The New Orleans daily Democrat. [volume] (New Orleans, La.) 1877-1880, 1877-04-12
THE mAENHAUT bond CASE.
The City Consolidated Bonds Va. ali
other Subsequent Issues.

Other subsequent issues.
The argument in this case was re sumed yester-
day by Judge John A. Camsbell for the plaintiffs.
Judge Campbell reviewed the law and facts
relative to the issuo Of the consolidated bonds,
showed how they originated. explained the guar
antees and conditions which the act Of the Legis-
lature provided in order to give them the highest
value aud validity. Such guarantees had induced
their sale at moro than their face value. They
always had priority to be paid out OF the taxes
on real estate until the s65O,0o0 required TO be
paid into the Sinking Fund to meet the interest
and redeem the principal Of these bonds WIS
levied and collected; no other use Of such taxes
could be made.
This was the contract which the city had i'm
paired and violated by various issues of bonds
and by delinquency In preserving the fund
which was dedicated to the payment Ct these
bonds. It was to correct this evil aud wrong that
the compaiDants resorea to equity, and asked
for remedies such as 1t certainly had the power to
apply. He proceeded, by great array OF authors
ties to show tina tiiob remedy existed and was
s,ways accorded In similar cases to prevent bad
faith and violations OF contract BY corporations.
The remedy was by an Injunction Erbiddipg
The corporation to pervert trust funds, and com.
polling it to keep its faith and not violate it's con-
tracts, even when authorized to do so by tho
Legislature. This Was all that was asked In this
case. No application was made Tor mandamus
to compel the city to impose tax: the applios-
ton was to prevent tho city from misapplying
tax authorized to be collected, and to enforce
trust.
Referring to the act OF 1876, authorizing tho
premium bonds aud repeating all other acts en-
towering the city to issue bonds, Judge Camp.
| bell said there was but one parallel to such
statute. and that was ono upon which Judge
Woods himself had passed In the case OF Miners
| administrators VI. City OF Pensacola. In that
case the city OF Pensacola sought TO be relieved
| from certain obligations by the plea that since
| their issue the city had been organized under
! new law which relieved them from the obliga-
| tions Of the old city.
| Judge Woods in deciding this case said:
ssIf the Legislature cannot take from NUM-
cipai corporation the power OF taxation conferred
| contemporaneously with the power to borrow
money and for the purpose OF rspaying the money
| borrowed 1t would seem to follow forfiori that
| IL could not utterly destroy the municipal corpo-
| ration which had issued bonds on the faith OF q
| Jaw authorizing taxation to pay them, thus not
only repealing The power OF taxation, but leaving
| no corporate entity in existence against which
| suit might be brought"
How the obligation OF . contract made by q
| municipal corporation for the payment OF
money could be more effecually impaired ii 10
| difficult to conceive.
Judge Wooas quoting Dillon on Corporation
| ~ follows: "As respects creditors OF . NUM-
cipsl corporation their rights are protected from
Legislative invasion by the constitution Of the Uni
ted States, and no repeal OF the charter OF . mu-
nicipal corporation can dissolve 1t % to impair
the obligation Of the contract or it may probably
covering his debt"
After much elaboration OF these propositions
and the citation Of many authorities, Judge
| Campbell closed his argument, and the City At
torney B. r. Jonas, was allowed to file bis brief
| for the city.