State ex rel. New Orleans Canal And Banking Company and Louisiana National Bank v. Heard

• Decision Date: 16 December 1895
• Docket Number: 11,856
• Court: Louisiana Supreme Court
• Parties: STATE EX REL. NEW ORLEANS CANAL AND BANKING COMPANY AND LOUISIANA NATIONAL BANK v. W. W. HEARD, STATE AUDITOR, ET AL

18 So. 746

47 La.Ann. 1679

STATE EX REL. NEW ORLEANS CANAL AND BANKING COMPANY AND LOUISIANA NATIONAL BANK v. W. W. HEARD, STATE AUDITOR, ET AL

No. 11,856

Supreme Court of Louisiana

December 16, 1895

Submitted November 7, 1895

APPEAL from the Civil District Court for the Parish of Orleans. King, J.

Branch K. Miller, for Plaintiffs, Appellees.

M. J Cunningham, Attorney General, for Defendants, Appellants.

OPINION

WATKINS J. MILLER, J.

Relators seek by mandamus to compel the respondents to comply with and perform their plain ministerial duties, which are designated in the Concurrent Resolution of the General Assembly, known as Act 182 of 1894 directing the Auditor to warrant, and the Treasurer to pay the amounts claimed by them, out of the surplus interest fund of 1889.

Relators base their claims upon a contract made and entered into by them, with the Board of Liquidation, representing the State of Louisiana, on the 26th of December, 1886, and renewed on the 3d of June, 1888; whereby they engaged, as fiscal agents of the State, to cash and carry the coupons of all valid consolidated and constitutional bonds of the State, up to and including those falling due on the 1st of July, 1889, as specifically stipulated therein.

They aver, that under sad contract, they respectively paid to the holders of interest coupons upon consolidated bonds of the State of Louisiana, which were presented to them for payment, each the sum of two thousand six hundred and sixteen dollars; which sums they are entitled to have reimbursed to them, respectively, "by their "principal, the State of Louisiana, for whose benefit and account "the said sums were paid."

They further aver, that there remains in the hands of the respondent State Treasurer an unexpended balance exceeding ten thousand dollars of the amount of the appropriation made by the general revenue act of the year 1888, being Act 48 of that year, to pay interest coupons of the State of Louisiana, which became due on the first of January and the first day of July, 1889.

That such unexpended balance is in law applicable to the reimbursement of the aforesaid sums by them paid, as fiscal agents of the State; that there is no other appropriation of said balance.

That by concurrent resolution No. 182 of the General Assembly of 1894 the respondent Auditor is directed to warrant for, and the respondent Treasurer is directed to pay them, respectively, the aforesaid sums; and in violation and disregard of their duties therein specified, said respondents have refused and declined, the one to issue his warrant and the other to make payment to them, of the aforesaid sums, as it is their plain ministerial duty to do.

Therefore relators complain, and pray for a peremptory mandamus to compel respondents' performance of duty.

Respondents, represented by the Attorney General, represent that the claims of relators are for the payment of certain coupons No. 31, due July, 1889, as shown by the list thereof furnished by relators to the Auditor. That said coupons were clipped from consolidated bonds which the State did not owe, which are null and void, and which should have been destroyed by the direction of the Constitution and the law, but which were fraudulently and illegally put upon the market by a former Treasurer of the State. That the bonds from which said coupons were clipped belonged, some to the Agricultural and Mechanical College and some to the Seminary fund; and some had been received in exchange for constitutional bonds. That the said bonds belonging to the Agricultural and Mechanical fund, were declared null and void after the 1st of January, 1880, and the General Assembly was prohibited from ever making any provision for payment, and was ordered to destroy the same by Art. 233 of the Constitution; that as the coupon is a part of the bond, the State does not owe it, and the Legislature is prohibited from paying it, and therefore concurrent resolution 182 of 1894 is null and void, as in violation of the Constitution, as well as Act 48 of 1888, in so far as it may be held to make appropriation to pay those invalid coupons; that the obligation of the State evidenced by those bonds was extinguished by that exchange, and neither the treasurer nor any other person had or has the legal power to revive that obligation by an illegal reissue of the bonds; that therefore the State does not owe said bonds or coupons, and the Legislature is without power to pay them, and respondents have no right to pay them; that the appropriation made by Act 48 of 1888 to pay interest coupons was only to pay coupons clipped from valid and legally outstanding bonds, and not from bonds illegally and fraudulently issued or put in circulation; that the surplus fund remaining in the treasury left from said appropriation after paying all valid coupons of the year must be used by the board of liquidation in buying up valid consolidated bonds, and can not be used to pay interest on fraudulent bonds; that as the State does not owe interest on these bonds the payment of these coupons would be a gratuity which the Legislature can not make; that the concurrent resolution, Act 182 of 1894, is a disguised appropriation, and the Legislature can not appropriate money by concurrent resolution; but such an appropriation as this, if within the legislative power, would have to be made by two separate bills, introduced after thirty days' proper advertisement, and passed in the regular way, and after all constitutional delays and requirements had been complied with, whereas the concurrent resolution 182 of 1894 was passed as a single resolution, without any of these formalities or delays.

On the trial the evidence showed that relators had paid and expended the sum of money claimed in satisfaction and discharge of coupons clipped from that species of bonds known as Agricultural and Mechanical College bonds in greater part, and that same were those falling due on the 1st of July, 1889, and which were duly presented to them as fiscal agents of the State of Louisiana for payment by the holders thereof in the due course of business and in pursuance of their contract with the State.

It was admitted by the Attorney General, on behalf of the respondent, that there is money enough in the interest fund of 1889, appropriated by Act 48 of 1888, to cover the amounts claimed by relators.

It is shown that due and proper demand was made of respondents for compliance with the provisions of concurrent resolution 182 of 1894 without avail.

The Attorney General introduced in evidence the joint report of the Auditor and Treasurer containing a list of consolidated and constitutional bonds as classified by the New Orleans Stock Exchange; other evidence conforming to the averments of the respondents' answer [47 La.Ann. 1683] -- particularly, extracts from the published journals of the Senate and House of Representatives, of the session of 1894, showing the course of the legislative proceedings in the introduction and passage of House concurrent resolution No. 27, and which bears the the number 182 in the published acts of 1894. The record contains the following admission of counsel pro and con, viz.:

"It is hereby admitted that the coupons sued upon were clipped from the bonds illegally issued by the Treasurer; that they became due on July 1, 1889, and were paid on that date by the relators' banks without any notice or knowledge that they were fraudulent, (they being) fiscal agents of the State, on date of their presentation. That similar coupons clipped from some bonds had been paid on presentation by the fiscal agents, on the first of January and July of each year, from the time they were put in circulation up to and including the coupon due 1st of July, 1889, up to that time there having been no suspicion of fraud, and all of said payments having been allowed by the Auditor and Treasurer in settlements made with the fiscal agents. That after these coupons were paid by relators, the fraudulent issue of the bonds was discovered in September, 1889, and they were not allowed credit therefor in their settlement with the Treasurer."

The language of the concurrent resolution 182 of 1894 is as follows, viz.:

No. 182.]

CONCURRENT RESOLUTION

Authorizing and directing the Auditor to warrant for, in favor of, the Louisiana National Bank and the New Orleans Canal and Banking Company, both of the city of New Orleans, and the Treasurer to pay said banks the amount of certain interest coupons, paid by the said banks as fiscal agents of the State of Louisiana, on July 1, 1889.

WHEREAS, In the year 1889 the Louisiana National Bank and New Orleans Canal and Banking Company, both of the city of New Orleans, were fiscal agents for the State of Louisiana; and

WHEREAS, In such capacity as fiscal agents the said banks paid to the holders thereof certain interest coupons of certain consolidated bonds of the State of Louisiana, maturing July 1, 1889; and

WHEREAS, The bonds from which said coupons had been detached were subsequently ascertained to be the property of the State of Louisiana, and which had fraudulently been put in circulation by E. A. Burke, then Treasurer of the State of Louisiana; and

WHEREAS, There remains in the hands of the State Treasurer a balance of appropriations made by the Legislature of 1888, to pay the interest upon the consolidated bonds of the State of Louisiana;

Therefore be it resolved, by the Senate of the State of Louisiana the House of Representatives concurring therein, That the Auditor is authorized and directed to warrant in favor of the said Louisiana National Bank for the sum of two thousand six hundred and sixteen dollars, and the said New Orleans Canal and Banking Company for the sum of two thousand...