Powell v. City & County of San Francisco

144 P.2d 617, 62 Cal. App. 2d 291, 1944 Cal. App. LEXIS 825

• Court: California Court of Appeal
• Decided: January 13, 1944
• Docket: Civ. 12510
• Status: Published

Opinions

WARD, J.

Plaintiff prosecutes this appeal from a judgment of nonsuit. He is a resident and taxpayer of the city and county of San Francisco, and brought the action for the purpose of enjoining the expenditure of public funds in the payment of traveling and per diem expenses of city officials to and from Washington, D. C., in the presentation of legal and engineering studies to a committee of Congress. (Charter of the City and County of San Francisco, § 27.) It was contemplated that such expenses would he incurred in the advocacy of an amendment to the Raker Act, enacted by the 63rd Congress of the United States of America (H. R. 7207), to permit the sale by the municipality to a public utility corporation of electric power for resale to the people of San Francisco. It had been judicially held that an agency contract to that end theretofore entered into violated the terms of the act, which granted certain rights of way over federal public lands and national parks to the city and county of San Francisco for the purpose of supplying water and electrical energy to the public. The mayor of San Francisco, therefore, upon authorization of the board of supervisors, appointed a committee of citizens (subsequently known as the committee), to introduce an amendment to the Raker Act. Following its introduction in Congress, it was there referred to the Public Lands Committee, a subcommittee of which visited San Francisco for the purpose of investigating the propriety of the amendment. Public hearings upon the amendment terminated about the time of the Japanese attack on Pearl Harbor in December, 1941, with the understanding that further hearings would be held in Washington before the full committee on a date to be set. In pursuance of this understanding the board of supervisors passed an ordinance appropriating $10,000 out of the unappropriated balance in the Heteh Hetchy Power Division to provide funds for the payment of expenses of certain designated city and county officials, etc., to be incurred in connection with the hearings before the congressional committee. Subsequently the board of supervisors approved a resolution, directing the manager of utilities, two members of the board of supervisors, the city attorney and two public utility engineers to represent the city and county before the Public Lands Committee.

Shortly prior to the time when it was necessary for these representatives to leave for Washington this action to enjoin the expenditure, and praying for a temporary injunction, was filed. Confronted by this emergency the committee hereinbefore mentioned made advances to cover such expenses, obtaining receipts from the heads of city departments. It was understood that should the claims be allowed by the city and county, the advances would be repaid. The amount appropriated by the supervisors was $10,000; the expenses incurred totaled $4,105.54.

Plaintiff contends that the circumstance that the members of the committee were not personally out of pocket affords an additional reason for restraining the proposed disbursement of public funds. This contention is not supported by authority nor by convincing argument. It does not appear from the evidence that the city was prejudiced, or that the advancement of the funds was to promote the individual interests of those advancing the money, or intended in anywise to influence the position that the city desired its official committee to take before Congress in its efforts to protect the interest of the municipality. On the trial of this cause some questions were asked indicating a misuse of the funds by individual members, but on appeal it seems to be admitted that there was no misuse of funds.

Plaintiff contends that the purposes for which municipal funds may be used does not include expenses to urge enactment of an amendment to a congressional act empowering the city and county to use certain lands, water and power of the United States Government. This contention seems to be without merit if the funds were properly and legally appropriated under the city charter from the particular fund used. The propriety of the action of the municipality will be first considered.

Plaintiff relies upon Mines v. Del Valle, 201 Cal. 273 [257 P. 530] and Mobley v. Board of Public Works, 44 Cal.App. 167 [186 P. 412]. In the Mobley case it was pointed out that the charter provided a precise method of acquiring a privately owned railway system and that the word “extension” had reference to improvements to an existing municipal system and not to the use of funds in investigating the advisability of “acquiring” an independent railway system. In the Mines case, the Charter of Los Angeles (§ 192(h)) empowered the public service commissioners to use money in the power revenue fund for the purpose of “ ‘conducting, operating and maintaining and extending the business of said department pertaining to electric power, ’ and particularly upon the words ‘ extend electric plants, works, ’ etc., and ‘extending the business of said department.’” It appears that the commissioners carried on a campaign, addressed to the purpose of influencing the voters of the municipality to approve a bond issue, using power revenue funds to pay for newspaper advertisements, circulars, posters, banners, etc. At pages 282-283 the court said: “The provisions of the charter giving to the board of public service commissioners power to extend the electrical plants and works of said city and to expend the funds in the power fund for the purpose of extending said public utility in our opinion refer simply to the physical management of the same and cannot be enlarged to include another and distinct power, that of raising money either directly or indirectly for the purpose of conducting and operating said utility, or for the purpose of extending the business thereof.” Quoting from the Mobley case the court further said (pp. 284-285): “ ‘Without regard to any other question discussed in the opinion of the district court of appeal, we are satisfied that the charter of San Francisco, as now written, does not authorize the payment of money from the funds of the municipal railway system for the purpose of investigating the condition and availability of a part or the whole of another street railway with a view to its purchase. The purposes for which expenditures from such fund can be made are carefully specified in section 16, article XII, of the charter, which, we think, excludes any such expenditure as here proposed. Such an investigation may not fairly be held to constitute an “extension or improvement” of the municipal system.’ ” The Mines ease held that a municipality in its proprietary capacity does not have power to do any and all things in the conduct of its business, and that the use of public funds on one side to advocate a controversial question before the voters was unjust to the rights of the members of the public who held a contrary opinion, in view of the fact that there was neither an express nor an implied provision in the charter authorizing an expenditure of public money for banners, etc.

In Mahoney v. San Francisco, 201 Cal. 248 [257 P. 49], it was held that when municipal revenue is allocated to separate funds the money in one fund may not be used for another purpose unless there is a specific provision therefor. As will appear hereafter there is a provision for the use of municipal funds for the purpose here contemplated.

There is a difference in the expenditure of money in acquiring a new system and in protecting the rights of that acquired. That the Supreme Court of this state recognized that there is a difference between the expenditure of funds for election purposes and the use of money to pay expenses in appearances before a judicial or legislative body is demonstrated when the holdings in two cases decided within a six months’ period—the Mines case and Crawford v. Imperial Irrigation Dist., 200 Cal. 318 [253 P. 725]—are considered. In the Crawford case, supra, page 322, the court said: “ ‘The employment of persons to influence legislation, or to influence decisions of the land department, or even the decisions of judicial tribunals, in a proper way, is not against sound public policy, . . . The means and methods to be used must be improper, or else such employment is perfectly legitimate in the eyes of the law.’ ” Quoting from 6 Corpus Juris, page 126, the court further said: “ ‘A distinction is drawn between the use of personal, or any secret or sinister, influence upon legislators, by one who seeks the passage of an act, which is contrary to public policy, and the open advocacy of the same. It is generally agreed that the appearance of a representative of an interested party before a public body to urge the adoption of a particular measure or policy is neither illegal nor improper when the means employed are open and have for their purpose the presentation of the merits of the advocated matter. ’ ” There is no evidence in the present case that the commission or its designated representatives in appearing before the congressional subcommittee in San Francisco or the full committee in Washington were actuated by any motive other than the legitimate protection of the city’s interest as it reasonably and honestly appeared to the commission. In the Crawford case, quoting from 21 Cal.Jur. 874, the court said (p. 334): “ ‘A public officer or board has not only the powers expressly enumerated by law, but also those implied powers which are necessary to the exercise of the powers expressly granted, . . .’ ” As late as June of 1943 the Crawford ease, to the effect that authority is often implied from power granted, was quoted with approval in California Drive-in Restaurant Assn. v. Clark, 22 Cal.2d 287 [140 P.2d 657], (See, also, 67 A.L.R. 686.) In addition, attendance at legislative and congressional sessions has been authorized by the laws of the State of California for advocacy of the passage of beneficial, or opposition to that of detrimental, legislation. (Deering’s Gen. Laws, 1941 Supp., Act 4276, § 1, p. 2064; California etc. Assn. v. Rindge L. & N. Co., 199 Cal. 168 [248 P. 658, 47 A.L.R. 904].) We conclude that the purpose in the appointment of the San Francisco representatives to attend and present the facts in the interest of the city and county of San Francisco was, under all the circumstances as they appear in the record, proper.

The procedure adopted was as follows: The board of supervisors appropriated a specified sum out of the “unappropriated balance” in the Heteh Hetchy Power Division for the use of representatives in connection with hearings before Congress'on the proposed amendment to the Raker Act. Subsequently the board approved the committee appointed to represent the city at such hearings. The members of the committee—in one instance there was a substitute for one of them —carried out their mission. The question therefore is whether the ordinance authorizing the expenditures violated the provisions of the charter.

Section 127 of the charter providés: “Receipts from each utility operated by the commission shall be paid into the city and county treasury and maintained in a separate fund for each such utility. Appropriations from such funds shall be made for the following purposes for each such utility in the order named, viz.: (a) for the payment of operating expenses, pension charges, and proportionate payments to such compensation and other insurance and accident reserve funds as the commission may establish or the board of supervisors may require; (b) for repairs and maintenance; (c) for depreciation as hereinafter described; (d) for the payment of interest and sinking funds on the bonds issued for acquisition, construction or extensions; (e) for extensions and improvements; and (f) for a surplus fund.” Section 128 provides for the disposition of funds for reconstruction and replacement. Section 129 provides that “If any accumulation in the surplus fund of any utility shall, in any fiscal year, exceed 25 per cent of the total expenditures of such utility for operation, repairs and maintenance for the preceding fiscal year, such excess may be transferred by the board of supervisors to the general fund of the city and county, and such amount shall be deposited by the commission with the treasurer to the credit of such general fund.” The sections relate to receipts from utilities. Heteh Hetchy project is one of several utilities operated by the city. The appropriation for expenses was from the particular fund involved; that is, the separate fund of Heteh Hetchy for “operation.” "Whether the money was to be taken from a “surplus” fund, as provided in the ordinance, or from an “unappropriated balance” as set forth in the appropriation itself, seems to be immaterial. The charter authorizes the payment of traveling expenses, including Pullman charges, and a reasonable amount per diem for necessary expenses, except in the discharge of routine duties. (§ 219.)

In the Mobley case it was held that an “investigation” could not be held to be an “extension.” In the Mines case it was held that there was no express authorization in the charter for the “extension” “nor can it be implied from any of the terms thereof” (p. 288).

The distinction between the present case and that principally relied upon by appellant is that in the Mines case the expenditure was for the purpose of “carrying on a campaign for the purpose of influencing the voters” (p. 287) in favor of an “extension.” The court specifically differentiated between the operation or extension of a municipal public utility and “the raising of the money to extend said system” (p. 282).

In the present case the money was not allocated for the purpose of extending the system under the circumstances of the Mines case, or to investigate the desirability of a purchase as in the Mobley ease. The purpose here was to continue a going business by seeking the approval of Congress to the continuance of a contract under which the municipality was operating with a private concern. The legality or illegality of that particular contract is not involved on this appeal. There is no evidence in the record disclosing a dishonest intention on the part of the municipality. (Mahoney v. San Francisco, supra; Mines v. Del Valle, supra.) The vital question is—under the implied provisions of the charter, may the action of the board of supervisors in appropriating the money as part of operating expenses be legally authorized? (Mines v. Del Valle, supra.)

“Operating expenses” usually cover physical maintenance, and may include administration, labor, interest, taxes, rent, insurance, claims, litigation expenses, etc., depending upon how the phrase is used in a particular case. (Words and Phrases, vol. 29, p. 555, et seq.; 46 C. J., p. 1112, § 5.) When the expenses, as in the present case, are under the control of a governmental agency, they may include such as are necessary or required by the governing body to promote or maintain before legislative bodies the interest of the utility. The term “operating expenses” as used in the San Francisco Charter is not confined to maintenance, but expressly refers to reserve funds, including pensions, accident compensation, etc. The power of a board of supervisors to pass an ordinance, or the power of a board or commission to adopt reasonable rules to make effective the purpose of the establishment of the commission under an express grant may sometimes be implied in the absence of legislative prohibition. (California Drive-in Restaurant Assn. v. Clark, supra; Bank of Italy v. Johnson, 200 Cal. 1 [251 P. 784]; Crawford v. Imperial Irrigation Dist., supra.)

The opinion in O’Connell v. City and County of San Francisco, 204 Cal. 1 [266 P. 1118], decided subsequent to the Crawford and Mines cases, does not set forth the facts of the case but the record on appeal discloses it to have been a suit in equity to compel the return of money paid by the city to a supervisor who had advanced the expenses of the Mayor, several attorneys, engineers and his own “to, and in, and returning from Washington, D. C.,” for the purpose of persuading the Secretary of the Interior to approve a written contract of sale to a private corporation of products of the Heteh Hetehy project. By ordinance the board of supervisors had authorized the payment from the “Hetehy Hetehy Operative Revenue Fund.” The complaint alleged that there was no such fund out of which the demand could lawfully be paid. The charter in effect at that time used the term “operating expenses” and “reserve fund.” A general demurrer to the complaint was sustained. On appeal the Supreme Court evidently did not consider the Mines opinion applicable to the facts in the O’Connell case, and filed the following opinion quoted in its entirety: “Upon a careful examination of the record herein, we are satisfied that the plaintiff’s complaint failed to state a cause of action; that the demurrer thereto was properly sustained, and that the judgment in favor of the defendants thereon was correctly given and made, and that this appeal is without merit.”

In conclusion it may be said that the record does not show that the visit to Washington was made in bad faith. It was a matter for the board to determine, without interference from a court, whether the purpose was necessary and in good faith. The funds expended are legally a charge against the municipality. In San Francisco v. Boyd, 17 Cal.2d 606 [110 P.2d 1036], in considering the power of the board of supervisors it was held, assuming the purpose to be proper (pp. 617-618) “that ‘the enumeration of some powers does' not exclude the exercise of powers not enumerated except as limited by the charter and the Constitution’ (West Coast Advertising Co. v. San Francisco, 14 Cal.2d 516, 523 [95 P.2d 138]); that where a charter is silent a city may exercise powers conferred upon it by general law provided such general powers are not inconsistent with those granted by the charter; if no restrictions or limitations are found in the charter, the power of the city in municipal affairs is full and complete.” We find no such limitation or restriction in this ease. It is not the function of this court “to interfere with such determination.” (San Francisco v. Boyd, supra, p. 614.)

The judgment is affirmed.

Knight, J., concurred.