The Detroit times., 1915-10-12

sary the payment OF the entire
debt even II II were specifically
not assumed. and the entire
debt OF the d. u. r.. admitted TO
-bs- S24.eO0. 900. although bonds
TO. more than Sso.0o0.000 are
authorized. Is far beyond any
borrowing power Of the city.
Fourth-Even II the entire
bonded debt Of the ID. u. r. did
not have TO be assumed. existing
library, water and lighting
bonds, which must be consider
ed public utility bonds under the
meaning Of the Home Rule act.
although they were issued for
the extension OF public utilities
already established At the time
OF the adoption Of the new con-
stitution, constitute such a total
that there Is not suflcient mar
gin left In tho total to which the
city may bond for general and
public utility purposes To take
care OF even the original $1l,-
900, 900 proposed TO be assumed
at the start.
Fifth-The plan provides for
the issuance Of bonds. II reven-
ues do not do all that is expect
ed Of them. secured only by the
property, whereas the law pro-
vides for q security franchise in
such q case. and the absence OF
such security franchise would
make the sale OF such bonds
doubtful and the uninterrupted
service to the people CORE
spondingiy doubtful.
The reasons advanced why tho
election should not be prevented
follow:
Because the plan proposed for
purchase OF the street railway Is
entirely legal and presents
desirable method OF settling q
question which has vexed and
harrassed the city OF Detroit
for years.
Because the street railway
commission and the street rail
way officers have been able 10
agree on all the terms OF the
sale contract except the pr.ce.
which. therefore, becomes 10,
gitimate matter for decision by
a court of equity.
Because the city. counting out
school and library bonds and
water bonds prior TO April Z,
1918. still has a margin of sl5,-
000. 900 and more, and with the
price still unfxed no person can
say that the purchase price AMI
the liability OF the city will be
any more than that.
Because In planning TO issue
bonds on the property alone.
without the issuance OF a secur-
ity franchise, the city would
simply be failing TO exercise
right conferred on II for use II
necessary. the security franchise
clause in the Law being permis-
sive and not mandatory.
The attorneys for the injunct q
argued that the city was stuck for
The whole debt. once Il took over
my part of a mortgaged property
and cited a lot OF decisions. the bur
fen of which was that while a rri
rate individual might purchase Q
nortgaged property, definitely ss
cunning a part OF the debt Ierscn
lilly. and IL the income from the
property did not pay the rest OF the
iebt let II go by default, a city hai
,ot that right. inasmuch as the city
laving spent q part Of the money Of
he taxpayer for an equity In prop
.rty, was bound to protect ira,
equity. even to the extent OF pay
ng the entire debt. Consequently
he decisions went TO prove tia
having purchased an equity in mort
gagged property. a city thereby as
sumed the rest Of the debt auto
One particular case In Illinois wa
:ited a. an exact parallel. Thii
vas . case where a water compan,
was to sell to q city. The purchase
price was some $4,000. but the va
.er company had . debt of $1,000
which the city specifically did no
assume. The total Of the two ex
.eeded the city's debt limit and tn,
supreme court put the kibosh On
he whole deal. ruling that the cit,
would become responsible for TIT
entire debt.
These and similar citations wera
disposed Of by Mr. Luckins BY III,
that the statutes Of 9th
sr states might read that way, bu'
not those Of Michigan.
Briefs were submitted BY Attorne,
Murfn. and Attorney Lucking prom
sed to have his In Tuesday or Wed
,esday. This means . decisiof
when the judges have had . chanc>
% argue IL out. probably BY Mon
lay.