The New Orleans bulletin. [volume] (New Orleans [La.]) 1874-1876, 1875-08-01
THE SUPREME COURT.
Decision in the Funding Board
Case.


ing decision Of the Supr. me Court:
state of Louisiana ex rel. Oscar ]. Forstall vs.
the Board OF OBSERVATION-DISCLOSURES one OF Act
No. g. session acts of 1874 page thirty nine, pro-
vides ''That for the purpose OF consolidating
and reducing the bonded and floating debt Of the
state the Governor, Lieutenant Governor, Audi
tor, Treasurer, Secretary of State and Speaker OF
the House Of Representa- res, are hereby
authorized to cause to be prepared, and to
issue bonds, to be known as consolidated
bonds of the State of Louisisna, Of the denonlins
tons Of 500, $500 and $1,000 to the amount OF
SIS 00O, 900, or so much thereof - may be neces-
sary ali payable forty years after the first day OF
January, 1874, and all to be numbered consecu-
lively and m ade payable to bearer, and to bear
interest at the rate OF per cent per annuw, pay
able semi-annually in the city Of New YORK and
city of New Orleans, on the first day OF July and
January OF each year, and coupons Tor such in
principal to be payable in lawful money OF the
United States.
Section three provides: "That the bonds au-
thorzed by section one shall be ned by the Gov
ernor, Auditor and Secretary OF State, and the
coupons shall be signed by the Auditor and
Ire asurer; and when 30 prepared said bonds
shall be exchanged by the board of liquidation
for all valid outstanding bonds OF the State, and
all valid warrants drawn previous to the passaga
of this act by the respective Auditors OF Public
Accounts of the State on the Treasurer thereof
except warrants issued by the Auditor in pay
ment of the constitutional officers OF the State,
ut the rate of sixty cents in consolidated bonds
for dollar in outstanding bonds and ali valid
warrants; provided that the holder Of any bond
or valid warrant rejected by q majority Of said
board may apply by petition to the proper court
for relief, and 4 final payment shall be rendered
in his favor against said board, it shall be the
duty Of said board to fund said claim In bonds at
the rsss provided By this act" cog
The same LEGISLATURE, at the same session,
proposed an amendment to the Constitution OF
the State. The first of this amendment ID a. fol-
lows: " The issue OF consolidated bonds autho-
rized BY the General Assembly OF the state at its
regular session, in the year 1874, 10 hereby de-
clared to create Q valid contract between the
State and each and every holder OF said bonds,
which the state shall by no means and 10 no wise
impair. The said bonds shall be valid obligation
Of the State in favor Of any holder thereof and no
court shall enjoin the payment OF the prln-
cipa or interest tax thereof, or the levy and
collection of the therefor; to secure such lew
collection aud payment, the judicial power shall
be exercised when necessary. the tax required
for the payment of the principal and interest OF
said bonds shall be assessed and collected each
and every year until the bonds shall be paid,
principal and interest, and the proceed, shall be
paid by the Treasurer Of the State to the holders
Of the bonds as the principal and interest OF the
same shall fall due, and no further legislation or
app topriaton shall be requisite for the said as
sess1nent and collection and for ouch payment
from the Treasury.i
!! This amendment was adopted, audit now forms
part of the organic law of the STATE. The Legs.
fature, at an extra session held in 1875 (Act No.
II, o. l10,) enacted " THAI the Board OF Llqul-
datlon constituted by the md section OF Act
No. 3, approved January "a, 1874, entitled an act
to provide for funding obligations of tbs State by
exchange for bonds, etc, is hereby prohibited
from issuing any bonds in exchange for any out
| standing bonds Of the State or warrants drawn
previous to the passage OF said act by the respect
i've Auditors ofthe State on the treasury thereof
forming items of State indebtedness, the le-
gality or validity of which may have
beea or may hereafter be questioned, until
said bonds or warrants shall first, by final de-
isiana, have been declared legal and valid obiga-
tions against the State of Louisiana, and tuat
the same were issued in strict conformity to law,
and not in violation of the Constitution OF this
State or OF the United States, and for a valid
consideration. That any person assessed for
State taxes is hereby authorized, in his own
name, to institute suit, or to intervene in any
| suit which may now or hereafter be in
stituted in q court. of competent jurisdic-
ton in the pa ish Of Orleans against
| and validity Of any Issue Of bonds OF the State,
| or warrants drawn previous to the passage OF
said Act No. 8 by the Auditor OF Public Accounts
on the State treasury, the legality and validity OF
which may have been or may hereaf er be ques-
toned, and to inquire into the confederation for
which said bonds or warrants may have been IT,
| sued and in his own name to prosecute such suit
or suits to final termination and until the legali-
ty and validity Of each and every issue OF bonds
and warrants as aforesaid shall have been finally
passed upon and determined by the Supreme
court OF tho State of Louisiana; and that III
order to facilitate and bring to speedy deter
mination all matters in controversy as provided
for in this act, every suit hereby instituted shall
have precedence in all courts over all other cases,
and to be fixed by motion OF o ther party
| the day of trial to be named In the motion
fixing such cases for trial to give way
thereto that all costs incurred in any suits under
l = u. ~ IN he aytnn nf a
final issue as to each separate issue OF bonds OF
warrants, the legality, validity or consideration OF
which are questioned, if the Court shall so deter
mine, shall be borne by the State of Louisiana
be warranted FIR by the Auditor of Pub ic Ac-
counts on the State Treasurer, to be paid for out
| OF any funds in the treasury not otherwise ap-
propriated, provided that any holders or holders
consideration is questioned in any suit or suits
brought under the provisions OF this act, may in
tervene in said suit suits, and that the costs oil
| such intervention shall abide the results OF the
suits in which such Intervention shall be hled.
| Section provides "that the following issue oil
bonds and warrants, so far as the same may be
now outstanding, are declared, queStioned and
doubtful as to their validity and legality, and
| said board of liquidation are hereby prohibited
| from issuing bonds authorized by section of Act
Of 1874, in exchange therefor, until the legality
validity and consideration OF the same shall have
been tested under the provisions OF this act and
final decree rendered to their legality va i'd
| ty and consideration, to wit" Here follows a
list of the bonds whose validity is questioned
among which are to be found bonds under Ac,
No. lis, approved March, 1867, for expenses Of
bu lding levees, $4,000 600; bonds under Act No.
approved February 25 ls79 for work dore Or
to be done on the levees, ~; $4,000:
| The relator asserts that he is the holder for
variou. parties of 149 bonds, known as the levee
bonds, for $1,000 each and 80 bonds of $1,000, each
issued for "psying certain debts" undr the act
Of the 18th OF February. 1866. He AYERS that it
is made the duty Of the Board OF Liquidation to
cause to be prepared and TO issue bonds to be
known as the consolidated bonds of the state Of
Louisiana, which bonds, when so made by the
board and signed, shall be exchanged by the
| board for all outstanding bonds Of the state
and all valid warrants. He proves, without
objection, that although he does not allege it,
Liquidators, who declined to exchange them for
bonds, as provided in act of Oath Of January,
| 1874, upon the ground that they were prohibited
from doing 30 under the act Of 18th OF May
1875 He prays for mandamus compelling the
Board of Liquidators to fund his bonds. He
| AYERS that the act entitled an set supplemental