McLaughlin v. Department of Water & Power

WOOD, J. Plaintiff appeals from a judgment in favor of defendants entered after their demurrer was sustained without leave to amend. In his complaint plaintiff alleges that he is the owner of eighteen bonds of Municipal Improvement District No. 35, located in the city of Los Angeles, the said bonds being each in the principal sum of - $1,000 and becoming due at various times from January 1, 1942, to January 1, 1964; that the bonds were issued on or about April 10, 1925, and the proceeds thereof used to construct a portion of the water works of the city; that the Department of Water and Power of the City of Los Angeles has charge of the water works of the city, of the municipal improvement district mentioned and of the collection and disbursement of revenues of said works; that “the Board [43]have been and now are collecting revenues from the Municipal Water Works of said City, and have caused the same to be set aside and deposited in the revenue fund in the city treasury pertaining to the Municipal Water Works of the said city; that said fund now contains more than sufficient moneys to satisfy all interest on all bonds in said issue now outstanding and due and unpaid in addition to all other obligations against said fund”. He seeks a writ of mandate to compel defendants to 1 ‘ apportion and set aside out of the revenue fund in the City Treasury pertaining to the Municipal Water Works of the said City, an amount or amounts sufficient to pay at maturity all sums which have become due on the said bonds held by petitioner and to apportion and set apart out of the said revenue fund in each year an amount or amounts sufficient to pay at maturity all sums coming due in said year for principal and interest on said bonds of petitioner”.

The bonds in question were issued under the provisions of the Municipal Improvement District Act enacted in 1915. It is provided in each of the bonds that “the principal and interest of this bond are payable exclusively out of taxes levied upon the taxable property in said Municipal Improvement District No. 35 of the City of Los Angeles, and neither the City of Los Angeles nor any officer thereof is holden for the payment thereof otherwise”. On July 1, 1925, new charter provisions were adopted, among them "section 223 providing in part as follows: “The board shall each year apportion and set apart out of the revenue fund in the city treasury pertaining to each such municipal works an amount or amounts sufficient to pay at maturity all sums coming due in said year for principal and interest, upon all outstanding bonds, general or district, issued for the purposes of the works, to which such revenue fund pertains, and said amounts shall be transferred forthwith into a special fund in the city treasury, to be designated by a name indicating the nature or purpose of such special fund and the works from which said amount or amounts were derived, and the money in such special fund shall be subject to apportionment by the Controller, as may be required to make such payments on the principal and interest of said bonds, and for no other purpose. Any interest or increment received on the money in any such special fund shall be paid into such special fund and become a part