Town of Mill Valley v. National Surety Co.

KERRIGAN, J.

This is an action to recover upon a bond given by respondent, as surety, to secure the performance by the Marin County Electric Railways of the terms and conditions of a certain franchise granted to it by the town of Mill Valley. In the lower court judgment went in favor of defendant, and this is an appeal from such judgment.

The main point relied on for a reversal is that the evidence is insufficient to support the findings.

[1]

The facts of the case are brief and may be stated as follows:

The Marin County Electric Railways, a corporation, was granted by ordinance a franchise to construct a street railroad in Mill Valley upon certain conditions, and the defendant became surety for such company for the faithful performance of this obligation. By the terms of the ordinance granting the franchise it was to be operative only in the event that the Railroad Commission within four months thereafter issued its certificate of approval. To meet this condition the railroad presented its application to the Railroad Commission, praying for a certificate of public convenience and necessity, but at no time either within the four months limited in the ordinance or thereafter was such a certificate granted by that board for all or any portion of the road provided for in the franchise, the board simply signifying, over a year thereafter, its willingness to grant its certificate on terms and conditions more onerous and different from those contained in the ordinance grant-, ing the franchise. The franchise, therefore, never became effective, and the road was never constructed. It was defendant’s position'below, and is here, that the obtaining of

[542]

the certificate from the Railroad Commission was a condition precedent to the granting of the franchise, and that as this was not performed such franchise never vested in the railroad, and there could, therefore, be no breach or failure to perform that would render the defendant liable, for the reason that the consideration had failed.

We see no escape from this contention.

[2]

Where. a bond is given for the performance of a contract, and; the latter is not binding upon the parties for any reason, there is no consideration for the bond, and no action, therefore, can be maintained on it. (9 Corpus Juris, p. 20.)