
    PROPERTY OWNER’S INTEREST IN PREMIUM ON BONDS.
    [Circuit Court of Hamilton County.]
    William C. Mudge v. The Village of Evanston et al.
    Decided, December 19, 1905.
    
      Street — Assessment for Improvement of — Credit to loliich Abutting Oimer is Entitled — From Premium Received on Bonds Sold.
    
    An abutting owner, upon whose property a street assessment was levied prior to the passage of the Municipal Code, is entitled to be credited with bis proportion of tbe premium received from the sale of bonds to meet tbe cost of tbe improvement, but this credit can only be made upon tbe interest payable on tbe deferred installments of bis assessment. (1 C. C. — N. S., 97, followed.)
    Jelke, P. J.; Swing, J., and Giffen, J., concur.
   We adhere to the law as laid down in the ease of Fridman v. Norwood, 1 C. C. — N. S., 97, where this court said:

“To even things up, whatever of a premium or surplus is yielded should be credited back on the assessments of those who have the principal and interest of the debt to pay.”

This case was affirmed by the Supreme Court in 70 O. S., page 431. The error of counsel for William C. Mudge lies in seeking to have the premium produced go to a reduction of the cost of the improvement. Thi¡s it does not do. The cost of the improvement is made by the actual expenditure of money in paying therefor. The premium goes to and affects the cost of borrowing the money for the deferred payments. If the municipal council, by some financial thermometer, could exactly know the rate of interest which would yield par for the bonds, it would be their theoretical duty to issue and. offer for sale bonds at that rate of interest. The premium bid and paid is the capitalization (with provision for its own absorption) of the margin of excess between, the market price of the money and that engaged to be paid in the bonds. To carry out the theory of the Fridman case, the municipality and the assessment-paying property owners in this deal should carry the burden evenly and without profit to either; hence the premium reduced should be credited back upon the interest payable by the property owners on the deferred assessment installments. The property owner, William C. Mudge, could have paid the cash assessment and -the whole question of interest as to him would have been eliminated. So far as anything is shown herein, he never had the right to pay anything less than the face total of the cash assessment. It is a mere matter of mathematical determination to ascertain what it cost the village of Evanston to borrow this money, be it on a three, three and one-half, four, four and one-half or five per cent, basis. The fair thing then is for the property owner to pay the amount of the cash assessment plus the interest at the rate it oost the village to borrow the money. The principal of the obligation has at all times been liquidated and fixed; hence Stephens v. Phoenix Bridge Company, 139 Fed. Rep., 248, is not applicable.

Chas. B. Wilby, for plaintiff,

Frcmh E, Ewihel, contra,

The only uncertain thing was the rate of interest, and that was ascertainable immediately upon the sale of the bonds. The plaintiff, William C. Mudge, has ever since the assessment was levied had the use of this liquidated sum, which at law is deemed a valuable thing usually estimated at six (6) per cent., and said plaintiff should not complain if the municipal credit is substituted for his personal credit to his profit and advantage.

We are therefore of the opinion that the plaintiff should pay the amount of the assessment with interest from the date thereof at the rate determined ais above indicated, to date, without compounding; or, he may, at his election, adopt the ten annual instalment plan, by paying the past instalments with their interest 'Calculated as above, without penalty, and without further interest.on the defaulted payments, and continue the instalments (into the future to the end of the ten year period, all with interest fixed as we have found proper herein.

This question can not" arise as to assessments levied since the passage of the new Municipal Code. Fortunately, the Legislature in Section 1536-292, Revised Statutes, has eliminated this complication as to the future.  