CITY OF SAORAMENTO.
(Oircuit Oourt, D. Oalifornia. February 18, 1884./
MUNICIPAL BONDS-SACRAMENTO CITy-No ACTION MAINTAINABLE.
The legislature of California in 1858 enacted th3t thereafter no action should be brought against the city of Sacramento bl. its creditors; that the city should issue its bonds for the purpose of funding Its debt, and should levy an annual tax of 1 per cent., of which a specified portion should be set aside for the payment of the bonds. Those who held claims against the city surrendered their evidences of indebtedness, and took the bonds instead. Held, that no action would lie upon the bonds, but that the remr'dy of the bondholders was by man. damu8 against the proper officers to compel them to carry out the terms of the statute. The creditors, by accepting the honds, contracted that the city should not be liable to be sued. In 1863 the legislature revised the act of 1858, re-enacted its provisions with regard to the payment of the bonds, except that the terms of the re-enacted clause, sanctioning a tax of 1 per cent., was permissive instead of mandatory. But, held, that the provision was still compulsory, since words in a statute permitting officers to discharge a public duty are to be construed as mandatory. If the act were of any other construction it would impair the obligation of contracts. The constitution of the state provided that all corporations should be subject to be sued like natural persons. Held, that (even supposing the clause to apply to municipal corporations) the bondholders had by thcir contract divested themselves of their constitutional right.
STATUTE PERMITTING PlllRFORMANOE OF A DUTY CONSTRUED AS 1I'IANDATORY.
8. W ArVER
At Law. J. W. Winans, for plaintiff. J. H. McKune, A. P. Catlin, and W. A. Anderson, for defendant. SAWYER, J., ,orally.) This is an aotion brought to recover $9,000 due on ooupons of the Saoramento city bonds. It is an ordinary aotion upon the instruments, not a mandamus against the offioers of the city, but an action against the city of Sacramento to reoover on these coupons as upon a oontract. Under the charter of Sacramento, of 1851, a large amount of indebtedness had aocrued, for which bonds were issued. In 1858 the city and oounty of Sacramento were oonsolidated into a municipal oorporation, like the city and county of San Francisoo; the boundaries of the oity and oounty being oo-extensive with the former boundaries of the county. In that aot consoli. dating the oity and county, provision was made for funding the then existing debt of the city and of the oounty of Saoramento, and provision was made iIn the act for the purpose of liquidating, funding, and paying the olaims against the oityand oountyof Sacramento hereinafter speoified. "The treasurer shall cause to be prepared suitable bonds for the oounty of Saoramento, not exoeeding the sum of six hundred thousand dollars, and for the oity of Saoramento not exoeeding one million six hundred thousand dollars, bearing interest at the rate of six per cent. per annum, from the first day of January, 18!l9." St. 1858, p. 280, § 37. Then it provides I for raising a fund for the payment of the interest, and ultimate extinguishment, of that
KENNEDY V. DITY OF SA.ORAMENTO.
prior indebtedness of the city of Sacramento so funded. In the last clause of the section it provides that "none of the claims herein apeci. fied shall be liquidated 01' paid except in the manner herein provided." The ,act also provides that "the city and oounty shall not be sued in any aotion whatever, nor shall any of its lands, buildings, improve. ments, property, franohises, taxes, revenues, actions, choses in action, and effects, be subject to any attachment, levy, or sale, or any process whateve1', either mesne 01' final," (Id. p. 268, § 1,) thereby cutting off all right of suit, and providing that none of the funds, or revenues from taxation, or otherwise, shaH be reached, on account of this indebtedness, otherwise than as provided in the act. Section 34 provides that the board of supervisors shall not have power to levy any greater taxes than as follows, viz.: "On the real and personal estate, exoept suoh as is exempt by law throughout the city and county, a tax of one hundred cents on the one hundred dol. lars," shall be levied, and the amount is limited to that sum annually, except for state and special purposes. But it provides further, that "they shall levy for municipal purposes, on all real and personal erty within the city, exoept such as is exempt by law, a tax of one hundred cents on one hundred dollars." Section 35 provides that "the revenue derived from and within the city limits for municipal purposes,-namely, taxes, licenses, harbor dues, water-rents, and fines collected in the mayor's court, or otherwise,-when paid into the treasury, shall be set apart and appropriated as follows: Fifty-five per cent. to an interest and sinking fund, which. shall be appliea to the payment of the annual interest and the final redemption of bonds issued for city indebtedness, in accordanee with the provisions of this act," referring to the bonds which were to be issued in liquidation of the prior indebtedness of the city in pursuance of the terms of the act. Section 38 provides: "The annual interest and principal of all bonds issued for claims against the city shall be paid from the interest and sinking fund provided in section 35, and in the manner otherwise provided in this act." There is, then, a provision for funding the ,prior indebtedness of the city to the amount of $1,600,000, and provision that 55 per cent. of the taxes and other revenues of the city shall be Bet apart to pay the interest, and to secure the ultimate extinguishment, of the bonds; and it is provided that "none of the claims herein specified shall be liquidated or paid, except in the manner herein provided;" and it is further provided that there shall be no suit against the city on these or any other claims, and that no execution or other process shall issue by which any of the property or revenues or moneys or other resources of the city shall be reached. The rate Of interest was 6 per cent. per annum, to be paid upon the indebtedness. The parties who surrendered their prior evidences of indebtedness and took these bonds, took them under the
i0l1sof thjs ant, which was ,a contract made between the city' and them; _ that the bonds should he collected only in that particular manner, paid.in _that particular mode, and no other; that there should he no other remedy for them; that the city should not be sued. The -advantagEls which they obtained are subject to the provisions made for theiqjlayment-to the limitations put upcm their remedy. The advantage, to the city was that it should not be harassed by any other kind of suit; an extension of the time for payment; and the reduction -of the rate of interest. The advantage to the holders was the specific, Qertain, and permanent provision made for prompt payment in future. This was a fair contract, entered into between the city on the one hand and its creditors on the other, in virtue of the provisions of this act. There were advantages gained and rights surrendered by each, and a valuable consideration moving from and to both contracting parties. In 1863 that charter was repealed and another one passed. The city and county.were restored by the charter of 1863. In that charter it is provided that the city of Sacramento may be sued upon bonds or covenants, etc., "provided, however, that such bond, covenant, agreement, contract, matter, or thing, that was the cause of action, has been made or entered into after the passage of this act," (St. 1863, p. 415, § 1;) so that, by implication, in providing the kinds of bonds upon which snit might be brought, it was limited to the covenants or bonds or liabilities accruing after the passage of the act. Thus, as to these bonds in question, there is no change in the law with reference to the liability of the city to be sued. And in that act it is also "provided further tha't none of the lands, tenements, hereditaments, taxes, revenues, franchises, actiou, choses in action, property, or effects of !lillY kind or nature whatsoever, of said city or of either or any of its trusts or uses, shall be attached, levied upon, or sold, on any process whatever, either original, mesne, or final," thereby continuing, as to all demands against the city, that provision of the charter of 1858 having reference to the inability to execute a judgment when obtained, by virtue of any process, mesne or final, against the city itself. With reference to the city of Sacramento, therefore, and with reference to these bonds, in both of these particulars, the law as laid down in the act of 1858 is continued. The third. clause of section 2 of the the act of 1863 also provides that the board of trustees shall have power "to levy and collect taxes and assessments on all property within the city, both real and personal, made taxable by law for state or county purposes, which taxes shall not exceed 1 per cent. per annum upon the assessed value of all property." St. 1863, p. 416. That is the same amount that they could levy under the old charter. Section 26 continues the provision for the payment of the bonds in question with one exception in language. In this _ the words "net water rents" are used instead of act rents." This is the only change. The provision is as follows, viz. :
v. CiTY of'sAcnAMENTo.
"The revenue derived from and within the city limits fot municipal'purposes, viz., taxes, licenses, harbor dues, water rents, and .flnes cOllected in the police courts or otherwise, except as hereinafter provided, when paid into the treasury, shall be appropriated and divided as follows: Fifty·fl:ve per cent. to qn'inteJ'est and sinking fimd, Which shall be applied to the paymt1ne of the annual interest upon the bondS legally 'issued for c'ttllindebtedness, .is· sued under the act of 1858; the excess o/saidlund, after'the J;Jayment of saUl interest, be applied to the 1'edemptio'n of said bonds, in SUch manner as the board 01 trustees may deterIMne." rd. 426, § 26. '
Thus in the act of 1868 the same provision for the' payment of these bonos is continued that was made in the act of 1858, and the the same limitations upon the remedy are continued by providing that no 'suit shalt be maintained agaiust the' city, and that none 'of its property, or revenues, 'or fUrids, shall be reached under any process, mesne or final. ' ' With to the amount levied, one word is changed only,the ,act that 100 cents on the $100 shall be positive provision in raised each year for the of is made ,permissive in form instead of mandatory iii,:'the new act. This is the only change in the act in that particulal',the same provision otherwis13 continuing as provided in the other act But words permissive in form, when a public duty is involved, are construed as mandatory. Under the provisions of these acts, in niy judgme!1t, the city is not liable to be sued on these bonds or coupons. It is one of the terms of the contract between the city and the bondholders, and a part cif, tli'e consideration upon which the bonds wereissued, that the city shall not be sued on them. The remedy alone is to compel the treasurer,bymandamus, to pay any money in the shiking fund upon the coupol1s. If the board of trustees refnse to provide that fund, the remedy is to compel them to provide fund by a 'mandamus,' in accordance with the duty imposed ,upon them by law. These are proceedings personally against the officers to compel them to perform a 'duty enjoined by law, in respect to which they have no discretion. Both of these remedies are remedies against officers to compel the performance of duties required by these express provisions of the act for the payment of 'these bonds, and not a suit against the city. Those remedies, the supreme court of California has held, are availitble. In the case of Meyer 'V. Bra/on, decided on September 28,1883, the supreme court held that the board of trustees is subject to be comveIled to perform its duty to provide this fund by mandamus. On page 157 of the Pacific Coast Law Journal, the court says:
"Having thus made provision for the payment annually of the interest on the bonds, and ultimately for their redemption, the legislature offered them ,in payment of the legal claims llgainst the old city government. The offer was accepted, and the holders of the latter surrendered their claims, in con,sideration of which the consolidated government issued to them it13 bonds, pur,suant to the provisions of the apt. The bonds carried with them the pledge of an annual tax for municipal purposes on all real and personal property v. ithin the city limits, except such as is exempt by law, of one hundred cents
on the one hundred dollars, per cent, of which to he set apart and appropriated to an interest and sinking fund to be applied to the payment of the annual interest upon the bonds and to their final redemption. The tax was the chief security offered the creditors as an inducement to accept the bonds in payment of their claimB, When the bonds, for whose payment with interest provision was thus made, were issued and accepteq by the creditors of the old city government, a contract was made as solemn and binding, and as much beyond subsequent legislation,as it would have been if made between private persons. These views will be found sustained and amplified in an able opinion recently rendered by the supreme court of the United States in a case entitled Louisiana v. Pitsburg. 105 U. S. 278."
I have examined that case, and it fully sustains this proposition. It is a similar case. The contract was enforced by mandamlt8 upon the officers. "It is well occasionally," added the court, "to recall the fact that there is no more reason to permit a municipal government to repudiate its solemn obligations entered into for value than there is to permit an individual to do so. Good faith and fair dealing should be exacted of the one equally with the other." In that case, then, it was held that the board of trustees was bound to go on and levy this tax in pursuance of the old law, if that was more advantageous to the parties than the new one. It is incompetent for them to repeal the old statute, so far as it affected the right of these bondholders; and in a recent case, decided February 13, 1884, (the case of Meyer v. Porter,2 Pac. Rep. 884,) the supreme court of California again takes a similar view. 'fhe question was whether the treasurer may be compelled to pay the interest out of the fund provided; and the supreme court holds in this case that the treasurer may be compelled to payout of the moneys which are in that sinkinR fund the interest due upon coupons that ,are presented, irrespective of the fact that only.one party presents his coupons. Under this decision, so long as there is any money in the fund, the holder of coupons due is entitled to his money on their presentation, and it is not necessary to file a bill in equity to enforce a trust, making all the holders of the bonds and coupons parties, for the purpose of distributiug thl:' fund pro rata, but that any man having overdue coupons may by mandainus compel the treasurer to payout the funds upon such coupons, so long as there are funds. Under those decisions of the supreme court of the state, supported by the authority of the supreme court of the United States, the holdel's of bonds and coupons have the exact remedy which the provision of the charter of 1858 provides for the payment of those bonds, and which the act of 1863 continues; and if the latter act does not in all respects continue the remedy in the particulars wherein the former act was repealed, the repeal is void, and the old act in force. The plaintiff insists that the provisions of thtl charter of Sacramento of 1858, that the city shall not be sued, and continued with respect to the bonds and coupons in question in the act of 1863, ia void under the provision of the state constitution that "all corpora-
KENNEDY V. CITY OF' SACRAMENTO.
tions shall have the right to sue, and shall be subject to be sued, in all courts in cases like natural persons." Old Const. art. 4, § 33. It may well be doubted whether this provision applies to municipal cor· porations and counties made corporations. But if it be otherwise, the contract in this case takes the bonds in question out of the provision. It was one of the conditions upon whioh the bonds were issued by the city and accepted by the bondholders that there should be no suit on the bonds, and no other remedy than that provided by the charter. This was a part of the benefit to inure to the city by the arrangement, and an important and valuable part of the consid· eration for its action in issuing the bonds and making the extraordinary and permanent provision and appropriation for payment beneficial to the bondholders. This part of the contract is. as important and as binding as any other. The provisions are that the city shall not be sued, and that none of its property, revenue,ot funds shall be taken upon any mesne or final process, and that nOne of the claims herein specified shall be liquidated or paid except in the . manner herein provided. Also, that "the annual interest and principal of all bonds issued for claims against the t'laid city shall be paid from the interest and sinking fund provided by section 85, and in the manner otherwise provided in this act." The action brought against the city, therefore, in the faoe of these provisions of the contract, cannot, in my judgment, be maint8,ined, for the reasons and upon the grounds stated. The only remedy is to proceed by mandamus against the officers personally, to compel them to perform their respective c1uties, as prescribed by the act of 1858, and uuder the act of 1863, also, so far as that act is in accord with the act of 1858. The supreme court, as we have seen, has held that it was incompetent for the legislature to repeal the provisions of the charter of 1858, so far as they affect the means provitled for liquidation of these bonds. Consequently, that the board of trustees could be oompelled by mandamus to provide the funds in accordance with the requirements of the charter of 1858; and, when so provided, that the treasurer, having the custody of the funds, could be compelled in like manner to pay the coupons as presented out of the funds provided. There must be judgment for defendant on the grounds indicated, viz., that a suit against the city is not the proper remedy, andeannot be maintained in the face of the contract entered into under the statute; and it is so ordered.
Ex parte WOR¥EY.
(Dilltrict Oour.t, W. D. North Carolina. 1884.)
POWERS AND DUTIl!:S ()l!'A MARSHAL AS 'TO PRECEPTS IN HIS HANDS AT TIlE FIUATlON ,OF HIS TERM' OF OFFICE.
In North Carolina a marshal, whose term of office has expired, may be required so to amend his return upon an execution as to furnish his successor with a description, of the land levied upon, sufficiently accurate to enable him to execute a valid deed to the purchaser at the execution sale.
A Petition for Orders to perfect ,title to lands sold on execution sale. P. A. Cnmmings, for petitioner. ' DIOK, J. The petitioner, Henry Worley, alleges that he is a pur. chaser at a sale J;l1ade by a deputy of R.M. Douglas, late marshal of this distriot, under a writ of exeoution founded upon a. regular judg. ment of this court, and levied upon the lands of the judgment debtor, SolomonDavis;that the purchase money has been paid by him to said deputy,l!>nd has been returned into court in part satisfaction of said judgment i that the term' of office of the late marshal has expired, and a has not been executed, and the levy indorsed upon the execution is ·defective in not the land Bold with Bllfficient certainty. The relief prayed foJ;' is an order to the late marshal, directing him to amend his levy so as to set forth a description of the land sold with more certainty as to location and boundaries. ,The petitioner also prays for an order to the present marshal, Thomas B. Keogh, directing him to perfect title and execute a deed to said lands, in cQnformitywithsection 994 oUhe Revised Statutes. Upon hearing the petition, the suggestions of counsel, and the evi· dence presented, it is considered tha,t the petitioner is entitled to the relief he seeks. A court has the power to direct writs of execution to be amended. at any· time., so as to set forth necessary facts for the purpose of SUPIlOl'ting proceedings under them. This power is indispensable to the adminiatration of justice l!>nd the due regulation of the officers of the court. Under section 788 of the BevisedStatutes, marshals and their deputies possess in ea.ch state the same powers in executing the lawl'l oUhe United States as the sheriffs and their deputies in. such have in executing state laws. Section 790, among Qther things, provides that marshals an.dtheir deputies,. -when the term of office expires, shall have power to execute all such precepts as may, at the time, be in their hands. We will, therefore, consi.der the laws of this state in determining some of the questions presented in this proceeding. . It is well settled in this sbate that a sheriff may be directed or permitted by the proper court' to make a return on a writ of execution, or to amend the same, at any time, so as to make it conform to the truth, even in cases where important consequences as to the rights of