Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1890-01-17
BATES Us. GERBER.
THE SUPREME COURT DOES FINALLY
DECIDE THE CASE.
1t Affirms the Decision of Judge Van
Fleet and Against the Bond
holders Claim.

For some days past rumors had been
current in this city to the effect that the
Supreme Court had rendered its decision in
the bond-interest case of George E. Bates
VS.. W. E. Gerber, Treasurer of this city.
The decision was not, however, rendered
until Wednesday. The opinion was writ
ten by Justice Works and concurred in by
Justices Mcfarland, Patterson and Them
ton. The case is entitled Bates against
Gerber an action for writ of mandamus, to
compel the respondent as Treasurer of the
city of Sacramento to pay interest on over
due coupons of certain bonds of said city.
The Court below sustained the demurrer to
the complaint, and rendered judgment for
the defendant thereon. The plaintiff then
appealed and the Supreme Court has
affirmed the decision of the lower Court.
In this case demand was made on the
Treasurer for the payment of the annual
interest provided for by the coupons, and
interest on the amount due on such cou-
pons from the time the same matured. The
Treasurer offered to pay the amount called
for by the coupons, on delivery of such
coupons to him, but declined to pay inter-
est on the interest. or to pay any part of the
Indebtedness unless the coupons were sur
rendered as fully paid and satisfied.
1t was contended by the appellant that,
concedipg that mandamus would not lie to
compel the Treasurer to pay interest on the
annual interest, such coupons drew interest
from their maturity, under the general
statute providing for such interest after
maturity, on all contracts, and that as the
debt existed, the Treasurer had no right to
impose, as q condition upon which he
would pey the annual interest, that the
coupons should be surrendered.
The Supreme Court, in its decision,
states that it cannot accede to this view of
the law. The bonds were provided for by
special statute, which provided specific
fund out of which they should be paid
The Act provided for the payment of the
principal and annual interest, and moth
ing more. There was no other fund out of
which the interest demanded could have
been paid, and to have paid out part of
the fund on liability not provided for or
allowed by law, would have been to divert |
part of the fund from the purpose in
tended, and thereby to deprive other bond
holders of their annual interest and per-
haps of their principal.
The statute having provided for what |
should be paid out of the fund.- and of |
what the fund should consist, it cannot be |
presumed that the Legislature intended |
that there should be a general liability |
over and against the city for interest on the |
annual interest in case the fund for any |
year should be insufficient to meet such |
interest. The statute Under and by virtue |
of which these bonds were issued was the |
basis of and became part of the contract, |
and the bondholders must be held to have |
taken the bonds with the understanding |
and agreement that they were only emit |
Al ~. . II
est and that if the fund provided for the |
payment thereof should be insufficient to |
meet the same no interest on the coupons |
was provided for or could be recovered. |
The decision of the lower Court was there
fore affirmed.