Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1902-12-03
Judge Lochrens Decision in OF
tumwa Case Has Bearing
on Many Cases
MuscATINE IS MUCH INTERESTED
Question of Municipal Ownership Is Up
There and the Authorities Are Some
what Disconnected by the Turn OF
Affairs-Ahstrac of the Opinion of
Judge Lochren.
sneciai to Times Republican.


Judge Lochren of the federal court O
appeals may have a bearing on the
water works situation here. Ii tfif
opinion is sustained by the Unitet
states supreme court to which 1t nov
seems the case will be appealed Mus
catine will find matters very mues
complicated. The case applies to this
city directly since the point involved
is the constitutional right of any city
in Iowa to incur debt beyond the
limit of five per cent Of the value OF
the taxable property. Muscatine ac-
ouired the waterworks plant two years
ago and the debt exceeds that limit. 1t
was claimed that as the debt represent
ed tangible assets it did not come with
in the prohibition of the constitution.
But the court of appeals thinks dlI-
ferently.
Another point at Issue is the ability
Of the city to acquire or build a hght-
ing plant. If the debt limit is al
ready passed that too, would become
out OF the question unless there is
some way of explaining the constitu-
lions as the state supreme court has
done.
So much interest has been taken
In the decision OF Judge Lochren in the
Ottumwa waterworks case that tho
opinion is presented. in all its essential
points.
Abstracts from Judge Lochren's opin-
ion are as follows:
aThe amount in dispute In this suit,
If only measured by the injury to the
complainant from the increased taxa
aion of Its property in the city OF OF
Humwa necessary to provide for the
payment OF bonds proposed to be is
sued for the construction of the new
water works was more than sufficient
to sustain the jurisdiction Of the cir
cult court. Whether we consider the
proportion of the $39S.991-the cost of
the proposed water works which would
rest on compliments property as q
part OF the taxable property of the
4 city, or the two mill tax thereon dur
Ing the period of fifty years provided
for. the burden of incunlbrance which
would be made to rest on the property
Of the complainant, would considera-
bly, exceed the sum OF $4,000.
Out LIZ S4ty Ol0 SilUuiN6 MCS dUOul
.1,aa enter into the proposed contract
COR the erection of water works and is
.spue and negotiate bonds of the city as
proposed to the amount of s39S,900.
to procure money to pay for same.
Complainant contends that the city
bieng already indebted beyond the
constitutional limit, has no right or
power to enter into such a contract or
+ "hafhnf ho ar
has not such power to issue and nego-
tiate that large amount of bonds. is
certainly matter in dispute in this
suit, brought to restrain and prohibit
the city from taking such action.
Section of article eleven Of the con-
etitution of Iowa is as follows:
No county or other political or mu-
nicipal corporation shall be allowed
to become indebted in any manner, or
for any purpose to an amount in the
aggregate exceeding Ave per cent of
the value of the taxable property with
such county or corporation, to be as
certaiHed by the last state and county
tax list previous to the mourning of
such Indebtedness
6. The language Of this section is
plain and simple, and its meaning is
nnmistakable. The incurring of the
indebtedness beyond the amount of
the limit is absolutely and unqualified
~ prohibited; no matter what the
pretext or circumstances, or the form
which indebtedness is made to as.
sumo. 1t curbs equally the power of
the legislature, the officials and the
people themselves; and was designed
TO protect the tax payers from the
following and fmproyidence of either,
or of all combined
Under ordinances that approved
contract, the city now. proposes to is
sue and sell at par its bonds to the
amount or $39S,900, bearing interest
al - per cent, payable semi -annually,
Tne principal payable at stated times,
4 as above mentioned; and with the mon
ey obtained by the city from the sale
S or such bonds. TO cause to be construct
ed under said contract the projected
system or water works, to be owned by
the city when constructed. The scheme
thus stated In its principal features.
without considering the details which
are claimed to have the effect of wholly
changing It's character, plainly involves
the mourning of the indebtedness by
the city to the amount of the bonds.
The bonds are obligations of the city
to pay the amount thereof to the hold
ers as the bonds and coupons shall
mature The city is to sell the bonds
Mt par and use the proceeds for the
construction of its own water works
plant, constructed for its mupicinal
uses and purposes. The city, there
fore. by the transaction will borrow
the money from the purchasers of the
bonds, oblfgate itself to repay 1t ac-
cording to the terms of the bonds, and
Invest the money thus borrowed in prop
erty to be owned by 1t and used for
municipal purpose.
"But 1t IS contended by the appel
liant that no Indebtedness on the part
OF the city will be incurred by the is
suing and negotiation OF such bonds,
and construction Of such water
works; because In the article referred
to- for the purpose of creating a sink
ing fund to be used In the erection Of
a system of water works there is lew
fed for the year 1899 and each year
thereafter till the cost of the water
works is fully paid, tax of two mills
on the dollar upon all property with
in the limit of the city, except lots
greater than ten acres used for hor-
ticultural or agricultural purposes. The
proceeds OF such tax to be used ex-e
cIusively to pay the cost of construc-
ton Of such water works and any