The record-union. [volume] (Sacramento, Calif.) 1891-1903, 1896-06-11
THE SUPREME COURT SAYS.
Its Decision in the Sacramento City Bond
Case.
Reasons Given by That Tribunal fer
Reversing the Judgment of
the Lower Court.


preme Courts decision in the case of
w. S. Kendall against James N. Porter,
Treasurer of the city, to recover in
terest on certain overdue city bonds:
This was an application for writ of
mandate to compel the respondent, as
Treasurer of the city of Sacramento,
to pay to plaintiff the principal of GER
tain overdue bonds of the city of Sac
ramento with interest thereon from the
date of their maturity. A demurrer to
the petition was sustained by the trial
court, and judgment thereupon entered
against the plaintiff, from which judg-
ment he prosecuted the appeal
The question thus presented is
whether the bonds of the city of Sacra-
mento, issued under the provisions of
the Act of April p, 1853, bear interest
after their maturity.
Various questions touching the con-
struction of the Act of 1858, under
which these bonds were issued, and the
rights of the bondholders hereunder,
have been decided by this and other
courts.
By these cases it is held that the
Act constitutes a contract between the
city and the bondholders, and that the
OtIuIOIutIS IlSHlS QttOI lIlc ouC
and that the duties of the city and its
officers upon the other, are measured
by the terms of the statute.
Here a number of authorities are
cited showing that while the Treasurer
was not authorized to pay interest on
coupons after they had matured and
remained unpaid, and holding that
overdue coupons did not bear interest,
bA Aa@ In,.l doc for
the payment of interest upon interest,
cases We're also cited showing it to be
the duty of the Treasurer to pay all
interest when it fell due. The finding
concludes thus:
The question whether or not there
was money in the treasury to pay the
bonds at the time they became due, and
that thus the holder of a matured bond
who had failed to present it at ma
turity could not recover interest, does
not here arise. If such be the facts,
they might constitute a defense to the
present action, but they cannot be con-
sidered upon demurrer. The Treasurer
is specially charged with the duty of
paying the interest. If he can make a
valid and sufficient showing why that
interest should not be paid, he may
make it in his return, but under the
facts here pleaded, as it is made the
explicit duty of the Treasurer to pay
the interest upon these bonds as it be-
comes due, mandamus may be en-
ployed to compel him to perform that
duty.
1t follows, therefore, that the de-
murrer was improperly sustained. The
judgment is reversed and the cause
remanded, with directions to the trial
court to overrule the demurrer to the
petition, with leave to the Treasurer
to make his answer or return thereto.
The Judges concurring are: Hen
shaw, Garoutte, Temple and Har-
rison, while Justices Mcfarland and
Van Fleet dissent.
The dissenting Justices are "of the
opinion that the judgment of the lower
courts should be affirmed, stating that
the rights which the appellant has
against the city are not those of a gen
eral creditor He could not recover a
judgment against the city upon his
bonds for single dollar; for the bonds
We're issued and accepted by the bond
holders under a statute which provides
that the city shall not be sued in any
action whatever The complaint does
not show the form Of the bonds, but
assuming that they are on their face
similar to ordinary bonds issued by
corporations, they do not in themselves
constitute complete and independent
contracts"
The dissenting Justices then quote
authorities showing that the statute
does not provide for either principal
or interest bearing interest after ma
turity Continuing, they say:
I'm the case at bar, 1t is contended
that there is no provision for the pay
1nent out of the special fund of any
thing other than the coupons and the
principal of the bonds. While the
bondholders, if they could sue the city,
might recover judgments for interest
accruing after the maturity of the
bonds, there is no provision in the Act
for the payment of such interest by
the City Treasurer out of the special
trust fund"
The dissent concludes as follows:
'We think that in the case at bar, the
majority opinion treats this proceeding
asan action against the city by a gen.
creditor to recover a judgment for in
terest on overdue bonds; but, in that
view, appellant could not recover either
the principal or interest of his bonds,
for both would be barred by the stat
ute of limitation
Kendalfs attorney in the case the re-
suit of which has so upset the calcula-
lions of the city's financiers, was Ex-
Senator F. s. Sprague, now practicing in
this city Other lawyers declined the
case, believing Kendall could not win,
but Sprague took it and successfully
carried If to the Supreme Court