The herald., 1896-04-10
REFUND[RS KNOCKED OUT
THE SUPREME COURT FINALLY RENDERS
A DECISION
Only MesEer Advices Received From San
Francisco, but the Result Is Announced
Officially In Telegram From Trowbridge
II. Ward-fiistorv of the Litigation


The refunding bonds have been de-
clared by the state supreme court to be
invalid. and the city treasury is in a
worse condition than ever before.
A telegram was received by Presi-
dent Freeman G. Teed of the city coun-
Gil from the clerk of the supreme court
yesterday, reading as follows:
City vs. Teed, demurrer sustained
and writ dismissed
This dispatch announces the deci-
sion of the supreme court upon the long
penring case, upon the outcome of
city's issuing sS60,000 worth of refund
ing bonds of the city. On the 21st day
of March, 1895, the council submitted to
the people the question of refunding the
bonds of the city of Los Angeles,
which were carrying a larger rate of iii-
terest than the city council believed the
same Indebtedness could be carried
for. The people sanctioned the issu
ance of the bonds, and in accordance
with the instructions of the council the
city clerk advertised for proposals to be
received on Monday, April 22d, 1895,
for the purchase of 1896, 900 worth of
bonds, drawing interest at the rate of
Az per cent per annum; one fortieth OF
the principal to be due and payable
each year. The said bonds were to be
dated on the first day of May. 1895.
The funds derived from the sale of
these bonds were intended to pay the
following bonded Indebtedness of the
city:
$4,000 of funded debt bonds of 1870,
due August 1st, 1895.
$17, 900 of Main sewer bonds of 1877,
due July 1st 1901.
s5S,O0D of funding bonds of 1881, due
July 1st 1901.
s15o.ooo Of general improvement
bonds of 1sS6.due July 1st, 1905.
$4,000 of the same of 1887, due July
1st, 1907.
$4,000 of the same of 1883, due Janu-
ary 1st, 1898.
In accordance with the advertise
ment calling for proposals, a large num-
Der was received, the highest, of which
was that of Street. Wyckes & Co. of
New York, who offered premium of
$20,394 for the bonds, but as in the case
of all other bidders, made the accept
ance of the bonds subject to the ap-
proval of their attorneys as to the va
lidity of the issue.
Upon submitting certified copies of
all the proceedings leading up to the is
suance Of these bonds. Boston firm of
attorneys declined to approve them, not
because the proceedings were irregular,
but upon the ground that municipal
corporation was not authorized to re-
fund it's debt for a period longer than
the time for which the original debt
was to run.
After considerable correspondence
upon this matter City Attorney Dunn
was sent to New York by the council
to personally interview the attorneys
upon the matter as well as to obtain an
opinion upon other bonds which the city
had authorized to be issued. An opin-
ion was received from Judge John F..
Dillon of New York city in which he
stated that while in his opinion the
proposed renewal did not conflict with
the constitutional provisions, he never
theless regarded the question as suff1-
| GENTLY serious to make 1t eXped1ent TO
| obtain the opinion of the supreme court
| of the state upon the subject before the
| bonds were issued.
Upon this opinion as basis, the coun-
| Gil again advertised for proposals to be
| received upon the Gath day of JYne,
| 1895, but requiring unconditional bids
| based upon the opinion of Judge Dillon.
| No such proposals were received, and
in order to settle the question the presi-
dent of the council, who is required by
law to attach his signature to the
bonds, refused to do so and the city
commenced an action to compel him to
attach his signature. This case mas
been pending in the supreme court for
a long time and the dispatch from Su-
preme Court Clerk Ward announces the
decision. Upon what points the decis-
ion is based has not yet been learned,
but sufficient information is at hand to
authorize the statement that no fur
ther effort will be made to float the
so-called funding bonds.
The city council in it's last levy for
municipal taxes made the provision for
the raising of the required amount OF
funds to pay these bonds as they be-
came due in case an adverse decision
was given by the supreme court. These
moneys are now on hand SO that no en-
barrassment will occur in this regard,
and as fast as the bonds become due
they will be paid and the credit of the
city will in no way be affected by the
adverse decision above rendered yester
day at San Francisco.
CONTRACTS FOR SEWER WORK
The sewer committee yesterday acted
upon the following:
In the matter of proposals to sewer
Breed street, recommend the bid of c.
l.. Powell for 10 cents per lineal foot for
the sewer complete, be accepted, and
the necessary resolution Of award be
adopted.
In the matter of proposals to sewer
Seventh street, recommend that the bid
of John F. Smith at rs cents per lineal
foot for the sewer complete, be accepted,
and the necessary resolution of award
adopted.
In the matter of proposals to sewer
Fifth street from San Pedro street to
Crocker street. recommend that the bid
of A. p Pusck. for $1.G2 per lineal foot
for sewer complete, be accepted and the
necessary resolution of award adopted.
In the matter of proposals to sewer
Pico and other streets, recommend that
the bid of c. l.. Powell, at " cents per
lineal foot for the sewer complete be
accepted, and the necessary resolution
of award be adopted.
In the matter of proposals to sewer
Fifth street from Wolfskill avenue to
Crocker street, recommend that the bid
of George Banaz, for 80 cents per lineal
foot for sewer complete. be accepted,
and the necessary resolution of award