The New Orleans bulletin. [volume] (New Orleans [La.]) 1874-1876, 1875-12-21

ment of a receiver.
Counsel for defendant not being advised
within what narrow limits the relief sought
by this motion was confined, have argued
many questions which it is not now necessary
| to pass upon or notice. The only question l.,
should the Injunction go as moved for!
There can be no serious question that so
much Of the Doth section of the act OF 1917
as provides for the manner in which the tax
to pay the consolidated bonds IS TO
be levied, and the safeguards Tor the
levy and collection of the tax constitutes
a contract with the bondholders, the substan-
| tial performance of which he is entitled 10 eX-
| act
Dillon on Municipal Corporations, Al.
Woodruff vs.. Tratnall, 10 Howard, l9J.
Curran vs. Arkansas, Is Howard, 304.
Van Hoffman vs.. The City OF Quincy,
Wallace, 535
Furman vs.. Nichol, Wallace, Al.
PEOPLE vs. Bond, 10 Cal, 563
| PEOPLE vs. Wood, Cal, 579
Brook YIN Park Company VS.. Armstrong, ID
N. Y. 23i.
| For the purposes of this motion it is lmnla-
| teriaJ whether the contract is contract with
the State OF Louisiana or with the city OF New
Orleans In the case of Van IL LEHMAN VS.. the
City of Quincy, supra, it was held, however,
by the Supreme Court of the United States,
| that under ike clrcuIuStdLceS ootA 1iO Aosoeo
and the corporation were bound.
1t is also unnecessary to consider whether
or not some Of the relief prayed for by the
| bill must be sought by mandamus after Judg-
ment and not by bill in equity.
| The only question which the Court is now
called on to decide is this: The city Of New
| Orleans having collected and set apart, as re-
auired by the act of 1852, a fund to pay the
interest on the consolidated bonds, can the
city be enjoinei from appropriating said fund
to any other purp3 se?
In MY Judgment there is no doubt that this
can be done. The money specially collected
| TO pay this interest Is deposited IN bank TO
| the credit of the fund for that purpose. This
money, being the fruits of contract between
the bondholders and the State and city, and
having been specially collected under author
| ity of law to pay this interest, and deposited
| ia bank to the credit Of a fund set apart for
such payment, it is held by the city in tidu-
ciary capacity, and the trust is imposed upon
| the city TO apply the funds to the object tor
| which they were collected. See authorities
cited below.
| This il a trust which equity can enforce.
| Judge Dillon in his learned work on Num-
cipal Corporations, says in section 729: " Ia
respect Of property held by municipal cor
| porations in trust or clothed with public du-
| ion to see that the trusts were performed and
the public duties discharged The Jurlsdlc
| ton of chancery in such over municipal
corporations is forcbly asserted by the House
of Lords in an interesting and important
| case, in which the corporation Of Dublin, IN
der act of Parliament, was the trustee of funds
raised from water rates to supply the city with
water, and when the bill charging the corpor-
alton with breaches of trust and m1smanage-
|
behalf of the inhabitants of Dublin payln
water rates." This was the case OF Attorney
General vs. Dublin, l Bligh, N r 312.
In the case of the People VS.. Ingersoll, So
N Y, So it was held that if the public cor
poration having power to act in corporate
| capacity has by its officers so acted under the
laws as to become bound by its obligations
the debt has become a corporate and county
charge and the moneys, the fruits and pro-
ceeds of the obligation and trust funds sub
ect to the control of the governing body of
the corporation under the general laws OF the
State.
| 81 it was held in the case of the Attorney
General w. Lichtield, II Beavan, 100, that
the borough first created under the munich
pal corporation act is trust fund.- and the
Court Of Chancery has authority and juris-
dction to compel the parties who receive and
apply the fund to account for the sums they
| receive, and the application of them, and
that the court has jurisdiction, If it be expe-
dent, and the case require 1t, to restrain the
| application of money collected by rates to
| costs, debts and expenses incurred prior to
making the rates.
The case of Trevillian VS.. the Mayor of
Exeter-5 DeGex, MacNaughten and Gordon,
o2S-was this: A corporation raised money
under an act Of Parliament on mortgages of
81, oil DO Of
acting on what the Court OF Appeal differ
ing from the court below decided to be an
erroneous construction of the act, applied
part of the money so raised in paying off old
mortgages affectil 6 other property OF the cor
| poration. On the tolls and additional works
| being an insufficient security, held that the
new mortgages were entitled to follow their
money 80 far as it had been enormously ap-
piled and to stand in place OF the cid paid
off mortgages as against the other property OF
the corporation.
| Soin the Attorney General VS.. Dublin supra,
| it was held that where there is any fund
created for the purpose of being applied to
| some public purpose, which fund is vested In
corporation, the Court of Chancery has, by
| its original inherent jurisdiction, right to
see to the due application of the fund.
| The Court OF Chancery will always lay
| hold of any breach of trust in relation to the
administration of property, let the party
guilty Of it be either in public or private
| capacity.
Charitable Corporation VS. Sutton. 2 Atk.,
406 See also Attorney General VS.. Elstlake,
81 Eng. Law and Equity, Rep. 43.
Surge vs. Eastern Railway Company, 74De
Gex; McNaughton and Gordon, 1873.
On these and many other authorities that
might be cited, feel justified in holding that
the tax collected and deposited under the act
of 1852, to pay the interest on the CONSOLE
dated bonds, is trust fund in the hands Of
the city authorities to be applied to that pur-
pose, and no other, aud that, if there is any
danger that the fund will be diverted to other
purposes, the compliments are entitled TO
their Injunction to restrain such diversion.
| On consideration of the pleadings and affi-
davits in this case, cannot shut my eyes to
the fact that there is danger OF the application
OF this fund to purposes other than that for
| which the law authorized it to be collected.
| oppaarc bnyyayar that some OF the