The record-union., 1895-10-10
INDIAN WAR-BOND CASE DECIDED.
No interest on Coupons After Maturity
of the Bonds.
The Judgment of Sacramento Court
Reduced by the Supreme Court
From $19,672 to $4,000.

The Supreme Court has rendered de-
cision in which ii holds that the State is
not liable for the interest on the coupons
on the Indian war bonds issued in 1851,
subject of much litigation in this State
through the efforts of their holders to
collect interest on them.
Henry Molineux obtained judgment in
the Superior Court of this county against
the State for 9,672. The State appealed,
and the Supreme Court reduced the
amount of the judgment to $500. Fol-
lowing is
THE DECISION
IN 1851 certain Indian war bonds were
issued on behalf of the State by virtue of
an Act OF the Legislature passed for that
purpose. Statutes of 1851, y. 800 The
bonds themselves and the coupons for the
semi-annual interest thereon, which ma
tured prior TO 1891. were paid by the
United States in Septem Der, 1856.
Plaintiff is the holder of certain cou-
pons that had been detached from these
bonds, representing the semi-annual in
terest thereon that accrued prior TO Sep
tember l, 1896, amounting in the aggre-
gate TO the sum OF u, 800. On the Sd of
March, 1894, ne prosecuted his claim
against the Stale TO the Board of Exam
liners and demanded that they allow the
claim, with legal interest on the coupons
from their respective dates Of maturity.
The board refused to allow his demand
and thereupon the present action was
commenced under the provisions OF the
Act OF February %. 1893. Statutes of
1893 p. so Judgment was rendered in
favor of the plaintiff for the amount of
the coupons and interest as claimed by
him. The defendant has appealed, and
the error chiefly relied upon i'll the appeal
is the allowance of interest on the cou-
pons.
lheliability of the State to pay interest
on The matured coupons Of it's bonds WAS
presented in Sawyer VS.. Colgan 102 Cal.
Zo3j, and we there said: Section 1917 of
the civil Code does not apply TO an in-
debtedness of the State. and the State is
not liable to pay interest on its debts un-
less its consent to do SO has been mani
tested by an Act OF its Legislature or
some lawful contract of It's executive
officers" United States VS.. North Caro-
lina 136 Statutes U. ). III; Carr vs.. State.
III Ind. 2O4.)
The respondent, however, contends
that under the provisions OF Section of
the Act Of 1898, under which this action is
brought, lie Is entitled to legal interest on
the coupons from their maturity. That
section is as follows: Section ;. In case
Judgment be rendered for the plaintiff in
any such suit. it shall be for the amount
actually due from the State to the plant
iii, with legal interest thereon from the
time the obligation accrued, and without
costs"
The illegal interest" for which judg-
ment is by this section authorized 10 be
entered in favor of the plaintiff is only
such interest as is authorized by law. If
the plaintiff is not legally entitled 10 in
terest on his claim, either by reason of
the nature of the claim or the immunity
Of the State from an obligation to pay in
teresL, this statute does not authorize its
recovery: aud as we have seen that there
was at that time no liability on the part
of the State Tor interest upon the coupons,
there was no legal interest" for which
recovery could be had, Irrespective OF the
statute itself.
The claim by the respondent that the
Act is retrospective. and by its terms in
cludes the right to recover legal interest
from the maturity of the coupons, is met
by Article y, Section 81, of the Consti-
tuition, which declares:
1.-The Legislature shall have no power
to make any gilt, or authorize
the making OF auy gift, of any public
money or thing OF value to any individ-
uhIy VI OkAOA NOi pOAabAOh LdL-
ever"
Inasmuch as prior to the passage of the
Act there was no liability for interest on
the part OF the state, 1t was not compe-
tent for the Legislature TO create such liza
biiity by the passage OF the Act. 10 in
crease the existing obligation Tor the cou-
pons by adding thereto the right to re-
cover interest thereon would be to make
q donation to the holder of the coupons of
the amount of the interest.
Fit be conceded that the State was I'M
der moral obligation to pay the same in
terest upon its indebtedness that is rec
ogniZed as recoverable by law between
individuals, such moral obligation does
not render the statute constitutional or
make the interest SO authorized other
than gift. (Bourn VS.. Hart, IS Cal 81;
Conlan VI. Board OF Supervisors, 50 Cal.
III
The Superior Court Is directed to mod
ify the Judgment appealed from by strlk-
ing therefrom the words nineteen thou
sand six hundred and seventy-two dol
lars' and insert in lieu thereof The words
"forty-five hundred dollars" and as SO
modified the judgment will stand
Affirmed.
The opinion was rendered by Justices
Harrison, Garoutte and Van Fleet, COM
prising Department one,