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board of liquidation, being Louis A. Wiltz, the governor, Samuel McEnery, lieutenant-governor, Allen Jumel, auditor, Edward A. Burke, treasurer, William A. Strong, secretary of state, Robert N. Ogden, speaker of the House of Representatives, and the State National Bank of New Orleans, fiscal agent, for a mandamus requiring them “ to apply and pay
to the extinguishment of the interest now due and payable upon the consolidated bonds of the State of Louisiana, or becoming due and payable upon said bonds, and to the redemption and retirement of such consolidated bonds, as are provided for and required by the aforesaid act No. 3 of the year 1874, any and all moneys and proceeds of the tax levied or fixed by said act now in the hands or subject to the control of the said defendants or either one of them, or which have been in the hands or subject to the control of the said defendants or either one of them, or which may come into their hands or become subject to the control of either of them, not already applied to the payment of interest upon the aforesaid bonds, or to the redemption and retirement of the bonds themselves, as provided for and required in and by said act No. 3;" and that they “may furthermore be commanded and required to prnceed, without delay, to collect the tax fixed or levied in and by the aforesaid act No. 3 of the year 1874, in the manner and to the extent contemplated by that statute, and to apply and pay all moneys realized from such tax to the discharge of the interest and redemption of the bonds issued under and by virtue of the aforesaid Funding Act No. 3 ... until the principal and interest of such bonds be fully extinguished and discharged ; and, finally, that the said defendants may severally be commanded and required to enforce the act herein above last referred to, and particularly to carry out, perform, and discharge each and every one and all the ministerial acts, things, and duties respectively required of them by the aforesaid act No. 3, according to the full and true intent and purport of that act.”
This suit was afterwards removed into the Circuit Court of the United States for the Eastern District of Louisiana.
Upon final hearing the Circuit Court denied the relief prayed for in each of the suits, because, as stated in the conclusions of law which were filed in connection with the findings of fact, it
appeared that the respondents were constitutional officers of the State, and had no relation to the funds collected, or to be collected, except as such officers; that they were clothed with no authority and charged with no duty to pay over or collect said funds to or in behalf of the relators and complainants, but, on the contrary, by the organic law of the State under which their offices were created and exist, the provisions of which constitute their sole mandate, are prohibited from so doing. For these reasons it was concluded that the State was the party which, by its action in its original capacity through the people, had rendered the execution of its contract with the relators impossible through the instrumentality of its officers or functionaries, and that the question presented was political rather than judicial, and could not be adjudicated without calling the State to the bar of the court and subverting its entire financial basis, no matter how unjustly adopted and ordained.
From a judgment and a decree to that effect a writ of error was brought and an appeal taken.
The two suits may properly be considered together here, as they were below, because they present substantially the same questions.
We have no doubt it was the intention of the State of Louisiana to enter into a formal contract with each and
holder of bonds so issued under the act of 1874, to levy and collect an annual tax of five and one-half mills on the dollar of the assessed value of all the real and personal property in the State, and to apply the revenue derived therefrom to the payment of the principal and interest of the bonds, and to no other purpose. By the obligation so entered into it was also agreed, that the tax levied by the act and confirmed by the Constitution should be a continuing annual tax until the bonds, principal and interest, were paid in full; that the appropriation of the revenue derived therefrom should be a continuing annual appropriation, and that no further authority than that contained in the act should be required to enable the taxing officers to levy and collect the tax, or the disbursing officers to pay out the money as collected in discharge of the obligation of the bonds. Whatever may be ordinarily the effect of a promise or a pledge of faith by a State, the language employed in this instance shows
unmistakably a design to make these promises and these pledges so far contracts that their obligation would be protected by the Constitution of the United States against impairment.
It is equally manifest that the object of the State in adopting the “ Debt Ordinance " in 1879 was to stop the further levy of the promised tax, and to prevent the disbursing officers from using the revenue from previous levies to pay the interest falling due in January, 1880, as well as the principal and interest maturing thereafter.
The bonds and coupons which the parties to these suits hold have not been reduced to judgment, and there is no way in which the State, in its capacity as an organized political community, can be brought before any court of the State, or of the United States, to answer a suit in the name of these holders to obtain such a judgment. It was expressly decided by the Supreme Court of the State in State, ex rel. Hart, v. Burke, 33 La. Ann. 498, that such a suit could not be brought in the State courts, and under the Eleventh Amendment of the Constitution no State can be sued in the courts of the United States by a citizen of another State. Neither was there when the bonds were issued, nor is there now, any statute or judicial decision giving the bondholders à remedy in the State courts or elsewhere, either by mandamus or injunction, against the State in its political capacity, to compel it to do what it has agreed should be done, but which it refuses to do.
These, then, are suits by creditors at large, of the class provided for in the act of 1874, to compel, by judicial process, the officers of the State to enforce the provisions of the act, when the State, by an amendment to its Constitution, bas undertaken to prohibit them from doing so, and when the court, if it requires an officer to proceed, cannot protect him with a judgment to which the State is a party. The persons sued are the executive officers of the State, and they are proceeded against in their official capacity. The money in the treasury is the property of the State, and not in any legal sense the property of the bond or coupon holders. If it be lost or destroyed, the loss will fall alone on the State or its agents, and the bondholders will be entitled to payment in full from other sources. True, the money was raised to pay this particular class of debts,
and the agreement was that it should not be used for any other purpose; but, notwithstanding this, the State has undertaken to appropriate it to defray the expenses of the government. In this way the State has violated its contract, and, if it could be sued, might perhaps be made to set aside its wrongful appropriation of the money already in hand, and raise more by taxation, if necessary.
That the Constitution of 1879 on its face takes away the power of the executive officers to comply with the terms of the act of 1874 cannot be denied. As against everything but the outstanding bonds and coupons, this Constitution is the fundamental law of the State, and it is only invalid so far as it impairs the obligation of the contract on the faith of which the bonds and coupons were taken by their respective holders. The question, then, is whether the contract can be enforced, notwithstanding the Constitution, by coercing the agents and officers of the State, whose authority has been withdrawn in violation of the contract, without the State itself in its political capacity being a party to the proceedings.
The relief asked will require the officers against whom the process is issued to act contrary to the positive orders of the supreme political power of the State, whose creatures they are, and to which they are ultimately responsible in law for what they do. They must use the public money in the treasury and under their official control in one way, when the supreme power has directed them to use it in another, and they must raise more money by taxation when the same power has declared that it shall not be done.
The parties prosecuting the suits do not, in direct terms, ask for the payment of the bonds and coupons they hold. In fact, this seems to have been purposely avoided, for in the suit for mandamus the petition was amended before the hearing by striking out all that would have the effect of confining the command of the writ to such a payment, and left the prayer for an order requiring the use of the money raised under the act of 1874 for the redemption and retirement generally of all the bonds and coupons of the issue. In the suit in equity, while it was asked that the “ Debt Ordinance” of 1879 might be declared invalid as against the complainants, payment of the
amount due was only sought through the general administration of the finances in accordance with the provisions of the act of 1874. In neither of the suits was any inquiry to be instituted in respect to the particular bonds and coupons held by the plaintiffs, or any special relief afforded as to them. All that is asked will inure as much to the benefit of the other holders of similar obligations as to the particular parties to these suits. So that the remedy sought implies power in the judiciary to compel the State to abide by and perform its contracts for the payment of money, not by rendering and enforcing a judgment in the ordinary form of judicial procedure, but by assuming the control of tbe administration of the fiscal affairs of the State to the extent that may be necessary to accomplish the end in view.
It is insisted, however, that the money in the treasury collected from the tax levied for the year 1879 constitutes a trust fund of which the individual defendants are ex officio trustees, and that they may be enjoined as such trustees from diverting it from the purposes to which it was pledged under the contract. The individual defendants are the several officers of the State, who, under the law, compose the board of liquidation. That board is, in no sense, a custodian of this fund. Its duty was to negotiate the exchange of the new bonds for the old on the terms proposed. It had nothing to do with levying the tax, collecting the money, or paying it out further than by purchasing the bonds with any surplus there might be from time to time in the treasury over what was l'equired to meet the interest. The provision in the law that it shall be the duty of the auditor, treasurer, and the board, respectively, to collect the tax, pay
the interest, and redeem the bonds evidently means no more than that the auditor and treasurer shall perform their respective duties under the general laws in the assessment and collection of the tax, and shall pay in the usual manner the interest and principal of the bonds as they respectively fall due, and that the board shall purchase and retire the bonds whenever there is a surplus, which, under the law, is to be used for that purpose.
The treasurer of state is the keeper of the treasury, and in that way is the keeper of the money collected from this tax, just as he is the keeper of other public moneys.