Court Opinion

ID: 7190605
Source: CourtListenerOpinion
Date Created: 2022-07-24 16:56:25.888779+00
Date Added: 2024-06-11T16:16:10.635505
License: Public Domain

Ludelixg, C. J.,
dissenting. The evidence in this record shows that the intervenors acquired the bonds in question in duo course of trade, for value, in good faith, and before maturity.
■ The act No. 26 of the General Assembly of 1869 authorized the bonds of the New Orleans, Mobile, and Texas Railroad Company to be guaranteed by the State, on certain conditions.
The act No. 31 of the General Assembly of 1870 authorized bonds of the company to be indorsed for a branch road to Shreveport. Both these acts were enacted before the adoption .of the constitutional amendment limiting the State debt. This amendment was ratified by a general election, in November, 1870. So that the obligation of the State to *400indorse the bonds of said company, on certain conditions, existed when the constitutional amendment was adopted.
Act No. 95 of the General Assembly of 1871 authorized the Governor to issue the bonds of the State in lieu of indorsing the bonds of the company, on condition that the company would release the State from its obligation to indorse and issue certificates of stock of the company to the State for the amount of the State bonds. In other words, it authorized the Governor to substitute the bonds of the State, instead of indorsing bonds of the company to a like amount, if the company would issue to the State certificates of stock. Certainly this did not create a debt; it was the substitution of one obligation for another, and was not prohibited by the constitution. The debt was the same, the evidence of it was changed. 23 An. 405, 622; 26 An. 561.
Rut it is said the conditions imposed on the company were not -performed before the adoption of the amendment. That fact might be important if the company were claiming the bonds or their payment. But Williams & Guión are innocent third holders of the bonds, which arc negotiable in their character, and whether the conditions wore performed or not, they had a right to presume that they had been performed, and that the bonds were regularly issued.
It seems to me that the rule is universal that where the power to make the obligation exists, and the law under which the bonds are issued authorizes the officers who sign them to execute them, and the bonds purport on their face to have been issued in pursuance of the statute, the bona fide third holder is protected, whether the conditions imposed on the party in whose favor the bonds issued have been performed or not. 21 How. 545; 9 Wall. 414; 1 Wall. 93, 393, 297; 5 Wall. 784; 7 Wall. 82, 619; 13 Wall. 297, Pendleton Cy. vs. Amy.
I therefore dissent from the opinion of the court.
Rehearing refused.