On appeal from a judgment of the Supreme Court, whose per curiam opinion is printed in 11 N.J. Mis. R. 194.
For the appellants, Burke, Sheridan & Hourigan (John Milton, of counsel).
For the respondents, Nicholas S. Schloeder.
The opinion of the court was delivered by
HEHER, J. The relators are judgment creditors of respondent township. They applied to the Supreme Court for writs of mandamus to compel the taxing authorities of the township to assess and levy, in addition to regular taxes, the amounts due upon the executions issued upon the judgments. The applications were denied. Thereafter the causes were consolidated, and the pleadings moulded, and judgment was entered overruling the demurrer to the return made by respondents to the alternative writ of mandamus. Relators appeal from this judgment, and from the order entered in each cause discharging the rule to show cause why a writ of mandamus should not issue.
Respondents alleged in the return, and contend in limine, that respondent township has a claim substantially exceeding the sums due to relators, growing out of the transaction which furnished the basis for relators' judgments; that suits to recover the sums so claimed to be due, instituted by the township against the Clinton Asphalt Company, are still pending and undetermined in a court of law; that the asphalt company "is the real party in interest and owner of the judgments" obtained by relators, and that execution should be stayed until it has had the opportunity to establish its alleged
set-off. But this contention is without merit. It is obviously specious. It was not interposed as a defense, nor made the subject of a cross-action, in the suits which resulted in judgments for relators. In each cause there was a judgment by default. Rules directing relators to show cause why their respective judgments should not be opened were discharged by consent. The respondent township will not be permitted, under such circumstances, to interpose, in an effort to defeat relators' efforts to secure satisfaction of their respective judgments, that this alleged claim constitutes a set-off against the judgments.
The return further alleged that, since June, 1932, the municipal finance commission, created by chapter 340 of the laws of 1931 (Pamph. L. 1931, p. 830), as amended by chapter 236 of the laws of 1932 (Pamph. L. 1932, p. 519), has functioned in respondent township, and that "by reason of the said statute the present action or proceeding is barred," and that "to comply with the demand of said writ would cause great confusion in the finances and affairs of the said township."
Appellants challenge the constitutionality of the statute, if applicable to their judgments, and specify that it is violative of article 4, section 7, paragraph 3, of the constitution of this state, forbidding the passage of any law impairing the obligation of contracts, or depriving a party of any remedy for enforcing a contract which existed when the contract was made, and article 1, section 10, of the federal constitution, prohibiting the several states from passing any law impairing the obligation of contracts, and, as well, a deprivation of their property without due process of law, and a denial of the equal protection of the laws, in contravention of the fourteenth amendment of the federal constitution. The Supreme Court, properly assuming that the statute is applicable, declined to pass upon its constitutionality, because the finance commission was not a party to the proceeding, and held, that, in any event, the application should be denied, for the reason that the granting of the remedy sought would work great confusion in the financial affairs of the township.
It was not requisite, for the purpose of determining the constitutionality of the statute, that the finance commission be a party to the proceeding. It is not the regularity of any action of the commission that is under attack, but rather the validity of the franchise granted by the legislature. Its very existence is challenged on the ground that the legislature, in attempting to set it up as a state agency for the statutory purpose, violated constitutional precepts. It is merely a nominal, and not a necessary, party to the proceeding. Compare Oliver v. Jersey City, 63 N.J.L. 634, 636.
That the granting of a writ of mandamus, in a case such as this, will work confusion in the financial affairs of the municipality, does not justify the denial of the application. It is not a discretionary matter. Mandamus is the only remedy of the creditor for the enforcement of his contract. This is a well established doctrine. Lyon v. City of Elizabeth, 43 N.J.L. 158; Piscataway Township v. First National Bank of Dunellen, 111 Id. 412. In Rahway v. Munday, 44 Id. 395, 418, Chief Justice Beasley, speaking for this court, held that the writ of mandamus, in such circumstances, is a remedy for enforcing a contract, and that the statute providing that when an execution upon such judgment shall have been served upon the assessor of the municipality, it shall be his duty to assess and levy, in addition to regular taxes, the amount due upon the execution, vests in the judgment creditor a right to have his debt paid from the source specified; that the statute makes no allowance for the pecuniary embarrassments or the insolvency of the corporation, and that the mandate of the act is that, in every case and in all situations, upon the requisite proceedings being taken, the sum due must be assessed and collected. The consequence of a contrary rule would be that, in the exercise of discretion, the Supreme Court could withhold the only remedy of the creditor for the enforcement of his contract. As Chief Justice Beasley pertinently said: "If a judgment should be obtained in an inferior court, and such court should refuse, without legal reason, to issue an execution upon it, the mandamus compelling such action would be
as much a remedy for enforcing such contract as would be either the judgment or final process."
We come now to a consideration of the constitutional questions raised. It is firmly established that the remedies for the enforcement of municipal obligations, which existed when the contract was made, must be left unimpaired 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 federal constitution, and is null and void. Port of Mobile v. Watson, 116 U.S. 305; 6 Sup. Ct. 398; 29 L. Ed. 620, 626. The obligation of a contract, in the constitutional sense, is the means provided by law by which it can be enforced; by which the parties can be obliged to perform it. Whatever legislation lessens the efficacy of these means impairs the obligation. If it tends to postpone or retard the enforcement of the contract, the obligation of the latter is, to that extent, weakened. Any authorization of the postponement of payment, or of means by which such postponement may be effected, is in conflict with the constitutional inhibition. State of Louisiana v. City of New Orleans, 102 U.S. 203; 26 L. Ed. 132. In Walker v. Whitehead, 16 Wall. 314, it is said: "Nothing is more material to the obligation of a contract than the means of its enforcement. The ideas of validity and remedy are inseparable, and both are parts of the obligation which is guaranteed by the constitution against impairment." If a particular form of proceeding is prohibited, and another is left or is provided which affords an effective and reasonable mode of ...