New Orleans Republican. [volume] (New Orleans, La) 1867-1878, 1875-12-21
COURT RECORD.
MONDAY, DECEMBER 90, 1875.


United states Circuit Court.
Present Hon w. B. Woods.
The court read the following decision:
Rosalie Maenhaut ct ais. VS.. the city of
| New Orleaus.-The facts as they appear
| from the pleadings and atfidavits are sub
| stantially IA follows: Previous to the TWEEN
| ty third of February, 1852, the city Of New
| Orleans was composed of one general
| municipal organization, which comprised
| municipalities, each of which had gov
ernme Mt Of its own, and each of which, as
| well as the general municipal body, had
| contracted debts for which they were re-
| spectively liable. At the date first named
an act Of the General Assembly Of Louisiana
was approved which established a muni-
| cipal corporation to be called the city of
| New Orleans, to be composed of the sew
eral municipalities, and to be governed by
| Mayor and Common Council. The act
| declared that the estate and title of the
several municipalities in lands, bridges,
| ferries, streets, roads, wharves, markets,
stalls, landing places, buildings and other
property, should be vested in the city of
| New Orleans.
| Section thirty-seven of this act provided
| that the debt of the general sinking fund,
commonly called the old city debt, and the
debts of the three municipalities, should be
assumed and paid by the city Of New Or
leans, and the city was declared liable
i
| the Mayor, we're constituted commissioners
| of the consolidated debt of New Orleans
| and they were authorized to issue the bonds
| of the city, having not more than forty
years 10 run. with interest payable semi
annually. The commissioners were au-
thorized to exchange these bonds for
| any bonds, obligations or debts of the
old corporation, or any of the municipalities,
| or to cell the same, and with the proceeds
pay off said debts. 1t was provided that
the bonds thus issued should form stock,
| to be called the consolidated debt of New
| Orleans.
| 1t was further provided as follows: The
| Common Council shall annually, in the
| month of January, pass an ordinance to
raise the sum of $500 600 by special tax
on real estate and slaves, to be called the
consolidated loan tax, and the rate per
cent on said tax in each municipality shall
be in proportion TO the debt Of each. All
| ordinances, resolutions or other acts passed
by said Council, after the first day of Jan
uary in each year, shall be nul. and void,
| puess the ordinance imposing the con-
| solidatiOn loan tax shall have been previous
| ly passed. At the end OF each and every
| year any surplus of the consolidated loan
tax remaining in the treasury after the
| payment Of all the interest shall be applied
| to the purchase, from the lowest bidder, of
! such bonds issued under this act as have
| the shortest period to run
| The section fourth provides Nor shall
| any loan be contracted unless the same be
| authorized by a vote OF the majority of the
| qualified voters OF said city; and no ordi
| nance creating debt or loan shall be valid
unless Tor some single object or work dis
| tnctly specified therein, and unless such
ordinance shall provide ways and means for
the punctual payment of running interest
| during the whole time for which said debt
| or loan shall be contracted By an act
Il do =
| toned, the amount to be levied in January
of each year to pay the principal and inter
| est on said bonds was increased to S650,OOO.
Under authority of this act, and upon the
| faith thereof, about $l0000,OOO OF bonds
| were issued, which were negotiated above
par, and sold in the money markets Of
| Europe and the United States.
1t furthor appears that, beginning with
| the year 1869, the city of New Orleans has
| issued several series of bunds. in violation
of the restrictions imposed by the act of
| 1852. At the extra session of 1870, an act
| was passed changing the form of the city
government. and repeating the act OF 1852,
| retaining in force, however, some of its
| clauses and sections.
In 1874 the act No. 53 was passed, which
postponed the levy and collection of any
lax for the sinking fund for the purchase of
the bonds of the ci y until December, 1876.
There is now outstanding about 4l42,00O
of the consolidated bonds.
1t appears further by the sverments in
the supplemental bill, that on the fourteenth
of July, 1875 the city of New Orleans
adopted an ordinance whereby it was pro
vided that the commissioners of the con-
solidated debt were authorized to pay, with
delay not exceeding ten days, fifty per
cent of the following past due interest oou-
pons, and that such pro rata payments be
continued out Of all interest collections up
to January, 1876, provided that the holders
of such coupons shall indicate their accept
ance of this arrangement by their respec-
tive signatures at the time OF payment.
The said coupons shall be stamped thus:
Half paid
Consolidated 1852, due July, 1875; Rail
road, up to July, 1875; Pontchartrain rail
road, due July, 1875 etc.
The paper to be signed by the coupon
holders under this ordinance is as fellows:
I'VE, the undersigned, holders of city bonds,
hereby acquiesce IN and approve ordinance
No. 1880 of the City Council, providing for
the payment OF fifty per cent Of the interest
collected and TO be collected up to the first
OF January, 1876 the balance to be used for
the general relief OF the city government,
reserving our right to be hereafter paid by
the city the balance due on said copons."
The supplemental bill charges that the
City Council, since the passage of the ordi
nance aforesaid, has allowed no bondholder
who did not consent to the ordinance, and
that it has excluded number, among
whom were complainants, because they did
not do so. The complainants are the hold
ers of seven of the consolidated bonds of
the city.
There has been deposited by the city in
the Louisiana National Bank to the credit
of the consolidated loan, during the six
months ending July 30 1875, the sum of |
$l74, 400 30, and there is now on deposit in |
the bank to the credit Of that fund or sum |
nearly if not quite sufficient to pay the in |
terest due on the consolidated bonds.
There are many other averments and'ad. |
missions of the pleadings and matter of |
fact set forth in the affidavits which, for the |
purposes of the present motion, it is unnec. |
essary to notice.
Although the prayer of the bill OF com.
plant is very broad, the purpose of the pres
ent motion is very narrow. 1t is that an in !
junction may issue against the city and |
against the Louisiana National Bank to re-
strain them from paying out the said funds
collected for the interest on the consolidated
bonds for any other purpose than that for
which said fund was collected, or in any
other manner than in accordance with the
laws and ordinances previously existing,
and that should there be any further de-
fault, the complainants may be allowed to
renew their motion for the appointment of
q receiver.
Counsel for defendant not being advised
within what narrow limits the relief sought
by this motion was confined have argued |
many Ouestiona which il ia NOT now neces- |