Yarnell v. City of Los Angeles

McFarland, J. This is an action brought by a resident, and tax-payer, against the city of Los Angeles, M. D. Johnson, treasurer of said city, and the City Bank, a private corporation. The purpose of the action is to enjoin the said treasurer from depositing the public moneys of the city with said bank pursuant to a certain contract between the city and the bank. Defendants filed a general demurrer “that said complaint does not state facts sufficient to constitute a cause of action.” An answer and supplemental answer were filed, together with some affidavits, and the case was submitted. Subsequently, the court rendered judgment, by which it was “ ordered, adjudged, and decreed that the demurrer to the complaint be sustained”; that plaintiff was not entitled to the injunction; that the order to show cause be discharged, and the action dismissed; and that defendants recover their costs. Plaintiff appeals from the judgment, and it is clear that the appeal turns upon the sufficiency of the complaint, and the correctness of the decision of the court upon the demurrer. Upon the face of the complaint appear the following facts: —

The city of Los Angeles is a municipal corporation existing under what is generally called a “ freeholders’ charter,” formed in pursuance of the amendment of section 8 of article 11 of the state constitution, approved March 10, 1887. (Stats, of 1887, p. 88.) The charter was approved by the senate and assembly on January 31, 1889. Section 44 of the charter provides, among other things (in brief), that it shall be the duty of the city clerk, on a certain day of January in each year, to advertise for sealed proposals from banks of deposit as l) the terms upon which they will “ receive and disburse the public moneys of said city.” The proposals are to specify the rate of Interest, estimated upon daily bal[606]anees, which the bank will allow on the public moneys deposited. And “ the bank offering the highest rate of interest shall be appointed the depositary of public moneys.” After it is ascertained who is the highest bidder, the council is to enter into a contract with the bank, providing that the latter shall pay “ all warrants drawn upon the city treasurer” so long as there is city money in the bank to meet the warrants on the various funds. Provision is made for a bond to be given by the bank. “Upon approval of such bond, and the signing of such contract, the council shall direct the city treasurer to deposit each day, when such bank is open for transaction of business, with the bank thus selected, all public moneys of said city by him collected or received. For each such deposit the treasurer shall take the receipt of the bank, and from and after the deposit of such money in said bank the treasurer and his bondsmen shall no longer be liable therefor.” Under this section of the charter the city made the kind of contract provided for therein with the defendant the City Bank; and the defendant Johnson, treasurer, was, under such contract, about to deposit the public money in said bank when this action was commenced. The question presented is, whether or not the provisions of said section 44 of the charter are constitutional and valid.