Abilene weekly reflector. [volume] (Abilene, Kan.) 1888-1935, 1905-05-18
WOULD SETTLE BOND SUIT.
Council Votes to Offer $500 in Set
Element Of Case.

Inc clty OVuuOiA noAu y otoS"
meeting last night to discuss the ga
bond suit which has been dragging
along in the courts for over 10 year.
at an expensive rate. The holder o.
the bonds, Cornell University, offerI
to settle the case for $500. The origi
nal bonds were $4,000 and interes,
and costs now make about $1,000 al
stake with another court trial COM
ing on. The city has already paid Q.
F. Mead $500 for trying the case and
has paid 5000 or more in court costs.
The councils action in endeavoring
to compromise the matter is the
sensible one as it is likely that many
years more Of litigation are in pros
pect. Attorneys familiar with The
case say that probably the city will
lose in the end since 1t received the
money and used it and the University
as innocent holder Of the bonds
would have right in equity to re-
turn Of the same.
The outline Of the case as made by
Mayor Humphrey will be interesting:
In 1887 the legislature passed a law
which provided that a city Of the
second class might subscribe to the
capital stock Of companies organized
for the purpose Of mining or boring
for coal or natural gas, and might is
sue bonds to the amount Of $4,000 in
exchange for such stock, but the
proposition should first be submitted
to the legal voters Of the city, and
upon . majority Of votes therefor,
the city council should issue the
bonds. This, law was some years
aiterward declared unconstitutional
in the case Of Geneseo VS.. The Geneseo
Natural Gas Co., IS Kas., 1858. The
proposition to issue bonds under this
law was submitted to the people In
1887, the so.called gas bonds in the
sum OF $4,000 were issued Dec. 18th,
1887. There was some question as
to the legality Of these gas bonds and
q purchaser could not be found for
them, except at large discount, and
on June 29th, 1888, the council by
resolution authorized the issuance OF
funding bonds to the amount Of
$4,000 to take up the outstanding gas
bonds. This rsiunding was done
under chapter 80 of the law Of 1872
which provided that every city OF the
second class is authorized and i'm
powered to compromise and refund
its matured and maturing indebted
ness upon such terms as can be agreed
upon. 1t will be noted that the gas
bonds had then been issued only a
little more than seven months. These
bonds were issued and sold through
Harris & Company Of Chicago, ILL.,, to
the Cornell University. The city
paid interest for . short time on these
bonds, and then made default in
payment. About 1896 suit was
commenced In the district court en-
titled John W. Edmlndson vs.. The
City of Abilene, Kansas, upon certain
coupons clipped from these bonds
1t was afterwards shown that Ed
mindson was only nominal party,
and that the coupons we're in fact
owned by Cornell University.
This case was decided in favor OF
the city upon the ground that the re-
funding bonds had not been properly
issued. The case was taken to the
Kansas court Of appeals, and the de-
cision Of the district court was Of
6rmed Of the May term Of 1898.
In 1898 q suit was commenced in
the United States circuit court by
Cornell University upon t46OO Of these
bonds. A defense was made BY the
city that the bonds we're not properly
issued, and that the question had
been settled BY the former adjudica-
ton WAS not properly raised BY the
plsadingS, and rendered judgment
against the city. The case then went
to the United States circuit court Of
appeals, which held that the question
Of former adjudication had been
properly raised and sent the case back
for trial to the United States circuit
court. Upon . rs.trial Of the case in
June, Judge Pollock Of the federal
court, rendered q decision in favor Of
the city. In his decision the court
says: