Ottumwa tri-weekly courier. [volume] (Ottumwa, Iowa) 1903-1916, 1905-01-10
ME- ! Ms ss4, 900 TX, CT j | TY I 7
Y IS f'' E 81
City Had no Right to Issue Negotiable
Bonds Citizens Voted to Donate
Land - Railway Company Bond
Holders Represented by Judge Wa
ternnan and Senator Ball.

railway DOnQS aCCOrQlnS 10 Cl6 Oplulou
Of Judge F. w. Eichelberger filed with
the clerk Of the district court today.
The decision is a most important one
and means a saving to the city Of the
amount OF the bonds, $4,000, besides
several thousand dollars interest.
8 The case was entitled j. P. Swanson
against the city Of Ottumwa and the
opinion was given on the plaintiffs de-
murrer to the answer OF the bond.
holders. The decision practically
closes the case as far as the district
court is concerned and the question Of
the legality OF the bond issue will prob
ably be fought out before the supreme
court.
City Solicitor w. n. G.. Jaques rep.
resented the city and Mitchell and
Hunter we're the attorneys for ]. p.
Swanson and the bond holders were
represented by Judge Waterman Of
Davenport and Senator Ball Of Iowa
City, at the hearing of the demurrer
before Judge Eichelberger few weeks
ago. The result is decided victory
for the city.
History OF Case.
Several years ago the voters Of the
city voted to donate land to- the Chi.
cago, 1T. Madison & Des MoineB rail-.
way company for depot, round house,
switch yards, etc. The amount was
not to exceed $35 900, and the com.
pRny was to build the railway into this
city. The road was built and after be
Ing used d. few years was sold to the
c. B. 3 O. and q large portion Of the
track torn up. It was urged at the
time Of building the road that 1t would
be q good thing for OttuYnwa hyscreat
Ing competlt lion. and when the com.
pany sold out to the Bur-
lington this argument failed. Sew
eral months ago when the first pay.
ment became due the city council
asked City Solicitor Jacques for his
opinion as to whether or not the city
would have to pay the bonds. He
stated that he did not think that the
bond Issue was legal. ]. p. Swanson,
o. taxpayer. filed petition with the
clerk of the district court asking that
4 the city be enjoined from paying tht
bonds and temporary injunction was
granted. The bondholders in their
answer asked for judgment against the
city on the bonds holding that the is.
sue WAS legal The question was sr
gled before Judge Eicbelberger few
weeks ago and he took the case under
advisement.
JUDGE Elchelberuer's Opinion.
The opinion OF Judge Tichelberger
filed with the clerk Of the district court
today is as follows:
"Following the decision In the case
Of Witter VS.. the Board of Supervisors,
112 Iowa $50. I hold that the city Of
Ottumwa had neither expressed nor
implied power to issue negotiable
bonds for the purpose OF purchasing
and donating depot site to the Fort
Madison railroad. Whilst cl,apter 133
Of the Acts of the Nineteenth General
Assembly gave the city the right to pro.
cure and donate land for that purpose
after vote Of the people authorizing
1t was had. yet nowhere Is 1t given ex.
press power to Issue negotiable bonds
to pay for such land. nor. under the
holding of the supreme court in the
Witter case, can such power be i'm.
piled. The case of Helms VS.. Lincoln
l02 Iowa SO, Is to the same general
effect. And the decisions of the SUI.
preme court Of the United States an.
nounce the same doctrine. Merrill VS..
iHoBtiCSllO, 100 ". .. ofS, HILL VS.. CITY
OF Memphis. Mo-, 1874 u. S. 1913. It is
claimed that the rule announced In
these cases does not apply except
when bonds are issued to cover cur.
rent expenses Of municipality. and
that when the expense is outside Of
4 such current expenses an implied
power exists to issue bonds to meet
this extraordinary expenditure. The
same distinction was sought to he
drawn In the Witter case but without
success. 1t is also strenuously urged
that the point was not involved in
either Helms or Witter cases, and
that all was said in regard to the right
4 to issue negotiable bonds was obiter
dtctum and not binding. But 1t seems
clear to me that 1t was the very point
necessarily decided in the Witter case.
The court states the point involved in
that case as follows: II then. under
the express power given the county to
purchase real estate, the power to
create an Indebtedness therefore fol.
!ows as a necessary incident to the ey.
sroise Of such power. may the county
issue its non-negotiable evidence Of
inch index edness?
After affirmative answer the court
proceeds to say:
The remaining question to be de-