Court Opinion

ID: 7191300
Source: CourtListenerOpinion
Date Created: 2022-07-24 16:56:57.893577+00
Date Added: 2024-06-11T16:16:11.775389
License: Public Domain

Concurring Opinion.
Spencer, J.
The State by the funding act declared its willingness to fund its outstanding obligations 'at sixty cents on the dollar, and or.ganized the Board of Liquidation to carry into effect its provisions.
By act No. 11 of 1875, known as the Supplemental Funding Act, it declared that there were certain series of its obligations (among which are named those held by plaintiffs and intervenor), which were of doubtful legality, and it forbade said board to fund them, until the decree of this court had been obtained, declaring that they were legal and valid debts of the State, contracted in pursuance of its constitution, for a valid consideration and issued in strict conformity to law.
A State can be sued only by its own consent, and it may therefore impose such limitations and restrictions on the right of suit as it pleases. Hence this court, in determining its powers and duties in cases against the State, must look to the act authorizing the same, in order to determine the scope and limitation of its power and jurisdiction. Outside of the act authorizing the suit, and beyond the limitations therein fixed, it is absolutely without authority to hear and determine; and must therefore confine its investigations within the limits and to the objects specified.
Act No. 11 charges us to investigate, first, the constitutionality of *47the act under which the bonds held by plaintiffs were issued — second, whether, if the said act be constitutional, said bonds were issued in strict conformity to its provision — third, whether there was a good and valid consideration to the State for the bonds.
We are required to investigate each and all of these questions, and to report by decree the results of that investigation. It is manifest, therefore, that the accepted rules of the commercial law are not the sole, or indeed the controlling, guides for our investigations. That law forbids all inquiry into the consideration of. negotiable paper, when in the hands of bona fide holders for value and before maturity, as in this case. Whereas, act No. 11, which is the charter by virtue of which we have any authority in this case, declares that we shall go into that inquiry and specifically charges us with it! Which law shall we obey? Which law shall govern us ? Certainly the act No. 11 — for if that is not to govern us — if its injunctions are to be ignored, we are without authority to hear this cause at all. .Any decision we would render would bo coram non judice.
I do not think that the act No. 11 in any way changes the laws of evidence. The facts in controversy before us may be proved by any lawful evidence, direct or presumptive, oral or written.
It is also clear that this court is not by said act vested with power to render judgment against the State for any sum of money — but we are directed, as it were, to render a special verdict — to find the existence or non-existence of certain facts and conditions relative to said bonds; and according as we shall find them to exist or not exist, the State directs that the board shall act. Our jurisdiction is extended and limited to these inquiries. We can not go beyond them, nor stop short of them, without disregarding the law under which we are authorized to act. If we find any one of the conditions specified by the law to be wanting in these bonds, it will be our duty so to declare, and it will, then be the duty of the board not to fund them.
I therefore address myself to the inquiries submitted to us by the statute, to wit;
First — Is the law under which the bonds were issued violative of the constitution of this State or of the United States ?
Second — Were the bonds issued in strict conformity to the law authorizing their issue ?
Third — Did the State receive a good and valid consideration therefor?
As the first of these questions was not raised in argument or pressed I pass it.
The second point has been especially contested, and in my opinion is the one upon which the plaintiffs’ rights must stand or fall.
*48The act of the legislature granting aid to the Bceuf and Crocodile Navigation Company, directs in substance, by its first section, that $80,000 of bonds of the State shall be issued “in favor of" the said company. By its second section the president and secretary of said company are authorized to sell or pledge the said bonds so' issued. By its third section it stipulates and reserves a mortgage in favor of the State upon all the property, rights and franchises of-the-said company to secure the payment of said bonds, and the reimbursement of any amounts the State may have to pay on account thereof.
The bonds held by plaintiffs, and said to have been issued under said act, are made payable “ to H. C. Warmoth or bearer.” There is a caption to the bonds as follows: “ Bonds of the State of Louisiana.” “Issued in favor of the Boeuf and Crocodile Navigation Company.” Plaintiffs contend that this is a substantial compliance with the directions of the statute, and that the bonds being made payable “ to H. G. Warmoth or bearer” is immaterial, since they bear upon their face the statement that they were issued in favor of the company. Unless good reasons can be assigned to the contrary I should be disposed to accept this view. But I think such reasons- exist. The State was, in effect, loaning or rather proposing to loan its bonds to the company upon certain terms and conditions; which were that the company should pay the bonds when due, and re-imburse the State any sums it might pay on account thereof — these obligations of the company to be secured by a mortgage on its property and franchises. The company was only to sell or use so much of the bonds as were necessary for the contemplated improvements, and such bonds as were sold or pledged were to be so sold or pledged by its president and secretary. This offer to loan by the State was clearly ineohate and incomplete until accepted by the company, of which acceptance we have no proof in this record. The company could only be bound to pay said bonds, and to re-imburse the State if it paid them, and by the stipulated mortgage, in the event, and to the extent, the corporation accepted, received and used the bonds. It therefore became a matter of importance that these bonds should not be given out, except upon such terms and under such circumstances as would insure the liability of the company for their payment or re-imbursement, and make effective the mortgage of the State. It seems to me therefore that an important purpose was contemplated and to be attained, in requiring the bonds to be issued in favor of the company, and in specifying the officers of the company who should negotiate them. It was a means of fixing the liability of the company. If the bonds had been made payable to the company, they could not have been sold or pledged, except by the indorsement of the company by its president and secretary. I take it that the words “in favor of” used *49in this statute must be .taken in their usual and ordinary signification, which is synonymous with “payable to.” When we speak of a note being given “ in favor of ” a person, we mean and are understood to say that it is payable to him. I think that the act contemplated and required that these bonds should be made payable to the company, and that there was a good reason and purpose in so requiring. As the bonds were in fact issued, i. e., payable to Warmoth or bearer, the company could, (and if solvent,) no doubt would dispute successfully its liability to the State, by denying that it ever received or disposed of them. I therefore think there was a fatal variance between the bonds as issued and the statute authorizing their issue, and that therefore they were not issued “in strict conformity to the law.” I prefer to rest my concurrence upon this ground.
I concur in the decree of the court in this case.