People v. Coon

25 Cal. 635, 1864 Cal. LEXIS 82

• Court: California Supreme Court
• Decided: July 1, 1864
• Status: Published

Opinions

By the Court, Currey, J.

The Legislature of this State, by an Act passed in 1863, authorized the Board of Supervisors of the City and County of San Francisco to take and subscribe one million dollars in the aggregate to the capital stock of “ The Western Pacific Railroad Company” and “ The Central Pacific Railroad Company of California,” and to provide for the payment of the same. (Laws of 1863, p. 380.) By this Act it was made the duty of the Board of Supervisors to order a special election for the purpose of submitting to the electors of the city and county the proposition for the Board to take and subscribe four hundred thousand dollars to the capital stock of “The Western Pacific Railroad Company,” and also the proposition for the same Board to take and subscribe six hundred thousand dollars to the capital stock of “The Central Pacific Railroad Company of California.” It was provided by this Act that if a majority of the electors voting was in favor of the proposition to subscribe for the stock of said companies, then it should become the duty of the Board to take and subscribe, in the name of the City and County of San Francisco, for its use, benefit and advantage, to the capital stock of each of said companies in the amounts specified, and therefor to pledge the faith of the city and county for the payment of the same, in the manner provided in the Act. The Act also provided that the subscription should be made conditioned to be paid in the bonds of the city and county, which should be issued in the sum of one thousand dollars each, from time to time, as the work should progress on the railroad, by a Board, consisting of the President of the Board of Supervisors, otherwise called the Mayor of the City and County of San Francisco, and the Auditor and Treasurer of said city and county, and styled the “ Pacific Railroad Loan Commissioners.” The special election was held, and the result of it was that a majority of the electors was in favor of the proposition submitted.

In April, 1864, an Act was passed by the Legislature by which the same Board of Supervisors was authorized and empowered “ To compromise and settle all claims upon the part of the Western Pacific Railroad and the Central Pacific Railroad for cash or other security, in place of bonds claimed by said companies of said city and county, under an Act to authorize the Board of Supervisors .of the City and County of San Francisco to take and subscribe one million dollars to the capital stock of the Western Pacific Railroad Company and the Central Pacific Railroad Company of California, and to provide for the payment of the same, and other matters relating thereto, approved April 22d, 1863; provided, that the power to make such compromise shall vest in said Board of Supervisors only after and in case said Board of Supervisors shall be compelled by final judgment of the Supreme Court to execute and deliver the bonds specified in said Act.” (Laws 1863-4, p. 388.)

The Board of Supervisors having declined, after request to take and subscribe to the capital stock of the Central Pacific Railroad Company, an application was made to this Court for a peremptory writ of mandamus to compel said Board to proceed to make the subscription and issue the bonds therefor as provided in the Act of 1863. The' respective parties to that proceeding appeared by counsel and argued the questions involved therein, after which this Court rendered a-judgment granting the writ, which was issued in June, 1864, commanding said Board of Supervisors to take and subscribe in the name of the City and County of San Francisco, for its use, 0 benefit and advantage, to the capital stock of the Central Pacific Railroad Company of California to the amount of six hundred thousand dollars, and for the payment of the same to pledge the faith of said city and county in the manner provided in the Act of 1863 ; and also commanding the Board of Supervisors to make an order directing the Board of Commissioners, styled “The Pacific Railroad Loan Commissioners,” to issue the bonds of the said city and county to the Central Pacific Railroad Company, upon the conditions as required and specified in and by the provisions of the Act. This writ was served on the Board of Supervisors.

Pending the application for a writ of mandamus, the Board of Supervisors, on behalf of the city and county, and the Central Pacific Railroad Company, by its President, were engaged in an effort to effect a compromise of the matter in difference between them, which resulted, after the writ had been issued and served, in an agreement upon the terms thereof; and to carry the compromise agreed upon into effect the Board of Supervisors, on the 20th of June, 1864, duly passed an ordinance entitled “ Providing for issuing bonds to Central Pacific Railroad Company.” By this ordinance, after reciting-the Act of 1863 and the election under that Act, and the judgment of this Court granting the peremptory writ of mandamus, and the Act of 1864, authorizing and empowering the Board of Supervisors to compromise and settle all claims upon the part of the Central Pacific Railroad Company of California, the people of the City and County of San Francisco ordained as follows:

“ Section 1. Four hundred bonds of said city and county, each for one thousand dollars, with interest coupons attached, dated July 1st, A. D. 1864, in all other respects, in form, substance, and execution, such as are required by said Act first above mentioned, shall be forthwith made, executed, and delivered to said Central Pacific Railroad Company of California.

“ Sec. 2. The payment of said bonds and coupons shall be provided for, and made in all respects as is provided in said Act of April 22, 1863, and for such payment the full faith and credit of said city and county are hereby pledged.

“Sec. 3. Said bonds and coupons shall be delivered to said Central Pacific Railroad Company of California upon the condition that the Board of Trustees or Directors of said company, at a regularly called meeting of the same, shall, by a vote duly recorded, accept said bonds and coupons in full discharge of all obligations on the part of said city and county to make any subscription to the capital stock of said company, and for all claims, debts, dues, bonds, and coupons whatsoever. Upon the issuing and acceptance of said bonds and coupons, the same shall be deemed to have been so received and accepted, in place of the bonds and coupons mentioned and provided to be given in the Act of April 22, 1863, before mentioned.”

This ordinance was duly approved by the Mayor on the 21st of June, and became a law on that day. Immediately thereafter the Central Pacific Railroad Company accepted the proposition contained in said ordinance, in accordance with the terms and conditions thereof, and signified the same to the Board of Supervisors. But the Mayor, Auditor and Treasurer, constituting the “ Pacific Railroad Loan' Commissioners,” refused to issue the bonds, as provided in said ordinance, after demand duly made therefor on behalf of the Central Pacific Railroad Company.

The relator has applied by petition to this Court for a peremptory writ of mandamus commanding and requiring the respondents to issue to the Central Pacific Railroad Company of California the four hundred bonds specified in said ordinance. To the relator’s petition setting forth the facts, in substance, as hereinbefore stated, the respondents have demurred. The grounds of the demurrer are in substance as follows:

First—It does not appear in or by said affidavit and petition that the respondents have any legal authority or power to execute or deliver to said Central Pacific Railroad Company the bonds referred to in said petition or any part thereof.

Second—It does not appear in said affidavit and petition that the Board of Supervisors of said City and .County of San Francisco, or any officers of said corporation, had any lawful authority to issue or cause to be issued to said Central Pacific Railroad Company bonds to said amount of four hundred thousand dollars, or any other amount, in the manner or for the causes or considerations alleged in said affidavit and petition.

Third—That said ordinance was passed without any lawful authority, and is wholly illegal and void.

Fourth—That the Act of . the Legislature of this State, approved April 4th, 1864, so far as the same authorizes or attempts to authorize, the issuing of bonds by the said city and county to the Central Pacific Railroad Company, or the payment by said Board of Supervisors to said company of cash or other securities, is in conflict with the Constitution of this State, and is null and void.

The respondents for answer to the petition deny that the Board of Supervisors at any time became, or were lawfully bound or obliged, to subscribe six hundred thousand dollars, or any other sum, to the capital stock of the Central Pacific Railroad Company of California, or to make, execute, or deliver to said company bonds to any amount whatever; and they also deny that the judgment of this Court was a final judgment, compelling them to execute or deliver the bonds specified in. the Act of eighteen hundred and sixty-three; and they further deny that they ever were or have been bound by law to execute or deliver to the Central Pacific Railroad Company said four hundred bonds; and they insist that said ordinance is wholly illegal and void, on the ground that neither the Board of Supervisors nor the Legislature had any right or power to make the Central Pacific Railroad Company a donation of four hundred thousand dollars, or any other sum of money belonging to the City and County of San Francisco.

The Act of eighteen hundred and sixty-three conferred on the corporate authorities of the City and County of San Francisco certain powers which were not comprehended by the general grant of powers contained in the Act consolidating the government of said city and county, passed by the Legislature in eighteen hundred and fifty-six. By the last section of the Act of eighteen hundred and sixty-three it is declared that this Act shall be in force and take effect from and after its passage. It provided the mode by which the electors, the corporators of the city and county, might express their will in respect to the privilege granted by the Act to take and subscribe to the capital stock of the railroad companies. The duty to submit the proposition to the electors of the city and county as to whether or not stock of the railroad companies should be taken and subscribed for the use, benefit and advantage of San Francisco was imposed on the Board of Supervisors, and the electors were provided with the opportunity of expressing their choice on the subject. The creation of this law did not depend on the vote of the electors, and therefore the objection that was interposed to the Act considered in Barto v. Himrod, 4 Selden, 483, is without force as authority touching the Act under examination. (Blanding v. Burr, 13 Cal. 356 ; The Bank of Rome v. The Village of Rome, 18 N. Y. 41; Starin v. The Town of Genoa, 23 N. Y. 446 ; Corning v. Greene, 23 Barb. 50; Grant v. Courter, 24 Barb. 242 ; Clarke v. Rochester, 24 Barb. 472 ; Moers v. City of Reading, 21 Penn. 202.)

By the choice of the electors of San Francisco, an obligation onerous in its character was assumed, for the purpose of prospective benefits, which it was supposed would accrue to ° the city and county from the construction of the railroads mentioned in the Act, and it has been determined by the judgment of this Court that the Board of Supervisors were in duty bound to take and subscribe, in the name of the City and County of San Francisco, for' its use, benefit and advantage, to • the capital stock of the Central Pacific Railroad Company, as required by the provisions of the Act of eighteen hundred and sixty-three, and also to proceed to direct the Pacific Railroad Loan Commissioners to issue the bonds of the city and county to the Central Pacific Railroad Company, upon the conditions required and specified in and by the provisions of the same Act. The execution of this judgment has been suspended, if not entirely superseded by the joint action of the Board of Supervisors of San Francisco on the one part, and the Central Pacific Railroad Company on the other, under and in pursuance of the provisions of the Act of April, eighteen hundred and sixty-four. But objections are interposed on the part of the respondents, to the effect, first, that the corporate authorities of San Francisco were not clothed with power to make the compromise agreed upon, and second, that the contingency specified in the proviso of the Act of eighteen hundred and sixty-four, and which stands as a condition precedent to the existence of authority in the Board of Supervisors to effect a compromise with the railroad company, has not transpired.

It is denied on behalf of the respondents that the Act of eighteen hundred and sixty-four conferred upon the Board of Supervisors the authority to compromise and settle the claims which accrued to the Central Pacific Railroad Company in the mode and upon the terms specified in the ordinance set forth. It is said the claim to be compromised and settled was notf a claim on the part of the railroad company for money or bonds without a consideration in return, but was a claim to exchange certificates of stock for bonds, and that to settle such a claim is to fix the amount of subscription by reducing it if possible. The Act authorizing a compromise provides for the settlement of the claim of the railroad company for cash or other security in place of bonds claimed by the company, of said city and county, under the previous Act. It can hardly be maintained that a settlement of the claim of the railroad by taking a reduced amount of bonds of the city and county without some corresponding benefit to the company would amount to an adjustment of the difference between the parties by compromise. But be this as it may, the statute is simply a grant of power to the Board of Supervisors to compromise and settle the claim of the company for cash or other security in the place of the bonds to be issued under the first Act, upon the happening of the contingency mentioned in the proviso. No other limitation is placed upon the power whenever it might arise than the words of the Act itself import; that is, that the claim to be compromised and settled should be satisfied by cash or other security, in place of the bonds to which the company might be entitled under the Act authorizing the subscription.

It is insisted that the Act of 1864 does not authorize San Francisco to withdraw her subscription from either of the railroad companies. There is nothing obscure or ambiguous in the language of this Act. It seems to us apparent that the authority granted by the Act was to the Board of Supervisors to compromise and settle the claims of the respective companies on such terms as in the wisdom'of the Board would best conduce to the interests of the City and County of San Francisco, provided such settlement could be made for cash or other security in the place of the bonds specified in the Act of 1863. It is a fact judicially known to us that at the time the Act of 1864 was passed, the case of French v. Teschemaker was pending in this Court, by which it was sought to overthrow, as unconstitutional, the Act of 1863, and in that case we were advised that the plaintiff was in fact the representative of a considerable portion of the electors of the City and County of San Francisco, who were opposed to subscribing for stock of the railroad companies as authorized by the Act of 1863, and by the election held in pursuance of its provisions ; and we may well suppose that the Act. of 1864 was passed in deference to the opinions of those opposed, and who, we are not prepared to say, were not reasonably opposed to the corporation of the City and County of San Francisco becoming a member of the railroad companies mentioned in the Act of 1863. So that if the object of the Act authorizing a compromise is to be sought for in the light of concurring circumstances, we might justly conclude it was designed to give the City and County of San Francisco the opportunity to sever its reluctant connection with these railroad companies by a compromise and settlement effecting such object.

It is claimed, however, that the.individual corporators of the city and county acquired rights to the capital stock of the railroad companies as beneficiaries, separate and distinct from the municipal corporation as an entity, of which they cannot be deprived, otherwise than by a majority vote therefor by the electors of the city and county; and, as a consequence, it is maintained that the Legislature had no power to pass an Act conferring on the Board of Supervisors the authority to so compromise and settle the claims of the railroad companies as to divest the individual corporators of these vested rights held in trust for them by the corporate authorities. The answer to all this is, that the corporation of the city and county is the creature of legislative enactment, and in legal contemplation is an entity possessing for many purposes the attributes oí individuality; and in the exercise of its legitimate powers can only act by and through its agents, appointed in the mode prescribed by the law of its creation. The Act of incorporation may be altered from time to time or repealed as the Legislature may will it. (Const. Art. 4, Sec. 31.) The powers of the corporation may-be enlarged or restricted, and the Legislature may determine by law who, as the representatives of the corporation, shall exercise the powers granted. Hence it is that the rights of the individual corporators can only be enjoyed in subordination to the power of the Legislature over the subject. A contrary doctrine carried to its ultimate consequences would require the affirmative consent of each individual corporator to every act done by the corporate authorities affecting his interests before he could become bound by such act; the result of which would be to render entirely useless and nugatory the corporate government of the city and county.

The Legislature conferred the authority on the Board of Supervisors to compromise and settle the claims of each of the railroad companies mentioned, for cash or other securities in place of bonds specified in the previous Act, provided it should first be determined by the final judgment of this Court that the Board were bound to execute and deliver such bonds. By this ■ Act the Board were permitted, in case the conditional contingency transpired, to enter into any compromise and settlement with the Central Pacific Railroad Company coming within the purview of the Act, which in their judgment would best subserve the interests of the city and county. The terms of the compromise and settlement have been agreed to upon the hypothesis that the contingency on which the Board were authorized to act has happened ; and the railroad company, as a party to that compromise, has the right to its execution, unless the condition on which the authority of the Board of Supervisors depends remains to arise; and this conducts us to the inquiry as to whether the judgment rendered by this Court in the case of the Central Pacific Railroad Company of California against the Board of Supervisors of the City and County of San Francisco, decided in June last, is a.final judgment, compelling the Board to execute and deliver the bonds specified in the Act of 1863.

It is maintained on the jiart of the relator that the construction given on behalf of the City and County of San Francisco to the judgment rendered by this. Court as a final judgment, compelling the Board of Supervisors to execute and deliver the bonds, is conclusive upon the city and county. We think it would be going beyond any just rule of law to so hold, for the reason that the Board of Supervisors have not the power by a construction of the effect of this judgment to assume an authority which depends for its existence upon this precedent condition.

The judgment referred to determined the obligation resting upon the corporation of San Francisco to take and subscribe to the capital stock of the Central Pacific Railroad Company, to be valid and binding, and the Board of Supervisors was required by this judgment to perform the obligation named, and to make an order directing the Pacific Railroad Loan Commissioners to issue the bonds to the Central Pacific Railroad Company upon certain conditions, and in all respects to perform and comply with the provisions and requirements of the Act. The judgment requiring the bonds to be issued was final, though the conditions upon which the duty to issue the same could only arise as the exigencies of the enterprise in contemplation might transpire, rendering the performance of this duty imperative. The judgment of the Supreme Court was a final judgment as to the obligations of the Board of Supervisors as the corporate authorities of the city and county, and as the conditions on which the bonds required to be issued by the Act of 1863 might become consummate, this judgment could be enforced in case of refusal to issue and deliver the bonds, and therefore to all intents and purposes it was, from the time it was pronounced, a final judgment coppelling the Board of Supervisors to execute and deliver the bonds specified in the Act.

It is further objected by the respondents that the Act of 1864 does not confer on the Board of Supervisors the power to compromise with one of the railroad companies without a compromise with the other also, and that therefore the ordinance referred to was passed without authority and is void.

The first section of the Act of 1863 provided for an election for the purpose of submitting to the electors “ the proposition for the Board of Supervisors to take and subscribe four hundred thousand dollars to the capital stock of the Western Pacific Railroad Company . and “ a proposition to take and subscribe six hundred thousand dollars to the capital stock of the Central Pacific Railroad Company of California.” The elector could not vote for or against taking and subscribing to the stock of one of the companies only. He could only vote for or against the twofold proposition as a unit. The third section of the same Act authorized the Board of Supervisors, in case the election authorized the subscription, to take and subscribe in the name of the city and county, to the capital stock of the companies respectively, in the proportions prescribed in the first section, and therefor to pledge the faith of the city and county for the payment of the same in the manner provided in the Act. There is nothing in the Act requiring the Supervisors to deal with the tvro companies jointly; nor is it provided that the action of one of the companies should at all be dependent upon or be controlled by that of the other. The two companies in their relations to each other sustained an individual independence from the passing of the election and the rights and obligations of each could not be affected by the action or conduct of the other. There is no reason why the Act should be construed to require a compromise and settlement with one of these companies to be made in connection with a like compromise and settlement with the other. Such a construction of the Act might be attended with embarrassments that would entirely defeat its execution, however much it might be to the benefit and advantage of the City and County of San Francisco to adjust and settle the claim of one of such companies. A construction that would most probably; if not necessarily, be attended with such consequences cannot be adopted in consistency with the settled rules of construction of statutes.

We might extend this opinion to the consideration of other questions suggested by counsel, but we deem it unnecessary as the conclusion to which we have come would not be changed thereby. After a careful examination of the whole case we are of the opinion that the application should be granted.

It is therefore ordered and adjudged that a peremptory writ of mandamus be issued to the respondents, commanding and requiring them to execute and deliver without delay to the Central Pacific Railroad Company of California the four hundred bonds of said City and County of San Francisco, described in the ordinance hereinbefore referred to, with the interest coupons attached as in said ordinance provided.