Court Opinion

ID: 6599380
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:06:21.973539+00
Date Added: 2024-06-11T15:57:57.802539
License: Public Domain

By the Oourt,

Dixoít, O. J.
The plaintiff owns one of the bonds issued by the city under the act of March 21st, 1861, entitled, “ An act to authorize the city of Appleton to exchange bonds with its present bondholders.” Laws of 1861, ch. 90. The averment in the complaint is positive. The denial in the answer is of “ sufficient knowledge to form a belief.” Upon such a denial the injunction will not be dissolved. For the purpose of dissolving an injunction upon complaint and answer, the denial must be of the same positive character as the averment.
By the sixth section of the act the city council were prohibited from issuing the bonds of the city thereafter for any other purpose whatever except in payment of the bonded debt of the city. It will be seen by reference to the whole act that it is drawn with great care and caution, and most stringent provisions made for the purpose of securing the prompt and sure payment of the new bonds and coupons to be issued under it. Among those provisions is that contained in section six. They were obviously introduced to induce the creditors to sur*472render the old bonds and accept the new. That found in section six is a most material and important one, insuring, as it were, the continued ability of the city to meet and discharge the bonds and interest. When accepted by the creditors and the city, and new bonds issued, it constituted a most material element of the new contract. It entered into and became a part of it, and as such is not the subject of legislative repeal or amendment so as to impair the right or diminish the security of the creditors without their assent. Eor cases fully in point upon this question we refer to People v. Woods, 7 Cal., 579, and People v. Bond, 10 Cal., 563. We refer also to Brooklyn Central R. R. v. Brooklyn City R. R., 32 Barb., 358; Thornton v. Hooper, 14 Cal., 9; Streubel v. The Mil. and Miss. R. R. Co., 12 Wis., 73, 74, 75 ; and Smith v. Cleveland, 17 Wis., 567-8-9.
As a creditor of the city and holder of the bond the plaintiff has, therefore, the right to question the validity of the act of March 23d, 1864 (Laws of 1864, ch. 199), and to restrain the city council from proceeding to issue bonds under it.
The motion to dissolve the injunction was properly denied and the order must be affirmed.