Case Name: CITY AND COUNTY OF SAN FRANCISCO et al., Petitioners, v. HAROLD J. BOYD, as Controller, etc., Respondent
Court: Supreme Court of California
Jurisdiction: California
Decision Date: 1943-08-10
Citations: 22 Cal. 2d 685
Docket Number: S. F. No. 16932
Parties: CITY AND COUNTY OF SAN FRANCISCO et al., Petitioners, v. HAROLD J. BOYD, as Controller, etc., Respondent.
Judges: 
Reporter: California Reports
Volume: 22
Pages: 685–708

Head Matter:
[S. F. No. 16932.
In Bank.
Aug. 10, 1943.]
CITY AND COUNTY OF SAN FRANCISCO et al., Petitioners, v. HAROLD J. BOYD, as Controller, etc., Respondent.
John J. O’Toole, City Attorney, and Walter A. Dold, Chief Deputy City Attorney, for Petitioners.
Jesse H. Steinhart, John J. Goldberg and S. A. Ladar for Respondent.
Leo R. Friedman as Amicus Curiae on behalf of Respondent.

Opinion:
GIBSON, C. J.
By this proceeding in mandamus the city and county of San Francisco and its Public Utilities Commission seek to compel respondent, as controller of the city and county, to audit and approve wage claims of certain motormen, conductors, streetcar operators and bus operators employed by the municipal railway at the rates of compensation fixed in the Salary Standardization Ordinance (Ordinance # 2184), effective July 1, 1943, and in the Annual Salary Ordinance for the year 1943-1944 (Ordinance # 2148), also effective July 1, 1943. In support of his refusal to audit and draw warrants for these claims, the respondent contends that their payment would constitute an illegal expenditure of public funds for the reason that the cited ordinances are void as being in contravention of section 151 of the city charter.
So far as presently material, section 151, by virtue of an amendment effective January 11, 1943, provides:
"The board of supervisors shall have power and it shall be its duty to fix by ordinance from time to time, . all salaries, wages and compensations . . . for the positions, or places of employment, of all officers and employees of all departments, offices, boards and commissions of the city and county in all eases where such compensations are paid by the city and county. . . .
"In fixing schedules of compensation as in this section provided, the civil service commission shall prepare and submit to the board of supervisors and the board shall adopt a schedule of compensations which shall include all classifications, positions and places of employment the wages or salaries for which are subject to the provisions of this section;
. . . The compensations fixed as herein provided shall be in accord with the generally prevailing rates of wages for like service and working conditions in private employment or in other comparable governmental organizations in this state;
The Annual Salary Ordinance for the fiscal year just expired (1942-1943) had provided rates of compensation for motormen, conductors and bus operators ranging from 80c to 87%c an hour depending on the type of work and the length of service.
Between January 15 and March 2, 1943, pursuant to the provisions of section 151 of the charter, the Civil Service Commission conducted a comprehensive investigation and by such survey obtained facts and data concerning wages paid to motormen, conductors, streetcar operators and bus operators for like service and working conditions in private employment and in other governmental organizations in this state. This survey extended to the rates of wages paid such employees in fourteen communities by some nineteen transportation systems or their branches, representing all of the street railway systems and comparable bus lines in the state. A schedule of the data thus considered by the commission discloses rates of pay ranging from 70c to 93½c an hour. It appears, however, that only operators of one-man cars and bus drivers received in excess of 87½c an hour. Based on such data and on changed economic conditions resulting in an increased cost of living, the commission, as required by the charter, after several public hearings at which all interested persons were heard, published its proposed schedule of rates of wage ranging from 85c to 92½c an hour, together with a comparison of existing schedules. Thereafter (and also as required by the charter) the commission transmitted the schedule to the board of supervisors with a summary of the facts and data obtained and considered by it in recommending the proposed rates.
Following many hearings the board of supervisors approved and adopted the rates of wage as recommended by the Civil Service Commission excepting only the rates proposed for bus operators. As to the latter class the board, under authority of the charter, amended the schedule proposed by the commission, and fixed the rates of pay at 5c an hour higher, the maximum rate being 97½c an hour. Thus, the board of supervisors in thereafter adopting the Salary Standardization Ordinance and the Annual Salary Ordinance, fixed rates of wages for motormen, conductors, streetcar operators and bus operators, ranging from 85c to 97½c an hour.
Respondent's principal contention is that these ordinances are invalid for the reason that the board of supervisors in fixing the rates exceeded the authority granted to it by section 151 of the charter. While conceding that the fixing of rates of compensation for municipal employees is a legislative function (citing to that effect San Diego Water Co. v. San Diego, 118 Cal. 556 [50 P. 633, 62 Am.St.Rep. 261, 38 L.R.A. 460]; Contra Costa Water Co. v. Oakland, 159 Cal. 323, 335 [113 P. 668]; Smyth v. Ames, 169 U.S. 466 [18 S.Ct. 418, 42 L.Ed. 819]), respondent contends that the power of the board of supervisors in this respect is subject to the charter limitation that the compensations fixed "shall be in accord with the generally prevailing rates of wages for like service and working conditions in private employment or in other comparable governmental organizations in this state," and that the power of the Civil Service Commission is subject to the limitation that the rates recommended by it be "in accordance" with the prevailing rates of compensation. He argues that since the rates fixed in the ordinances exceed to the extent above noted the maximum rates paid elsewhere in this state to like employees for comparable work, they are not "in accord with" or "in accordance" with the generally prevailing rates. In other words, respondent contends that the quoted phrases as used in the charter, mean not higher than the prevailing rates of wages.
In our opinion, the phrases do not require that the rates of wages recommended by the commission or fixed by the board be identical with or not higher than the generally prevailing rates, but rather that there be a reasonable or just correspondence between the rates established and those elsewhere prevailing, i.e., that they be in harmony with and substantially conform to such other rates. (See Webster's Int'l. Dictionary; The Oxford English Dictionary; Roget's Thesaurus.) The word "accordance" is defined in Webster, supra, and in Black's Law Dictionary to mean in "agreement; harmony; concord; conformity." It should be noted that prior to its amendment in January, 1943, section 151 provided that the rates of compensation fixed "shall be not higher than prevailing rates for like service and working conditions." The amendment deleted that express limitation. The determination whether proposed rates of compensation are in accord or in harmony with generally prevailing rates is within the discretion of the rate-making authority. The courts will not interfere with that determination unless the action is fraudulent or so palpably unreasonable and arbitrary as to indicate an abuse of discretion as a matter of law. (See Hannon v. Madden, 214 Cal. 251, 257 [5 P. 2d 4]; see, also, Mann v. Tracy, 185 Cal. 272 [196 P. 484]; In re City and County of San Francisco, 191 Cal. 172, 184 [215 P. 549]; McQuillin, Municipal Corporations, 2d ed., sec. 535, p. 301.)
Respondent concedes that this court is not required to determine the generally prevailing rates of compensation and admits that a writ of mandamus should issue unless it is concluded "that upon no conceivable basis under all of the evidence . . . can the rates as fixed be brought within the charter limitation." The evidence discloses that the generally prevailing rates of compensation are somewhere between 70c and 93½c an hour, the minimum and maximum rates paid by other transportation systems in the state. Under the facts of the present case we are not prepared to hold that the board of supervisors abused its authority to fix rates "in accord with" or in harmony with the generally prevailing rates of compensation.
Respondent also contends that the ordinances are invalid for the reason that the Civil Service Commission failed to comply with certain requirements of section 151 of the charter prescribing the procedure to be followed iu formulating a proposed schedule of rates of compensation. This procedure is outlined in the following portion of section 151:
"The proposed schedules of compensation or any amendments thereto shall be recommended by the civil service commission solely on the basis of facts and data obtained in a comprehensive investigation and survey concerning wages paid in private employment for like service and working conditions or in other governmental organizations in this state. The commission shall set forth in the official records of its proceedings all of the data thus obtained and on the basis of such data the commission shall set forth in its official records an order making its findings as to what is the generally prevailing rate of pay for each class of employment in the municipal service as herein provided, and shall recommend a rate of pay for each such classification in accordance therewith. The proposed schedules of compensation recommended by the civil service commission shall be transmitted to the board of supervisors together with a compilation of a summary of the data obtained and considered by the civil service commission and a comparison showing existing schedules. Before being presented to the board of supervisors for consideration, the proposed schedules and a comparison with existing schedules shall be published once a week for two weeks. ."
It is agreed that the commission proceeded in conformity with the requirements of the foregoing charter section except it is claimed that it did not set forth in the official records of its proceedings all of the data obtained in its investigation, nor did it set forth an order making its findings as to the generally prevailing rates. As before stated the commission made a survey of the rates of wages paid to conductors, motormen and bus operators in all streetcar and bus line operations of all street railway systems and comparable bus lines in the State of California. In formulating its recommendations to the board of supervisors the commission had before it and considered all the facts collected in such survey. Not all of this data was set forth in its official records but it did set forth therein a Summary of Wage Recommendations and Supporting Data. This summary listed among other things the present rate paid by the municipal railway, the prevailing union wages, and the appropriate prevailing wage for all such designated employees. These schedules reflected the findings of the commission with respect to prevailing wages and constituted a substantial compliance by the Civil Service Commission with the procedural steps enumerated in section 151. Moreover, the charter section provides that "The board of supervisors may approve, amend or reject the schedule of compensations proposed by the civil service commission." Thus it is clear that the rates of compensation are fixed by the board of supervisors and involve an exercise of the independent judgment of that body. A compilation of the data obtained and considered by the commission with its recommendations was transmitted to the board. The board thereupon held many hearings after which these ordinances were enacted fixing the rates of compensation pursuant to the schedule recommended by the commission and amended by the board.
The ease of Sullivan v. McKinley, 14 Cal.2d 113 [92 P.2d 892], relied on by respondent, does not support his contention that the ordinances here involved are invalid. In that case certain persons employed as car painters by the municipal railway sought a writ of mandamus to compel the payment to them of a rate of wage of $10 a day as provided in the annual salary ordinance. Payment was' resisted on the ground that a $9 rate of wage had been fixed for them in the budget and annual appropriation ordinance. In denying a writ this court held, in view of the provisions of section 71 of the charter that "All increases in salaries or wages . . . shall be determined at the time of the preparation of the annual budget estimates and the adoption of the annual budget and appropriation ordinances . . . ," any effort of the board of supervisors to increase a wage scale in the annual salary ordinance over the amount provided in the approved budget was void. It was pointed out that "Once the budget is approved by the Board of Supervisors, the fiscal terms of the annual appropriation ordinance and the annual salary ordinance are automatically fixed beyond the power of change by any amendment. ' ' In the present case the increase was timely and was published as provided in the charter, thus affording opportunity to interested parties to object thereto. While an ordinance is invalid if the mandatory prerequisites to its enactment are not substantially observed (Sullivan v. McKinley, supra, 117; McQuillin, Municipal Corporations, 2d ed., p. 747, see. 709), no attack is here made on the procedure followed by the board itself; and as there was substantial compliance by the commission with the procedural steps governing its action, we do not find it necessary to determine whether the validity of an ordinance enacted by the board of supervisors could be affected by irregularities or defects in the procedure followed by the commission.
'"There is nothing in the record indicating that this proceeding is collusive. On June 29, 1943, an action was commenced in the superior court by a taxpayer to enjoin payment of the compensations provided in the ordinances in question. Because of the pendency of that action respondent controller refused to audit and approve wage claims of employees of the municipal railway. This proceeding in mandamus was thereupon commenced by the city and its public utilities commission. The taxpayer, plaintiff in the superior court, filed a petition for leave to intervene which was thereafter withdrawn. It appears from the petition and the answer thereto that a sum of money was appropriated by the board of supervisors to employ and pay counsel to represent respondent controller in this proceeding. In his petition to intervene the taxpayer alleged that the present proceeding was ' ' an amicable suit" and was brought to "by-pass" his superior court action. Upon the hearing of this proceeding, however, the attorney for the taxpayer declared, "I did state in my brief that this was an amicable suit. I have listened to [counsel for respondent] and he has made, as he always does, a very able presentation of his side of the matter. I have no desire to disrupt the agreed statement of facts in this proceeding, but I would like an opportunity to present my views so far as they are applicable to this charter. Whether that is done by the court granting my application [to intervene] is a matter of indifference to me so long as I have an opportunity to present the legal phase of it, as I see it." After orally presenting his views on the issues involved, and receiving permission to file a brief "as a friend of the court" (which brief has been since filed), he withdrew his petition for leave to intervene. It is evident from these facts and the contents of the brief filed on behalf of the taxpayer that he does not claim this proceeding is collusive.
A suit is not condemned by law merely because it is friendly (Price v. Sixth Dist., 201 Cal. 502, 516 [258 P. 387]; Golden Gate Bridge etc. Dist. v. Felt, 214 Cal. 308, 316 [5 P.2d 585]). It is true, of course, that an action not founded upon an actual controversy between the parties to it, but which is brought for the purpose of securing a determination of a point of law for the gratification of the curiosity of the litigants, or the sole object of which is to settle rights of third persons who are not parties, is collusive and will not be entertained. (Golden Gate Bridge etc. Dist. v. Felt, supra; Collier v. Lindley, 203 Cal. 641, 644, 645 [266 P. 526]; People v. Pratt, 30 Cal. 223.) This is not such a case. Respondent, as a public officer is bound by oath to faithfully perform and discharge the duties of his office. He would be acting in violation of his public duty if he authorized payment of claims that involved an illegal expenditure of public funds. Whether he could safely approve the payment of these claims depends upon the validity of the ordinances authorizing the compensation, and the determination of this question involves a construction of the charter and the application of its provisions to the facts of this case. His right to approve the payments had been challenged in a suit. A real controversy therefore existed as to respondent's duties in the premises.
The fact that the fees of counsel for both sides ultimately must be paid from public funds does not render the proceeding collusive. It has been held that in litigation involving only private parties and rights, payment of all counsel fees by one party to the litigation may give that party "such control over both the preparation and argument of the cause, as to make the suit . . . collusive ." (Gardner v. Goodyear etc. Co., 131 U.S. Appendix ciii [21 L.Ed. 141].) This does not apply, however, where, as here, the adversary parties are a municipal corporation and one of its officers. It is not uncommon for a public official charged with the auditing or disbursement of public funds to question expenditures directed by another officer, agency or department of government. His refusal to audit or pay claims frequently gives rise to controversies which usually can be settled only by the judgment of a court. The fact that the opposing parties are authorized to employ attorneys who are paid from public funds does not render the suit collusive since the common source of such payment does not give one party control over the preparation and argument of the cause. There is nothing in the record before us which indicates that the board of supervisors selected counsel for respondent or exercised any control over the preparation or presentation of the ease on behalf of respondent. There have been many cases in the courts of this state involving public officers similar to the present suit in which opposing parties were represented by attorneys who were paid from the same public source, yet no contention was made that the suits were thereby rendered collusive. See Parker v. Riley, 18 Cal.2d 83 [113 P.2d 873, 134 A.L.R. 1405]; Swing v. Riley, 13 Cal.2d 513 [90 P.2d 313] ; Railroad Commission v. Riley, 12 Cal.2d 48 [82 P.2d 394] ; Vandegrift v. Riley, 220 Cal. 340 [30 P.2d 516]; Heron v. Riley, 209 Cal. 507 [289 P. 160] ; Hecke v. Riley, 209 Cal. 767 [290 P. 451]; Stockburger v. Riley, 21 Cal.App.2d 165 [68 P.2d 741].) In Golden Gate Bridge etc. Dist v. Felt, 214 Cal. 308 [5 P.2d 585], the district sought a writ of mandate to compel Felt, as secretary of the district's board of directors, to sign certain bonds proposed to be issued by it. Amici curiae, representing certain taxpayers not parties therein, contended that the proceeding was collusive. This court disposed of the contention as follows: "It is conceded that respondent secretary is personally desirous of a decision in favor of petitioner. In other words, this is a friendly suit. It appears that the bridge district agreed to reimburse respondent for the expense incurred by him in the litigation, in the event that the contractors or the bidders for the bonds or other persons interested did not do so. . . . These facts, amici curiae assert, show that the proceeding is fictitious and collusive, being a mere attempt to secure an advisory opinion without an actual contest.. . Neither on principle nor authority does this position commend itself to us. . . . Nor is the fact that he [respondent] is removable at the pleasure of the board material. . A genuine controversy existed. . . . Able counsel were retained to present the case for respondent to this court, and it is not suggested that they were lacking in diligence or good faith in their preparation of the case. Under these circumstances this court can properly consider the petition and adjudicate the issues raised therein." The parties here were ably represented and the issues were fully developed and forcefully presented in evident good faith, and as before stated there is no evidence of collusion in this proceeding.
Let a peremptory writ of mandate issue as prayed, and pursuant to stipulation of the parties waiving the right to petition for rehearing and the statutory time within which such writ may issue, it is ordered that such peremptory writ may issue upon the filing of this decision.
Shenk, J., Schauer, J., and Carter, J., concurred.