The record-union. [volume] (Sacramento, Calif.) 1891-1903, 1898-02-15

the overdue coupons did not pear IN
terest, because the Act nowhere in its
terms provided for the payment of in
tereSt upon interest. Bates VS.. Gerber,
81 Cal. 800, affirmed the case of Davis
VS.. Porter, and the court said: "The
statute under and by virtue of which
the 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 understand
ing and agreement that they were only
entitled to the principal and annual in
terest, and that, if the fund provided for
the payment thereof should be sufficient
to meet the same, that no interest on the
coupons was provided for or could be
recovered"
The statute being thus the measure of
the bondholders' rights, it becomes i'm
portant to consider its provisions in re-.
lation to the interest upon the bonds,
for the bondholders will be entitled to
just such interest and no other as by a
fair intendment the statute provides that
they shall have. Section 81 of the Act
authorizes the city Of Sacramento to
issue bonds, not exceeding the sum OF
81 100000, bearing interest at the rate
of 3 per cent. per annum from the first
day of January, 1859, and payable at
the office of the Treasurer. y The
interest on said bonds shall be made
payable at the Office of the Treasurer on
the first day Of January of each year.
Coupons for the interest shall
be attached TO each bond SO that they
may be removed without injury to the
bond. Said coupons consecutively num-
bered shall be signed by the Treasurer.
Section SO provides: The annual in
terest and principal of all bonds issued
for claims against said city shall be
paid from the interest and sinking fund
provided by Section 80, and in the man
ner otherwise provided in this Act. Sec
ton 40 provides: 1t shall be the duty
Of the Treasurer to pay the interest on
said bonds. when the same falls due,
out of the interest funds, as provided in
this Act. Section 80 of the Act Gre
ates the interest and sinking fund and
declares that the fund shall be applied
to the payment of the annual interest,
and the final redemption of bonds issued
for city Indebtedness. 1t is by this lam
guage specifically declared that the
bonds shall bear interest; that the in
terest shall be payable annually from
the date of their issuance, and that the
interest shall be made a charge upon
and payable out of fund created by
and designated in the Act There is no
suggestion or intimation that the inter-
est is to cease upon the maturity of the
bend. 1t is a rule SO general and we'll
established that it is not even contro-
verted by respondents in this case, that
interest-b bearing coupon bonds continue
to bear interest after their maturity.
People VS.. Getzendaner, 1871 ILL.,, 234;
Pruyn VS.. the City of Milwaukee, Is
Wis, 367; Cromwell VS.. County of Sac
ramento, 90 u. s., 81: Beckwith VS.. H.
P. and F. r. r. Co., % Conn, 26S; stat
utes Of 1850, p. 90; Civil Code, Sec. 1917,
1918; Kohler vs.. Smith, 2 Cal, 591;
Nash VS.. FL Dorado County, "a Fed.
Rep, 252)
To take these bonds out Of the opera
ton of this rule there must be pointed
out some language in the statute evin-
Give of an intent so to do, some declara
ton which will justify the court in say
ing that it was designed that the in
terest should cease upon the maturity
Of the bond. That this intent can be de-
duced from the fact that the coupons
attached to the bonds extended only to
maturity is a proposition met and dis
posed of by People VS. Getzendaner, and
Pruyn VS.. City Of Milwaukee, supra.
The attached coupons never extend be-
yond the maturity of the bond. The
presumption is always that a contract
will be performed, not violated. 1t Is pre-
sumed, therefore, that the bonds will be
met and paid at maturity.
When we come to scan the language
of the Act above quoted, we find that
the bonds are to bear annual interest
from the date of their issuance, with
out any limitation upon the length of
time that annual interest is to run. We
find that the interest is payable at the
office of the Treasurer on the 1st day
of January of each year. We find also
that a fund is created which is TO be
devoted to the payment of the annual
interest and TO the final redemption of
the bonds, and. finally, that it is made
the duty of the Treasurer to pay the
interest on the bonds, when it falls due,
cut OF the interest funds provided in
the Act. These terms not only show
no intention to terminate the interest
upon the maturity of the bonds, which
intention must be expressed If this
contract Is to be made an exception to
the general rule, but, to the contrary,
they indicate with some clearness the
intent that the bonds shall bear an
nual interest from the date of their
issuance until the time they are actu-
ally paid. Nor can there be discerned
IN this any hardship upon the city. II
is but the application of the general
statutory rule allowing interest for the
detention OF moneys due.
In Beals vs.. Arnador County. IS Cal.
10, which is relied upon by respondent,
the question under consideration by the
court involved and was determined
upon an entirely different principle
from that which governs this eonsid-
Grafton, and this was pointed out by the
learned author Of that opinion IN Nash
KS II Dorado County. ~ Fed. Rep.
% In Beals VS.. Amador County an
equitable demand growing out Of the
division Of a county had been recog-
r4ized by the Legislature which had i'm
posed upon the new county an obliga-
ton 10 pay a specific sum. The obi
CATION extended no further than the
law expressly required, and the gen
eral principle here is. as declared in the
case of Whiteman VS.. the United States
- Court of Claims Rep. Ia. that from
legal obligation created solely by
statute no obligation to pay interest
viii ordinarily arise In the case al
bar. however. the obligation to pay in
terest is Itself part of the contract
The declaration in Sober VS. Gala
veras County. 50 Cal, 134. that interest
was not provided for after the matur-