Perry v. Commissioners for the Liquidation of the Clinton & Port Hudson Rail Road

11 Rob. 404
Supreme Court of Louisiana·Decided July 15, 1845·Published·Cited by 1 cases

Opinion

Garland, J.

A reference to 2 Robinson, 218, will show the original character of this case, and the grounds upon which the claim is based. After the cause was remanded for a new trial, and before it eame on for trial, proceedings were instituted (un~ [405]*405der the provisions of an act of the Legislature, entitled “An act to preserve the credit of the State,” approved March 26th, 1842. — Acts 1842, p. 460, § 2) by the State against the Clinton and Port Hudson Rail Road Company, for the purpose of having its charter forfeited, which was decreed, and the judgment was affirmed in this court — 2 Robinson, 307; 4 Robinson, 445. The defendants, Saunders and Fluker, were appointed commissioners, for the purpose of liquidating the affairs of the company, and entered upon the discharge of their duties. In the course of the year 1843, these commissioners entered into a compromise with the plaintiffs, by which the amount to be paid them was settled, and a compensation of a certain amount arranged. It was also agreed that the compromise should “ not in any way deprive the plaintiffs aforesaid of their mortgage and privilege as contractors for the construction of the Clinton and Port Hudson Rail Road, until the debt due them is finally paid, or a release hereafter made by them.” This compromise Was homologated, and made the judgment of the District Court; and, on an appeal, affirmed by this court. See 7 Robinson.

In March, 1839, an act was passed by a constitutional majority of both branches of the Legislature, entitled “An act to expedite the construction óf the Clinton and Port Hudson Rail Road,” by which the State agreed to loan the company its bonds for $500,000, payable in ten, twenty, and thirty years, bearing interest at the rate of five per centum per annum, upon condition, that “ the company shall bind itself to pay the principal and interest of the bonds ” to be issued and loaned. To secure the payment of these bonds and interest, it was enacted that the company shall mortgage, or hypothecate, in favor of the State, the capital stock of the same, together with all the property, moveable and immovable, and slaves belonging to the same; and shall also subrogate the State to all the mortgages which may have been executed in favor of the institution by each individual stockholder, both under the original and amended charter And it was further enacted, “'that, in case said bonds and the interest thereon are not punctually paid, according to the provisions of this act, the rail road constructed by said company shall, by the mere failure so to pay said bonds [406]*406and the interest thereon, and the payment thereof by the State, become the property of the State; and the said company shall still be bound to pay the principal and interest of said bonds; and the said rail road shall revert back to said company on the payment of the bonds, if paid within five years after maturity;” and the State may take such other steps as may be necessary to its indemnity, in case the company shall not pay the bonds and interest. See acts of 1839, pp. 214, 216, ss. 2, 4. In the month of June, 1839, an attorney in fact of the Rail Road Company appeared before a notary public in New Orleans, to execute the pledge, or hypothecation, required by the act of the Legislature; and in the authentic act then passed is recited and stated what the Legislature had proposed, and that three-fourths in number and amount of the stock holders of the company had accepted the propositions, and had, in the act of acceptance, given to the board of directors “the power to comply with all the requisitions of said act of the Legislature, and, among others, to pledge to the State of Louisiana the capital stock of said company, together with all the property, moveable arid immovable, and slaves belonging to the same, and to subrogate the said State of Louisiana to all mortgages which may have been executed in favor of said institution, by each individual stock holder, both under the original and amended charter; being seven hundred and fifty thousand dollars in amount, as the whole is set forth in the second section of the said- legislative' act.” ' The foregoing is the authority conferred on the directors by the stock holders. We will now state what the agent of the directors, and the officers of the State, did. The act proceeds: “Now, therefore, for the purpose of accomplishing the object or objects contemplated by the aforesaid legislative act, and especially for the purpose of obtaining the bonds of the State of Louisiana, signed by the governor of this State, and counter signed by the treasurer thereof, to the amount of five hundred thousand dollars, as provided for in the third section of said legislative act, he, the said James H. Muse, in his aforesaid capacity, does hereby, for and in the name and in behalf of the Clinton and Port Hudson Rail Road Company, and for and in the name of the President and Directors of said Com[407]*407pany, by virtue of the' authorisation in him vested as aforesaid, specially pledge to the State of Louisiana, the capital stock of the said Clinton and Port Hudson Rail Road Company, together with all the property, moveable and immovable, and slaves, now belonging thereto, or which m future shall or may belong thereto; hereby pledging to the said State the rail road belonging to said company as far as the same is now constructed, and the whole extent of the same when fully completed; and also the whole of the land upon which the said rail road is constructed, and will be found to be constructed when finished; and likewise all and every matter, thing, property and appurtenance thereto attached, and thereunto belonging, or in any wise appertaining.” The act then proceeds to subrogate the State to the mortgages executed by the stock holders, describing them. It contains other stipulations not now necessary to state.

In the month of March, 1841, the interest on the bonds loaned by the State not having been paid, the Legislature passed an act entitled “ An act to protect the credit of the State,” in the preamble to which, a brief statement is made of their transactions with the Clinton and Port Hudson Rail Road Company; and it is said that “ a portion of the first instalment of the interest on said bonds is past due and unpaid, and the company is unable to pay the same;” it is therefore enacted, that the state treasurer pay such portion of the interest on said bonds as may remain due; and also, “ that by virtue of the second and fourth sections of the act aforesaid, the said' road, with all the machinery, fixtures, slaves and appurtenances thereunto belonging, or in any wise appertaining, be, and they are hereby declared to be forfeited to the State,” reserving to the company the right of redeeming the same in five years. Other provisions are made in relation to the disposition of the revenues, any excess of which over the expenses, is to be applied to the interest of the bonds; and, finally, the corporation is made the agent of the State, for the purpose of administering the affairs of the company, so long as the State “ shall retain the ownership, or control of the premises.” Acts of 1841, pp. 74, 75, ss. 1, 2.

[408]*408In 1842-3, by the proceedings before stated, the charter of the company was forfeited, and the defendants were appointed commissioners.

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Perry v. Commissioners for the Liquidation of the Clinton & Port Hudson Rail Road, 11 Rob. 404 (La. 1845).

11 Rob. 404 (Perry v. Commissioners for the Liquidation of the Clinton & Port Hudson Rail Road) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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