Meyer v. Porter

McKee, J. Application for a writ of mandate to compel the treasurer of the city of Sacramento to pay, out of funds in the city treasury, certain past due and payable coupons, belong[69]ing to bonds, issued by the city of Sacramento, of which the plaintiff is the owner and holder.

The fund, out of which payment is demanded, is known as the “ interest and sinking fund ” of the city of Sacramento. It is admitted there was in that fund, when the coupons were presented and payment demanded, the sum of one hundred thousand dollars, yet the treasurer refused to pay, and the court below sustained him in his refusal.

The coupon bonds in the hands of the petitioner were issued under a charter granted to the city in April, 1858. That charter empowered the municipal authorities to issue bonds for the past indebtedness of the former city government, and to set apart and appropriate fifty-five per cent of the municipal revenue, when paid into the treasury, “to an interest and sinking fund, which shall be applied to the payment of the annual interest and the final redemption of bonds issued for city indebtedness, in accordance with the provisions of this Act.” (§§ 34, 35, Stats. 1858, p. 279.) The bonds were therefore issued under a law which provided for their redemption as they became due, with interest thereon, payable annually until redeemed. But the charter also provided that, “the city and county shall not be sued in any action whatever, nor shall any of its lands, buildings, improvements, property, franchises, taxes, revenue, actions, dioses in action, and effects be subject to any attachment, levy or sale, or any process whatever, either mesne or final.” (§ 1, Stats. 1858.)

In 1863 the charter or 1858 was repealed, and a new charter substituted. The repeal of the old charter did not impair the validity of contracts made under its provisions.

In fact, the substituted charter of 1863 contained the same provision for an “interest and sinking fund” for the payment of the annual interest of the bonds and of their redemption as that contained in the repealed charter; and it also contained an implied prohibition against suits or actions against the city upon any bonds which had been issued under the former charter. Therefore it is contended that by both the original and substituted charters the holders of these city bonds took and held them with notice that no auctions upon them could be maintained against the city.