California Court of Appeal Mar 15, 1906 No. Civ. No. 77.Published
Before: McLaughlin
Synopsis
APPEAL from a judgment of the Superior Court of Stanislaus County, and from an order denying a new trial. W. M. Conley, Judge presiding.
The facts are stated in the opinion of the court.
McLAUGHLIN, J.
This is an application for a writ of mandate commanding defendant, as' treasurer of Modesto irrigation district, to pay the interest on certain bonds. The petition sets forth the corporate organization and capacity of the district, the official relation of defendant thereto, and his refusal to pay certain interest coupons upon demand, notwithstanding that he had sufficient money in his hands available for such purpose. It appears therefrom that plain
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tiff is the owner and. holder of four bonds for $500 each, issued by said district on January 1, 1902, bearing interest at the rate of six per cent per annum, and that certain interest coupons attached to said bonds were due and payable at the time demand for payment was made. That he also owns twelve interest coupons .for $15 each, which were detached from bonds for a like sum, bearing interest at the same rate, issued January 1, 1890. The aggregate sum claimed is $1,096.40, of which sum $162.40 is for interest on the interest coupons above mentioned, accruing after said coupons became due and payable. It is alleged generally that the payment of the several sums included in the total demand is a duty resulting from the office held by defendant, and that the plaintiff is the party beneficially interested in such payment. A general demurrer to the petition was overruled, and the defendant, answering, traversed all the averments of the petition, save those relating to the corporate capacity of the district, and defendant’s official connection therewith. All of the denials, and most of the affirmative averments, were based on want of information or belief, but it was positively alleged' that defendant at no time had in his hands money applicable to the payment of plaintiff’s claim. The court sustained a demurrer to several special defenses set up in the answer, and the cause was tried on the pleadings above epitomized. Judgment was entered commanding the defendant to pay the full sum demanded, and he appeals from such judgment and from the order denying his motion for a new trial.
We will notice only the assignments of error and specifications of insufficiency of the evidence discussed in the briefs and argument.
120 Cal. 297, [52 Pac. 833].) During the course of the trial, and after the plaintiff had rested his case, the defendant applied to the court for leave to amend his answer by alleging as a separate defense that the cause of action as to several of the coupons was barred by the provisions of section 337 of the Code of Civil Procedure. The court clearly indicated that the application would be denied, but it is insisted that the failure to make an
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additional formal ruling constitutes reversible error. Under the circumstances, and in view of what was said by the court, it must be assumed that the application was denied.
(Summerville
v.
Kelliher,
144 Cal. 160, [77 Pac. 889].) There was no abuse of discretion in denying the application to amend. If, according to a contention to be noticed later, the court was bound to pass upon the question suggested in any event, then the amendment was entirely immaterial. If it was necessary to plead the bar of the statute specially,, then such amendment amounted to no more than a tardy demurrer to the complaint. Amendments setting up the bar of the statute Of limitations are allowed only in furtherance of justice, and we cannot say that the ends of justice were defeated in this instance by refusing to permit the amendment.
(Wise
v.
Williams,
72 Cal. 548, [14 Pac. 204] ;
Stuart
v.
Lander,
16 Cal. 375, [76 Am. Dec. 538];
Coake
v.
Spears,
2 Cal. 412, [56 Am. Dec. 348] ;
Bank
v.
Heron,
122 Cal. 109, [54 Pac. 537];
Bliss
v.
Sneath,
119 Cal. 528, [51 Pac. 848];
Pleasant
v.
Samuels,
114 Cal. 38, [45 Pac. 998 ].)
It was urged in the petition for rehearing that the facts pleaded and proven show that a number of the interest coupons became due and payable more than four years before the action was commenced, and it is argued that defendant as a public officer was bound to refuse payment as to such coupons. In other words, it is said that under the facts it was not defendant’s duty, specially enjoined by law, to pay the “outlawed” coupons. As a conclusion from his premise and argument, counsel for appellant earnestly insists that in a proceeding of this kind against an officer of a municipal corporation, the bar of the statute of limitations is always an issue, whether it is pleaded or not. At the outset, we were impressed by the plausible and able argument of counsel in support of his position, but careful analysis and research have convinced us that the rule is, and should be, the other way. For many years, able lawyers in this state and elsewhere contended that a municipal corporation held its funds as a trustee for those having demands, for the payment of which the money was provided, and that it could not plead the stat ute of limitations against a person having a claim which
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was payable out of such funds. It was argued that a municipal corporation, like a bank, was simply the custodian of special funds, holding the same for the benefit of those who were or might be entitled thereto.
It is apparent at a glance that this contention was diametrically opposed to the contention here. The courts, however, declined to adopt that extreme, though reasonable, view and we understand the rule to be that the defense of the statute of limitations is a privilege personal to the debtor, and that a municipal corporation, in common with other debtors, may waive or avail itself of such defense in any legal proceeding. (Code Civ. Proc., secs. 1089, 1091;
Bates
v.
Gregory,
89 Cal. 398, [26 Pac. 891];
Underhill
v.
Trustees,
17 Cal. 178;
Barnes
v.
Glide; 117
Cal. 8, [59 Am. St. Rep. 153, 48 Pac. 804].) But while this is the general rule, it has been pointedly held, in a case very similar to the case at bar, that “when payment is provided for out of a particular fund, or in a particular way, the debtor cannot plead the statute of limitations without showing that the particular fund has been provided or the method pursued.”
(Sawyer
v.
Colgan,
102 Cal. 292, [36 Pac. 580].) Instead of making any such showing in the proposed amendment, or elsewhere in his pleadings, appellant affirmatively alleged that no fund was at any time provided for the payment of the interest coupons in question. Our attention has not been directed to any statute forbidding payment of such demands after the bar of the statute has intervened, and as all municipal corporations and bodies act through public officers, it follows that, unless the statute of limitations is set up by demurrer or answer, in this or any other legal proceeding against a public officer, the defense must be deemed waived. The resolution adopted by the board of directors in 1903 shows on its face that an assessment was levied to pay the interest on “outstanding six per cent bonds,” and it is not pretended that money enough was not paid into the hands of defendant under such assessment to redeem the plaintiff’s coupons. It nowhere appears that any money was available for such purpose earlier than 1902. This coupled with the further fact that no pretense is made that the bonds were barred by the statute, makes it certain
[254]
that defendant was not prejudiced by the ruling refusing his application for leave to amend.
(Freehill
v. Chamberlain, 65 Cal. 604, [4 Pac. 646];
Meyer
v.
Porter,
65 Cal. 74, [2 Pac. 884];
Bates
v.
Gregory,
89 Cal. 392, [26 Pac. 891] ;
Sawyer
v.
Colgan,
102 Cal. 292, [36 Pac. 580];
Barnes
v.
Glide,
117 Cal. 9, [59 Am. St. Rep. 153, 48 Pac. 804].)
It is next contended that there is no evidence tending to show that the coupons were ever signed by the secretary of the irrigation district. As the denials touching this phase of the case are based on information and belief, there was no issue on that point.
(Mulcahy
v.
Buckley,
100 Cal. 489, [35 Pac. 144];
Weill
v.
Crittenden,
139 Cal. 489, [73 Pac. 238];
County of Mendocino
v.
Peters, 2
Cal. App. 24, [82 Pac. 1122].) But as each coupon bears the lithographic signature of the secretary adopted by him, there is nothing in the point, anyway.
(Pennington
v.
Baehr,
48 Cal. 565;
Williams
v.
McDonald,
58 Cal. 529;
McKee
v.
Vernon County,
3 Dill. 210, [Fed. Cas. No. 8851];
Grieb
v.
Cole,
60 Mich. 397, [1 Am. St. Rep. 533, 27 N. W. 579];
Mezchen
v.
More,
54 Wis. 217, [11 N, W. 534].)
The next point made is that there was no evidence to show that defendant had in his hands money available for the payment of the coupons when demand was made. As the coupons held by plaintiff were for interest on outstanding six per cent bonds, it seems clear that a large portion, at least, of the sum of $12,442.50 in defendant’s hands at that time, was available for the purpose of paying them.
(Carter
v.
Tilghman,
119 Cal. 106, [51 Pac. 34].) The court did not err in refusing to allow the defendant to show by parol testimony that the purpose of the assessment levied was other and different from the purpose as disclosed in the resolutions adopted by the board of directors, at the time the assessment was levied. Nor did it err in refusing to admit the resolution of the board, transferring all moneys to the fund applicable to the payment of the interest on refunded bonds. The bonds and coupons held by plaintiff had not been refunded, and the board could not, by transfer, immediately after his demand was made, defeat plaintiff’s right to have money collected for that purpose applied to the payment of the coupons
[255]
held by him.
(Carter
v.
Tilghman,
119 Cal. 106, [51 Pac. 34];
Higgins
v.
San Diego,
131 Cal. 303, [63 Pac. 470].)
We find no error in other rulings on the admissibility of evidence, and it could serve no useful or beneficial purpose to discuss each alleged error in detail.
Mandate will lie for the enforcement of the right here asserted. (Code Civ. Proc., sec. 1085;
Meyer
v.
Widber,
126 Cal. 254, [58 Pac. 532];
Mitchell
v.
Patterson,
120 Cal. 286, [52 Pac. 589].) The defendant had no absolute right to a trial by jury, and it was not an abuse of discretion to refuse to allow disputed questions of fact tó be so tried. (Code Civ. Proc., sec. 1090;
Woods
v.
Varnum,
85 Cal. 645, [24 Pac. 843];
Cassiday
v.
Sullivan,
64 Cal. 266, [28 Pac. 234].)
The plaintiff was not entitled to interest on the interest coupons from the date of their maturity, or the demand made.
(Davis
v.
Porter,
66 Cal. 659, [6 Pac. 746] ;
Bates
v.
Gerber,
82 Cal. 550, [22 Pac. 1115];
Kendall
v.
Porter,
120 Cal. 108, [45 Pac. 333, 52 Pac. 143];
Sawyer
v.
Colgan,
102 Cal. 293, [36 Pac. 580];
Davis
v.
State,
121 Cal. 211, [53 Pac. 555].) No provision of law establishes a liability for such interest, and the district of which defendant is treasurer has made no provision for the payment of the same. But it is urged that appellant is liable therefor by reason of his failure to pay the interest coupons on demand. If it be conceded that he could, under any circumstances, be personally liable for such interest, such liability would be in the nature of a penalty, or for damages, a.nd we are clearly of the opinion that such a liability cannot be enforced through the medium of a writ of mandate.
The order denying a new trial is, therefore, affirmed, and the judgment appealed from is hereby modified by deducting therefrom the sum of $162.40, the amount of interest erroneously included therein, and by striking therefrom the provision for interest from the first day of January, 1904. As so modified, the judgment is hereby affirmed, the respondent to pay the costs of this appeal.
Chipman, P. J., and Buckles, J., concurred.
AI Brief
AI-generated · verify before citing
Holding. The court held that a municipal corporation may waive the statute of limitations as a defense, and that such defense must be pleaded to be considered. Additionally, the court held that interest on interest coupons cannot be recovered through a writ of mandate.
Issues
Whether the statute of limitations is an issue in a mandate proceeding against a public officer if not pleaded.
Whether the defendant was entitled to amend his answer to plead the statute of limitations.
Whether the plaintiff is entitled to interest on interest coupons in a mandate proceeding.
Disposition. modified and affirmed
Quotations verified verbatim against the opinion
“the defense of the statute of limitations is a privilege personal to the debtor, and that a municipal corporation, in common with other debtors, may waive or avail itself of such defense in any legal proceeding.”
“unless the statute of limitations is set up by demurrer or answer, in this or any other legal proceeding against a public officer, the defense must be deemed waived.”
“we are clearly of the opinion that such a liability cannot be enforced through the medium of a writ of mandate.”