The New Orleans daily Democrat. [volume] (New Orleans, La.) 1877-1880, 1879-01-03

tax added 10 the consolidated loan tar and IL
| certain other specified taxes, shall not ex-
coed In the aggregate one dollar and fifty
Sess Acts 1856, PIP. 14s, 162. secs. Az, lit. The
manner Of levying the tax for the consolidated
loan, az fixed by the thirty seventh section OF
the act OF 1852, was not interfered with or
changed. That tax was to be levied as here
tofore, and when added to the general equal
and uniform tax which was TO be levied on all
property for other purposes, the aggregate
was not TO exceed q specified rate.
There was never year when this CONSOLE
dated loan tax was not collected, although the
mode oil It's assessment was altered. In 1870
another charter was granted to New Orleans
and oil the rights Of the consolidated bond
holders, secured to them by previous legis-
latlon, were recognized, and the collection of
the tax for their payment was provided for
Sess. Acts 1870, PIP. A, Az, secs. "a, A. And In
1874 the validity Of the consolidated bonds Of
Now. Orleans is recognized In all its integ-
rity' by solemn Legislative declaration.
the annual tax for the payment Of the con-
solidatlon loan interest had been uninter-
ruptedly laid for twenty-four years, that the
General Assembly undertook to deprive the
holders of the consolidated debt OF all the
means OF procuring or Of enforcing payment
vi their bonds, or tho interest upon them
Meanwhile, I'm 1876, q suit had been insti-
tuted In the United States Circuit Court BY
holders Of the consolidated bonds against the
Guy bflH UuTDDSf Oh pEbnDlISUtnH IHHlr
debit and to compel specific performance of
the contract between themselves and the
city, which they alleged grew out OF and was
contained In the thirty-ssventh section Of the
act OF 1862. They sought to have their posi-
ton as creditors first Ia order, and entitled to
preference In payment out Of the taxes levied
upon lands, determined by a decree Of court
The unconstitutlonality Of the act Of 1852
was pleaded by the city, but the Circuit Court
affirmed Its validity, and declared that the
n ffsxvNu tod mt
between the city and the consolidated bond
holders, which could not be impaired, and
that the city was Liable to those bondholders
for the sums collected undor 1t. The decree
adjndicata In this. II ID not necessary that
should pass upon that plea, as am consider
ing the defense rs m original question.
In 1876 the act was passed upon which the
city relies to justify II IN refusing or neglect
Sess. acts, p. g. 1t prohibits the assessment
or collection OF any tax for the payment Of
any bonds, or interest OF any bonds, except
those styled premium bonds Of the city, and
repeats all previous laws which required or
authorized the Council to levy any tax for
the payment Of any other bonds. It deprived
the consolidated bondholders by one stroke
OF oil process for the enforcement of their al
legged contract with the city, and annihlated
assured TO them. No tax has since been
levied to pay the interest on their bonds, or
to redeem any portion of them. If the Gene
raj Assembly had constitutional authority to
make that enactment the relator Is remediless.
II otherwise, the act OF 1852 Is binding upon
tho city.
What was the effect of the act of 1859. quoad
the consolidated bondholders and the State?
Was there contract made thereby between
them, and II yea, can any subsequent legisa-
ton invalldate it2 There Ii no distinction be-
tween a contract OF State and contract of |
an Individual, and contract which q corpo-
ration makes under authority Of the State is
which the city Of New Orleans made was to
pay the consolidated bonds, which were to be |
issued In lieu Of the previous obligations Of
the old city and the three municipalities, and |
of Lafayette, and she stipulated as security |
for the performance Of this engagement that |
q certain and specified sum should be raised |
by taxation each year, to be applied to the /
payment OF the coupons and the partial ex-
tinguishment OF the principal and as further
nounced the nullity Of all ordinances, resolu-
tions or other acts which the Council might |
pass, until the ordinance imposing tho con-
loan tax should have been adopted. |
This engagement was accepted by those who
held the old obligations, and an exchange was |
effected. Here, then, was contract made by
a public corporation, under express authority
Of the Legislature. with Its creditors, who as
sented 70 It by perfecting the arrangement
learned author lays down the rule
the rights OF these con-
tracing parties, and the obligations resting
upon them thus: when under the exercise OF |
powers delegated, the rights Of third persons
form Of contract with the municipal cor
poration, the Legislature cannot change the
powers OF the corporation 80 as to impair the
rights OF It's creditors. The constitution Of
The obligation OF contracts, and while the
Legislature may alter or notify the powers
of the subdivision Of the State, such altera-
lion cannot be allowed to affect the creditors
II the subdivisions. They are entitled to
claim that the corporation shall
exercise such powers as it had at the time
their contract was made" Burroughs Tax
alton, AIT. And yet more; the rights OF these
creditors cannot be successfully impugned by
ture for the Supreme Court Of the United
States holds that when the courts of O State
have decided that bonds issued by CORPORA
lion are valid, II tho courts of that State sub
reverse that decision and declare
,ure have not the power to authorize their
ssue, then the rights of the holders OF bonds
ssued during the time when the courts of the
state held them valid are not affected by the
subsequent adverse ruling that they were in
valid Gelpeke VS.. city Of Dubuque, ] Wall.
rs; Havemeyer vs.. Iowa county, Wall. 294;
Lamson's case, Wall. ATT.
In Van Hoffman VS. city Of Quincy, 4 Wall
,35, the court says: ut Is clear that where q
state has authorized municipal corporation
20 contract and to exercise the power of local
,axatlon to the extent necessary to meet Its
the power Of taxation thus
given cannot be withdrawn until the contract
8 satisfied. The State and the corporation in
such cases are equally bound. The power be-
,omes trust, which the donor cannot annuI
md which the donee Is bound to execute and
neither the State nor the corporation can any
more impair the obligation OF the contract
han any other"
In Smith vs. Appleton, 10 Wis. 495, that
,ourt, constituting an act very similar to our
lct OF 1882 under which new bonds have been
ssued TO take the place of and to be received
~ creditors In the stead Of old bonds, OBJ
served that the stringent provisions Of the
vet to secure the payment Of the interest
were obviously introduced to induce credit
RS to surrender their old bonds and accept
he new. These provisions, when accepted
y the creditors and the city, and the new