Los Angeles herald., 1890-04-29
They Are Awarded to the
City Bank by Law.
Judge Van Dyke Hands Down
an Elaborate Opinion.
The City Council Left Without a Leg
to Stand On.
The Taxpayers Are to Get the Benefit of
$4,000 Interest on the Use of
the Public Moneys.

tuc COutcSJ lOT tue USE VI tllo ClIy
moneys. The new charter provides a
way to let the funds out at interest.
Under this law the City Bank bid Az
per cent per annum for the use of the
money. Certain interested parties tried
to prevent this, and the last movement
was a suit brought by Mr.. Jesse Var
nell, as q bondsman on the City Treas
urer's bond, to restrain the Treasurer
from letting the money go out of his
hands. To this the attorneys of the
bank, the Messrs. Graft, Gibbon &
Creighton, demurred, and yesterday
Judge Van Dyke handed down an opin-
ion sustaining the demurrer, and thus
ruling that the City Bank must get the
money. ]. S. Chapman, Esq, the at
torney for Yarnell, is in San Diego, and
nothing will be done until he returns
in day or two, when the judgment will
be formally entered and the money pro-
badly turned over to the bank.
After reviewing the history of the
case, Judge Van Dykes opinion goes on
to set forth the reasons for the decision
he has come to, as follows:
The charter of this city was framed by
freehOlders in pursuance of Section S,
Article XII, of the State constitution, as
amended in 1887. AS that section first
stood, charter framed by freeholders
could only be made in city containing
more than 100, 900 inhabitants. By the
amendment of 1887 a similar provision
was added as to cities containing popu-
lation of 10000 and not more than
1O0, 200.
In Brooks vs.. Fischer, 70 Cal. 173, it
was held by our Supreme Court that the
charter of this city was framed and ap-
proved in accordance with the pro-
visions of the constitution. The section
OF the constitution in question provides
that when such charter is submitted to
the Legislature for its approval, and has
been approved as therein provided, it
Nshall become the organic law" of said
city, land shall supersede any existing
charter, and all amendments thereof
and all special laws inconsistent with
said charter" 1t is, therefore, a law,
and of as high dignity as though it had
been passed by the ordinary law-making
power (in case where there is no con-
stitutional prohibition of such action on
the part of the Legislature). Under the
former constitution the Legislature,
that is, the ordinary law-making power,
passed special laws incorporating cities
and towns, and prescribed the duties OF
the various officers of the same, there
being no limitation as in the present
constitution in that respect. The
charter of this city, passed by the Legis-
lature under the former constitution, in
1873, contained a provision similar to
the one embodied in the present charter
IN reference to the deposit of the public
funds in bank.
1t is intimated on the part of counsel
for plaintiff that no action was ever
taken under the old charter for
the purpose of depositing the pub
lie funds in a bank, for the reason
that there was some question about its
validity. 1t is difficult to see wherein
such provision under the former con-
stftution should be invalid, for the rea-
aon, as stated, that there was no restric-
ton upon the legislative power in refer
ence to the incorporation of cities and
towns, and the Legislature therefore pos
sessed full power in the premises. II
has always been held where there is nc
such restriction, that municipal corpora
tions were entirely subject to legislative
control in the use and disposition of mu
nicipal property and funds. In Other
words, the power of the Legislature in
the premises is only limited by the Con
stitution of the United States and the
constitution of its own State. 1t is moi
pretended, nor could it well be shown
that such legislation in the least infringes
upon the Constitution of the United
States; and in the former State constitu-
tion there was no limitation in reference
to the power of the Legislature over mu-
nicipal corporations, as already stated.
The people of the State, however, in
adopting the present constitution, saw
fit to limit the power of the Legislature
In reference to municipal corporations
and accordingly declared that corpora
tions for municipal purposes shall not
be created by special laws, but the Leg
islature, by general laws, shall provide
for the incorporation, organization and
classification in proportion to population
of cities and towns" (Section 6, Article
XII These general acts of incorpora-
tion, however, cannot be imposed upon
any city or town, but cities or towns may
become incorporated under such general
laws, the same as corporations for pri-
vate purposes may be organized by COM
plying Will tllt ScIltTdl law Oh CQo SUD-
Rct of private corporations.
The constitution also provides another
mode of incorporating cities and towns
having population of over 10000 in
habitants. That mode is pointed out in
Section 8, Article XI., and consists in
IKE framing of charter by freeholders,
as in the case under consideration. This
mode is outside of the general law
making power. 1t is not originated by
bill introduced into one of the two
houses of the Legislature and passed as
in the legislative article provided, and
submitted to the Governor for his ap-
proval. But it is nevertheless a law and
ranks the same as general acts of incor-
poration adopted in the usual manner of
passing laws. The only restriction i'm
posed upon such acts of incorporation,
whether originating from the freehold
ers, or passed by the Legislature in the
shape Of general laws, is as follows
"And cities and towns heretofore or
hereafter organized and all charters
thereof framed or adopted by authority
of this constitution, shall be subject to
and controlled by general laws. Sec.
6, Art. XII. And in addition thereto, OF
course, they must be in conformity with
the provisions of the constitution.
Plaintiff % counsel contend that the
Dr0vision Of the chartar in uuaation