Bank of Commerce & Trust Co. v. City of Memphis

On May 1, 1903, the City of Memphis executed a trust deed to secure an issue of $3,500,000 of water works bonds. The bonds matured at the rate of $50,000 per year beginning’ May 1, 1904. All bonds have been paid as they matured. The income from the water works has proven larger than anticipated so that the city has been able to pay all interest as it accrued and to pay off more than $1,000,000 of the bonds — taking some of them up before they fell due. The bonds now bear such a premium, it is no longer profitable for the city to purchase them before maturity.

Just prior to the filing of the…