State ex rel. Exchange Bank v. Board of Liquidators

Tho opinion of tho court was delivered -by

Manning, O. J.'

Tho relator holds ñvo bonds of one thousand dollars each, issued by tho State to the Baton Rouge, Grosse Teto, and Opelousas railroad in 1855, and purchased by him in 1872, which with their coupons ho desires to fund in tho consolidated bonds of the State. Tho exchange is to bo made at tho rate of sixty cents on tho dollar, under the funding act of 1874. To accomplish this he applied to the defendant. *265who refused to fund them, alleging that the act of May 17. 1875, had prohibited it until tho Supreme Court of this State had so ordered. Thereupon the relator took this proceeding by mandamus to compel tho defendant to exchange his bonds and coupons for the consolidated bonds of the State.

The defendant met tho alternativo writ with a denial that relator was in a situation which authorized him to require that his bonds bo funded, and for this: that the act of 1875 expressly prohibits tlie defendant from issuing any bonds in exchange for outstanding bonds or warrants of dato anterior to January 24,1874, the legality of which has been or shall hereafter be questioned, until said bonds or warrants shall have been declared by tho Supreme Court of this State legal and valid obligations against the State, and that they were issued in strict conformity to law, and not in violation of tho State and Federal constitutions, and for a valid consideration. Acts 1875, p. 110.

The same act proceeds to declare “ questioned and doubtful as to their legality and validity” certain enumerated bonds, among which are thirty thousand dollars of bonds of tho kind held by the relator, and tho Board of Liquidation is prohibited from issuing bonds, authorized by the funding act, in exchange for tho bonds thus enumerated until their legality, validity, and consideration have been tested under the provisions of the act and a final decree rendered thereon. Tho relator must therefore obtain from this tribunal a final decree establishing tho legality and validity of his bonds before lie can properly demand of the defendant that they be funded, and until he has obtained such decree he is not entitled to the writ Of mandamus to compel tho defendant to do that which it is not his duty to do before a final decree of this court is exhibited to him declaring such funding to be his ditty.

Tlie answer of the defendant also denies that relator’s bonds form any portion of tho floating debt, or of tho valid outstanding bonds, within the -meaning of tho supplemental funding act, and alleged that they did not pass from the possession of the State lawfully, and that the State did not receive any valid consideration for them.

It is manifest that the issue thus tendered is of higher dignity than a mere question of practice. It strikes at the root of the power of tlie Board of Liquidation to fund certain enumerated bonds, or classes of bonds, and the whole scope of that power, its original range and extent, and its subsequent limitation, come necessarily under review in order ■to determine the rights of relator in the present proceeding.

The funding act (acts 1874, p. 39) was a confession of bankruptcy on the part of tho State. It provided for tho exchange of all valid outstanding bonds of tho State; and all valid warrants drawn previous to its enactment, with certain exceptions, for consolidated bonds at the *266rato oí sixty cents in the latter for one dollar of tlio former. To effect this exchange, a Board of liquidators was constituted, whose duty was to receive the old bonds and warrants and issue tho new bonds, and in ease of the rejection of any bond or warrant by this board and its refusal to make tho exchange tho holder of tho bond or warrant thus rejected might apply by petition to tho proper court for relief, and if final judgment should bo rendered in his favor against tlio board, then it shall-lie its duty to fund tho bond or war-rant thus offered.

• The supplemental act, enacted tho following year, separated certain bonds ironi the general mass of the State obligations, and put them under suspicion. It enumerated them, in aggregate over fourteen millions, and declared their legality and validity questionable, and prohibited the Board of Liquidation from exchanging them until their validity shall bo tested in the manner pointed out by the act, and prescribed that the solo convincing and determinativo test should bo a final decree of tins tribunal declaring them to ho legal and valid obligations of the State, and that they were issued in strict conformity to law, and not in violation of the constitution of this State or of the United States, and for a valid consideration.

In order to enlarge this facility for testing the validity of any bond enumerated in tlio proscribed list, permission was given to any person assessed for State taxes to institute suit in liis own name, or to intervene in any suit instituted by another, against tho Board of Liquidation and prosecute it to a final termination; and any holder of braids or warrants whoso validity is questioned in any suit brought under the provisions of this aet may intervene in such suit, tlio final termination of all of them being a decree rendered by tho Supreme Court, without which tlio bond or warrant thus questioned could not bo funded. ■

Tlius it is apparent that the board was not compelled to exchange any bond or warrant that might bo presented under the act of 1874 for a consolidated bond without question. That it had a discretion is obvious from tho provision made Cor tho holder in ease ids braid was rejected; i. e., lie may apply by petition to a proper court for relief, and if final judgment is rendered in his favor, it shall bo the duty of tho board to fund his claim.

But tho act of 1875 deprived the board of this discretion quoad the bonds enumerated in it. So far from imposing upon its members the duty of inquiry touching the validity, or legality, or consideration of these bonds, tho act commanded them to assume that they wore invalid, illegal, and of no consideration, and prohibited them from deciding the question — prohibited them from exchanging the bonds until another designated tribunal had decided it for them.

Under the act of 1874, it is the duty of the board to fund the general *267indebtedness of tlio State, with discretionary power to reject such claims as did not seem proper, and with tho right to the holder to test tho merits of the rejection before a competent court. Under tho act of 1875; it is tho duty of the board to reject the bonds enumerated in it, and the holder of them must himself lift the cloud which that debt declares rests upon them, and vindicate their validity, legality, and good consideration by obtaining- a decroe from tho court of tho last resort in liis favor. That which was the duty of the board to do under the first act is its imperativo duty not to do under tho second.

A mandamus is an order issued in tho name of tho .State, addressed to an individual, or corporation, or court of inferior jurisdiction, directing- the performance of some act belonging to tho placo, duty, or quality 'With which it is clothed. Its object is to prevent a denial of justice, and it should therefore bo issued in all cases where tho law has assigned no relief by the- ordinary means, and even when a party has other means of relief, if the slowness of ordinary legal forms is likely to produce such delay that the public good and the administration of justice will suffer from it. Code of Practice, arts. 829 et sey. Our courts have more extensive power under the Code of Practice in issuing the writ than have those of common-law jurisdiction, but it never issues to compel public officers to do an act -in which they have discretionary power. College vs. Treasurer, 2 La. 395. One of its important and distinctive features is, that it is used merely to compel and coerce the performance' of a pre-existing duty. Wherever there is a clear and specific legal right to be enforced, or a duty which ought to be performed, and there is no other specific and adequate legal remedy, the writ will issue. It is not granted in doubtful eases. To warrant tho relief, the relator must have a clear and legal right to tho performance of a particular act or tho fulfillment of a particular duty at tho hands of the respondent, and this right must be a completo and not merely an inchoate right. High’s Extraordinary Legal Remedies, sections 7, 9,10.

To justify the issuance of tho writ in this, case, tho relator must have a present and perfect right to have, tho bonds presented by him funded, and it must be the respondent’s duty to fund them, a duty tho performance of which is not discretionary on the one hand — a right which is hot inchoate and imperfect on tho other.

Another prerequisite is that the respondent shall have refused to do that which was his duty .to do. It is not sufficient that tho relator has a, specific legal right tobo enforced, but its enforcement must have been obstructed and prevented by tho refusal of the respondent. It is not sufficient that the relator may have a legal duty to perform, but that duty must pre-exist-, and his refusal to-perform it is. the basis of tho, writ, and must be an antecedent fact or act which alone justifies its issuance.

*268• The relator’s bonds were among those enumerated in the act of 1875 as “questioned.” 'The law denounced them as suspect, and imposed upon the board the duty of refusing to fund them. It was not only not its duty to fund them, but its duty was not to fund them. Its only warrant for funding them was the sanction of their validity and legality, attested by a final decree of this court. Until that was imparted to thorn, there was no dereliction of duty by tho board in its refusal to fund the bonds, and nothing but its refusal to do its duty can furnish tho legal occasion for the command to do it.

It is objected that this ruling will compel circuity of action, and will foster multiplicity of suits, which the law abhors, for if tho holder of bonds is driven to his suit against the board to tost their validity, and can not halt until lie has obtained a final decree of this court, he must at last invoke, tlic writ of mandamus to compel the board to fund, and, again, that the validity of the bonds can as well bo inquired into and established by the writ of mandamus as by tlio direct action. But it is not to be assumed that tho board will refuse to do its duty when the bondholder presents that which alone can authorize it to act, viz.: the decree of the Supreme Court. And it must bo assumed that the board will refuse so long as it is its duty to refuse. Tho writ of mandamus is not fitted to ascertain the validity of bonds that arc made doubtful, not by a presumption of law merely, but by an express statutory declaration. Its essence is the enforcement of a right already ascertained, not tho ascertainment of a possible right already declare',d doubtful.

Tho intent of tho supplemental funding act will bo the more apparent if we consider the nature and effect of tho judgment we are now asked to render. It is to make the. mandamus peremptory, 1hat is, to say to the lower court, there was error in your not ordering tho respondent to fund the relator's bonds, although that respondent was never obliged to fund them until this decree is exhibited to him. Tlic essential prerequisite to tho respondent’s funding them is tiro decree now rendered upon his refusal to fund them. Not until tho final decroe of this court pronounces the validity of the bonds is his refusal a dereliction of duty, but we are asked to declare their validity, and in tho same breath to reverse the judgment of the lower court as being wrong, when tho only thing that could justify it in rendering a different judgment would be tho exhibition of our decree, now for tho first timo rendered. That decree is one of the ingredients, an essential ingredient, of the relator’s cause of action, but it is not supplied until tho action terminates. It should have been a germ that developed into life, and gave vitality to a right until then only in embryo. - By this construction, tho decree terminates tho existence of the action, though without it tlio - action could not have lived.

The final decree of this court was a necessary preliminary to the *269relator’s demand of the board to fund his bonds. The refusal to obey that decree was a necessary preliminary to the issuance of the mandamus to the respondent. The case lacks both, and therefore

It is ordered, adjudged, and decreed that the judgment of the lower court refusing the mandamus is affirmed with costs.