The New Orleans daily Democrat. [volume] (New Orleans, La.) 1877-1880, 1877-05-23
THE BOARD OF LIQUIDATION.
xY,e Feyee IsondIaoIdcrs Referred Rack
Again to the Courts.


all the members present.
The minutes were read and approved Oh
amended
The board then, on motion, proceeden 10 &c
upon the applications before them;
q. L. O. Dupuy, cashier Of the State Nationa
HANK, Is bonds, $1,000 each, per cent levee
$4,000: bonds ssned under act 1l6, approved
March 90. 1867 known as the four million issue
Speaker Bush read an extract from decision o
the gupreme Court in the case OF the State e,
rel. o. j. Forstal Va. State Board OF Liquidation
the proceeding being an action by msndamus
the Judgment OF the lower court az to bonds is-
sued under act approved February 10, 1866, was
reversed and set aside, but affirmed as TO bonds
issued under act approved March 26. 1867 mo-
rl5). those bonds being held by relasor, the
eou,t combining it's decree to The bonds actually
before 1t and
HELD BY THE REhAfoR.
After reading the decree entire speaker bosn
held that action by mandamus WAS not that con-
semplated by act No. II, of 1870
the Prasideut was, on motion, requested to In
vite the agents of bondholders present to give
sIieir ideas.
MR. DupUx
stated briefly that the bonds had been sent TO
him about eight months ago. by New York
banking firm, for cjnyersiqn II they were de-
c,tnsd he would return them TO the owners,
stating the reason assigned by the board for re-
lection: that his interest was only that OF an
aren't. At the time that the application was
gled similar bonds, he said, had been converted
bv the former board.
MIR. FoRsTAuL
.A.xz1 hat In had ,rouant cd Itrua a,uniut of
tbe bonds after decision had been obtained in
She Supreme Court which he understood to be q
test case governing The entire Issue, and had so
advised the owners who were European residents,
exclusively in Frankfort, Amsterdam and Lon
tou and he thought that The board should con.
slider them valid obligations.
He also introduced his attorney, Mr.. Gordon,
who stated that under the construction OF the
law the decision of the Supreme COURT in the case
mentioned
COVERED THE ENTIRE ISSUE.
The rule of the commercial world, he thought,
Sould he that these bonds were In the hands Of
third parties and were entitled to conversion.
tupaE JOHN RAY,
attorney for other agents, remarked that he was
She attorney In the case Of Frank Morey, decided
hv the gupreme Court, and that the Injunction
sned ous by the Attorney General against the
conversion Of bonds issued Under act No 30 of
1865 was made prior to the passage OF the
law creating the Funding Board. In
his opinion the later decree-that mentioned =
covered the legality OF the entire series. but he
understood from the decision OF the board now
that remaining bonds could not be funded aud
chat il would be necessary for dissolution OF the
Injunction 30 far as the bonds now presented
were concerned He claimed that the Injunction
did not however. prohibit Tia board from acting,
"a The Injunction was obtained be ore the pas-
sage OF tue act creating the board
Another attorney present,
MIR. FLANAGAN,
slated the decision OF the supreme Court in the
Forstall case merely covered the bonds then be-
fore the court; that the late decision april 80
rsT7.l provided that the bonds could not be
funded under mandsmus, and that the owners
must first obtain Judgment as to the validity of
che bonds.
Speaker Bush ramarked that in his opinion,
the board had but one DUTY to perform, and that
was 10
CONFORM THE LAW.
Whether il be ii be furious or not was not the
fault of the board, but must, as interpreted by
the Supreme Court be their guide. In the statute
81 1876 there were specific bonds questioned j and
among them the issue now under consideration
The decision of the Supreme Court, he thought,
applicable 10 these bonds. was limited to the
bonds in litig alton, aud none other. The present
Supreme Court had decided in conformity to act
ii Of 1876, that no bonds questioned under that
law could BIO funded, unless passed upon by the
direct action of that court, and until we have 3
decision OF The Supreme Court under Chat statute
we have no alternative left but to
REJECT THE BONDS.
Gov, Nichols said the decision mentioned
above showed ia 80 many words that tho court
was passing no opinion except upon the bonds ia
Inc hands Of the relator. The duties Of the
hoard he said, was limited and the board must
be guide by the law, which expressly prohib Is
the funding of any bonds except such az have
been passed upon by the Supreme Court.
discussion arose as to tho manner i'll which
trst case could be made by tho bondholders.
Members OF the board held that it could be
raised under the general issue that the bonds had
been sold to the holiersl for valuable consider
tiop, but that the onua could not he put upon the
State when the state had
PLACED IT uroN THE BoNpHoLpEns.
Speaker Bush offered a resolution in accordance
with his We've.
Lieut.. Gov. wiltz claimed that the courts
would act as they had previously done with re-
gard TO the bonds and that although he did not
see the utility of the resolution in order to save
trouble IL would be we'll to amend the resolution
read in order that all of the bonds OF that series
might be included when the holders would be
able to seek redress.
THE RESOLUTION
was then amended to cover that ground, and
was adopted as follows:
luires that bonds presented for funding, which
are questioned by said law, shall be passed upon
by the Supreme Court ana by final DEGREES be
declared legal and valid obligations against the
State Of Louisiana, that the came were issued in
strict conformity to law, not in violation OF the
constitution of this State or Of the United States,
and for valid consideration.
Inasmuch as the only caee passed upon by the
Supreme Court which has been presented to our
consideration, wherein bonds issued under act No.
IFS of 1867, approved March &c. extra session,
called in question as instituted by maudamus.
aud in its opinion and decree the said court e1-
pressly limits and restricts its decision to the
particular bonds comprised in that litigation:
And, inasmuch as the Supreme Court OF this
State did, on the thirtieth day of April, 1877,
order and decree that all bonds questioned by act
IL extra session of 1875 must have their validity
determined by direct action before being fund
able, and whereas, the bonds now presented for
funding under said act lis Of 1867 have not been
passed upon by the Supreme Court as required
by the decree rendered in the case of the State
ex rel. Exchange Bank of Canandaigua vs.. the
Board of Liquidation; therefore, be it
r3,otA Ia han do y,raH ari Tod hu T.,