Court Opinion

ID: 5441472
Source: CourtListenerOpinion
Date Created: 2022-01-08 18:03:50.02122+00
Date Added: 2024-06-11T08:32:01.283789
License: Public Domain

Sharpstein, J., specially concurring.
The only objection to the validity of the bonds Avhich seems to us to merit any serious consideration is that after a majority of the electors voting upon the proposition to issue bonds to aid in the construction of a railroad upon a certain specified route between tAAro certain specified points had voted in favor of granting such aid, the board of supervisors entered into an agreement Avhereby said board agreed to issue bonds to the amount of six thousand dollars per mile, for the construction of a railroad on said route for a distance less than the entire distance betAveen the termini mentioned in the proposition submitted to said electors. And that objection is founded upon the hypothesis that it AAras the understanding of the electors Avho voted upon the proposition that in consideration of the aid granted the entire road should be constructed.
There is but one Avay in which Ave can arrive at .the intention of the electors who voted upon the proposition to grant aid, and that is by an inspection of the proposition itself.
The proposition voted upon, as stated in the notice of the election, Avas substantially as folloAvs: That the board of supervisors should be authorized to grant [in lieu of the aid of one *317hundred thousand dollars, previously authorized to be granted in the construction of a railrord connecting the town of Santa Cruz Avith the Southern Pacific Railroad], upon terms which might appear to said hoard advantageous to said county, the aid of said county “ in the construction of a railroad on the route ” described as “ beginning at or near the Pajaro depot, on the Southern Pacific Railroad, in the county of Monterey, and running thence in the most practicably direct route through the county of Santa Cruz, crossing the Pajaro River near Watson-ville, and crossing the San Lorenzo River between the county road leading to Soquel and the bay of Monterey, and thence along or near the coast to the boundary of said county near the southeast corner of the Point New Year’s Ranch,” . . . . “to an amount of not exceeding in the aggregate the sum of two hundred and forty thousand dollars, in the bonds of Santa Cruz County as proposed by said board, to be issued at the rate of not more than six thousand dollars per mile for every mile of main track actually constructed.”
The vote was in favor of aiding in the construction of a railroad on a route “ beginning at or near Pajaro depot, and ending at the boundary of said county near the southeast corner of the Point New Year’s Ranch.” And the board of supervisors Avas authorized “ to grant, upon terms which to them ” might “ appear advantageous to the county,” the aid of the county in the construction of a railroad on that route, in the bonds of the county, “ to be issued at the rate of not more than six thousand dollars per mile for every mile of main track actually constructed,” until the aggregate of the bonds so issued should amount to two hundred and forty thousand dollars.
Noav, it is not claimed that so much of the road as has been actually constructed Avas not constructed on the route designated in the proposition which Aras submitted to the electors of the county. But it is claimed that the board of supervisors Avas not authorized to agree to issue bonds at the rate of six thousand dollars per mile, for any number of miles less than the whole number between the terminal points of the route. The board, however, Avas expressly authorized to grant said aid upon terms which might appear to it to be adArantageous to the county, and if it appeared to it to be advantageous to the *318county to aid in the construction of nineteen miles and no more of the road constructed on the route designated, it is not the province of this court to review the decision of the board upon that question. We are bound to assume that it appeared to the board to be advantageous to the county to have no more than nineteen miles of that road constructed, at an expense of six thousand dollars per mile to the county, until we are convinced that it appeared otherwise to said board.
The board wTas not bound to issue bonds at the rate of six thousand dollars per mile for every mile of railroad which might be constructed between terminal points mentioned in the proposition to grant aid. But it was authorized to issue them at the rate of six thousand dollars per mile for every mile of main track actually constructed. And whether it issued them at the rate of six thousand dollars per mile for a part of the distance, or for the entire distance, it was issuing them in aid of the construction of a railroad on the route designated in the proposition upon which the electors had voted. By aiding in the construction of nineteen miles of railroad on the route designated, the county was aiding pro tanto in the construction of it from one to the other of the terminal points mentioned in said proposition. If it was the intention of the electors voting upon the proposition to grant the aid of the county in the construction of a railroad upon the route specified, that said aid should not be granted except upon the condition that a railroad should be constructed the entire length of the route, it must be admitted, we think, that they have failed to express that intention. And if they have, it is no part of the duty of this court to supply the omission. It is our duty to construe the contract which the parties have made, not to make on for them.
The construction which we have put upon the vote of a majority of the electors who voted upon the proposition to issue bonds in aid of the construction of said railroad, is in accord with that which the board of supervisors practically put upon that vote • and the people of said county acquiesced in that construction for a considerable period of time by offering no resistance to the issuing of the bonds, and by paying the interest upon them semi-annually for a period of more than four years, three of which preceded the purchase of said bonds by *319the petitioner herein. It is not necessary to invoke the doctrine of “municipal decision,” or of estoppel, of which it is one of the forms, to the extent that it has been applied by the Supreme Court of the United States to cases involving the validity of municipal bonds, in order to sustain the validity of these bonds. In a late treatise on public securities the author says: “ It has often happened in the cases which have come before the Supreme Court of the United States, that the municipalities which sought to evade the force of the bonds issued on their behalf, had received the proceeds of the bonds, enjoyed the benefits of the improvements made by them, paid the interest for many years, and these circumstances as well as the doctrine of municipal decision have influenced the court in their determinations.” And then adds: “It is not, however, against these decisions when these different elements are combined, that we make our protest.” (Burroughs on Public Securities, p. 341.) In addition to those enumerated in the above extract there is in this case another very important element, and that is that it was made a condition, precedent to the issuing of any bonds to aid in the construction of said railroad, that a certain contract by which said county had agreed with the Santa Cruz and Watsonville Railroad Company to aid it to the extent of one hundred thousand dollars, “in the construction of a railroad connecting the town of Santa Cruz with the Southern Pacific Railroad, at or near the town of Watsonville,” should be canceled; and it appears by a recital in the agreement between the board of supervisors and the Santa Cruz Railroad Company, that said contract with the Santa Cruz and Watsonville Railroad Company was “fully and forever canceled and annulled, and said county released and discharged from all liability thereunder, and covenants therein.” That liability amounted to within fourteen thousand dollars of the whole amount of the bonds held by the petitioner. And it is not even suggested that the liability so canceled can be restored so as to place the parties in the same condition that they were in prior to its cancellation. Does not that present a case for the application of the principle of estoppel?
If that principle can be applied to a municipality, it is difficult to conceive of a case to which it could be applied more *320properly than to the one at bar. Here a majority of the electors voted in favor of a proposition which will at least admit of the construction which all of the parties interested in it practically put upon it for a period of four or five years by issuing the bonds and paying interest thereon, and now, after said bonds, which are negotiable, have passed through several hands, this court is asked to hold that such construction was erroneous, and that the petitioner, who paid their full market value, should have made that discovery before purchasing them, although it does not appear that any tax-payer, supervisor, treasurer, or legal adviser of the county made it until some time afterwards.
That which it is now claimed constituted a condition precedent to the power to issue the bonds, is certainly not clearly expressed in the proposition submitted to the electors, and for which a majority of them voted, and it seems to us inexplicable that if such a condition had been supposed to exist, the board of supervisors should have been permitted to issue the bonds in utter disregard of it, when any tax-payer in behalf of himself and all other tax-payers of the county could have intervened and prevented the issue of them. And it is still more inexplicable to us that under such circumstances the interest on the bonds should have been paid for a period of four or five years without a word of protest from any tax-payer, so far as we are advised. “ They had an opportunity, before innocent third persons could be injured or committed to the acts of their public agents, to enjoin the proceeding and protect themselves; they did not seek that protection; but now when they have received all the fruits of the contracts of their agents from third persons who have acted upon their recognition of the authority of their agents, they ask the privilege of denying this recognition, and thus escape from their obligations. It is too late for them to do so as against innocent third persons. They are concluded not simply by acts of their public agents but their own.” v (State v. Van Horne, 7 Ohio St. 327.)
If the construction of the power conferred upon the board of supervisors, for which the respondent contends was clearly the correct one, we might be compelled to hold that the petitioner was chargeable with notice of the want of authority in the board of supervisors to enter into the agreement which they entered *321into with the railroad company. But it is by no means clear that that construction is the correct one, and it is clear that during a period of four or five years all parties interested acted as if it was not the correct one, and we think that in a case like this that circumstance is entitled to great weight.
McKbístry, J., concurred.
Ross, J., specially concurring.
I concur upon the second ground'discussed in the opinion of Mr. Justice Sharpstebí and for the reasons by him given.