UNITED STATES SUPREME COURT DECISIONS ON-LINE

The decree heretofore entered upon the mandate of this Court, 175 U. S. 175 U.S. 120, permitted of no distinction being made between drainage warrants issued for the purchase of the dredging plant of the Mexican Gulf Ship Canal Company and such as were issued in the purchase of the franchises and in settlement of the claim for damages urged by the Canal Company and Van Norden against the City of New Orleans.

There was no error in permitting all parties holding drainage warrants of the same class to come in and prove their claims without formal intervention or special leave, though the validity of such warrants in the hands of their holders might be examined except so far as such validity had been already settled by the decree.

Warrants to the amount of twenty thousand dollars issued for drainage funds collected by the city and misapplied and appropriated to the general funds of the city were also properly allowed.

This was a writ of certiorari to review a decree of the court of appeals, rendered May 1, 1900, affirming a decree of the Circuit Court for the Eastern District of Louisiana, rendered March 26, 1900, which overruled certain exceptions of the defendant, the City of New Orleans, to a master's report upon the amounts due under a decree rendered by the court of appeals May 7, 1898, and affirmed by this Court January 15, 1900. 175 U. S. 175 U.S. 120.

The decree of the circuit court of appeals, affirmed by this Court, contained the following paragraphs:

1. That the City of New Orleans was indebted to John G. clubjuris

Page 180 U. S. 200

Warner in the sum of $6,000, with interest, and that he was entitled to be paid such sum out of the drainage assessments set forth in the bill.

2. That such drainage assessments constituted a trust fund in the hands of the city for the purpose of paying the claims of the complainant and holders of the same class of warrants issued under the act of sale from Warner Van Norden, transferee, to said city under authority of Act No. 16 of the Legislature of Louisiana, approved February 24, 1876.

3. That it be referred to a master to take and state an account of all said drainage assessments, that warrant holders be entitled to establish their claims before the master without formal interventions or special leave of the court, and that, upon the coming in of his report, complainant and other claimants would be entitled to an absolute decree for the amounts due them if the fund established by the accounting be sufficient, but if not sufficient to pay such claims in full, then for the proper pro rata thereof, etc. The other provisions of the decree are immaterial.

Upon this reference, warrants to the amount of $316,000, of a total of $320,000 ($4,000 having been paid), were presented by different parties, including Warner, and the master found: (1) that all these warrants were

"issued to Warner Van Norden, transferee of the Mexican Gulf Ship Canal Company by the defendant, the City of New Orleans in payment of the consideration of the agreement and contract of sale between himself and said city, by act [of sale]. . . dated June 7, 1876, as in said act specified, pursuant to the authority of the act of the Legislature of Louisiana No. 16, dated February 24, 1876, as set forth in the complainant's bill, etc.; . . . that each of said warrants was indorsed in blank by Warner Van Norden, transferee, to whose order they were made payable, and delivered to said claimants, or other parties through whom they have acquired title, and that the said Van Norden has since . . . formally transferred to the complainant, and to all holders of warrants who might intervene in this cause, any and all interest he ever had in said warrants, and subrogated them to all his rights of actions and remedies against the defendant appertaining to the same. "

Page 180 U. S. 201

Exceptions were filed to this report upon the ground: (1) that the advantages of the decree extended only to such warrants as were issued in payment of the property purchased by the act of sale, which said property, as shown by the inventory and appraisement of T. S. Hardee, City Surveyor, amounted to $153,750;

"that the balance of drainage warrants issued under said act were not in payment of the price of the property thereby sold, and hence were not purchase warrants in the sense of the opinions and decrees of the circuit court of appeals and of the supreme court herein; that such balance of said warrants was issued in settlement of a claim for damages urged by the Mississippi & Mexican Gulf Ship Canal Company and Warner Van Norden against the City of New Orleans;"

(2)

"that of said warrants the sum of $20,000 were issued, as will appear by the express terms of the act, in payment of work which had been done by said Van Norden -- that is, digging canals and building levees which, at the time of the passage of said act, had not been surveyed or measured by the city surveyor, and hence that as to these warrants there could be no recovery or allowance made."

In a supplemental report upon these exceptions, the master found that the city issued warrants Nos. 313 to 392 inclusive, in discharge of the consideration of the agreement of sale passed before Le Gardeur, notary public, amounting to $300,000, and also issued warrants Nos. 393 to 402 inclusive, aggregating $20,000, not for work, but as a compromise for drainage taxes collected and misappropriated, as stated in the said act of sale.