Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1901-09-25
DISTRICT MUST PAY
Independent School District OF
Sioux City Defeated In
Bond Suit.
The Principal and Interest Now
Amount to SIS. O0O-.Long
Litigation.
Case Has Been in the Various
Courts For Many
Years.

Sioux City, Sept. 25.-As conclusion
| Of litigation over bond issue made
over twenty years ago, and whose prin-
cipal and interest now amount to nearly
$4,000, the United States circuit court
of appeals has decided against The in
dependent school district of Sioux City.
The district must pay the amount of the
Judgment unless some legal resource not
now anticipated can stay the matter.
The decision is in the case of Robert
Rev vs. the school district 1t involves
a $4,000 issue of bonds, dated Navem-
Der 1, 1850, by the district township of
Sioux City. The district township COM
prised those fringes of Sioux City
township surrounding the city but not
then included in the city or the inde-
pendent district. Since then the terri
tory has been annexed, the independnt
district assuming obligations Of the dis
trict township.
1t has been maintained by the school
ly issued, without consideration. They
were Issued by a schol board of which
w. B. Tredway was president and II.
G. McKeown secretary. o. G. Tredway
was named as payee of the bonds, but
the coupons were made payable to bear
err.
1t was alleged that the bonds were ir-
regularly issued, and in the pleadings
the charge was made that o. c. Tired
way caused them to be issued and cir
culated with intent to defraud. 1t has
been insisted that two sets of bonds
were issued under one authorization.
The securities sold we'll, bringing face
and accrued interest Rockford Ill,
parties took them. and they finally
came into possession Of Robert Rev OF
that place.
The interest was paid until 1883, and
then the district repudiated the obliga-
ton. Litigation began in 1893, with a
suit in the district court, tried in 1894.
The attorneys for Rev became satisfied
before the case was reached that they
would be defeated and dismissed with
out prejudice. Under the line of ju-
dicial decision and Interpretation then
governing in such cases the bondholder
was thought certain of defeat. The SUI
preme court OF the United States was
on record in decisions which, as con-
strued and enforced by the lower
courts, held against the bondholder in
such case. Rather than go to decis-
on and be defeated. the bondholder dis
missed. Later the supreme court
placed new construction on former
decisions, holding strongly for the pur-
chaser of such paper. A precedent
was established under which Rew's
lawyers We're convinced they could
win.
Accordingly a second case was
brought, this time in the federal dis
trict court, in 1899. It was tried last
year before Judge Shiras. July Q, 1900.
He rendered judgment, holding that he
did not have jurisdiction of the bonds.
because the school district and the
payee named in the bonds-Mr. Tired
iway-were both residents of Iowa.
But as the coupons were payable to
bearer, the court assumed jurisdiction
of them to render Judgment, as well
as power to decide all law points in
volving the bonds.
From the judgment the school dis
trict appealed to the circuit court of
appeals. which yesterday with JUS
tees Sanborn, Thayer and Adams pre-
siding. delivered q unanimous Judg-
ment Affirming Shiras.
No appeal can be taken to the SUI
prene court under the rules. The only
hope OF the district Is to take the case
before the supreme court for review on
certiorari. But in the very cases which
furnish precedents for the present de-
cision, the application for certiorari was
made and denied. 1t is therefore as
summed 1t will again be denied. It is
thought likely the district will not pur-
sue. the litigation farther, as 1t has
been expensive.
In substance the court OF appeals
holds that the bondholder is a bona fide
purchaser for full value and is entitled
10 enforce them against the district
with interest. With accrued interest
The Judgment is now about $4,000.
About $4,000 of interest is avoided by
the district because 1t pleaded the stat
ute of Limitation against amounts due
more than ten years before the liti-
cation began, that being the period in
such cases. Unless settlement is
reached the hearing on the bonds
themselves will now take place.
OFFICIAL WEATHER FORECAST.
Des Moines, Sept. 25.-Forecast for
Iowa: Fair west, showers in east por-
+,o,, this afternoon and probably to-