9-40-25. Bondholders' statutory mortgage on utility--Disposition of utility prohibited until bonds retired. There shall be a statutory mortgage lien upon such utility and the extensions, additions, and improvements thereto acquired pursuant to this chapter, in favor of and for the equal benefit of the lawful holders of bonds issued pursuant to this chapter and interest coupons and each of them, but no such lien shall attach to or become a charge upon or against any property or utility or any part thereof previously owned by such municipality by whatever means or funds acquired. Until all such bonds are fully paid with interest, the municipality shall not sell or otherwise dispose of said utility and shall not establish, authorize, or grant a franchise for the operation of any other utility for supplying like products or services in competition therewith.
Source: SL 1931, ch 194, § 6; SDC 1939, § 45.2406; SL 1949, ch 191, § 3.
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