City of Oakland v. Williams

DOOLING, J.,

pro tem.

Appeal from a judgment entered after an order sustaining a demurrer to appellants’ petition for writ of mandate. Petitioners seek to compel respondent to transfer to the 1925 Oakland harbor improvement fund from the 1925 Oakland harbor interest fund the amount of the premium realized on the sale of certain improvement bonds. The sole controversy between the parties is whether a premium realized on the sale of these bonds, which were issued under the provisions of the Municipal Bond Act of 1901 (Stats. 1901, p. 27), should be placed in the construction fund or the interest and redemption fund. This depends upon the proper construction to be given to the pertinent provisions of the statute.

■Section 6 of the act in question is. in the following language : 1

‘

Such bonds may be issued and sold by the legislative branch of the city, town or municipal corporation as they may determine, but for not less than their par value, and the proceeds of such bonds shall be placed in the municipal treasury to the credit of the proper improvement fund, and shall be applied exclusively to the purposes and objects mentioned in the ordinance.”

It is conceded by respondent that when bonds are sold for more than their par value the entire purchase price, including the premium, constitutes the proceeds of the bonds. Indeed, this would not seem to be open to dispute. The sole question before us, therefore, is narrowed to this: What are the purposes and objects mentioned in the ordinance to which “the proceeds” shall be “applied exclusively”? The answer to this question is to be found in section 2 of the statute, which reads, so far as here material, as follows: “Whenever the legislative branch of any city, town or municipal corporation shall, by resolution passed by vote of two-thirds of all its members determine that the public interest or necessity demands the acquisition, construction or completion of any public improvement . . . the cost of which will be too great to be paid out of the ordinary annual income and revenue of the municipality, it may at any

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subsequent meeting of such legislative branch, by a vote of two-thirds of all its members, order the submission of the proposition of incurring a bonded debt for the