Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1888-04-07

standing claims against the city and
county, and winds up the section in these
| words
And none of the claims herein specified shall
| be liquidated or paid Jour italicsl except in
the manner herein provided.
Section So provides, among other things,
as follows:
The annual interest and principal of all
bonus issued for claims against said city shall
be paid from the interest and sinking fund
provided in Section IS, aud in the manner other
| wise provided in this Act.
Section 40 provides, among other things,
as follows:
| 1t shall be the duty of the Treasurer to pay
| interest on said bonds when the same falls due,
out of said interest funds, as provided in this
Act.
| That the law under which municipal
bonds are issued is part of the contract
between the corporation and the bond
! holders has so long been the settled law of
| the whole country that it would seem use
less to quote authorities to establish the
proposition. That point has been several
times decided by our own Supreme Court
and the United States Circuit Court at
San Francisco in relation to these very
coupons and the funding law Of 1855 (See
Meyer VS.. Brosn, Go Cal $50; Kennedy
VS.. Sacramento, 10 Sawyer, 29)
We would ask particular attention to
this latter decision, as it discusses the sub
ject fully. Taking, then, the law in con-
nection with the coupons sued on, and the
contract would read about as follows: "On
the LIST day of January, 1876, the city and
county of Sacramento will pay to the
bearer at the office of the Treasurer of the
city and county, So for interest due on
bond No. AZ, provided there is money
enough in the sinking and interest fund of
the city of Sacramento applicable to the
payment of the same; and if the money
is not then in the fund, will pay the same
rs soon as it comes into said fund properly
applicable to this coupon"
That such is the meaning of the contract
is evident from these provisions of the
funding bill. Section 81 forbids the pay
ment of these bonds and coupons, except
in the manner herein provided" Section
81 limits the rate of taxation. Section So
appoitio the taxes raised, setting apart
ffty-fiye per cent. to the sinking and inter
est fund. Section 50 directs the coupons
! and bonds to be paid from the interest and
sinking fund, and does not provide for pay
ing from any other fund and, finally, Sec
| ton 40 directs the Treasurer to pay the
coupons from the interest and sinking
! fund. II, by the conditions Of the con-
| tract, these coupons are only to be paid by
! the Treasurer from the interest and sink
| ing fund, when by their terms they are
| due, and when there is money in that
! fund applicable to their payment, then
these coupons were aominaLiy due in 1876
and 1877, but in reality pere not due until
/ 1888, when the money came into the in
terest and sinking fund wherewith to pay
| them. This is the view taken of these
coupons in the case of Freehill V. Cham
berlain, 60 Cal, COS. We quote from the
opinion of Mr.. Justice Myrick in the case
of Freehill V. Chamberlain, 65 Cal, 603-4 !:
1t is urged that as the coupons in question
matured, according to their face, on the LIST of
! January, 1872, the Statute of Limitations bars
any proceeding on the part of petitioner to en-
( force payment; that if the proper amount of
taxes were not levied in any one year such levy
/ shonld have been compelled by mandamus;
| that If any step necessary to have proper funds
| in the treasury had been omitted, proceeding
to compel such step was the proper course We
| do not understandable to be the law as apple
able 10 this case.
| According to the Act of April %, 1868. supra,
an action could be maintained against the city
/ on these bonds or coupons; by law it was the
duty of the city to make provisions for the paw
ment of the bonds and coupons according to the
| statute under which they were issued and
| by emitting to perform such duty the city could
| not create the defense of the Statute of Iimta-
| tons; not until the funds were in the treasury
properly applicable would the statute begin to
| run: not urtil that period would the petitioner
] have any right of action or proceeding against
| the Treasurer.
1t will be observed from this quotation
that Justice Myrick expressly lays down
two material propositions in his opinion.
First, that under the Act of 1868 1.-THE
same Act on which the plaintiff is rely
ing), "no action could be maintained
against the city on these coupons"
| And further, that not until the funds
were in the treasury, properly applicable,
would the statute begin to run" against
these coupons.
1t will be observed that this opinion was
concurred in by five of the other Justices,
Justice Mckee either not sitting or refus-
ing to concur. And these two points were
not mere dicta, but the essential and turn
ing point in the case.
J Following this decision was that of JUS
tice Thornton, in the case of Davis VS..
Porter (66 Cal. 65S). In this opinion it is
held by the Court of seven Justices that
the City Treasurer is not authorized or re-
quired, when there is money in the inter
est and sinking fund, to pay past due cou-
pons, with interest on the same. Now, as
the law prescribes that these coupons shall
only be paid out of certain fund, and
only then by the Treasurer, and that the
city cannot be sued, then that would seem
to be an end of the case
But Mr.. Justice Thornton made some
remarks about interest (the suit being a
mandamus suit against the Treasurer to
compel him to pay interest on coupons)
which had nothing to do with the case be-
fore the Court. They were less even than
dlctd. They do not even amount to an
expression of an opinion upon the subject
to which they refer, and cannot be held as
authority for anything. They are simply
surmises about what might possibly arise
in some future proceeding.
We have shown, to our own satisfaction
at least, that these coupons, by the terms
Of the law (contract) under which they
were executed, were not in reality due
until 1887, and could not bear interest
until that time and in this case not even
after 1887, because, as soon as they were
demanded after the money was in the in
terest and sinking fund, it was rendered to
wi. Phe1S shiiN aiC lCiuSCo W iOItDl TIT
same.
That this law was constitutional and
binding as a contract, we do not doubt
"The City and County of Sacramento u
was not the original debtor, but it was
"the Mayor and Common Council of the
City of Sacramento" 1t was optional, not
compulsory, on the part of the creditors
whether they would surrender their claim:
against the Mayor. etc, and accept of the
new bonds under the Act of 1865. If they
did accept them they must take them sub
ject to all the reservations, terms and con-
ditions of the Act or contract under which
they were offered.
But supposing the Court may not coin
eide in our views on this point, We lay
down this additional proposition If these
coupons were not only by their own terms
but by the conditions of the law and con-
tract under which they were issued, paya-
bic absolutely on the first days of January,
1876 and 1877, still the city of Sacramento
could not be sued for the same. The reason
the city is not liable to suit is that the law
of 1858, under which these bonds were
issued, declares expressly that no suit shall
be brought against the city and county on
them, and the law of 1868, rechartering
the city of Sacramento, does not intend to
impose any new liability on the city of