ERROR to the Circuit Court of the United States for the District of Louisiana.
This was an action commenced Feb. 7, 1874, by Freeman Clark against the Jefferson City Gas-light Company and the city of Carrollton, La., to recover $7,200, the amount of overdue interest coupons cut from certain bonds issued by said city to that company.
On the 11th of January, 1871, the mayor and council of the city of Carrollton passed an ordinance authorizing the mayor to enter into a contract with that company to light the city and supply the citizens with gas-light, and providing that, in consideration of the execution of the contract by the company within a specified time, 'the city of Carrollton, through the mayor, shall provide and issue forty-five $1,000 bonds of the city of Carrollton, payable in thirty years, with interest at eight per cent, payable semiannually to the order of the said Gas-light Company: Provided, the said company shall guarantee the said bonds, and assume the payment of the principal thereof at maturity; And provided further, that if at the maturity the said company shall fail to pay said bonds, then the said city shall pay the same, and become the owner of all the gas-works, main-pipes, posts, &c., then lying and being within the present limits of the city of Carrollton.
'That the treasurer of the city of Carrollton shall specially appropriate and set aside in lawful money, every month, such amount or proportion of the taxes and dues of said city as shall be necessary to meet the interest on said bonds and such gas-bills as may accrue against said city; and that the mayor in said act shall be authorized to make such other agreements, not inconsistent herewith, as may be necessary to carry out the purposes of the ordinance, and make the said contract legal and conclusive on both parties thereto.'
A contract embracing the terms and stipulations of the ordinance was entered into between the mayor and the company; and the latter, having complied therewith, received the bonds, with coupons for interest attached.
The bonds and coupons were in the following form:--
'No. 1.] CITY OF CARROLLTON. [$1,000.
'A.] State of Louisiana. [No. 1.
'Know all men by these presents, that the city of Carrollton will pay to the Jefferson City Gas-light Company, or order, the sum of $1,000, in current money of the United States, in thirty years from the date thereof, with interest at the rate of eight per cent per annum, payable semiannually on the first day of January and first day of July of each year, at the office of the city treasurer, on the delivery of interest coupon attached to said bond. For the payment of the principal and accruing interest on this bond the faith and credit of the city of Carrollton is pledged, as set forth in the ordinance printed on the reverse hereof, passed and approved Jan. 11, 1871.
'In testimony whereof, the seal of the city of Carrollton is hereto affixed, and the signatures of the mayor, controller, and treasurer appended in writing on the first day of July, 1871.
[SEAL.] 'T. A. MARTIN, Controller.
'FREDERICK KERN, Treasurer.
'D. M. BISBEE, Mayor.
(Written across the face:) 'The Jefferson City Gas-light Company guarantee the payment of the principal and interest on this bond to the holder thereof.
'JOHN LOCKWOOD, President."$40.]
COUPON.
'The city of Carrollton will pay to bearer forty dollars at the office of the city treasurer, being six months' interest due July 1, 1874, on bond No. 1, for one thousand dollars.
'A.
FREDERICK KERN, Treasurer.'
An act of the legislature of Louisiana, passed Feb. 12, 1872, empowered the mayor and city council of the city of Carrollton to ordain, establish, and cause to be carried into effect and execution, all such by-laws, ordinances, resolutions, rules, and regulations as they might deem expedient for the good government of said corporation which are not contrary to the Constitution and laws of the State or the United States. They were also authorized and empowered to fund the outstanding debts and obligations of the city created for wharves, streets, gas, and other improvements of said city, by issuing its bonds in such sums as they might deem advisable, running for thirty years, with interest at eight per cent payable semiannually: Provided, that any ordinance for the issue of bonds should provide for the payment of their principal and interest by levying such annual tax as would raise a sufficient sum to pay the interest of said bonds as the same might come due, and should create a sufficient sinking fund to meet the principal at maturity.