State ex rel. Louisiana Trust & Savings Bank v. Board of Liquidation of State Debt

• Decision Date: 11 January 1915
• Docket Number: 20854
• Citation: 67 So. 370,136 La. 571
• Parties: STATE ex rel. LOUISIANA TRUST & SAVINGS BANK v. BOARD OF LIQUIDATION OF STATE DEBT et al
• Court: Louisiana Supreme Court

67 So. 370

136 La. 571

STATE ex rel. LOUISIANA TRUST & SAVINGS BANK v. BOARD OF LIQUIDATION OF STATE DEBT et al

No. 20854

Supreme Court of Louisiana

January 11, 1915

Rehearing Denied February 8, 1915

SYLLABUS

(Syllabus by the Court.)

A state may not be sued in its own courts without its consent.

The funds of a state are the property of the state, and they are administered by the Legislature.

A suit for the possession of the funds of a state, as depositary or otherwise, is a suit against the state.

The board of liquidation of the state debt is a servant of the state, charged, in part, with depositing the funds of the state; the deposits to be made under certain conditions and at its discretion.Its duties in that connection are discretionary to a certain extent.They are not ministerial.

'Wherever an action is brought for a breach of duty imposed by statutethe party bringing it must show that he had an interest in the performance of the duty, and that the duty was imposed for his benefit.But where the duty was created or imposed for the benefit of another, and the advantage to be derived to the party prosecuting, by its performance, is merely incidental, and no part of the design of the statute, no such right is created as forms the subject of an action.'

Harry P. Gamble, Asst. Atty. Gen. (Gustave Lemle, McCloskey & Benedict, and Howe, Fenner, Spencer & Cocke, all of New Orleans, Albin Provosty, of New Roads, Laycock & Beale, of Baton Rouge, Ott, Johnson & Ott, of Bogalusa, Bird & Bird, of Baton Rouge, and Hall, Monroe & Lemann, of New Orleans, of counsel), for appellantBoard of Liquidation of State Debt.

Browne, Williamson & Browne, of Shreveport, Thomas M. Burns, of Covington, Merrick, Gensler & Schwarz, of New Orleans, and Charles A. Holcombe and Taylor & Porter, all of Baton Rouge, for appellee.

OPINION

SOMMERVILLE, J.

The relator bank alleges that it was solicited by the respondent board to bid, under the terms of Act No. 205 of 1912, p. 415, for the deposit of the public funds of the state of Louisiana for a limited term, and to thus become one of the fiscal agencies of the state of Louisiana; that it bid for the deposit of those funds, to the extent of one-fourth of the money to be deposited by the board of liquidation of the state debt, within the Sixth congressional district, which deposit would amount to about $ 20,000 per annum; that, contrary to the terms of the statute, defendant board has awarded the contract for such deposit to other banks in said district, at a lower rate of interest than that bid by relator.And it asks that an injunction issue to prevent the respondent board from declaring certain banks located in said district to be --

'the successful bidders for any part of the funds of the state to be deposited by said board within the district, and from awarding a contract or contracts to said banks, or either of them, for any part of said deposit, or to any other bank or banks, except the highest bidders, within said district, found to be a safe depository in the sense of safely keeping and restoring the funds; and in case said board has already entered into a contract with said banks, or any of them, for any part of the deposits of the funds of the state of Louisiana to be made in the Sixth congressional district thereof, so bid for by relator, from executing and carrying out the same, or depositing any part of said funds in said banks.

'That an alternative writ of mandamus issue in this case directed to the said board of liquidation of the state debt of the state of Louisiana, through its proper officers, commanding said board to assemble and to pass upon the said bids from the Sixth congressional district on the face of the papers, and upon the reliability of the highest bidder or bidders in the Sixth congressional district, in the sense of safely keeping and restoring the funds, and further to declare the relator the successful bidder for one-fourth of all of the funds of the state of Louisiana to be deposited by said board within the Sixth congressional district of said state under the terms of said ActNo. 205 of 1912, and upon the security required by said act to be furnished by the relator, to award to relator and execute with it the contract for the deposit of one-fourth of all of the funds of the state of Louisiana to be deposited by said board in the Sixth congressional district of the state of Louisiana, under the terms of said ActNo. 205 of 1912, or show cause to the contrary on the day and date and at an hour to be fixed by this honorable court.

'That the said board of liquidation of the state debt of the state of Louisiana, through its proper officers, be duly cited to appear and answer this demand, and, after legal delays and proceedings had, that there be judgment in favor of relator, perpetuating the said injunction and declaring said mandamus absolute.'

Relator made certain banks in the Sixth congressional district also partiesdefendant, which had been declared the successful bidders by the respondent board, and asked for judgment against said banks.

The board of liquidation of the state debt appeared and excepted to the jurisdiction of the court'on the ground that exceptor is an arm, instrument, and agency of the state, and cannot be sued in the courts of the state without express legislative authorization and consent, which have not been given.'The board answered further.The cause was tried and submitted.And there was judgment in favor of relator as prayed for, from which judgment all of the respondents have appealed.

No principle is better established than that the state may not be sued in its own courts without its consent.If, therefore, this be a suit against the state, relator must show some authority from the Legislature under which the suit was brought, or its petition will be dismissed.

The state is not named on the record as a party to the suit.The board of liquidation of the state debt is named respondent.But the question whether the state is in legal effect a party to the controversy is not always determined by the fact that it is not named as a party on the record, but by the effect of the judgment or decree which may be rendered.

The board of liquidation of the state debt was organized by Act No. 3 of 1874, p. 39, for the purpose of consolidating and reducing the floating and bonded debt of the state.It was composed of the governor, lieutenant governor, auditor, treasurer, secretary of state, speaker of the house of representatives, who, in section 2 of the act, were authorized or directed to elect a fiscal agent for the state, who should be a member of the board.Absolute discretion was given to the board in selecting this fiscal agent, until the passage of Act No. 23 of the Extra Session of 1907, p. 25, when the election or selection of fiscal agents for the state, parishes, municipalities, etc., was provided for after advertising for bids for the deposit of the funds of the state and of the different divisions of the state.It is not clear by the terms of that act that the funds of the state, in custody of the state treasurer, were to be adjudicated in this way.Be that as it may, the act was specially repealed by section 7 of Act No. 316 of 1910, p. 538.

The facts, briefly stated, upon which relief is asked by relator, are these:

That the Legislature, in Act No. 205 of [136 La. 575]1912, p. 415, has made provision for the selection of a fiscal agency or agencies for the state, parishes, municipalities, public boards, etc., having the custody of public funds.That this fiscal agency or these fiscal agencies must be a bank or banks organized under the laws of the state or of the United States, and domiciled in this state; and they may be selected by the board of liquidation, or by the proper authority of the parish, municipality, commission, or other body created by or under authority of the state, or of any parish or municipality thereof, as the case may be.This bank or these banks must give the security mentioned in the act.Section 3 of the act provides:

'That all funds belonging to or received in behalf of the state of Louisiana by the state treasurer shall be deposited by the board of liquidation of the state debt, one-half thereof in one or more banks in the city of New Orleans, and the remainder in one or more banks in each of the congressional districts of the state, exclusive of the first and second districts,' etc.

Section 4 of the act provides, among other things:

'That the conditions under which the funds of the state of Louisiana[here leaving out reference to the parishes, municipalities, boards, etc.] shall be deposited, are as follows:

'(1) That all public moneys in charge of such authorities shall be let by the depositing authority to the bidder or bidders in the city of New Orleans and in the respective congressional districts as provided in paragraph one of section three of this act, offering the highest rate of interest for all or any part of the funds of such authority consistent with the safe-keeping and * * * return thereof,' etc.

Other conditions were imposed upon the fiscal agent or agencies.

Section 6, in part, provides:

'All banks desiring to become fiscal agencies or depositories of the state of Louisiana * * * shall make application in writing to the board of liquidation.* * * Said applications * * * shall remain sealed until the date specified in the circular, at which time the same shall be opened in the presence of a quorum of the board of liquidation * * * and shall be examined, and the said fiscal agencies and depositories shall then be selected and notified of such selection.'

Section 7 provides:

'That it shall be the duty of the board of liquidation * * *...