Arizona republican., 1895-07-28
STOP THE DEAL. The Validity Of the M. 6 P. Railroad Bonds Brought Into Question
 Yesterday. An Injunction Suit to Prevent
 Their Payment.
 
The Bonds Having Been Converted Into Funding Bonds Are in
 the East For Sale.

A suit of more than unusual moment was filed in district court yesterday by Judge Woodward, acting for s. c. Heineman of Tempe. The defendants are Territorial Auditor Leitch, H. 0. Boone, H. c. Underwood and Morris Goldwater, members of the territorial board of equalization P. J. Cole, terri torial treasurer; J. T. Priest, W. M. Standage and ". L. George, members of the board of sup evisors I. N. Cox, clerk of the board and D. L. Murray, county treasurer The suit is an ap- plication for an injunction against paw ment of or any further recognition by them of the validity of the Mar icopa & Phoenix railroad bonds. These bonds were issued by the then board of super visors of Maricopa county on April 3, 1885, under the provisions of an act of the Thirteenth legislature. entitled Gan act to aid in the construction of cer- tain railroad between the city of PhG- nix and the Southern Pacific railroad" There were 200 of these bonds of the de- nomination of $1,000 each bearing seven per cent interest, and due thirty years from the date of issue.
 Then there came the loan commission und CT the funding act. This commls sion took up, paid and cancelled l9S of the bonds. $19S ,0O0 amounting with in. terest to $2O9 $50. There were then is sued in place of the bonds so cancelled, funding bonds of the denomlnation Of $l ,0C0, from Nos. l5i 70 4Ga inclusive. The county thus became indebted to the territory to the sum of $2I0,000 bearing interest at five per cent.
 It is alleged in the complaint that the legislature was without power to au- thorize the issue of those railroad bonds that the restrictions imposed by congress for bade it, that therefore the bonds were void and constituted no in- debtedness.
 The plaintiff sues as a resident, tax payer and owner Of real estate, in be- half of himself and the other taxpayers of the county. He asks that the de- fendants be emporarily restrained from the levying of tax for the payment of any part of the prin- cipal and intere and from the collection of taxes for the same purpose and from the paying of the money of the county OF of the territory to any person for or on account of such 1 bonds or attached coupons. The con- p!aint closes with prayer that the in- junction upon a final hearing shall be made permanent.
 | It is Hnderstood that Territorial Trea- surer Cole is now in the east for the purpose of disposing of the funding bonds issued in lieu of the original rail- road bonds. The immediate object of the suit is to arrest negotiations for their sale.
 The legislative power to confer authority upon boards of supervis- ors to issue bonds in aid of private enterprises in territories has been questioned before. It was held in the first judicial district that bonds is- sued under precisely the same author ity were invalid, and lawyers seen yes terday regarding this suit were general ly of the opinion that the Thirteenth legislature went bey yond it's depth ID that famous act No. 47.
 The first district case was brought by London capitalist, holder of bonds of the Tucson and Globe road. against Pima county, to compel the payment oi interest. Judge Sloan decided that the bonds were invalid and similar view was taken by the supreme court of the territory, and six months ago lts decision was affirmed by the supreme court of the United States.
 The finding of the lower courts, how ever, was affected by the circumstance that no equivalent was given in return for the bonds, and none was really intended to be given. The grading oi the road began and the roadbed wal carried out across the desert and tht end of it WAS dropped at the foot of z mesquite tree. It is there yet.
 No adverse decision though can affect the M. & F.. the beneficiary of the act of the thirteenth legislature It has obtained the benefit, ane even the bonds have gone out O existence. Whether or not their sue cessors, the territorial bonds, may bt affected by the suit is said by lawy err to be close question.