The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1892-04-28
VALIDITY OF BONDS.
ALI Accepted Except $1S5,O0O
Funding Bonds.
REASON FOR THEIR REJECTION.
City Council to Consider the Matter
Library Management to BE In
CURED Into-Janitor BIZ.

qufred Into-Janitor Bill.
It has been decided by Blair & Co.,
New York. on the advice of their counsel,
that all the bonds voted for at the recent
election are valid except the issue of $l35..
900, known as the funding bonds. The
following correspondence was received
Yesterday by City Clerk Stoneman, and
gives the reasons for their conclusions.
The first letter is from Blair & Co., bank.
ers, SO Wall street, New York:
We have wired you today to kindly SEND us
sthdavit OF the publication OF the election
notice in the Press Times, together with the copy
Of the notice. We have received today the
opinion OF our attorneys approving each separate
Issue of the bonds covered by our purchase,
with the single exception OF the $l35,000 fund.
ing bonds of 1892 Their unqualified opinion is
conditional only upon the amount of indebted
ness existing at the time OF the delivery of the
bonds to US not being in excess of the legal
lmits
We submitted the legal papers both to Judge
John F. Dillon, our attorney, to Messrs. Storey &
Thorndike, the attorneys of our associates, and
70 Messrs. Brewster. Cobb Estabrook.
In regard to the Seattle funding bonds of 1892
Judge Dillon writes us - follows:
On the papers before me am not satified tn at
these bonds would be valid, for the reason that
neither the validating ordinance nor the ordi-
nance authorizing the issue OF the bonds for this
purpose was submitted to the voters OF the an
nexed district, to-wit. the Ninth ward. / find
an act in the session laws of 1ss9-s0, page 2S6 to
the effect that no property within annexed terri
tory shall ever be taxed to pay any portion OF
the indebtedness of such corporation contracted
prior to or existing at the date OF such annexa-
ton The diffieulty is that these warrants were
N lob At fhe
OF such annexation. Another difficulty Is that
the act OF March Z, 1891, which alone authorizes
the valuation OF such warrants, distinctly pro-
yides that 1t shall have the sanction of three
nfths OF the voters in such city. To say the
least, this presents question OF doubtful con-
st.uction and result
weherewith submit copy Of the opinion OF
Messrs. Storey Thorndike on this same issue
and you will notice that each OF them, without
any knowledge OF the position tAken by the
other, has reached the same decision. 1t will be
necessary, therefore, that this issue be legaized
by the supreme court of the state o. Washington
felse such steps be taken in accordance with
their instructions as will make the issue q legal
and binding obligation. 1t was our ambition
that the legality of all the issues should be es-
tablished without any delays and without re-
course to the courts, and we are extremely graft
fed that we can carry out at once the full spirit
Of our contract on so large portion of the loan.
The blanks will go forward on Saturday, and
q soon as received, we would thank you to have
the matter OF execution given prompt atten-
ton, Tor we stand ready to receive and pay for
the bonds in accordance with the terms of our
contract.
We presume that your city attorney can at
once take steps to have the suit brought in the
courts covering the $4,000 funding bonds.
Trusting that you will give this matter your
usual courteous attention, we remain, etc.
BLAIR q Co.
The enclosure is from Storey & Thorn
dixie, Of Boston, to Brewster, Cobb e. Esta-
brook, of the same place. and is as follows:
We have examined the papers you submitted
Q us relating to the issue by the city Of Seattle
wssh, OF $lS5,00o per cent. funding bonds Of
~, dated April /, 1892, and we meet with one
aincuity that we are unable to overcome.
The constitution OF the state requires for the
Issue of these bonds the assent of three-ffths of
the voters. The ordinance, No. 1867, submit
hng the question to the voters provided (section
y that the election should not be held in any of
the voting precincts of the Ninth ward and &C.
eordingly 1t appears to have been held only in
the other wards, and not in the whole city. The
reason given for not submitting the
question to all the electors in the city
. that the Ninth ward was annexed to the city
aiter the indebtedness to be funded was In
cured, and the act under which 1t was an
ncxed provides that 1t shall never be taxed for
the purpose of paying any OF the previous in
oebtedness OF the city. This does not seem to
Us to be sufficient reason for not submitting the
question to the voters as required by the consdt-
tution The bonds to be issued are the bonds of
the city. and, although it may not b possible to
tax the Ninth ward on account of the indebted
ness. yet the property of the city In which that
ward is interested is liable for their payment
At all events the provision OF the constitution
does not make an exception in such a case and
the requirement has not been complied with
We find the same difficulty with the vote of the
electors upon the proposition to validate the
warrants which are to be funded by this loan
In other respects the proceedings for the issue
OF the bonds appear TO have been regular and
would authori re the issue of bonds pro-
vided that the legal Ii init of Indebtedness Is not
exceeded
George Donworth, corporation counsel,
when asked what he considered to be the
effect of the opinions expressed by Judge
Dillon and the other attorneys for the
bond purchasers, replied as follows:
The whole bond issue, aside from the one
hundred and thirty-ive thousand (s135 900
Of funding bonds has been held good by the
ieea advisers of the bond buyers, so that there
WIZ be no further question about them. They
OBJECT, however, to the issue known as "Seattle
FUNDING Bonds" on the ground that the ratifica-
uon OF the Indebtedness TO be funded was not
voted upon by the voters of the whole city.
The facts In the case were these: The war
rants now undertaken to be funded were issued
IN The year 1890, before the annexation OF the
district known as the Ninth ward. At the time
tae warrants were issued they were invalid by
reason OF the fact that the approval of the voters
was needed at that time for the creation of any
Indebtedness whatever on the part OF the city.
consequently the warrants could not have been
enlofeed and were wholly Intellectual as an obli-
CATION OF the city. In March. 1891, an act was
passed authorizing cities to submit to the voters
thereof the question of the ratification OF Illegal
warrants where the only ground of Illegally
was me want OF prior assent of the voters there
W Alter the passage OF the act, on June l, 1891,
we Ninth ward was annexed to the city
was assumed by the old city council, in ar
ranging for this bond issue, that as the Ninth
ward was not in the city at the time the war
rants were issued, the voters thereof could not
oe taxed for the warrants or bonds TO be based
upon them, consequently they had no voice in
'neif ratification. 1t is here that the question
arises question almost identical with this
was passed upon by the supreme court about
month ago in the case OF DeMattos va the city
OF New Whatcom. That city had taken the
SAME view of the law in regard to ratifylng
Prior Indebtedness as WAS taken in regard 10
uese oonos by Tue OLD city council The only
point OF distinction between the New whatcom
ease and ours Is that New whatcom was formed
by consolidation OF two existing municipal.
ties; whereas, with US It was the annexation of
unorganized territory to ali existing city
The supreme court decided in that case that
the submission of such question to the voters
OF part of the city was imperative, even
though that part constituted tho whole OF the
former city whose Indebtedness was to be rati-
fed. II is worthy of note that the decision in
the New whatcom case had not reached the