The record-union., 1895-09-20
VICTORY FOR THE GAS COMPANY.
The Supreme Court Decides in Its
Favor.
It Holds That the Charter Does Not
Affect the City's Contract With
the Company.

Young, appellant, which VIII explain
itself:
The Capital Gas Company. q corpora
ton organized and existing under the
laws of the State of California, ls, ana loE
more than twelve years last past mas
been. engaged in the business OF furnish
ing gas 10 the residents OF the CITY OF
Sacramento Ia municipal corporatlon)
and TO consumers generally for pront,
and has had shares OF stock issued 10
and held by divers persons, and Z. d.
Cummings is, and for more than one
year last past, has been, the duly ap-
pointed and acting Secretary OF said cor
poration.
The said corporation has, during
period OF more than twelve years last
past, been engaged in said business
under and pursuant to certain franchises
duly granted TO il by said City OF Sacra-
mento.
On the I1th day of January, 1857, the
Board of Trustees of said Capital Gas
Company, by resolution reg gularly passed,
fixed the prices to be paid by consumers
thereof at So for each thousand cubic feet.
j. ID. Young, the appellant herein, Is,
and for more than three years last past
has been, the duly elected and quallhed
Auditor of said city of Sacramento. and
under the provisions of the charter there
of duly adopted it is the duty of said
upon the treasury for claims against said
city which have been allowed by the
Board of Trustees thereof.
The Fire Department is and for more
than one year prior to 1894 was one of the
departments of the municipal government
of the city of Sacramento.
AT all the times herein mentioned b. I.
Steinman was and still is the holder and
owner of stock in said Capital Gas Com
pany, and was and still is the President
of said company, and since the first Mon
day IN January, 1894, has been, and still
is the duly elected, qualified and acting
Mayor of said city OF Sacramento.
Between the first day of February, 1894,
and the first day of March, 1894. the Fire
Department OF the city of Sacramento
used and consumed 5000 cubic feet of gas.
furnished and distributed by the Capital
Gas Company, which gas, according to
the rate fixed as aforesaid, was of the
value of S25 so, and thereafter and on the
lst of March, 1894, the said gas company
presented its bill therefor in said amount,
duly itemized and verified, TO the Board
of Trustees of said city, which bill was
allowed by said board for said sum of
S25 so, and presented 10 the Auditor
aforesaid who rejected the same, and re-
turned it to the board as provided by the
charter.
Thereafter the same bill was again al
lOW6u anu ApprONeU ny Tie bOdTQ OF
Trustees and by b. u. Steinman, the
Mayor, in due form, and was again pre-
scented TO the Auditor, who refused to
audit the same or TO draw his warrant
therefor on the Treasurer OF said city in
favor of the said gas company.
Said sum of S25 50 is still due and owing
from the said city to said gas company.
The gas so furnished was not furnished
under any express contract, nor was ii
furnished pursuant to any contract en-
tered into before the election of said
Mayor, except that it was so furnished
pursuant to the franchises of the said gas
company and the law applicable TO said
gas company.
The decision then quotes Section 2Il of
the city charter, which provides that no
memb ber OF the Board of Trustees or Offi-
Ger or employe of the city shall be or be-
come directly or Indirectly Interested in
or with the performance of any contract,
work or business, or in the sale of any
article, the expense, price or considera-
ton OF which is payable from the City
Ireaaury.
Upon the facts as found by the court of
which the foregoing is condensed state
ment, the court below adjudged that an
alternative writ of mandate heretofore
issued IN the case be made peremptory,
requiring the appellant herein as Auditor
10 issue his warrant upon the treasury of
the city of Sacramento. and upon the
proper fund therein, for the amount of
the demand, viz, for SO 50.
e. The defendant Auditor, as aforesaid
appeals from the judgment, and the cause
comes up on the judgment roll.
The officers OF municipal corporation
like those OF private corporations, are
agents OF the corporate body.
1t is a cardinal doctrine of the law of
agency that whenever an agent is in
I'D Fhrara IA
ton in the exercise of the power con-
ierred upon him 1t is an implied condi-
tion that this discretion shall be used In
good faith for the benefit OF the princi-
pal and in accordance with the true pur-
pose of the agents appointment.
To this extent every agency which is
not purely ministerial one involves a
fiduciary relation between the parties.
tAloraweiz on Private Corporations, Sec.
5l6.)
Ii is In consonance with this principle
that officers of corporation may not,
under any circumstances. use their Off
clal position for their own benedt or for
the benefit of anyone except the corpora
tion itself, aud they may not represent
the corporation in any contract or trans
action IN which they are person nally in
teresIed in obtaining an advantage at the
expense of the corporation.
In such cases it is said the corporation
would not have the benefit of their unbi-
Rsed judgment, as self-interest would
prompt them TO prefer their own advan-
tage TO that OF the company. (San Diego
VS.. S. d., ETC., Company, Al Cal l06;
Shakspear vs.. Smith, II Cal. 63S; Finch
VS.. Riverside, ETC., Company, 81 Cal 5g7;
Wickersham VS.. Crittenden, SO Cal %;
Capron VS.. Hitchcock, IS Cal. 427; Dillon
on Municipal Cor, Sec. 444.)
The rule embodied in the foregoing de-
-. 1. II. l., 81.
lost of others which might be mentioned,
is not an arbitrary one. In other words,
it is founded in reason, and Is not TO be
unfortunately applied irrespective OF
the circumstances OF the case. Mora
wetz, Sec. OIL
1t would seem that the circumstances of
the present case bring it within the ex-
ceptions TOR the following reasons:
Flrst-Ihe authority to transact the
busines OF the municipal corporation of
the city Of Sacramento; TO procure sup
plies therefor, and to audit and allow
claims against the city is vested in the
Board of Trustees. and b. U. Steinman,
as Mayor OF the city, has not, so far as
appears from the record, any authority in
the premises.
Second-The gas furnished TO the city
was not supplied under or pursuant to
any express contract with the respondent
corporation OF which Steinman is Presi-
dent, and the right TO recover the reason
able value thereof is based upon the i'm
pied promise which the law raises.
Ihird-Under Section 629 of the Civil
Code the respondent was bound upon
proper demand 10 furnish gas to the city,
ana upon refusal so 10 do was liable to a
penalty OF $50 as liquidated damages and
g day as liquidated damages for each
day such refusal or neglect continues
thereafter.
Under the operation of this law the gas
company was not free agent with power