The record-union., 1898-02-15

and the statutes of this State past due
coupons as Well as past due bonds bear
interest in all cases Where the obliga-
ton to pay is general and unqualified.
But although in Davis VS.. Porter the
question whether these coupons bore
| interest after maturity was left open
and undecided, it was clearly and dis
! tinctly held in the later cases of Bates
VS.. Gerber, 50 CAL, $50, and Davis VS..
Sacramento, 50 Cal, 49, that they do
not bear interest.
/ The case of Bates VS.. Gerber was ex-
actly the same as Davis VS.. Porter:
mandamus to compel the Treasurer TO
| pay overdue coupons with accrued in
terest Necessarily the plaintiff in
| that case had to contend for a reversal
of Davis VS.. Porter, but the court re-
| affirmed its former decision, and went
much further The Treasurer in the
Bates case had not only refused to pay
| the interest claimed to have accrued
after maturity of the coupons but had
| refused to pay the face Of the coupons
unless they should be surrendered as
/ fully paid and satisfied. and it was
| earnestly contended on the part Of the
/ plaintiff that the coupons drew inter
est from their ma turity under the gen.
| eral law providing for such interest
| after maturity on all contracts, and
/ that as the debt existed, the Treasurer
had no right to impose, as a condition
upon which he would pay the annual
| interest, that the coupons should be
surrendered"
1t is important to note carefully the
answer which the court made to this
proposition They did not deny-and
! they could not have denied-that under
the general law of the State past due
coupons draw interest, but they held
that the bonds from which these cou-
pons We're detached "were provided for
by special statute which provided a
| specific fund out Of which they should
be paid. The Act provided for the pay
ment of the principal and annual in
terest and nothing more. Getting stat
ute) There was no other fund out of
which the interest demanded could have
| been paid and to have paid out part
| of the fund on a liability not provided
for or allowed by law would have been
/
purposes intended and thereby to de-
prive other bondholders of their annual
| interest and perhaps of their principal"
The principal opinion from which this
quotation is made contains more to the
same effect, and announces the conclu-
sion that these coupons by reason Of
the special provisions of the contract be-
tween the city and it's creditors do not
| Il ra1u int "a f11y ha
curing opinion of Justice Fox is much
fuller and if possible more emphatic in
its assertion Of the same proposition. In
the subsequenticase of Davis VS.. Sacra-
mento, which was an ordinary action
against the city upon past due cou-
pons. the same conclusion was reached,
and the court in its opinion took occa-
sion to distinguish the case of Davis
VS.. Yuba County, rs Cal, 452. in which
interest was recovered on past due cou-
pons upon the ground that the liability
of Yuba County on her bonds was a gen.
eral one, whereas in the case of the Sac
ramento bonds there was no liability ex-
cept to pay out of special fund.
These two cases last cited are strictly
| in point and decisive of this case because
as above remarked there is no distinc-
ton to be made under the common law
or under the statutes of California be-
| tween past due coupons and overdue
coupon bonds in respect to the right to
collect, or the obligation to pay, inter-
est. Obligations Of either class draw in
| tereSt where there is general liability
of the debtor to pay, but when payment
is to be made in prescribed order out of
q special fund then the obligations pay
/ able out Of such fund are to be paid in
the amounts severally called for in their
| due order of payment, and not other
wise and this for the reason that when
ever payment of the specified amounts
in the prescribed order is departed from
one creditor is given what belongs to
another-there is a robbing Of Peter to
pay Paul.
/ The passage which have italicised in
the above quotation from the opinion
of the court in Bates VS.. Gerber states
this proposition very forcibly, and it is
the whole foundation of the decision in
| that case and the subsequent case of
Davis VS.. Sacramento.
Now, applying that proposition to the
| facts of this case what do We find? OF
the bonds and coupons issued under the
Act of 1858 each was an express written
promise of the city of Sacramento to pay
a definite sum of money at a certain
date. The payments to be made ac-
oordng to these written promises may
| be tabulated as follows: