Page:Federal Reporter, 1st Series, Volume 9.djvu/764

 BREWIS V. CITY OF DULOTH AND VILLAGE OF DULDTH. T49 �do, the creditors, at least, can enforce a proportionate share of their obligations against the two corporations carved out of one. Both are liable to the extent of the property set off to each respectively. �The debt of the city at the time the village was created by act of February 23, 1877, was about $400,000, and the act creating the village of Duluth authorized an apportionment of the debts as fol- lows: �Section 8, in substance, provides that after one year from February 23, 1877, the village shall become jointly liable with the city on all bonds issued prior to the passage of this act, unless it shall -within the year take up and cancel, as hereinafter provided, $218,000 of the evidence of indebtedness outstanding of the city, provided that inter- est to January 1, 1878, on all bonds and maturing coupons shall be treated and regarded as part of said evidence of outstanding indebt- edness. �Section 4 enacts that not more than $100,000 of village 6 per- cent. 30-year bonds shall be issued for taking up outstanding bonds and orders of the city of Duluth to the amount of $218,000, and in- terest thereon to January 1, 1870. These bonds are to be placed in the possession of the jadge of the Eleventh judicial district of the state of Minnesota. �Section 5 enacts that persons holding bonds, matured coupons, or orders of the city of Duluth prior to the passage of this act may sur- render the same to the judge of the district court for exchange for the bonds of the village of Duluth; and whenever $218,000 has been surrendered, the judge shall issue to the persons so surrendering, the bonds of the village of Duluth to one-fourth of the amount so sur- rendered, and on the delivery of the village bonds shall cancel the amount of city bonds received in exchange. �Other sections provide for annexation of more land from the city limita. �This statute interferes with the rights of creditors. The obliga- tions of a municipal corporation are not affeeted, although the name may be changed and the territory increased or diminished, if the new organization embraces substantially the same territory and the same inhabitants. It may be true that generally creditors, to obtain relief, must look exclusively to the corporation creating the debt ; but when a state of facts exists as disclosed here, and the old corporation is diminished in population, wealth, and territory to the extent admitted, it would be a mockery of justice to withhold the relief asked, ��� �