Wright v. Lake Charles Harbor and Terminal Dist.

• Citation: 188 So.2d 449
• Decision Date: 01 July 1966
• Docket Number: No. 1788,1788
• Parties: Gerald O. WRIGHT, Plaintiff-Appellant, v. LAKE CHARLES HARBOR AND TERMINAL DISTRICT, Defendant-Appellee.
• Court: Court of Appeal of Louisiana (US)

Page 449

188 So.2d 449

Gerald O. WRIGHT, Plaintiff-Appellant, v. LAKE CHARLES HARBOR AND TERMINAL DISTRICT, Defendant-Appellee.

No. 1788.

Court of Appeal of Louisiana, Third Circuit.

July 1, 1966.

Writ Refused Aug. 3, 1966.

Porter, Scofield & Cox, by James J. Cox, Lake Charles, for plaintiff-appellant.

Stockwell, St. Dizier, Sievert & Viccellio, by James R. St. Dizier, Lake Charles, for defendant-appellee.

EN BANC.

SAVOY, Judge.

Plaintiff has appealed from an adverse judgment rendered against him in the district court.

The matter is before this Court for the second time. After appellant had perfected his appeal in this Court, appellee filed a motion to dismiss the appeal on the ground that this Court had no jurisdiction. We denied the motion to dismiss the appeal, holding that this was the proper tribunal to hear the appeal, citing Article 7, Section 29 of the Louisiana Constitution. Wright v. Lake Charles Harbor and Terminal District (La.App., 3 Cir.,1966), 186 So.2d 639.

Because of the nature of the case we granted the parties a special hearing which was heard by the entire Court.

Both counsel have argued the case orally and have supplied the Court with exhaustive briefs.

In his petition plaintiff states that he is a taxpayer and a registered voter residing within the territorial limits of Lake Charles Harbor and Terminal District (hereinafter referred to as the 'District'); that the District is a political subdivision of this State; that on November 10, 1965, the Board of Commissioners of the District published in the official journal of the District a notice in the form of a resolution authorizing the issuance of $5,000,000 Port Improvement Revenue Bonds of the District, and providing for the method of paying said bonds; that on the same date the District published in its legal journal a notice in the form of a resolution providing for the issuance of $16,400,000 Refunding and Improvement Bonds, Series A & B of the District, said resolution provided the method of paying the principal and interest of said bonds and further provided for the escrow and investment of said funds, including a portion of the proceeds of said bonds for the purpose of paying certain outstanding obligations of said District.

Petitioner stated that he desires to contest the constitutionality and legality of the aforesaid issues, and asked the district court to issue a permanent injunction enjoining the district from proceeding with the issuance of said bonds.

Petitioner averred that the proposed issuances of the aforesaid bonds will increase the ad valorem taxes affecting the property within the limits of said District without the property holders within the District having an opportunity to vote on said increase in taxes; all in violation of the Constitution and statutes of this State.

Plaintiff alleged that the District proposes to construct a bulk handling facility, which is really a 'coke plant' and further proposes to acquire land and to pay certain fiscal, legal and engineering fees from the proceeds of the $5,000,000 bond issue; that the use of the public funds for the construction of the coke plant will unduly deplete the public fisc, and it is intended to give advantage to a private industry at the taxpayers' expense; said coke plant is being constructed chiefly for the advantage and benefit of Cities Service Oil Company; that the proposed coke plant has already been leased to private firms, and that the anticipated revenues of this facility will be the sum of $1,920,000 over a ten-year period, which is economically unsound.

Plaintiff alleges further that with reference to the proposed bond issues mentioned hereinabove, the District proposes to secure said bonds by pledge and dedication of the net revenues which the District will derive from the operation of its system, and also from the proceeds of the motor fuel tax funds dedicated to the District for a period of forty years, thus binding and restricting the successors to the present Board to the payment of said bonds; that the District has not dedicated or allocated any of the funds to be derived from the said bonds, except with reference to the $5,000,000 issue, and that petitioner fears that the District may waste said funds without any consequent public advantage; that the taxpayers in the District, in the years 1954 and 1961, approved certain bonds and provided for ad valorem taxes therefor on the basis that said bonds would be paid for from Port revenues and gasoline taxes and such ad valorem taxes as might be necessary, and that the diversion of the Port revenues and gasoline taxes from the support of said bonds to the revenue bonds without approval of the taxpayers constitutes a breach of faith with said taxpayers.

Plaintiff also alleges that the advertisement of the resolution proposing the $5,000,000 bond issue is illegal for the reason that the resolution states that any person in interest may contest the legality of the resolution and the validity of the bonds for a period of thirty days from the date of the adoption of the resolution, but that the Constitution and statutes of this State provide a period of thirty days from the date of the publication of the resolution within which the legality thereof can be raised; that both of said bond issues provide that all bonds shall bear interest from October 1, 1965, although the bonds will not be sold and revenue therefrom will not be derived under the proposed bond issue until December 15, 1965, thus providing for the expenditure of interest on said bond issues for a period of 75 days without any benefits being derived therefrom.

Petitioner alleged that on December 15, 1964, the District entered into a contract of lease with Societa Alluminio Veneto Per Azioni and Cities Service International, Inc., under which the District has leased to the said parties the coke plant, which lease was entered into without observing the requirements of LSA-R.S. 41:1211--1221, which statutes require, among other things, advertisement and submission of bids before said property can be leased; that said lease constitutes a loan or grant of public property in violation of the provisions of Article 4, Section 12 of the Louisiana Constitution, and further violates the prohibition of the said Article, which prohibits a political subdivision from undertaking to carry on the business of a private corporation by furnishing lands for the use of the said corporation.

Defendant filed an answer and reconventional demand. In its answer, defendant denied all of the allegations contained in plaintiff's petition and alleged various statutes, articles of the Constitution, and decisions of the courts of this State in support of its position. Assuming the position of plaintiff-in-reconvention, defendant asked for certain damages as a result of delays caused by plaintiff, defendant-in-reconvention, in delaying the sale of the bonds and other related matters. Defendant prayed that plaintiff's main demand be dismissed, and that it recover on its reconventional demand. Counsel for defendant then filed a Motion for Summary Judgment.

After a trial on the Motion for Summary Judgment, the district judge granted said motion and dismissed plaintiff's suit. This appeal followed.

In the recent case of Delta Equipment and Construction Company v. Royal Indemnity Company, (La.App., 1 Cir., 1966), 186 So.2d 454, the court stated:

'It is now the well settled law of this state that summary judgment will lie only when the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue or dispute as to a material fact, and that the mover is entitled to judgment as a matter of law. LSA-C.C.P. Article 966; Kay v. Carter, 243 La. 1095, 150 So.2d 27.'

After carefully reviewing the record in the instant case, we are of the opinion that there are no material issues of fact, and that the issues involved herein are solely matters of law.

The District was created in 1924 as a political subdivision of this State by virtue of the Constitution of Louisiana and Acts of our State Legislature. The District has constructed, developed, maintained and operated harbor and terminal facilities since its inception; and in connection with these facilities, it has, from time to time, issued bonds and other indebtedness for capital improvement of the Port facilities.

There are presently outstanding in the District public improvement bonds in the sum of $10,845,000; $4,385,000 of this sum are the bonds outstanding from an issue of the District dated July 1, 1954, pursuant to an election in May of that year; $6,460,000 represents the amount outstanding of bonds entitled 'Series A of 1961' which were also issued pursuant to an election of 1961. The total amount of the 1961 bond issue was $13,000,000; $7,000,000 of said bonds were sold, and $6,000,000 have not yet been issued. Of the $7,000,000 bonds sold and issues, $6,460,000 are outstanding at this time.

On November 3, 1965, the Commission, through its Board, adopted two resolutions; one authorizing $16,400,000 of refunding and improvement bonds--$10,400,000 being designated as Series A and designed to refund and take the place of the $10,845,000 outstanding; and to issue $6,000,000 of Series B bonds for the purpose of paying certain cost of acquiring land, dredging and construction for the District. The other resolution authorized the issue of $5,000,000 Port improvement revenue bonds to be secured by Port revenues and 1/20 motor fuel tax dedicated to the Port from the gasoline tax collected by the State, under the provisions of Article 6--A, Section 5 of the Louisiana Constitution of 1921.

Counsel for plaintiff complains that the issuance of the improvement bonds is illegal for two reasons: (1) that no election has been called for this purpose; and (2) that because of the diversion of the Port revenues and the motor fuel tax from the general obligation...