The record-union. [volume] (Sacramento, Calif.) 1891-1903, 1898-02-15
The Supreme Court Declares That
1t Must Be Paid.
Chief Justice Beatty and Justices McFar=
land and Van Fleet Dissent.

LII OOul VI tllC StdtS u
California. Filed February IA, 1898.
In Bank.
w. S. Kendall, plaintiff and appel
liant, VS.. James N. Porter, Treasurer of
the City of Sacramento, defendant and
respondent. Sac. No. 81.
Syllabus by the Record Union.'o
Do the bonds of Sacramento, issued
under Act 1853, bear interest after ma
turity?
The majority of the court holds: The
act was a contract between the city
and her creditors. It authorized 8 per
cent. bonds, with interest coupons. at
tached, to be detached on payment as
due. The Act creates a sinking and
interest fund for that purpose and re-
demption. There Is no suggestion that
interest is to cease after maturity OF
the bonds.
Interest bearing coupon bonds continue
to bear interest after maturity. This
is well established rule. The claim
that interest ceases on maturity is dis
posed of by People VS.. Getzendaner
and Pruyn VS.. Milwaukee, supra. The
presumption is that the contract will
be performed, not violated.
There is by the Act no limitation on the
length of time the annual interest is
to run and no disclosed intention TO
terminate interest on maturity of the
bonds. On the contrary it is expressed
that the bonds bear interest from their
date until paid. This is no hardship,
but simply application Of the general
statutory rule.
The question whether or not there was
money in the treasury to pay the
bonds when due, and therefore
holder of a matured bond who failed
to present it at maturity could not re-
cover interest, does not arise here IL
such is the fact it might be defense
to this action but cannot be consid-
cred on demurrer.
If the City Treasurer can make valid
and sufficient showing why interest
should not be paid, he may make 1t
on his return, but on the facts pleaded
here it is his duty to pay interest on
the bonds as it becomes due.
The demurrer was improperly sustained.
Judgment reversed and case remanded
with leave to the Treasurer to make
answer.
Mcfarland, j., dissents, for the Act pro-
vides the city shall not be sued. The
bonds are not independent contracts,
but parts of a contract made by rea-
son of the Act of 1858, by which all
rights as general creditors under old
demands were waived and the right
to sue the city was waived.
The question is whether under the stat
utes payment of interest on bonds
other than that evidenced by the cou-
pons, is enjoined as a duty upon the
Treasurer. He is to pay "as provided
in the Act and he is, therefore, to
pay only the interest represented by
the coupons. This court so held in ef-
feet in Davis VS.. Porter. &c Cal, and
Bates vs. Gerber, 81 Cal.
There is no provision for payment of
interest after maturity out Of the
special fund created by the Act, and
by that the bondholders are bound.
Beatty, c. J.. and Van Fleet, J., also
dissent, holding that the bonds do not
draw interest after maturity 1t has
been settled that 1t Is not the duty
Of the Treasurer to pay accrued in
terest, and, hence. nlandamus is not
the proper remedy.
The bonds were not a general obliga-
ton, but were to be paid only as pro-
vided by the Act" /. e. out of the
specially provided fund. Hence. the
rights of the bondholders are to be
measured only by the terms Of the
Act" and in the manner there pro-
vided.
Previous decision Of this court hold
that the coupons do not bear inter
est after maturity.
In Davis VS.. Sacramento the holding IS
decisive of this case, because there
Is no distinction under common law
or the statutes between past due
coupons and overdue coupon bonds, in
respect to the right to collect or the
obligation to pay interest.
The bonds and coupons are each an
express promise to pay definite sum
and no more, and as provided in the
Act of creation and not otherwise
II the position Of petitioner is correct,
then all holders of all bonds have the
same right, and somewhere in the
twentieth century the bonds Of 1898
will be drawing interest to date aud
the coupons belonging to this CEN
fury will remain unpaid. Many cases
cited in support.