State ex rel. Hope & Co. v. Board of Liquidation

42 La. 647
CourtSupreme Court of Louisiana
DecidedMay 15, 1890
DocketNo. 10,541
StatusPublished

This text of 42 La. 647 (State ex rel. Hope & Co. v. Board of Liquidation) is published on Counsel Stack Legal Research, covering Supreme Court of Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State ex rel. Hope & Co. v. Board of Liquidation, 42 La. 647 (La. 1890).

Opinions

The opinion of the court was delivered by

Watkins, J.

This suit is a supplement to that of same title decided recently and adversely to the relators. 41 An. 585.

The relators seek, by mandamus, to compel the various respondents, as the members of the Board of Liquidation, to assemble, take action on their bonds and decide whether of not they are fundable in consolidated bonds of the State.

The respondents return:

1. That relators’ petition states no cause of action.

2. That the judicial department of the State government has no-power to control their official action, or conduct, or their exercise of official discretion.

3. That they are members of the executive department of the State government, and, as such, designated as members of said Board of Liquidation of the State debt, and that they are not responsible to the judicial department of the State government as to the time when, or the manner in which they shall perform their duties»

4. That the courts are without jurisdiction to compel them to-[649]*649meet, or to fix a time for their meeting, as the authority to convene the board is executive.

5. That, in their opinion, the present time is inopportune for a meeting of the board.

The judge below made the mandamus peremptory, and in his decree fixed and designated a time within which the respondents should convene and decide whether or not relators’ bonds are fund-able. Prom that judgment the respondents have appealed.

The question is, therefore, whether the courts have jurisdiction and authority over the respondents, as members of the Board of Liquidation, to compel them to meet and take action on the bonds of relators.

The respondent board was created under and by virtue of Act 3 of 1874, which was a legislative enactment, making provision for an examination into and funding of the valid part of the public debt in consolidated bonds of the State.

Sec. 1 of that act provides that for the purpose of consolidating and reducing the floating and bonded debt of the State, the Governor, Lieutenant Governor, Auditor, Treasurer, Secretary of State and Speaker of the House of Representatives, are hereby authorized to' cause ‘to be prepared and to issue bonds, to be known as 1 consolidated bonds of the State of Louisiana,’ * * * to the amount of $15,000,000, or so much thereof as may be necessary,” etc.

See. 2 provides “ that the parties designated in the foregoing section shall constitute a board of liquidation, and a majority of said board shall elect a fiscal agent for the State, who shall be a member of said board.”

Section 3 provides “ that the bonds authorized by Sec. 1 shall be signed by the Governor, Auditor, and Secretary of State, * * * and, when so prepared, said bonds shall be exchanged by the Board: of Liquidation for all valid outstanding bonds of the State, and all valid warrants, drawn previous to the passage of the act, * * at the rate of sixty cents in consolidated bonds for one dollar in outstanding bonds and all valid warrants; provided, that the holder of any bond, or valid warrant, rejected by a majority of said board may apply by petition, to the proper court, for relief, and if final judgment shall be rendered in his favor, against said board, it shall be the duty of said board to fund his claim in bonds, at the rate' provided by this act,” etc.

[650]*650That this was intended as a scheme for the ascertainment and reduction of the public debt within a prescribed compass will appear by reference to the provisions of Sec. 13 of the act, which are as follows, viz:

That the entire State debt, prior to the year of our Lord 1914 shall never be increased, directly or indirectly, beyond the sum of|15, - 000,000, hereby authorized, it being the intent and object of this act, and of the exchanges to be effected thereunder, to reduce and restrict the whole indebtedness of the State to a sum not exceeding ‡16,000,000, and to agree with the holders of the consolidated bonds to be issued hereunder that said indebtedness shall not be increased beyond said sum during said period. ” (Our Italics).

This act was approved on the 24th of January, 1874, and, at the same time, a constitutional amendment was proposed confirmatory of the scheme, and which declares that the consolidated bonds to be issued under and in pursuance of that act shall be valid and binding contracts of the State, in favor of the holders thereof.

Under the Constitution of the State, in force at the time, as well as under the one now in force, the executive department of the State government was composed exclusively of the officers enumerated in the funding law, as composing the Board of Liquidation, with the exception of the Speaker of the House of Representatives, who is an officer of the political department of the State.

When we take into consideration that the object in view was to liquidate the public debt, which consisted at the time of many millions of dollars in excess of the proposed limitation, evidenced by bonds and warrants of various series, and in exchange for which consolidated bonds were to be given, it is manifest that a political question of serious importance was presented for the consideration of the General Assembly, and that they wisely conceived the idea and devised the funding scheme, and gave it in charge of the executive department of the State government, with the solitary super-addition of the Speaker of the House of Representatives,' as the most suitable exponent of the political power of the State. Or, in other words, a case is presented where the political department of the State has delegated to the executive department thereof the authority to examine into and place a limitation upon the State debt, by funding miscellaneous evidences of debt into consolidated bonds of the State.

At most the funding law merely extends a grace to the public cred[651]*651itors of the State, of which they have the option to avail themselves under the exceptional circumstances stated. In case creditors elect to do so, and any one- of their'claims should be disputed and disallowed by the respondent, such creditor has the right to have its legality tested in the mode pointed out in Section 3 of the act. That is the particular manner and event in which the State has consented to submit herself to the jurisdiction of the courts in the premises, and the statute points out the formula, or ceremonial, of the judicial procedure, and expressly limits action in the premises. Lord Cecil vs. The Board of Liquidation, 30 An. 35; State ex rel. New York Guaranty Co. vs. Jumel, 38 An. 337; State ex rel. Newman vs. Funding Board, 39 An. 395.

Act 11 of 1875 supplemented, only, the authority conferred by the statute of 1874, in the following particulars:

1. By authorizing any tax payer to institute suit in his own name, or to intervene in any pending suit, for the purpose of testing the legality or validity of any issue of bonds or warrants, and to inquire into the consideration for which same’ issued.

2. To restrain the board from funding such bonds or warrants until their validity shall have been finally determined by this court.

3.

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Bluebook (online)
42 La. 647, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-hope-co-v-board-of-liquidation-la-1890.