Court Opinion

ID: 7192802
Source: CourtListenerOpinion
Date Created: 2022-07-24 16:59:12.039753+00
Date Added: 2024-06-11T16:16:14.303880
License: Public Domain

Concurring Opinion.
Fenner, J.
My study of this case leads me to the following conclusions :
• L I am unable to appreciate the subtle distinction under which it is contended that, while the bonds may be prescribed as claims for-money, as held in the Conger case, they are not prescribed as claims' entitled to be funded under the Premium Bond Act. Under our sys-' tern, prescription is a mode of extinguishing debts. Obviously, the Premium Bond Act contemplates only the funding of debts of the” City, and if these bonds, though once debts, have been extinguished by pre-' scription, they are no longer debts, and are not entitled to be funded.
2. The Premium Bond Act creates no vinculum .juris between the' City and holders.of bonds who did not accept its provisions. As to them* *758until the moment of acceptance, the Act remained a mere proposition in behalf of the City, without effect upon their rights or obligations. Their right to avail themselves of its benefits depended upon their status at the moment of acceptance. If, at that moment, their bonds were valid and subsisting obligations of the City, they all would be entitled to fund, otherwise not. I am unable to agree with my brother of the District Court, that the case is affected by the facts that the premium bond scheme is laid out on a scale broad enough to embrace the entire bonded debt existing at its date, that an amount of premium bonds equal to the whole were executed and that a tax was provided and actually levied sufficient for the extinguishment of the whole.
¡ These were necessities of the scheme based upon the contingency that all might accept. But it is undeniable that non-accepting bondholders acquired no rights in or upon the unissued premium bonds or the taxes levied under the scheme. The unissued bonds remained the property of the City, and the surplus of the tax went to the City, not to be distributed among or held for non-accepting bondholders, but to be employed in reducing the bonded debt by purchase or payment. There is no foundation, therefore, for the idea that the provisions or execution of the premium bond scheme constituted a continuing recognition of the unfunded bonds. If the whole of the unfunded bonds were paid or otherwise extinguished, it would not, at least without further legislation, affect the premium bond scheme.
■.'3. The opinion of another learned District Judge, who has had this question before him, is filed with the brief, in which the position is taken that Act No. 133 of 1880 created a trust in favor of all creditors of the City holding debts valid at that date, against the execution of which the trustee cannot oppose prescription. It might be a sufficient answer to this position to say, that in this case the relator is not seeking the execution of any trust created by that Act. The relief sought is exclusively under the Act No. 31 of 1876, which in' express terms was left entirely unimpaired by the Act of 1880.
But, on broader grounds, I can discover no difference in the principles applicable to this Act from those already mentioned as applicable to the Premium Bond Act. It provides for the creation of new bonds and for their exchange for valid obligations of the City, or for their sale and application of the proceeds to the retirement of like valid obligations, and for the application of the surplus of the premium bond tax, in the manner prescribed. But it has no reference to any except subsisting valid obligations, and applies to them only so long as they continue such. Indeed, the Act denounces penalties against the members of the board, in case they should extend its benefits to any *759invalid obligation. It is a perversion of tlie legislative purpose to engraft upon tlie Act the effect of rendering the obligations of the City imprescriptible.
4. Nothing in any legislation deprived the holders of matured bonds of the power to interrupt prescription by judicial citation, and, therefore, the rule contra wo» valentem, has no application.
5. The effect of the statement of recognized liabilities, prepared by the City under the legislative direction found in the Premium Bond Act, needs no discussion, for, admitting its validity as an interruption of prescription, more than five years elapsed between its date and that of the institution of this suit.
Adhering to the principles of Conger vs. City, 32 An. 1250, the relator’s bonds are prescribed and afford him no basis for relief.
I, therefore, concur in the decree rendered herein.
Rehearing refused.