The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1900-03-20
MUST PAY THE BONDS
Trouble for Ellsworth Over Bonds for
q II Grounds.

Trouble for Ellsworth Over Bonds for
&. A, IL. Grounds.
Judge Hook, in the federal court, has
handed down an opinion in the case OF
Charles B. Masslich against the city of
Ellsworth. This was an action brought
on funding bonds Of the city issued to
refund the original bonds TO purchase the
permanent Grand Army reunion grounds
at Ellsworth. Judge Hook gave judg-
ment for the bondholders. Messrs.
Bentley and Hatfield and ex-Judge Hor-
ton prosecuted the bondholders, while
Ellsworth city was represented by Sena-
tor Ira z. Lloyd and Colonel Charles J.
Evans Of Ellsworth. The following is a
full text Of Judge Hooks opinion in the
case:
This action is brought upon certain
matured coupons taken from series of
refunding bonds issued by the city of
Ellsworth, pursuant to chapter 80 of the
laws Of 1879 of this state, which is COM
monty known as the general refunding
act. The cause is submitted upon the
pleadings and the agreed statement Of
facts. The plaintiff is bona fide holder
for value of the securities in suit and ac-
quired the securities without notice of
any inf1rmity therein except such notice
as he is by law chargeable with by the
recitals in the bonds, the laws of the
state and public records of the city.
Three defenses are urged on behalf of
the city: First, that Indebtedness re-
funded was not a valid and subsisting
obligation of the city; second, that the
city received no part of the proceeds of
the refunding bonds but that they were
paid to certain individuals; third, that
the refunding bonds caused the total in
debtedness of the city to exceed statu-
tory limitation.
All of these questions are properly de-
termined by a consideration of the re-
citals of the bonds in connection with
the laws of the state. 1t is recited upon
the fact Of the bonds that they were is
sued for the purpose of refunding GER
tain outstanding legal and subsisting in
debtedness of the city which was matured
and maturing; also that they were Is
sued under and by authority of and in
accordance with the provisions of the re-
funding act; also that all acts, conditions
and things required to be done precedent
TO and in the issuing of the bonds have
been properly done, happened and per-
formed in regular and due form as re-
quired by law. The refunding act, pur-
suant to which the bonds were issued,
does not require to be kept any public
record, showing the existing indebted
ness of city about to act Hereunder.
nor does it designate or specify any such
record so that a purchaser of any such
bonds could thereby ascertain the amount
Of Of ha ftri-
pality Whatever requirements are made
in this particular, that is to say, as TO
the keeping of records showing the
amount of such existing Indebtedness are
made by other legislative acts Of the state
Of Kansas. No constitutional limitation
upon the mourning of Indebtedness IS
urged by the city.
Two principles Of law are announced
by the circuit court of appeals of this
circuit in a very recent decision, which
are decisive of the controversies OF this
cause. They, are. first, that a recital
upon the fact Of bond by the proper Of
ficials of municipal or quasi municipal
corporation who are charged by law with
the duty OF passing upon the question
whether or. not the conditions and re-
quirements precedent to the issue of
bonds have been compiled with, eStop the
corporation from an assertion TO the con-
trary as az INST ninnocent purchaser
of such bonds for value. II is not meant
by this that an erroneous recitation can
supply lack Of power 10 issue bonds or
estop CITY or county from asserting an
absence Of legislative power, but If the
power IS cuce given, tnst ii may estop
the corporation TO deny the observance
Of precedent conditions or limitations upon
theexerciso of such power. Second. .hat
where thee IS a limitation upon the
amount o. ths Indebtedness which nu-
nitcipal CT quasi municipal corporation /
may incu-. and it IS sought 10 charge
the bondhoider with notice q rae amount
OF such Il seotedness as shown By public /
records. such records mGst be required
to be kept or they must - designated /
or referred % b. thel aw whiea author
lies the Issuing OF the bonds Board o /
commissioners W Sutin, g Fed ~
An exhaustive discussion % the effect Z
OF recitzis on the ace o. municipal bonds I
VIII oe found in me recent case q B3ard /
a. Commissioners ~ Rswil-ls, II L. : i
20
These cases which contain resume O. /
ths prior decisions upon tbs subject - 4
QJssre shat Judgment IN this case should /
g. for the pt&intlG.
Eugene J. Han. the poet ard publisher. /
says that one dose Of Foley Hoasy and /
Tar restored his voice when E2zrssness /
threatened 70 prevent his Iectsre ~ Cez~
tral Music Hail. Chsezgo- Hooking Drag 4
Co. Dockum K AIggizssz AID G. GsEr- 4
ing
Rev. z A Eoyt % KinS-nRa- sssis.ars. i
secretary q the coE1<sr~zes. was taken i
sick With rn@gzsozsa SGraug TIA session
He Was reported s-7-ze better yesterday i