ERROR to the Supreme Court of the State of Louisiana. The facts are stated in the opinion of the court.
The opinion of the court was delivered by: Mr. Justice Miller delivered the opinion of the court.
Mr. Simon Sterne and Mr. George W. Biddle, with whom were Mr. A. Sydney Biddle and Mr. James Lowndes, for the plaintiff in error.
Mr. Gustave A. Breaux and Mr. James Lingan for the defendant in error.
A suit was brought by the Attorney-General of Louisiana in the name of the State, in the Superior Court of the District for the Parish of New Orleans against Charles Clinton, State auditor, and Antoine Dubuclet, State treasurer. The petition enumerated a great number of claims against the State which it declared to be illegal and void, and which it was feared the auditor would allow, and the treasurer pay, against which action the petition prayed for an injunction. Among these claims, the only one which demands our attention was one for $2,500,000 of State bonds issued under the act of the legislature ture of April 20, 1871, entitled 'An Act to relieve the State from its obligation to guarantee the second-mortgage bonds of the New Orleans, Mobile, and Chattanooga Railroad Company.' While there were several grounds of objection stated in the petition, the only one which concerns us is the allegation that the issue of these bonds was an an attempt to create a debt of $2,500,000, when the limit to the State debt of $25,000,000, as fixed by the amendment to the State Constitution of 1870, had already been exceeded. In this suit the New Orleans, Mobile, and Texas Railroad Company, successors to the New Orleans, Mobile, and Chattanooga Railroad Company intervened, and the temporaty injunction was dissolved.
On appeal to the Supreme Court the order dissolving the injunction was reversed, and when the case came back to the court of original jurisdiction for further proceedings, Williams and Guion were permitted to intervene for their interest as holders of three of the bonds of $1,000 each, the payment of which was sought to be enjoined in the suit.
The Superior Court decreed the bonds to be void, and perpetually enjoined the treasurer from paying them on their interest coupons, and on appeal to the, Supreme Court that decree was affirmed. It is this final judgment of the Supreme Court of the State that the present writ of error sued out by Williams and Guion seeks to review.
The reason why the State court held these bonds void is that by an amendment of the Constitution of the State, adopted in 1870, no debt should be thereafter created which, added to the debt of the State then existing, would swell the total amount above $25,000,000; and that amount had been reached before the issue of the bonds in question and before the act of the legislature under which they were issued had been passed.
Counsel for defendants in error insist that the writ of error should be dismissed for want of jurisdiction.
They say that the suit is one in the courts of their own State, to which the State itself is a party plaintiff, against its own officers, and the decision rested entirely on the construction of the Constitution and laws of the State, and that no question of Federal law is involved in it. If this be strictly true, their contention should be sustained.
In answer to this, it is said that the bonds held by the intervenors were founded on an obligation which existed prior to the constitutional amendment, and did not, therefore, add to the debt which existed when that amendment was adopted. This is denied by the counsel for the State, and upon the solution of this question the whole case depends, both as to its merits and as to the jurisdiction of this court. For it is insisted by plaintiffs in error that if their contract existed in effect before the amendment, the amendment as construed by the State court impairs the obligation of that contract, and this court can review that question; while if the bonds constitute a new and independent contract, the constitutional provision was properly applied to them and the judgment is right. As this is the question we are to decide, and as it was raised and insisted on by the plaintiffs in error in the court below, we think this court has jurisdiction.
The bonds in question were, as we have already said, issued under an act of the Louisiana legislature, approved April 20, 1871, which was after the constitutional amendment had become come operative. That amendment, which went into effect in December, 1870, declares 'that prior to the first day of January, 1890, the State debt shall not be so increased as to exceed twenty-flve millions of dollars.'
That the State debt already exceeded that sum when the bonds were issued, and, indeed, when the act was passed under which they were so issued, is not denied. But, as already stated, the effect attributed to these facts is denied, on the ground that they were issued in lieu of and in extinguih ment of an obligation of the State existing when the constitutional amendment was adopted.
To determine the soundness of this proposition, it is necessary to examine the statute which authorized their issue, and the nature of the supposed obligation on which the later transaction is said to be founded. The statute reads as follows, and is here given in full:––
'An Act to relieve the State from its obligation to guarantee the second-mortgage bonds of the New Orleans, Mobile, and Chattanooga Railroad Company, under an act of the General Assembly approved February 21, 1870, by subscription on the part of the State to the capital stock of said corporation, and to regulate the conditions of such subscription, and to ...