Rose v. Estudillo

California Supreme Court Jul 1, 1870 No. No. 1,950Published

Before: Temple

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Holding. The Court held that the Legislature cannot constitutionally enact a statute requiring existing county creditors to submit their claims to a commission for re-auditing as a condition of payment, as this impairs vested contractual rights. Consequently, the petitioner is entitled to payment from funds raised under the laws existing at the time the debt was incurred.

Issues

Whether the Legislature may constitutionally require existing county creditors to submit their claims to a Board of Commissioners for re-auditing as a condition of payment.
Whether a county treasurer may be compelled to pay a creditor from funds raised under prior law when the new funding act provides no mechanism for such payment.

Disposition. remanded

Quotations verified verbatim against the opinion

“It was not competent for the Legislature to pass an Act which would declare these claims invalid, nor could it authorize a commission to do so.”

“This provision of the Act is repugnant to the Constitution. The creditor could not be compelled to accept another and an essentially different mode of payment from that provided by his contract”

“the petitioner had a right to be paid, from these funds, of which the Legislature could not deprive him without his consent.”

Synopsis

Funding Act—Construction of.—An Act of the Legislature, creating a Board of Commissioners for the purpose of examining into the legality or illegality of all claims or demands outstanding against a county, and for the funding of such as they shall consider legal and just; and which further provides that no such, demand or claim shall he a legal claim against the'county, unless it is presented to and allowed Try such Commissioners, is, in this last respect, unconstitutional.

Wabbant Issued Before the Passage of the Act.—A warrant issued by the Auditor of a county, and which had been duly presented by the holder to the Treasurer, for payment, and indorsed by him “not paid for the want of funds,” prior to the passage of the Act, and the holder having elected not to present his warrant to said Commissioners, and it was therefore never funded, is, nevertheless, a valid claim against the county, and was the duty of the Treasurer of the county to pay the same from the first moneys in the treasury, applicable to such payment. ,

Idem.—Powers of Legislature. — Impairing a Contract.—It is not competent for the Legislature to declare such a claim invalid, nor could it authorize a commission to do so. The creditor could not be compelled to accept another and an essentially different mode of payment from that provided by his contract; that is to say, by the laws existing at the time he became a creditor of the county.

Idem.—Bemedv.—The Act having provided what taxes may be imposed by the county, for county purposes, and designated the purpose to which each fund shall be devoted, no provision being made for that class of indebtedness to which the claim of the holder of the warrant belongs, except the funding provisions contained in the Act, and there being no funds in the treasury of the county applicable to that purpose, at the time he made his demand on the Treasurer, he has no remedy, except to apply to the Legislature, to provide the means of paying his debt.

Idem.—If there were funds in the treasury of the county, applicable to such payment at the time the demand was made by the holder of the warrant, which were raised under the law as it stood before the passage of the Act, and the warrant was first in the order of outstanding, unfunded debt of the county, which existed prior to the Act in question, he had a right to be paid from these funds, which the Legislature could not deprive him of, without his consent.

Temple, J., delivered the opinion of the Court:

On the 18th of March, A. D. 1868, an Act was passed by the Legislature to provide for the government of the County of San Diego. Among other things, that Act provides for the funding of the funded indebtedness of the county, and creates a Board of Commissioners, whose duty it is to “carefully examine into the legality or illegality of all the unfunded indebtedness, accounts, warrants, vouchers, claims,, or demands of every nature or character whatever, which now are or may remain outstanding against said county on the first day of April, 1868; and they shall audit and allow, or reject in whole or in part, any or all of said unfunded indebtedness, accounts, warrants,” etc., “according, as in their judgment, the same shall appear to be a legal and just claim against the county, or otherwise, ” etc. “No such certificate of indebtedness, warrant, claim, demand, or other charge, shall be a legal and valid claim against said county, or be paid, until passed upon, audited and allowed by said Board.” The Act then provides, that if the warrants are audited by them, they shall allow interest; provided, if only a portion due on the warrant is allowed by them, then interest shall be reckoned on that portion only.

The petitioner is the holder of certain warrants, issued by the Auditor of the county, and which had been duly presented to the Treasurer for payment, and indorsed “not paid for [274]want of funds,” prior to the passage of the Act. His claim, therefore, was a part of the recognized indebtedness of the county, authenticated and allowed as provided by law, and it was the duty of the Treasurer of the county to pay the warrants from the first moneys in the treasury properly applicable thereto. He had done all the existing laws required him to do.

It was not competent for the Legislature to pass an Act which would declare these claims invalid, nor could it authorize a commission to do so. Nor could the Legislature impose other and new conditions upon the creditors. (McCauley v. Brooks, 16 Cal. 11; People v. Bond, 10 Cal. 566.)

The warrants of the petitioner, therefore, if he had chosen to have them funded, would have been conclusive evidence that his claim was legal and just within the meaning of the Act. The petitioner elected, however, not to present his warrants, and they have never been funded. By the terms of the Act, unless so presented and allowed by the Commissioners, they are not valid and legal claims against the county, and cannot be paid.

Rose v. Estudillo

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