Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1888-04-07
COUPON INTEREST.
The Case Of Davis Versus City Of Sac
Famento.
THE CITY'S DEFENSE.
Brief OF H. o. Beatty, of Counsel
for Sacramento. Giving Clear
Statement of the Law and
His Conclusions.

Following is the brief of Judge II. o.
Beatty, of counsel for the city of Sacra-
mento. This is the action brought to col
lect interest upon coupons of the city
bonds which are overdue and unpaid, and
which claim, if established, would increase
the debt of the city, in the aggregate,
several hundred thousand dollars. Our
readers will therefore peruse with much
interest the able statement of the case by
Judge Beatty, and arrive at their own con-
illusions. The action is pending in the
Superior Court of this county, with Hon.
John Hunt, of San Francisco, sitting as
Judge in the case. The decision is ex-
pected within few weeks. Following is
Judge Beatty's review of the law, as sub
mitted TO the Court, in reply to the plain
tiff demand
BRIEF FOR DEFENDANT.
The plaintiffs brief seeks to establish
three material propositions-one of fact,
or perhaps we might more properly say of
mixed law and fact, and two of law.
The main fact relied on, and attempted
to be established by the plaintiff in his
brief, is that if all the money which
rightfully should have been paid into the
interest and sinking fund Of the CITY of
Sacramento under the Funding Act of
1858, had been so paid, there would have
been no deficiency of means in that fund
to have paid the coupons of 1876, and also
those of 1877, the years they respectively
fell due. In other words, if the Trustees
had regularly levied 55-hundredths of
one per cent. property tax for the benefit
of that fund, and the Auditor and Treas
urer had set apart 55-hundredths of the
gross income of the Water Works and
55-hundredths of the dog license to that
fund, and the Treasurer, at the end of the
fiscal year, had set apart to the interest
and sinking fund the unexpended balances
in certain other funds, then there would
have been money enough on hand to meet
the annual interest as it fell due on the
lst days of January, 1876 and 1877.
Now, while we think there may be some
inaccuracies and errors in the plaintiffs
calculations, we do not deem it material,
in our view of the case, to 90 into any
minute calculations on this head, but shall.
IN arguing legal points presented in the
case, assume the plaintiff has fully estab-
lished his facts as he assumes them to be.
The first legal point made by the plaintiff
is proposed in the form of a query: "Do
interest coupons of such bonds, if not paid
at maturity, bear interest from date?"
We answer that the question pro-
pounded is so indefinite as to be mislead-
ing, and does not admit of a categorical
answer. If the gentlemen on the part of
the plaintiff mean to PROFOUND the ques-
ton whether coupons in the form of those
issued by the city and county of Sacra-
mento under the funding bill of 1853
would bear interest after the date of ma
turity, in the absence of any restraining
clause in the Act under which they were
issued, then we would answer at once, they
certainly would bear interest, though pos
sibly there might be no mode of enforcing
the payment of the same. But we under
stand
First-That these particular coupons,
owing to the peculiar provisions of the
law under which they were issued, do not,
and never can, bear interest.
Second-If they did bear interest, the
city cannot be sued for that interest.
Third-lf there ever was a cause OF
action against the city, it has long since
been barred by the Statute of Limitations.
In considering the question as to whether
these coupons bore interest after they be.
came due, we are to bear in mind the fact
that the original debt, in lieu of which
the 1858 bonds were issued, was the debt
of the Mayor and Common Council Of
the city of Sacramento" In 1859 the
Charter of the Mayor and Common
Council OF the city of Sacramento was re-
pealed, and a new municipality created
under the name of the "City and County
of Sacramento" This new municipality
embraced not only the territory formerly
within the limits of the city, but also all
the territory of the county outside the
city. 10 this new corporation all the
property of the county was transferred
The new municipality was required to as.
sumo all the debts Of the old county moi
exceeding 100000 in amount, and all the
debts of the old city government not ex.
ceeding 100000 in amount Combining
ourselves to the city debt: 1t was to be
funded as presented; the first 100000 in
bonds were to be made payable in 1888
the next 100000 in 1898, the next il
1898, and the remainder in 1908. Wher
the limit of Sl,600,000 was reached ther
the funding was to cease. For these gen
eral provisions of the Act, see Sections
and 2, pages 267 and 26S, and Section 81
page $50, of the Statutes of 1858.
But now let us see how this new munich
pality was to pay the debts of these two
older corporations.
First-In Section | it is provided that
the consolidated municipality
Shall not be sued in any action whatever mo-
shall any of its lands, buildings, Improvements
property, franchises, taxes revenues, actions
chooses in action and effects be subject to any
attachment levy or sale, or any process what
ever, mesne or final
Here, then, to start, is an absolute anC
unqualified prohibition of any suit agains
the municipality on these debts.
Section "a of the Act reads as follows:
Section a. The Board of Supervisors shall
mot have power to levy any greater taxes thai
Shs follows viz: On the real and personal estate
except such as is exempt by law throughout The
city and county, q tax of one hundred cents OF
the one hundred dollars such State taxes a!
the law may require. and in addition thereto
they shall levy for municipal purposes on al
real and personal property within the city lin
its, except such as is exempt by law, tax o
one hundred cents on the one hundred dollars
one hundred dollars on property outside of the
city limits,
The remainder of this section throws nC
light upon the construction of the part We
have quoted. Now, this section, as We
understand it, provides: First, that the
Board of Supervisors may levy tax fol
general county purposes not to exceed one
per cent. on the taxable property. In the
other direction there is no limit. They
might, in their discretion, levy only hal
or quarter per cent. They are only pro,
hibited from leyying beyond one per cent
In regard to city taxes, the same prohibi.
tion applies as a limitation, that is: The
Supervisors shall not have power to levy
any greater taxes lplural than as follows
This must apply 10 all the taxes thereafter
mentioned. When the taxes for city pur-
poses are mentioned it declares that they
shall levy the full amount of one per cent
Here, then, as we understand this section
one clause says they shall levy one per
cent, and another that they shall not levy
erceedine one per cent. This law definitely
fixes the amount of levy, and the Board
had no right to make it higher or lower
for any purpose. We have been thus par
ticular in stating our views Of this section
because the counsel on the other side, ii
their brief. have quoted part of a SEN