canal company, and hence is, as claimed, dedicated to public uses, and inalienable; and tbe judgment below is affirmed, with costs, and it is so ordered.