The Montgomery advertiser., 1906-05-26
CITY BONDS
 ARE INVALID Securities Rejected by Fourth National Bank. DELAY TO THE SCHOOLS No Money With Which to Erect
 New Building. Flaw Found in Action of Council Issu- ing the Paper--Msyor Teague
 Had Advised Against

Guided by the opinion or US attorney,
 the Fourth National Bank of Mont
 gomery yesterday declined to accept
 the SIS. .o00 of Montgomery school bonds
 on which the bank bid $103. 56 IA. Notice of the failure to accept the se- curities was sent to Mayor Teague yes-
 terday Afternoon by Thomas J. Rev
 holds, president of the bank. The let ter to the mayor was brief and formal.
 It stated that the bank had decided not to accept the bonds on legal grounds purely. in view of the opinion of its attorney, R. L. Harmon. The opinion was enclosed in the communication. Mir. Harmon, the banks attorney, yes- terday, completed a lengthy opinion, addressed to the president of the bank. in which he gave the legal reasons for advising the bank not to accept the securities.
 Opinion of Lawyer.
 Tn his opinion, Attorney Harmon | states that he has made a careful exaru- nation and comparison of the addi- tional public school building bonds, to the amount of $75,000, proposed to be issued by the city on July 1. 1905, and made payable July 1, 1945, and that in his opinion, the bonds, 'as Autograph ed and dated and signed. would be
 void in the hands of the purchaser" The chief reason for the statement
 of the banks attorney is that the bonds, which were authorized to be issued by an ordinance passed in the city council. October 1s. 1905. provides that tho bonds in question shall be dated July l, 1905, and mature July l. 1S45..
 An act of the legislature of 1903 cov- ering bond issue elections, he says. re- quires that notice of such election shall be printed in a newspaper in the mu- I--s- Aalr Ca Q- sive weeks, prior to the date of elec- ton. This advertisement must state, among other things, the time for which the bonds are to run. In the notice of election published he points out that the bonds shall run for forty years from the date of issuance. Thus the action of the council, in making the
 bonds mature on a date four months less than forty years is illegal. and
 would destroy the value of the bonds to the rurchaser, as such action on the part of the mayor or the council Is without authority. In support of this opinion, he cites several recent cases In which decisions have been decided in similar way.
 Irreguiarity of Advertising. Another objection he makes to the
 validity of the bonds is founded on an | irregularity of the manner in advertise | ing the bond issue election The Mont gomery Journal. The law, which he quotes, requires that the notice of elec- l tions be printed once week for three successive weeks before the election. He points out that In The Journal. the otiee appears on July 22, and on Au- gust and 12, leaving one week Tn which the notice was not published.
 This omission of one week, he says, 's not in compliance with the law. Because of the action of the Mayor and the Council in Issuing bonds, In a manner which the attorney declares
 was not in accordance with legal form Mir. Harmon states that in his opinion the bonds as Autographed and. dated
 would be void in the hands of pur-
 chaser having notice of the facts. and since the bonds refer to the ordinances of the City Council of July 10 and october 19. 1905, and the, act of the Legislature of 1903. he thinks any pur- chaser could be charged with having had notice of their invalidity.
 The fourth of the objections he makes relates to the wording of the notice of election as it appears in The Journal This notice says the said bonds to bear a rate of interest not to exceed 1-2 per cent. per annum." In his judgment. Attorney Harmon says, this is not equivalent to stating that the bonds shall bear interest I.
 the rate of { 1-2 per cent. per annum. What Will be DOnes
 With the acceptance of the bonds, the question arises. what will the city do? The proceeds of the sale
 were to have been used for the pur-
 chase of a lot and the erection there
 on of a new high school for girls. The City Council has purchased the lot. corner of Scott and McDonough streets. for S14,50O, but agaTnst the will of
 Mayor Teague. Then, where Is the money to be realized to pay for this property7
 Again an important question is. whether City Attorney c. P. Mcintyre regards the bonds in the same light as MT. Harmon? If so, will the Coun-
 cill call an election for new school bonds. will they be included in the S25O, 900 bond election now contempla- te6 for other purposes. or will 1t only be necessary to reissue the school bonds? All of these questions are perplex- ing and Mayor Teague dislikes the sit nation, He, however, is satished Tn knowing 1t was not his fault and that his judgment in the matter was cor
 rect. 1t will be remembered that he
 urged the Council not to purchase a
 school los uni Jl the money was Tn
 sight
 The Mayor has referred the matter
 to the City Attorney and it Is probable
 that nothing will be done in the di-
 lemma until MT. Mcintyre reports to
 the Council at the next regular meet