State ex rel. Maestri v. Cave

• Decision Date: 10 July 1939
• Docket Number: 35464.
• Citation: 193 La. 419,190 So. 631
• Parties: STATE ex rel. MAESTRI, Mayor, v. CAVE, Com'r of Public Finance.
• Court: Louisiana Supreme Court

190 So. 631

193 La. 419

STATE ex rel. MAESTRI, Mayor, v. CAVE, Com'r of Public Finance.

No. 35464.

Supreme Court of Louisiana.

July 10, 1939

Rehearing Denied July 14, 1939.

Appeal from Civil District Court, Parish of Orleans; H. C. Cage Judge.

Proceeding by the State, on the relation of Robert S. Maestri, Mayor of the City of New Orleans, against Jess S. Cave, Commissioner of Public Finance, for a writ of mandamus ordering defendant to execute a certain contract as directed by the provisions of an ordinance. From a judgment for relator making the alternative writ of mandamus peremptory, respondent appeals.

Affirmed.

Walter M. Barnett, Jr., of New Orleans, for appellant.

Francis P. Burns, City Atty., and William Boizelle, Asst. City Atty., both of New Orleans, for appellee.

ROGERS, Justice.

At a special meeting of the Commission Council of the City of New Orleans, held on June 23, 1939, Honorable Robert S. Maestri, Mayor of the City, introduced Ordinance No. 14923, C. C. S., proposing the refunding of all paving certificates which will be outstanding after July 1, 1939, on a basis that will guarantee a reduction of at least one-third in the amount of interest to be paid by those property owners who had been unable heretofore to meet their obligations under the paving certificates, thereby assisting them to discharge those obligations which are now in default. No protest or opposition having been filed with the Commission Council, the ordinance was adopted on June 30, 1939, and being emergency legislation, as set forth in section 22, became immediately effective. Act No. 27 of the Fourth Extra Session of 1935 is relied on as the supporting authority for the adoption of the ordinance.

Among other things, Ordinance No. 14923, C. C. S., provides, in section 20, that the City of New Orleans shall enter into a contract for the underwriting of the refunding paving certificates-Issue of 1939, with Newman, Harris & Company, the terms of the contract being set forth in the ordinance. As soon as the ordinance became effective and as directed therein, Honorable Robert S. Maestri, Mayor of the City of New Orleans, proceeded to sign the proposed contract with Newman, Harris & Company. Honorable Jess S. Cave, Commissioner of Public Finance, declined to sign the contract and fulfill the other requirements of the ordinance, setting forth his reasons therefor in a letter addressed to the Mayor and Commission Council. Thereupon the Honorable Robert S. Maestri, as Mayor of the City of New Orleans, applied to the Civil District Court for a writ of mandamus to require Honorable Jess S. Cave, as Commissioner of Public Finance of the City of New Orleans, to perform his ministerial duty and sign the contract with Newman, Harris & Company, as directed by the provisions of the ordinance. In his return to the application for a writ of mandamus, the respondent, Honorable Jess S. Cave, set forth at length his reasons for declining to sign the contract.

The proceeding was heard by the Honorable H. C. Cage, presiding judge of the Civil District Court for the Parish of Orleans, who made the mandamus peremptory. The respondent, Honorable Jess S. Cave, has appealed from the judgment.

The trial judge, in ordering that the writ of mandamus be made peremptory handed down his written reasons, which are to be found in the transcript. The trial judge, in his reasons, has so clearly stated and disposed of the issues that we have concluded to adopt them as our opinion in the case.

The reasons of the trial judge are in the following words and figures, to-wit:

‘ This is a proceeding by the Mayor of the City of New Orleans against Jess S. Cave, Commissioner of Public Finance of the City of New Orleans, for a writ of mandamus ordering him to execute a certain contract in accordance with the directions contained in Ordinance No. 14,923, C. C. S., approved June 30, 1939.

‘ The Ordinance authorizes the issuance of $3,686,020 Refunding Paving Certificates-Issue of 1939, hereinafter sometimes referred to as the ‘ New Certificates,’ in order to refund a similar amount of Refunding Paving Certificates, dated January 1, 1936, hereinafter sometimes referred to as the ‘ Old Certificates.’ Section 20 of the Ordinance provides for a contract with a brokerage firm named Newman, Harris & Co., designed to secure a sale of the New Certificates on a certain basis therein specified if no better bid is received after advertisement for public tenders, and it is this contract which the defendant refuses to sign.

‘ The Old Certificates were issued pursuant to Section 47 1/2 of the Charter of the City, as amended by Act 27 of the Fourth Extraordinary Session of 1935, and were authorized by Ordinance No. 14,372 C. C. S.

‘ Since the Old Certificates bear interest at the rate of 4 1/2% per annum, and since the New Certificates, to the extent of $1,350,000 will bear interest at a rate not to exceed 3 1/4% per annum, and to the extent of the remaining $2,336,020, at a rate not to exceed 2 3/4% per annum, and since no extension of maturities is involved, it is patent that the proposed refunding would effect a substantial saving.

‘ The defendant, in his return to the alternative writ of mandamus, sets forth various grounds on which the issuance of the New Certificates is claimed by him to be illegal. I shall proceed to state these grounds in order, together with my decision thereon.

" 1. There is no authority in law for the issuance of said Refunding Paving Certificates-Issue of 1939. It is a well accepted principle of law, repeatedly adhered to by the Supreme Court of Louisiana and the courts of other states and of the United States, that a municipality possesses only such powers as are expressly granted to it by the Constitution and laws of the State. The courts have been particularly strict in the application of this principle to the issuance of obligations of municipalities and have held that in the absence of express Constitutional or statutory provisions authorizing the issuance of the particular obligations of the municipality to be issued, a municipality is utterly without power to issue any such obligations. Section 47 1/2 of the Charter of the City of New Orleans, as enacted by Act No. 27 of the Laws of the Legislature of the State of Louisiana, of the Fourth Extra Session of 1935, authorizes the issuance of Refunding Paving Certificates of the City of New Orleans only for the purpose of refunding the original Paving Certificates outstanding at the date of the passage of said act. Said original Paving Certificates were refunded by the issuance of the $7,854,080 Refunding Paving Certificates of the City of New Orleans, dated January 1, 1936, and, therefore, the City of New Orleans has exhausted the powers contained in said act. There is no other act and no Constitutional provision which can in any way be construed as authorizing the issuance of the Refunding Paving Certificates-Issue of 1939 authorized by the ordinance referred to above.'

‘ While the relator cannot point to any statute or constitutional provision expressly authorizing the New Certificates, it has been settled by the Supreme Court of Louisiana that the authorization to call and redeem an obligation necessarily includes authority to issue and sell refunding obligations for the purpose of raising the money necessary, so long as the refunding obligations can be issued and sold on a basis which involves a saving to the public. State v. Board of Liquidation of State Debt, 190 La. 520, 182 So. 661.

‘ As stated above, the Old Certificates were issued pursuant to Section 47 1/2 of the Charter of the City of New Orleans, as amended by Act 27 of the Fourth Extra Session of 1935. Subdivision (d) granted specific authority to the Commission Council to provide in the Ordinance for the issuance of the Old Certificates that they could be made callable on any interest payment date upon due publication of notice and, following this permission, the Ordinance authorizing said Certificates (Ordinance No. 14,372, C. C. S.) specifically provided that the Certificates should be redeemable at their principal amount, plus accrued interest to the date of redemption.

‘ Since, as shown above, a substantial saving will be effected by the contemplated refunding, the facts in this matter are on all fours with the decision in State v. Board of Liquidation of State Debt, supra.

" 2. Even assuming that the provisions of said Section 47 1/2 of the Charter of the City of New Orleans may be construed as authority for the issuance of said Refunding Paving Certificates-Issue of 1939, which is hereby specifically denied, nevertheless the said Refunding Paving Certificates-Issue of 1939 are illegal and invalid for the following reasons:

" A. The $7,854,080 Refunding Paving Certificates, dated January 1, 1936, all mature January 1, 1951 and were redeemable at the option of the City of New Orleans on any interest payment date. All paving assessments and all funds pledged to the payment of said Refunding Paving Certificates by the ordinance authorizing the issuance thereof, were pledged equally and ratably to all of said certificates. The proposed Refunding Paving Certificates-Issue of 1939 are to be issued in two series, $1,350,000 thereof constituting Series A maturing serially, without option of redemption, $150,000 in each of the years 1940 to 1948, inclusive, and $2,336,020 constituting Series B, maturing in 1951 and being subject to redemption at the option of the City on any interest payment date. While the ordinance authorizing the issuance of said Refunding Paving Certificates-Issue of 1939 attempts to apply the paving assessments and other funds applicable thereto, equally and ratably to all of said $3,686,020

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