Sacramento daily record-union., 1882-01-28
LOCAL INTELLIGENCE.
THE CITY SUED.

An action has been brought in the United
States Circuit Court of the Ninth District
of California, BY Theodore Leroy, an alien,
against the city Of Sacramento, to recover
SO. .75S for pas. due coupons upon the bonds
OF the funded debt of the city, with interest
on about oue.fourth of the amount sued for
from January l, 1873. Whether this is a
claim for legal interest, or at the rate ex-
pressed in the bonds from which the coupons
are cut. is not clear from the papers which
were served yesterday on Mayor Brown
The suit is for inteTest-one fourth from 1873,
onefousth from 1879, one-fourth from 1880
aad the remaining one-fourth from 1881
The amount of bonds LeRoy represents
is between S45 600 and SAG 600. There are
two Issues involved in this action by LIE Roy
He has not sued upon any coupons barred
by the statute Of limitations /; that is, none
were sued upon that were due prior to 1878
1t is settled, IN the opinion of competent
authority, that detached coupons are barred
by the statute according to the terms thereof,
to wit, in four years in California. This
opinion is based ON a decision OF the Supreme
Court of ,he United States reported in 20th
Wallace Reps.
The second issue is as to whether detached
coupons. after becoming due, bear interest.
There is q decision, or a dic5uIn at least, of
the Suprt ms Court of the United States,
that they do bear interest. That matter is
one of great Importance to this city. If it is
so finally held, this city viii have to pay, on
an average, two and a haf years interest
upon about $500 900 worth of coupons out.
standing and not in the hands of the Fund
Commissioners of the city.
Hha y,~assr,t ettfE - farasurued to he a test of
these two issues. 1t is known that there are
a number of other suits brought, but service
has not been made except in this case It
was understood over year ago that these
claims we're to be sued upon as matter of
precaution, and 60 hold the city to its agree
ment made over year ago that 1t would pay
one years interest on the bonds In June OF
each year, in which case the suits were not TO
be pressed. In June of last year the city
paid the coupons falling due in 1877. 1t is
now to be apprehendsd that as this suit has
been pressed, the others may be also. 1t is
the opinion of the Commissioners that this
trouble would not have come about, and that
no suits would have been pushed, had it not
bsen for the threats made in certain quarters
that the city Inight, or could, or should, In
effect, repudiate the whole debt-this idea, it
believed by the Commissioners, operated upon
the bondholders, with the result now stated.
1t is doubtful, according to some authorities,
whether this suit can be maintained Ia the
United States Courts but there seems to be
no doubt that a suit may be maintained
against the city to compel payment of inter
est. The present is simple action against
the city for the money due. There is
clause il the funding law under which the
debt OF the city was funded, providing how
the money shall be collected to pay these
coupons and also providing that no suit or
attachment shall ever be brought against
the city to enforce the payment of the cou-
pons. Il msy be (but it is doubt
full, that the present action, in the
face of that law, cannot he maintained
In the United States Court. But it is the
opinion Of lawyers that there is no question
but that an appropriate proceeding might be
had in a proper Court to compel the City
Trustees to do their duty in the performance
of their part Of the contract to wit, the col
lection and payment OF a specific tax, which
the Act itself points out, and declares shall be
set apart for the payment of these coupons.
For year past the city has kept this con-
tract, except in one small particular, and
which is of so little Importance that the cred
itors do not complain of it; that is, the
money from the water-works is not set apart,
as the creditors claim, in the amount required
by the law. II is surmised that the reason
the actions referred TO having been brought,
and the present one pushed, is found in the
fear of the creditors that the city might, under
renewed importunities, be induced the coming
spring to repudiste the arrangement made
last year regarding the payment of the cou-
pOns of lSIS-as 1t might do.