State of Louisiana Elliott v. Jumel Elliott v. Wiltz

• Decision Date: 05 March 1883
• Citation: 107 U.S. 711,2 S.Ct. 128,27 L.Ed. 448
• Parties: STATE OF LOUISIANA ex rel. ELLIOTT and others v. JUMEL, Auditor, etc., and others. In Error to the District of Louisiana. ELLIOTT and others v. WILTZ, Governor, and others. Appeal from the Circuit Court of the United States for the Eastern District of Louisiana
• Court: U.S. Supreme Court

107 U.S. 711

2 S.Ct. 128

27 L.Ed. 448

STATE OF LOUISIANA ex rel. ELLIOTT and others v. JUMEL, Auditor, etc., and others. In Error to the

Circuit Court of the United States for the Eastern

District of Louisiana.

ELLIOTT and others

v WILTZ, Governor, and others. Appeal from the Circuit

Court of the United States for the Eastern

District of Louisiana.

March 5, 1883.

[Syllabus from pages 711-712 intentionally omitted] W. H. Peckham, for plaintiffs in error and appellants.

John A. Campbell, for defendants in error and appellees.

WAITE, C. J.

The legislature of Louisiana, at its session of 1874, by an act known as act No. 3 of 1874, provided for an issue of bonds, to be designated as consolidated bonds of the state, for the purpose of consolidating and reducing the floating and bonded debt. The bonds were to be payable to the bearer 40 years from January 1, 1874, and bear interest at the rate of 7 per cent. per annum, payable on the first day of July and the first day of January in each year. The amount was not to exceed in the aggregate $15,000,000. The governor, lieutenant governor, auditor, treasurer, secretary of state, speaker of the house of representatives, and a person to be elected by these officers as a fiscal agent of the state, were created a board of liquidation, with power to issue the bonds and exchange them for all valid outstanding bonds, and certain valid warrants on the treasury, at the rate of sixty cents in the new bonds for one dollar of old bonds and warrants. The bonds were to be signed by the governor, auditor, and secretary of state, and the coupons by the auditor and treasurer. Section 7 of the act was as follows:

'That a tax of five and a half mills on the dollar of the assessed value of all real and personal property in the state is hereby annually levied, and shall be collected, for the purpose of paying the interest and principal of the consolidated bonds herein authorized, and the revenue derived therefrom is hereby set apart and appropriated to that purpose, and no other; and that it shall be deemed a felony for the fiscal agent or any officer of the state or board of liquidators to divert the said fund from its legitimate channel as provided, and upon conviction the said party shall be liable to imprisonment for not more than ten years nor less than two, at the discretion of the court. If there shall during any year be a surplus arising from said tax after paying all interest falling due in that year, such surplus shall be used for the purchase and retirement of bonds authorized by this act; said purchases to be made by the said board of liquidation from the lowest offers, after due notice: provided, that the total tax for interest and all other state purposes, except the support of public schools, shall never hereafter exceed twelve and a half mills on the dollar. The interest tax aforesaid shall be a continuing annual tax until the said consolidated bonds shall be paid or redeemed, principal and interest; and the said appropriation shall be a continuing annual appropriation during the same period, and this levy and appropriation shall authorize and make it the duty of the auditor and treasurer, and the said board, respectively, to collect said tax annually, and pay said interest and redeem said bonds until the same shall be fully discharged.'

By other sections it was provided that any judge, tax-collector, or any other officer of the state obstructing the execution of the act, or any part of it, or failing to perform his official duty, should be deemed guilty of a misdemeanor, and on conviction thereof punished; that each provision of the act should be, and was declared to be, a contract between the state of Louisiana and each and every holder of such consolidated bonds; that the tax-collectors should not pay over any moneys collected by them to any other person than the state treasurer; and that no court, or judge thereof, should have power to enjoin the payment of principal or interest of any of the bonds, or the collection of the special tax therefor. Immediately after the passage of this act the state adopted an amendment to its constitution, as follows:

'The issue of consolidated bonds authorized by the general assembly of the state, at its regular session in the year 1874, is hereby declared to create a valid contract between the state and each and every holder of said bonds, which the state shall by no means and in no wise impair. The said bonds shall be a valid obligation of the state in favor of any holder thereof, and no court shall enjoin the payment of the principal or interest thereof or the levy and collection of tax therefor; to secure such levy, collection, and payment, the judicial power shall be exercised when necessary. The tax required for the payment of the principal and interest of said bonds shall be assessed and collected each and every year until the bonds shall be paid, principal and interest, and the proceeds shall be paid by the treasurer of the state to the holders of said bonds, as the principal and interest of the same shall fall due, and no further legislation or appropriation shall be requisite for the said assessment and collection, and for such payment from the treasury.'

Under this authority, consolidated bonds to the amount of about $12,000,000 were issued. John Elliott, Nicholas Gwynn, and Henry S. Walker are the holders and bearers of these bonds to the amount of $20,000, and of unpaid coupons due January 1, 1880, to the amount of $78,900. The bonds, in accordance with the requirements of the act under which they were issued, are signed by the governor, auditor and secretary of state, and the coupons by the auditor and treasurer.

On the first day of January, 1880, a new constitution of Louisiana went into effect. A portion of that constitution, called the 'Debt Ordinance,' is in these words:

'STATE DEBT.

'Article 1. Be it ordained by the people of the state of Louisiana, in convention assembled, that the interest to be paid on the consolidated bonds of the state of Louisiana be and is hereby fixed at 2 per cent. per annum for 5 years from the first day of January, 1880, 3 per cent. per annum for 15 years, and and 4 per cent. per annum thereafter, payable semi-annually; and there shall be levied an annual tax sufficient for the full payment of said interest, not exceeding three mills, the limit of all state tax being hereby fixed at six mills: provided, the holders of consolidated bonds may, at their option, demand, in exchange for the bonds held by them, bonds of the denomination of five dollars, one hundred dollars, five hundred dollars, one thousand dollars, to be issued at the rate of 75 cents on the dollar of bonds held, and to be surrendered by such holders; the said new issue to bear interest at the rate of 4 per cent. per annum, payable semi-annually.

'Art. 2. The holders of consolidated bonds may at any time present their bonds to the treasurer of the state, or to an agent to be appointed by the governor,—one in the city of New York and the other in the city of London,—and the said treasurer or agent, as the case may be, shall indorse or stamp thereon the words, 'interest reduced to 2 per cent. per annum for five years from January 1, 1880, 3 per cent. per annum for 15 years, and 4 per cent. per annum thereafter: provided, the holder or holders of said bonds may apply to the treasurer for an exchange of bonds,' as provided in the preceding article.

'Art. 3. Be it further ordained, that the coupon of said consolidated bonds falling due the first day of January, 1880, be and the same is hereby remitted, and any interest taxes collected to meet said coupon are hereby transferred to defray the expenses of the state government.'

Article 209 of the same constitution provides that 'the state tax on all property for all purposes whatever, including expenses of government, schools, levees, and interest, shall not exceed in any one year six mills on the dollar of its assessed valuation.'

Elliott, Gwynn, and Walker demanded of the proper state officers payment of their coupons which fell due January 1, 1880, but such payment was refused, the auditor and treasurer stating 'that they could not comply with the request made of them, owing to the prohibition contained in article 3, state-debt ordinance of the constitution of the state of Louisiana, adopted twenty-third July, 1879, and recently promulgated.'

All the taxes allowed by the new constitution have been levied for the year 1880, but no proceedings have been taken to levy and collect the five-and-a-half mill tax under the act of 1874. About $300,000 is in the treasury of the state, collected under the levy imposed by the act of 1874 to meet the coupons falling due January, 1880, but the treasurer refuses to apply it to the payment of the coupons, and claims to hold it only for the purposes to which it was to be appropriated by the terms of the new constitution. There are also taxes levied for former years under the act of 1874 which remain uncollected, and which are subject to future collection and payment into the treasury under the operation of the collection laws.

In this condition of things, the appellants Elliott, Gwynn, and Walker, on the sixteenth of January, 1880, commenced a suit in equity in the circuit court of the United States for the eastern district of Louisiana, against the several officers of the state composing the board of liquidation, and the prayer of the bill is that it may be——

'Ordered, adjudged, and decreed' that the act No. 3, of 1874, 'so far as your orator's interests hereinabove declared are concerned, was all the time from its passage, has been, and, at the time of the rendition of the decree herein prayed for, is a valid and subsisting law of the state of Louisiana; that the act aforesaid, the constitutional amendment of 1874, and the several bonds and coupons of interest held and owned by your orators as aforesaid, separately...