Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1888-01-20
THOSE BOND CASES.
They Come Up Again in the SUPERB
Court-Points of Law

They Come Up Again in the Superior
Court-Points of Law.
Two more of the Sacramento city bond
suits were on trial in Judge Armstrong;
department of the Superior Court yester-
day. Judge John Hunt, Jr., of San Fran
cisco, presided by exchange with Judge
Armstrong, who was disqualified to sit in
these particular cases. While the parties
to the records were different, both cases
were practically the same-between holder
of the bonds of the city on the one hand
and the city and its representatives on the
other. In both cases A. c. Freeman
represented the plaintiffs, and A. p Catlin
the defense. w. G. Belcher had heretofore
appeared for Mr.. Davis, but he was unable
TO be present, not having recovered from
the injuries recently received by an acci-
dent, and Mr.. Freeman represented him
on the trial of the case, with the under
standing that Mr.. Belcher would Join in
the preparation of the brief The facts
were practically agreed upon in both cases.
and they were resolved down to simply
determination of questions of law.
The first case tried was that of George L.
Bates vs.. E. ]. Gregory ct al.-the CITY
Trustees. The action was for a writ of
" SOihllVl tlc IIuStGtS 10 lSSIlS
new bonds in place of several old ones
which had been issued in 1854. An Act of
the Legislature was passed in April %,
1854, authorizing the city of Sacramento,
as incorporated by the Act of March %,
1851, to issue certain bonds. falling due in
1874, and bearing interest at the rate of 10
per cent per annum. Under this Act a
large number of bonds were issued. In
1858 the governments of the city and
county were consolidated, and
IN THE CONSOLIDATION ACT
1t was provided that the old city bonds
could be refunded and replaced with 6 Der
cent. bonds. In the meantime the 1854
bonds had become scattered, and as the
Consolidation Act limited the time for
their refuudIng and many were still out
standing. the Legislature of 1859 extended
the time for their presentation. Another
extension Act was passed in 1861. In
1868 the law to consolidated the govern
ments of the city and county was repealed,
and the present charter of the city of Sac
ramento was passed. In 1864 another law
was enacted, providing for the refunding
of all of the bonds of the city-then out
standing. The plaintiff claims that his
1854 bonds should be refunded under this
law of 1864. The defense claimed that the
plaintiff, not having taken advantage of
the Funding Act of 1858, allowed his bonds
to pursue the course contemplated by the
Act of 1854; and that they fell due in 1874.
and consequently outlawed in 1873. The
plaintiff contended that the provisions of
the Acts OF 1858 and 1864, that the city
should not be sued upon bonds
ISSUED BY THEIR SANCTION,
Exempted prior bonds from the operation
of the statute of limitations. Mr.. Catlin
argued further that the present Board of
Trustees were in no sense the successors to
the Mayor and Common Council of the CITY
of Sacramento created by the charter of
1851, and that that incorporation
terminated with the consolidation of the
city and county governments in 1858. in
this case no claim is made that the bonds
shonld be paid. but only that the Trustees
shall take them up and replace them with
new bonds. Upon their face the bonds call
for s., 544, but the prayer of the petition is
that the new bonds be issued for the face of
the old bonds, together with the amount of
unpaid coupons to January l, 1S59,-aggre-
gazing some $500. The law of 1864 pro-
vided for the issuance of bonds with cou-
pons, dating from the beginning of 1859.
Should the position of the plaintiff be sus-
tanned by the Courts, the Trustees will be
ordered in this paticular case to issue a
bond for some 81, 500, carrying unpaid in
terest coupons from 1859. The case was
heard and submitted on briefs to be filed.
The next case was that of Samuel Davis
against the City of Sacramento. This is an
action to recover interest on coupons of city
bonds issued in 1853, which coupons are
detached from the bonds. The coupons
fell due in 1876, and have not been paid.
1T is claimed in this case that under the
Act authorizing the issuance of the bonds
1t was made the duty of the local govern
ment to levy tax of 81 on the SlO0 for the
general fund, Of which fifty-fve per cent.
was to be placed into the
BOND SINKING AND INTEREST FUND,
And that certain other revenues from the
water works, Court fines, ETC., were to 90
into the same fund; that, beginning with
about 1861, the tax levy was rarely made of
81 for the general fund, but was at times
made as low as 25 cents that when the
coupons were presented for payment their
payment was refused because of lack of
funds; that had the former city officers
levied the 81 tax, the money would have
been provided for the payment of tbe
coupons, and that by reason of this neglect
on the part of the municipal officers the
plaintiff has been kept out of his coupon
money; therefore he sues for interest on
his interest coupons. The face value of the
coupons Is about S34 600, and the interest
asked for on that amount is some $50 COO.
Mr.. Catlin claimed that the action was
barred by limitation that there could be
no such thing as a suit for interest on in
terest; that cause of action could not be
split up; and that if interest should be paid
TO the plaintiff on these coupons and the
coupons not taken up, he could transfer
them to some other party, who
COULD AGAIN COLLECT INTEREST
On them. He also made the point that un-
der the Act providing for the issuance of
the bonds from which the coupons had
been clipped, the city could not be sued.
and he cited decisions of the State Supreme
Court and the United States Circuit Court
in support of his position. The plaiatiff
claimed that, as the city officers had ne
elected to levy the tax directed bv the Act
of 1858, and that the result had been the
non-pavment of the coupons, he was au-
thorized, notwi hstanding the decisions, to
bring direct eetion against the CITY. In
this case 70 evidence has been taken Coun-
sci for the plaintiff offered tabulated
statement showing, year by year. the as
sessed property valuation of the CITY, the
rate OF taxation, the income from the
water works, Court fines, etc, with q view
OF showing that had the full percentage
been levied and collected and the 50 per
cent OF the gross, instead of the net, re-
ceipts OF the water works, etc, been turned
/ into the interest and sinking fund, the cou-
pons in question woald have been paid at
maturity. Thedsfense objected, and pend.
ing the argureeat an adjournment was
taken until tbs morning ct 10 O'Clock.