25 La. Ann. 65 | La. | 1873
Lead Opinion
The State of Louisiana, through Attorney General Belden, instituted this suit in September, 1872, to recover from the North Louisiana and Texas Railroad Company the sum of one hundred and twelve thousand eight hundred dollars, with legal interest thereon
The answer contains a general denial, and a special denial that any bonds were issued when the company were in default, and sets up the-act No. 97 of 1872, published on twenty-first September, 1872, and the-acceptance of the terms thereof by the company as a release from, all liability to the State, and a perpetual bar to any suit by the State in regard to the bonds issued under act 108 of 1868.
From a judgment in favor of the State for $87,360,-amount of interest coupons paid, with eight per cent, interest thereon from certain dates, and an order for the enforcement of the second mortgage upon-the railroad, etc., and_ a nonsuit on the claim for the return of the-three hundred bonds, the company have appealed.
The act No. 108 of 1868, which is the charter of the North Louisiana ’ and Texas Railroad Company, authorized the issuance to said company of six thousand dollars of State bonds for every mile of track when completed, to be transferable by the indorsement of the president of the company, and with the interest at eight per cent., payable semi-annually, to be secured by a second mortgage in favor of the State, upon the said railroad, fixtures and appurtenances, the company having the right to execute a first mortgage to the amount of fifteen-thousand dollars per mile, which by act No. 105 of 1871 was increased to twenty-five thousand dollars per mile, and it was made incumbent on the company “on or before the maturity of any of the interest coupons on any of said bonds to deposit the amount thereof in the State treasury for the payment thereof, and in the event of the failure of said railroad company to make such deposit for the payment of the interest coupons, or any bonds so issued to them, that no further issue of bonds shall bo made to said railroad company, and the State shall have the right to foreclose the mortgage herein given to secure the payment of the bonds and interest issued to said board, according to-the provisions of this act.” See sections 11 and 12.
It is urged on behalf of the State that the conditions or terms of this act were not accepted within the prescribed time ; that it does not release the company from the liability to refund what the State had paid on account of the company before the act was passed, and that it is unconstitutional because, by necessary implication, it repeals acts 108 of 1868 and 105 of 1871 so far as they stipulate a mortgage in favor of the State or hold the company liable on the bonds issued to them, without having made adequate provision in the said repealing act for the payment of the principal and interest of the bonds, as required by article 111 of the constitution.
Mrst, as to the acceptance of the terms and conditions of the act. It appears to have been approved on the tenth of April, 1872, and it was to take effect from and after its passage; but it was not published until the twenty-first of September following. This is one of the many instances (if plaintiffs theory be correct) suggestive of the evils resulting from the practice, which has grown up within the last four years, of making laws during twelve months of the year instead of sixty days as fixed by one of the articles of the constitution; but, in our
Considering the acceptance as having been made within the prescribed time, as we do, there can be little doubt as to the effect of the act, if not unconstitutional, in releasing the company from all liability to the State on the bonds, which necessarily includes liability for the interest on the bonds whether then due or not. One of the objects of the act was to release the company from liability to the State, and by ■ express terms they were upon a certain contingency relieved from all liability on the bonds then issued or to be issued. The liability for the interest coupons resulted solely from and was embraced in the liability for the bonds of which they were a part when issued.
The State has, by making the act No. 108 of 1868 the basis of its suit, recognized and affirmed its constitutionality in regard to the adequate ways and means provided for the payment of the current interest and the principal of the bonds. That provision was the obligation of the railroad company to deposit in the State treasury, at the prescribed dates, the money to pay the interest and the bonds, which obligation was secured by a second mortgage on the railroad, its fixtures and appurtenances. The State now says that the act No. 97 of 1872, relied on by the defendants, has repealed that provision of said act 108, but does not contain some adequate provision for the same purpose, and it is therefore void because in conflict with the prohibition in article 111 of the constitution. This article reads: “ Whenever the General Assembly shall contract a debt exceeding in amount the sum of one hundred thousand dollars, unless in case of war to repel invasion or suppress insurrection, it shall, in the law creating the debt, provide adequate ways and means for the payment of the current interest and of the principal when it shall become due; and the said law shall be irrepealable until principal and interest be fully paid; or, unless the repealing law contain some adequate provision for the payment of the principal and interest of the debt.”
Conceding that the act No. 97 of 1872 repeals, in this respect, the provisions of act No. 108 of 1868, and that the question of the ade-
There is another view in which this case may be considered, without direct reference to the constitutional question raised by the counsel of the State, and which is quite as favorable to the defense. This is a controversy between the State, which issued the bonds, and the railroad company for whose benefit they were issued, and the holders of the bonds and their rights are not before us. Nor is there any claim before us to enforce the payment of any of said bonds. The State has paid some of the interest on them, which it alleges the company were obligated to pay and which it is seeking to collect, as a debt due by the company. As a defense to the suit the company plead a settlement under act 97, which has authorized a giving in payment. No provision of the constitution inhibits the State from accepting from its debtors such settlements as the Legislature may think judicious.
The company insist that there should be a final judgment instead of one of nonsuit on the demand for the return and annulment of the three hundred bonds, alleged to have been issued after default. In this we concur. The testimony of the officers of the company and the statement or certificate of the Auditor in relation to this fact, are positive that no such bonds were issued.
It is therefore ordered that the judgment appealed from be reversed, and that there be judgment in favor of the defendants, rejecting plaintiff’s demands.
Concurrence Opinion
concurring. The only important question in my judgment that arises in this case is, as to the constitutionality of the act of the Legislature passed April 10,1872, and numbered 97. On the part of the State it is contended that it violates article 111 of the State constitution. That article provides that “whenever the General Assembly shall contract a debt exceeding in amount the sum of one hundred thousand dollars, unless in case of war to repel invasion or suppress insurrection, it shall, in the law creating the debt, provide adequate ways and means for the payment of the current interest and of the principal when the same shall become due, and the said law shall be irrepealable until principal and interest be fully paid; or, unless the repealing law contain some adequate provision for the payment of the principal and interest of the debt.”
The last sentence or clause of article 111 gives to the General Assembly a latitudinous discretion in the matter of providing ways and means for the payment of the debts it may contract exceeding in amount $100,000. The act No. 97, I conceive, virtually repeals the act 108, approved September 26, 1868, as to the kind or form of security required. In the latter act a second mortgage is retained upon the railroad, its fixtures, appurtenances, etc. The act No. 97 substitutes stock of the company in lieu of the second mortgage retained by act 108. This the Legislature had the right to do under the wide discretion it has under article 111 of the constitution. But the question here arises, has the General Assembly provided adequate means by the act No. 97 for the payment of the principal and interest of the debt contracted by the act 108 of September, 1868 This question, it is held on the part of the defendant, is for the General Assembly to determine. I think otherwise. Here the State raises the question of the constitutionality of an act of the Legislature. It is not for the party with whom the issue is made to decide it. It is to be solved by determining whether “ adequate means ” has been provided by the Legislature for the payment of the debt it has created. In my view of the case it becomes a judicial question. Either the force and value of the second mortgage or the value of the stock of the company will run jpa/i'ipassu with the fortunes of the company in the future depending upon the success and business of the railroad. From the lights before me I am unable to say that the stock of the company transferred to the State is not “ adequate means” providedfor the paymentof the debt created. With the policy of substituting the stock in place of the second mortgage the courts have nothing to do.
Entertaining these views of the subject I concur in the decree rendered in the case.