Jamestown weekly alert. [volume] (Jamestown, Stutsman County, D.T. [N.D.]) 1882-1925, 1921-12-29
COURT HOLDS SALE
!. D. BONDS BELOW
]. PAR WAS ILLEGAL
North Dakota May Not Sell
Bonds Below Par, Must Re-
ceive Cash and Cannot Pay
Commission to Purchaser,
According. lin to Supreme
Court.

Bismarck. N. D.. Dec. 23.-North
Dakota may not sell its bonds at less
than par, must receive cash for
them. and may not give commission
to the purchaser that makes the price
received less than par according to
q decision of the North Dakota SUI
preme court i'll the case of Alex Cur
rie, ct al against Lynn j. Frazier,
ct al but better known as the Ram
sey County tax payers case. The de-
scision was handed down in affirm
ilfg the decision of Judge Cole Of
the District bench and appealed to
the supreme court by the former In
dustrial Commission. The case was
brought in the Burleigh County
J. courts by tax, payers of Ramsey and
{ ToWner counties and was an action
to enjoin the Industrial Commission
from selling Bonds Of the State, thru
the Bank of North Dakota, to Spitz-
er-Ilorick and Company of Toledo,
Ohio, for less than par, five per-
cent below par being the figures
named on the contract.
between the time of the appeal to
the. supreme court and the final de-
cision. membership of the Industrial
Commission was changed thru the
! installation of officers elected at the
recent recall election. Part of the
contract was abrogated by the retir-
ing OF The Industrial Commission be-
fore it went out Of office and a new
4 contract signed and this contract la
ter was modified lily the new Indus
trial Commission.
7 The decision was by the ma jority
of4the court, Justice Birdzell, being
tho author and Justices Christian
son and Robinson concurring. Chief
Justice Grace and Justice Bronson
specially concurred, but held that
following upon the entrance OF the
new Industrial Commission upon its
:duties,5 the appeal from the District
Court should have been dismissed al
lowing the decision made there to
stand and thus attaining the same
end: While the court took notice of
the reports Of q new contract it did
enter into their decision and the. de-
I cisibn is upon the stipulation by, At
; torney5 General VIM. Lemke repre-
senting the former Industrial Com
mission and the attorneys of the tax
Z payers, j.. ]. Kehoe and E.. Wheel
er of Cando. 8 =
In reaching its decision the 81
preme court says. T.
"rhe stipulated facts,sin our opin-
ion, show beyond a doubt that the
bank never became the purchaser ,1f
the bonds which it attempted TO sci!
to Spitzer-Rorick & Company. It
had them merely for safe keeping, as
its own receipts indicated. 1t was
not carrying the bonds as assets. AS
it sold them. it remitted the pro-
. ceeds to the Industrial commission.
In it's letters of advice it, ex pressly
acknowledged that it had held the
bonds merely for safekeeping and
that the sale had resulted partly
thru the activities of the bank incur
ring expenses under the direction Of
the Industrial Commission, which ex-
penses were charged to the appro-
priation of the Commission. The
bank never at any time pretended to
be the owner of the bonds. The at
tempted sale therefore must be con-.
sidered as having been made by tho
Industrial Commission. In view Of
the facts tis not necessary to con-
slider whether or not the bank, un-
der the direction of the Industrial
Commission, could in fact purchase
at par andSrecall at a discount. /.
"Can the Industrial Commission
sell at discount to the purchasers
Of bonds which the statutes require
to be sold at par and for cash? We y lte|
are clearly OF, the opinion that it can
not. The attorney general argues
that If the sale by the bank IL In
reality sale by the Industrial Com.
mission las we hold it to be, payment
OF such commissions as were paid
+. and contracted to be paid to Spitzer-
Rorick and Company is not in: con q.
\ travention Of the statute prohibiting
the sale sat less than par. We have Y 2
Examined all Of the authorities cited
H IN this connection and find that,
while they support the payment e of, I, e 2
N reasonable commission to an agent
L 81 broker where {. one Is employed,
Il they do not countenance the allow
u ance of commission to q purchaas- a
4 Il er. To- do SO Il In q case where the
II commission must be substracted
m from the par value would result IN
4 81 sal ats less than par-the thing