New Orleans Republican. [volume] (New Orleans, La) 1867-1878, 1875-01-24
COURT RECORD
SATURDAY, JANUARY %, 1875.
Supreme Court.
Adjourned to February /.
Superior District Court.

ing decision:
State of Louisiana VS.. Charles Clinton,
Auditor, ct al; the New Orleans, Mobile
and Texas Railroad Company, and Will
liams and Guion, intervenors.-A. P. Field,
Attorney General and J. Q. A. Fellows and
j. B. Cotton for the State; John A, Camp
bell and w. w. Howe for the in.
tervenOrs The litigation in this case
springs out of demand on the part of the
Mobile and Chattanooga Railroad Company,
a corporation OF the State of Alabama, for
the payment of the interest due and to
become due on $2,500,000 of the bonds of
the State of Louisiana, dated April "a, 1871,
and issued under the provisions of act No.
95 of 1871.
The grounds of refusal by the State and
its public officers for not paying the interest
on these bonds may be briefly stated under
three heads:
|. That the conditions prescribed by the
act under which these bonds were issued
had not been complied with at the Date of
their issue.
2. That they we're not issued in con-
f0rmity with the requirements of the statute,
but were obtained through improper prac-
tees, and without consideration to the
State that as such they are a disguised
donation, and are therefore void.
3. That their issue was in violation of the
| State constitutional limitation of the public
| debt S25 000, 900, which was in force at the
| time OF their issue.
By act No. %, approved August ID, 1863
the Mobile and Chattanooga Railroad Com
| pany, obtained authority to exercise and
| enjoy its corporate powers in the State of
| Louisiana. Under this act the company OBJ
tanned the right of way through the State of
| Louisiana to the Texas line with all the
| privileges and rights to construct, own and
| operate their road through and across the
State. At the session of the Legislature of
| 1859 act No. 26 passed, entitled an act to
| expedite rho construction of the railroad of
the New Orleans, Mobile and Chattanooga
Railroad Company in the State OF Louisiana.
| Section one of this act provides that the
| State shall indorse the. second mortgage
bonds of the company to the extent of
| Sl2 500 on each mile of the road completed
| in a westerly direction from the city of
| New Orleans, and within the State of
| Louisiana. Section two provides that when
| one continuous section OF forty miles shall
have been constructed by the company with
the rails laid thereon, then it shall be law
full for the State to give its guarantee
for the second mortgage bonds as provided
in section one of this act.
Section twelve, after providing what the
company is required to do in constructing
the road to the Texas line, limits the time
| to three years within which the entire road
shall be completed through the State of
Louisiana, under the penalty in case of tail
ure that the State is discharged from her OBJ
legation to guarantee the second mortgage
bonds. On this point the testimony OF Bayley
the engineer, Dodge and other witnesses ls
conclusive. The obligations imposed by this
| statute upon the State in favor Of
the company as condition precedent
to their right to demand the guaran
tee of their second mortgage bondi
had ceased prior to the passage
of act No 95 of 1871, because
: the first section of forty continuous miles o
7 the main line of the road was not construct
4 | ed within twelve months, and because the
= whole main line was not constructed within
r | three years, as provided in section lively,
+ | of the act approved February II, 1869. 1t i
S clear enough that there was, therefore, nj
. longer any obligation resting upon thu
S State of Louisiana to guarantee the secon(
mortgage bonds of the company, as stipu
q lated by this act.
!. The act No. 95, approved April %, 1871
J. entitled an act to relieve the State from 1t
+ obligation to guarantee the second mort
a gage bonds of the Mobile and ChattanO0g
l. Railroad Company, is therefore imperative
e because no such obligation was resting VI
o on the State at the time.
d The subscription by the State for 2oOO
# shares of the stock of said company, autho
D. lied by section one of this act, was MULTI
% for two reasons-frst that there was no al
l. tecedent obligations resting upon the Stat
l and second. that the stock itself is not show
= to possess any value whatever. Lhe Min
n by the company OF release to the State
lie its prior obligation to guarantees the secon
d mortgage bonds had no legal effect becau!
Il, the obligation had ceased before the pas
N age of the act,
le This brief recital of the legislation
Is reference to the Mobile and ChattanOOg
ID Railroad Company brings us to the htig
10 ton now before the court. 1t is necessar
Dr. therefore, to consider first the natul
u. Of us1It Z N ar
Is by the pleadings. The position taken
a the railroad company and other bondhol
n ers, that the suit is one by the State again
10 her officers, by injunction TO prohibit the
10 from paying the interest on the bonds,
o. too narrow, and falls far short OF a corre
W understanding Of the case. The only etfe
ID | which the Injunction had or could have Wi
ry to prevent the Auditor and Treasurer fro
ID violating the law by paying money out
ne | the public treasury on obligations tn
le | were void. Nothing could be decided co
n Trajectory with the railroad company
v, | other holders of these bonds under the
v, junction granted in favor of the State, III
Id issue could only be determined 5etwe'
10 the State and the parties themselves.
IL The suit Is therefore one in which Il
lie State holds the affirmative against the NJ
he | bile and Chattanooga Railroad Company
.e- | annul and cancel these bonds. The motif
of of the railroad company and other holde
.e- | of these bonds to dissolve the lp) lnctl
ce sued out by the State against the Audit
or and Treasurer amounts to traverse Of I
is allegations in the petition of the State tn
III the bonds are void.
he 1t is apparent from a perusal of t
an statutes on this subject, and more partiC
larly the statute No. 95, of 1871, that t
CIV State was contracting with this railro
ID | company to construct branch road fro
he VeImiliOnville TO Shreveport
n do ~ or thR Iauial atuTh ia the nFOp
in. and the only authority competent TO rep
M sent the State, or that can bind it in a &C
sir tract TO construct a public work, such as
all railroad, yet the Legislature can only q
lei in its legislative capacity in pursuance
raI the forms of legislation, by enacting pub
ey statutes. The agents or agencies p
ty | scribed by the act are not permitted
or deviate from the conditions imposed
in the act in carrying intO effect its provision
err. Section one of the act of 1871 prOyid
nd among other things, that the company {
lly | ligAted itself 20 commence the constructs
he of the road within six months from {
date of the acceptance by the company
the terms of the act, and file
lease of the obligations of the Sta
TO guarantee the second mortgage BEN
=, 1t appears that in four days after this
,ho became a law, to wit, on the twenty-tOul
de- of April, 1871, the Governor and the Sec
tary of State signed the whole issue
he these bonds, $500 in number, for 81
nj each, with eight per cent coupons attach,
payable seRli.annually for forty years.
pe evidence OF Bayley and other witness
am shows that the work on the road was l
commenced within six months, nor has
,;s vet been commenced. The premeditat
Ah, f1Far~a Nafnrsa