The San Francisco call., 1913-07-17
CITY HAS POWER
To CHANGE THE
SIZE Of BONDS
City Attorney Long Replies
With Emphasis on eyes"
to Mayor Rolph's
Question
SUPREME COURT HAS
DECIDED LAW POINT
Minimum Denomination Is
Fixed in Charter at $40
Change May Be Made

Y Long to the effect that bonds Of any
denomination, even as low at SO and
$50 each, may be sold to raise money
<ox the building of the proposed exten-
sion of the municipal railway, was
written in answer to the following in
quiry from Mayor Rolph
Inquiries have been made of me for
e. city. bonds of lower denomination than
r. $1,000. All of the city bonds are of the
. par value Of $1,000 Is there any way
whereby any part or all of any issue
could be changed into bonds of smaller
denominations
Mr. Long, in the beginning of his
opinion. cites a city charter section
which provides that the ordinance call
ing such special election, the acquisi-
.. tion of public utilities shall set forth
the purposes for which the election is
called, the estimated cost of each utfl-
fty proposed the proposed method and
manner of the payment thereof and that
If 1T shall be necessary to incur mu-
nicipaI Indebtedness the ordinance shall
specify that bonds of the city and coun-
~ shall issue for the payment of the
cost of such utility. or utilities. as is
set forth in such ordinance.
NOT LESS THAN SO
Section 10 provides that the bonds
ticle shall be of such form as the su-
pervisoTs in the ordinance calling the
election therefor shall determine. The
bonds so issued shall be issued in de-
nominations of not less than $40 and
not more than $1,000.
Decisions of the supreme court to
show that minor changes can be made
are cited by the citf attorney.
The first is that of Derby versus the
city of Modesto. 104 Cal. SIS, which
was an action filed by a taxpayer to
enioin the levy of a tax for the pur-
pose Of raising money to pay for bonds
which had been issued by the city and
sold and paid for.
The next case TO be decided by the
supreme court was that of Skinner
versus the city of Santa Rosa, 107 Cal.
'46 f. where a taxpayer protested to the
City council against their delivering to
q successful bidder certain city bonds.
- Mr.. Long next refers to the case of
. Law versus San Francisco, IA Cal
3S4- Here taxpayer brought action
. TO restrain the city from issuing mu-
'nicipal bonds The bonds were claimed
10 :be invalid on account of several
alleged. Irregularities in the proceed
-ings- OF the supervisors.
The Law case is of Importance"
: SAYS the city attorney, in his opinion,
: as showing the undoubted frame of
!. :lsiBd- of the court to follow the early
Defby case, unless it can be shown
= that:ah increase burden may be placed
: -stll the taxpayer by changing the num-
=. bef and denomination of the bonds"
LONGS OPINION
~. Continuing, Mr.. Long says:
:; 1.-THE district court of appeal for the
= second appellate district has, since the
- a bpve supreme court decisions rem
:.*:.do.efed' decision bearing on our ques-
~ itfoIi.. =: IN City of Santa Barbara VS..
for s' to eg eeogmp the anqsSs city clerk S
J. OF. the city of Santa B4rbara to certify
= and cause to be published an ordinance
= Of that city and to sign his name and
*.efflx:t the corporate seal of the city to
= eer'siH improvement bonds authorized
Il ssiie had been authorized by vote of
- the people. The ordinance calling the
-. EpeciaT election contained certain re-
:: cjtals not required by law, and among
>.:@ffers, the number and the denomi-
ma ton of the bonds. The number was
. fixed: at 4e. The denomination was
-af.ced a { Sl.250 each. payable one each
, Yea =. 80 This violated statute which
.4l1hite the amount to $1,000 each,
2 ffeF sthe election an ordinance was
PASSED. authorizing the issuance Of
hondsi Of the denomination of $3.50
ORDINANCE WAS CHANGED
5'<:..It. being called to the attention of
tire city authorities that this was for
Hidden by statute and no bonds hav
= repealed. and another one passed fix
ing the number at so and the denom-
~ Tration a S625. payable two each year
=. was this latter ordinance that the
-:: clerk refused TO certify and publish
:: and the bonds provided by that ordin-
alroe to which he refused to attach his
=: name nd the corporate seal of the
.: tlty. He placed his refusal on The
ground that the city council had no
. rsauthpritY 10 depart from the denom-
9nation fixed in the notice of election
: The. court held otherwise on the
grounds: First that there was no
NECESSITY for fixing the denomination
j. Of. the bonds in the notice of cleo
- tion. and so. this may be treated as
+: mere surplusage, and second, that no
e hardship could result TO the taxpayers
80 from the change.
=. 1T may be claimed that. under our
charter, section s of article XII, re-
quiTing the notice of election ts Specf-
.sfv the character Of the bonds. and sec
tion 10, requiring that the bonds shall
be Of such form as the supervisors. in
% the ordinance calling the election there
% for, shall determine; makes 1t manda-
tory upon the supervisors to determine
the denomination before the election, is
aeld. But IL would Stlll be true that
taxpayers could not show any injury
Dn account of a mere change in the
number and denomination of the bonds.
And so. the courts language, at page
345 there is no difference that can or
will in any manner affect the tax
payer to his disadvantage is of signifi-
cance.
NO OBJECTION RAISED
g. 1T is to be noted that in none Of the
above cases has any objection been
sraised by bond holder. who had al
ready purchased bonds of the higher
denomination, TO the issuance of bonds
OF smaller denomination. But the
court having held that such a change
does not inyalidate the bonds, I can
not see that the rulings would have
becn any different had such objection
acen. raised.
Il am. therefore, of the opinion that
TIE denomination of municipal bonds
already authorized by vote of the peo-
pie may be changed so long the de-
nomina tions are fixed at not less tina n
$40 and not more than $1,000. Also.
6he bonds should be redeemed at such
ejmes and with reference to the prin-
.eipal.due on the bonds. in such amounts
IS may. have been determined by the
supervisors in the ordinance calling the
special election at which the people au-
= thorized their issuance.
And the amount of the tax levy to
he made for the payment of such bonds
should remain as it was described in
. the ordinance giving notice of the
'.slection.'
2. Thirty-three delegates to the national