New Orleans Republican. [volume] (New Orleans, La) 1867-1878, 1875-12-21

oI tne Cnted States that, under like cir
| cumstances, both the State and the corpo.
| ration were bound.
1t is also unnecessary to consider whether
Or, or not some Of the relief prayed for by the
bill must be sought by mandamus after
judgment, and not by bill in equity.
| The only que stion which the court lie now
called on to decide is this: The city of New
Orleans having collected and set apart, as
| required by the act of 1852 fund to pay
the interest on the consolidated bonds, can
the city be enjoined from appropriatiug
said fund to any other purposel
In my Judgment there ia no doubt that
| this can be done. The money specially col
lected to pay this int crest is deposited in
bank to the credit of the fund for that pur-
| pose. This money, being the fruits of a
contract between the bondhoders and the
State and city, and having been specially
| collected under authority of law to paw this
| interest, AMI deposited in bank 20 the credit
| OF fund set apart for such payment, it is
| held by the city in tiduciary capacity, and
the trust is imposed upon the city to apply
| the funds to the object for which they were
collected. See authorities cited below.
This is trust which equity can enforce.
Judge Dillon, in his learned work on
| Municipal Corporations, says, in section
~ In respect OF property held by muni-
| cipal corporations il trust or clothed with
public duties, equity has always asserted
| ITO juA'eulSlIuu ~ htt ludl IU0 ituSL6 were
| performed and the public duties discharged
The jurisdiction Of cbancery IN such over
| municipal corporations is fOrcibly asset ted
| by the House of Lords in an interesting
and important case, in which the corpora
ton of Dublin, under act of Parliament
was the trust ,e of funds raised rom water
rates to supply the city with water, and
when the bill charging the corpora lion with
breaches of trust and mi9management wa
! filed by the attorney general on behalf of
| the inhabitants Of Dublin paying water
! rates." This was the case of Attorney
General vs. Dublin, ! Blioh, N. R. 3l2.
| In the case of the Peop.e vs. Ingersoll. IS
| n. Y, 30, il was held that if the public cor
pOratlon, having power to act in corporate
| capacity, has by its officers 60 acted under
| the laws ss to become bound by its ob'ga-
! tions the debt has become a corporal and
| county charge, and the moneys, the fruits
| and proceeds of the obligation aud trust
| funds subject to the control of the govern
| ing body of the corporation, under the gen
| eral laws of the State.
So it was held IN the case of the Attorney
| General vs.. Lichfeld, II Beaven, 100, that
| the borough first created under the muni-
| cipal corporation act is q trust fund and
| the court of chancer- has authority and
| jurisdiction to compei the parties who re-
| ceive and apply the fluid to account for the
Gums they receive, and the application of
| if it be expedient, aud the case require it,
| 20 restrain the application of money col
lected by rates to cosGs, debts and expenses
| incurred prior to making the rates.
The case of Trevillian VS.. the mayor of
Exeter DeGex, MacNaughteu and Cor
don, e2S-was this; A corporation raised
| money under an act of Parliament on mort
cages of the tolls and additional works of a
| csual, and acting on what the Court OF Ap-
peal differing from the court below de-
| cided to be an erroneous construction of
the act. applied part of the money so raised
in paying of old mortgages affecting other
property of the corporation. On the tolls
| and additional works being an insufficient
security, held that the new mortgages
were entitled to follow their money SO far
as it had been enormously applied and to
stand in place OF the old paid-utf mortgages
as against the other property of the corpo-
ration.
So in the Attorney General vs. Dublin
supra, it was held that where there is any
fund created for the purpose of being ap-
piled to some public purpose, which fund is
vested in a corporation, the Court of Chan
Gerry has, by its original inherent jurisdic-
ton, 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 a pub.
lie or private capacity. Charitable corpo-
ration vs. Sutton, Atk,, 406. See also At
torney General vs. Eastlake, 81 Eng. Law
and Equity Rep, 43; Sturgess VS.. Eastern
Railway Company, De Gex, McNaughton
and Gordon, l58
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
consolidated bonds is a trust fund in the
hands of the city authorities to be applied
to that purpose, and no other, and that, if
there is any danger that the fund will be
diverted to other purposes. the complain
ants arc entitled to their injunction to re-
strain such diversion.
On consideration of the pleadings and
atfdavits in this case, can not 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.
1t appears, however, that some of tho
holders of the consolidated bonds have con-
sented to receive half the interest on their
bonds, and to allow the city to use the other
half for other purposes. 1t is their right to
make this agreement and the court will
not interfere with it. The city ought to be
restrained only from diverting so much of
the fund as may be necessary to pay the in
terest on the bonds the holders of which do
not consent to the terms of ordinance No.
3l90. Administration sci les. A preliminary
injunction must issue accordingly 1t will
be also ordered that should there be any
further default, the complainsnts may renew
their motion for receiver.
In the argument upon the motion for in
junction it was claimed by counsel for the city
that the act Of 1852 was in violation of the
constitution of lSi5, which was in force when
that act was passed, and which declared
(article l27) that taxation shall be equal
and uniform throughout the State" The
provisions of this act of 1852, which is
deemed to cOntravene this constitutional
requirement, is this: "The rate per cent of
said tax (tax to pay interest on consolidated
debit in each municipality shall be in pro-
portion to the Indebtedness of each"
can not see any conflict between the law
and the constitution. As at present ad-
vised, do not think the objection to the
law well founded.
John Cockrem, receiver, N. w. Casey,
substituted. vs.. John Ray and E. Z.
OBFien.-Verdict for $2309 80.
f. F. Case We. Ii. A. Frederic.
for $500.
Superior District Court.
State vs.. Bank of America.-On relation |
of Morgan MOrgans, tax collector of st. |
Charles parish, sequestration of $205 ~ of |
funds deposited. Ordered without bond.
State VS.. w. Van Norden.-Fieri facias |
issued for license tax of $50 as contractor.
Superior Criminal Court.
GRAND JURY.
In the following cases in which the Su- |
preme Court lately annulled the Judgment, |
on the ground that Judge Braughn was not |
the legal Judge of the Superior Criminal |