Knoxville daily chronicle. [volume] (Knoxville, Tenn.) 1870-1882, 1882-04-19
WASHINGTON.

WASHINGTON, D. c., April H.
p An important municipal bond de
cision was rendered by the Supreme
Court of the United States to,day
in the case Of the State of Louisi-
ana ex rel. the Southern Bank,
plaintiff in error, VS.. Edward Pills
bury, mayor of New Orleans ct al,
in error to the Supreme Court OF
Louisiana. This was petition of
the Southern Bank of New Orleans
the municipal authorities of that city
to levy special tax for the purpose
of paying the interest and ultimately
the principal of a certain series of
bonds issued by the city under au-
thority of an act of the State
Legislature in 1852, and known as
consolidated bonds of 1852 There
are about S4,000,000 of these bonds
now outstanding, and of this amount
relator Southern banks holds
100000. Interest on these bonds
was paid for time, but in 1876
the Legislatures of the States passed
an act known as the premium bond
act, which prohibited the levying of
any tax for payment of any other
bonds than those therein provided
for, and which forbade courts of the
State from issuing writs of manda-
mus to enforce the collection of any
such prohibited tax. This act put
stop to the payment of inter
est on consolidated bonds of
1852, and Southern banks. A large
holder of these bonds instituted
the present action to test the con
stitutionality of the premium bond
act" to have their consolidated bonds
of 1852 declared valid against the
city, and to enforce payment.
This court, in a long and carefully
prepared opinion by Justice Field,
holds that the act of 1852 consti-
tutes valid and binding contract
between the State and holders of the
bonds issued under that act, which
subsequent legislation cannot be
permitted to annul, and that the
t'premium bond act" of 1876 is the
most remarkable piece of legislation
ever presented to this court for
consideration, amounting as it does
to open reputation of the city 8
faith. Legislation of the State thus
impairing the obligation of a con-
tract made under it's authority is null
and void, and the courts, in enforc>
ing the contract, will pursue the same
course and apply the same remedies
as though such invalid legislation
had never existed. The act of 1875
cannot be permitted to control the
power of the city authorities to levy a
tax stipulated by the act of 1852.
1t is the judgment of this court,
therefore, that the Judgment of the
Supreme Court of Louisiana should
be reversed, and that mandamus
should issue, commanding the city
of New Orleans, by it's proper au
thorities, to carry out and fulfill, as
near as may be under altered circum-
stances, the provisions of the
37th section of an act of the Legisla-
ture of the State of louisiana, ot
February 23rd, 1852, and numbered
II, and also an act of same date mum
bered 72,in relation to the leyying OF 6
special tax to pay interest and ulti'
mately the principal of the consoli.
dSted bonds authorized to be issued
by said acts, that is to say, COM
manding them to raise annually
commencing immediately, by specia
tax ID this manner as near as may bt
prescribed by said 37th section of ac
No. II, if not provided in some 9th
er manner, the sIn of 100000, te
be appropriated, first, to the pay.
ment of the current years interes
accruing on said bonds, second, t.
the payment of the interest in al
rears, and third, after all the accrued
interest shall be fully paid, then t.
purchase from the lowest bidder, O
snch bo.,ds issued under the sai'
acts, and still outstanding, as hav