Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1889-12-02
THOUSANDS SAVED.
THE BATES BOND CASE DECIDED IN
FAVOR OF THE CITY.
A Lengthy and Able Decision by the
Supreme Court Sustaining
Judge Hunt.

the common council OF sacramento, as II
was then known, issued bonds for this pur-
pose, and also for certain other purposes.
The bonds were made payable on the 1st of
July, 1874, unless called in before that time
Among the bonds issued and not funded,
because they were not presented in the re-
quired time, were three bonds of the sggre-
gate face value of 2,544 81.
Attached to one of the bonds were forty
semi-annual coupons for $27 % each, and
attached to each of the other two bonds
were forty semi-annual coupons for $50
each.
On October II, 1887, thirty-three years
after the bonds were originally issued, and
thirteen years after they were made paya-
BILE, George E. Bates, of San Francisco, foc
several years practicing attorney in this
city, presented the three bonds to the City
Trustees and demand in lieu thereof, under
the Act of 1864, the issuance of bonds to
him in equal amount 10 the principal and
interest due on the bonds which he offered
to surrender. The Trustees after consider
ing the matter refused the demand, on the
ground that the claims were 'stale and
barred by the Statute of Limitations" For
the three old bonds Bates expected in re-
turn new bonds, with the accumulated in
terest thereon, which would have amounted
to many thousands of dollars.
1t is estimated that about $50 900 of these
old bonds, for some reason, were never
presented to be refunded.
Bates sued out a writ of mandate to COM
pei the City Trustees to comply with the
demand.
Superior Judge Hunt, of San Francisco,
heard the motion in this city, and in a
learned and lengthy decision decided in
favor of the city. Bates appealed to the
Supreme Court, and yesterday that Court
filed in the Office of ]. S. Williams, Clerk
OF the Supreme Court, a decision affirming
the judgment of Judge Hunt. The effect of
the decision, it is thought, will not inter
fere in the other bond cases. Chief Justice
Beatty, being familiar with the case, did
not participate in the decision, which is as
follows:
George E. Bates, petitioner and appellant, vs.
Eugene J. Gregory ct al, respondents.
This was application for writ of mandate
TO eompeI the defendants ss Trustees ~ the
city OF Sacramento, 10 issue to petitioner new
bonds of the city in accordance with the pro-
visions of the Act of March %, g., in ex-
change for unpaid bonds held by him, which
were issued under the provisions of the Acts of
April 26, 1858, and April 10, 1854.
The defendants. in their answer and upon the
trial, contended that the claims were stale and
barred by The statute OF limitations. This con-
tention prevailed and resulted in judgment
for the defendants: from which order and an
order denying new trial plaintiff appeals.
March 20, 1871, the city of Sacramento was in
corporated by an Act of the Legislature passed
on that date, entitled IAN Act to incorporate the
city Of Sacramento" (Stat. 1851. p. 39l) BY this
Act the government of the city was placed in
the hands of a Mayor, Recorder and Common
Council, who were constituted body polite
under the name of the Mayor and Common
Council of the city of Sacramento; with au
thority to sue and be sued; TO borrow money
and pledge the faith and credit of the city
therefor, and to levy and collect taxes.
April 26, 1858, another Act was passed, entitled
Gan Act to extend and better define the powers
and duties of the Common Council of the city
of Sacramento, and to authorize the establish
ment of free schools in said city tStat. 1858, p
110, which conferred upon the Mayor and Com
mon Council the power to issue bonds for the
purpose of raising funds to pay the other exist
ing Indebtedness of the city. In the exercise of
the power thus granted the Mayor and Com
mon Council of the city of Sacramen o issued a
= certain bond dated on the 9th day of May, 1854
Z nd numbered AIS, for the sum of S544 65 and
made payable to Jonathan Williams OF bearer
on the first day of July, 1874. unless sooner
called in, together with forty semi-annual
coupons thereto attached for S27 % each.
Another Act was passed April 10, 1854, entitled
Gan Act authorizing the Mayor and Common
Council of the city of Sacramento to issue bonds
for certain purposes" (Stat. 1854 p 1867, under
which the Mayor and Common Council of the
city of Sacramento issued two certain bonds for
36l and 3S4, and dated the oath and 25th OF
April 1854; and attached TO each bond were
forty semi-annual coupons for $50 each. Both
bends were made payable on the LIST day of July,
1874 unless otherwise called in; bond No. SOL
was made payable to Edward MCGOWAN or
bearer and No. SS4 to Stow and English or
bearer.
April "a, 1878, another Act was passed, which
consolidated the city of Sacramento with the
county, under the corporate name of the CITY
and County of Sacramento" This Act vested
oil the and nrODRrty of the CITY of SaP-
mento in the consolidated Government, and pro-
vided for the funding of all claims existing
against the city on the lst day of January, 1859,
and fixed the time at June l, 1859, within
which the holders of such demands might pre-
sent them for funding. This time was thereafter
extended to the 1st of October 1859 (Stat. 1883,
(Stat. 1861, D. 30Sl April p, 1863 an Act enti-
tied Gan Act to incorporate the city OF Sacra-
mentor (Stat. 1868, p. 4l5) was passed, creating
the present "Clty of Sacramento, This last
Act provided, among other things, that all the
property and revenue which belonged to the
Mayor and Common Council OF the city OF Sac
ramento on the SOth day of April, 1855, should
become the property of the city of Sacramento.
and that it should have power to sue and be
sued and defend upon any obligation; provided,
that such obligation was not made or entered
into prior TO the passage OF the Act.
On the 22d DAY of March, 1864, an Act was
passed entitled IAN Act to provide for the
fiquidation of the Indebtedness of the city Of
Sacramento, which accrued prior to January !,
1889" (Stat. 1864, p 2l7) By this last Act the
BOARD of Trustees oil the Guy were empowered
to issue to all holders of claims against the city,
which accrued prior to January ], 1853, bonds
PAYABLE to bearer on February l. 1888, TO bear
dale of May l. 1864, and bear interest from jan
TSTI $50 st per cent per annum PAYABLE
annually after the first six years on the LIST day
of January at the office of the City Treasurer.
The Act prescribed no time within which cred
itors should present their demands for hquida-
ton but provided that bonds should be issued
for all claims which accrued prior to January
/ 1889 that the Board of Trustees, upon exam
chould consider HlnQal and inst -
The petitioner on october II, 1887, presented
the three bonds above described to the defend
ants for funding, and demanded in lieu thereof,
under the Act of 1864 the issuance of bonds to
him equal in amount to the principal and in
terest due on the bonds which he offered to sur
render. This demand refused by the de-
PENDANTS The appellant, upon these facts, ar
CUES that the Statute of Limitations was sus-
pended by the Acts of 1858, 1858 and 1864 as to
all persons holding claims who might choose at
any time TO accept their provisions, and that
the Act of 1861 is q continuing offer held out 10
the creditors of the city of Sacramento, which
can only be Withdrawn by repeal of the Act,
and ali who have claims such as are men
toned in the Act and accept its terms can en-
force the funding OF their obligations by man.
damus It is conceded by respondents that
mandamus is the proper remedy If the claims
of petitioner are not stale or barred.
The Act of incorporation of the city OF Sacra
nento of IS l. and the Acts of 1855 and 1854, IN
der which the bonds of petitioner were issued
expressly authorized suits against the corpora
ton upon such obligations. The inhibition o
that 1.-THE city and county shall not be sued IL
any action whatever, nor shall any Of its bonds
buildings improvements, property, franchises
taxes, revenues, actions, ehoses IN actions al
effects be subject TO any attachment, levy Of
sale or any process whatever, either mesne o.
final p and that prescribed in the first sec
ton of The Act of 1868 is that the city
may ''sue aud be sued and defend upon any
bond, covenant, agreement contract, matter o.
thing whatever, of which Courts of law o.
equity have jurisdiction provided, however
that such bond covenant, agreement, contract
matter or thing that is the cause of action, hai
been made or entered into after the passage o
mis- Act These inhibitions clearly applied
only to obligations Of the city and county ant
CITY respectively, incurred after the passage Q
The several Acts The restriction in the frs
Act was to prevent the city and county OF sac
ramento from being sued upon any obligation
inc,TTred nv il as such and that in the SECOND
ACT, to protect the city of Sacramento agains
suits upon claims for which the former city ant
county had alone become liable. Inc Act Q
1864 did not enlarge or affect these representa-
tons in any way. n.,, :; =;
work on Municipal Corporations Vol. l, sec
So, that " if a municipal corporation become
indebted, the rights of creditors cannot De I'm