The New Orleans daily Democrat. [volume] (New Orleans, La.) 1877-1880, 1878-01-19
Premium Reuds.

IA Member of the General Assembly" In ~
able article TN the premium bond act, pro
pounds this question "Why, II maybe asked
has the city government not cided with tht
consolidated creditor and pressed decision
on the legality Of the other debt?
The intertpgatory is easily answered. The
suit of the Southern Bank alias hlaenhaut
instituted IN the Circuit Court 0l the United
States, commenced May. 1875 the petition
admitting the validity Vi railroad and water.
works bonds, and disputing the legality OF all
others,
The following parties. holders Of these other
bonds were cited to appear and answer, viz
Louisiana National bank, New Orleans
Canal and Banking Company, Hibernia Ma
tional Bank Levee Steam Cotton Press Com
panv, Eager. Ellernann d Co. and w. Van
Nprdet.
These parties were represented by counsel,
The cofnplainants, however, completely ahan-
coned the point Of illegality Of other bonds,
and drew from the honorable Judge (Wooda),
In his decision. the remark: although the
prayer OF the bill of complaint Is very broad,
tho purpose of the present motion Is very mar
row that was simply for an Injunction re-
stlnining the city from paying out the funds
collected for the consolidated bonds for any
other purpose"
So much for the efforts of the consolidated
bopdholders to bring the matter to test
But that still nooted point was again
brought before the court In the Morris
Ranger case
The complainant took the same ground that
all bonds issued III violation Of the act Of 1862
and 1864 were null and void, and claimed
priority OF payment for the principal and in
terest of the bonds
His honor, Judge Woods. refused the prayer,
Of the petition, and thus delivered his opin-
lon upon the legality of the bonds:
According to the averments or the bill,
bonds 10 the amount of s15, 900 600 had been
Issued since 1854 hot In accordance with the
terms of these acts These bonds, IL is fair to
presume. are IN the hands Of bona iide holders,
N
aud the city having authority to issue bonds.
the holders have the right TO presume that
the conditions precedent have been complied
with, and these bonds are valid and binding
upon the city N their hands Now. the holders
OF the consolidated debt bonds and Of the rail-
road bonds and Of the waterwurks bonds had
their remedy 10 restrain the city from issuing
these unauthorized bonds But they did not
resort to IT. they have waited Hupnely until
the large mass Of bonds has been issued by
the city, IN violation, az | think, Of their
rights, and until these bonds have passed into
the hands of bona flde holders, and IL Ia now
t9o late for them 70 set up any claim that
against them Or against the city.
These bondholders were asleep when they
should have been awake. They should have
looked after their interests when the Issue Of
these bonds was In .feft and not to have waited
until theyifell into The hands Of innocent hold
eIs.. SO that. In my Judgment these bonds are
binding now upon the city, and they are good
as against the holders Of the consolidated
bonds. the railroad bonds and the waterwurks
bonds"
The subject again came before the court on
the report OF T. Wharton Coltens Master In
Chancery, In the Maenhaut case (which report
has been frequently paraded before the public
as u judicial decisionl
The main points thereof were completely
ignored, the honorable Judge maintaining the
opinion he had already given in the Morris
Ranger case as to the legality Of The other
bonds.
Ii will, therefore, be seen that all the dec-
siohs thus far made on these disputed points
are emphatcHly in favor of the idea that the
city was legally bound for them.
1t cannot be truthfully said that any bonds
have been funded without the weight Of a i,l-
dicial sanction; nor without having been fully
recognized by prompt payment of interest up
10 the commencement of the Leeds admins
tratiun, when further payments ceased
A MEMBER or THE Cry GOVERNMENT.