The Stark County Democrat. [volume] (Canton, Ohio) 1833-1912, 1901-01-11
must PAY bonds
United States Court Of Appeals Decides
Important Case.
DECISION IS OF Local INTEREST.
Cuyahoga County Received
Benefits of Illegal Bond Issue
...Will Have to Settle.

land Central Armory case, in which the
New York Insurance company was
plaintiff in error and the board of
county commissioners of Cuyahoga
county defendant in error.
The case was submitted to the court
May 81, 1900. The opinion was given
by Circuit Judge Severens and concur
red In by Circuit Justice Harlan and
District Judge Thompson.
The action of the court Is against the
county and declares that the county is
liable to the bondholders.
The litigation arising from the build
Ing of the armory has been Of long
standing and the questions raised in
tricate' The supreme court of the state
ruled that the first levy and issuance
of bonds to defray the expense of build
ing were illegal and that the bonds
which had been sold were not collect
able. The bonds We're held by the New
York Life Insurance company and the
New York Mutual Insurance company,
and amounted to S225,00O. At the con-
vening of the legislature after the rul-
Ing of the supreme court referred TO
legislation was introduced and passed
authorizing the county commissioners
bonds. This law was held by Judge
Day to be unconstitutional on account
of its retroactive effect The higher
court has now declared that the law is
in accordance with the constitution and
perfectly sound. The amount which
the bondholders have paid to the
county will therefore have to be paid
back unless the county determines to
. h.
of the United States. The landholders'
interests were represented by Garfield,
Garfield & Howe and Judge Sanders, of
Squire, Sanders & Dempsey, Cleveland.
The court of appeals decision held
that the obligation of Cuyahoga county
to pay the bonds existed and that the
levy to satisfy them must be made
upon the county. ''The legislature
may compel a county to pay a legal
obligation" the decision says. 1T is
inadmissble to revert to the PROPOSE
tion that the claim was originally in
valid in point of law. Both parties to
the borrowing and lending supposed the
law valid and intended making a valid
contract. The question is one of NOR
ais. No sufficient grounds on which
negligence in making a right determi-
nation of the validity of the law can be
charged upon the purchaser of the
bonds. We are not to be understood
as expressing any view of our own upon
the subject of the validity Of the
statute under which the bonds were
Issued. We are not required to do SO
for the purpose of the case as it Is pre-
sented to US. We are referring to the
existing circumstances and to the legal
presumption in favor of the validity of
statute.
THE county received the full pa
value of the bonds, purchased the
site, erected the building. continuing
to recognize its obligations upon
the bonds by paying interest, and now
holds the title to and is In possession |
of the property acquired by the bor- |
rowed money. No taxpayer appears to |
have raised any objection until after |
the transaction had been substantially |
accomplished The circuit court erred
In sustaining the demurrer.
THE judgment is accordingly re.
versed and the cause remanded with
directions to overrule the demurrer and
take such further proceedings in the
case as it may be advised are not in
consistent with this opinion"
This decision Is of considerable local
interest in view of the condition ex-
listing in Stark county over the Canal
Fulton bridge. 1t is claimed by the
prosecuting attorney that if no taxpayer
objects that the county will have to pay
the money due on the bridge providing
there has been no fraud perpetrated
and that the work has been honestly
done at n reasonable price. and that if |
the tax payer does object it is a ques-
tion as to whether the county will not
have to pay in the end. In com
menting upon this decision, the Cleve-
land Leader. under the head of "The
County Must be Honest" says:
"The decision of the United States
circuit court of appeals on the arm
ory bond case appears to have disposed
of that case for good. Moreover, the
decision is on the side of right and
honesty. The court holds that the |
bondholders have a valid claim against
the county for the amount paid for the
bonds, with interest. |
after the armory had been nearly
completed and bonds had been issued
to pay for Ii suit was begun to enjoin
the collection by the county treasurer
OF the tax designed to pay the interest
and principal of the bonds. The suit
was based on the allegation that the
people of one county could not be
taxed for the erection Of an armory, be-
cause it was the duty of the state to
provide from the general revenues for
the erection of armories for the ma
t1onal guard. All the courts up to the
Ohio supreme court decided that tba
bonds were issued without due author
ity, and that the bond holders had no |
recourse. The circuit court of ap-
peals. without touching the question
whether the bonds are valid, decides
that the county must pay.
"The bondholders will. therefore, get |
their money; and that Is right. II there
was O question as to the constitution |